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Tag: University of Michigan

FBI Investigating Racist Emails Sent to Jewish & Black Students at University of Michigan

MichiganBy Steve Neavling
ticklethewire.com

The FBI is helping investigate who sent racist emails to students using what appeared to be a university account.

The emails, sent out Tuesday from an email account that looked like it belonged to a professor of computer science and engineering, attacked black and Jewish students, MLive reports. Professor J. Alex Halderman said he did not sent the emails.

A university spokesman said the message involves spoofing, which means someone created an email that looked like it came from another account.

M President Mark Schlissel tweeted, “I condemn the hateful messages sent tonight. DPSS & ITS are investigating as spoofing/hacking.”

The Tale of the Stolen Meteorite

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By Greg Stejskal
ticklethewire.com

I was assigned to the FBI’s Ann Arbor, Michigan office for most of my career (referred to as a resident agency or RA in the Bureau) We were primarily responsible for investigating violations of federal  law in five counties which had a total population of about a million people.  Ann Arbor is also the home of the University of Michigan, one of the largest and most prestigious research institutions in the world.

A good thing about working in a RA was there were a variety of cases – some were very unique.

It was August 1998 when I got a call from Detective Kevin McNulty of the UM Department of Public Safety. McNulty and I had worked cases together before, and he told me that they had located a meteorite that had been stolen from the UM Museum of Natural History. McNulty explained that the 60 lb. meteorite, worth about $10,000, had been stolen from the fourth floor of the museum a few days before.

Apparently there was good market for meteorites especially ones from the Diablo (devil in Spanish) Canyon crater, aka Barringer Crater, near Flagstaff, Arizona. That crater has gained a sort of a science fiction cult fascination with the people that believe extraterrestrials have visited earth and may be still among us.  Part of this fascination is probably because the crater is relatively young in earth’s geological history, and it still looks like an impact crater like the ones on the moon. (In the 1984 movie, “Starman,” the ET character played by Jeff Bridges is trying to get to the Barringer crater to rendezvous with a rescue craft from his home planet.)

The meteorite that was stolen from the museum was actually a fragment of a much larger meteor that created the crater in Diablo Canyon when it struck the earth about 50,000 years ago. It is estimated that the meteor weighed about 60,000 tons with a diameter of approximately 100 feet and traveling at 30,000 mph when it hit. Most of the meteor vaporized on impact, but pieces of it were strewn around the crater.  The impact had the explosive power of a ten megaton bomb (1 megaton = 1 million tons of TNT). The crater is almost 600 feet deep and is about 3,900 feet across.

No Witnesses

No humans would have been around to witness the impact. It would be at least 10,000 years before any humans would be in the area. It was the Spanish explorers in the 16th Century who named the canyon Diablo. For reasons that have been lost, the Indians who descended from the earlier inhabitants considered the canyon cursed.

In the early 1900s, Daniel Barringer, a mining engineer who had made millions from silver mining in Arizona, took an interest in the crater. He believed that the crater had been caused by a meteor impact. The prevailing scientific theory at the time was that the crater resulted from some type of volcanic activity and the meteorite fragments around the crater were coincidental.

Because fragments found in the area were composed of iron and nickel, Barringer believed the main mass of the meteor was buried beneath the floor of the crater and that meteor mass would be worth millions. Over the next several years, Barringer drilled numerous exploratory holes in the floor of the crater – some as deep as 1,400 feet.  But he never hit any main mass nor did he discover an alien spacecraft.

Barringer rightly deduced the crater was created by a meteor impact, but he didn’t understand the physics of the tremendous force caused by the impact which resulted in the near total vaporization of the meteor leaving only fragments.  The Barringer family still owns the crater. It is a popular tourist attraction and has been designated a national historical site.

Meanwhile back in Ann Arbor, there had been no witnesses to the theft of the meteorite, and at the time no surveillance cameras were in the area of the theft. After the theft, Det. McNulty had put a photo and description of the meteorite on the internet, a relatively new forum for broadcasting reports of stolen property. The rock dealer, Michael Casper, had been surfing the Internet and came across McNulty’s posting. Casper contacted the UM museum and confirmed the meteorite he had purchased was the one that had been stolen.

McNulty wanted to recover the meteorite, but was concerned Casper, the dealer in NY, might not cooperate and McNulty had no police power in New York.

I agreed to call Casper, and he was very cooperative. He understood that he was in possession of stolen property, and that because it had been transported interstate his continued possession of it was potentially a violation of federal law. He agreed to return it to UM.  Casper also provided the name and address of the person who sold the meteorite to him, Steven Collins.

Collins had called Casper and told him he had a 60lb. Diablo Canyon meteorite for sale. Casper initially agreed to purchase it for $2,300. When Collins delivered the meteorite, they agreed that Casper would pay $1,000 and trade a prehistoric crab fossil and a 200 lb. slab of crystallized purple quartz, amethyst, for the meteorite.

Both McNulty and I assumed that the name and address that had been provided to Casper were false. But it turned out there was a Steven Collins living at the address given to Casper in Pittsfield Township, outside of Ann Arbor. That Steven Collins had been convicted of second-degree murder in Michigan; had served time and was currently on parole which could provide some leverage when dealing with Collins.

McNulty made contact with Collins, and he readily admitted that he had sold the meteorite to the dealer in NY. Collins said he had run into a guy he had met in prison, and the guy had offered to sell him a meteorite that he said he had found in Arizona. He paid the guy a few hundred dollars knowing the meteorite was worth much more. Collins claimed he didn’t know the meteorite was stolen. Collins gave the name of the inmate, but no one by that name could be found in the Michigan Department of Corrections records.

Lacked Evidence

Although McNulty had recovered the meteorite, he didn’t have enough evidence to prosecute Collins for the theft from the museum.

I thought we might be able to prosecute Collins federally for interstate transportation of stolen property (ITSP), but we needed for him to admit that he knew the meteorite was stolen. I believed Collins had stolen the meteorite himself, but I was pretty sure he wasn’t going to admit to that. However, sometimes a bad denial can be almost as good as a confession.

I wanted to interview Collins again, and I wanted it to be a surprise. I didn’t want to give him time to prepare or worse decide he didn’t want to talk to me.

I decided to try to talk to him where he worked. He was working for a construction company testing a cleared and graded site for the level of compaction of the soil – a good job for a self-described rock hound. I told Collins that we were having some trouble with his original story as there was no inmate by the name he gave us that had ever been in the Michigan prison system.

Collins said that he hadn’t bought the meteorite from a former inmate, but from a guy he met in bar. He said he couldn’t admit to having been in a bar because that was a violation of his parole.  (I didn’t mention that his having left Michigan and traveling to New York without permission was also a parole violation.)

In the bar he struck up a conversation with a guy about rocks. The guy seemed to be pretty knowledgeable, and he said he had a meteorite that he wanted to sell. They went to the guy’s car and in the trunk was a large meteorite that the guy said had come from Diablo Canyon. Collins knew that it was a meteorite, and had some idea of its value. He agreed to buy it for $400. He paid in cash and had no documentation of the sale.

Collins claimed that he didn’t know the guy’s name, nor did have any contact information for him. Collins hadn’t seen him before or since. He hadn’t noticed whether the car’s license was from out-of-state. He was only able to give a very general description of the guy. Collins told me the name of the bar, but said he didn’t know any of the employees or patrons in the bar. He didn’t think there was anyone in the bar who could corroborate any part of his story.

Collins had not only changed his story when it was challenged, he had provided what I thought was a pretty weak new story as to how he acquired the meteorite – a bad denial.

Collins was federally charged with Interstate Transportation of Stolen Property and his parole was violated for having left Michigan. He pleaded guilty and admitted to the judge he knew the meteorite was stolen when he transported it to NY. He was sentenced to nine months incarceration in addition to the about two years he did for parole violation.

We never did learn how he was able to get the meteorite out of the museum without being seen.

“The truth is out there.”

 

Medical Societies Weigh in on Dangers of Marijuana to Children


By Ross Parker
ticklethewire.com

As the war of words heats up on the trend toward legalization of marijuana, two medical societies have issued their positions on the subject, particularly as it relates to the effect of the drug on teen agers.

As reported earlier, some medical studies have shown negative neurological effects of regular marijuana use on developing brains, particularly the high THC potency available in today’s market. A recent University of Michigan survey found a moderate increase of marijuana use by kids in the nation’s schools, as well as a strong downward trend in their perception that marijuana can be dangerous. The study also reported that one of the sources for one-third of the 12th graders who use pot was from adults who had a medical marijuana prescription.

Among the medical groups that are expressing concern over these developments and others are the American Society of Addiction Medicine (ASAM) and the American College of Emergency Physicians (ACEP).

Using NIDA studies ASAM indicated that the addiction rate for youth who use pot is 17%, almost triple that of adults. It also puts the number at 25-50% for those who use the drug on a daily basis. The Society opposes both the “medicalization” of marijuana and the legalization for recreational use.

The ASAM plans to discuss these and other related issues at a Medical and Scientific Conference, April 10-13 in Orlando.

The ACEP issued a recent report that states which have decriminalized marijuana have had a dramatic increase in the need for medical intervention for children. Likewise the call rate to poison centers has increased 30% in those states compared to no increase in states where there are no legalization laws.

The College is especially concerned about the dangers posed to children by marijuana edible products such as cookies and chocolates. Such products are attractive to children and can be eaten with no regard to the effects, especially of high dose products. ACEP has called for child-resistant packaging, warning labels and public education.

 

Parker: Medical Societies Weigh in on Dangers of Marijuana to Children

Ross Parker

Ross Parker was chief of the criminal division in the U.S. Attorney’s Office in Detroit for 8 years and worked as an AUSA for 28 in that office. 
 
By Ross Parker
ticklethewire.com

As the war of words heats up on the trend toward legalization of marijuana, two medical societies have issued their positions on the subject, particularly as it relates to the effect of the drug on teen agers.

As reported earlier, some medical studies have shown negative neurological effects of regular marijuana use on developing brains, particularly the high THC potency available in today’s market. A recent University of Michigan survey found a moderate increase of marijuana use by kids in the nation’s schools, as well as a strong downward trend in their perception that marijuana can be dangerous. The study also reported that one of the sources for one-third of the 12th graders who use pot was from adults who had a medical marijuana prescription.

Among the medical groups that are expressing concern over these developments and others are the American Society of Addiction Medicine (ASAM) and the American College of Emergency Physicians (ACEP).

Using NIDA studies ASAM indicated that the addiction rate for youth who use pot is 17%, almost triple that of adults. It also puts the number at 25-50% for those who use the drug on a daily basis. The Society opposes both the “medicalization” of marijuana and the legalization for recreational use.

The ASAM plans to discuss these and other related issues at a Medical and Scientific Conference, April 10-13 in Orlando.

The ACEP issued a recent report that states which have decriminalized marijuana have had a dramatic increase in the need for medical intervention for children. Likewise the call rate to poison centers has increased 30% in those states compared to no increase in states where there are no legalization laws.

The College is especially concerned about the dangers posed to children by marijuana edible products such as cookies and chocolates. Such products are attractive to children and can be eaten with no regard to the effects, especially of high dose products. ACEP has called for child-resistant packaging, warning labels and public education.

 

Marijuana Use Among American Teens on the Rise

By Ross Parker
ticklethewire.com

The use of marijuana by American teens continues to increase. Unlike use of other drugs and alcohol, which are either decreasing or remaining stable, the use by 8th and 10th graders went up 1.3 and 1.8 % in 2013, according to the Monitoring the Future study conducted by the University of Michigan of 40,000 to 50,000 teen agers in 389 private and public secondary schools.

Even more important than this result is the sharp decline among teens in the perception that marijuana use is risky. During the preceding eight years the percentage of 8th, 10th, and 12th graders who see great risk from regular pot use has gone down from 74 to 61%, 66 to 47%, and 58 to 40%, respectively.

Another significant finding is that, during the years 2012 and 2013 in states where medical marijuana is legal, one-third of the 12th grade users say that one of their sources is another person’s medical marijuana prescription.

The most encouraging result of the study is that the use of “synthetic” marijuana is decreasing significantly, and the use of bath salts remains stable at a relatively low level. Moreover, teens increasingly report that the risk of these synthetics is great. This result seems to credit the work of DEA, local law enforcement and other sources to publicize the significant dangers of these drugs, as well as the speedy scheduling and aggressive enforcement activity.

Drug use in decline among teens include: narcotics (other than heroin), OxyContin, Vicodin, and most hallucinogens. Alcohol use is also down, the lowest in over two decades. Drugs that are essentially stable in use include: heroin, LSD, amphetamines, Adderall, methamphetamine, Ketamines and steroids.

The study was funded by research grants from the National Institute of Drug Abuse, part of the National Institutes of Health. It was conducted by research professors at the University of Michigan’s Institute for Social Research. 2013 was the 39th year that the study has been conducted. The results will be published in a volume of Monitoring the Future National Results on Adolescent Drug Use later this year.

 

“Mark From Michigan”: Dumb and Dumber


Mark Koernke

 Greg Stejskal served as an FBI agent for 31 years and retired as resident agent in charge of the Ann Arbor office.
  
By Greg Stejskal
ticklethewire.com
Mark and I never really hit it off.

I first met Mark Koernke in the late ‘80s. Gene Ward, a fellow FBI agent, had asked me to accompany him on an interview of Koernke. We met with Koernke in his basement office at Alice Lloyd Hall, a University of Michigan dormitory, where he was a janitor.

Ward was investigating a potential hate crime, the painting of some racial epithets on a home. It had been suggested that Koernke might know something about it. Koernke denied that he had any knowledge, and we concluded that he most probably had no connection to the graffiti painting.

During the course of the interview, Koernke made it known that he had been an intelligence officer in the Army, and in addition he was a counter intelligence expert. He said, he continued to train US military units regarding tactics of foreign militaries. I made no secret of my skepticism of Koernke’s background and questioned some of his conspiracy theories he apparently felt compelled to share with us.

This all pre-dated Koernke’s semi-notoriety, later he would have a national following as “Mark from Michigan” and his own radio show “The Intelligence Report.”

He was an early purveyor of the “New World Order,” which he believed was a world-wide conspiracy. As best as I’ve been able to understand, the New World Order involves the takeover of the US by the United Nations which is fronting for some insidious international cabal that wants to institute international socialism. Part of this conspiracy was the building of secret concentration camps in the western US to house those who would be unwilling to accept the New World Order. Among other things, “black helicopters” were being used to spy on Americans.

The black helicopters and Mark from Michigan became synonymous. The New World Order was supposed to have happened by now, but it hasn’t and maybe that’s because Koernke has been on watch. I think Koernke perceived himself to be the “intellectual” underpinning of the militia movement – sort of a latter day Thomas Paine.

Anyway our paths continued to cross. There were the times I saw him surveilling the federal building parking lot. I guess he was trying to log our movements for intelligence purposes. I would wave to him, and he would hide.

During the late 80s and early 90s the militia movement grew dramatically. The high-water mark came soon after the bombing of the Murray federal building in Oklahoma City.

Many people in the movement were shocked and disgusted by the slaughter of innocent people including children. They did not want to be identified with a philosophy that condoned such acts. (In contrast Koernke espoused the theory that the government actually did the bombing to set-up Timothy McVeigh and to destroy records that proved the “Gulf War Syndrome” was real. He didn’t really explain why those records were in Oklahoma City.)

As the militia movement diminished, there were some internal conflicts.

In 1997, in Michigan, one member of the militia was murdered and other members were charged with the murder. Although Koernke was never believed to be involved, he was subpoenaed to be a witness. When a process server showed up on Koernke’s porch, an argument ensued.

Greg Stejskal

Apparently Koernke threatened the server with a rifle resulting in Koernke being charged with assault with a dangerous weapon. Koernke’s trial date was in May, 1998, but Koernke didn’t appear for the trial, and a bench warrant was issued for his arrest. In June a federal fugitive warrant for Koernke was issued based on my affidavit stating there was reason to believe he had fled from Michigan.

While Koernke was a fugitive, he continued his shortwave radio broadcasts from various undisclosed locations. He mentioned me several times in unflattering terms. He also said, that unless the federal charges were dropped, “a lot of their (FBI) people might get hurt.”

The following July a Michigan State Police helicopter was searching for marijuana growing plots in rural Barry County (just north of Battle Creek, Michigan). The helicopter crew observed a pickup truck, a man and a woman near an abandoned mobile home.

When the helicopter came in for a closer look, the man, Koernke, began running. I don’t know if the helicopter was black, but it must have been unsettling for Koernke to have a helicopter seemingly coming for him. Koernke then jumped into a shallow lake where only his head was showing. (Presumably Koernke was looking for a hollow reed so he could breathe while submerged like in so many old movies.)

When the police ground units arrived Koernke was persuaded to come out of the water, but not before giving a one finger salute. Koernke told the police he was Michael Kerns. He was affecting an Irish brogue and had attempted to dye his hair red although the result was closer to orange. Several weapons were found in the pickup including an AR-15 and a semi-automatic AK-47. Kerns/Koernke was taken into custody and lodged in the Barry County jail in Hastings.

It was suspected that Kerns might be Koernke, but a positive identification would take hours as there was not yet a way to electronically transmit fingerprints to locations where his prints were on file. That night the Barry County Sheriff called me and asked if I could come to his jail to identify Koernke.

When I arrived at Barry County Sheriff’s Office, there sat Mark Koernke with orange hair and no mustache. I greeted Mark by name, but he acted like he didn’t know me and was talking in a terrible Irish brogue and said his name was Michael Kerns.

I told him that I needed to ask him a few questions, but first I had to advise him of his rights. After advising him, I passed him the acknowledgement form and asked him to sign it which he did. I looked at the form and asked him if he realized he had signed the form “Mark Koernke.” He looked totally crest fallen.

In August 1999, after again being placed on bond, he was tried on the assault charge and found guilty. The judge sentenced him to 80 days in jail, but he was credited with time served and given probation.

Koernke continued his shortwave broadcasts and hawking his videocassettes with titles like “America in Peril” to a somewhat diminished audience. But our paths were destined to cross one more time.

In March 2000, there was a bank robbery in downtown Dexter, Michigan, Koernke’s hometown. I responded to the robbery and was in route when I heard radio traffic describing a suspect vehicle, an ’85 white Plymouth Fury. A sheriff’s deputy had stopped a car matching that description, but when he approached the car, it sped off. A high-speed chase ensued that lasted 40 minutes. During the chase the officers became aware that the car was Mark Koernke’s, and he appeared to be driving it.

The police were able to cut-off Koernke. He tried to ram a police car and run-over a deputy. Then he decided to drive cross-country across a field, but ended up hitting a tree. He got out and ran toward a channel of a lake. There he again executed his water escape and evasion tactic, swimming across the channel. The police caught up to him on the other side.

As a MSP trooper with his gun drawn approached Koernke, Koernke shoved him. The trooper displayed remarkable restraint and didn’t shoot him, but rather subdued and handcuffed Koernke.

I had proceeded to the bank and quickly learned Koernke was not the bank robber. (We later caught the actual bank robber who was responsible for several other robberies.) Apparently Koernke, a customer of the bank, had stopped in the street in front of the bank. He had his son get out of the car to place a deposit in the bank’s ATM. The son after making the deposit ran back to the car. He was wearing a baseball cap as was the bank robber.

Witnesses outside the bank saw this, and when they were questioned about the bank robbery, thought they had witnessed the getaway. A description of the car was broadcast which led to Koernke being stopped and then the chase began.

It is not clear to me why Koernke fled from the police. There were no helicopters up that day. He later claimed that he feared for the safety of his 2 sons who were in the car, but they remained in the car for a good portion of the high speed chase. (Koernke had them get out of the car before he was forced to stop.)

In March 2001, Koernke was convicted of fleeing from the police, assault with a dangerous weapon (his car) and resisting and obstructing. The trial and sentencing were before the same judge as his first trial. But the judge was far less sympathetic this time. She sentenced him on each count to run concurrently with 7 years being the maximum time in prison. It would be about 3 years if he were paroled. He did not get along well in prison and did close to the maximum time.

On March 15, 2007, Koernke completed his sentence. He has resumed doing the shortwave broadcasts of his “The Intelligence Report,” most recently carried on Liberty Tree Radio. In addition he has many videos available on You Tube. I’m guessing drones and the NSA/Snowden revelations are giving him a lot of new material.

The Hole-in-the-Truck Gang

By Greg Stejskal
ticklethewire.com

It was a cold early spring Saturday morning, and I was following a lead in a rural part of Michigan. I had received a call on Friday afternoon that there was a unique piece of evidence on a farm near the Michigan/Ohio border.

When I got to the farm, I made contact with the owner and identified myself. He walked me to the back of an outbuilding. There parked in the weeds was a white cargo van with flat tires. The farmer opened the van’s back door. In the middle of the cargo bay was a circular hole that had been cut in the floor.

So why was I out here on a cold Saturday morning looking at a van with a hole in its floor?

It all started in the summer the year before, 1998. An Environmental Protection Agency /FBI task force that was working illegal dumping cases had received information that a waste disposal company near Ann Arbor, Michigan, was defrauding clients by not doing work and overcharging. There were also rumors that the company was surreptitiously creating spills which they then charged clients to clean-up. The information was fragmentary, and it was coming primarily from disgruntled employees.

The disposal firm was Hi-Po. Hi-Po had been in business for about 9 years. The founders Aaron Smith, who was just 26, and Stephen Carbeck (34) started with a pick-up and a power washer. They had grown Hi-Po to more than 100 employees and several vacuum trucks at well over $200,000 each. By all accounts Hi-Po had become extraordinarily successful with such clients as the University of Michigan and Chrysler.

In the summer of 1998, the EPA/FBI task force had learned that recently one of the Hi-Po employees had quit reportedly because he was upset with Hi-Po not performing work and then charging for the work that hadn’t been done.

That employee, Michael Stagg had retired from the Washtenaw County (Michigan) drain commissioner’s office prior to working at Hi-Po.  EPA agent Greg Horvath and FBI agent, Steve Flattery,  both from the task force, and I went to Stagg’s home in Ann Arbor. He wasn’t surprised to see us and said he had been thinking about coming to us.

Stagg was very forthcoming, but he only had limited direct knowledge. He had inspected a Hi-Po clean-up project in Riverview, a city south of Detroit. There he saw that Hi-Po had only done about ½ the work they had contracted to do, but Stagg was told Hi-Po billed Riverview for the whole job. (Later we learned that a Riverview official was receiving kickbacks.)

Because Stagg had left Hi-Po, he had no ability to get additional evidence. He did suggest we contact Greg Cainstraight (good name for a potential cooperating witness), who had been recently hired as Hi-Po’s chief financial officer. Stagg seemed to think that Cainstraight was uncomfortable with some of the things Hi-Po was doing and might be cooperative.

Cainstraight had attended West Point and played football there. He transferred to Michigan State University where he received his accounting degree. We decided to meet Cainstraight cold and try to get a feel for whether he might be willing to work with us. It was a gamble. We did not have a strong case. If we approached Cainstraight, and he wasn’t cooperative, he could go back and warn Smith and Carbeck of the investigation. With forewarning they could make it very difficult for us to make a case.

I knew it was important to establish some rapport with Cainstraight. I talked to him about playing college football and being a West Point cadet. (I had been an undistinguished football player at Nebraska.) The West point motto, “Duty, Honor, Country” was mentioned and “The Long Gray Line,” John Ford’s movie and Rick Atkinson’s book. I think Cainstraight would have been cooperative, no matter who contacted him, but it’s important for a cooperating witness to trust the agent who handles him. We did develop a trusting a relationship, and as a result he agreed to attempt to record possibly incriminating conversations with Smith and Carbeck.

Cainstraight told us that Smith and/or Carbeck would on occasion come to his office and discuss business matters. It would not be practical to have Cainstraight “wired” all the time. (This was before miniature digital recorders were generally available. We were still using Nagra reel-to-reel tape recorders.) So we decided to wire Cainstraight’s briefcase which he told us he customarily kept next to his desk. Our tech guys put a recorder in the briefcase and made a small hole for the microphone. They also placed an exterior on/off switch so that Cainstraight could easily activate the recorder.

In September, when I delivered the briefcase to Cainstraight, we talked about recording conversations. We decided to see what transpired without trying to orchestrate any meeting. If that didn’t work, we might try to instigate something.

Within days Cainstraight called me and said he thought had recorded a good conversation. (He had no way to review the tape as Nagra’s don’t have playback capability.) “Good Conversation” turned out to be a dramatic understatement. Smith and Carbeck had come to Cainstraight’s office and for about 2 hours, held forth with a running narrative of their criminal activity at Hi-Po.

They talked about defrauding the University of Michigan. They billed UM for whole days of sewer maintenance, even though Hi-Po was doing nothing. On jobs where Hi-Po was doing work for UM and other clients they substantially over billed. They alluded to employees at UM, Chrysler and Riverview that they were bribing to play along.

But most disturbing were their stories of the incidents where they created intentional spills. Smith, as though he was telling a story about a fraternity prank, told about how he and Carbeck took a cargo van out at night with 55 gallon drums of diesel fuel. Then Smith dumped the drums through a hole in the floor of the van. Smith and Carbeck laughed when they related how the empty drums and Smith were rolling around in the back of the van as Carbeck drove away from one of the dumping sites. (Later they would anonymously report the spills to their clients, and Hi-Po would clean them up.)

Ironically, I suspect, Smith and Carbeck were trying to recruit Cainstraight to be a full-fledged member of their criminal conspiracy, and Cainstraight was recording their recruitment pitch. In my experience I had never heard nor heard of a recorded statement that was so incriminating regarding so many criminal acts. It was as though it had been scripted. One statement by Smith became notorious, “My scams are 90% foolproof.”

In October, 1998, the Assistant US Attorney, Kris Dighe, decided to get a search warrant for the Hi-Po facility. The search warrant was executed by the task force and officers from the UM Department of Public Safety. A huge amount of records were seized, and UMDPS arranged for space where the records could be stored and analyzed. The records would corroborate what many witnesses had and would tell us. They also substantiated much of Smith and Carbeck’s recorded admissions.

AUSA Dighe obtained an indictment charging Smith and Carbeck with numerous violations including RICO (Racketeer Influenced Corrupt Organization), a statute designed to prosecute organized crime which in effect Hi-Po had become. They were also charged with the predicate acts underlying a RICO charge: mail fraud; conspiracy; bribery; money laundering; intentional dumping of hazardous waste (violations of the Clean Water Act).

So that’s what brought me to that field in southern Michigan to see a forlorn van with a hole in the floor. The van wasn’t a critical piece of evidence, but it was a symbol of the “foolproof” nature of Smith’s scams.

Epilogue:

Smith and Carbeck pleaded guilty to one count each of violating the RICO Act. (I’m sure they were not enthusiastic about the prospect of hearing the recorded admissions played for a trial jury.)They were the 1st people in the US to be convicted of racketeering in an environmental case. Smith was sentenced to 33 months and Carbeck 27 months. (They had previously agreed to testify, if necessary, against other defendants.)

Smith, Carbeck and Hi-Po were ordered jointly to pay a total of $504,000 restitution to UM, Chrysler, the city of Riverview, the Budd Co. and the Michigan Department of Environmental Quality. Smith was also ordered to forfeit $500,000. Both Smith and Carbeck were also ordered to publish apologies in local newspapers.

They at least indicated they were 100% sorry.

 

Stejskal: The Hole-In-The-Truck Gang

Greg Stejskal

Greg Stejskal served as an FBI agent for 31 years and retired as resident agent in charge of the Ann Arbor office.

By Greg Stejskal
ticklethewire.com

It was a cold early spring Saturday morning, and I was following a lead in a rural part of Michigan. I had received a call on Friday afternoon that there was a unique piece of evidence on a farm near the Michigan/Ohio border.

When I got to the farm, I made contact with the owner and identified myself. He walked me to the back of an outbuilding. There parked in the weeds was a white cargo van with flat tires. The farmer opened the van’s back door. In the middle of the cargo bay was a circular hole that had been cut in the floor.

So why was I out here on a cold Saturday morning looking at a van with a hole in its floor?

It all started in the summer the year before, 1998. An Environmental Protection Agency /FBI task force that was working illegal dumping cases had received information that a waste disposal company near Ann Arbor, Michigan, was defrauding clients by not doing work and overcharging. There were also rumors that the company was surreptitiously creating spills which they then charged clients to clean-up. The information was fragmentary, and it was coming primarily from disgruntled employees.

The disposal firm was Hi-Po. Hi-Po had been in business for about 9 years. The founders Aaron Smith, who was just 26, and Stephen Carbeck (34) started with a pick-up and a power washer. They had grown Hi-Po to more than 100 employees and several vacuum trucks at well over $200,000 each. By all accounts Hi-Po had become extraordinarily successful with such clients as the University of Michigan and Chrysler.

In the summer of 1998, the EPA/FBI task force had learned that recently one of the Hi-Po employees had quit reportedly because he was upset with Hi-Po not performing work and then charging for the work that hadn’t been done.

That employee, Michael Stagg had retired from the Washtenaw County (Michigan) drain commissioner’s office prior to working at Hi-Po. EPA agent Greg Horvath and FBI agent, Steve Flattery, both from the task force, and I went to Stagg’s home in Ann Arbor. He wasn’t surprised to see us and said he had been thinking about coming to us.

Stagg was very forthcoming, but he only had limited direct knowledge. He had inspected a Hi-Po clean-up project in Riverview, a city south of Detroit. There he saw that Hi-Po had only done about ½ the work they had contracted to do, but Stagg was told Hi-Po billed Riverview for the whole job. (Later we learned that a Riverview official was receiving kickbacks.)

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