UNITED STATES DISTRICT COLRT souUthn ~ite:dn DSi tsattreicst CoOf UT*B MBS
SOUTHERN DISTRICT OF TEXAS
- HOUSTON DIVISION JllN 2 5 2007
Michael N. M~lby,C lerk of
UNITED STATES OF AMERICA 8
8 07Cc 2- 2-3 8 Count 1 : 18 USC 37 1-Conspiracy
8 Count 2: 18 USC 1956(h)-Conspiracy
8 to Money Launder
8 Count 3 & 4: 18 USC 1343-Wire Fraud
v. 8 Counts 5 - 8: 18 USC 1341 ail Fraud
8 Counts 9 - 14: 18 USC 1957- Monetary
,WARREN TODD HOEFFNER 8 Transactions with Criminally Derived
RACHEL ROSSOW 5 Property
JOHN PRESTAGE 8 Notice of Criminal Forfeiture
INDICTMENT
TKE'GRAND JURY CHARGES:
COUNT ONE
(Conspiracy, 1 8 U.S.C. 3 7 1)
A. INTRODUCTION
At all times material to this indictment:
The Hartford Insurance Companv
1. The Hartford Insurance Company ("The Hartford") located in Hartford,
Connecticut, is one of the largest investment and insurance companies in the
United States, and offers business insurance among oth
er products. The Hartford
insured a number of companies which were manufacturers, sellers, andlor
distributors of silica containing products or related protective equipment and
safety products. These companies included Pulmosan, Pauli and Griffin, Gifford
Hill, Humble Sand, Ideal - Basic, Mine Safety Appliances ("MSA"), Oglebay
Norton, Empire Abrasives and Specialty Sand (the "Insureds").
2. The department of The Hartford known as Claim and Legal
Management Services ("CaLMS") handled general liability lawsuits and claims
against The Hartford's Insureds that involved latent injuries related to exposure to
asbestos and silica, and other latent injuries that spanned multiple policy periods.
3. Within The Hartford's CaLMS department was a Functional Claim
Team section. The Functional Claim Team section consisted of several teams of
"claim handlers," each supervised by a team leader, all working toward the
management and settlement of claims against The Hartford's Insureds. The
Functional Claim Team section referred to the Insureds that had claims brought
against them as their "Accounts."
The Defendants
4. Warren Todd Hoefher ("Hoefher"), defendant herein, was the general
partner of Hoefher & Bilek, LLP ("Hoeffner & Bilek"), a law firm in Houston,
Texas. Hoefher represented individuals who brought silica-related claims against
The Hartford's Insureds.
5. Rachel Rossow ("Rossow"), defendant herein, was an employee of The
Hartford occupying a position of trust and responsibility from April 10,2000, until
on or about Septerrlber 17, 2003. During Rossow's employment with The Hartford
she earned a salary ranging from approximately $75,000 to $85,000 per year. From
November 2000 until the time of her dismissal, Rossow was a team leader in the
CaLMS department. As a team leader, Rossow supervised several claim handlers,
including John Prestage. Rossow was responsible for settling claims and for
recommending to The Hartford appropriate and cost effective amounts to settle
claims against The Hartford's Insureds whose accounts were under her
supervision.
6. John Prestage ("Prestage"), defendant herein, was an employee of The
Hartford occupying a position of trust and responsibility fiom December 18,2000
through on or about January 17,2004, as a CaLMS claims consultant assigned to
various Accounts by Rossow. During his employment at The Hartford, Prestage
earned a salary ranging from approximately $45,000 to $69,000 per year. Prestage
was responsible for settling claims and for recommending to The Hartford
appropriate and cost effective amounts to settle claims against The Hartford's
Insureds whose accounts were assigned to him.
The Claims and The Hartford
7. Hoeffner & Bilek, along with other law f m s , represented hundreds of
individuals who claimed that they had silicosis and/or other silica-related diseases.
Hoefher & Bilek combined their various silicosis clients with like clients of other
attorneys or firms and filed joint claims andor civil lawsuits against
manufacturers, sellers and/or distributors of silica containing products or related
protective equipment and safety products.
8. Hoefher & Bilek represented hundreds of claimants, who ostensibly
suffered fiom silica-related diseases, and who brought claims against the
following eight businesses which were insured by The Hartford and other
insurance companies: Pulmosan, Pauli & Griffin, Gifford Hill, Humble Sand, Ideal
Basic, Mine Safety Appliances ("MSA"), Oglebay Norton and Empire Abrasives
(the "Insureds" or Accounts").
9. As team leader and first line supervisor, Rossow supe~sedan d
managed seven of eight Accounts. Rossow assigned Prestage to the following five
Accounts: Pulmosan, Pauli & Griffin, Gifford Hill, Humble Sand and Ideal Basic.
10. On or about February 26,2002, Hoefher called a meeting in New
Hampshire for all major insurance carriers involved in silica litigation against The
Hartford and other insurance companies. Prestage attended this meeting on behalf
of The Hartford. At this meeting, Hoeffier proposed to settle all of his clients'
silica-related claims.
1 1. Defendant Hoeffher would and did represent Specialty Sand, a
policyholder of The Hartf-o rd, in connection with threatened legal action against
The Hartford regarding its insurance coverage provided to Specialty Sand relating
to silica lawsuits pending against Specialty Sand. Hoeffher also represented
individuals who filed claims against Specialty Sand.
B. THE CONSPIRACY
12. From in or about February 2002 and continuing through in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere, the defendants,
WARREN TODD HOEFFNER,
RACHEL ROSSOW, and
JQ$$+J pDOQTAGg - _- _ -- -- - __ -- -
did knowingly combine, conspire, confederate and agree with each other and
others known and unknown to the Grand Jury to commit the following offenses
against the United States:
a. To knowingly devise and intend to devise a scheme and artifice to
defraud and to obtain money by means of false and fraudulent
pretenses, representations and promises and knowingly to use and
cause to be used the United States mail and private and commercial
interstate carriers for the purpose of executing the scheme &d artifice
to defkaud, in- violation of Title 18, United States Code, Section 1341;
b. To knowingly devise and intend to devise a scheme and artifice to
defkaud and to obtain money by means of false and fraudulent
pretenses, representations and promises and knowingly to transmit
and cause to be transmitted by means of wire, radio or television
communication, writings, signs, signals, pictures, or sounds for the
purpose of executing such scheme or artifice, in violation of Title 18,
United States Code, Section 1343.
C. THE MANNER AND MEANS
It was a part of the conspiracythat:
13. Defendants Hoeffner, Rossow and Prestage would and did meet
together in various places including Laguna Beach, California, New York City,
Palm Beach, Florida, and Nashville, Tennessee, and communicate by cell phones,
during the negotiation of the settlement of claims of Hoeffner's clients, the
majority of which were managed andlor supervised by Rossow and Prestage.
14. Defendant Hoeffner would and did make payments to defendants
Rossow and Prestage, through bribes and kickbacks, for recommending to The
Hartford that The Hartford pay certain amounts to settle the claims of his clients
6,
against The Hartford's Insureds and The Hartford.
15. Defendants Hoeffher, Rossow and Prestage would and did falsely
promise, pretend and represent to The Hartford, directly and through their agents,
in interstate and intrastate telephone conversations, by electronic mail ("email"), in
documents sent by and through the United States mail and interstate and
international carriers, and by authorizing checks in certain amounts for settlement
payments, that the settlement amounts of the claims against The Hartford's
Insureds and The Hartford were appropriate amounts to settle the claims in the
best interests of The Hartford and its Insureds, well knowing that the defendants
intended that some of that money (the "Settlement Funds") would instead be
funneled by and through Hoeffner to Rossow and Prestage, employees of The
Hartford.
16. Defendants would and did induce The Hartford to pay more than
$34,000,000.00 in Settlement Funds, knowing that more than $3,000,000.00 of
those funds would be used to pay bribes and kickbacks to Rossow and Prestage.
Rossow received approximately $2,68 1,873.79 in bribes and kickbacks. Prestage
received approximately $764,476.21 in bribes and kickbacks. Additionally,
Hoeffher received approximately $5,366,839.20 in attorney's fees paid out of the
Settlement Funds.
D. OVERTACTS
In furtherance of th-e conspiracy and to effect the objects thereof, the
defendants committed the following overt acts, among others:
(1) On or about August 29,2002, defendant Hoefher charged and caused
to be charged to an American Express account in his name two round trip airline
tickets on Delta Airlines from Hartford, Connecticut, to West Palm Beach, Florida,
one for defendant Rossow and one for defendant Prestage.
(2) On or about September 6,2002, defendant Hoefher caused $97,000.00
to be transferred by wire from his personal money market investment account at
Secured Trust Bank in Tyler, Texas, to Fleet Bank in Hartford, Connecticut, for
the benefit of New Country Motors, Inc. to purchase two BMW automobiles, one
each for defendants Rossow and Prestage.
(3) On or about September 9,2002, defendant Prestage signed a delivery
agreement at New Country Motors in Hartford, Connecticut, for a new 2002 BMW
530ia automobile with a total sales price of approximately $46,876.00.
(4) On or about October 30,2002, defendant Rossow signed a delivery
agreement with New Country Motors in Hartford, Connecticut, for a 2003 BMW
530ia automobile with a total sales price of approximately $50,124.00.
(5) On or about November 22,2002, defendant Hoeffher caused The
8
Hartford's check #077568595, payable to Hoefher & Bilek Trust Account, dated
November 20,2002, in th-e amount of $2,000,000.00 (memo: "Humble First
Payment") to be deposited into Hoefher and Bilek's IOLTA Foundation Trust
Account at American Bank in Corpus Christi, Texas.
(6) On or about November 26,2002, defendant Hoeffher signed check
# 1 35 1 payable to John Prestage in the amount of $262,500.00, with the memo
"Title VII settlement with Bell and Hoeffner," drawn on Hoefher & Bilek's
IOLTA Foundation Trust Account at American Bank in Corpus Christi, Texas.
(7) On or about November 26, 2002, defendant Prestage deposited and
caused to be deposited check #I35 1 payable to John Prestage in the amount of
$262,500.00, drawn on Hoefher & Bilek's IOLTA Foundation Trust Account into
his personal account at American Savings Bank in Connecticut.
(8) On or about November 26,2002, defendant Hoeffher signed check
#I352 payable to "Rachael Rossowy' in the amount of $3 12,500.00, with the memo
"Title VII settlement with Bell and Hoefher," drawn on Hoefher & Bilek's
IOLTA Foundation Trust Account at American Bank in Corpus Christi, Texas.
(9) On or about February 4,2003, defendant Hoefher signed check #I360
payable to John Prestage in the amount of $265,500.00, with the memo "Final
Title VII Settlement re: Bell and Hoefher," drawn on Hoefher & Bilek's IOLTA
9
Foundation Trust Account at American Bark in Corpus Christi, Texas.
(1 0) On or about F- ebruary 4,2003, defendant Hoeffner signed check
#I361 payable to "Rachael Rossow" in the amount of $3 12,500.00, with the memo
"Final Title VII Settlement re: Bell and Hoeffner," drawn on Hoeffner & Bilek's
IOLTA Foundation Trust Account at American Bank in Corpus Christi, Texas.
(1 1) On or about February 5,2003, defendant Hoefher caused The
Hartford's check #077926564, payable to Hoefher & Bilek Trust Account, dated
February 3,2003, in the amount of $2,000,000.00 (memo: "Final Pymt Humble
Global Settlement") to be deposited into Hoefher and Bilek's IOLTA Foundation
Trust Account at American Bank in Corpus Christi, Texas.
(12) On or about February 6,2003, defendant Prestage deposited and
caused to be deposited into his personal account at American Savings Bank in
Connecticut check #I360 payable to John Prestage, in the amount of $265,500.00,
drawn on Hoeffner & Bilek's IOLTA Foundation Trust Account at American
Bank in Corpus Christi, Texas.
(13) On or about February 6,2003, defendant Hoefher caused to be
deposited into Hoeffner and Bilek's IOLTA Trust account at Southwest Bank of
I ~ Texas in Houston, Texas, The Hartford's checks #077926483 and #077926472,
both payable to Hoeffner & Bilek Trust Account, and both in the amount pf
$295,3 12.50; The Hartford check #077926 18 1, payable to Hoeffner & Bilek LLP,
in the amount of $1 17,000.00; and Horizon, a subsidiary of The 'Hartford, check
#96755383, payable to Hoeffner & Bilek in the amount of $1,987,720.28.
(14) On or about February 20,2003, defendant Hoeffner caused The
Hartford's check #077926494, payable to Hoefher & Bilek, LLP Trust Account,
dated January 30, 2003, in the amount of $1 45,000.00 (memo: "Gifford Hill East
Texas") to be deposited into Hoeffner and Bilek's IOLTA Trust Account at
Southwest Bank of Texas in Houston, Texas.
(15) On or about February 20,2003, defendant Hoeffner signed check
#2883 payable to Rachel Rossow in the amount of $25,000.00, drawn on Hoeffner
& Bilek's IOLTA Trust Account at Southwest Bank of Texas in Houston, Texas.
(16) On or about February 25,2003, defendant Rossow deposited and
caused to deposited check #I352 payable to "Rachael Rossow," dated November
26,2002, in the amount of $3 12,500.00, signed by defendant Hoeffner, drawn on
Hoefher & Bilek's IOLTA Foundation Trust Account into her personal checking
account at Windsor Federal Savings & Loan in Connecticut.
(1 7) On or about February 26,2003, defendant Hoeffner signed check
#2884 payable to Rachel Rossow in the amount of $148,750.00, drawn on
Hoefher& Bilek's IOLTA Trust Account at Southwest Bank of Texas in
Houston, Texas.
(1 8) On or about M- arch 3,2003, defendant Rossow deposited and caused
to be deposited into her new Jumbo Money Market account at Windsor Federal
Savings & Loan in Connecticut, the following checks, all made payable to her, and
signed by defendant Hoefher, check #I36 1, dated February 4,2003, in the
amount of $3 12,500.00, drawn on Hoefher & Bilek's IOLTA Foundation Trust
Account at American Bank; check #2883, dated February 20,2003, in the amount
of $25,000.00, drawn on Hoeffner & Bilek's IOLTA Trust Account at Southwest
Bank of Texas; and check #2884, dated February 26,2003, in the amount of
$148,750.00, drawn on Hoeffher & Bilek's IOLTA Trust Account at Southwest
Bank of Texas.
(1 9) On or about June 16,2003, defendant Hoeffher charged and caused
to be charged to an American Express account in his name two round trip airline
tickets on US Airways fi-om Hartford, Connecticut, to Santa Ana, California, one
for defendant Rossow and one for defendant Prestage.
(20) On or about July 17,2003, defendant Hoefher caused two checks
from Horizon, a subsidiary of The Hartford, check #9675 6206, payable to
Hoefher & Bilek Trust Account, in the amount of $58,000.00, and check
#96756207, payable to Hoeffher and Bilek Trust Account, in the amount of
12
-
$46,000.00, to be deposited into Hoefher and Bilek's IOLTA Foundation Trust
account at American Bank in Corpus Chnsti, Texas.
(21) On or about July 28,2003, defendant Prestage deposited and caused
to be deposited into his personal account at Banknorth in Connecticut, check
#I086 payable to John Prestage, dated July 20,2003, in the amount of $8,000.00,
signed by defendant Hoeffner, drawn on Hoeffner's personal bank account at
Sterling Bank in Houston, Texas, with the memo "loan."
(22) On or about September 3,2003, defendant Rossow deposited and
caused to be deposited into her new Jumbo Money Market account at Windsor
Federal Savings & Loan in Connecticut, check #I091 payable to "Rachael
Rossow," dated July 20,2003, in the amount of $8,000.00, signed by defendant
Hoefher, drawn on Hoeffner's personal bank account at Sterling Bank in
Houston, Texas, with "loan" written in the memo section.
(23) On or about November 20,2003, defendant Hoefher caused The
Hartford to wire transfer $10,000,000.00 from Fleet National Bank in Haftford,
Connecticut, to the bank account of Specialty Sand Qualified Settlement Fund
Trust at Bank of Texas in Dallas, Texas.
(24) On or about November 25,2003, defendant Hoefher caused
$583,887.42 to be wire transferred from the bank account of Specialty Sand at
Bank of Texas in Dallas, Texas, to Hoefher and Bilek's IOLTA Foundation Trust
Account at American Bank in Corpus Christi, Texas.
(25) On or about December 5,2003, defendant Hoefher caused
$3,000,000.00 to be wire transferred from the bank account of Specialty Sand
Qualified Settlement Fund Trust at Bank of Texas in Dallas, Texas, to Hoefher
and Bilek's IOLTA Foundation Trust Account at American Bank in Corpus
Christi, Texas. ,
(26) On or about December 5,2003, defendant Hoefher wrote and caused
to be written check #I369 made payable to "Rachael Rossow" in the amount of
$1,675,000.00 drawn on the account of Hoeffner and Bilek IOLTA Foundation
Trust Account at American Bank in Corpus Christi, Texas, with the notation in the
memo section of the check, "Final title VII settlement - Part I."
(27) On or about December 5,2003, defendant Rachel Rossow deposited
and caused to be deposited into a personal investment account at SmithBarney in '
Connecticut check #I369 made payable to "Rachael Rossow" in the amount of
$1,675,000.00 drawn on the account of Hoefher and Bilek's IOLTA Foundation
Trust Account at American Bank.
(28) On or about January 6,2004, defendant Hoeffner caused to be issued
check # 10756 payable to "John Prestige" in the amount of $6,600.00 drawn on the
14
account of Hoefher & Bilek at Southwest Bank of Texas in Houston, Texas.
(29) On or about J-anuary 8, 2004, defendant Prestage deposited and caused
to be deposited check #lo756 payable to him in the amount of $6,600.00 drawn on
the account of Hoefher & Bilek at Southwest Bank of Texas in Houston, Texas,
into a checking account at Banknorth in Connecticut.
(30) On or about March 15,2004, defendant Hoeffher caused The Hartford
to wire transfer $10,000,000.00 from Fleet National Bank in Hartford,
Connecticut, to the bank account of Specialty Sand Qualified Settlement Fund
Trust at Bank of Texas in Dallas, Texas.
(3 1) On or about April 6,2004, defendant Hoeffner caused $4,000,000.00
to be wire transferred from the bank account of the Specialty Sand Qualified
Settlement Fund Trust at Bank of Texas in Dallas, Texas, to Hoefher and Bilek's
IOLTA Foundation Trust Account at American Bank in Corpus Christi, Texas.
(32) On or about April 7,2004, defendant Hoeffher wire transferred and
caused to be wire transferred $1 50,000.00 from the Hoeffner & Bilek IOLTA
Foundation Trust Account at American Bank in Corpus Christi, Texas, to
defendant Rossow's checking account at Windsor Federal Savings and Loan in
Windsor, Connecticut.
(33) On or about April 12,2004, defendant Hoeffner purchased and
caused to be purchased a Sterling Bank cashier's check in the amount of
$125,000.00 payable to the United States Treasury with the remitter listed as John
Prestage and Warren T. Hoefher.
(34) On or about November 6,2004, defendant Prestage wrote check
#I91 9 in the amount of $66,000.00 payable to the United States Treasury on his
account at Banknorth in Connecticut.
In violation of Title 18, United States Code, Section 37 1.
COUNT TWO
(Conspiracy to Money Launder, 18 U.S.C. 5 1956(h))
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set out
at length herein, paragraphs 1 through 11 and paragraphs 13 through 16 of Count
One of the Indictment.
B. CONSPIRACY TO MONEY LAUNDER
2. From in or about February 2002 and continuing through in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere,
WARREN TODD HOEFPNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
defendants herein, together with others known and unknown to the Grand Jury,
did knowingly combine, conspire, confederate and agree among themselves and
with one another to commit the following offenses against the United States:
a. To knowingly conduct and attempt to conduct financial transactions,
knowing that the property involved in the financial transactions
represented the proceeds of some form of unlawful activity, that is
wire fi-aud and mail fi-aud, knowing that the transactions were
designed in whole or in part to conceal, or disguise the nature, the
location, the source, the ownership, or the control of the proceeds of
specified'unlawful activity, in violation ofTitle 18, United States
Code, Section 1956(a)(l)(B)(i);
b. To knowingly conduct and attempt to conduct financial transactions
which involved the proceeds of a specified unlawful activity, with
the intent to promote the carrying on of specified unlawful activity,
that is wire fraud and mail fraud, and knowing that the property
involved in the financial transactions represented the proceeds of
some fonn of unlawful activity, in violation of Title 18, United States
Code, Sectio-n 1956(a)(l)(A)(i); and
c. To knowingly engage in and attempt to engage in monetary
transactions within the United States in criminally derived
. , property that iS of a value greater than $10,000 and is derived from
specified unlawful activity, that is wire fraud and mail fraud, in
violation of Title 18, United States Code, Section 1957.
In violation of Title 18, United States Code, Section 1956(h).
COUNT THREE
(Wire Fraud - 18 USC 5 1343)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference as though set out
at length herein, paragraphs 1 through 11 of Count One of the Indictment.
2. On or about September 26,2002, defendant Hoeffher arranged to
purchase from New Country Motors in Hartford, Connecticut two BMW '
automobiles, one to be delivered to defendant Rossow and one to be delivered to
defendant Prestage, during defendant Hoefher's negotiations with The Hartford
I on the settlement of claims of his clients against The Hartford and its Insureds,
~ 18
whose Accounts were managed or supervised by defendants Rossow and Prestage
on behalf of The'Hartford-.
3. On or about September.9,2002, defendant Prestage accepted delivery of
the BMW automobile purchased for him by defendant Hoeffier.
4. On or about October 22,2002, defendant Rossow accepted delivery of
the BMW automobile purchased for her by defendant Hoefher.
B. THE SCHEME AND ARTIFICE TO DEFRAUD
5. Beginning in or about February 2002 and continuing to in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere, the defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly devise and intend to devise a scheme and artifice to
defraud The Hartford and to deprive The Hartford of its right to the honest
services of Prestage and Rossow, and to obtain money and property from The
Hartford by means of false and fraudulent pretenses, representations and promises,
and attempting to do so, including the concealment of material facts. .
C. MANNER AND M-E ANS
It was part of the scheme and artifice to defraud that:
6. Defendants Hoefher, Rossow andprestage would and didmeet together
in various places including Laguna Beach, California, New York City, Palm
Beach, Florida, and Nashville, Tennessee, and communicate by cell phones,
during the negotiation of the settlement of claims of Hoefker's clients which were
managed andlor supe~sedby Rossow and Prestage.
7. Defendant Hoefher would and did make payments to defendants
Rossow and Prestage, through bribes and luckbacks, for recommending to The
Hartford that The Hartford pay certain amounts to settle the claims of his clients
against The Hartford's Insureds and The Hartford.
8. Defendants Hoefher, Rossow and Prestage would and did falsely
promise, pretend and represent to The Hartford, directly and through their agents,
in interstate and intrastate telephone conversations, by electronic mail ("email"), in
documents sent by and through the United States mail and interstate and
international carriers, and by authorizing checks in certain amounts for settlement
payments, that the settlement amounts of the claims against The Hartford's
Insureds were appropriate amounts to settle the claims in the best interests of The
Hartford and its Insureds, well knowing that the defendants intended that some of
that money (the "Settleme-n t Funds") would instead be funneled by and through
Hoeffner to Rossow and Prestage, employees of The Hartford.
9. Defendants would and did induce The Hartford to pay more than
$34,000,000.00 in Settlement Funds, knowing that more than $3,000,000.00 of
those funds would be used to pay bribes and kickbacks to Rossow and Prestage.
Rossow received approximately $2,68 1,873.79 in bribes and kickbacks. Prestage
received approximately $764,476.2 1 in bribes and kickbacks. Additionally,
Hoeffner received approximately $5,366,839.20 in attorney's fees paid out of the
Settlement Funds.
D. EXECUTION OF THE SCHEME AND ARTIFICE
10. On or about September 6, 2002, in the Houston Division of the
Southern District of Texas and elsewhere, defendants
WARREN TODD HOEFFNER,
and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, for purposes of executing and attempting to do so, knowingly transmitted
and caused to be transmitted by means of wire, radio, and television
communication, writings,- signs, signals, pictures, and sounds, that is $97,000.00
transferred by wire from defendant Hoefher's personal money market investment
account at Secured Trust Bank (now Texas State Bank) in Tyler, Texas, to Fleet
Bank in Hartford, Connecticut for the benefit'of New Country Motors, Inc. in
Hartford, Connecticut.
In violation of Title 18, United States Code, Sections 1343, 1346 and 2.
COUNT FOUR
(1 8 U.S.C. 1343 - Wire Fraud)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set out
at length herein, paragraphs 1 through 11 of Count One and paragraphs 2 through
4 of Count Three of the Indictment.
B. THE SCHEME AND ARTIFICE TO DEFRAUD
2. Beginning in or about February 2002 and continuing to in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere, the defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
- and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly devise and intend to devise a scheme and artifice to
defraud The Hartford and to deprive The Hartford of its right to the honest
services of Prestage and Rossow, and to obtain money and property from The
Hartford by means of false and fraudulent pretenses, representations and promises,
and attempting to do so, including the concealment of material facts.
C. MANNER AND MEANS
3. The Grand Jury realleges and incorporates by reference, as though set
out at length herein, paragraphs 6 through 9 of Count Three.
D. EXECUTION OF THE SCHEME AND ARTIFICE
4. On or about April 7,2004, in the Houston Division of the Southern
District of Texas and elsewhere, defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, for the purpose o-f executing the aforesaid described scheme and artifice
to defraud, and attempting to do so, knowingly transmitted and caused to be
transmitted by means of wire, radio, and television communication, writings,
signs, signals, pictures, and sounds, that is $150,000.00 transferred by wire from
the Hoeffner & Bilek IOLTA Foundation Trust Account at American Barik in
Corpus Christi, Texas to the account of defendant Rossow at Windsor Federal
Savings and Loan in Connecticut.
In violation of Title 18, United States Code, Sections 1343, 1346 and 2. .
COUNTS FIVE through EIGHT
(18 U.S.C. 1341 - Mail Fraud)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set
forth in full herein, paragraphs 1 through 1 1 of Count One and paragraphs 2
through 4 of Count Three of this Indictment.
B. THE SCHEME AND ARTIFICE TO DEFRAUD
2. Beginning in or about February 2002 and continuing to in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere, the defendants-
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
I
and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly devise and intend to devise a scheme and artifice to
defraud The Hartford and to deprive The Hartford of its right to the honest
services of Prestage and Rossow, and to obtain money and property fi.om,The
Hartford by means of false and fraudulent pretenses, representations and promises,
and attempting to do so, including the concealment of material facts.
C. THE MANNER AND MEANS
3. The Grand jury realleges and incorporates by reference as though set
forth in full herein,~ara~ra6~ hthsro ugh 9 of Count Three. ' .
D. EXECUTION OF THE SCHEME AND ARTIFICE
4. On or about the dates set out in the Counts below, in the Houston
Division of the Southern District of Texas, and elsewhere, defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others hown and unknown to the Grand Jury, each aiding and abetting one
another, for the purpose of executing the aforesaid scheme and artifice to defraud
and attempting to do so, did knowingly cause to be sent and delivered by the
United States Postal Service, and private or commercial interstate carriers, as
described below according to the directions thereon, and did howingly take and
receive and cause' to be taken and received therefrom the following matters and
things set out in the counts below:
COUNT DATE MAILICARRIER MATTER
Count Five Check number
077568595 from
The Hartford i/a/o
$2,000,000
payable to
Hoefher & Bilek
Trust Account
November 20,
2002
Airborne Express
In violation of Title 18, United States Code, Section 1341, 1346 and 2.
Check numbers
077926472 and
077926483 from
The Hartford both
i/a/o $295,3 12.50
and both payable
to Hoeffner &
Bilek Trust
Account
Check number
077926494 from
The Hartford i/do
$145,000.00
payable to
Hoeffner & Bilek,
LLP Trust
Account
Check number
077926564 from
The Hartford i/do
$2,000,000
payable to
Hoeffner & Bilek
Trust Account
Count Six
Count Seven
Count Eight
January 29,2003
-
January 30,2003
February 3,2003
United States
Postal Service
Federal Express
Federal Express
COUNTS NINE through TWELVE
(1 8 U.S.C. 1957(a) - Monetary Transactions Involving
Property Derived from Specified Unlawful Activity)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set
forth in full herein, paragraphs 1 through 1 1 of Count One and paragraphs 2
through 4 of Count Three of this Indictment.
B. MONETARY TRANSACTIONS
2. On or about each of the dates set out in the counts below, in the Houston
Division of the Southern District of Texas and elsewhere, defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly engage in, and attempt to engage in, a monetary
transaction affecting interstate commerce in criminally derived property of a value
greater than $10,000, that is, the transfer by check drawn on the Hoefher & Bilek
Trust Account, styled "IOLTA Foundation Trust Account," at American Bank in
Corpus Christi, Texas, a financial institution engaged in interstate commerce, in
2 8
the amounts to the payees indicated below, such finds having been derived fiom
specified unlawfhl activity, that is mail fraud, in violation of Title 18, United
States Code, Section 134 1 :
COUNT DATE Check No. Payee Amount
Nine November 26,2002 1351 John Prestage $262,500.00
Ten Novernber26,2002 1352 Rachel Rossow $3 12,500.00
Eleven February 4,2003 1360 John Prestage $265,500.00
Twelve February 4,2003 1361 Rachel Rossow $3 12,500.00
In violation of Title 18, United States Code, Sections 1957(a) and 2.
COUNT THIRTEEN
(1 8 U.S.C. 1 957(a) - Monetary Transactions Involving
Property Derived from Specified Unlawful Activity)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set
forth in full herein, paragraphs 1 through 11 of Count One and paragraphs 2
through 4 of Count Three of this Indictment.
B. MONETARY TRANSACTIONS
2. On or about December 5,2003, in the Houston Division of the Southern
District of Texas and elsewhere, defendants
-W ARREN TODD HOEFFNER, '
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly engage in, and attempt to engage in, a monetary
transaction a.ffecting interstate commerce in criminally derived property of a value
greater than $10,000, that is, the transfer by check #I369 in the amount of
$1,675,000.00 payable to defendant Rossow and drawn on the Hoeffher & Bilek
Trust Account, styled "IOLTA Foundation Trust Account," at American Bank in
Corpus ~hrishT, exas, a financial institution engaged in interstate commerce,
such h d s having been derived from specified unlawful activity, that is wire
fraud, in violation of Title 18, United States Code, Section 1343.
In violation of Title 18, United States Code, Sections 1957(a) and 2.
COUNT FOURTEEN
(1 8 U.S .C. 1957(a) - Monetary Transactions Involving
Property D- erived from Specified Unlawful Activity)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set
forth in fill herein, paragraphs 1 through 1 1 of Count One and paragraphs 2
through 4 of Count Three of this Indictment.
B. MONETARY TRANSACTIONS
2. On or about April 7,2004, in the Houston Division of the Southern
District of Texas and elsewhere, defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly engage in, and attempt to engage in, a monetary
transaction affecting interstate commerce in criminally derived property of a value
greater than $10,000, that is, the transfer by wire of $1 50,000 from the Hoefher &
Bilek Trust Account, styled "IOLTA Foundation Trust Account," at American
Bank in Corpus Christi, Texas, a financial institution engaged in interstate
commerce, to the checking account of defendant Rossow at Windsor Federal
Savings and Loan in Win-d sor, Connecticut, such funds having been derived from
specified unlawful activity, that is wire fraud, in violation of Title 18, United
States Code, Section 1343.
In violation of Title 18, United States Code, Sections 1957(a) and 2.
NOTICE OF CRIMINAL FORFEITURE
(1 8 U.S.C. 5 98 1 (a)(l)(C) and 28 U.S.C. 5 2461)
Counts 1, 3-8
Pursuant to Title 28, United States Code, Section 2461(c), and Title 18,
United States Code, Section 98 l(a)(l)(C), as a result of the commission of
violations charged in Counts One, and Three through Eight of this Indictment, the
defendants
WARREN TODD HOEFRWR
RACHEL ROSSOW
JOHN PRESTAGE
are provided notice that upon conviction, all property which constitutes or is
derived from proceeds traceable to a violation of Title 18, United States Code,
Sections 1341, 1343, or a conspiracy to commit such offenses, shall be forfeited to
the United States. Such property includes, but is not limited to, the following:
(1) Approximately$8,8 13,189.20 in U.S. Currency, which represents the
proceeds obtained from the conspiracy as alleged in Count One of this
indictment;
(2) Approximately $8,8 13,189.20 in U.S. Currency, which represents the
proceeds obtained from the overall scheme as alleged in Counts Three
through Eight of this Indictment;
(3) All h d s in Citi Smith Barney, Account #xxx-xxx64- 16, in the name of
Rachel M. Rossow, including any interest, dividends or other monies
representing appreciated value of the initial investment;
(4) 2003 BMW 530ia Automobile, registered to Rachael M. Rossow; and
(5) 2003 Volvo XC90 Automobile, registered to John F. Prestage.
NOTICE OF CRIMINAL FORFEITURE
(18 U.S.C. 5 982(a)(1))
- Counts 2, 9- 14
Pursuant to Title 18, United States Code, Section 982(a)(1), as a result of
the commission of the violations charged in Counts Two and Counts Nine through
Fourteen of this Indictment, the defendants
WARREN TODD HOEPPNER
RACHEL ROSSOW
JOHN PRESTAGE
are provided notice that upon conviction, all property, real and personal, involved
in a violation of Title 18, United States Code, Sections 1956(h) or 1957(a), and all
property traceable to such property, shall be forfeited to the United States. Such
property includes, but is not limited to, the following:
Count 2: (1) Approximately $8,813,189.20 in U.S. Currency, which
represents the money involved in, or traceable to, the money
laundering conspiracy;
(2) All funds in the Citi Smith Barney account,, previously
identified in this notice, including any interest, dividends or other
monies representing appreciated value of the initial investment;
(3) 2003 BMW 530ia Automobile, registered to Rachael M.
Rossow; and
(4) 2003 V- olvo XC90 Automobile, registered to John F. Prestage.
Counts 9, 1 1 : Approximately $52 8,000.00 in U.S. Currency; and
the 2003 Volvo XC90, previously identified in this notice, which
is traceable to property involved in money laundering violations
as alleged in Counts Nine and Eleven.
Counts 10,
12- 14: (1) Approximately $2,450,000.00 in U.S. Currency; and
(2) Approximately $2,300,000.00 in the Citi Smith Barney
account, previously identified in this notice, which is traceable to
property involved in money laundering violations as alleged in
Counts Ten and Twelve through Thirteen, with appreciated
value.
All defendants may be jointly and severally liable for all money judgments
imposed in this case.
SUBSTITUTE ASSETS
In the event that the property subject to forfeiture as a result of any act or
omission of the defendant:
a. cannot be located upon exercise of due diligence;
b. has been placed beyond the jurisdiction of the Cow;
c. has been tran-s ferred or sold to, or deposited with a third party;
d. has been substantially diminished in value; or
e. has been commingled with other property which cannot be divided
without difficulty;
it is the intent of the United States to seek forfeiture of any other property of the
defendant up to the value of such property pursuant to Title 2 1, United States
Code, Section 853(p), and Title 18, United States Code, Section 982(b)(l)
incorporating Title 21, United States Code, Section 853(p).
1
Original Signature on File
DONALD J. DeGABRIELLE, JR.
United States Attorney
Braddock
United States Attornev
SOUTHERN DISTRICT OF TEXAS
- HOUSTON DIVISION JllN 2 5 2007
Michael N. M~lby,C lerk of
UNITED STATES OF AMERICA 8
8 07Cc 2- 2-3 8 Count 1 : 18 USC 37 1-Conspiracy
8 Count 2: 18 USC 1956(h)-Conspiracy
8 to Money Launder
8 Count 3 & 4: 18 USC 1343-Wire Fraud
v. 8 Counts 5 - 8: 18 USC 1341 ail Fraud
8 Counts 9 - 14: 18 USC 1957- Monetary
,WARREN TODD HOEFFNER 8 Transactions with Criminally Derived
RACHEL ROSSOW 5 Property
JOHN PRESTAGE 8 Notice of Criminal Forfeiture
INDICTMENT
TKE'GRAND JURY CHARGES:
COUNT ONE
(Conspiracy, 1 8 U.S.C. 3 7 1)
A. INTRODUCTION
At all times material to this indictment:
The Hartford Insurance Companv
1. The Hartford Insurance Company ("The Hartford") located in Hartford,
Connecticut, is one of the largest investment and insurance companies in the
United States, and offers business insurance among oth
er products. The Hartfordinsured a number of companies which were manufacturers, sellers, andlor
distributors of silica containing products or related protective equipment and
safety products. These companies included Pulmosan, Pauli and Griffin, Gifford
Hill, Humble Sand, Ideal - Basic, Mine Safety Appliances ("MSA"), Oglebay
Norton, Empire Abrasives and Specialty Sand (the "Insureds").
2. The department of The Hartford known as Claim and Legal
Management Services ("CaLMS") handled general liability lawsuits and claims
against The Hartford's Insureds that involved latent injuries related to exposure to
asbestos and silica, and other latent injuries that spanned multiple policy periods.
3. Within The Hartford's CaLMS department was a Functional Claim
Team section. The Functional Claim Team section consisted of several teams of
"claim handlers," each supervised by a team leader, all working toward the
management and settlement of claims against The Hartford's Insureds. The
Functional Claim Team section referred to the Insureds that had claims brought
against them as their "Accounts."
The Defendants
4. Warren Todd Hoefher ("Hoefher"), defendant herein, was the general
partner of Hoefher & Bilek, LLP ("Hoeffner & Bilek"), a law firm in Houston,
Texas. Hoefher represented individuals who brought silica-related claims against
The Hartford's Insureds.
5. Rachel Rossow ("Rossow"), defendant herein, was an employee of The
Hartford occupying a position of trust and responsibility from April 10,2000, until
on or about Septerrlber 17, 2003. During Rossow's employment with The Hartford
she earned a salary ranging from approximately $75,000 to $85,000 per year. From
November 2000 until the time of her dismissal, Rossow was a team leader in the
CaLMS department. As a team leader, Rossow supervised several claim handlers,
including John Prestage. Rossow was responsible for settling claims and for
recommending to The Hartford appropriate and cost effective amounts to settle
claims against The Hartford's Insureds whose accounts were under her
supervision.
6. John Prestage ("Prestage"), defendant herein, was an employee of The
Hartford occupying a position of trust and responsibility fiom December 18,2000
through on or about January 17,2004, as a CaLMS claims consultant assigned to
various Accounts by Rossow. During his employment at The Hartford, Prestage
earned a salary ranging from approximately $45,000 to $69,000 per year. Prestage
was responsible for settling claims and for recommending to The Hartford
appropriate and cost effective amounts to settle claims against The Hartford's
Insureds whose accounts were assigned to him.
The Claims and The Hartford
7. Hoeffner & Bilek, along with other law f m s , represented hundreds of
individuals who claimed that they had silicosis and/or other silica-related diseases.
Hoefher & Bilek combined their various silicosis clients with like clients of other
attorneys or firms and filed joint claims andor civil lawsuits against
manufacturers, sellers and/or distributors of silica containing products or related
protective equipment and safety products.
8. Hoefher & Bilek represented hundreds of claimants, who ostensibly
suffered fiom silica-related diseases, and who brought claims against the
following eight businesses which were insured by The Hartford and other
insurance companies: Pulmosan, Pauli & Griffin, Gifford Hill, Humble Sand, Ideal
Basic, Mine Safety Appliances ("MSA"), Oglebay Norton and Empire Abrasives
(the "Insureds" or Accounts").
9. As team leader and first line supervisor, Rossow supe~sedan d
managed seven of eight Accounts. Rossow assigned Prestage to the following five
Accounts: Pulmosan, Pauli & Griffin, Gifford Hill, Humble Sand and Ideal Basic.
10. On or about February 26,2002, Hoefher called a meeting in New
Hampshire for all major insurance carriers involved in silica litigation against The
Hartford and other insurance companies. Prestage attended this meeting on behalf
of The Hartford. At this meeting, Hoeffier proposed to settle all of his clients'
silica-related claims.
1 1. Defendant Hoeffher would and did represent Specialty Sand, a
policyholder of The Hartf-o rd, in connection with threatened legal action against
The Hartford regarding its insurance coverage provided to Specialty Sand relating
to silica lawsuits pending against Specialty Sand. Hoeffher also represented
individuals who filed claims against Specialty Sand.
B. THE CONSPIRACY
12. From in or about February 2002 and continuing through in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere, the defendants,
WARREN TODD HOEFFNER,
RACHEL ROSSOW, and
JQ$$+J pDOQTAGg - _- _ -- -- - __ -- -
did knowingly combine, conspire, confederate and agree with each other and
others known and unknown to the Grand Jury to commit the following offenses
against the United States:
a. To knowingly devise and intend to devise a scheme and artifice to
defraud and to obtain money by means of false and fraudulent
pretenses, representations and promises and knowingly to use and
cause to be used the United States mail and private and commercial
interstate carriers for the purpose of executing the scheme &d artifice
to defkaud, in- violation of Title 18, United States Code, Section 1341;
b. To knowingly devise and intend to devise a scheme and artifice to
defkaud and to obtain money by means of false and fraudulent
pretenses, representations and promises and knowingly to transmit
and cause to be transmitted by means of wire, radio or television
communication, writings, signs, signals, pictures, or sounds for the
purpose of executing such scheme or artifice, in violation of Title 18,
United States Code, Section 1343.
C. THE MANNER AND MEANS
It was a part of the conspiracythat:
13. Defendants Hoeffner, Rossow and Prestage would and did meet
together in various places including Laguna Beach, California, New York City,
Palm Beach, Florida, and Nashville, Tennessee, and communicate by cell phones,
during the negotiation of the settlement of claims of Hoeffner's clients, the
majority of which were managed andlor supervised by Rossow and Prestage.
14. Defendant Hoeffner would and did make payments to defendants
Rossow and Prestage, through bribes and kickbacks, for recommending to The
Hartford that The Hartford pay certain amounts to settle the claims of his clients
6,
against The Hartford's Insureds and The Hartford.
15. Defendants Hoeffher, Rossow and Prestage would and did falsely
promise, pretend and represent to The Hartford, directly and through their agents,
in interstate and intrastate telephone conversations, by electronic mail ("email"), in
documents sent by and through the United States mail and interstate and
international carriers, and by authorizing checks in certain amounts for settlement
payments, that the settlement amounts of the claims against The Hartford's
Insureds and The Hartford were appropriate amounts to settle the claims in the
best interests of The Hartford and its Insureds, well knowing that the defendants
intended that some of that money (the "Settlement Funds") would instead be
funneled by and through Hoeffner to Rossow and Prestage, employees of The
Hartford.
16. Defendants would and did induce The Hartford to pay more than
$34,000,000.00 in Settlement Funds, knowing that more than $3,000,000.00 of
those funds would be used to pay bribes and kickbacks to Rossow and Prestage.
Rossow received approximately $2,68 1,873.79 in bribes and kickbacks. Prestage
received approximately $764,476.21 in bribes and kickbacks. Additionally,
Hoeffher received approximately $5,366,839.20 in attorney's fees paid out of the
Settlement Funds.
D. OVERTACTS
In furtherance of th-e conspiracy and to effect the objects thereof, the
defendants committed the following overt acts, among others:
(1) On or about August 29,2002, defendant Hoefher charged and caused
to be charged to an American Express account in his name two round trip airline
tickets on Delta Airlines from Hartford, Connecticut, to West Palm Beach, Florida,
one for defendant Rossow and one for defendant Prestage.
(2) On or about September 6,2002, defendant Hoefher caused $97,000.00
to be transferred by wire from his personal money market investment account at
Secured Trust Bank in Tyler, Texas, to Fleet Bank in Hartford, Connecticut, for
the benefit of New Country Motors, Inc. to purchase two BMW automobiles, one
each for defendants Rossow and Prestage.
(3) On or about September 9,2002, defendant Prestage signed a delivery
agreement at New Country Motors in Hartford, Connecticut, for a new 2002 BMW
530ia automobile with a total sales price of approximately $46,876.00.
(4) On or about October 30,2002, defendant Rossow signed a delivery
agreement with New Country Motors in Hartford, Connecticut, for a 2003 BMW
530ia automobile with a total sales price of approximately $50,124.00.
(5) On or about November 22,2002, defendant Hoeffher caused The
8
Hartford's check #077568595, payable to Hoefher & Bilek Trust Account, dated
November 20,2002, in th-e amount of $2,000,000.00 (memo: "Humble First
Payment") to be deposited into Hoefher and Bilek's IOLTA Foundation Trust
Account at American Bank in Corpus Christi, Texas.
(6) On or about November 26,2002, defendant Hoeffher signed check
# 1 35 1 payable to John Prestage in the amount of $262,500.00, with the memo
"Title VII settlement with Bell and Hoeffner," drawn on Hoefher & Bilek's
IOLTA Foundation Trust Account at American Bank in Corpus Christi, Texas.
(7) On or about November 26, 2002, defendant Prestage deposited and
caused to be deposited check #I35 1 payable to John Prestage in the amount of
$262,500.00, drawn on Hoefher & Bilek's IOLTA Foundation Trust Account into
his personal account at American Savings Bank in Connecticut.
(8) On or about November 26,2002, defendant Hoeffher signed check
#I352 payable to "Rachael Rossowy' in the amount of $3 12,500.00, with the memo
"Title VII settlement with Bell and Hoefher," drawn on Hoefher & Bilek's
IOLTA Foundation Trust Account at American Bank in Corpus Christi, Texas.
(9) On or about February 4,2003, defendant Hoefher signed check #I360
payable to John Prestage in the amount of $265,500.00, with the memo "Final
Title VII Settlement re: Bell and Hoefher," drawn on Hoefher & Bilek's IOLTA
9
Foundation Trust Account at American Bark in Corpus Christi, Texas.
(1 0) On or about F- ebruary 4,2003, defendant Hoeffner signed check
#I361 payable to "Rachael Rossow" in the amount of $3 12,500.00, with the memo
"Final Title VII Settlement re: Bell and Hoeffner," drawn on Hoeffner & Bilek's
IOLTA Foundation Trust Account at American Bank in Corpus Christi, Texas.
(1 1) On or about February 5,2003, defendant Hoefher caused The
Hartford's check #077926564, payable to Hoefher & Bilek Trust Account, dated
February 3,2003, in the amount of $2,000,000.00 (memo: "Final Pymt Humble
Global Settlement") to be deposited into Hoefher and Bilek's IOLTA Foundation
Trust Account at American Bank in Corpus Christi, Texas.
(12) On or about February 6,2003, defendant Prestage deposited and
caused to be deposited into his personal account at American Savings Bank in
Connecticut check #I360 payable to John Prestage, in the amount of $265,500.00,
drawn on Hoeffner & Bilek's IOLTA Foundation Trust Account at American
Bank in Corpus Christi, Texas.
(13) On or about February 6,2003, defendant Hoefher caused to be
deposited into Hoeffner and Bilek's IOLTA Trust account at Southwest Bank of
I ~ Texas in Houston, Texas, The Hartford's checks #077926483 and #077926472,
both payable to Hoeffner & Bilek Trust Account, and both in the amount pf
$295,3 12.50; The Hartford check #077926 18 1, payable to Hoeffner & Bilek LLP,
in the amount of $1 17,000.00; and Horizon, a subsidiary of The 'Hartford, check
#96755383, payable to Hoeffner & Bilek in the amount of $1,987,720.28.
(14) On or about February 20,2003, defendant Hoeffner caused The
Hartford's check #077926494, payable to Hoefher & Bilek, LLP Trust Account,
dated January 30, 2003, in the amount of $1 45,000.00 (memo: "Gifford Hill East
Texas") to be deposited into Hoeffner and Bilek's IOLTA Trust Account at
Southwest Bank of Texas in Houston, Texas.
(15) On or about February 20,2003, defendant Hoeffner signed check
#2883 payable to Rachel Rossow in the amount of $25,000.00, drawn on Hoeffner
& Bilek's IOLTA Trust Account at Southwest Bank of Texas in Houston, Texas.
(16) On or about February 25,2003, defendant Rossow deposited and
caused to deposited check #I352 payable to "Rachael Rossow," dated November
26,2002, in the amount of $3 12,500.00, signed by defendant Hoeffner, drawn on
Hoefher & Bilek's IOLTA Foundation Trust Account into her personal checking
account at Windsor Federal Savings & Loan in Connecticut.
(1 7) On or about February 26,2003, defendant Hoeffner signed check
#2884 payable to Rachel Rossow in the amount of $148,750.00, drawn on
Hoefher& Bilek's IOLTA Trust Account at Southwest Bank of Texas in
Houston, Texas.
(1 8) On or about M- arch 3,2003, defendant Rossow deposited and caused
to be deposited into her new Jumbo Money Market account at Windsor Federal
Savings & Loan in Connecticut, the following checks, all made payable to her, and
signed by defendant Hoefher, check #I36 1, dated February 4,2003, in the
amount of $3 12,500.00, drawn on Hoefher & Bilek's IOLTA Foundation Trust
Account at American Bank; check #2883, dated February 20,2003, in the amount
of $25,000.00, drawn on Hoeffner & Bilek's IOLTA Trust Account at Southwest
Bank of Texas; and check #2884, dated February 26,2003, in the amount of
$148,750.00, drawn on Hoeffher & Bilek's IOLTA Trust Account at Southwest
Bank of Texas.
(1 9) On or about June 16,2003, defendant Hoeffher charged and caused
to be charged to an American Express account in his name two round trip airline
tickets on US Airways fi-om Hartford, Connecticut, to Santa Ana, California, one
for defendant Rossow and one for defendant Prestage.
(20) On or about July 17,2003, defendant Hoefher caused two checks
from Horizon, a subsidiary of The Hartford, check #9675 6206, payable to
Hoefher & Bilek Trust Account, in the amount of $58,000.00, and check
#96756207, payable to Hoeffher and Bilek Trust Account, in the amount of
12
-
$46,000.00, to be deposited into Hoefher and Bilek's IOLTA Foundation Trust
account at American Bank in Corpus Chnsti, Texas.
(21) On or about July 28,2003, defendant Prestage deposited and caused
to be deposited into his personal account at Banknorth in Connecticut, check
#I086 payable to John Prestage, dated July 20,2003, in the amount of $8,000.00,
signed by defendant Hoeffner, drawn on Hoeffner's personal bank account at
Sterling Bank in Houston, Texas, with the memo "loan."
(22) On or about September 3,2003, defendant Rossow deposited and
caused to be deposited into her new Jumbo Money Market account at Windsor
Federal Savings & Loan in Connecticut, check #I091 payable to "Rachael
Rossow," dated July 20,2003, in the amount of $8,000.00, signed by defendant
Hoefher, drawn on Hoeffner's personal bank account at Sterling Bank in
Houston, Texas, with "loan" written in the memo section.
(23) On or about November 20,2003, defendant Hoefher caused The
Hartford to wire transfer $10,000,000.00 from Fleet National Bank in Haftford,
Connecticut, to the bank account of Specialty Sand Qualified Settlement Fund
Trust at Bank of Texas in Dallas, Texas.
(24) On or about November 25,2003, defendant Hoefher caused
$583,887.42 to be wire transferred from the bank account of Specialty Sand at
Bank of Texas in Dallas, Texas, to Hoefher and Bilek's IOLTA Foundation Trust
Account at American Bank in Corpus Christi, Texas.
(25) On or about December 5,2003, defendant Hoefher caused
$3,000,000.00 to be wire transferred from the bank account of Specialty Sand
Qualified Settlement Fund Trust at Bank of Texas in Dallas, Texas, to Hoefher
and Bilek's IOLTA Foundation Trust Account at American Bank in Corpus
Christi, Texas. ,
(26) On or about December 5,2003, defendant Hoefher wrote and caused
to be written check #I369 made payable to "Rachael Rossow" in the amount of
$1,675,000.00 drawn on the account of Hoeffner and Bilek IOLTA Foundation
Trust Account at American Bank in Corpus Christi, Texas, with the notation in the
memo section of the check, "Final title VII settlement - Part I."
(27) On or about December 5,2003, defendant Rachel Rossow deposited
and caused to be deposited into a personal investment account at SmithBarney in '
Connecticut check #I369 made payable to "Rachael Rossow" in the amount of
$1,675,000.00 drawn on the account of Hoefher and Bilek's IOLTA Foundation
Trust Account at American Bank.
(28) On or about January 6,2004, defendant Hoeffner caused to be issued
check # 10756 payable to "John Prestige" in the amount of $6,600.00 drawn on the
14
account of Hoefher & Bilek at Southwest Bank of Texas in Houston, Texas.
(29) On or about J-anuary 8, 2004, defendant Prestage deposited and caused
to be deposited check #lo756 payable to him in the amount of $6,600.00 drawn on
the account of Hoefher & Bilek at Southwest Bank of Texas in Houston, Texas,
into a checking account at Banknorth in Connecticut.
(30) On or about March 15,2004, defendant Hoeffher caused The Hartford
to wire transfer $10,000,000.00 from Fleet National Bank in Hartford,
Connecticut, to the bank account of Specialty Sand Qualified Settlement Fund
Trust at Bank of Texas in Dallas, Texas.
(3 1) On or about April 6,2004, defendant Hoeffner caused $4,000,000.00
to be wire transferred from the bank account of the Specialty Sand Qualified
Settlement Fund Trust at Bank of Texas in Dallas, Texas, to Hoefher and Bilek's
IOLTA Foundation Trust Account at American Bank in Corpus Christi, Texas.
(32) On or about April 7,2004, defendant Hoeffher wire transferred and
caused to be wire transferred $1 50,000.00 from the Hoeffner & Bilek IOLTA
Foundation Trust Account at American Bank in Corpus Christi, Texas, to
defendant Rossow's checking account at Windsor Federal Savings and Loan in
Windsor, Connecticut.
(33) On or about April 12,2004, defendant Hoeffner purchased and
caused to be purchased a Sterling Bank cashier's check in the amount of
$125,000.00 payable to the United States Treasury with the remitter listed as John
Prestage and Warren T. Hoefher.
(34) On or about November 6,2004, defendant Prestage wrote check
#I91 9 in the amount of $66,000.00 payable to the United States Treasury on his
account at Banknorth in Connecticut.
In violation of Title 18, United States Code, Section 37 1.
COUNT TWO
(Conspiracy to Money Launder, 18 U.S.C. 5 1956(h))
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set out
at length herein, paragraphs 1 through 11 and paragraphs 13 through 16 of Count
One of the Indictment.
B. CONSPIRACY TO MONEY LAUNDER
2. From in or about February 2002 and continuing through in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere,
WARREN TODD HOEFPNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
defendants herein, together with others known and unknown to the Grand Jury,
did knowingly combine, conspire, confederate and agree among themselves and
with one another to commit the following offenses against the United States:
a. To knowingly conduct and attempt to conduct financial transactions,
knowing that the property involved in the financial transactions
represented the proceeds of some form of unlawful activity, that is
wire fi-aud and mail fi-aud, knowing that the transactions were
designed in whole or in part to conceal, or disguise the nature, the
location, the source, the ownership, or the control of the proceeds of
specified'unlawful activity, in violation ofTitle 18, United States
Code, Section 1956(a)(l)(B)(i);
b. To knowingly conduct and attempt to conduct financial transactions
which involved the proceeds of a specified unlawful activity, with
the intent to promote the carrying on of specified unlawful activity,
that is wire fraud and mail fraud, and knowing that the property
involved in the financial transactions represented the proceeds of
some fonn of unlawful activity, in violation of Title 18, United States
Code, Sectio-n 1956(a)(l)(A)(i); and
c. To knowingly engage in and attempt to engage in monetary
transactions within the United States in criminally derived
. , property that iS of a value greater than $10,000 and is derived from
specified unlawful activity, that is wire fraud and mail fraud, in
violation of Title 18, United States Code, Section 1957.
In violation of Title 18, United States Code, Section 1956(h).
COUNT THREE
(Wire Fraud - 18 USC 5 1343)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference as though set out
at length herein, paragraphs 1 through 11 of Count One of the Indictment.
2. On or about September 26,2002, defendant Hoeffher arranged to
purchase from New Country Motors in Hartford, Connecticut two BMW '
automobiles, one to be delivered to defendant Rossow and one to be delivered to
defendant Prestage, during defendant Hoefher's negotiations with The Hartford
I on the settlement of claims of his clients against The Hartford and its Insureds,
~ 18
whose Accounts were managed or supervised by defendants Rossow and Prestage
on behalf of The'Hartford-.
3. On or about September.9,2002, defendant Prestage accepted delivery of
the BMW automobile purchased for him by defendant Hoeffier.
4. On or about October 22,2002, defendant Rossow accepted delivery of
the BMW automobile purchased for her by defendant Hoefher.
B. THE SCHEME AND ARTIFICE TO DEFRAUD
5. Beginning in or about February 2002 and continuing to in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere, the defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly devise and intend to devise a scheme and artifice to
defraud The Hartford and to deprive The Hartford of its right to the honest
services of Prestage and Rossow, and to obtain money and property from The
Hartford by means of false and fraudulent pretenses, representations and promises,
and attempting to do so, including the concealment of material facts. .
C. MANNER AND M-E ANS
It was part of the scheme and artifice to defraud that:
6. Defendants Hoefher, Rossow andprestage would and didmeet together
in various places including Laguna Beach, California, New York City, Palm
Beach, Florida, and Nashville, Tennessee, and communicate by cell phones,
during the negotiation of the settlement of claims of Hoefker's clients which were
managed andlor supe~sedby Rossow and Prestage.
7. Defendant Hoefher would and did make payments to defendants
Rossow and Prestage, through bribes and luckbacks, for recommending to The
Hartford that The Hartford pay certain amounts to settle the claims of his clients
against The Hartford's Insureds and The Hartford.
8. Defendants Hoefher, Rossow and Prestage would and did falsely
promise, pretend and represent to The Hartford, directly and through their agents,
in interstate and intrastate telephone conversations, by electronic mail ("email"), in
documents sent by and through the United States mail and interstate and
international carriers, and by authorizing checks in certain amounts for settlement
payments, that the settlement amounts of the claims against The Hartford's
Insureds were appropriate amounts to settle the claims in the best interests of The
Hartford and its Insureds, well knowing that the defendants intended that some of
that money (the "Settleme-n t Funds") would instead be funneled by and through
Hoeffner to Rossow and Prestage, employees of The Hartford.
9. Defendants would and did induce The Hartford to pay more than
$34,000,000.00 in Settlement Funds, knowing that more than $3,000,000.00 of
those funds would be used to pay bribes and kickbacks to Rossow and Prestage.
Rossow received approximately $2,68 1,873.79 in bribes and kickbacks. Prestage
received approximately $764,476.2 1 in bribes and kickbacks. Additionally,
Hoeffner received approximately $5,366,839.20 in attorney's fees paid out of the
Settlement Funds.
D. EXECUTION OF THE SCHEME AND ARTIFICE
10. On or about September 6, 2002, in the Houston Division of the
Southern District of Texas and elsewhere, defendants
WARREN TODD HOEFFNER,
and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, for purposes of executing and attempting to do so, knowingly transmitted
and caused to be transmitted by means of wire, radio, and television
communication, writings,- signs, signals, pictures, and sounds, that is $97,000.00
transferred by wire from defendant Hoefher's personal money market investment
account at Secured Trust Bank (now Texas State Bank) in Tyler, Texas, to Fleet
Bank in Hartford, Connecticut for the benefit'of New Country Motors, Inc. in
Hartford, Connecticut.
In violation of Title 18, United States Code, Sections 1343, 1346 and 2.
COUNT FOUR
(1 8 U.S.C. 1343 - Wire Fraud)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set out
at length herein, paragraphs 1 through 11 of Count One and paragraphs 2 through
4 of Count Three of the Indictment.
B. THE SCHEME AND ARTIFICE TO DEFRAUD
2. Beginning in or about February 2002 and continuing to in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere, the defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
- and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly devise and intend to devise a scheme and artifice to
defraud The Hartford and to deprive The Hartford of its right to the honest
services of Prestage and Rossow, and to obtain money and property from The
Hartford by means of false and fraudulent pretenses, representations and promises,
and attempting to do so, including the concealment of material facts.
C. MANNER AND MEANS
3. The Grand Jury realleges and incorporates by reference, as though set
out at length herein, paragraphs 6 through 9 of Count Three.
D. EXECUTION OF THE SCHEME AND ARTIFICE
4. On or about April 7,2004, in the Houston Division of the Southern
District of Texas and elsewhere, defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, for the purpose o-f executing the aforesaid described scheme and artifice
to defraud, and attempting to do so, knowingly transmitted and caused to be
transmitted by means of wire, radio, and television communication, writings,
signs, signals, pictures, and sounds, that is $150,000.00 transferred by wire from
the Hoeffner & Bilek IOLTA Foundation Trust Account at American Barik in
Corpus Christi, Texas to the account of defendant Rossow at Windsor Federal
Savings and Loan in Connecticut.
In violation of Title 18, United States Code, Sections 1343, 1346 and 2. .
COUNTS FIVE through EIGHT
(18 U.S.C. 1341 - Mail Fraud)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set
forth in full herein, paragraphs 1 through 1 1 of Count One and paragraphs 2
through 4 of Count Three of this Indictment.
B. THE SCHEME AND ARTIFICE TO DEFRAUD
2. Beginning in or about February 2002 and continuing to in or about
November 2004, in the Houston Division of the Southern District of Texas and
elsewhere, the defendants-
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
I
and
JOHN PRESTAGE
and others, known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly devise and intend to devise a scheme and artifice to
defraud The Hartford and to deprive The Hartford of its right to the honest
services of Prestage and Rossow, and to obtain money and property fi.om,The
Hartford by means of false and fraudulent pretenses, representations and promises,
and attempting to do so, including the concealment of material facts.
C. THE MANNER AND MEANS
3. The Grand jury realleges and incorporates by reference as though set
forth in full herein,~ara~ra6~ hthsro ugh 9 of Count Three. ' .
D. EXECUTION OF THE SCHEME AND ARTIFICE
4. On or about the dates set out in the Counts below, in the Houston
Division of the Southern District of Texas, and elsewhere, defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others hown and unknown to the Grand Jury, each aiding and abetting one
another, for the purpose of executing the aforesaid scheme and artifice to defraud
and attempting to do so, did knowingly cause to be sent and delivered by the
United States Postal Service, and private or commercial interstate carriers, as
described below according to the directions thereon, and did howingly take and
receive and cause' to be taken and received therefrom the following matters and
things set out in the counts below:
COUNT DATE MAILICARRIER MATTER
Count Five Check number
077568595 from
The Hartford i/a/o
$2,000,000
payable to
Hoefher & Bilek
Trust Account
November 20,
2002
Airborne Express
In violation of Title 18, United States Code, Section 1341, 1346 and 2.
Check numbers
077926472 and
077926483 from
The Hartford both
i/a/o $295,3 12.50
and both payable
to Hoeffner &
Bilek Trust
Account
Check number
077926494 from
The Hartford i/do
$145,000.00
payable to
Hoeffner & Bilek,
LLP Trust
Account
Check number
077926564 from
The Hartford i/do
$2,000,000
payable to
Hoeffner & Bilek
Trust Account
Count Six
Count Seven
Count Eight
January 29,2003
-
January 30,2003
February 3,2003
United States
Postal Service
Federal Express
Federal Express
COUNTS NINE through TWELVE
(1 8 U.S.C. 1957(a) - Monetary Transactions Involving
Property Derived from Specified Unlawful Activity)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set
forth in full herein, paragraphs 1 through 1 1 of Count One and paragraphs 2
through 4 of Count Three of this Indictment.
B. MONETARY TRANSACTIONS
2. On or about each of the dates set out in the counts below, in the Houston
Division of the Southern District of Texas and elsewhere, defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly engage in, and attempt to engage in, a monetary
transaction affecting interstate commerce in criminally derived property of a value
greater than $10,000, that is, the transfer by check drawn on the Hoefher & Bilek
Trust Account, styled "IOLTA Foundation Trust Account," at American Bank in
Corpus Christi, Texas, a financial institution engaged in interstate commerce, in
2 8
the amounts to the payees indicated below, such finds having been derived fiom
specified unlawfhl activity, that is mail fraud, in violation of Title 18, United
States Code, Section 134 1 :
COUNT DATE Check No. Payee Amount
Nine November 26,2002 1351 John Prestage $262,500.00
Ten Novernber26,2002 1352 Rachel Rossow $3 12,500.00
Eleven February 4,2003 1360 John Prestage $265,500.00
Twelve February 4,2003 1361 Rachel Rossow $3 12,500.00
In violation of Title 18, United States Code, Sections 1957(a) and 2.
COUNT THIRTEEN
(1 8 U.S.C. 1 957(a) - Monetary Transactions Involving
Property Derived from Specified Unlawful Activity)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set
forth in full herein, paragraphs 1 through 11 of Count One and paragraphs 2
through 4 of Count Three of this Indictment.
B. MONETARY TRANSACTIONS
2. On or about December 5,2003, in the Houston Division of the Southern
District of Texas and elsewhere, defendants
-W ARREN TODD HOEFFNER, '
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly engage in, and attempt to engage in, a monetary
transaction a.ffecting interstate commerce in criminally derived property of a value
greater than $10,000, that is, the transfer by check #I369 in the amount of
$1,675,000.00 payable to defendant Rossow and drawn on the Hoeffher & Bilek
Trust Account, styled "IOLTA Foundation Trust Account," at American Bank in
Corpus ~hrishT, exas, a financial institution engaged in interstate commerce,
such h d s having been derived from specified unlawful activity, that is wire
fraud, in violation of Title 18, United States Code, Section 1343.
In violation of Title 18, United States Code, Sections 1957(a) and 2.
COUNT FOURTEEN
(1 8 U.S .C. 1957(a) - Monetary Transactions Involving
Property D- erived from Specified Unlawful Activity)
A. INTRODUCTION
1. The Grand Jury realleges and incorporates by reference, as though set
forth in fill herein, paragraphs 1 through 1 1 of Count One and paragraphs 2
through 4 of Count Three of this Indictment.
B. MONETARY TRANSACTIONS
2. On or about April 7,2004, in the Houston Division of the Southern
District of Texas and elsewhere, defendants
WARREN TODD HOEFFNER,
RACHEL ROSSOW,
and
JOHN PRESTAGE
and others known and unknown to the Grand Jury, each aiding and abetting one
another, did knowingly engage in, and attempt to engage in, a monetary
transaction affecting interstate commerce in criminally derived property of a value
greater than $10,000, that is, the transfer by wire of $1 50,000 from the Hoefher &
Bilek Trust Account, styled "IOLTA Foundation Trust Account," at American
Bank in Corpus Christi, Texas, a financial institution engaged in interstate
commerce, to the checking account of defendant Rossow at Windsor Federal
Savings and Loan in Win-d sor, Connecticut, such funds having been derived from
specified unlawful activity, that is wire fraud, in violation of Title 18, United
States Code, Section 1343.
In violation of Title 18, United States Code, Sections 1957(a) and 2.
NOTICE OF CRIMINAL FORFEITURE
(1 8 U.S.C. 5 98 1 (a)(l)(C) and 28 U.S.C. 5 2461)
Counts 1, 3-8
Pursuant to Title 28, United States Code, Section 2461(c), and Title 18,
United States Code, Section 98 l(a)(l)(C), as a result of the commission of
violations charged in Counts One, and Three through Eight of this Indictment, the
defendants
WARREN TODD HOEFRWR
RACHEL ROSSOW
JOHN PRESTAGE
are provided notice that upon conviction, all property which constitutes or is
derived from proceeds traceable to a violation of Title 18, United States Code,
Sections 1341, 1343, or a conspiracy to commit such offenses, shall be forfeited to
the United States. Such property includes, but is not limited to, the following:
(1) Approximately$8,8 13,189.20 in U.S. Currency, which represents the
proceeds obtained from the conspiracy as alleged in Count One of this
indictment;
(2) Approximately $8,8 13,189.20 in U.S. Currency, which represents the
proceeds obtained from the overall scheme as alleged in Counts Three
through Eight of this Indictment;
(3) All h d s in Citi Smith Barney, Account #xxx-xxx64- 16, in the name of
Rachel M. Rossow, including any interest, dividends or other monies
representing appreciated value of the initial investment;
(4) 2003 BMW 530ia Automobile, registered to Rachael M. Rossow; and
(5) 2003 Volvo XC90 Automobile, registered to John F. Prestage.
NOTICE OF CRIMINAL FORFEITURE
(18 U.S.C. 5 982(a)(1))
- Counts 2, 9- 14
Pursuant to Title 18, United States Code, Section 982(a)(1), as a result of
the commission of the violations charged in Counts Two and Counts Nine through
Fourteen of this Indictment, the defendants
WARREN TODD HOEPPNER
RACHEL ROSSOW
JOHN PRESTAGE
are provided notice that upon conviction, all property, real and personal, involved
in a violation of Title 18, United States Code, Sections 1956(h) or 1957(a), and all
property traceable to such property, shall be forfeited to the United States. Such
property includes, but is not limited to, the following:
Count 2: (1) Approximately $8,813,189.20 in U.S. Currency, which
represents the money involved in, or traceable to, the money
laundering conspiracy;
(2) All funds in the Citi Smith Barney account,, previously
identified in this notice, including any interest, dividends or other
monies representing appreciated value of the initial investment;
(3) 2003 BMW 530ia Automobile, registered to Rachael M.
Rossow; and
(4) 2003 V- olvo XC90 Automobile, registered to John F. Prestage.
Counts 9, 1 1 : Approximately $52 8,000.00 in U.S. Currency; and
the 2003 Volvo XC90, previously identified in this notice, which
is traceable to property involved in money laundering violations
as alleged in Counts Nine and Eleven.
Counts 10,
12- 14: (1) Approximately $2,450,000.00 in U.S. Currency; and
(2) Approximately $2,300,000.00 in the Citi Smith Barney
account, previously identified in this notice, which is traceable to
property involved in money laundering violations as alleged in
Counts Ten and Twelve through Thirteen, with appreciated
value.
All defendants may be jointly and severally liable for all money judgments
imposed in this case.
SUBSTITUTE ASSETS
In the event that the property subject to forfeiture as a result of any act or
omission of the defendant:
a. cannot be located upon exercise of due diligence;
b. has been placed beyond the jurisdiction of the Cow;
c. has been tran-s ferred or sold to, or deposited with a third party;
d. has been substantially diminished in value; or
e. has been commingled with other property which cannot be divided
without difficulty;
it is the intent of the United States to seek forfeiture of any other property of the
defendant up to the value of such property pursuant to Title 2 1, United States
Code, Section 853(p), and Title 18, United States Code, Section 982(b)(l)
incorporating Title 21, United States Code, Section 853(p).
1
Original Signature on File
DONALD J. DeGABRIELLE, JR.
United States Attorney
Braddock
United States Attornev
