FBI Raids Cleveland and Miami Optima Mgmt Offices

Posted on August 4, 2020August 4, 2020 by Denise Simon

CLEVELAND, Ohio — The FBI on Tuesday raided the Cleveland offices of a company with ties to a Ukrainian oligarch that owns several downtown buildings.

Fderal Bureau of Investigation's evidence response team removes boxes of evidence and computer hard drives from the Cleveland offices of Optima Management Group, August 4, 2020, at the One Cleveland Center building. John Kuntz, cleveland.com

FBI spokeswoman Vicki Anderson said agents searched the offices of Optima Management Group in One Cleveland Center at East 9th Street and St. Clair Avenue. A spokesman for the IRS also said his agency’s investigators were present.

Optima is a conglomerate of companies across the United States that has interests in real estate in Cleveland, including One Cleveland Center, the 55 Public Square building and the Westin Cleveland Downtown. Its offices are visible from an entrance and windows on the side of One Cleveland Center, and on Tuesday multiple agents were seen carrying and moving computers, boxes and other items both inside the office and later as they loaded materials into a van.

Anderson said agents also executed search warrants at an office in Miami.

Federal authorities in Cleveland have been conducting a wide-ranging probe involving Ukrainian oligarch Igor Kolomoisky that has been ongoing for quite some time. Kolomoisky is a principal of the Privat Group, a large Ukrainian business company, and principals of the company are also part of Optima.

Ukraine Billionaire Igor Kolomoisky Investigated For Money ... source

Optima had a much larger presence in Cleveland about a decade ago when it bought several buildings under the leadership of executive Chaim Schochet. Its presence in Northeast Ohio has dwindled in recent years.

Optima also controlled Warren Steel Holdings, a mill northwest of Youngstown that closed in 2016.

Kolomoisky and a fellow Ukrainian billionaire formed PrivatBank in the early 1990s. It became one of the Ukraine’s key financial institutions, according to Forbes. The Ukrainian government nationalized the bank in 2016 after an investigation suggested there was large-scale fraud over a decade-long period, Forbes reported.

The financial news outlet places Kolomoisky’s net worth at about $1 billion. He remains a complicated political figure in his home country. He is a former governor of Ukraine’s Dnipropetrovsk region.

Published reports said that Kolomoisky had refused to set up a meeting with President Donald Trump’s ally Rudy Giuliani and Ukrainian President Volodymyr Zelensky in an attempt to dig up dirt against Democratic presidential nominee Joe Biden last year.

Kolomoisky’s attorney Michael Sullivan declined comment.

The Daily Beast reported that the U.S. Attorney’s Office in northern Ohio and FBI are involved in a wide-ranging probe that involves Ihor Kolomoisky and whether he committed financial crimes, including money laundering. It bases the assertion on three people briefed on the investigation and said the investigation has been under way for some time. The financial news outlet places Kolomoisky net worth at about $1.2 billion. The Daily Beast, citing The Financial Times, said he lives in Tel Aviv and remains a complicated political figure in his home country. He is a former governor of Ukraine’s Dnipropetrovsk region.

***

Just last year, the relationship between the Ukrainian president and the oligarch became a source of controversy when it was revealed that two US business partners running the infamous back-channel campaign in Ukraine to dig up dirt on Joe Biden went to Kolomoisky to set up a meeting between Zelensky and Rudy Giuliani. The meeting ended abruptly when the oligarch refused.

Kolomoisky returned to his native country last year after spending two years in self-imposed exile in the wake of a government takeover of PrivatBank, which he cofounded in the 1990s.

A subsequent investigation by Ukraine regulators found a $5.5 billion shortfall in PrivatBank’s ledgers from what they called “a large-scale and coordinated fraud” that involved the bank’s major shareholders, Kolomoisky and fellow Ukrainian billionaire Gennadiy Bogolyubov. To keep the bank from collapse, the government tapped into taxpayer funds to plug the hole.

Kolomoisky’s attempt to wrest control of PrivatBank has also stirred unrest, especially among lenders like the International Monetary Fund, prompting a vote by Ukraine’s parliament last week aimed at stopping Kolomoisky from taking back the bank.

With the ongoing US grand jury investigation, federal agents have traveled multiple times to Ukraine — including in February — where they met with Riaboshapka and investigators from the National Anti-Corruption Bureau of Ukraine to discuss the case against the 57-year-old oligarch and his partner, BuzzFeed News has learned. In an interview, Artem Sytnyk, director of the anti-corruption bureau, said he’s cooperating with the FBI in an “ongoing investigation,” but declined to give details because of a confidentiality agreement with the FBI. The Justice Department’s international money laundering and kleptocracy team took part in the trip.

For more than a year, federal agents have tracked millions of dollars that were wired into the US from companies owned by Kolomoisky and Bogolyubov to snatch up properties — including four skyscrapers in downtown Cleveland — in a spending spree that began around 2008 and lasted for the next five years, according to court records and a source familiar with the investigation.

In all, $622.8 million was funneled to the companies that were used to buy the real estate, according to the suit.

In addition to Ohio, purchases include a sprawling Motorola factory in Illinois that was shuttered, a 31-story skyscraper in downtown Louisville, and an iconic office complex in Dallas that was once the headquarters of Mary Kay Cosmetics.

Money also went to buy at least a dozen steel and ferroalloys plants across the country — including facilities in Ohio, Kentucky, West Virginia, Illinois, and Michigan — that collectively became major suppliers to the North American steel industry.

The lawsuit claims that many of the purchases were carried out with the help of three Miami investors described as “trusted lieutenants”: Mordechai Korf and Uriel Laber, who held ownership stakes in the real estate, and Korf’s brother-in-law, Chaim Schochet, an executive who ran the properties. At least two of the Cleveland skyscrapers have since been sold, records show.

In a forensic audit done for Ukraine’s top regulatory agency, analysts found 95% of the bank’s corporate lending had been to “parties related to former shareholders and their affiliates.”

Marc Kasowitz, a New York attorney for the Miami investors, said the accusations in the lawsuit “will be shown to be complete fabrications when the evidence in this case comes out.” Kasowitz represented President Trump in the Justice Department’s probe into Russian interference in the 2016 election. “Our clients have earned a well-deserved reputation for honesty and high integrity over the past 20+ years and this lawsuit is nothing more than a fictional orchestrated political attack on an investor in our clients’ businesses.”

Valeria Gontareva, former chair of the National Bank of Ukraine, the nation’s chief regulator, said the level of fraud on the institution was larger than any crime ever perpetrated on a Ukrainian bank. “We called it an expanding universe,” said Gontareva, now a senior policy fellow at the London School of Economics.

Kateryna Rozhkova, first deputy governor of the nation’s regulatory agency, told BuzzFeed News that when the losses were first discovered, “we were simply freaked out and didn’t know what we should do about it.”

The government ordered a sweeping audit of the bank’s finances by Kroll Inc., the New York–based corporate investigative firm, which alleged the scheme was set up to “disguise the origin and destination of loan funds” with the help of employees in the bank, regulators said.

The larger issue looming in Ukraine is whether Zelensky will allow the National Anti-Corruption Bureau to work with the FBI and carry out its own inquiry and whether the country will extradite Kolomoisky if he is indicted in the US, according to Roman Groysman, a former Florida prosecutor who once lived in Ukraine.

“Is [President Zelensky] going to pressure the National Anti-Corruption Bureau and the prosecutor general to thwart the possibility of extradition — that’s the question,” said Groysman. “Or is he going to remain neutral and let them do their jobs? That’s the best thing he could do.”

He said NABU was set up at the request of the IMF with the help of the US and European Union to investigate corruption in Ukraine. It’s supposed to be impervious to political pressure.

“If it’s finally allowed to operate as an independent investigative agency and do what it was supposed to do without undue political interference, then maybe that’s a signal. If not, then it’s going to be the same thing we have always seen.” More here.

CIA Fought with FBI over Unvetted Steele Dossier

Posted on July 29, 2020July 29, 2020 by Denise Simon

Except perhaps if you challenge former CIA Director John Brennan.

CIA Director John Brennan: ISIS Could Carry Out More ...

Poor lil John, he is trying to write a book and wants access to some of his CIA files and notes. That request has been denied. His book titled Undaunted: My Fight Against America’s Enemies, at Home and Abroad, slated for release in October may not have some citations or chapters in it because he has been denied access to classified material. President Trump and his security clearance was apparently never revoked. Hummm.

Meanwhile, it appears the large share of the RussiaGate operation against Donald Trump is in fact owned by the FBI. There are some CIA operatives however that do need to be explained, beginning with Eric Ciaramella.

The FBI continued to rely on intelligence from Christopher Steele, the former British spy who alleged collusion between the Trump campaign and Russia, even after the CIA warned his allegations were “very unvetted,” according to newly declassified documents.

“We would have never included that report in a CIA-only assessment because the source was so indirect. And we made sure we indicated we didn’t use it in our analysis, and if it had been a CIA-only product we wouldn’t have included it at all,” the CIA’s deputy director of analysis told the Senate Intelligence Committee in an April 21 report.

The report, declassified on Tuesday, shows that the FBI successfully pushed to include Steele’s information in a January 2017 Intelligence Community Assessment (ICA) regarding Russian interference in the 2016 election after a “bitter argument” with the CIA.

While multiple claims by Steele have since been debunked by investigators, the bureau had also used Steele’s intelligence to surveil former Trump campaign aide Carter Page.

Then- FBI director James Comey and deputy director Andrew McCabe argued that Steele’s information was relevant to the question of Russian interference in the 2016 election and lobbied the CIA and the Office of the Director of National Intelligence to include Steele’s dossier in the January 7, 2017 ICA.

On Dec. 20, 2016, Comey had tried to include Steele’s information in the body of the ICA but John Brennan, then- CIA director, “pushed back,” saying he was “very concerned about polluting the ICA with this material.” The agency eventually agreed to add the information in a two-page annex to the ICA on Dec. 29, 2016.

An assistant director for an intelligence agency supported the annex’s information regarding Russia’s election-related efforts, but warned allegations of collusion involving members of the Trump campaign was uncorroborated, according to the report.

“I can tell you that there is no information coming from [redacted] sources that would corroborate any of that,” the official told the Senate panel, adding that Steele’s Trump-related information was “very unvetted.”

Brennan told the committee that someone in the British government had called him to clarify that they were not involved in creating the dossier.

“He wanted to make sure that I understood and that others in the senior officialdom of the U.S. government understood that that officer, Steele, had been a former [redacted] but had no current relationship with [redacted] and that dossier was not put together in any way with [redacted] support,” Brennan said. “So he wanted to make sure there was a separation there.”

An Interesting Arrest in Portland of a Militant Arsonist

Posted on July 29, 2020July 29, 2020 by Denise Simon

The FBI and special agents of the U.S. Marshall service are not heard from at all when it comes to the daily assaults in Portland. Perhaps this one particular arrest will offer some hope for the work being done in Portland and many other cities around the country.

Portland Man Charged in May 29, 2020 Arson at Justice Center

PORTLAND, Ore.—U.S. Attorney Billy J. Williams announced today that Edward Thomas Schinzing, 32, has been charged by criminal complaint with using fire to maliciously damage or destroy the Justice Center in downtown Portland on May 29, 2020.

Multnomah County and the City of Portland own the Justice Center building located at 1120 SW 3rd Avenue in Portland. The facility houses the Multnomah County Detention Center jail and the Portland Police Bureau headquarters.

According to court documents, Schinzing was marching with a group of protestors when he arrived at the front of the Justice Center shortly before 11:00 p.m. on May 29, 2020. A few minutes later, several people broke windows near the northwest corner of the Justice Center where the Corrections Records Office is located. They subsequently entered the secured office through the broken windows.

Three civilian Multnomah County employees were working inside the Corrections Records Office at the time and fled for safety as the windows were broken. Based on a preliminary review of publicly-available videos from YouTube, Twitter, surveillance cameras, and still photos posted online, about 30 individuals entered the Justice Center through the broken windows. The individuals spray-painted portions of the office; damaged computer and other office equipment, furniture, and interior windows; and started fires.

Among those who entered the Justice Center, Schinzing was identified by a comparison with a jail booking photo and a distinctive tattoo of his last name across his upper back. Schinzing spread a fire that started near the front of the office by lighting additional papers on fire and moving them into a drawer of a separate cubicle.

At about 11:08 p.m., the building’s fire sprinkler system activated and extinguished the fires. At about the same time, law enforcement officers secured that portion of the Justice Center. The Multnomah County Detention Center housed approximately 289 inmates at the time.

Schinzing made his first appearance in federal court today before a U.S. Magistrate Judge and was ordered detained pending further court proceedings. Arson is punishable by up to 20 years in prison with a mandatory minimum sentence of 5 years.

This case is being jointly investigated by the FBI; Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); U.S. Marshals Service; Portland Police Bureau; Multnomah County Sheriff’s Office; and Multnomah County District Attorney’s Office. It is being prosecuted by the U.S. Attorney’s Office for the District of Oregon.

Criminal complaints are only accusations of a crime, and a defendant is presumed innocent unless and until proven guilty.

Schinzing marching with a crowd of demonstrators across the Burnside Bridge in Portland on May 29, 2020

Schinzing marching with a crowd of demonstrators in downtown Portland on May 29, 2020

Schinzing inside the Corrections Records Office on May 29, 2020 before the fire is ignited

Close up of Schinzing inside the Corrections Records Office on May 29, 2020 before the fire is ignited

Schinzing spreading the fire in the Corrections Records Office by moving flaming papers into separate cubicles on May 29, 2020

A demonstrator photographs the fire in the Corrections Records Office on May 29, 2020

Damage to the Corrections Records Office from fire on May 29, 2020

Chinese Embassy in San Francisco Still Open, Why?

Posted on July 29, 2020July 29, 2020 by Denise Simon

Primer: The Chinese consulate in San Francisco is harboring a biology researcher who falsely denied connections to the Chinese military to obtain a visa and gain access to the country, according to court documents filed by the FBI.

The filing came as part of a document that cited a slew of other episodes in which Chinese nationals allegedly lied on their visa applications by hiding their military connections. More details.

FBI Arrests Chinese Researcher for Visa Fraud After She ... source

Axios:

Every country spies. And many countries — including the U.S. — use their diplomatic outposts to do it. But for years, China has used its embassies and consulates to do far more than that.

Why it matters: The Trump administration’s recent hardline stance against China’s illicit consular activities is a public acknowledgment of real problems, but it comes at a time when U.S.-China relations are already dangerously tense.

Driving the news: Last week, the U.S. demanded that China close its Houston consulate in order to “protect American intellectual property and Americans’ private information,” White House National Security Council spokesperson John Ullyot said in a statement.

In response, the Chinese government ordered the closure of the U.S. consulate in Chengdu, a facility nestled in China’s more remote inland region that served primarily as a visa-issuing office for Chinese hoping to visit the U.S., and was not a major hub for U.S. intelligence activity.

Yes, but: The Houston consulate wasn’t China’s most important espionage hub.

“San Francisco is the real gem but the U.S. won’t close it,” a former U.S. intelligence official told Axios.
It indicates the Trump administration is likely making an example of the Houston consulate in a bid to achieve its goal of a reduction in Chinese espionage activities without taking an even harsher measure, such as closing the San Francisco or New York consulates.

The Chinese government has long used its embassy and consulates in the U.S. to exert control over student groups, collect information on Uighurs and Chinese dissident groups, and coordinate local and state level political influence activities.

Surveilling Uighurs: Leaked classified Chinese government documents have revealed that Chinese embassies and consulates are complicit in the ongoing cultural and demographic genocide against Uighurs.

The CCP has sought to track down Uighurs who have left China and force them to return, with orders to place them in mass internment camps “the moment they cross the border.”
China’s embassies and consulates have also collected information on Uighurs abroad and submitted that information to Xinjiang police.
Consular officials have frequently refused to renew Uighur passports, telling them they must return to China in order to obtain new documents — only to be disappeared into camps as soon as they do.

Controlling Chinese students: The Chinese embassy and consulates keep close tabs on Chinese students in the U.S., occasionally sending them political directives and quietly organizing demonstrations.

The Chinese embassy and consulates have paid students to demonstrate in support of visiting Chinese leaders, instructing them to crowd out anti-CCP protesters. They have also asked Chinese Students and Scholars Associations (CSSA) presidents to hold study sessions on party thought and to send back photos of the sessions to ensure compliance.
“I feel like the tendency is that the consulate tries to control CSSAs more and more,” one CSSA president told me in 2018.

Supporting United Front organizations: Chinese diplomatic officials regularly meet with leaders of U.S.-based organizations tied to the United Front Work Department, the political influence arm of the CCP, and preside over the ceremonies and banquets held by these organizations.

One such organization, the National Association for China’s Peaceful Unification, has branches in more than 30 U.S. cities. Its members issue statements in support of China’s official foreign policy positions, and the Chinese embassy and consular officials encourage them to engage in local U.S. politics.

The bottom line: Dealing with bad behavior by diplomats is a highly sensitive geopolitical issue that can easily result in damaged relations.

Go deeper … Mapped: Where U.S. and Chinese embassies and consulates are located

***

In part, how big a problem does the U.S. have regarding Chinese spies around the nation?

Economic Espionage

To achieve its goals and surpass America, China recognizes it needs to make leaps in cutting-edge technologies. But the sad fact is that instead of engaging in the hard slog of innovation, China often steals American intellectual property and then uses it to compete against the very American companies it victimized—in effect, cheating twice over. They’re targeting research on everything from military equipment to wind turbines to rice and corn seeds.

Through its talent recruitment programs, like the so-called Thousand Talents Program, the Chinese government tries to entice scientists to secretly bring our knowledge and innovation back to China—even if that means stealing proprietary information or violating our export controls and conflict-of-interest rules.

Take the case of scientist Hongjin Tan, for example, a Chinese national and American lawful permanent resident. He applied to China’s Thousand Talents Program and stole more than $1 billion—that’s with a “b”—worth of trade secrets from his former employer, an Oklahoma-based petroleum company, and got caught. A few months ago, he was convicted and sent to prison.

Or there’s the case of Shan Shi, a Texas-based scientist, also sentenced to prison earlier this year. Shi stole trade secrets regarding syntactic foam, an important naval technology used in submarines. Shi, too, had applied to China’s Thousand Talents Program, and specifically pledged to “digest” and “absorb” the relevant technology in the United States. He did this on behalf of Chinese state-owned enterprises, which ultimately planned to put the American company out of business and take over the market.

In one of the more galling and egregious aspects of the scheme, the conspirators actually patented in China the very manufacturing process they’d stolen, and then offered their victim American company a joint venture using its own stolen technology. We’re talking about an American company that spent years and millions of dollars developing that technology, and China couldn’t replicate it—so, instead, it paid to have it stolen.

And just two weeks ago, Hao Zhang was convicted of economic espionage, theft of trade secrets, and conspiracy for stealing proprietary information about wireless devices from two U.S. companies. One of those companies had spent over 20 years developing the technology Zhang stole.

These cases were among more than a thousand investigations the FBI has into China’s actual and attempted theft of American technology—which is to say nothing of over a thousand more ongoing counterintelligence investigations of other kinds related to China. We’re conducting these kinds of investigations in all 56 of our field offices. And over the past decade, we’ve seen economic espionage cases with a link to China increase by approximately 1,300 percent.

The stakes could not be higher, and the potential economic harm to American businesses and the economy as a whole almost defies calculation. More details here.

AG Barr’s Testimony Before House Judiciary Cmte

Posted on July 27, 2020July 27, 2020 by Denise Simon

Written Statement of AG Bar… by Fox News on Scribd

Primer: This is going to be a contentious session slated to last up to 4 or more hours. Why?

Some Democrats have suggested trying to impeach Barr over accusations he’s politicized the Justice Department. Nadler said his committee “may very well” initiate impeachment proceedings.

“I think the weight of the evidence and of what’s happened leads to that conclusion,” Nadler said.

Two other Democrats, Reps. Steve Cohen of Tennessee and Bill Pascrell of New Jersey, have called for Barr’s impeachment.

Items to be covered will be RussiaGate, the militant demonstrations around the country, criminal statistics, Roger Stone and more.

JUST IN: AG Barr Warns House Dems He May Not Appear at ...

Chairman Nadler, Ranking Member Jordan, Members of the Committee, I am pleased to be here this morning. I accepted an invitation to testify before this Committee in late March, but it was postponed as a result of the pandemic that continues to pose challenges to us all. I know some other hearings this week have been postponed to honor your late colleague, Congressman John Lewis of Georgia. On behalf of the Department of Justice, I want to pay my respects to Congressman Lewis, an indomitable champion of civil rights and the rule of law. I think it is especially important to remember today that he pursued his cause passionately and successfully with an unwavering commitment to nonviolence. We are in a time when the political discourse in Washington often reflects the politically divided nation in which we live, and too often drives that divide even deeper. Political rhetoric is inherent in our democratic system, and politics is to be expected by politicians, especially in an election year. While that may be appropriate here on Capitol Hill or on cable news, it is not acceptable at the Department of Justice. At the Department, decisions must be made with no regard to political pressure—pressure from either end of Pennsylvania Avenue, or from the media or mobs. Ever since I made it clear that I was going to do everything I could to get to the bottom of the grave abuses involved in the bogus “Russiagate” scandal, many of the Democrats on this Committee have attempted to discredit me by conjuring up a narrative that I am simply the President’s factotum who disposes of criminal cases according to his instructions. Judging from the letter inviting me to this hearing, that appears to be your agenda today. So let me turn to that first. As I said in my confirmation hearing, the Attorney General has a unique obligation. He holds in trust the fair and impartial administration of justice. He must ensure that there is one standard of justice that applies to everyone equally and that criminal cases are handled even-handedly, based on the law and the facts, and without regard to political or personal considerations. I can tell you that I have handled criminal matters that have come to me for decision in this way.

The President has not attempted to interfere in these decisions. On the contrary, he has told me from the start that he expects me to exercise my independent judgment to make whatever call I think is right. That is precisely what I have done. From my experience, the President has played a role properly and traditionally played by Presidents. Like his predecessors, President Trump and his National Security Council have appropriately weighed in on law-enforcement decisions that directly implicate national security or foreign policy, because those decisions necessarily involve considerations that transcend typical prosecutorial factors. Moreover, when some noteworthy event occurs that potentially has legal ramifications – such as leaks of classified information, potential civil rights abuses by police, or illegal price fixing or gouging – the President has occasionally, and appropriately, confirmed that the Department is aware of the matter. But the handling of the matter and my decisions on criminal matters have been left to my independent judgment, based on the law and fact, without any direction or interference from the White House or anyone outside the Department. Indeed, it is precisely because I feel complete freedom to do what I think is right that induced me serve once again as Attorney General. As you know, I served as Attorney General under President George H. W. Bush. After that, I spent many years in the corporate world. I was almost 70 years old, slipping happily into retirement as I enjoyed my grandchildren. I had nothing to prove and had no desire to return to government. I had no prior relationship with President Trump. But as an outsider I became deeply troubled by what I perceived as the increasing use of the criminal justice process as a political weapon and the emergence of two separate standards of justice. The Department had been drawn into the political maelstrom and was being buffeted on all sides. When asked to consider returning, I did so because I revere the Department and believed my independence would allow me to help steer her back to her core mission of applying one standard of justice for everyone and enforcing the law even-handedly, without partisan considerations. Since returning to the Department, I have done precisely that. My decisions on criminal matters before the Department have been my own, and they have been made because I believed they were right under the law and principles of justice. Let me turn briefly to several pressing issues of the day. (…) Read on here.