Category Archives: FBI

ANTIFA and the CVE Program(s)

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So far we can label this a failure…gotta wonder if residents in Portland were told to shelter in place or they just do it on their own.

The DHS website last updated in 2016 with respect to Countering Violent Extremism reads in part as follows:

Terrorism Prevention Partnerships

Violent extremist threats come from a range of groups and individuals, including domestic terrorists and homegrown violent extremists in the United States, as well as international terrorist groups like al-Qaeda and ISIL. Lone offenders or small groups may be radicalized to commit violence at home or attempt to travel overseas to become foreign fighters. The use of the Internet and social media to recruit and radicalize individuals to violence means that conventional approaches are unlikely to identify and disrupt all terrorist plots.

Here in the United States, acts perpetrated by violent extremists can have far-reaching consequences. Terrorism Prevention Partnerships (TPP) have therefore become a key focus of DHS’s work to secure the homeland. TPP aims to address the root causes of violent extremism by providing resources to communities to build and sustain local prevention efforts and promote the use of counter-narratives to confront violent extremist messaging online.  Building relationships based on trust with communities is essential to this effort.

See something say something? Okay….Did the Portland Police report anything? The Mayor? The Governor? The citizens of Portland?

According to OregonLive, authorities knew well in advance:

Multiple demonstrations are taking place in downtown Portland on Saturday.

Online postings indicate two right-wing demonstrations are scheduled for Saturday: one involving the Proud Boys, a fraternal organization known for street fighting, and another organized by conservative activist Haley Adams and the “HimToo Movement.” Counterprotesters, including supporters of Rose City Antifa, are planning to gather in opposition.

Portland police say three sites — at Pioneer Square, Chapman Square and Waterfront Park — will be involved, and that the events will begin around noon. Lt. Tina Jones declined to comment on the groups that police were anticipating at each protest, or how many people they expected to be there.

UPDATED 6:49 p.m.: 3 arrested in downtown Portland protests involving antifa, right-wing groups

UPDATED 5:29 p.m.:

The protests are over. We’ll have a story up shortly.

So, seems this CVE/DHS program did not work out so well, right? Read on and ask yourself, is this the best we can do?

Terrorism Prevention Lines of Effort

OTPP implements a full-range of partnerships to support and enhance efforts by law enforcement, faith leaders, local government officials, and communities to prevent radicalization and recruitment by terrorist organizations.  OTPP also provides these stakeholders with training and technical assistance to develop CVE prevention programs in support of resilient communities. OTPP leads the Department’s CVE mission with the following objectives:

  • Community Engagement. OTPP works with the Office for Civil Rights and Civil Liberties to facilitate community engagements to build awareness and promote dialogue with community partners, which includes engagements with DHS senior leadership;
  • Field Support Expansion and Training. OTPP supports DHS field staff across the country to develop and strengthen local partnerships and to provide training opportunities;
  • Grant Support. OTPP worked with FEMA to provide $10 million in grants to community-based programs under the FY2016 Countering Violent Extremism Grant Program.  Those projects have a period of performance that runs through July 2019.
  • Philanthropic Engagement. OTPP works with the philanthropic community to maximize support for local communities, and encourage long-term partnerships;
  • Tech Sector Engagement. OTPP engages the tech sector to identify and amplify credible voices online and promote counter-narratives against violent extremist messaging.

There is some kind of procedure to be listed as a domestic terror group, but those details are fleeting in open source information. We have some big work to do and some questions to be answered. However, according to the FBI website here is a sample list for gangs/extremist groups:

11.30.10

Black September

11.30.10

Aryan Nation

12.06.10

Mexican Mafia

12.06.10

Mafia Monograph

12.06.10

Bloods and Crips Gang

11.30.10

Clarence Smith (aka 13x)

05.05.11

White Hate Groups

03.27.11

WACO / Branch Davidian Compound

03.23.11

Imperial Gangsters

Imperial Gangsters The Imperial Gangsters was a violent street gang based in Miami. In 1994, the FBI’s Miami Division proposed an undercover operation against the gang. In 1995, the division requested a reauthorization of the operation.

03.02.11

Black Guerilla Family

03.02.11

Black Mafia Family

05.17.11

Original Knights of the KKK

03.02.11

Gangster Disciples

11.30.10

Weather Underground (Weathermen)

11.30.10

American Nazi Party

11.30.10

Aryan Brotherhood

The Aryan Brotherhood, a violent white supremacist gang, formed within the California state prison system in the late 1960s. On August 9, 1982, the FBI’s Los Angeles Field Office opened a racketeering enterprise investigation into the gang. The case was closed in 1989.

12.06.10

Nuestra Familia

12.06.10

Aryan Circle

11.30.10

George Jackson Brigade

12.06.10

The Covenant The Sword The Arm of the Lord

12.06.10

White Supremacist Groups

12.06.10

George Lester Jackson

(1941-1971)

12.06.10

The Ku Klux Klan (KKK)

12.06.10

The Hells Angels

11.29.10

Five Percenters

The Five Percenters was an offshoot of the Nation of Islam founded in Harlem in 1965 under Clarence Edward Smith, also known as Clarence 13X and other names. This release covers from 1965 to 1967 and consists of one main file primarily concerned with the group’s potential to foment public disturbances and containing a number of references to the group found in other FBI files.

11.30.10

Black Panther Party

The Black Panther Party (BPP) is a black extremist organization founded in Oakland, California in 1966. It advocated the use of violence and guerilla tactics to overthrow the U.S. government. In 1969, the FBI’s Charlotte Field Office opened an investigative file on the BPP to track its militant activities, income, and expenses. This release consists of Charlotte’s file on BPP activities from 1969 to 1976.

05.24.11

National Gang Threat Assessment

05.24.11

Almighty Latin Kings

03.02.11

El Rukns

The El Rukns, a violent street gang that trafficked in narcotics and stolen property, was established in the 1960s. FBI offices in Chicago, Springfield, Illinois, and Minneapolis investigated the gang in cooperation with local police and federal drug enforcement authorities. The materials in this release range from 1982 to 1991.

03.29.11

White Aryan Resistance

The White Aryan Resistance—also known as the White American Resistance (WAR)—is a white supremacist group. This release consists of two sections from an FBI investigation into the group. The dates range from 1987 to 1988.

 

Corpus Christie and Philadelphia Busts Prove the U.S. Cocaine Problem

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CORPUS CHRISTI, Texas — On their latest trip to South America, a CBP Air and Marine Operations aircrew spoiled cocaine smugglers’ best efforts when they contributed to the arrest of 11 smugglers and the seizure of almost $300 million worth of narcotics between June 17-21.

Small vessel carrying narcotics
This low-profile vessel is designed to be hard to detect
when moving in open waters.

“No one can hide from us on our watch,” said Director of Air and Marine Operations Bob “Thor” Blanchard. If smugglers are trying to bring drugs into the U.S., our dedicated and experienced crews will find them and they’ll go to jail.”

The crew of an AMO Lockheed P-3 Orion maritime patrol aircraft began its work by detecting a small fishing vessel or “panga” loaded with 1,656 pounds of cocaine. The next day, the crew was on patrol using its sophisticated radar system detected a purpose-built smuggling vessel. The “Low Profile Vessel” or, LPV, was loaded with 4,134 pounds of cocaine. On the last day of its trip and while heading back to the United States, the crew detected a hard to find semi-submersible vessel. That load was one of the Corpus Christi office’s largest ever seizures. The 16,938-pound load on this vessel brought their weekly total to 22,728 pounds, or roughly the weight of three heavy-duty pickup trucks.

An AMO P3
A P-3 Orion Long Range Tracker patrols
the Gulf of Mexico.

The National Air Security Operations Center—Corpus Christi is a division of Air and Marine Operations and operates the Lockheed P-3 Orion conducting counterdrug patrol missions over the Eastern Pacific Ocean and the Caribbean Sea. Together with the National Air Security Operations Center in Jacksonville, Florida, Customs and Border Protection P-3 crews seized or disrupted 261,939 pounds of cocaine in 2018.

The mission of the U.S. Customs and Border Protection, Air and Marine Operations is to serve and protect the American people. It applies advanced aeronautical and maritime capabilities and employs its unique skill sets to preserve America’s security interests. With 1,800 federal agents and mission support personnel, 240 aircraft and 300 marine vessels operating throughout the United States, Puerto Rico, and U.S. Virgin Islands, Air and Marine Operations uses its sophisticated fleets to detect, sort, intercept, track and apprehend criminals in diverse environments at and beyond U.S. borders.

*** It was earlier this month that yet another cargo ship arrived at the Philadelphia shipping yard containing 15,000 kilos of cocaine. This ship named the MSC Gayane had traveled from Chile, Panama and the Bahamas before reaching the Packer Avenue Marine Terminal Port on the Delaware River were the actual bust occurred. The MSC Gayane is a newer cargo ship that flies a Liberian flag yet is Swiss owned. The value of the cocaine aboard was over $1 Billion.

Officials gather on the decks of a container ship on the Delaware River in Philadelphia photo

Six crew of the cargo ship are in Federal custody.

The six men have been identified as Ivan Durasevic, Nenad Illic, Aleksandar Kavaia, Bosko Markovic, Laauli Pulu, and Fonofaavae Tiasaga, according to NBC10. Tiasaga and Durasevic were the first charged last Thursday with conspiracy to possess cocaine. Four of the five suspects waived their preliminary hearings while the fifth suspect asked from a continuance through his attorney, which was granted by the judge.

The nationalities of the six crew members had not been confirmed as of Monday. According to an attorney, one of the defendants is from Montenegro. There were two interpreters present in the court room that spoke Serbian and Samoan with the defendants, according to the Associated Press.

The crew members allegedly admitted to helping load cocaine onto the cargo ship while it was at sea off the west coast of South America, according to an affidavit. Authorities said 14 boats approached the ship on two separate occasions. Records show the previous ports of call were the Bahamas on June 13, Panama on June 9, Peru on May 24, and Columbia on May 19.

 

Odebrecht Files for Bankruptcy Protection

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When a huge global construction conglomerate like Odebrecht ends up in a John Podesta email released by Wikileaks, one should take some notice, right?

Odebrecht, the Brazilian company that is synonymous with corruption, decided to file for bankruptcy protection on Monday after years of graft scandals and trials involving top Latin American businessmen and politicians. Founded in 1944 as a construction company, Odebrecht expanded into the chemical and energy industries to become one of Brazil’s largest conglomerates. It counts among its building achievements the Miami International Airport, the Lisbon metro, and Brazil’s Transnordestina railway. At one point, its global success was seen to have symbolized Brazil’s economic boom.

In part published in 2017:

Odebrecht has confessed to paying $98 million in bribes to the governments of Venezuela’s Hugo Chávez and of his successor Nicolás Maduro over the last decade. If the allegations are true, Venezuela has received the most bribes from the construction group outside of Brazil. Next on the list is Panama with $59 million for which 17 executives and former officials have been charged while President Juan Carlos Varela has been accused. Varela, who had been advocating for proposed charges to be filed, became implicated in February by one of the partners of Mossack Fonseca —the law firm at the center of last year’s Panama Papers scandal —who said Varela admitted to him he accepted bribes from Odebrecht, accusations Varela has denied. Peruvian authorities, similarly to Varela, had been taking aggressive measures to fight Odebrecht-related corruption involving $30.4 million in bribes until their own names became implicated. Toledo, as well as former President Alan García, are being investigated by Operation Car Wash while a third former president, Ollanta Humala, has been implicated by Marcelo Odebrecht himself, but he has not been named in the investigations.

Notable projects in the U.S. include:

The first Brazilian company to complete a public project in the country, Odebrecht celebrates 20 years of operations in the United States in 2010. The construction company has completed 55 projects throughout its history and is currently present in Florida and Louisiana. In the country, Odebrecht has also been in California, North Carolina and South Carolina.
Odebrecht arrived to U.S. soil after it won the public bid to build a stretch of the Metromover, Miami’s above-ground subway. Soon after, in 1992, Odebrecht was responsible for building Route 56, a highway in the region of San Diego, California.
After these projects, the rhythm of the work continued to be intense. The following year, after winning the bid to work on the Santa Ana River chute, the company earned an important contract: The Seven Oaks Dam project in California, in the amount of US$ 168 million, with a construction period of 52 months. During this same year, 1993, the Company was responsible for the construction work on the Merrill Barber Bridge and the Golden Glades viaduct, which extends 2,464 meters to serve those who use the I-95 system, the federal highway that goes from Southern Florida to Canada. As a result of these experiences, Odebrecht was chosen to erect Garcon Point Bridge in Santa Rosa Bay, at the border between Florida and Alabama.
In the building construction area, Odebrecht was responsible for the American Airlines Arena, a sports and cultural complex in Miami, where it competed for the contract with major U.S. companies. It also built the Fortune House building, an apart hotel with 29 floors, the Ocean Steps building, with 15 residential floors, and the Ritz Carlton Key Biscayne Resort & Spa, a residential hotel project.
One of the company’s main clients is Miami-Dade County – with projects in the sector of aviation and mass transportation. The partnership has existed since 1993, when the construction company was responsible for building the American Airlines cargo building. Currently, Odebrecht is responsible for expanding the North Terminals of the Miami International Airport, building the lightweight vehicle that will run on the tracks (Mia Mover) and extending the subway (Airport Link).
The North Terminal Development Program, which involves investments of US$ 2.85 billion, is the center of a bigger venture, worth US$ 6.2 billion, called the “Capital Improvement Program.” Undertaken by Miami-Dade County, it was developed with aims of expanding and improving the aviation system. The complete project includes 52 new gates, four train stations, new installations for the United States Immigration and Citizenship Services, 123 counters, 119 self-service kiosks, 72 federal inspection service posts and a new luggage system. In September, the Sky Train operation began running, connecting the ends of the four main areas of the North Terminal in under five minutes. It is estimated that the program will be completed in 2011, while the construction work for the South Terminal began in 2001 and was completed in 2007. The project included Concourse J, a lobby with 15 departure gates for national and international flights, Concourse H, which already existed and was modernized, as well as a patio that surrounds the area of these buildings.
Also at the Miami International Airport, Odebrecht is heading the construction of the MIA Mover, an automatic vehicle that runs on tracks and will connect the Miami International Airport (MIA) to the Miami Intermodal Center (MIC), a terminal that connects different transportation services. The development, the result of a US$ 256 million investment, will be completed in September 2011.
Another project underway is the construction of the Airport Link, which will connect MIC at the airport to the Earlington Heights subway station. With an investment of US$ 360 million, the project extends nearly four kilometers, with the construction of three subway substations, a bus stop and highway access points.
Odebrecht was also at the Orlando Airport, working on the North Transversal taxi strip and South Terminal Complex. The project also involved the construction of access ramps and new viaducts.
In New Orleans since 2006, Odebrecht won two new contracts in 2010 in the city. In August, it signed a contract with the US Army Corps of Engineers to undertake preventive construction work for floods. In May, the company began constructing four water pumping stations, with aims of preventing floods caused by hurricanes. Recently, the company also delivered projects at Cataouatche Lake and in the region of Chalmette, work designed to reconstruct and fortify containment dikes. The construction works are part of the Hurricane Storm Damage Risk Reduction System (HSDRRS), which consists of 250 different projects and involves total investments of US$ 15 billion.

Main Completed Projects
South Terminal of the Miami International Airport – Miami, Florida
Containment Dike at Lake Cataouatche – New Orleans, Louisiana
Containment Dike at Chalmette Loop – New Orleans, Louisiana
American Airlines Arena – Miami, Florida
Expansion of the FIU Football Stadium
Expansion of the Northeast Terminal of the Orlando International Airport – Miami, Florida
Seven Oaks Dam – San Bernardino, California
Carnival Center for the Performing Arts – Miami, Florida
Miami International Airport Dolphin Garage Building – Miami, Florida
M-DWASD Head Office – Coral Gables, Florida
South Road System Extension – Miami International Airport – Miami, Florida
Miami International Airport North Terminal Extension – Miami, Florida
Fine Air Hangar at the Miami International Airport – Miami, Florida
Metromover – Miami, Florida
Western “U” Apron at the Miami International Airport – Miami, Florida
Fort Lauderdale International Airport Yard – Fort Lauderdale, Florida
Merrill Barber Bridge – Vero Beach, Florida
Santa Rosa Bridge – Santa Rosa County, Florida
Ritz-Carlton Key Biscayne Resort & Spa – Miami, Florida
Route 56 – San Diego, California
Miami International Airport Lobby “A” – Miami, Florida
American Airlines Terminal – Miami, Florida
Federal Express Terminal – Miami, Florida
Challenge Air Cargo Terminal – Miami, Florida
Miami International Airport Western “U” Cargo Terminal – Miami, Florida
Miami International Airport Control Tower – Miami, Florida
Golden Glades Viaduct – Miami, Florida

Odebrecht Organization
Founded in Bahia in 1944, Odebrecht Engenharia & Construção is currently the largest company in the sector in Latin America. With earnings of over R$ 18.7 billion in 2009, 70% of its revenues originate from projects abroad. It is present on the three Americas, Africa, Europe and the Middle East, and employs some 87,000 people.
The company, which has already completed nearly 2,000 projects in 35 different countries, provides integrated services in the areas of engineering, supply, construction, assembly and management of projects in the civil construction, industrial and special technology areas. Odebrecht Engineering & Construction includes six companies, consolidated in 2010, based on the business or geographic area of operations: Odebrecht Energia, Odebrecht Industrial, Odebrecht Infraestrutura, Odebrecht Latin America and Angola, Odebrecht Venezuela and Odebrecht International.
In 2009, Odebrecht finished building the Doraleh container terminal in Djibuti, and started the construction work to rebuild over 240 km of railroad for Arcelor Mittal in Liberia. Among its current projects, worthy of note are the Tripoli Airport (Libya) and the construction of an ethanol plant in Ghana.

The Bribery Schemes

According to its admissions, Odebrecht engaged in a massive and unparalleled bribery and bid-rigging scheme for more than a decade, beginning as early as 2001. During that time, Odebrecht paid approximately $788 million in bribes to government officials, their representatives and political parties in a number of countries in order to win business in those countries. The criminal conduct was directed by the highest levels of the company, with the bribes paid through a complex network of shell companies, off-book transactions and off-shore bank accounts.

As part of the scheme, Odebrecht and its co-conspirators created and funded an elaborate, secret financial structure within the company that operated to account for and disburse bribe payments to foreign government officials and political parties. By 2006, the development and operation of this secret financial structure had evolved such that Odebrecht established the “Division of Structured Operations,” which effectively functioned as a stand-alone bribe department within Odebrecht and its related entities. Until approximately 2009, the head of the Division of Structured Operations reported to the highest levels within Odebrecht, including to obtain authorization to approve bribe payments. After 2009, this responsibility was delegated to certain company business leaders in Brazil and the other jurisdictions. To conceal its activities, the Division of Structured Operations utilized an entirely separate and off-book communications system, which allowed members of the Division of Structured Operations to communicate with one another and with outside financial operators and other co-conspirators about the bribes via secure emails and instant messages, using codenames and passwords.

The Division of Structured Operations managed the “shadow” budget for the Odebrecht bribery operation via a separate computer system that was used to request and process bribe payments as well as to generate and populate spreadsheets that tracked and internally accounted for the shadow budget. These funds for the company’s sophisticated bribery operation were generated by the Odebrecht Finance Department through a variety of methods, as well as by certain Odebrecht subsidiaries, including Braskem. The funds were then funneled by the Division of Structured Operations to a series of off-shore entities that were not included on Odebrecht’s balance sheet as related entities. The Division of Structured Operations then directed the disbursement of the funds from the off-shore entities to the bribe recipient, through the use of wire transfers through one or more of the off-shore entities, as well as through cash payments both inside and outside Brazil, which were sometimes delivered using packages or suitcases left at predetermined locations.

Odebrecht, its employees and agents took a number of steps while in the United States to further the scheme. For instance, in 2014 and 2015, while located in Miami, two Odebrecht employees engaged in conduct related to certain projects in furtherance of the scheme, including meetings with other co-conspirators to plan actions to be taken in connection with the Division of Structured Operations, the movement of criminal proceeds and other criminal conduct. In addition, some of the off-shore entities used by the Division of Structured Operations to hold and disburse unrecorded funds were established, owned and/or operated by individuals located in the United States. In all, this conduct resulted in corrupt payments and/or profits totaling approximately $3.336 billion.

Braskem also admitted to engaging in a wide-ranging bribery scheme and acknowledged the pervasiveness of its conduct. Between 2006 and 2014, Braskem paid approximately $250 million into Odebrecht’s secret, off-book bribe payment system. Using the Odebrecht system, Braskem authorized the payment of bribes to politicians and political parties in Brazil, as well as to an official at Petróleo Brasileiro S.A. – Petrobras (Petrobras), the state-controlled oil company of Brazil. In exchange, Braskem received various benefits, including: preferential rates from Petrobras for the purchase of raw materials used by the company; contracts with Petrobras; and favorable legislation and government programs that reduced the company’s tax liabilities in Brazil. This conduct resulted in corrupt payments and/or profits totaling approximately $465 million.

Nadler’s Committee to Hold Mueller Report Hearings

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They have some old Nixon people to coming chat with them and this is after some select present and former IC officials have already been chatting with key democrats in the House. Swell eh?

The House Judiciary Committee will hold a series of hearings related to special counsel Robert Mueller’s report, with the first one titled “Lessons from the Mueller Report: Presidential Obstruction and Other Crimes” taking place next Monday.

Next week’s hearing will feature John Dean — the former White House counsel who famously turned on President Nixon during the Watergate investigation, as well as “former U.S. Attorneys and legal experts,” according to the committee’s press release.

“These hearings will allow us to examine the findings laid out in Mueller’s report so that we can work to protect the rule of law and protect future elections through consideration of legislative and other remedies,” Chairman Jerry Nadler (D-NY) said in a statement. “Given the threat posed by the President’s alleged misconduct, our first hearing will focus on President Trump’s most overt acts of obstruction.  In the coming weeks, other hearings will focus on other important aspects of the Mueller report.”

The announcement comes as calls for opening an impeachment inquiry have grown louder among House Democrats, particular after Mueller made rare on-camera remarks reiterating his report’s finding that President Trump could not be cleared of obstruction.

It is unclear whether this new series of hearings will tamp down the impeachment inquiry talk. The committee has held other hearings broadly related to topics covered by Mueller’s investigation, while its attempts to get key figures — particularly former White House Counsel Don McGahn and Attorney General Bill Barr — to testify have been stymied.

Note as well that Pelosi said last week the House will only do what will get results. Due to pressure, has she changed her mind? Even Nadler added that impeachment will only work if that is the will of the American people. What about Adam Schiff? Well he too just said on ABC, that ‘we are not there yet’.

 

REP. ADAM SCHIFF (D), HOUSE INTELLIGENCE COMMITTEE CHAIRMAN: Well, look, I think we’re going to do what’s right for the country and at this point, the speaker has not reached the conclusion and I haven’t had either it’s best for the country to put us through an impeachment proceeding that we know is destined for failure in the Senate. Now that calculus may change if the president continues to stonewall, if the president continues to demonstrate his unfitness for office. There may be little additional cost to going through that process.

It is in a way, even if unsuccessful in the Senate, the ultimate form of censure in the House. But we’re not there yet and I think if it is a close call, close calls go against putting the country through that. We have an important legislative agenda to try to advance, we have important oversight work we can do outside the context of impeachment, and I think at this point that is still the preferred course.

The democrats are resolute in ensuring this American political nightmare continues for many more months and they are fundraising from it all too. One has to ask if the DNC is paying media advertising rates to keep this up as long as ABC, CNN and the rest keep these talking heads on this topic…gotta wonder.

Fraud/Theft on Govt Contractor for Puerto Rico Hurricane

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Not only do individuals not do the research and proper vetting of people and information, but when the Federal government is guilty, things are really bad. The Federal government has people, technology and the resources to ‘get it right’ when it comes to spending taxpayer dollars but again, we get fleeced.

So we have this cockamamie contractor that in the end was just not real and no one up or down the system to figure that out. So, 475,000 tarps that were to be delivered to Puerto Rico, never happened but the money…well that is gone too. Yikes.

Puerto Rico: Where Americans live without roofs - CNN

Just for fun, read the contract here.

Now for the story that began burning in 2017 and continues.

The owners of the Textile Corporation of America promised the government that they could deliver 1,000 new jobs to residents of Pikeville, Tennessee, and millions of dollars of supplies to hurricane-ravaged Puerto Rico. And federal and state leaders lined up to support them, helping them secure millions of dollars in contracts and grants.

But two years later, the company is the subject of a federal criminal investigation alleging that its executives bilked taxpayers out of those millions.

According to affidavits filed by the Federal Bureau of Investigation in a federal court in Tennessee in October and February, the Textile Corporation of America (TCA) fabricated evidence of work performed at a Pikeville, Tennessee, textile plant in order to draw grants from the Tennessee Valley Authority (TVA)—a federally owned corporation—and the state’s Department of Economic and Community Development.

The FBI alleges that the company’s owners pocketed much of that money for personal use.

But more than a million dollars of the grant money, investigators say, went towards the purchase of tarps to fulfill a $30 million Federal Emergency Management Agency hurricane relief contract. The TCA sister company to which FEMA awarded that contract, Master Group USA (MGUSA), used more fraudulent paperwork, including fabricated copies of invoices and wire transfers, to conceal the fact that it was purchasing those tarps from China, in violation of federal sourcing laws, the FBI alleges. FEMA awarded MGUSA nearly $4 million before canceling the contract, after the tarps failed to meet quality requirements.

Some information about the scheme has trickled into public view over the past year. But the existence of a federal criminal investigation into TCA and MGUSA, and the full extent of their alleged fraud, as spelled out in a pair of FBI affidavits, has not been previously reported. Those affidavits, filed in November and February, sought the seizure of millions of dollars from the companies’ Pakistani-American owners, brothers Karim and Rahim Sadruddin, and search warrants for their email accounts and those of a number of family members allegedly involved in the scheme.

No criminal charges have yet been filed, and the Justice Department declined to comment. But the allegations against the Sadruddin brothers go beyond a typical case of procurement fraud, given the roster of high-profile politicians who lent their support to their companies over the past two years.

The Sadruddin brothers, and the family members allegedly party to the scheme, did not respond to requests for comment on the investigation. Nor did Troy King, the former attorney general of Alabama and TCA’s chief counsel.

King was one of a number of high-profile public figures who lined up to support TCA’s plans to buy, renovate, and revitalize the Pikeville textile plant. At an unveiling ceremony in July 2017, King, flanked by then-Tennessee Gov. Bill Haslam (R) and an aide to Rep. Scott DesJarlais (R-TN), said the project “represents the renaissance of America, the return of America as a global manufacturing center.”

“This is a great story,” DesJarlais said of the project. “A local entrepreneur made an investment in his community.”

“Textile Corporation of America’s commitment to create 1,000 jobs in Bledsoe County, a Tier 4 Distressed county, will have an incredible impact on the community and surrounding area,” promised Haslam. “We appreciate the company’s investment in our state and look forward to building a lasting partnership in the future.”

As of early this year, no work had been done at the site, and its gates had been padlocked.

A month before the ribbon-cutting ceremony, TCA received a $3 million “fast track” development grant from the state, $850,000 of which was to go towards purchasing the Pikeville facility, with the rest earmarked for redeveloping it. The company brought on a local contractor, Cagle Development, to assist with the project.

The structure of the grant stipulated that TCA would finance its own work at the site, then submit paperwork to a local development agency, which was charged with administering the grant funds. The agency would then use those funds to reimburse TCA for work performed.

In October 2017, TCA submitted its first tranche of paperwork for reimbursement: a $1.4 million invoice for work performed by Cagle on the site and records of a wire transfer from TCA’s bank account to Cagle’s. “

Ed Cagle, the contractor’s owner, recalled seeing a copy of the invoice in the company’s records and immediately recognizing that it was fraudulent. “He made up the invoice and put Cagle Development up top,” Cagle told The Daily Beast in an interview on Friday.

Cagle immediately called up the Pikeville mayor, who was one of TCA’s biggest boosters at the time and whom Cagle knew personally. “I never did receive this money,” Cagle told him. “I don’t know why somebody fabricated this but this is not me.”

Cagle would eventually tip off federal and state authorities to the apparent fabrication as well. “The FBI got involved, they came in and checked all my records,” he recalled. “They saw that I never did get the money,”

The FBI checked bank records as well and concluded that “the wire transfer record submitted by Karim Sadruddin to obtain a reimbursement… is, in fact, fraudulent.”

By the time authorities realized that TCA had already received reimbursement checks for both that $1.4 million and another $850,000 for the purchase of the Pikeville facility. In November 2017, Karim Sadruddin drove from his home in Atlanta to Pikeville, picked up the checks, and deposited them in a bank account with a prior balance of just $500.

Later that month, he submitted another invoice—also fraudulent, according to the FBI—for work ostensibly performed by Cagle and financed by TCA. In January, the company received a check for $728,000, every last penny available under the Pikeville grant.

Around the same time, the Sadruddins began hitting up the TVA for money as well. TCA had received a $230,000 performance grant from the federally owned company, and in January 2018, Rahim Sadruddin sent an email to the agency falsely claiming that the Pikeville facility was “in operation from this week onwards,” and that he wanted “to get in touch with you regarding the grant funds.”

In June, the Sadruddins officially certified that the Pikeville plant had been up and running for months. They secured the $230,000 in TVA grant money as a result.

In fact, according to the FBI, “the Pikeville facility was not commercially operational as a textile manufacturing plant. No textiles were being produced.” Instead, the affidavits allege, they were simply using the Pikeville facility as a warehouse to store tarps purchased to supply their sister company MGUSA’s $30.8 million FEMA contract, under which the company agreed to provide 475,000 tarps to areas hit by hurricanes in 2017, chiefly in Puerto Rico.

The Sadruddins had already begun transferring TCA’s grant money to MGUSA in order to purchase those tarps, according to the FBI. FEMA awarded the contract in November 2017, as TCA was drawing down its Pikeville grants. The FBI estimates that more than $1 million of TCA’s grant funds, or more than a third of the total, eventually went towards the purchase of tarps under the FEMA contract.

Soon after the contract was awarded, a FEMA representative reached out to MGUSA to verify that the tarps being provided complied with the Trade Agreements Act, which contains restrictions on countries of origin for such purchases. MGUSA documentation showed the tarps were being shipped from China, a nation barred by those sourcing restrictions.

To allay FEMA’s concerns, MGUSA provided copies of purchase orders and wire transfers designed to show that the tarps were purchased from a company in Taiwan and simply shipped through China to minimize transit costs. Those documents, the FBI alleges, were also fraudulent.

The Department of Homeland Security’s inspector general, which conducted its own investigation into the FEMA contract, determined that the Taiwanese company listed on those purchase orders didn’t actually exist. The IG also determined that the wire transfer records submitted to the agency were fraudulent.

The tarps were, in fact, coming from China. FBI investigators determined that the Sadruddins even visited the Chinese facility where they were being produced. Investigators interviewed that supplier, who told them that, “Karim wanted the tarps to be from a TAA compliant country, but the supplier explained to Karim that a factory in China was the only source which could produce the tarps in the needed time period, and after a couple of days, Karim Sadruddin agreed to take the tarps from China.”

MGUSA eventually provided more than 58,000 tarps under the contract, for which the company was paid more than $3.7 million, before FEMA suspended the work, citing concerns about the quality of the goods provided, and their Chinese sourcing. It’s not clear how many actually made it to Puerto Rico.

As it pursues a criminal investigation against the Sadruddins, the FBI has also sought to recoup the millions of dollars they say were illegally extracted by their two companies. But the frequent transfers of money between various bank accounts owned by the Sadruddin brothers and the family has apparently made recouping that money difficult.

The FBI attempted to seize more than $815,000, for instance, from a bank account in the name of Rahim Sadruddin’s wife, Fatima. But according to court filings, the bank could only locate about $130,000 of those funds.

For the residents of Pikeville, the cost of the Sadruddins’ alleged fraud can’t be measured just in dollar terms.

“What really upset me was offering people over there 1,000 jobs,” said Cagle of TCA’s textile project. “These people really put a lot of hope into that. So to see somebody come in and steal all their grant money, and them living like kings, that’s what bothers me the most.”

Cagle sighed. “I wish I’d never met them.”