Attorney General Horne Announces Indictment of Scott Helmer on Charges of Fraudulent Schemes

PHOENIX (Wednesday, February 23, 2011) -- Attorney General Tom Horne announced today that Scott Arthur Helmer, 36, of Tempe, Arizona was indicted by an Arizona State Grand Jury of 20 charges related to his operation of his insurance business, Helmer Risk Management, LLC located in Scottsdale, Arizona.

Helmer is charged with eleven counts of Fraudulent Schemes and Artifices, class 2 felonies, five counts of Theft, class 2 felonies and four counts of Theft, class 3 felonies.

The indictment alleges between November 1, 2008 and December 31, 2009 that Helmer, in his capacity as a licensed insurance broker inArizona, diverted insurance premiums for commercial policies covering eleven businesses. The State alleges that Helmer used the premiums paid by the businesses to finance his insurance agency and personal lifestyle instead of forwarding the money to the appropriate insurance companies.

Scott Helmer and Helmer’s Risk Management, LLC’s insurance licenses were revoked by the Arizona Department of Insurance on November 18, 2009.

These charges are merely allegations, and Scott Helmer is presumed innocent until and unless proven guilty.

This case was investigated by the Arizona Department of Insurance Fraud Unit. Arraignment for Scott Helmer is scheduled for February 28, 2011 at 8:30 a.m. before Commissioner Rees of the Maricopa County Superior Court.



Indictment Below:

THOMAS C. HORNE
Attorney General
Firm Bar No. 14000

BEVERLY RUDNICK
State Bar No. 024531
Assistant Attorney General
1275 West Washington Street
Phoenix, Arizona 85007-2926
Telephone 602-542-3881
crmFraud@azag.gov

Attorneys for Plaintiff

IN THE SUPERIOR COURT OF THE STATE OF ARIZONA
IN AND FOR THE COUNTY OF MARICOPA

STATE OF ARIZONA,                         Plaintiff, v. SCOTT ARTHUR HELMER, (001)                         Defendant.

Case No:    68 SGJ INDICTMENT CHARGING VIOLATIONS OF: COUNTS 1-11: FRAUDULENT SCHEMES AND ARTIFICES, Class 2 Felonies, in violation of A.R.S. 13-2310; COUNTS 12-16: THEFT, Class 2 Felonies, in violation of A.R.S. § 13-1802; COUNTS 17-20: THEFT, Class 3 Felonies, in violation of A.R.S. § 13-1802.

The Arizona State Grand Jury accuses SCOTT ARTHUR HELMER, charging on this    
     day of February, 2011 that in or from Maricopa County, Arizona:

COUNT 1: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about June 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.
Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from Algae Energae and Standard Funding Corporation for premiums to purchase an insurance policy and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of an insurance policy with XL Specialty Insurance Company.

COUNT 2: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about March 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from Blackwell Enterprises and Standard Funding Corporation for premiums to purchase an insurance policy and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of an insurance policy with Arch Specialty Insurance.

COUNT 3: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about March 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from High Mountain Inspection and Standard Funding Corporation for premiums to purchase insurance policies and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of insurance policies with Arch Specialty Insurance, Lexington Insurance Company, Fireman’s Fund Insurance Group, Interstate Fire Insurance Company and Indian Harbor Insurance.

COUNT 4: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about November 1, 2008, and ending on or about July 31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from J & L Pipeline and Standard Funding Corporation for premiums to purchase insurance policies and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of insurance policies with Arch Specialty Insurance, RSUI Indemnity and American International Specialty Insurance Company.

COUNT 5: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about March 1, 2009, and ending on or about August  31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from Wesco Minerals and Standard Funding Corporation for premiums to purchase an insurance policy and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of an insurance policy with Fireman’s Fund Insurance Group.

COUNT 6: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about July 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from Ferguson Service Systems and Standard Funding Corporation for premiums to purchase insurance policies and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of insurance policies with Fireman’s Fund Insurance Group, Century Surety Company and Commerce & Industry Insurance Company.

COUNT 7: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about July 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from Citrus Energy, LLC and Standard Funding Corporation for premiums to purchase insurance policies and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of insurance policies with Indian Harbor Insurance Company, USF Insurance Company and Associated International Insurance.

COUNT 8: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about July 1, 2009, and ending on or about September 30, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from Drexel Diesel Services and Standard Funding Corporation for premiums to purchase an insurance policy and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of an insurance policy with Arch Specialty Insurance.

COUNT 9: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about May 1, 2009, and ending on or about December 31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from Turner Point Energy and Standard Funding Corporation for premiums to purchase an insurance policy and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of an insurance policy with Maxum Indemnity Company.

COUNT 10: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about April 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from Doug Terry Racing and Standard Funding Corporation for premiums to purchase an insurance policy and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of an insurance policy with Fireman’s Fund Insurance Group.

COUNT 11: FRAUDULENT SCHEMES AND ARTIFICES

During a period of time beginning on or about July 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER pursuant to a scheme or artifice to defraud, knowingly obtained a benefit by means of false or fraudulent pretenses, representations, promises or material omissions, in violation of A.R.S. §§13-2310, 13-2301, 13-603, 13-701, 13-702, 13-703, 13-801 and 13-804.

Said conduct occurred when SCOTT ARTHUR HELMER obtained proceeds from Arizona Clean Fuels and Standard Funding Corporation for premiums to purchase an insurance policy and SCOTT ARTHUR HELMER did not forward all of those proceeds towards the purchase of an insurance policy with Essex Insurance Company.

COUNT 12: THEFT

During a period of time beginning on or about June 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER without lawful authority, knowingly converted for an unauthorized term or use services or property of another, in an amount more than $25,000,  entrusted to him or placed in his possession for a limited, authorized term or use in violation of A.R.S. §§13-1802(A)(2), 13-1801, 13-1802(G), 13-1802(H), 13-603, 13-701, 13-702, 13-801, and 13-804.

            Said conduct occurred when SCOTT ARTHUR HELMER used monies entrusted to him, as a licensed insurance agent, by Algae Energae and Standard Funding Corporation to be used for the purchase of an insurance policy. SCOTT ARTHUR HELMER used these funds for his own unauthorized purposes.

COUNT 13: THEFT

During a period of time beginning on or about March 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER without lawful authority, knowingly converted for an unauthorized term or use services or property of another, in an amount more than $25,000,  entrusted to him or placed in his possession for a limited, authorized term or use in violation of A.R.S. §§13-1802(A)(2), 13-1801, 13-1802(G), 13-1802(H), 13-603, 13-701, 13-702, 13-801, and 13-804.

            Said conduct occurred when SCOTT ARTHUR HELMER used monies entrusted to him, as a licensed insurance agent, by Blackwell Enterprises and Standard Funding Corporation to be used for the purchase of an insurance policy. SCOTT ARTHUR HELMER used these funds for his own unauthorized purposes.

COUNT 14: THEFT

During a period of time beginning on or about March 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER without lawful authority, knowingly converted for an unauthorized term or use services or property of another, in an amount more than $25,000,  entrusted to him or placed in his possession for a limited, authorized term or use in violation of A.R.S. §§13-1802(A)(2), 13-1801, 13-1802(G), 13-1802(H), 13-603, 13-701, 13-702, 13-801, and 13-804.

            Said conduct occurred when SCOTT ARTHUR HELMER used monies entrusted to him, as a licensed insurance agent, by High Mountain Inspection and Standard Funding Corporation to be used for the purchase of an insurance policy. SCOTT ARTHUR HELMER used these funds for his own unauthorized purposes.

COUNT 15: THEFT

During a period of time beginning on or about November 1, 2008, and ending on or about July 31, 2009, Defendant SCOTT ARTHUR HELMER without lawful authority, knowingly converted for an unauthorized term or use services or property of another, in an amount more than $25,000,  entrusted to him or placed in his possession for a limited, authorized term or use in violation of A.R.S. §§13-1802(A)(2), 13-1801, 13-1802(G), 13-1802(H), 13-603, 13-701, 13-702, 13-801, and 13-804.

            Said conduct occurred when SCOTT ARTHUR HELMER used monies entrusted to him, as a licensed insurance agent, by J & L E Pipeline and Standard Funding Corporation to be used for the purchase of an insurance policy. SCOTT ARTHUR HELMER used these funds for his own unauthorized purposes.

COUNT 16: THEFT

During a period of time beginning on or about March 1, 2009, and ending on or about August  31, 2009, Defendant SCOTT ARTHUR HELMER without lawful authority, knowingly converted for an unauthorized term or use services or property of another, in an amount more than $25,000,  entrusted to him or placed in his possession for a limited, authorized term or use in violation of A.R.S. §§13-1802(A)(2), 13-1801, 13-1802(G), 13-1802(H), 13-603, 13-701, 13-702, 13-801, and 13-804.

            Said conduct occurred when SCOTT ARTHUR HELMER used monies entrusted to him, as a licensed insurance agent, by Wesco Minerals and Standard Funding Corporation to be used for the purchase of an insurance policy. SCOTT ARTHUR HELMER used these funds for his own unauthorized purposes.

COUNT 17: THEFT

During a period of time beginning on or about July 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER without lawful authority, knowingly converted for an unauthorized term or use services or property of another, in an amount more than $4,000 but less than $25,000,  entrusted to him or placed in his possession for a limited, authorized term or use in violation of A.R.S. §§13-1802(A)(2), 13-1801, 13-1802(G), 13-1802(H), 13-603, 13-701, 13-702, 13-801, and 13-804.

            Said conduct occurred when SCOTT ARTHUR HELMER used monies entrusted to him, as a licensed insurance agent, by Ferguson Service Systems and Standard Funding Corporation to be used for the purchase of an insurance policy. SCOTT ARTHUR HELMER used these funds for his own unauthorized purposes.

COUNT 18: THEFT

During a period of time beginning on or about July 1, 2009, and ending on or about October 31, 2009, Defendant SCOTT ARTHUR HELMER without lawful authority, knowingly converted for an unauthorized term or use services or property of another, in an amount more than $4,000 but less than $25,000,  entrusted to him or placed in his possession for a limited, authorized term or use in violation of A.R.S. §§13-1802(A)(2), 13-1801, 13-1802(G), 13-1802(H), 13-603, 13-701, 13-702, 13-801, and 13-804.

            Said conduct occurred when SCOTT ARTHUR HELMER used monies entrusted to him, as a licensed insurance agent, by Citrus Energy, LLC and Standard Funding Corporation to be used for the purchase of an insurance policy. SCOTT ARTHUR HELMER used these funds for his own unauthorized purposes.

COUNT 19: THEFT

During a period of time beginning on or about July 1, 2009, and ending on or about September 30, 2009, Defendant SCOTT ARTHUR HELMER without lawful authority, knowingly converted for an unauthorized term or use services or property of another, in an amount more than $4,000 but less than $25,000,  entrusted to him or placed in his possession for a limited, authorized term or use in violation of A.R.S. §§13-1802(A)(2), 13-1801, 13-1802(G), 13-1802(H), 13-603, 13-701, 13-702, 13-801, and 13-804.

            Said conduct occurred when SCOTT ARTHUR HELMER used monies entrusted to him, as a licensed insurance agent, by Drexel Diesel Services and Standard Funding Corporation to be used for the purchase of an insurance policy. SCOTT ARTHUR HELMER used these funds for his own unauthorized purposes.

COUNT 20: THEFT

During a period of time beginning on or about May 1, 2009, and ending on or about December 31, 2009, Defendant SCOTT ARTHUR HELMER without lawful authority, knowingly converted for an unauthorized term or use services or property of another, in an amount more than $4,000 but less than $25,000,  entrusted to him or placed in his possession for a limited, authorized term or use in violation of A.R.S. §§13-1802(A)(2), 13-1801, 13-1802(G), 13-1802(H), 13-603, 13-701, 13-702, 13-801, and 13-804.

            Said conduct occurred when SCOTT ARTHUR HELMER used monies entrusted to him, as a licensed insurance agent, by Turner Point Energy and Standard Funding Corporation to be used for the purchase of an insurance policy. SCOTT ARTHUR HELMER used these funds for his own unauthorized purposes.

Pursuant to A.R.S. § 21-425, the State Grand Jurors find that the offenses described above were committed in Maricopa County, Arizona.

                                                                    
(A "True Bill")

THOMAS C. HORNE
ATTORNEY GENERAL
STATE OF ARIZONA  
Dated:                                                                   



                                                                                                                                                                    
BEVERLY RUDNICK                                                   Foreperson of the State Grand Jury
Assistant Attorney General

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ATTORNEY GENERAL HORNE CO-SPONSORING FAIR HOUSING WEBINAR FRIDAY

PHOENIX (Tuesday, February 22, 2011) - Attorney General Tom Horne is inviting the public to participate in a fair housing webinar on Friday, February 25th from 9:30 am to noon.

The webinar will feature a panel of experts from the Arizona Attorney General’s Office, Community Legal Services, the Southwest Fair Housing Council, and Don’t Borrow Trouble Arizona. Discussion topics will include discrimination, reasonable accommodations, complaints, equal opportunities, protected classes, assistive animals, children and fair lending.

“As Arizona’s Attorney General, it is my responsibility to enforce Arizona’s Fair Housing Act as well as to educate our community about the importance of fair housing and the requirements of our civil rights laws,” said Horne. “Some housing violations take place because people are unaware of fair housing laws. Others are deliberate acts of discrimination. I encourage all Arizonans to learn more about their fair housing rights and responsibilities.”

Register online now at www.dbtaz.org or call 1-888-624-4611.

The Attorney General’s Civil Rights Division is always available to provide training to businesses and professional associations that are working to comply with the law. Information on events and training provided by the Division throughout the year can be found on the Attorney General’s Office website, www.azag.gov.

If you would like more information or feel you have been a victim of housing discrimination, please call the Attorney General’s Office at 602-542-5263 or email at civilrightsinfo@azag.gov.

For more information, contact Arizona Attorney General's Office Director of Community Education and Outreach Kathleen Winn 602-542-6903.

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HORNE SAYS MEXICO RISKS BECOMING A FAILED STATE UNLESS MEXICO AND THE U.S. COOPERATE TO COMBAT DRUG VIOLENCE AND ECONOMIC UPHEAVAL

PHOENIX (Wednesday, February 16, 2011) -- Attorney General Tom Horne, speaking at the Border Security Expo and Conference in Phoenix, said today that the United States and Mexico need to work in cooperation to combat the organized criminal enterprises that control drug traffic into the U.S. These criminal enterprises could threaten the Mexican government, and it is very much in the interests of the U.S. and Arizona to help Mexico.

“The criminal enterprises are engaging in diversified organized criminal activity ranging from hijacking cargo shipments to murder,” Horne noted. “This is in addition to promulgating an unprecedented wave of violence targeting judges, mayors, law enforcement officials, journalists and innocent civilians. These criminal enterprises do this because it is in their nature, and they will continue to escalate their parasitic criminal conduct without regard for the economic, moral or societal consequences because their ultimate aim is power, money and control of the border.”

Horne made a number of specific proposals.

“I am calling on the governments of both the U.S. and Mexico to immediately begin work to cut off funding for border criminal enterprises; begin joint U.S. and Mexico prosecution of cross-border criminal activity in commercial endeavors; enlist international businesses in eliminating money laundering; increase multi-agent and bi-national crime fighting task forces including those that target the flow of illegal weapons into Mexico; help Mexico reform its justice and law enforcement system, including new laws adopting U.S. methods for asset forfeiture, anti-racketeering laws, as well as terrorism, and joint anti-corruption efforts.”

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AG Horne Speech Below –

CRIMINAL ENTERPRISES HEADQUARTERED IN MEXICO ARE A SUBSTANTIAL AND URGENT THREAT TO MEXICAN AND U.S. ECONOMIC STABILITY

I come here to propose a new three-cornered partnership: 1) among all U.S. Law enforcement—federal, state, and local; 2) among all U.S. law enforcement and Mexican law enforcement; and 3) between U.S. and Mexican law enforcement and affected industries, particularly transnational businesses that are victims of or are being misused by criminal enterprises.

The criminal enterprises operating in and from Mexico present an immediate and escalating threat to the economic well-being of the region and therefore to North America.

Smuggling activity is present on virtually every international border. The necessary existence of import restrictions creates profit-making opportunities for smugglers.

The U.S./ Mexico border separates the largest economy in the world and the U.S.’s second largest trading partner. Accordingly, smuggling across this border is a profitable activity. Generations of generally familial smuggling organizations exist on both sides of the border. These organizations have deep roots in the fabric of the cities and towns along all of the trade routes between the U.S. and Mexico.

Mexican criminal enterprises now present a new and different threat to North American well-being. They are fiercely competitive multi-crime criminal enterprises. This discussion uses the term “criminal enterprises” because this term is used in federal and state racketeering statutes.

There are many sources of the increased power of criminal enterprises.

1. Immigration into the U.S. brought Mexican criminals to U.S. cities in large numbers in the 1990s. Substantial Mexican criminal populations allow drug organizations to rely on extended ties to integrate their distribution networks.
2. The Mexican Criminal Enterprises have incorporated influences from the “Zetas,” former members of an elite military unit originally recruited by a drug organization as mercenaries in inter-enterprise warfare. The Zetas brought with them greater eagerness to diversify into criminal opportunities other than drug smuggling.
3. Other opportunities for bringing young men to northern Mexico included preparation for people to illegally cross the border. Maquiladoras plants brought many unemployed young men to northern Mexico. Underemployed, disaffected young men, feeling the self-perceived invincibility of youth and eager to prove themselves are ready for recruitment into criminal organizations and related street gangs. When conflicts mean that a kingpin’s relatives may die or be injured, naked aggression is not as attractive as when the casualties will be replaceable strangers. Aggression and brutality became more acceptable.
4. The threat posed by the Mexican Criminal Enterprises continues to escalate because of persistent popular ignorance and misinformation on both sides of the border.

It does not appear to be widely understood that continued consumption of Mexico-sourced drugs is the direct root cause of the erosion of the free democracy in Mexico and ultimately of the economy of North America. Young people forego tuna that has not been harvested with adequate care for dolphins. They are acutely aware of the indirect consequences of their consumer decisions. Yet they continue to buy Mexico-sourced drugs as if there were no consequences for these decisions.

The Criminal Enterprises are engaging in diversified organized criminal activity, such as diverting petroleum products, hijacking truck and train cargo, extorting major businesses, and targeted intelligence-driven kidnappings of business leaders. They are uniquely situated for attacks on trade because they grew out of smuggling organizations, so they have deep roots on the key trade routes between the U.S. and Mexico. Apart from the direct injury to the immediate victims, these criminal activities are strategically significant in two ways. First, they are sources of income and therefore sources of power to the Criminal Enterprises. Second, they infiltrate, burden and ultimately destroy trade-related activity and investment.

The Criminal Enterprises may not intend to strangle commerce. Indeed, they may have no thought that this could happen and no desire for this result. But a pack of wolves may decimate a deer population without a thought about what that may mean to future wolves years hence. They act like wolves because that is their nature. Criminal Enterprises act as they do because that is their nature. They will continue to escalate their parasitic criminal conduct without regard to whether their crimes will ultimately kill the host. They will continue unless they are stopped. So the diversification of criminal conduct will continue as long as the economic opportunities are there and will take whatever advantage of those opportunities that they can get away with.

Some observers of the present violence have written that President Calderon’s decision to call in the military was the initial cause of the present violence. However, the rise of the newly aggressive and power-acquiring Criminal Enterprises was not caused by Calderon’s administration.

The Zetas arrived on the scene in the late 1990s, bringing their military tactics and new ruthlessness and opportunism.

The Criminal Enterprises’ tactics are clearly intended to undermine representative government by instilling lack of confidence and fear in the Mexican people. These outrages to civil life include murders, extortion of city residents, car bombings, and beheadings.

In any event, in the present circumstances, it is not really possible for the Mexican government to back down. While it has long been believed by some in the U.S. that Mexican government officials accepted bribes to allow Mexican drug and human smugglers to operate with relative amnesty, that was in the context of the crimes of drug and human smuggling. From the Mexican perspective, these are quasi-victimless crimes. The crimes have changed. They now include diversion of petroleum, hijacking cargo, kidnapping business people, extorting insurance companies, extorting whole cities, and atrocious murders, including of clergy, journalists, and political leaders. No government can look the other way in connection with such conduct, no matter what bribe amount is offered, so there is no “back down” solution.

Nor would the Criminal Enterprises accept a return to the former order, even if could be offered. Once the Criminal Enterprise has enjoyed the criminal benefits of operating with impunity in a governmentally challenged area and parceled out those income streams to the inner circle, its nature does not permit unforced retreat. A leader who proposed to his inner circle that the group henceforth limit itself to drug and human smuggling and abandon the other criminal opportunities would not remain the leader for long.

Some have proposed legalizing drugs as a panacea by which the violence could be stopped and the strength of Mexico’s representative government restored, deflecting the threat to the economy. This is not possible. Consider the economics of, say, a hypothetical “National Cocaine Corp.”, a new business formed to sell hypothetically recently legalized cocaine in the U.S. As the first order of business, it must undertake the expense of getting an FDA approval. The Mexican Criminal Enterprises won’t have any of these expenses. In addition, some young people will inevitably be deemed too young to use the drugs legally. This market would not be available to a legal company, but the Criminal Enterprises would keep selling to this market. There is no legal product that can match the price of good old smuggled drugs. So the Mexican Criminal Enterprises would stay in business and would continue smuggling the same products, but for a larger market because the products are approved by the government as “legal.”

Sealing the border cannot fully resolve the threat to trade. This would not stop the Criminal Enterprises in Mexico from operating. They would continue to develop diversified criminal activities, in addition to selling drugs in Mexico. They would complete the escalation of their dominance over the representative government, strangling U.S./Mexico trade from the south side of the perfect wall. They would still cause economic collapse. The collapsed Mexican representative government would then have little control of the growth of the Criminal Enterprises. The Criminal Enterprises would turn their attention to penetrating the U.S. with diversified criminal activities, using the collapsed northern Mexican areas as staging grounds.

The sober truth is that the U.S. faces a substantial and immediate risk that the Mexican criminal enterprises will drive the U.S.’s neighbor and second largest trading partner into economic ruin in the next few years. There is no easy “back down” solution, no “legalize drugs” solution. Mexican Criminal Enterprises pose a serious threat to U.S./Mexico trade, which in turn poses a serious threat to the economic health of Mexico and therefore of North America.

Success depends in part on Mexican action because if the Mexican government loses the battle for control of the trade routes, the U.S. and Mexican economies will be damaged.

We—the U.S. and Mexico acting together—must act decisively now. It will require a close partnership with, and often following the leadership of, the Mexican government. The alternative is the catastrophic consequences of a destabilized Mexico.

In the short term, focusing on preserving U.S./Mexico commerce points to several parallel goals:

1. focusing U.S. and Mexican investigation and prosecution on the Criminal Enterprises’ incursions into commercial activities, with the investigations centered in Mexico and the prosecutions in the U.S.;
2. cutting off Criminal Enterprises from sources of income and materiel that the U.S. has direct influence over, specifically money laundering, including the payments for illegal drugs and aliens, and the weapons flowing south from the U.S.; and
3. recasting and vastly expanding efforts to prevent and treat U.S. use of Mexico-sourced drugs.

The first of these focal points will require significant new approaches and resources:

1. U.S. government outreach to all U.S./Mexico international businesses. Enlist as allies those that are in some way facilitating the Criminal Enterprises, wittingly or unwittingly. As examples, money transmitters and stored value program operators are used by Criminal Enterprises to transfer value from the U.S. to Mexico without the risk and expense of smuggling bulk cash. Hundreds of millions of illicit dollars pass through these systems annually. Review anti-money laundering programs and industry contribution of data relating to these transactions and gather industry insights into how the illicit money flows and how industry members could prevent or report it.
2. Recruit and train federal and state investigators and prosecutors in the U.S. and Mexico to address specific criminal industries and enlist victim businesses, to include petroleum theft, cargo hijacking, import-export fraud, kidnapping/extortion, and intellectual property theft aimed at international businesses. Expand existing federal and state civil racketeering efforts to support bringing trade-based civil racketeering cases in U.S. courts.
3. Collect these investigators and prosecutors in multi-agency collocated task forces modeled on the High Intensity Drug Trafficking Area or Border Enforcement Security Taskforce task forces.
4. Expand U.S. judicial and related support resources in the economic centers with most direct trade and business headquarter connections with Mexico, such as San Diego, Los Angeles, Phoenix, San Antonio, Houston, New Orleans, Miami, and New York.

The second of the focal points, money laundering, including bulk cash flow into Mexico, is being addressed by substantial U.S. resources. The strategic analysis here, as elsewhere, starts by identifying the components that permit the Criminal Enterprises to continue and prosper and thereby threaten U.S./Mexico trade. It proceeds to identify those components that are most essential to the Criminal Enterprises’ endangerment of the U.S./Mexico economy, and then those components among them that are most vulnerable to government attack.

Regarding the flow of weapons, cross-border multi-jurisdictional task forces similar to those described above must focus on the reduction of the flow of weapons into Mexico. These prosecutions would include racketeering actions against U.S. gun sellers who are aware that their sales are facilitating Mexican Criminal Enterprises.

Preventing and treating use of Mexico-sourced drugs will require, above all else, broad recognition of the consequences of funding the Mexican Criminal Enterprises. A massive public education effort would get the truth to potential consumers, who, once aware of the consequences, will do the right thing. U.S. consumers have dramatically changed attitudes toward drunken driving and smoking once made aware of the consequences. They will also do so with regard to the threat to the economic survival of Mexico, the extreme violence, and the erosion of the quality of life in Mexico that are the consequences of Mexico-sourced drug use in the U.S.

Focusing on preserving US / Mexico commerce points to other long term goals, including:

1. expand support of Mexico’s ongoing reforms of its judicial system to make it more transparent, more resistant to corruption, and therefore more credible in its results;
2. support of freedom of the Mexican press by assisting with investigations of intimidation and assassination of journalists and other media representatives;
3. form joint anti-corruption initiatives partnering with U.S./Mexico international businesses to address corruption that affects U.S./Mexico trade;
4. support of ongoing Mexican reforms of the federal and state police by offering training and technical support of Mexican law enforcement agencies and the Mexican military;
5. promote more effective Mexican statutes adapting concepts from U.S. forfeiture, racketeering, and terrorism statutes to the Mexican legal framework;
6. reduce the availability of young gunmen in northern Mexico by restructuring manufacturing opportunities as, perhaps, by encouraging plants to move from population centers, improving working conditions, and matching job supply and local demand for jobs more effectively to minimize excess labor supply.

A recent article in Foreign Affairs magazine pointed out that although Mexico has serious problems, Colombia had problems that were even more severe and yet Colombia prevailed. Hopefully, with US help, Mexico can also succeed.

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ARIZONA ATTORNEY GENERAL HORNE JOINED BY THE GILA RIVER INDIAN COMMUNITY SUE TO STOP GLENDALE CASINO AND TO PROTECT THE GAMING COMPACTS

PHOENIX (Monday, February 14, 2011) -- Arizona Attorney General Tom Horne and the Gila River Indian Community today announced the filing of a joint lawsuit to stop a Glendale Casino from opening in a Glendale neighborhood near a local high school. Working together to protect Arizona - Tribal Gaming Compacts, the State of Arizona and the Gila River Indian Community have taken this action to stop Tohono O’odham from opening a casino that would violate the Proposition 202 Compacts approved by the citizens of Arizona and seventeen other Arizona tribes.

The lawsuit filed today in the U.S. District Court for Arizona requests an injunction to prevent the Tohono O’odham from opening a casino in Glendale. Tohono O’odham leaders have repeatedly said they fully intend to immediately open a casino in Glendale if the land is placed into trust by the United States - without ever obtaining approval from Secretary of Interior Salazar or the State of Arizona.

AG Tom Horne provided this legal background: "Initially, the Gila River Indian Community sued the United States. In a separate lawsuit the City of Glendale also sued the United States. The Tohono O'odham Nation intervened in both lawsuits. The purpose of both lawsuits is to have the decision concerning the land in question (Glendale land) remanded to the Department of the Interior for proceedings that were omitted but necessary. This office intervened on behalf of the State of Arizona supporting the Gila River Indian Community. In this new action, both the Gila River Indian Community and the State of Arizona seek a judgement for breach of contract because of the initial agreement that tribal gaming would not occur within cities and neighborhoods."

Arizona Citizens voted to approve Proposition 202 in 2002 to allow Indian Casinos to operate on existing reservation lands and to keep casinos out of cities and neighborhoods. Now the Tohono O’odham Nation claims that a legal loop hole allows it to open a casino in Glendale in violation of its Compact and the promise made to the citizens of Arizona by the 17 tribe coalition that supported Proposition 202. GRIC Governor William Rhodes said, “Arizona tribes and Arizona voters made a promise to keep casinos out of neighborhoods and to make gaming work for the economic benefit of every tribe and our state. We can’t let one tribe break that promise at the expense of all other Arizona tribes and 6 million people of the state of Arizona.”

Even though the Department of Interior has never determined that gaming on the Glendale land would be legal, the Tohono O’odham Nation has made clear in its court filings that it has no intention of ever seeking an eligibility ruling. Their plan is to just open the casino and then see if anyone can shut the casino down. The Secretary of Interior apparently agrees with this approach which could trigger a crisis in Indian gaming in Arizona.

By contrast, Attorney General Horne and the Gila River Indian Community believe that any gaming conducted without a formal eligibility ruling violates the Compacts, which only allow casinos on IGRA approved lands. Except for very limited exceptions which do not apply here, IGRA does not allow a Casino on Indian land acquired after 1988.

“What Tohono O’odham has proposed not only violates federal and state law, it breaks the promise of Indian gaming relied on for years by tribes and Arizonans alike,” Rhodes said. “So far, the federal government has not been willing to uphold the law. The BIA has decided to avoid making a decision and to leave this to the courts to figure out. So, together with Attorney General Horne, we intend to make sure that happens.”

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HORNE JOINS GOVERNOR BREWER IN LAWSUIT AGAINST OBAMA ADMINISTRATION FOR FAILURE TO PROTECT ARIZONA’S BORDER WITH MEXICO

(PHOENIX) – Thursday, February 10, 2011 -Attorney General Tom Horne has joined Governor Jan Brewer in filing a counterclaim against the federal government – which is suing Arizona over S.B. 1070 – for not fulfilling its Constitutional mission to protect the international border.  A summary of the filing and the complete lawsuit are attached.

Summary of Counterclaim - 2-10-11.pdf

answer and counterclaim.pdf

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Attorney General Tom Horne Confirms the Arrest of Melissa Gizelle Pacheco on Charges of Vulnerable Adult Abuse

PHOENIX (Thursday, February 10, 2011) -- Attorney General Tom Horne today confirms the arrest of Melissa Gizelle Pacheco of Phoenix, Arizona, on multiple charges of vulnerable adult abuse. Pacheco, a registered nurse, is being arrested for her alleged conduct as owner of the Fiesta Village Assisted Living Facility, where she allegedly failed to properly staff, maintain and clean the home where at least 65 adults with both physical and mental limitations were living under her care.

The facility was shut down and the residents removed to other facilities by the Phoenix Police Department.

Melissa Pacheco was arrested at 10:00 a.m. today by the Phoenix Police Department and investigators from the Medicaid Fraud Control Unit of the Attorney General’s Office.

“The allegations here are extremely disturbing.  I applaud the efforts of the Phoenix Police Department to aggressively investigate these charges.  I have asked my Medicaid Fraud investigators and prosecutors to assist in any way possible to be certain anyone found responsible for causing these deplorable conditions is held responsible,” Horne said.

The charges are merely accusations and the suspect is presumed innocent of all charges until or unless she is proven guilty.

The charges will be reviewed by the Attorney General's Phoenix Office.  For more information, contact Arizona Attorney General's Office Press Secretary Amy Rezzonico at 602-542-8019.

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DEPUTY COCHISE COUNTY SHERIFF DEPUTY AND WIFE CHARGED WITH EMBEZZLING NEARLY $1 MILLION DOLLARS FROM SIERRA VISTA DOCTOR

PHOENIX (Wednesday, February 9, 2011) - Attorney General Tom Horne today announced the charging of Angelina Lopez and her husband, Cochise County Sheriff’s Deputy Victor Lopez, of Sierra Vista, Arizona. Lopez and her husband have been charged with embezzling nearly $1,000,000 from her former employer, a medical doctor in Sierra Vista, Arizona.

The charges, filed in Cochise County are a result of an investigation conducted by the Arizona Department of Public Safety and the Sierra Vista Police Department. Angelina Lopez was charged with one count of fraudulent schemes and artifices and three counts of theft. Her husband, Victor Lopez, was charged with conspiracy, fraudulent schemes and artifices and three counts of theft.

The charges are merely accusations and the suspects are presumed innocent of all charges until or unless they are proven guilty.

This case was referred to and is being prosecuted by the Arizona Attorney General’s Office Criminal Division. Copies of the indictment are attached. For more information, contact Arizona Attorney General's Office Press Secretary Amy Rezzonico at 602-542-8019.

ANGELINA_LOPEZ_INDICTMENT.pdf
VICTOR_LOPEZ_INDICTMENT.pdf

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HORNE ANNOUNCES CLEAN ELECTIONS CANDIDATE ROBERT MARK GREEN ENTERED GUILTY PLEA: GREEN FALSIFIED HIS APPLICATION TO RECEIVE FUNDS TO RUN FOR DISTRICT 7

PHOENIX (Tuesday, February 08, 2011)  --  Attorney General Tom Horne announced today that Robert Mark Green, 48 of Phoenix, entered a guilty plea today to resolve his pending felony charges in Maricopa County Superior Court.  Green pleaded guilty to forgery, a felony, admitting that he falsified a "Participating Candidate's Application to Receive Funds and Qualifying Contribution Report" filed with the Arizona Citizens Clean Election Commission on March 8, 2010, as part of Green's campaign for the Republican nomination for State Senate in Legislative District 7.

“Misuse of the State’s public funds and fraud will not be tolerated.  I thank the Clean Elections Commission and the Secretary of State’s office for their cooperation in this matter,” Horne said.

Green has agreed to pay a $9,479 fine, repay $11,060.63 in investigation costs, and has agreed to not seek funds from the Citizen's Clean Election Commission while he is on probation.  Green could serve up to four years on probation, and could be ordered to serve up to a year in the Maricopa County Jail.  Green will be sentenced on March 8, at 8:30 a.m. before Judge John Hannah.

“The message here is that people who cheat our election system and get caught, will pay a serious penalty,” said Todd Lang, Executive Director of the Clean Elections Commission.

Click here for a copy of the Plea Agreement.

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Horne: Lethal Injection Lawsuit Is Frivolous

Phoenix (Friday, February 4, 2011) - Attorney General Tom Horne responded today to a lawsuit filed in the United States District Court for the District of Columbia by several Arizona inmates against the Federal Drug Administration (FDA) in which the inmates have asked the court to order the FDA to deny importation of drugs used for executions and to recall drugs already acquired from other countries. Arizona carried out the execution of inmate Jeffrey Landrigan in October using drugs obtained from England and intends to use drugs from the same supplier in upcoming executions. The FDA has indicated that regulating drugs used in executions is not within the scope of their authority.

Horne stated: “This lawsuit, filed by the Federal Public Defenders Office, is a frivolous use of tax dollars. Lethal injection is considered the most humane method of carrying out an execution, and the protocol that the Arizona Department of Corrections (ADC) follows has been upheld by the courts as providing more than adequate protections to ensure that the execution will be carried out properly and without unnecessary suffering.’

‘Because United States suppliers no longer manufacture the first drug used in the execution protocol, ADC was forced to look elsewhere for the drug and purchased it from a supplier in England. There is no evidence that drugs manufactured in England are inferior or are somehow unsafe, and the execution of inmate Landrigan was carried out without incident. It is absurd to suggest that the FDA should be ordered to recall drugs obtained from England or to deny further importation of drugs for use in carrying out executions.”

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ATTORNEY GENERAL TOM HORNE SAYS NEW YORK CITY INVESTIGATORS OVERSTEPPED BOUNDARIES IN GUN SHOW PROBE; BLOOMBERG FAILED TO COORDINATE WITH LAW ENFORCEMENT

PHOENIX (Tuesday, February 1, 2011) -- Arizona Attorney General Tom Horne says New York City Mayor Michael Bloomberg overstepped his authority by sending New York undercover officers to Arizona in an attempted “sting” operation at a Phoenix gun show.

“Local law enforcement and the Arizona Department of Public Safety were never notified that Mayor Bloomberg’s operation was being undertaken. That is standard professional courtesy and is also designed to protect the general public,” Horne said. “Arizona law enforcement should have been made aware that people posing as criminal elements were in fact undercover officers. The fact that no such notification was made indicates this so-called sting is nothing less than a public relations stunt.”

Horne added, “I would suggest that Mayor Bloomberg consider the skyrocketing crime rate in New York City before he asks any more of his city’s police to leave town on these p.r. missions. According to the most recent FBI statistics, violent crime in New York City increased significantly in 2010 compared to data from 2009. Robbery went up 3.9 percent, forcible rape rose 13.9 percent, aggravated assault increased 8.8 percent and murder rose 12.3 percent. Clearly, the good men and women of the New York City Police Department have more pressing crimes to investigate than alleged violations at a gun show 2,400 miles away.”

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HORNE ANNOUNCES ARIZONA NOW TO OPPOSE FEDERAL E.P.A. GREENHOUSE REGULATIONS

PHOENIX (Tuesday, February 1, 2011) -- Attorney General Tom Horne announced today that Arizona has withdrawn from a United States District Court lawsuit in which Arizona had previously supported the U.S. Environmental Protection Agency’s (EPA) greenhouse gas regulatory scheme.

Because of this action, Arizona will no longer support the proposed EPA Reporting Rule requiring mandatory reporting of greenhouse gas emissions above appropriate thresholds in all sectors of the U.S. economy. The state will also no longer support the Endangerment Finding and so-called California Waiver portions of the regulations.

“I am passionate about protecting the rights of individual states under the 10th Amendment. And I am equally passionate about limiting government intrusion into the ability of employers to reasonably operate their businesses,” Horne said. “This regulatory scheme is a classic example of a federal agency trying to do the job of elected legislators and at the same time place burdensome mandates on business.”

“The federal government cannot continue to increase its size and scope at the expense of the constitutional protections envisioned by the Founders. This proposed EPA action would exacerbate that problem and have therefore withdrawn the support this action was given by my predecessor,” Horne concluded.

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ATTORNEY GENERAL HORNE POSTS LEGAL BRIEF ON HEALTH CARE LAWSUIT

Click here to view a copy of the health care ruling.  (http://myfloridalegal.com/webfiles.nsf/WF/JDAS-8DMNTD/$file/VinsonRuling1312011.pdf)