A federal undercover investigation reveals that terrorists or criminals could steal an American citizen's identity, use basic counterfeiting skills to create fraudulent documentation for that identity, and obtain a genuine U.S. passport from US State Department.

A genuine U.S. passport is a vital document, permitting its owner to travel freely in and out of the United States, prove U.S. citizenship, obtain further identification documents, and set up bank accounts, among other things.

Unfortunately, a terrorist or other criminal could take advantage of these benefits by fraudulently obtaining a genuine U.S. passport from the Department of State.

At a briefing on the results of GAO's investigation, State officials agreed with GAO that the investigation exposes a major vulnerability in State's passport issuance process. According to State officials, the department's fraud detection efforts are hampered by limitations to its information sharing and data access with other federal and state agencies.

After GAO's briefing, State officials notified GAO that they identified and revoked GAO's four fraudulently obtained U.S. passports, and were studying the matter to determine the appropriate steps for improving State's passport issuance process.

Nicholas Cosmo, 37, the owner and president of Agape World, Inc. and Agape Merchant Advance, LLC, was arrested Tuesday night as a result of a federal complaint charging him with mail fraud, according to a report obtained by the Fraud & Corruption Committee of the National Association of Chiefs of Police.

Federal agents executed search warrants at the Agape and AMA offices located in Hauppauge, Maspeth, and Jackson Heights (Queens County), New York, and the government has moved to freeze bank accounts related to Agape, AMA, Cosmo, and others, and has seized $1.5 million thus far. The defendant’s initial appearance occurred yesterday before United States Magistrate Judge E. Thomas Boyle at the U.S. Courthouse, 100 Federal Plaza, Central Islip, New York.

The charges were announced by Benton J. Campbell, United States Attorney for the Eastern District of New York, Ronald J. Verrochio, Inspector-in-Charge, New York Division, U.S. Postal Inspection Service, and Joseph M. Demarest, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

According to the complaint, the defendant planned and carried out a fraudulent scheme in which he, and others acting at his direction, represented to investors that money they invested in Agape and AMA would be used to provide short-term loans to businesses, that the loans would be secured by borrowers’ assets with 99% security on their investments, and that investors would receive substantial interest returns ranging as high as 48% to 80% per year.

While a small number of interest-generating loans were made to commercial borrowers, bank and trading records reveal that most of the money invested in Agape and AMA was used to pay prior investors, to pay more than $55 million to brokers who recruited the investors, and to fund seven commodities futures trading accounts controlled by Cosmo and through which he lost more than $80 million between October 2003 and October 2008.

The records also indicate that, from January 1, 2006, until November 30, 2008, more than $370 million was deposited into Agape and AMA bank accounts, the vast majority of which was provided by more than 1,500 investors, and that less than $10 million of the $370 million was actually lent to commercial borrowers. As of January 22, 2009, there was approximately $746,000 remaining in the Agape and AMA bank accounts.

By paying investors partial returns -- represented to be profits from interest-generating loans -- Cosmo persuaded current investors to invest additional funds in Agape and AMA, and also encouraged new victims to invest in the two companies. To conceal the fact that the returns paid to investors were really funds provided by new investors, Cosmo falsely inflated profits from some of the commercial loans that were actually made.

For example, he distributed approximately $5.2 million to more than 100 investors, claiming that the money represented the principal and profits related to a single commercial loan. In fact, that particular loan generated less than $45,000 in interest for Agape, and the balance of the $5.2 million return was drawn from funds provided by new victim-investors.

“This defendant, who operated a classic Ponzi scheme to enrich himself and his colleagues at the expense of investors, is now in custody and the government’s investigation is continuing,” stated United States Attorney Campbell. “In these difficult economic times, it bears repeating that if an investment opportunity seems too good to be true – promising unusually high returns and virtually no risk – it is probably not on the level.” Mr. Campbell extended his grateful appreciation to the Postal Inspection Service and the FBI for their assistance.

FBI Assistant Director-in-Charge Demarest stated, “Investors generally understand that there’s a correlation between risk and reward, and high-yield investments offer higher rates of return to compensate investors for greater risk. But Nicholas Cosmo not only understated the risk, he completely misrepresented the underlying investments. When you lie about what you’re selling people, that’s fraud.”

Postal Inspector-in-Charge Verrochio stated, “Operators of Ponzi schemes tell investors they can’t lose, when in fact most never win. The defendant in this case lured his clients with promises of high returns on their investments, but in the end his pyramid of deception came crumbling down but not before losing millions of dollars, their dollars! As long as Americans are victimized by those who use the U.S. Mail to defraud, Postal Inspectors will be on their trail.

If convicted, Cosmo faces up to 20 years in prison on the mail fraud charge. He also faces a fine of up to the greater of $250,000, or twice the pecuniary gain or loss. The government’s case is being prosecuted by Assistant United States Attorneys Grace M. Cucchissi and Vincent Lipari.

While most of the focus of federal law enforcement today is on counterterrorism, federal police agencies must still contend with more traditional anti-crime operations including emerging organized crime gangs.

Criminal enterprises represent a near and long-term threat to our nation. The criminal activities of these enterprises are increasing in scope and magnitude as they network with each other to expand operations worldwide. The geopolitical and technological changes of the last decade have allowed these enterprises to flourish globally, and their impact on the United States is expected to increase over the next five years.

Organized crime groups from Russia and other former members of the Soviet Union are engaged in racketeering activity, and are deeply involved in large scale white collar crime. They are skilled in the use of monetary systems to funnel and conceal the proceeds of their criminal activity, employing state-of-the-art encryption to safeguard their communication networks against traditional forms of detection.

Asian criminal enterprises are composed of U.S.-born citizens and immigrants. They are multi-crime organizations that, like other ethnically-based criminal enterprises, often victimize their own ethnic immigrant communities.

These communities are typically hesitant to report victimization to authorities. As the immigration of Russian, former Soviet Union, and Asian populations into the United States increases in the next five years, so too will related ethnic organized crime. 

La Cosa Nostra and Italian organized crime enterprises still pose a significant threat and will continue to influence the political and economic structure of the United States through engagement in racketeering-related activity. Alien smuggling and human trafficking will also continue to pose significant threats to the national security, as transnational criminal enterprises expand their activities in this area for economic profit.

In addition, the ability to facilitate the entry of illegal aliens into the United States could potentially be used to increase the membership of some of these criminal enterprises such as La Mala Salvatrucha or MS-13.

An emerging crime problem is Balkan criminal enterprises, specifically Albanian transnational organizations or clans. They are rapidly expanding their criminal activities to include loan sharking, weapons trafficking, alien smuggling, stock market manipulation, human trafficking, and drug trafficking. Additionally, these clans are forming partnerships with La Cosa Nostra, or LCN, crime families, as well as challenging traditional organized crime enterprises for territory.

Major theft rings account for billions of dollars in losses suffered by our nation's businesses, with corresponding price increases passed on to the US consumer. Loss prevention and asset protection are top priorities for corporate America as increasingly sophisticated and highly organized criminal enterprises engage in cargo theft, high tech theft, vehicle theft, jewelry and gem theft, organized retail theft, art and cultural antiquity theft, and other major theft activity.

Drug trafficking remains a significant problem. The impact of illegal drug abuse is estimated to be over $160 billion in U.S. economic losses each year, including costs associated with health care, violent crime, and lost productivity. Colombian criminal enterprises are the largest source of cocaine in the world, and are also major heroin suppliers to the U.S. market.

Mexican criminal enterprises manufacture and supply much of the methamphetamine available in the United States, and transport the majority of cocaine and heroin into our nation. The ability of Mexican enterprises to corrupt public officials in Mexico and the United States has enhanced their capability to transport and distribute these illicit drugs.

Caribbean-based criminal enterprises specialize in the transportation and smuggling of drugs into Puerto Rico and the U.S. mainland. Over the next five years, South American and Mexican drug trafficking organizations will continue to maintain their dominance, and Caribbean-based groups will provide alternate importation routes.

A rise in homicides from 1999 through 2006, and continued incidence of other violent crimes have been attributed to the resurgence of violent gangs in major metropolitan areas, such as Chicago, Los Angeles, and New York, which average approximately 600 homicides per year. Within hours after celebrating the New Year, the city of Newark, NJ, experienced six homicides, all deemed gang-related.

Over the next five years, the Federal Bureau of Investigation must continue to focus the resources of Safe Streets Task Forces to combat those violent street gangs having major impact in our communities. This will necessitate use of RICO (Racketeering Influence and Criminal Organization Act).

Sources: National Association of Chiefs of Police, US Department of Justice, Federal Bureau of Investigation, Drug Enforcement Administration   

Ivan Gonzalez-Bejarano, 48, linked to the Cali Cartel, was sentenced by U.S. District Judge Steven D. Merryday to a term of life imprisonment for conspiracy to import and distribute more than five kilograms of cocaine.

The joint federal investigation, that spanned several years, yielded information revealing that Gonzalez-Bejarano had been trafficking cocaine into the U.S. for at least 20 years.

Gonzalez-Bejarano, also known as Flaco, Omar, Marino, Don Ruben, and El Vincino, was found guilty Friday, Oct. 17, 2008, following a two-week jury trial.

Gonzalez-Bejarano was high ranking member of the Cali Cartel, an organization responsible for smuggling more than 30 metric tons of cocaine.

The sentencing was the culmination of a multi-year investigation by the Panama Express South Strike Force, a federally approved Organized Crime Drug Enforcement task force consisting of ICE, the Drug Enforcement Agency (DEA); the Coast Guard; the Internal Revenue Service (IRS); the FBI and Joint Interagency Task Force South.

Operation Panama Express targets Colombian maritime smuggling organizations responsible for cocaine trafficking throughout the Easter Pacific to the U.S. and elsewhere for distribution.

The case was prosecuted by Assistant United States Attorney Walter E. Furr, III.

Jim Kouri, CPP is currently fifth vice-president of the National Association of Chiefs of Police and he's a staff writer for the New Media Alliance (thenma.org).  In addition, he's the new editor for the House Conservatives Fund's weblog. Kouri also serves as political advisor for Emmy and Golden Globe winning actor Michael Moriarty. 

He's former chief at a New York City housing project in Washington Heights nicknamed "Crack City" by reporters covering the drug war in the 1980s. In addition, he served as director of public safety at a New Jersey university and director of security for several major organizations.  He's also served on the National Drug Task Force and trained police and security officers throughout the country.   Kouri writes for many police and security magazines including Chief of Police, Police Times, The Narc Officer and others. He's a news writer for TheConservativeVoice.Com and PHXnews.com.  He's also a columnist for AmericanDaily.Com, MensNewsDaily.Com, MichNews.Com, and he's syndicated by AXcessNews.Com.   He's appeared as on-air commentator for over 100 TV and radio news and talk shows including Oprah, McLaughlin Report, CNN Headline News, MTV, Fox News, etc.  His book Assume The Position is available at Amazon.Com. Kouri's own website is located at http://jimkouri.us