After 12 Years on the Run, Joseph Dibee Has Been Apprehended

Joseph Mahmoud Dibee, one of two remaining fugitives linked to a domestic terrorism group that carried out dozens of criminal acts in the late 1990s, ranging from vandalism to arson, has been apprehended.

The 50-year-old fugitive, a U.S. citizen who had been on the run for 12 years, made an initial court appearance in Portland, Oregon today. He faces additional federal felony charges in California and Washington State.

Federal authorities learned that Dibee was traveling through Central America on his way to Russia with a planned stop in Cuba, according to court documents. With assistance from Cuban authorities, he was detained there before boarding a plane bound for Russia and was returned to the United States.

Dibee fled the U.S. in December 2005. In 2006, he was indicted along with 11 co-conspirators as part of Operation Backfire, a long-running FBI domestic terrorism investigation. The conspirators, known as The Family, have been linked to more than 40 criminal acts between 1995 and 2001, including arson and vandalism, causing more than $45 million in damages. The Family’s 1998 arson attack on a ski resort in Vail, Colorado—which caused estimated damages of $26 million—was its most notorious act.

“The crimes they committed were serious and dangerous,” said Special Agent Tim Suttles, who has been working the Operation Backfire investigation from the FBI’s Portland Division since 2004. “Just because time passes doesn’t mean the FBI forgets. We are very gratified to have Dibee in custody.”

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Prolific Fraudster Sentenced to 40 Years

He was, in the words of the assistant U.S. attorney prosecuting him, a “financial predator.” And the federal judge he recently stood before called his long-term fraud crime spree “outrageous” and “despicable,” noting the more than 500 victims ensnared by his latest scheme.

The individual in question is Harris Dempsey “Butch” Ballow, a Texas man who had seemingly made a career out of separating people from their hard-earned money through various financial scams—starting back in the 1980s. But that career has finally come to end: The 75-year-old Ballow was sentenced in May to 40 years in prison after pleading guilty to defrauding investors in a Nevada company. He was also ordered to pay more than $37 million in restitution to those investors.

And according to FBI Houston Special Agent Kendall Hopper, who worked the case, what made this particular criminal scheme even worse was that Ballow had perpetrated it while he was a fugitive from justice hiding out in Mexico. “Ballow fled the United States in late 2004, right around the time he was scheduled to appear in court for sentencing on a previous federal conviction for fraud-related money laundering,” said Hopper, “but instead of keeping a low profile, he brazenly continued his criminal ways.”

In this most recent scheme that netted him the 40-year prison term, Ballow and co-conspirators were able to buy up the majority of the publicly traded shares of a Nevada company called E-SOL International Corporation and install fictitious people as company officers. At the time, E-SOL had almost no assets and conducted no business. Ballow then rebranded E-SOL as a holding company for a couple of phony businesses—of course controlled by him and his associates—and got to work soliciting investors.

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Violent Gang Leader Orders Eyewitness Murdered

On the evening of October 23, 2014, Douglas and Deborah London of York County, South Carolina—just across the border from North Carolina—were watching television in their home when the doorbell rang. When they opened the door, she was immediately shot in the head by a man standing outside, and her husband was shot multiple times. Their adult son, who was also present, made a frantic call to 911, but the couple died next to each other on the floor of their home.

As the York County Sheriff’s Office began to investigate the double homicide, they asked the FBI’s Charlotte Field Office for help.

In the coming months, the investigative team of FBI special agents and task force officers from the Charlotte-Mecklenburg Police Department uncovered a web of violence that stretched across state lines and beyond local prison cells.

Turned out that the Londons had been specifically targeted—they were the owners of a mattress store in Pineville, North Carolina that had been robbed at gunpoint by three men five months earlier. Jamell Cureton, the leader of the Valentine Bloods—a hood, or set, of the national and exceedingly violent United Blood Nation (UBN) gang—had gone into the store and pulled his gun on Douglas London, who had his own gun. The two exchanged gunfire, and Cureton was hit. Also at the scene that day were Nana Adoma, the lookout who was just inside the door; and David Fudge, the getaway driver in the car outside.

The three escaped and drove Cureton to a hospital, but all three were taken into custody shortly afterward by local police and faced state charges.

Realizing that Douglas London was the only eyewitness who could identify him in the mattress store robbery, Cureton—who was in state custody at the time—discussed the “elimination” of London with other gang members through a series of phone calls, letters, and in-person visits.

Valentine Bloods member Malcolm Hartley was to be the triggerman. He was driven to the Londons’ home by fellow gang member Briana Johnson, rang the couple’s doorbell, and murdered them both in cold blood. “And then,” said FBI Special Agent Chad Pupillo, “Johnson drove him back to Charlotte, where they met with other gang members, disposed of the evidence—including burying the murder weapon—and celebrated the victims’ murders.”

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Malware Developer Responsible for Countless Computer Intrusions

Not that they knew him personally, but Taylor Huddleston, a 27-year-old from Hot Springs, Arkansas, was for a time very popular among the world’s cyber criminals, thanks to a malicious piece of software he created called NanoCore RAT.

That malware allowed hackers to steal sensitive information from victims’ computers, including account numbers and passwords, and even allowed them to secretly activate the webcams of infected computers to spy on unsuspecting victims.

“Basically, the malicious software compromises victim computers and steals information,” said a special agent from the FBI’s Washington Field Office who investigated the case. “The NanoCore RAT has the ability to control a victim’s computer.”

This type of malware—a Remote Access Trojan (RAT)—is all the more insidious because in most cases victims have no idea their computers have been compromised. According to court documents, NanoCore RAT was used to infect and attempt to infect more than 100,000 computers.

RATs are not only a threat to individual users but to commercial enterprises as well. And if hackers decide to target U.S. infrastructure using this malware, the agent said, “there is a potential for national security implications.”

Huddleston had the skills to develop malicious software. “There are many cyber criminals out in the world,” the agent said. “Many are not sophisticated in terms of developing a new malware. Instead, they would rather purchase malware to carry out their crimes.”

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601 Defendants Charged, More Than $2 Billion in Fraud Losses Recorded

FBI Deputy Director David Bowdich took part in a press conference today with U.S. Attorney General Jeff Sessions, Health and Human Services (HHS) Secretary Alex Azar III, and other federal officials to announce a nationwide health care fraud and opioid takedown that has resulted in charges against 601 defendants around the country, along with a total of more than $2 billion in fraud losses.

This takedown, the largest health care enforcement action taken to date by the joint Department of Justice and HHS Medicare Fraud Strike Force, involved numerous federal and state agencies working together on the front lines in the fight against health care fraud. “But our work is not finished—we are just getting started,” said Sessions. “We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers, wherever they are.”

The charges announced today aggressively targeted schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and family members), and private insurance companies. Some of these schemes involved medically unnecessary prescription drugs and compounded medications that were often never even purchased and/or distributed to beneficiaries. In other cases, patient recruiters, beneficiaries, and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills for services that were medically unnecessary or never performed.

According to Bowdich, “Any good criminal investigator or analyst will tell you that to find the criminals, you have to follow the money. And the people we’ve charged this week viewed our health care system as their personal ATM.”

Another focus of the operation was medical professionals allegedly involved in the unlawful distribution of opioids and other prescription narcotics.

Because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims, aggressively pursuing these corrupt professionals not only has a deterrent effect on other medical professionals who might be tempted but also ensures that their licenses can no longer be used to bilk the system. Among those charged in this operation were 165 doctors, nurses, and other licensed medical professionals.

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Ponzi Scheme Resulted in $10 Million in Losses for Investors

In July 2008, special agents from the FBI Sacramento Field Office executed a search warrant at the residence of a suspect and interviewed other individuals in connection with a mortgage fraud investigation.

In addition to finding evidence for their own case, investigators uncovered ties to what appeared to be a separate mortgage fraud scheme, and FBI Sacramento opened another case, working in partnership with the Internal Revenue Service (IRS) Criminal Investigation.

The main subject of the second case was Lee Loomis, president of Loomis Wealth Solutions, a company based in Roseville, California, but operating in about half a dozen states. And it wasn’t long before FBI and IRS investigators realized they were dealing with a much broader criminal scheme, and that mortgage fraud was just the tip of the iceberg.

After a long-term and complex investigation by law enforcement, Loomis was charged, pleaded guilty, and sentenced earlier this year for running a multi-faceted investment fraud/Ponzi scheme that caused millions of dollars in losses to more than 183 investors.

By reviewing voluminous amounts of evidence—including personal and company records, real estate records, bank records, financial statements, etc.—and questioning victims, employees of Loomis-owned entities, and others, investigators learned that from 2006 through 2008, Loomis offered what he called a “wealth-building program.”

During seminars about his company held at hotels and casinos, he boasted of unusually high rates of return for anyone who invested with him, and he advertised individualized financial family planning to help prospective clients earn money for college tuitions and retirement. Those attending the seminars were then asked to submit financial information including tax returns, pay stubs, copies of bills, and information concerning their home equity. Loomis would analyze this information and—targeting families with substantial home equity and good credit—invite them to a private two-day workshop.

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Dedicated Law Enforcement Effort Leads to Capture of Indiana Fugitive

Seymour, Indiana, in the 1990s was a Midwestern town with rural roots and a comfortable, small-town feel. Parents felt safe letting their children walk to Girl Scout meetings with friends and ride their bikes unchaperoned.

All that changed on January 20, 1999, when a 10-year-old girl waiting for her father after gymnastics practice was abducted and molested. The man who approached her outside a local girl’s club said he had locked the keys in his car and needed someone with slender arms to reach them.

The attack shocked the community, all the more when the suspect fled before he could be apprehended. At the time, no one realized it would take nearly two decades to bring justice to the victim and her family, and a sense of closure to the community—or that an Indiana State Trooper who was born and raised in Seymour, and is now an FBI agent, would play a central role in resolving the case.

On that cold January day, Charley Hollin forced the girl into his car at knifepoint, drove away, and sexually assaulted her. Afterward, he made the girl leave the car naked, and her clothes were thrown out after her. Hollin also mistakenly threw out his own jacket, which contained his day planner.

Todd Prewitt was an Indiana State Police trooper at the time, and although he wasn’t assigned to the investigation, he took a keen interest. The crime had occurred in his district, and Seymour was his hometown. “I didn’t know the victim,” he said, “but I had family friends who sent their kids to that girl’s club.”

The assault itself was tragic, but then justice was not served. Hollin’s identity was known to authorities—and reported by the media—because they had his day planner. But the victim could not positively identify her assailant with full certainty, so authorities were forced to wait for the results of DNA testing before they could arrest Hollin and charge him with the crime. Hollin took that opportunity to flee.

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International Business E-Mail Compromise Takedown

Today, federal authorities—including the Department of Justice and the FBI—announced a major coordinated law enforcement effort to disrupt international business e-mail compromise (BEC) schemes that are designed to intercept and hijack wire transfers from businesses and individuals.

Operation WireWire—which also included the Department of Homeland Security, the Department of the Treasury, and the U.S. Postal Inspection Service—involved a six-month sweep that culminated in over two weeks of intensified law enforcement activity resulting in 74 arrests in the U.S. and overseas, including 42 in the U.S., 29 in Nigeria, and three in Canada, Mauritius, and Poland. The operation also resulted in the seizure of nearly $2.4 million and the disruption and recovery of approximately $14 million in fraudulent wire transfers.

A number of cases charged in this operation involved international criminal organizations that defrauded small- to large-sized businesses, while others involved individual victims who transferred high-dollar amounts or sensitive records in the course of business. The devastating impacts these cases have on victims and victim companies affect not only the individual business but also the global economy. Since the Internet Crime Complaint Center (IC3) began formally keeping track of BEC and its variant, e-mail account compromise (EAC), there has been a loss of over $3.7 billion reported to the IC3.

BEC, also known as cyber-enabled financial fraud, is a sophisticated scam that often targets employees with access to company finances and trick them—using a variety of methods like social engineering and computer intrusions—into making wire transfers to bank accounts thought to belong to trusted partners but instead belong to accounts controlled by the criminals themselves. And these same criminal organizations that perpetrate BEC schemes also exploit individual victims—often real estate purchasers, the elderly, and others—by convincing them to make wire transfers to bank accounts controlled by the criminals.

Foreign citizens perpetrate many of these schemes, which originated in Nigeria but have spread throughout the world.

During Operation WireWire, U.S. law enforcement agents executed more than 51 domestic actions, including search warrants, asset seizure warrants, and money mule warning letters. And local and state law enforcement partners on FBI task forces across the country, with the assistance of multiple district attorney’s offices, charged 15 alleged money mules for their roles in defrauding victims.

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FBI Warns of Posting Hoax Threats

Today, the Federal Bureau of Investigation is announcing a campaign to educate the public on the consequences of posting hoax threats to schools and other public places and reminds communities that these hoax threats are not a joke.

In the aftermath of tragic shootings such as the ones at Santa Fe High School in Texas and Marjory Stoneman Douglas High School in Florida, the FBI and law enforcement around the country often see an increase in threats made to schools and other public forums.

The FBI and our partners follow up on every tip we receive from the public and analyze and investigate all threats to determine their credibility. Federal, state, and local law enforcement then employ a full range of tools to mitigate those threats that are deemed credible. Making false threats drains law enforcement resources and cost taxpayers a lot of money. When an investigation concludes there was a false or hoax threat made to a school or another public place, a federal charge could be considered, which carries a maximum sentence of five years in prison. If a federal charge is not warranted, state charges can be considered.

Public assistance is crucial to our efforts to curb these hoax threats. We ask that the public continue to contact law enforcement to report any potential threats or suspicious activity. If there is any reason to believe the safety of others is at risk, we ask that the public immediately reach out to their local police department by calling 911, or contact the FBI via tips.fbi.gov or over the phone (1-800-CALL-FBI). As always, members of the public can call their nearest FBI field office to report a tip.

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$43 Million Ponzi Scheme Fleeced Tennessee Friends and Neighbors

Nobody would have suspected that the affable Tennessee tractor salesman who was raised among them, tended their lawns in high school, and prayed beside them at Sunday services was scamming them by the millions. Indeed, that’s probably what made the man’s investment scheme so successful, investigators say.

Jeffery Gentry, 40, pleaded guilty in federal court last August to charges related to his $43 million scheme that bilked investors—including friends, family, neighbors, and fellow parishioners—out of more than $10 million. Gentry, who owned and operated Gentry Brothers Tractor Supply and Gentry Auto in the Middle Tennessee town of Sparta, was sentenced on May 14 in U.S. District Court in Nashville to three years in prison. He was also ordered to pay $10.4 million in restitution to his victims.

Gentry’s scam was a textbook Ponzi scheme that promised investors high guaranteed rates of return on investments. He told investors the funds would finance the purchase of mowers and farm equipment to satisfy lucrative state contracts. In return, investors could expect monthly proceeds as high as 10 percent, thanks in part to rebates from equipment manufacturers for cash purchases, according to investigators. But it was all a lie, sustained in large part by investors’ faith that a lifelong neighbor and friend would never purposely do them wrong.

“He kind of preyed on that aspect of it,” said Jeff Guth, chief of the Sparta Police Department in White County, a close-knit rural community of 26,000 residents where the median household income is about $36,000. “Most of these people were friends of his. A lot of them went to church with him. They wouldn’t believe that someone close to them like that would be doing that.”

Guth learned of the scheme a few days before Christmas in 2016, when the police station lobby filled up with distraught investors fearing they had been duped. Gentry’s tractor store—an informal gathering spot where many of the investment transactions occurred—had shut down without explanation, suddenly casting doubt on their guaranteed returns. At the police station, former farmers and other retirees waved handwritten statements revealing their six-figure outlays, much of it from savings and retirement accounts. Suspecting there would be still more victims, Guth called the FBI in nearby Cookeville—a satellite office of the Bureau’s Memphis Division—for support.

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