National Roundup

Wisconsin
Ex-financial adviser sentenced to 63 months for fraud scheme

MILWAUKEE (AP) — A former financial adviser has been sentenced in Milwaukee to more than five years in federal prison for scamming $2.6 million from 27 victims, including his own parents.

According to court records, Edward Matthes, 51, persuaded family, friends and community members in Oconomowoc to invest in fictitious Mutual of Omaha accounts. Matthes put the funds into his own bank account from 2013 to 2019 and used the money for home improvements, vacations, child support and other things, prosecutors said.

Matthes pleaded guilty to three counts of wire fraud in November 2020, the Journal Sentinel reported. The U.S. Department of Justice recently announced that Matthes was sentenced to 63 months in prison.

FBI Special Agent in Charge Robert Hughes said Matthes took advantage of vulnerable people.

“Most of his victims were elderly, and he spent years gaining their trust, only to wipe out a lifetime of their savings,” Hughes said. “I commend the tireless efforts of our special agents and law enforcement partners who worked jointly to bring this case to justice.”

Eastern District Court Judge Brett Ludwig, during sentencing, described Matthes’ conduct as “aggravated” and said he “cultivated trust” and maintained a “veneer of friendship” with his victims while he stole their retirement savings.

Nevada
Russian to be deported after failed Tesla ransomware plot

RENO, Nev. (AP) — A Russian man was sentenced Monday to what amounted to time already served and will be deported after pleading guilty to trying to pay a Tesla employee $500,000 to install computer malware at the company’s Nevada electric battery plant in a bid to steal company secrets for ransom.

Egor Igorevich Kriuchkov, appearing by videoconference from jail, apologized after U.S. District Judge Miranda Du in Reno acknowledged the attempted hack was not successful and the company network was not compromised.

“I’m sorry for my decision. I regret it,” the 27-year-old Kriuchkov said through a Russian-language court interpreter.

Chris Frey, his court-appointed attorney, said Kriuchkov speaks fluent English, but the judge provided the interpreter anyway.

Kriuchkov said the nine months he has been in U.S. custody made him reflect on the pain he caused his family in Russia and the damage caused to his reputation. Several family members sent email messages to the judge seeking leniency.

“I understand it was a bad decision,” said Kriuchkov said, who could have faced up to five years in prison and a $250,000 fine.

The judge, who agreed not to use the company name in court, went along with a plea agreement reached between prosecutors and Kriuchkov.

He was sentenced to 10 months in custody for his guilty plea in March to conspiracy to intentionally cause damage to a protected computer; to pay about $14,825 in restitution for company time investigating the attempted intrusion and turning the case over to the FBI; and three years of federal supervision if he remains in the U.S. or returns from abroad. He will remain in custody until he leaves the country.

Tesla CEO Elon Musk acknowledged after Kruichkov’s arrest in August in Los Angeles that the company had been the target of what Musk termed a serious effort to collect company secrets. Federal authorities had said Kriuchkov was heading to an airport to fly out of the country.

Tesla has a massive factory near Reno that makes batteries for electric vehicles and energy storage units. Company officials did not immediately respond Monday to messages seeking comment/
The judge put the amount Kriuchkov offered to pay the unidentified employee at $500,000. She did not address previous reports that the bribe amounted to $1 million.

Federal authorities credited the employee with reporting Kriuchkov’s overtures to company officials.

The hack was designed as a distributed denial-of-service attack, using junk data to flood the Tesla computer system, while a second intrusion would let co-conspirators extract data from the company network and demand ransom with the threat of making the information public.

Other suspected co-conspirators are identified in court document by nicknames, and references are made to at least one other failed effort to target another unidentified company.

Kriuchkov told a judge in September that he knew the Russian government was aware of his case, but prosecutors and the FBI never alleged ties to the Kremlin.

“There’s no question the offense is serious,” Du said, citing concerns about “these types of cyber-ransom offenses” in the U.S. and other countries. “Fortunately, the scheme was not successful.”

California
2 ex-officers charged with bribery in exotic car scheme

LOS ANGELES (AP) — Two former California Highway Patrol officers have been charged with accepting $35,000 in bribes in exchange for falsifying records for exotic cars, authorities said.

Jessie Anthony Carrillo and James Yao Kuo pleaded not guilty Monday during their arraignment in Los Angeles County Superior Court on one count each of conspiracy and three counts of accepting a bribe, according to the California Attorney General’s Office.

Kuo’s attorney, Daniel V. Nixon, said his client denies any wrongdoing.

“He flatly rejects the allegations made against him in the complaint and we expect to vigorously defend the case in court in the weeks ahead,” Nixon said in an email.

Carrillo’s attorney, Sam Tyre, said his client looks forward to “the truth coming out.”

“The truth will show Jessie has done nothing wrong and he is not guilty of any charges,” Tyre said in an email.

The charges were filed on Jan. 19 by the state’s Department of Justice, and the former officers surrendered to authorities six days later.

Carrillo and Kuo conspired to alter documents intended for Carfax and the state’s Department of Motor Vehicles for two so-called “gray market” vehicles in 2016 and 2017, authorities said.

Such vehicles are imported into the U.S.and are often illegal to drive in California because they may not meet safety or emission standards and cannot be registered.

Authorities did not uncover the scheme until 2019, according to court documents, when Kuo’s former girlfriend told the CHP that the two officers had been accepting money to submit false paperwork to the DMV.

Kuo was no longer employed with the CHP as of August 2020, the agency said, and Carrillo was no longer employed as an officer as of January 2020. It was not clear what led to their departures from the highway patrol last year.

Kuo worked out of the East Los Angeles Area office and Carrillo was assigned to the agency’s Southern Division office.

The CHP declined to comment further.