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The War on Drugs, and Ultimate Drugs: Wealth, Power and Political Influence

     

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In This Issue

   

JCFR's TOOLBOX -- Try it. You'll love it.

 

By:  Leslie Kim

 

When Vladymir and Svetlana Petrovich arrived in the US in 1991, part of a large group of Russians fleeing religious persecution, they and their two accompanying children settled in Denver, Colorado, and began new lives within the American Dream. On the day that they crossed over the Russian border, they were able to leave their old lives behind.

The story of Pablo Jorge Martinez-Perez and his assimilation in the US began during the same month and year as the Petrovich family, albeit in a different way. In his case he left his Mexican village, traveled North to the border, found a low paying factory job in the northern most region of his country and worked for the many months it took him to save the money that would buy his passage into the US. He, too, when running across the border, left his old life behind.

By 1999, all were doing fine and were citizens of our great nation. A nation of opportunity. Both good and bad. The Petrovich family traveled through the INS system easily. Pablo took the pathway that included nuptials, marrying Vanita Adele Jones, a 31-year old never-been-married book-bindery worker who was born a US citizen. As a legal spouse, he applied for and was granted US citizenship after that marriage.

Fast forward 18 years. 2008.

The Petroviches, like so many Americans, were caught in the real estate market downfall when Vladymir lost his job after the mortgage lending firm that employed him collapsed. Svetlana's work as a translator was enough to feed the family, however not enough to keep up their house payments without dipping into their savings. Within the next two years the savings were gone and Vladymir's income as an on-again/off-again day laborer did little to alleviate their dire financial position.

Things had also changed for Martinez. He and his wife had parted ways eight years and two children into the marriage, and he was working as a janitor for the Los Angeles Unified School District.

Vladymir and Svetlana, watching their two decades long "new world" crashing around them, saw their misfortune increase when Vladymir was hit by a car when crossing a Denver street. The driver of the striking vehicle stopped at the scene, called the police and an ambulance, and was fully cooperative. "It was raining. I didn't see him until it was too late." Luckily he was well insured. His name was Pablo Jorges Martinez-Perez and he'd traveled to Colorado to visit a few family members.

And so the paths of these two naturalized US citizens collided. Both literally and figuratively.

The economic ending of this chance meeting worked out well -- in a financial sense -- for the Petrovich family. Vladymir suffered soft-tissue injuries to his neck and lower back, had a hairline fracture at L-1/L-2, and had tingling sensations in all four extremities and that were claimed in a lawsuit to seriously affect his enjoyment of life. He was unable to go camping with his son Andrei or bicycle with his daughter Marina. At times he was short with Svetlana and the marriage was challenged due to his ongoing pain and discomfort. The proceeds of that lawsuit were enough pay off the house, buy a new car, put both children through college and still have a healthy cushion. Attorney Boris Yankovich had done a good job; one for which he collected thirty five percent.

End of story?

No.

Paul Harvey, a radio and television commentator, long did a piece called "The Rest of the Story." In it he would tell a story, much like that appearing above, and then at the crux of the tale he would reveal what had really happened. At the end he would close with "and now you know The Rest of the Story."

What did happen here?

Vladymir had grown up in one of the hundreds of thousands of Moscow housing units that reach into the Russian skies and held extended families in their 500 square feet of living space. Attorney Boris lived, with his family, two units away on the same floor. A few units farther up the hall resided Victor, now a Denver chiropractor, and Antoly, who was the administrator of a medical clinic. The four had been boyhood friends, closer than any brothers in a time when friendships defined survival in emerging communist Russia. All four had immigrated to the US and become citizens of our great country.

When Great Colorado Equity Insurers, the company holding the million-dollar-liability-limit paper that insured the Martinez-Perez rental vehicle, processed the claim and recognized the severity of the injuries, they opted to pay limits Boris danced all the way to the bank with his $350,000 share, Antoly did just fine, as did Viktor. And Vladymir, who was by the way truly injured, was financially set.

And now the "Rest of the Story."

On a trip to Los Angeles, well prior to this pathway convergence, Ramon Jose Baptista-Morales had run into his own boyhood buddy Pablo Jorge Martinez-Perez. Ramon, deeply entrenched in the Denver staged accident scene, was working as a runner for one of the larger organizations. His job was to recruit Mexicans -- those who did not fit a likely stereotype -- to be participants in well-scripted accident scenarios. Recognizing Pablo, Ramon saw an opportunity to enrich himself by another commission -- and Ramon knew how to get the otherwise law-abiding Pablo to cooperate. Blackmail. "Amigo, do you think you would have a job if the world knew that you murdered your mother and your father and then fled Mexico?" Pablo had indeed, after being beaten to within inches of his own life by peyote-drugged mother and drunken father for what he swore would be the last time, set fire to their home as a final act of defiance before he headed north. He did not know that they were both passed out inside, although his heart knew that he would have done it either way. "What do you want?" he asked Ramon. The answer was "Your secret will die if you do one thing for me. Come to Denver. I promise you it will be easy."

Vladymir was not a knowing participant; he was merely walking the three blocks to a local restaurant to have lunch with one of his (also involved) old friends. The car came out of nowhere and the impact threw him about fifteen feet. His injuries were real, always a great thing for a stager who has no true regard for those injured in a well-staged mishap.

Pablo kept his secret past uncovered, Vladymir was financially set, Boris made a big pot of money, Ramon, Antoly and Viktor were well compensated for their parts and everybody lived happily ever after.

Have we arrived at the final "Rest of the Story?"
Of this story: yes. No one will ever know. Of tomorrow's similar story? Perhaps no.
This crack in the system, the one that allows such stories to be written, is crumbling.

In the past two years, massive strides have been made in the collection of International Intelligence. Leaving ones past behind in a country of origin is no longer a guarantee. The real test is in how long it will take industry to respond to the challenge of routinely collecting such data.

The Petrovich-Martinez story, while loosely based on reality, is fictional -- stated here to illustrate what can and will continue to occur until industry catches up to this resource. When they do, here is how it will play out:

The Russian Connection:

In cases of suspect immigrant cartels (industry currently faces escalating "accident" activity emanating from cluster immigrant neighborhoods), adjusters will routinely search Russian databases with an eye toward link analysis. Why? Because unbeknownst to all but the most astute investigators, such databases can be searched at reasonable cost, and, in the case at hand, would have quickly revealed that multiple of the "players" has direct childhood links to one another. A further understanding of the family-like loyalties that were produced by these living arrangements would assist in cracking these rings of seemingly unrelated players.

Russian citizens carry, by law, multiple identifying documents. Society does not move around in Russia; the vast majority of Russians will spend their entire lives in only one of two apartments -- that being just the way it is in that culture. Not only do addresses get listed in the national databases, but cross-referencing "neighbors" is also routine. Link analysis becomes simple. Further, privacy concerns are miniscule compared to those that we have in the US. Each Russian citizen has three major inputs of data; the first at age 16. These records are government held, but they are indeed searchable. Private vendors have access to compiled records, much akin to how things work in the US. There is a private vendor in San Antonio who works directly with a Moscow provider, yet the insurance industry has heretofore not stumbled upon this solution. There are surely others, too.

Culturally speaking, the boyhood friends were taking care of one of their own. In the best way they knew how, while enriching themselves, and ... it worked perfectly. A $99 search could have served as an entrance point.

In the big picture, we have a case of situational ethics. At what cost was the Petrovich's house saved? Who actually paid the $1 million proffered by the Colorado insurer? And is there ever a situation where the little picture is wrong but the big picture is right?

The Mexican Connection:

Figures from 2009 state that more than 48 million Hispanics live in the US and that the rate of border crossings is estimated at a staggering 2 million per year. Many of these individuals, situationally, are "ripe for picking" by organized criminal cartels.

Once again, technology is the answer. So is education. Mexico does indeed have an 800 million piece database that covers 95% of all those born in Mexico. A query through the American vendor that has exclusive rights to US distribution of this data for insurance, financial and human resources usage can confirm if a person who states they are Mexican by birth (either now legally OR illegally in the US) has a Mexican National Identifier Number issued by the Federals. There are also six other forms of trackable identifying information readily available, plus local, state and federal civil and criminal records.

While numerous US insurers have recently become aware of the existence of this information, there has been little or zero cross-industry sharing of latest resources. This fact became readily apparent at the recent SHRM (Society of Human Resources Management) national conference held in San Diego, CA. With 11,000+ attendees and a vendor floor that dwarfs that of IASIU or NHCAA (it looked more like RIMS), we queried 15 major providers of Background Records on if they had the ability to go back beyond the "cross the border" date of a potential employee. In every case we learned that the HR industry searches only US records except in fringe cases, generally after the fact, and then it is done via private investigators, at large cost, in individual Mexican states. Not one vendor was aware that they could now confirm an identity of a potential employee for less that $40.

In the fabricated case of Pablo Jorge Martinez-Perez, this same $40 would not only confirm his identity as a real one (not one that was produced in a back room fake identity mill on Figueroa Avenue), but could extend to a revelation of a criminal trail. The US Courts heavily rely on the doctrine of "knew or should have known." How this will surface on a future hiring arena case is both imaginable and frightening.

The Future

As technology sharing capabilities increase, industries must learn to take advantage of this new tool against fraud and/or identity misrepresentation. British records are as well maintained as are US records. Australian records are available as well as records for most nations. At this writing we are doing cross-industry searches in order to ascertain what other countries maintain databases, what those databases include, how accessible they are and through whom or what entities, and the reliability levels of the information itself.

 

ADDENDUM 5/11

 

In a recent case opened by www.fightfraudamerica.com, British records were accessed that allowed the Costa Rican Supreme Court to stop the fraudulent resolution of a multi-million dollar investment scam and get in the way of thousands of American investors losing huge sums of money.
 
This is a prime example of the good that can happen when international databases are both accessed and used within the routine investigation process.

 

First Milanes proposal included Citi letter that was fake

By the A.M. Costa Rica staff

Savings Unlimited investors today are trying to put the finishing touches on a second conciliation agreement that will keep casino operator Luis Milanes out of jail. What many do not know is that the first proposal was suspected of being rife with fraud and identity theft.

Savings Unlimited, operated by Milanes, was a high-interest investment scheme that collapsed in 2002 when Milanes fled the country.

The initial proposal is relevant because that and the current proposal both offered the downtown Hotel Europa to the estimated 500 victims who chose to pursue a case against Milanes and associates. The second proposal includes a long-term payout to the victims, so it is dependent on Milanes' good faith. How much Milanes had to do with constructing the first proposal, if anything, is not known.

What is known is that the proposal identified Pedro Borges Fiol as executive director of the Savings Unlimited Recovery Fund, and he invited contact from former investors via ads published in a weekly newspaper. The proposal presented to the court included a letter purportedly from Citibank. That letter was a verification that a company seeking to purchase the Hotel Europa had $10 million in its account.

A Savings Unlimited investor in the United States asked a public service firm called Fight Fraud America to check out the proposal. The company filed a report in February that cast doubt on the initial proposal.

Leslie Kim, who heads Fight Fraud America, said that Citibank denied the letter came from its Fresh Meadows, New York, office. The bank said that no one with the name Michael Harripersaud, worked for the company anywhere in the world, she said. That was the name at the bottom of the letter. The financial giant launched its own investigation, said Ms. Kim.

Fight Fraud America also checked out the purported purchaser of the hotel, DFS International Limited that was being represented by Incite International Holdings, according to the proposal. Ms. Kim reported that Incite was a new British corporation with a mail drop as an address.

The company had no supporting documents filed with the British Registry, its Web page was new and no one at its listed Las Vegas, Nevada, location had heard of the firm when an investigator paid a call, said Ms. Kim. She deemed the firm a shelf corporation.

Eventually Fight Fraud America said it came in contact
with Teresa Collo, identified as the owner of DFS International Limited. The report said that the woman had no knowledge of Borges or Incite and did not know where Costa Rica was located.

That proposal is no longer valid, and Borges could not be located to comment on who set up the purchase offer.

The second proposal is the topic of a meeting of lawyers and investors today. Milanes wants to put up 11 properties including the Hotel Europa downtown and will continue to pay $100,000 a month for eight months with a much larger final payment, according to the proposal. Two firms seek to be trustees of the arrangement. They would have to sell the properties and remit the proceeds to Saving Unlimited victims at a percentage of what they had on deposit with Milanes. When the company failed, Milanes was believed to have had $200 million on deposit. The current proposal is estimated to be worth about $10 million.

The Hotel Europa is a key element of the deal, and the principal occupants there now is Milanes himself in the penthouse and one of his casinos on the first floor. A court-appointed appraiser never got a financial statement from the hotel, so no one among the investors and court officials knows if the business is making money or throwing off large losses. Most downtown hotels are facing hard times.

The U.S. investor who sought help from Fight Fraud America also paid to have the final report translated into Spanish. Both copies were turned over to the Judicial Investigating Organization, but it does not appear that agents followed up on the extensive information in the report. At the end of April, judicial agents completed a detailed report on the extensive business interests of Milanes in other countries, but that document is not available and, inexplicably, not part of the court file.

The negotiations between investors and their lawyers and Milanes and his lawyers are not open to the public or press. But some investors have reported that prosecutors, the majority of lawyers, the public defender representing some investors and maybe even the judge are pushing for approval of the second proposal.

Some investors said they wanted to see the deal in writing before making a decision. If the investors accept the deal, there will be no trial, and Milanes will not face the possibility of jail. Prosecutors are reported to be anxious to avoid a trial. Lawyers probably will be paid off first, if the deal goes through.

Unclear is if anyone has done a title search on the properties that Milanes is offering as part of the settlement.


Copyright 2010 The John Cooke Fraud Report