Investigators of the Year
Michael Paulhus and John Croes
Special Agent, U.S. Secret Service
Special Agents Michael Paulhus and John Croes initiated an investigation targeting individuals that hijacked the CUSIP numbers of dormant U.S. corporations (which included several in New Jersey). This scheme has cost thousands of investors more than $100 million. As a result of the investigation of SA's Paulhus and Croes, multiple suspects were identified and it was determined that at least fifty four (54) dormant companies were compromised. Further investigation revealed that the U.S. stock was offered by highly mobile "boiler rooms" located in Europe and South America. In an attempt to enhance sales, victim investors were lulled by a fraudulent website designed to mimic an SEC website, complete with SEC logos and hyperlinks for investor research. SA's Croes and Paulhus coordinated multiple surveillance operations throughout the United States, consensually monitored telephone calls, and investigative interviews to gather intelligence on the complexity of this highly organized global scheme. It was determined that the suspects in this case would steal the dormant companies CUSIP numbers, rename the corporations, and enable selling of stock shares to thousands of unsuspecting investors. To date, this ongoing investigation has resulted in the arrest of several suspects and the seizure of thirty two (32) bank accounts containing $2 million dollars in assets. In addition, multiple vehicles, aircrafts, boats and more than thirty (30) properties have been seized. The potential fraud loss attributed to this case is more than $1 billion. As a result of the hard work and dedication of SA's Paulhus and Croes, the State of New Jersey and ultimately the entire Nation's financial institutions are more stable.
Eric Donelan
Special Agent, U.S. Department of State, Diplomatic Security Service, New York Field Office
Working with Customs and Border Patrol and with the U.S Attorney's Office of the Eastern District of New York, Special Agent Eric Donelan conceived, initiated and implemented for the U.S. Department of State "Operation Haystack," an aggressive anti-fraud enforcement effort that has to date netted 31 separate arrests in the U.S. and tomes of criminal intelligence that led to scores of arrests overseas. Most international travelers at U.S. airports caught entering the country with fraudulent passports or fraudulent visas, were, prior to Operation Haystack, interviewed and then returned on the next flight to their country of origin. Under this "turn-around" procedure, there was little incentive for the fraudulent traveler to cooperate with U.S. authorities during interviews. SA Donelan engineered a synergistic solution to break the "no-risk" cycle of the fraudulent travelers and to target overseas and in the U.S. the larger, more sophisticated human trafficking operations. SA Donelan identified and prioritized the Diplomatic Security (DS) offices at our U.S. Embassies overseas that enjoyed the highest degree of cooperation from their respective host-country enforcement officials in investigating U.S. visa fraud. Customs & Border Patrol (CBP) partnered with SA Donelan and shared its expert analysis on visa fraud trends and their frontline expertise in snaring fraudulent documents at the border. The U.S. Attorney's Office of the Eastern District of New York (EDNY) agreed to accept for prosecution arrests made under Operation Haystack, and within days four suspects were in custody that would have otherwise been denied entry to the U.S. and turned back home on the same airline. Fraudulent travelers are often coached and prepared by their document vendors prior to seeking illegal entry into the U.S., and these travelers, now detained in U.S. custody and facing real jail time, were never coached or prepared for any other consequence than being turned around and sent home. Incarcerated "Haystack" suspects have provided valuable information concerning the document fraud rings that sponsored their travel. In Colombia, India, Nigeria, and a dozen other countries where local law enforcement cooperates robustly with the anti-fraud efforts of our embassy Diplomatic Security offices, confessions obtained in the U.S. by detained Haystack suspects have generated scores of search warrants, arrest warrants, and undercover sting operations overseas in the countries where these fraud conspiracies thrive. In the year Operation Haystack has been running, six separate document fraud operations overseas have been dismantled by joint investigations between our embassy DS Agents and local law enforcement. SA Donelan has generated 31 separate arrests under "Haystack," each becoming a DS international investigation aimed at capturing, in the U.S. or abroad, the chief operators of these extensive passport and visa fraud conspiracies. The success of this operational concept of arresting fraudulent travelers rather than turning them around has attracted attention, and SA Donelan has made presentations about "Haystack" to audiences as close as New Jersey and as far away as Mumbai, India, at the annual Consular Affairs Fraud Prevention Conference. It is impossible to envision Operation Haystack without the aggressive enforcement and devoted partnership of CBP and EDNY. It is equally impossible to envision Haystack without SA Eric Donelan, who pioneered approval for this ground breaking operation through the domestic and overseas bureaus of the U.S. State Department, and who devoted himself so completely to ensuring that "Haystack" delivered the results he had promised.