2003-06-16 -- Felton, Hector and Jose Jury -- Guilty Pleas -- News Release

Two Plead Guilty in Scheme to Pass $25 Billion in Phony U.S. Federal Reserve Notes

NEWARK - Two men pleaded guilty today to conspiracy, admitting that they attempted to negotiate $25 billion in fictitious U.S. Federal Reserve bonds, U.S. Attorney Christopher J. Christie announced.

Hector Felton, 51, of Tucson, Ariz., and Jose Jury, 64, of Mexico City, Mexico, pleaded guilty before U.S. District Judge William G. Bassler to Count One of a two-count Indictment, charging them with conspiracy.

Both defendants admitted that, beginning in March 2002, they and other participants concocted a scheme to obtain a line of credit in the amount of $650 million from a U.S. brokerage house. Felton and Jury both admitted to purporting that the proceeds of the line of credit would be used for global humanitarian needs when, in fact, they intended to convert a portion of the proceeds for their own personal use.

According to the defendants' plan, the line of credit would be secured by the contents of an authentic-looking pre-World War II Federal Reserve case containing up to $125 billion in Federal Reserve bonds. The Federal Reserve case was one of several in the defendants' possession, and was said to contain financial instruments officially issued by the Federal Reserve that were moved out of the United States in the 1930s and returned to the United States through the Phillippines. Over the course of several months in Spring 2002, the defendants misled the brokerage house agent as to the bonds' authenticity and genuineness, attesting that the bonds were real on various occasions.

In fact, the bonds were entirely fictitious. According to one meeting in May, Jury provided the brokerage house agent with a photocopy of a Federal Reserve Note with a face value of $100 million and stated that the bonds in the Federal Reserve case were alike. The amount on the note was misspelled as "one hundred million dollar."

The two defendants were indicted and then arrested on July 31, 2002, when they traveled to New Jersey to try to close the deal at the brokerage house.

The defendants face a maximum prison sentence of 20 years and a $250,000 fine when they are sentenced by Judge Bassler on Sept. 29, 2003.

As to the remaining defendants, Alain Cuny fled the country in violation of his bail conditions last November. Another defendant, David Metzler, died earlier this year.

Christie credited Special Agents of the Federal Bureau of Investigation, under the direction of Louie F. Allen , with bringing the case against the defendants.

The cases are being handled by Assistant U.S. Attorney Michele Brown of the U.S. Attorney's Commercial Crimes Unit in Newark.

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Defense Counsel:

Hector Felton: Henry Klingeman, Esq.

Jose Jury: Anthony Randazzo, Esq.