SAN JOSE – 8 September – LAWFUEL – The Law News Network – The United States Attorney’s Office for the Northern District of California announced that two individuals pleaded guilty yesterday in federal court to participating in a scheme to defraud Applied Materials, Inc. of Santa Clara and a Pennsylvania-based precious metals company of more than $2 million in platinum. Defendants Ladi Malloy Tulaner, 45, and Frederic Anthony Kendle, 47, of Gardena, California pleaded guilty this afternoon before U.S. District Judge James Ware to participating in the scheme, to committing wire fraud in violation of 18 U.S.C. § 1343, and to participating in a conspiracy in violation of 18 U.S.C. § 371. Earlier this summer, co-defendants Peter C. Calderone, 37, of Las Vegas, Nevada, and Sheron Wallace, a/k/a Gwendolyn Kendle, 50, of Las Vegas, Nevada pleaded guilty of conspiring in the scheme in violation of 18 U.S.C. § 371 and participating in the scheme in violation of 18 U.S.C. § 1343.
According to the court records, each defendant admitted to participating in an elaborate scheme which employed deceptive domain names and e-mail addresses to send bogus emails to Johnson & Matthey, Inc., a precious metals company located in West Chester, Pennsylvania, purporting to place an order for platinum on behalf of Applied. The fraudulent order sought 12 platinum sputtering targets worth approximately $2.3 million for alleged use in the fabrication of semiconductors. Johnson Matthey had agreed to ship the sputtering targets in three shipments to Northern California. Sputtering targets are used in the manufacture of semiconductors.
In confirming the order, representatives from Johnson & Matthey and Applied Materials determined that the order for the sputtering targets was fraudulent and contacted the Federal Bureau of Investigation. As part of the investigation to learn the identity of the individuals behind the scheme, Johnson Matthey fabricated four fake platinum sputtering targets and placed them in a package that was tracked upon shipment from Pennsylvania. If the items had been legitimate, the value of the single shipment containing four platinum sputtering targets would have been worth approximately $788,000.
Following surveillance by agents from the FBI and the Rapid Enforcement Allied Computer Team (REACT) Task Force in San Jose, Mr. Calderone was arrested after he retrieved the package in Fremont, California from the BAX Global shipping facility and transferred the package to Mr. Kendle and Ms. Wallace in Livermore, California. Mr. Kendle and Ms. Wallace were then followed to Encino, California, where the package was transferred to Mr. Tulaner. After transferring the package to Mr. Tulaner, Mr. Kendle and Ms. Wallace were arrested. Mr. Tulaner was followed and ultimately arrested when he was caught opening the package in Southern California.
As part of the plea agreements, Mr. Tulaner admitted that he was an organizer and leader of the fraudulent scheme.
The wire fraud charges carry a maximum statutory penalty of 20 years imprisonment and a fine of $250,000 conspiracy charge, and the conspiracy charges carry a maximum statutory penalty of 5 years imprisonment and a fine of $250,000. However, any sentence following conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. The defendants will be sentenced by United States District Judge James Ware at 1:30 p.m. on the following dates: Mr. Calderone on October 3, 2005, Ms. Wallace on November 14, 2005, Mr. Kendle on December 12, 2005, and Mr. Tulaner on November 21, 2005.
The prosecution is overseen by the Computer Hacking and Intellectual Property (CHIP) Unit of the United States Attorney’s Office. Assistant U.S. Attorney Shashi Kewalramani from the CHIP Unit is prosecuting the case with the help of legal assistant Mimi Lam. This prosecution is a result of an investigation by the FBI’s Cyber Crime Squad in the San Jose Resident Agency and the REACT Task Force.