DENVER, CO --(Marketwired - August 20, 2015) - "Colorado U.S. Attorney John Walsh and Assistant United States Attorney Matthew T. Kirsch obviously subverted the law when they used mail and wire fraud statutes to criminalize the debt of the IRP Solutions Corporation to wrongly-convict and imprison the IRP6," says Cliff Stewart, A Just Cause. "Overly-broad interpretation of criminal statutes not only undermines Congress' intended use for the legislation but is an anathema to justice", adds Stewart.
The IRP6 case concerns six software executives (David A. Banks, Kendrick Barnes, Clinton A. Stewart, David A. Zirpolo, Demetrius K. Harper, and Gary L. Walker) of the IRP Solutions Corporation who developed the Case Investigative Life Cycle (CILC) criminal investigations software for federal, state and local law enforcement. The IRP6 were wrongly-convicted in 2011 on mail and wire fraud charges in a Denver federal court (D. Ct. No. 1:09-CR-00266-CMA).
According to July 15, 2015 Bloomberg BNA, Criminal Law Reporter (Vol. 97, No. 15), the Supreme Court of the United States (SCOTUS) has become increasingly skeptical of the federal judiciary's and prosecutor's "expansive interpretations of criminal law" and is emphasizing, through recent opinions, an appeal "to adopt a realistic view of what Congress intended" when interpreting criminal statutes. Bloomberg BNA highlighted a number of representative cases where the high court rejected expansive interpretations by prosecutors.
In 2010, the Supreme Court rejected the Justice Department's arguments that Enron executive, Jeffrey Skilling, had violated the "honest services" fraud statute when he misrepresented Enron's financial conditions so that he could earn more compensation from Enron. SCOTUS found that the honest services statute only covers employees who received bribery or kickbacks as a result of the fraud (Skilling v. United States, 561 U.S. 358 (2010)).
Other cases cited by Criminal Law Reporter include a case where federal prosecutors argued that a woman possessed chemical weapons when she sprinkled powder on her husband's mistress' belongings that caused a mild thumb burn and where a fisherman was "charged with obstruction of justice for disposing of illegally caught fish. Prosecutors argued, in essence, that the fisherman's disposal of fish was equivalent to destruction of evidence, such as financial records associated with Sarbanes-Oxley. "One has to wonder what motivated prosecutors to bend laws to pursue wrongful-convictions in the IRP6 case", says Lamont Banks, A Just Cause.
In a May 29, 2015 email to A Just Cause, retired federal judge, the Honorable H. Lee Sarokin of the U.S. 3rd Circuit Court of Appeals, questions why prosecutors improperly used mail and wire fraud statutes to relentlessly pursue and harshly punish the IRP6 for "failing to pay corporate debts."
"Although the primary charge was that the [IRP6] defendants had misrepresented their success and prospects to certain staffing companies, the case was presented to the jury on the basis that the software program developed by the defendants was a phony and a scam," says Sarokin. "The defendants had formed a software company to develop a program to aid law enforcement in sharing information. They worked for years on the project, spent their time and money, entered into a substantial lease, hired former law enforcement personnel to work on the project, engaged law firms and travelled the country demonstrating the program to potential customers such as Homeland Security, the FBI, the N.Y. Police Department, etc. As interest increased, they engaged staffing companies to provide programmers. A former assistant U.S. attorney [Greg Goldberg] sent a letter to the current U.S. attorney claiming that these individuals had committed fraud -- had lied about their prospects to staffing companies -- a claim consistently denied. Whom the letter writer represented was not disclosed," shared Sarokin.
"It is difficult to reconcile the charge with the time and money devoted to the project by the [IRP6] defendants and the unanswerable questions: Why would scammers pick law enforcement as their target?" Sarokin questions, and "why would they personally guarantee the obligations to staffing companies? How could they possibly make any money unless the [CILC software] were a success and contracts obtained? Who pushed so hard for the indictments?" Sarokin ruminates.
"AUSA Kirsch possessed a substantial amount of information that IRP Solutions was a legitimate business and that numerous law enforcement agencies had expressed great interest in IRP's software and that movement was afoot by DHS and NYPD to acquire CILC," says Sam Thurman, A Just Cause.
Court records show that in the first quarter of 2003, the Colorado Bureau of Investigation agreed to purchase the beta version of CILC Precinct software for $375,000.00 and trial testimony reflects that Paul Tran from the Department of Homeland Security was in discussions with IRP executives to spend $12 million dollars on a pilot project from the New York division of Immigrations and Customs enforcement. "Kirsch's assertions that we were a scam software company set-up to defraud staffing companies is ludicrous," says David Banks, COO, IRP Solutions Corporation. "Kirsch was keenly aware of these facts prior to indicting us. It is bizarre that he would continue to pursue us," adds Banks.
In February 2004, Police Magazine released an article about the CILC Software. "CILC is an enterprise level client-server application that could be the detail-oriented solution you've always wanted for your investigative units. It may also be the solution for your records management woes and a way to rid yourself of the endless stacks of paper," Police Magazine stated. "Developed over the last four years by a team of software engineers, CILC comes with a built in law enforcement pedigree. And once you decide to implement CILC, IRP can customize the software to give it expertise on the procedures that are unique to your agency...This customization and IRP Solutions attention to detail make CILC powerful enough to become your agency's primary investigative case management tool," Police Magazine added. "It was these types of customizations that we were making in good faith for the Department of Homeland Security and we incurred debt with staffing companies doing so," says David Banks, COO, IRP Solutions Corporation.
Court records show that in November 2004, as part of the Federal Investigative Case Management System initiative, David Banks and Gary Walker demonstrated their software to a joint DHS/DOJ team consisting of multiple law enforcement agencies, including the FBI, Immigration and Customs Enforcement, Secret Service, U.S. Marshals, Border Patrol and others. "The meeting was coordinated by Steven Cooper, the head of DHS' CEE (Consolidated Enforcement Environment) program", says David Banks, COO, IRP Solutions Corporation, "and when the meeting was completed, Cooper told us that the FBI was impressed with CILC Cooper suggested to us that we solidify a relationship with a large defense contractor or systems integrator who could serve as the primary contractor and we would serve as a subcontractor," adds Banks.
Court records show that in December 2004, in response to a request from Bill Witherspoon of DHS, IRP provided quotes for the purchase of two CILC modules that exceeded $100 million dollars. "We were told that the quotes were needed for inclusion into their 2005 budget exercise", says Banks, COO, IRP Solutions Corporation.
On February 9, 2005, about one and half months after sending the quote to Homeland Security, the FBI raided IRP Solutions corporate offices with a search warrant alleging that IRP Solutions was a "purported" software company. From 9am to 10pm, FBI agents imaged every computer, including software engineering computers, and departed with patent documents and software engineer's logs that outlined software development work completed daily by each developer," says Banks.
Court documents reflect that on August 8, 2005, the head of the Denver FBI office sent a letter to a staffing company declining to conduct a criminal investigation or pursue criminal charges against IRP Solutions because the matter should be handled civilly. "If the top FBI official in Denver found that corporate debt was a civil matter, certainly AUSA Kirsch had the same understanding I have to believe Kirsch's motives were sinister and he was using mail and wire fraud statutes as a subterfuge to accomplish some alternative objective," adds Stewart.
Court records show that in 2007, Kirsch brought the IRP6 matter before a federal grand jury (No. 06-01) in Denver and called multiple witnesses, including David Zirpolo (IRP6). David Zirpolo (IRP6) testified before the grand jury and told them about IRP6's business dealings.
"I recall that when a grand juror asked me why, after being in the software business for 20 years, we chose to continue to increase our debt to staffing companies, I told them because we felt that a major sale was right around the corner that would enable us to pay both current and past debt. When I raised a folder and told the grand jury that I had proof of our innocence, prosecutors tried to rush me out of the proceedings, but a few grand jurors raised their hands expressing interest in the evidence folder, therefore the prosecutor had to provide it to them. Prior to testifying, prosecutors told me that I wasn't a target of the investigation, but that obviously changed after I provided favorable testimony and exculpatory evidence to the grand jury," exclaims Zirpolo.
Transcripts show grand jurors ultimately expressed concerns about the direction of the government's investigation, when a grand juror asked if "debt was a federal crime". "Kirsch never received an indictment from that grand jury and would take the case before another grand jury in 2009 to secure an indictment", says Thurman.
Court records show that in February 2009 IRP Solutions was closing a sale with the City of Philadelphia, specifically, the Philadelphia Police Department and Inspector General's Office. "Our Philly business was scuttled when I received a phone call from Inspector General Amy Kurland's secretary telling me that Kirsch had contacted Ms. Kurland and told her an indictment was coming," says Banks, COO, IRP Solutions Corporation. "What or who was driving Kirsch to interfere with our business?" ponders Banks.
In a summer 2012 interview with Fierce Government IT, FBI Chief Technology Officer Jack Israel discussed that industry giants like IBM, SAIC, DynaCorp and Lockheed Martin repeatedly fail to deliver usable investigative and intelligence software for law enforcement. "The failure of these large competitors certainly makes one wonder whether corporate espionage was the reason IRP Solutions was raided," muses Thurman.
In May 2009, the IRP6 were indicted on mail and wire fraud charges. "Strangely, Kirsch only called a single witness before the grand jury" says Thurman, "and that witness was FBI Agent Robert Moen. I guess Kirsch didn't want the mountains of exculpatory evidence threatening his chance of obtaining an indictment," concludes Thurman.
"It is obvious from the facts in the IRP6 case that Kirsch and Walsh grossly misused federal mail and wire fraud statutes to indict, convict and imprison the IRP6 on the basis of failing to pay corporate debts and we will continue to provide detailed information to President Obama, Attorney General Loretta Lynch and members of the United States Congress to expose this injustice and exonerate the IRP6," says Lamont Banks.
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