Northern District of Alabama
Press releases recorded for this federal judicial district.
Birmingham Woman Charged with Tax Evasion and Preparing Fraudulent Tax ReturnsRead the Press Release
Federal prosecutors have charged a Birmingham woman with tax evasion and aiding in the preparation of fraudulent tax returns announced U.S. Attorney Joyce White Vance and Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
The U. S. Attorney’s Office charged EUNICE F. PLUMMER, 35, with three counts of tax evasion and eight counts of aiding in the preparation of fraudulent tax returns. The government also filed a plea agreement with Plummer in which she agrees to plead guilty to the charges and to pay restitution of $104,098 to the IRS for taxes not paid on income earned in 2011 through 2013, plus an additional $67,206 to the IRS for aiding in the preparation of fraudulent tax returns.
Plummer is the owner of M&P Tax Services located in Birmingham, AL. The information charges Plummer evaded income taxes for 2011, 2012, and 2013 by preparing and submitting personal tax returns in which she failed to report all the taxable income she earned from her business. According to the plea agreement, Plummer attempted to evade taxes by depositing the income received from M&P Tax Services into a bank account held in a relative’s name. Plummer’s understatement of taxable income resulted in additional taxes of $104,098 owed to the IRS.
The information also charges Plummer prepared false returns for the clients of M&P Tax Services and requested significant refunds from IRS. Plummer added false deductions and expenses to her clients’ tax returns which resulted in a$67,206 tax loss to the government
The case was investigated by the Internal Revenue Service - Criminal Investigation and prosecuted by Assistant United States Attorney Amanda Wick.
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Former Deputy Sheriff in Madison County, Alabama, Charged with Civil Rights Violations and Obstruction of JusticeRead the Press Release
The Justice Department announced that Justin Watson, 29, a former deputy with the Madison County Sheriff’s Office, turned himself in today following an indictment on July 30, 2015, when he was charged with deprivation of rights under color of law for allegedly assaulting and injuring R.B. on Aug. 22, 2012. The indictment charges Watson with a second civil rights violation for allegedly conducting an unlawful traffic stop of R.B.
Watson also has been charged with three counts of obstruction of justice. The indictment alleges that Watson obstructed justice by providing false and misleading testimony in a criminal proceeding in state court and by corruptly persuading two witnesses.
Watson faces a maximum sentence of eleven years in prison for the two civil rights charges and sixty years in prison for the three obstruction counts.
The investigation by the Huntsville Resident Agency of the FBI is ongoing. The case is being prosecuted by Special Litigation Counsel Forrest Christian of the Justice Department and Assistant U.S. Attorney Mary Stuart Burrell of the U.S. Attorney’s Office for the Northern District of Alabama.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty.
Man Who Flew into Birmingham Airport and Tried to Fly Out Under Assumed Names Wanted in Detroit for MurderRead the Press Release
BIRMINGHAM -- A man who flew into the Birmingham-Shuttlesworth International Airport under an assumed name in March 2014 is wanted in Michigan for the murder of his father-in-law, announced U.S. Attorney Joyce White Vance.
U.S. District Judge Karon O. Bowdre sentenced ROBERT ANTHONY RICKS, 31, of Detroit, to the 16 months he has served since his arrest in Birmingham, but ordered him to remain in custody so he can be transferred to Detroit.
Assistant U.S. Attorney Elizabeth Holt told Judge Bowdre that there is an arrest warrant and a court detainer for Ricks out of Wayne County, Mich., for his father-in-law's murder. Holt said Ricks left Baltimore, Md., with his father-in-law on Feb. 21, 2014. The man's body was discovered in Detroit in March 2014, but not identified until months later.
Ricks was arrested in Birmingham in March 2014 after flying into and attempting to fly out of the Birmingham airport under assumed names. He pleaded guilty in March this year to one count of illegally possessing a document identifying him as someone else and intending to use that document to enter an aircraft or secure airport area.
According to Ricks' plea agreement, he flew from Atlanta to Birmingham on a Delta flight using another person's ticket. That ticket was in the name of a person identified in court documents by the initials, U.W.
Once in Birmingham, Ricks obtained United Airlines boarding passes from Birmingham to Chicago, and from Chicago to Colorado Springs by telling a United representative in Birmingham that he was M.M. Ricks made the claim at a United boarding gate after hearing a public address system message for M.M.
Ricks was arrested after he left the secure area of the Birmingham airport, twice tried to re-enter the area by going up the down escalator, and then tried to go through Transportation Security Agency checkpoints using one of the United boarding passes.
Holt told Judge Bowdre that it is still unknown how Ricks got to the Atlanta airport.
The FBI investigated the case, which Assistant U.S. Attorney Elizabeth Holt is prosecuting.
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Ohio Man Indicted for Receiving Grenade Fuzes in Blount CountyRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted an Ohio man for illegally receiving about 1,340 M228 grenade fuzes in Blount County last year, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Steven L. Gerido.
A one-count indictment filed in U.S. District Court charges JAMES WILLIAM COPLEY, 54, of Akron, Ohio, with knowingly receiving explosive materials on Oct. 22.
The M228 grenade fuzes are igniting fuzes meant for training grenades, which are not intended to project shrapnel. The fuzes, however, can be used with improvised grenades and explosive devices. ATF regulates M228 fuzes as low explosives and anyone selling or buying them is required to have a Federal Explosive License.
"Tight regulations on transactions involving any explosive material are required in order to protect public safety," Vance said. "That safety is threatened when anyone who has not obtained the proper federal license possesses explosives. We will actively pursue prosecution of those individuals," she said.
A Hayden man, Matthew Joseph Smith, pleaded guilty in federal court in June to selling about 1,340 M228 grenade fuses in October to someone who was not licensed to possess them. Smith owns Whispertech, an explosives materials dealer and training company.
The maximum penalty for receiving explosive material without a proper license is 10 years in prison and a $250,000 fine.
The ATF investigated the case, which Assistant U.S. Attorney John B. Felton is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Federal Grand Jury Indicts Lauderdale County Man for Distributing and Possessing Child PornographyRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Lauderdale County man on multiple charges of distributing and possessing child pornography, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, Alabama Law Enforcement Agency Secretary Spencer Collier, and Lauderdale County Sheriff Rick Singleton.
A two-count indictment filed in U.S. District Court charges TRAVIS OLANDERS CHERRY, 42, with distributing and possessing child pornography in 2013 and 2014.
Because the State of Alabama previously convicted Cherry for sexual abuse in the second degree, the maximum penalty for distributing child pornography is 40 years in prison and a $250,000 fine, and the maximum penalty for possessing child pornography is 20 years in prison and a $250,000 fine.
The FBI, ALEA State Bureau of Investigation, and the Lauderdale County Sheriff’s Office investigated the case, which Assistant U.S. Attorney Jacquelyn Hutzell is prosecuting.
An indictment contains charges. A defendant is presumed innocent until proven guilty.
Decatur Woman Indicted for Fraudulently Using Credit Cards Stolen from MailRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted a Decatur woman in connection to using a fraudulent credit card stolen from the mail, announced U.S. Attorney Joyce White Vance and U.S. Postal Inspector Frank Dyer.
A four-count indictment filed in U.S. District Court charges CASEY MICHELLE HARDIMAN, 31, with two counts of wire fraud, one count of aggravated identity theft and one count of possessing stolen mail.
According to the indictment, Hardiman committed wire fraud when she used a stolen credit card on April 7 and April 8 at two Huntsville stores. Hardiman also committed aggravated identity theft by using the stolen card, according to the indictment.
Between April 7 and April 10, Hardiman possessed more than 200 letters and items of mail that had been stolen from numerous mailboxes in Madison County, the indictment charges.
The maximum penalty for wire fraud is 30 years in prison and a $1 million fine. Aggravated identity theft carries a mandatory two-year prison sentence, which must be served consecutively to any other sentenced imposed for the crime. Theft of U.S. mail carries a maximum penalty of five years in prison and a $250,000 fine.
The U.S. Postal Inspection Service and the Huntsville, Madison and Decatur police departments investigated the case, which Assistant U.S. Attorney Davis Barlow is prosecuting.
An indictment contains charges. A defendant is presumed innocent until proven guilty.
Birmingham Man Indicted for Three Armed CarjackingsRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted a Birmingham man for three armed carjackings in April and for being a convicted felon in possession of 9mm pistol, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
A six-count indictment filed in U.S. District Court charges JERMAINE DANIEL PARKS, 31, with two separate carjackings on April 9 and a third on April 18. The indictment also charges him with brandishing a firearm during each of the carjackings, and with possessing a Glock 9mm pistol on April 22, after being convicted last year in Jefferson County Circuit Court for the felony offense of robbery, third degree.
"Violent criminals who repeatedly arm themselves to prey on unsuspecting victims must be taken off the streets," Vance said.
On April 9, according to the indictment, Parks brandished a firearm and forcefully took a 2005 Nissan Altima from an individual identified by the initials, L.M. On the same day, he also brandished a firearm and forcefully took a 2008 Saturn Vue from an individual identified in the indictment by the initials, G.C. On April 18, Parks brandished a gun and forcefully took a 2010 Nissan Rogue from an individual identified by the initials, K.H., according to the charges.
The maximum penalty for carjacking is 20 years in prison and a $250,000 fine. Brandishing a firearm during a crime of violence carries a mandatory minimum sentence of seven years in prison, which must be served consecutively to any other sentence imposed for the crime, and a maximum $250,000 fine. The maximum penalty for being a convicted felon in possession of a firearm is 10 years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney John B. Felton is prosecuting.
An indictment contains charges. A defendant is presumed innocent until proven guilty.
Ten People Charged in Northeast Alabama Conspiracy to Distribute MethRead the Press Release
HUNTSVILLE -- Two illegal aliens serving time in Georgia state prisons and using contraband cell phones directed at least eight people in northeastern Alabama and Chattanooga to carry out a conspiracy to traffic methamphetamine, federal and local officials announced today.
Eight people now face a federal indictment that they conspired to traffic 50 grams or more of the illegal drug in Cleburne, Etowah, Marshall and DeKalb counties from December 2013 through May this year. A ninth individual faces a separate distribution count in the indictment. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger Stanton, Etowah County Sheriff Todd Entrekin, Gadsden Police Chief John Crane, Dekalb County Sheriff Jimmy Harris, Cherokee County Sheriff Jeff Shaver and Heflin Police Chief A.J. Benefield announced the charges from a 19-count indictment returned in June and unsealed this month following the arrest of three defendants. One of the remaining six defendants already was in federal custody, and the five others are in jails or state prisons in Georgia and Alabama.
A 10th defendant, THOMAS WATSON SMITH, 39, of Rome, Ga., was charged in April with one count of possession with intent to distribute at least 50 grams of methamphetamine in Cherokee County in August 2014. Smith pleaded guilty June 30. He is scheduled for sentencing Oct. 14.
The June indictment charges JOSE ROLANDO ARROYO BALCAZAR, 36, his sister, JUANNA BALCAZAR, 28, of Boaz, YESENIA MONTUFAR MARTINEZ, 28, MIGUEL MANRIQUEZ, 38, ALLEE THOMAS WALKER, 37, ANTHONY PAUL LEE, 36, BERNUBE PEREZ, 22, and RAFAEL JOSE CASTILLO MORALES, 27, of Chattanooga, Tenn., with the 2013-2015 conspiracy. MELISSA NICASIO, 28, also of Chattanooga, is charged with one count of conspiring with Morales between March and April this year to distribute 50 grams or more of methamphetamine in Etowah and DeKalb Counties.
The three defendants arrested July 9 are Juanna Balcazar, Morales and Nicasio.
"The conspiracy charged here was responsible for supplying the intensely addictive and debilitating drug, methamphetamine, in northeast Alabama for at least two years," Vance said. "Thanks to the many law enforcement agencies that joined together to identify the participants in this organization, including two who were giving orders from within Georgia state prisons, we were able to shut off this illegal supply network. This case exemplifies the mission of the OCDETF Program," she said.
“This case is another great example of local, state and federal law enforcement partners working together to eliminate a significant drug-trafficking operation," Stanton said. "Thanks to all the members of the FBI’s North Alabama Safe Streets Task Force and particularly, the Etowah County Sheriff’s Office and the Gadsden Police Department for their tireless work in bringing this case to fruition.”
Jose and Juanna Balcazar and Manriquez are Mexican nationals in the United States illegally, and Morales is a Honduran national in the country illegally. Jose Balcazar is serving a 30-year sentence in a Georgia state prison on a 2007 methamphetamine trafficking conviction, according to Georgia Department of Corrections records. Manriquez is serving a life sentence in a separate Georgia prison on a 2003 murder conviction, according to the state's Corrections Department records.
Jose Balcazar and Manriquez communicated with each other and with people outside the prison system to carry on the methamphetamine trafficking operation in northeast Alabama, according to testimony last week in federal court in Huntsville during a detention hearing for Morales. Morales, who was living in Chattanooga, was ordered into custody pending trial.
Along with the June indictment's two conspiracy charges, most of the remaining counts charge various defendants with distributing methamphetamine on specific dates between July 2014 and May 2015. Count 19 charges Lee with possessing a firearm -- a .380-caliber Derringer pistol -- in furtherance of a drug-trafficking crime.
The penalty for the conspiracy counts and the counts of distributing 50 grams or more of methamphetamine is 10 years to life in prison and a maximum $10 million fine. The minimum prison term for those offenses increases to 20 years if there has been a previous felony drug conviction. The penalty for distributing five grams or more of methamphetamine is five to 40 years in prison and a maximum $5 million fine. That penalty increases to 20 years to life in prison if there has been a prior felony drug conviction. The firearms charge carries a minimum mandatory prison sentence of five years and a maximum fine of $250,000.
The FBI’s North Alabama Safe Streets Task Force, with participation of the sheriff's offices in Etowah, Cherokee and Dekalb counties, the Gadsden and Heflin Police Departments, and the District Attorney's Offices for Cherokee and Etowah counties investigated the case as part of the Organized Crime Drug Enforcement Task Force Program. The OCDETF Program is a partnership between federal, state and local law enforcement agencies. Its principal mission is to identify, disrupt and dismantle the most serious drug-trafficking organizations primarily responsible for the nation’s illegal drug supply. Assistant U.S. Attorney Laura D. Hodge is prosecuting the case.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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North Alabama OCDETF Earns National Recognition for Group Fighting Heroin SupplyRead the Press Release
BIRMINGHAM -- The Organized Crime Drug Enforcement Task Force for the federal Northern District of Alabama earned national recognition for the focused effort it launched in 2012 to stem the flow of heroin into Birmingham by prosecuting some of the largest heroin distributors in the city, on down to street-level dealers, announced U.S. Attorney Joyce White Vance.
OCDETF Regional Director Michael F. Smith today presented a 2014 National OCDETF Award to an interagency Heroin Initiative Group of investigators and prosecutors working with Assistant U.S. Attorneys Gregory R. Dimler and L. James Weil. Dimler leads the OCDETF section in the U.S. Attorney's Office. The bi-annual awards recognize outstanding investigations from the OCDETF Regions, as well as individuals who best exemplify the mission and spirit of the OCDETF Program, said national Organized Crime Drug Enforcement Task Forces Director Bruce Ohr.
"The initiative launched in 2012 was a major strike at the supply of heroin into Birmingham, which significantly interrupted the flow of the drug into our community and shut down some major suppliers," Vance said. "Of course, there are always new sources, new traffickers and new street dealers, so the fight continues," she said. "We have an ongoing commitment to working with federal, state and local law enforcement partners to interdict the heroin supply, while working with our community-based initiative and partners in the medical community to prevent and treat addiction," she said. "I am grateful we have groups like this, committed to protecting the community."
During today’s award presentation, Ohr thanked the interagency Heroin Initiative Group for developing a unified approach to address the heroin epidemic threatening the Birmingham area. “Your contributions and achievements have bolstered the OCDETF Program’s efforts to fight heroin and positively impact our communities,” he said.
The OCDETF Program is a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF Program is to identify, disrupt, and dismantle the most serious drug-trafficking organizations primarily responsible for the nation’s illegal drug supply.
Participants in the 2012-2013 Heroin Initiative Group that received the award, along with Dimler and Weil, are: Hattie French and Jude Washington, Jefferson County Sheriff's Office; Gregory S. Gauger and M. Wayne Gerhardt, FBI; Jason Green, Pelham Police Department; M. Ezra Heath, Internal Revenue Service, Criminal Investigation; Scott Holmes, Tuscaloosa County District Attorney’s Office; Alan Miller, Shelby County District Attorney’s Office; John Walker, Birmingham Police Department, and Patrick Wilson and Troy Wilson, Drug Enforcement Administration.
A spike in heroin overdose deaths in the Greater Birmingham Metro Area spurred the group's formation. The U.S. Attorney called law enforcement together in July 2012 to develop a unified approach to reduce the spread of the deadly drug. Heroin deaths had almost doubled in Jefferson County from 2011 to 2012, climbing from 30 to 58. The number of heroin deaths also soared, from 15 to 82, between 2008 and 2012 in Jefferson, Shelby and Tuscaloosa counties. The rise in heroin deaths leveled off for a year after the law enforcement push, but took off again in 2014, with 137 in Jefferson County alone.
The 2012 initiative saw federal, state and local law enforcement combine to share intelligence and work within the framework of two OCDETF investigations to disrupt the supply of heroin and dismantle the organizations distributing it. While the investigations were under way, the U.S. attorney and law enforcement leaders began a media outreach to educate the community about the growing presence and deadly nature of heroin.
On the supply side, the OCDETF investigation called, "King of the Hill,” focused on the heroin trafficking activities of Billy “Champ” Williams Jr., and his associates. The work dismantled Williams' organization and included the seizure of two kilograms of nearly pure heroin and a kilogram and a half of cocaine. Williams and 10 members of his organization were convicted of drug trafficking or money laundering and the government seized more than $500,000 in cash, jewelry, furs and luxury vehicles. Williams was sentenced to 22 years in prison.
In a second OCDETF operation, called "Blue Magic," the DEA, and multiple local and state agencies, simultaneously targeted lower-level heroin dealers and their sources of supply. The office wanted drug dealers and the community to know that federal authorities are serious in tackling the heroin problem at the street level and up the supply chain.
Of the 49 defendants indicted on federal charges in Blue Magic, 40 pleaded guilty and one was convicted at trial. One of those defendants pleaded guilty to distributing heroin that caused a death and was sentenced to the mandatory minimum of 20 years in prison. The remaining sentences ranged from probation for the first-time offenders to 12 ½ years for the dealers who qualified as career offenders under Federal Sentencing Guidelines. As part of the initiative, more than 30 individuals were charged in state courts with trafficking small amounts of heroin.
Madison Woman Pleads Guilty in Scheme that Caused $558,857 Fraudulent Income Tax RefundRead the Press Release
BIRMINGHAM -- A Madison woman pleaded guilty today in federal court to theft of government property and money laundering as part of a scheme to obtain fraudulent tax refunds, including one for $558,857, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Roger C. Stanton.
ANGELIQUE B. HARRIS, 49, entered her guilty plea before U.S. District Judge R. David Proctor. Through a related civil action, she forfeited a 2013 Lexus ES350 luxury automobile worth about $45,000 that she bought with some of the criminal proceeds. Harris' sentencing date has not been set.
A federal grand jury indicted Harris in October. She pleaded guilty to the indictment's charge that she, with the aid of others not named in the indictment, stole U.S. Treasury refunds between February 2013 and February 2014.
Harris also pleaded guilty to money laundering for using proceeds of a fraudulent October 2013 federal income tax refund of $558,857 to purchase the luxury Lexus from a Huntsville dealership. The IRS paid the refund on a tax return fraudulently filed in the name of a couple, identified in the indictment as "P. and A.O." The refund was deposited into an account Harris opened at a Huntsville bank, according to the indictment.
The maximum penalty for theft of government property and money laundering is 10 years in prison and a $250,000 fine.
The IRS and FBI investigated the case, which Assistant U.S. Attorney Russell E. Penfield is prosecuting.
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Federal Grand Jury Indicts Church Staff Member for Producing, Receiving and Possessing Child PornographyRead the Press Release
BIRMINGHAM – A federal grand jury last week indicted a Shelby County man on multiple charges of producing, receiving and possessing child pornography, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
A four-count indictment filed in U.S. District Court charges JASON MICHAEL HANKINS, 34, with the production, receipt and possession of child pornography in 2013. Hankins found at least one of his victims by seeking out a single mother on a Christian dating website. Hankins worked at Shades Crest Baptist Church as part of the Family Life Center staff, assisting in the planning and coordinating of recreational activities.
The maximum penalty for producing child pornography is 30 years in prison and a $250,000 fine, per count. The maximum penalty for each count of receiving and possessing child pornography is 20 years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney Jacquelyn Hutzell is prosecuting.
Members of the public are reminded that an indictment contains only charges. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
Woman in Prison for BP Oil Spill Fraud Now Charged with Food Stamp Fraud and Tax EvasionRead the Press Release
BIRMINGHAM -- Federal prosecutors have charged a McCalla woman, already serving time for attempting to defraud the Gulf Coast oil spill claims fund, with food stamp fraud and evading income taxes, announced U.S. Attorney Joyce White Vance, Internal Revenue Service, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Agriculture Office of Inspector General, Investigations, Special Agent in Charge Karen Citizen-Wilcox.
The U.S. Attorney's Office last week charged SHERICA LACEY LEE, 33, with one count of tax evasion and one count of wire fraud through an information filed in U.S. District Court. The information also seeks to have Lee forfeit $23,757 to the government as proceeds of illegal activity. The government also filed a plea agreement with Lee in which she agrees to plead guilty to the charges and to pay restitution of $134,448 to the IRS for taxes not paid in 2008 through 2010, plus $23,757 to the Department of Agriculture for food stamp benefits she was not eligible to receive between July 2009 and June 2013. Lee also consents, additionally, to forfeit the $23,757 sought in the information.
"This defendant is in prison for trying to steal money intended for the victims of the massive BP oil spill in the Gulf of Mexico, and now she must face the charges that she stole from U.S. taxpayers and from money intended to feed poor families," Vance said. "Fraud seemed to be this defendant's default mode, but government agencies and this office hit the kill switch."
"Sherica Lacey Lee attempted to evade her tax obligation by not reporting all of her income to the Internal Revenue Service,” Hyman-Pillot said. "Tax evasion undermines the integrity of our nation’s tax system, which is built on voluntary compliance. IRS Criminal Investigation will continue to enforce the nation’s tax laws and recommend prosecution on individuals who choose to violate our tax system.”
The information charges Lee evaded income taxes for 2008 by preparing and submitting a personal tax return that falsely reported she had no taxable income, when she had $229,147 in taxable income that year. Lee ran a tax preparation business, Lacey's Income Tax Service, with several locations in the Birmingham area. Between 2008 and 2010, according her plea agreement, Lee's company filed more than 2,000 tax returns and generated about $2.5 million in receipts.
The information also charges Lee with wire fraud as part of a scheme to obtain federal benefits from the USDA Supplemental Nutrition Assistance Program. USDA administered SNAP, formerly known as the Federal Food Stamp Program, in conjunction with the Alabama Department of Human Resources.
Although Lee had income in excess of $200,000 in 2009, she applied for SNAP benefits by falsely stating on her application to DHR that she had no household income, cash on hand, or money in the bank, according to her plea agreement. Lee submitted additional false application forms in 2010, 2011 and 2012. Her applications caused the $23,757 in SNAP benefits to be wired to an account established in her name and loaded monthly onto an Electronic Benefit Transfer card, which could be used as a debit card to purchase food.
Lee was sentenced in June 2014 to one year and a day in prison for attempting to defraud the Gulf Coast Claims Facility. As part of Lee's plea agreement in the current case, she and the government agree to a prison sentence of 24 months, unless the low end of the U.S. Sentencing Guideline range is more than 24 months. In that case, the government would recommend the low end of the guideline range. The government also would recommend that Lee's sentence run concurrently with the sentence she is now serving.
IRS, Criminal Investigation, and USDA-OIG investigated the case, which Assistant U.S. Attorney Pat Meadows is prosecuting.
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South Carolina Attorney Charged with Fraud and Money Laundering in UA Sorority House Furnishing SchemeRead the Press Release
BIRMINGHAM -- Federal authorities today arrested a South Carolina attorney on fraud and money laundering charges as part of a scheme that involved submitting false invoices for furnishings and equipment for a University of Alabama sorority house and receiving payment without providing the furnishings and equipment, announced U.S. Attorney Joyce White Vance, U.S. Secret Service Special Agent in Charge Craig Caldwell, and U.S. Postal Inspection Service Inspector in Charge Keith Morris.
An eight-count indictment returned by a federal grand jury last week charges JENNIFER ELIZABETH MEEHAN, 38, with wire fraud, bank fraud and money laundering. According to the indictment filed in U.S. District Court, Meehan used interstate electronic communication to submit fraudulent invoices totaling about $95,000 to Greek Resource Services, a contract company that handles the finances for fraternities and sororities at UA. Meehan was in charge of furnishing the newly constructed Gamma Phi Beta sorority house between September 2013 and March 2015.
The indictment also charges Meehan with executing a bank fraud scheme involving about $375,000, in which Meehan opened an account at First Citizens Bank under a fraudulent business name and then submitted additional fraudulent invoices to Greek Resource Services. GRS then gave Meehan two checks totaling about $375,000, which she deposited into the newly opened First Citizens account.
Meehan, a former member of Gamma Phi Beta at Alabama, was acting in her position as president of the House Corporation Board of the Epsilon Lambda Chapter of Gamma Phi Beta Sorority in an unpaid, volunteer capacity during the course of the fraud, according to the indictment.
Meehan is charged with money laundering for, on four separate occasions, wiring more than $10,000 gained through the bank and wire fraud into accounts she owned.
Meehan could face a maximum penalty of 30 years in prison and a $250,000 fine if convicted of the mail fraud.
The U.S. Secret Service and the U.S. Postal Inspection Service investigated the case, which Assistant U.S. Attorney David H. Estes is prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Former Boaz Housing Authority Comptroller Charged with Theft of HUD FundsRead the Press Release
BIRMINGHAM -- Federal prosecutors on Thursday charged the former comptroller for the Boaz Housing Authority with stealing federal Housing and Urban Development funds, announced U.S. Attorney Joyce White Vance and HUD Special Agent in Charge Nadine E. Gurley.
The one-count information filed in U.S. District Court charges STANLEY J. KNOP, 47, of Crossville, with stealing HUD funds from Aug. 4, 2010, through Oct. 25, 2013, while he was comptroller of the Boaz Housing Authority, which receives HUD funding. The United States seeks forfeiture of $160,618 that has been identified as proceeds of the theft.
“The U.S. Attorney’s Office is dedicated to holding accountable corrupt public employees who steal federal funds entrusted to their oversight," Vance said. "The substantial sum stolen from the Boaz Housing Authority was much needed by that community, but it was deprived of those funds by the acts of a selfish individual. This prosecution can see that those funds are restored to the community,” she said.
“The charges today demonstrate our commitment to combat the theft of HUD funds, especially when the funds involved are earmarked to assist our neediest families," Gurley said. "The United States Department of Housing and Urban Development, Office of Inspector General, will continue to partner with other federal, state and local authorities to ensure that corrupt individuals do not use their positions to enrich themselves at the government’s expense," she said.
Knop could face a maximum penalty of 10 years in prison and a $250,000 fine if convicted of the theft.
HUD-OIG and the FBI investigated the case, which Assistant U.S. Attorney Laura D. Hodge is prosecuting.
The public is reminded that an indictment or information contains only charges. A defendant is presumed innocent unless and until proven guilty.
Mail Carrier Charged with Taking Bribes to Deliver Packages Containing MarijuanaRead the Press Release
BIRMINGHAM – Federal Authorities today arrested a mail carrier on charges that he took bribes to deliver packages containing marijuana, announced U.S. Attorney Joyce White Vance, Assistant Special Agent in Charge Christopher Nugent, U.S. Postal Service - Office of Inspector General, Inspector in Charge Adrian Gonzalez, U.S. Postal Inspection Service, and Alabama Law Enforcement Agency Secretary Spencer Collier.
The arrest of EARL JERON WHITE, 33, of Pleasant Grove, follows his indictment by a federal grand jury on May 28. The grand jury returned an indictment charging White with one count of possessing with intent to distribute marijuana in Jefferson County between March 2013 and April 2014. It also charged White with one count of being a public official who demanded or accepted payment for delivery of the U.S. mail within that same time. White appeared before a federal magistrate judge today for a formal reading of the charges against him.
The maximum penalty for the drug distribution charge is five years in prison and a $1 million fine. The maximum penalty for the bribery count is two years in prison and a $250,000 fine.
“Corruption of postal employees is a significant vulnerability and a serious breach of public trust,” Gonzalez said. "With the coordinated efforts of the U.S. Postal Inspection Service and our law enforcement partners, postal inspectors will continue their vigilant watch against anyone receiving bribes to transport illegal drugs through the U.S. Mail.”
The U.S. Postal Inspection Service, the U.S. Postal Service – Office of Inspector General, in conjunction with ALEA's State Bureau of Investigation, investigated the case, which Assistant U.S. Attorney John B. Felton is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Hayden Man Pleads Guilty to Distributing Grenade FusesRead the Press Release
BIRMINGHAM -- A Hayden man pleaded guilty today in Federal Court to charges of Distribution of Grenade Fuses to an Unlicensed Person, announced U.S. Attorney Joyce White Vance and Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge David Hyche.
U.S. District Judge Madeline M. Haikala took the guilty plea from Matthew Joseph Smith, 56, on charges stemming from an October 22, 2014, incident where approximately 1,340 M228 grenade fuses were distributed by Smith to another individual who did not have a license to possess the fuses. The sentencing in the case is set for September 15, 2015.
“This conviction sends a message to those who deal in explosive materials without proper authority in the Northern District of Alabama. Individuals who hold a license to possess explosive materials owe a duty to act within the boundaries of the law at all times. When those boundaries are exceeded, we will actively pursue prosecution to ensure the safety of the public,” said U.S. Attorney Joyce White Vance.
“ATF remains committed to utilizing its dual criminal/regulatory role to identify, disrupt and prosecute those who criminally use explosives that put our communities at risk,” said Steven L. Gerido, ATF Special Agent in Charge.
ATF investigated the case. Assistant United States Attorney Brad Felton is prosecuting the case.
Madison County Man Gets 140 Years in Prison for Producing, Possessing and Distributing Child PornographyRead the Press Release
HUNTSVILLE – A federal judge today sentenced a Madison County man to 140 years in prison on multiple charges of producing child pornography, some of it taken with cameras he hid in the bathrooms of three Huntsville-area businesses, announced U.S. Attorney Joyce White Vance, Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr., Alabama Law Enforcement Agency Sec. Spencer Collier and Etowah County Sheriff Todd Entrekin.
U.S. District Judge Madeline H. Haikala sentenced JEREMY JOSEPH NELSON, 42, for producing child pornography between 2012 and 2014, possessing child pornography depicting children under age 12, and distributing child pornography. Nelson pleaded guilty to the charges in February.
A sentencing document filed by the government on Monday said Nelson possessed more than 1 million images of child pornography and traded thousands of those images with other sex offenders. The document also said that Nelson has exploited hundreds of children in Alabama, and that he "produced his own images of child pornography depicting children in Alabama for his own sexual gratification and for trading."
"This defendant called himself a monster and should spend the rest of his life in prison," the government document said.
In Nelson's guilty plea, he acknowledged that for several years he used hidden cameras surreptitiously to record underage girls in the bathroom of his residence. He also acknowledged that, while working as a janitor, he had hidden cameras in the employee bathroom of a Huntsville television news studio, in the customer bathroom of a Cadillac dealership, and in the bathroom and changing rooms of a dance studio.
Nelson pleaded guilty to four counts of using or causing a minor to engage in sexually explicit conduct so he could record the conduct. One of those counts stated that the crime took place at a Huntsville dance studio. Nelson also pleaded guilty to possessing child pornography on computer, computer disk or videotape, and to distributing the pornography over the Internet.
The Department of Homeland Security and the Alabama State Bureau of Investigation investigated the case, which Assistant U.S. Attorneys Jacquelyn Hutzell and Daniel Fortune are prosecuting.
Birmingham Store Owner Pleads Guilty to Food Stamp and Tax FraudRead the Press Release
BIRMINGHAM -- The owner of a Southside Birmingham grocery store pleaded guilty today in federal court to food stamp and tax fraud totaling more than $1.6 million, announced U.S. Attorney Joyce White Vance, U.S. Department of Agriculture Office of Inspector General, Investigations, Special Agent in Charge Karen Citizen-Wilcox, and Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
SUFYAN HAZEM SALEH, 33, of Birmingham, pleaded guilty before U.S. District Judge R. David Proctor to one count of tax fraud and one count of food stamp fraud. As part of his plea, he agreed to pay restitution of $498,470 to the IRS and $1,125,772 to the USDA, which administers the food stamp program under the name Supplemental Nutrition Assistance Program, or SNAP. Saleh is scheduled for sentencing Sept. 10.
Saleh owns the now closed City Supermarket at 1531 13th Place South, a convenience grocery story that was authorized by USDA to accept food stamp benefits, according to his indictment and plea agreement. A federal grand jury indicted Saleh in August 2014. The indictment remained sealed until Saleh's arrest in February.
Individuals in the SNAP program receive benefits from the USDA on an electronic benefit transfer card, which functions like a debit card. Saleh pleaded guilty to redeeming EBT SNAP benefits for cash, which is prohibited, between January 2010 and December 2011. Of the approximate $1.9 million City Supermarket redeemed in EBT SNAP benefits during that period, the USDA estimated that $1,125,772 was food stamp fraud, according to Saleh's plea.
Saleh also pleaded guilty to tax fraud for under reporting to the IRS his 2009 and 2010 income received from redeeming SNAP benefits. Saleh did not report about $1.6 million in income from food stamp redemption for the two tax years, resulting in a tax loss of about $498,470, according to his plea.
The maximum penalty for the tax fraud is three years in prison and a $250,000 fine. The maximum penalty for food stamp fraud is five years in prison and a $250,000 fine.
Saleh recently was arrested on unrelated state charges of food stamp fraud.
The USDA-OIG and IRS-CI investigated the federal case, which Assistant U.S. Attorney Pat Meadows prosecuted.
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U.S. Attorney Charges Serra Nissan General Manager with Defrauding ManufacturerRead the Press Release
BIRMINGHAM - Federal prosecutors today charged the general manager of Serra Nissan with conspiracy to defraud Nissan North America through its dealership incentive programs, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
The U.S. Attorney’s Office filed a one-count information in U.S. District Court charging that RANDY D. VISSER, 45, of Vestavia Hills, directed officers of the Birmingham dealership to falsify sales reports submitted by wire to the manufacturer so Serra Nissan could receive incentive payments it did not earn. Prosecutors also filed a plea agreement with Visser, in which he acknowledges the conspiracy charge and states his intention to plead guilty.
The charge against Visser follows last month's grand jury indictment of Serra Nissan's controller, Kimberly H. Branch. The 16-count indictment of Branch includes conspiracy and wire fraud charges based on the same scheme to defraud Nissan North America by falsely reporting to the manufacturer that certain cars were sold at Serra Nissan when they were sold at another Serra dealership.
The conspiracy charge against Visser charges that, between March 2013 and April 2013, Visser directed other employees at Serra Nissan to create false documents reporting vehicles sold at Serra Visser Nissan in Cullman as sold at Serra Nissan in Birmingham. The process, known as "pooling sales," occurs when a dealer owns or is associated with more than one dealership and attributes sales from one dealership to another in order to meet sales incentive levels that each dealership would not reach on its own.
At all times relevant to the charged offense, Visser owned 49 percent of Serra Visser Nissan. His wife owned 2 percent and her father, Anthony Serra, owned 49 percent, according to Visser's information and plea agreement. Serra owns 50 percent of Serra Nissan and his daughter owns the other 50 percent, according to the documents.
Visser and others in the conspiracy fraudulently claimed 15 vehicle sales for Serra Nissan, causing Nissan North America to overpay the dealership $64,800 in incentives, according to the charges.
The conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine.
FBI and IRS-CID investigated the case, which Assistant U.S. Attorneys Amanda S. Wick and Jennifer S. Murnahan are prosecuting.
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Department of Justice Announces Investigation of the Jefferson County Jail in Birmingham, AlabamaRead the Press Release
WASHINGTON – The Justice Department announced today that it has opened an investigation of the Jefferson County Jail in Birmingham, Alabama, focusing on the treatment of juveniles. The investigation will assess whether juveniles are detained at the jail in conditions that pose a serious risk of harm to their physical and psychological well-being.
The department has received allegations that juveniles at the jail are regularly housed with adult detainees, have been victims of sexual abuse and have been approached by adult detainees for sexual activity and favors. Additionally, juveniles, including those with diagnosed mental illnesses and intellectual disabilities, allegedly are routinely placed in solitary confinement or lockdown—sometimes for months at a time—with little or no access to the law library, telephone, commissary, educational opportunities and other services.
“Isolation—particularly the prolonged and restrictive lockdown alleged in Jefferson County—can lead to paranoia, anxiety, depression and suicide, and exacerbate pre-existing psychological harms,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Indeed, the 2012 Report of the Attorney General’s National Task Force on Children Exposed to Violence concluded that ‘[n]owhere is the damaging impact of incarceration on vulnerable children more obvious than when it involves solitary confinement.’”
“Our commitment to finding solutions to problems in Alabama’s troubled jails and prisons is ongoing,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama. “Where possible, the best solution is always a collaborative approach that encourages the state and counties to correct conditions that are constitutionally inadequate. However, we have not hesitated to file suit where necessary.”
The department will conduct the investigation using its authority under the Civil Rights of Institutionalized Persons Act (CRIPA) and the Violent Crime Control and Law Enforcement Act. Under CRIPA, the Attorney General has the authority to investigate violations of the constitutional rights of prisoners in “institutions,” including county jails, where such violations are “pursuant to a pattern or practice of resistance to the full enjoyment of such rights.” The Violent Crime Control and Law Enforcement Act authorizes the Attorney General to bring suit against any governmental entity that has engaged in “a pattern or practice” of depriving juveniles of their rights secured by the Constitution or federal statute. The department has conducted similar investigations in other jurisdictions, including of the Leflore County Juvenile Detention Center in Mississippi, the jails on Rikers Island in New York, the Terrebonne Parish Juvenile Detention Center in Louisiana and the Scioto and Marion Juvenile Correctional Facilities in Ohio.
The Special Litigation Section of the Civil Rights Division is conducting this investigation. Individuals with relevant information are encouraged to contact the department via email at [email protected] or by phone at (855) 258-1432.
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United States Contracting Official Charged with Obstructing a Federal AuditRead the Press Release
BIRMINGHAM – Federal prosecutors today charged a civilian contract officer working with the U.S. Army Contracting Command at Redstone Arsenal with obstructing an audit by the Department of Defense, Office of Inspector General (DODIG), announced U.S. Attorney Joyce White Vance and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
The U.S. Attorney's Office filed a one-count information in U.S. District Court charging TERESA MAYBERRY, 54, of Huntsville, with obstruction of a federal audit. Mayberry created a series of false documents that she provided to DODIG to obstruct its 2012 audit of an Army contract to purchase parts for Russian-made Mi-17 helicopters, according to the charge. Mayberry has entered a plea agreement with the government, also filed today in District Court, in which she acknowledges the charge against her and states her intention to plead guilty.
The Special Inspector General for Afghanistan Reconstruction (SIGAR), the Defense Department's Defense Criminal Investigative Service (DCIS), U.S. Army Criminal Investigation Command (CID), the FBI and the Internal Revenue Service Criminal Investigation Division (IRS-CI) are working jointly in the investigation of fraud and corruption in Mi-17 helicopter contracting.
"Fraud and corruption in military contracting is theft from all of us who pay taxes," Vance said. "It harms our mission overseas and undermines the confidence of the American public, which demands a military procurement system that spends tax dollars wisely and responsibly," she said. "Particularly in light of the move of Army Materiel Command onto Redstone Arsenal, this investigation should serve as a warning for those who seek to defraud the U.S. military and the American public that my office will pursue these crimes aggressively.”
According to the information filed today, in late 2011 and 2012, DODIG was investigating contracts involving overhauls and purchases of spare parts, amounting to more than $8 million, for Russian-made Mi-17 helicopters. It was material to DODIG to determine whether the Army paid a reasonable price for the parts, whether the parts purchased were needed, and whether proper contracting procedures were followed.
Mayberry was involved in implementing the parts contract, which she had signed on behalf of the United States. In the course of the investigation, DODIG several times requested contracting documents from Mayberry related to the decisions to purchase spare parts. On several occasions, Mayberry prepared, and directed her subordinates to prepare, a variety of false and backdated documents that she provided to DODIG in response to its requests, according to the information. As an example, the information charges that Mayberry caused the creation of a backdated document, bearing her signature, which falsely represented that price negotiations had taken place on parts purchases.
The charge carries a maximum penalty of five years imprisonment and a $250,000 fine.
The SIGAR, DCIS, Army CID, FBI and IRS-CI are investigating the case. DOJ Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section (on detail from SIGAR), and Assistant U.S. Attorneys Henry Cornelius and Ramona Albin are prosecuting the case.
Serra Nissan Controller Arrested on 16-Count IndictmentRead the Press Release
BIRMINGHAM – Federal agents this morning arrested KIMBERLY H. BRANCH, controller for Serra Nissan, based on a 16-count indictment returned by a federal grand jury last week, announced U.S. Attorney Joyce White Vance, Federal Bureau of Investigation Special Agent in Charge Roger C. Stanton and Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
The indictment against Branch, 34, of Trussville, was unsealed this morning following Branch's arrest at the car dealership. The indictment includes charges of a conspiracy and wire fraud related to a scheme to defraud Nissan North America Inc. between March 2013 and April 2013. According to the charges, Branch and others at Serra Nissan falsely reported cars as having been sold at Serra Nissan in Birmingham in order to obtain additional incentive payments that the dealership did not earn. This process, called “pooling sales,” occurs when a dealer owns or is associated with more than one dealership and combines or attributes sales from one dealership to another in order to meet sales incentives levels that each dealership would not reach on its own.
According to the indictment, Branch is the controller at Serra Nissan and was responsible for instructing another Serra Nissan employee to create false documents to hide the fraud, in the event Nissan North America audited the dealership. The 15 vehicle sales fraudulently reported at Serra Nissan caused Nissan North America to pay the dealership $82,750 in incentives, according to the indictment.
FBI and IRS-CID investigated the case, which Assistant U.S. Attorneys Amanda S. Wick and Jennifer S. Murnahan are prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty in court.
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Mulga Mother and Sons Indicted on Prescription Pill Distribution ChargesRead the Press Release
BIRMINGHAM -- A federal grand jury on Thursday indicted a Mulga woman and her two sons in connection with the illegal distribution of prescription painkillers, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.
A three-count indictment filed in U.S. District Court charges SUSAN ROBERTSON HICKS, 49, JONATHAN CODY HICKS, 26, and DUSTIN WADE COX, 33, with conspiring to possess, with the intent to distribute, oxycodone between January and May in Jefferson County. The indictment also charges Susan Hicks and son, Jonathan Hicks, with possessing and distributing the opioid painkiller on March 30, and charges the mother and son, Dustin Cox, with possessing and distributing oxycodone on April 27.
The three defendants were arrested on a federal complaint May 1. According to the sworn affidavit supporting the complaint, DEA agents, using a confidential source, bought 20 oxycodone tablets from Susan and Cody Hicks at their Birmingport Road home on March 30. On April 27, the same confidential source, under DEA surveillance, went to Hicks' home and bought 20 oxycodone pills from Dustin Cox, five of which Cox took from a prescription pill bottle bearing Susan Hicks' name, according to the affidavit.
The maximum penalty for the distribution charges is 20 years in prison and a $5 million fine.
The DEA investigated the case, which Assistant U.S. Attorney Austin D. Shutt is prosecuting.
Federal complaints and indictments contain charges. Defendants are presumed innocent unless and until proven guilty.
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Illegal Alien Indicted for Illegal Gun Possession and Distributing "Ice"Read the Press Release
BIRMINGHAM -- A federal grand jury today indicted a Mexican man living in Brighton on charges of illegal gun possession and distributing high-purity methamphetamine known as "ice," announced U.S. Attorney Joyce White Vance, Alcohol, Tobacco, Firearms and Explosives Assistant Special Agent in Charge David Hyche and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.
An indictment filed in U.S. District Court charges SERAFIN “Primo” JARAMILLO-ECHEVERRA, 27, possessed with intent to distribute methamphetamine on April 8 in Jefferson County, and that he possessed with intent to distribute more than 50 grams of "ice" at two separate locations in Jefferson County on April 10. Federal sentencing guidelines define "ice" as a substance containing at least 80 percent methamphetamine.
The indictment also charges Jaramillo-Echeverra carried a Hi-Point .45-caliber semi-automatic pistol in relation to a drug-trafficking crime on April 10, and that he was an illegal alien in possession of a firearm.
The maximum penalty for possession with intent to distribute methamphetamine is 20 years in prison and a $1 million fine. Possession with intent to distribute more than 50 grams of "ice" carries a minimum prison sentence of 10 years and a maximum $10 million fine. The maximum sentence for carrying a firearm during a drug-trafficking crime is five years in prison, which must be served after completion of any other sentence imposed for the crime, and a $250,000 fine. The maximum penalty for being an illegal alien in possession of a firearm is 10 years in prison and a $250,000 fine.
ATF and DEA investigated the case, which Assistant U.S. Attorney William G. Simpson is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Former Serra Nissan Sales Manager Sentenced to Two and Half Years in Prison for Fraud ConspiracyRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a former sales manager at Serra Nissan in Birmingham to two and a half years in prison for his role in a scheme at the car dealership to falsify auto loan documents, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, and Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge Virginia Emerson Hopkins sentenced ABDUL ISLAM MUGHAL, 49, of Trussville, on two counts of fraud at the Nissan dealership. Mughal pleaded guilty in July 2014 to one count of conspiring with others, including Serra Nissan salesmen, general managers, sales managers and finance managers, to falsify loan documents in order to defraud customers and financial institutions in order to sell more cars. He also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions, including Capital One Auto Finance, between January 2012 and October 2013.
The judge granted the government's motion for forfeiture in the case and set a July 2 hearing to determine the amount that must be forfeited, along with the amount of restitution Mughal must pay to victims. He must report to prison July 28.
"This defendant championed the use of predatory lending practices while he worked as a car dealership sales manager," Vance said. "He defrauded customers and the lenders that trusted the dealership to present truthful information during the financing process," she said. "Growing fraud and other deceptive practices in auto sales and financing are important issues affecting consumers, and my office is committed to working with law enforcement agencies and the Federal Trade Commission to prevent fraud during the auto lending process and to prosecute those who commit the crime."
"Financial fraud like Mr. Mughal engaged in undermines the trust we must have when making major financial decisions, like purchasing a vehicle, that carry serious consequences -- consequences that cost all of us, such as increased business costs, to say nothing of the harm to the victims themselves," Stanton said. "The sentence handed down today is appropriate given the many victims left in the wake of Mr. Mughal’s fraud.”
“Abdul Mughal and his co-conspirators orchestrated a scheme driven by deception and deceit. They defrauded financial institutions and deceived customers of Serra Nissan with the intent to increase profits and enrich themselves. Their criminal actions are unacceptable,” Hyman-Pillot said. “The sentencing of Mughal will serve as an example that Internal Revenue Service-Criminal Investigation and our law enforcement partners will work together to uncover similar schemes and recommend prosecution to the fullest extent of the law.”
According to Mughal's guilty plea, while he was the dealership's general sales manager, "there was a pervasive scheme throughout Serra Nissan ... that if a customer did not qualify for a car loan for some reason, the salesman, finance managers, sales managers, or GSM were to falsify information or documents that would ensure the customer was funded."
His plea agreement with the government listed ways that Mughal and others falsified loan documents including, but not limited to:
- Inflating the income information of prospective car buyers, a process participants sometimes referred to as “fluffing.”
- Creating or altering documents to submit to financial institutions that required proof of the prospective buyer's income or residency.
- Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount, a process participants sometimes called “power booking.” Mughal and others had a financial incentive to power book a deal, because if the profit on a transaction were high enough, the dealership would pay the employees on the deal something above their normal commission.
- Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify because of poor credit or insufficient income.
In his plea, Mughal acknowledged one incident in which he told a salesman that a specific sale “could not be funded until they created a ‘legal lie’ for the bank” that showed the buyer, identified as J.T., made $5,000 per month.
J.T. bought a vehicle from Serra Nissan on Oct. 16, 2012. J.T. submitted a bank statement to Serra Nissan showing an ending account balance of $11.03, but the loan application the dealership submitted to Capital One Auto Finance included a fraudulent bank statement showing J.T. had monthly deposits of $6,179, according to court records.
In a second vehicle purchase on Oct. 16, 2012, a customer identified as W.K. submitted only a Social Security letter as proof of income. Serra Nissan, however, submitted a loan application to Capital One on W.K.'s behalf that also included a fraudulent bank statement, a claim of $2,973 in monthly Veterans Administration benefits -- although W.K. is not a veteran -- and false information that W.K. was retired from the State of Alabama and made $4,500 a month, according to court records.
The FBI and IRS-CI investigated the case, which Assistant U.S. Attorney Amanda Schlager Wick and Robin Beardsley Mark are prosecuting.
Tuscaloosa Man Sentenced to 25 Years in Prison for String of Armed RobberiesRead the Press Release
BIRMINGHAM -- A federal judge on Tuesday sentenced a Tuscaloosa man to 25 years in prison for a string of armed robberies in Tuscaloosa in 2012, announced U.S. Attorney Joyce White Vance and Alcohol, Tobacco, Firearms and Explosives Assistant Special Agent in Charge David Hyche.
U.S. District Judge L. Scott Coogler sentenced DeMARDUS TARVER, 21, to just over four years in prison on the robbery charges, to be followed by nearly 21 years in prison on weapons charges associated with the robberies. Tarver pleaded guilty to four robberies under the federal Hobbs Act, which involves robbery affecting interstate commerce, and to using or brandishing a firearm during two of those robberies.
According to court records, Tarver robbed the following Tuscaloosa stores: Family Variety, 911 East Crescent Ridge Road, on Oct. 21, 2012; Buddy's Food Mart, 14439 Alabama Highway 69, on Oct. 21, 2012; Fast Stop, 2601 Fosters Ferry Road, on Nov. 14, 2012, and Raceway Service Station, 940 Veterans Memorial Parkway, on Nov. 14, 2012. Tarver discharged a gun during the Fast Stop robbery and brandished a gun during the Raceway Service Station robbery.
ATF investigated the case, which Assistant U.S. Attorneys L. James Weil Jr. and Joseph P. Montminy prosecuted.
Vendor Who Bribed Two-Year College Chancellor Resentenced to Three Years in PrisonRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a computer software vendor to three years in prison for paying more than $600,000 in bribes between 2002 and 2006 to the then chancellor of Alabama's two-year college system, announced U.S. Attorney Joyce White Vance and Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge Virginia Emerson Hopkins sentenced JAMES WINSTON HAYES, 71, to prison and again ordered he pay $628,454 in restitution and forfeit $5 million. The judge originally sentenced Hayes to probation in 2011. Today's resentencing was the result of a November ruling by the U.S. Court of Appeals for the Eleventh Circuit, which vacated the judge's earlier sentence. The government challenged the probationary sentence on appeal and the 11th Circuit ruled that a sentence of probation was unreasonable for Hayes' crime.
"Mr. Hayes received millions of taxpayer dollars by bribing the chancellor of Alabama's two-year college system to ensure the defendant's company received contracts from colleges within the system," Vance said. "Through fraudulent contracts and fake invoices, he even had taxpayers financing his bribe payments," she said. "Imprisonment is a necessary and just punishment for his crimes."
“Today’s sentence of James Hayes emphasizes the government’s relentless effort to hold an individual accountable for his criminal behavior,” Hyman-Pillot said. “Mr. Hayes used financial bribes to influence contracts with the Alabama Department of Postsecondary Education. The overall conspiracy was fueled by greed and deceit. I hope this sends a clear message that Internal Revenue Service-Criminal Investigation will continue to trace every penny used in kickback schemes to expose all individuals who engage in bribery and corruption,” she said.
Hayes formerly owned ACCESS Group Software, a Walker County company that sold educational computer software to the Alabama Department of Postsecondary Education. ACCESS did business with more than 25 two-year colleges and technical schools in Alabama. Hayes pleaded guilty in 2008 to bribing Roy Johnson, then chancellor of the two-year college system, and to conspiring to commit money laundering.
Over four years, Hayes paid Johnson more than $600,000 in bribes, and in return, Hayes’ software company obtained lucrative government contracts that earned his company more than $14 million in revenue and about $5 million in profit.
Johnson pleaded guilty in the case to charges of bribery, conspiracy to commit bribery, conspiracy to commit money laundering, obstruction of justice and tampering with a witness. Johnson was sentenced to six years and six months in prison. Both Hayes and Johnson assisted the government in its investigation of corruption in the two-year college system after they were charged. Including Hayes and Johnson, the investigation resulted in 17 convictions.
Assistant U.S. Attorney George Martin prosecuted the case and Assistant U.S. Attorney Praveen Krishna handled the case on appeal.
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Birmingham Area Doctors Charged with Illegally Supplying Controlled SubstancesRead the Press Release
BIRMINGHAM – As part of the Drug Enforcement Agency's Operation Pilluted, federal authorities today arrested a Midfield doctor and charged a Birmingham doctor for illegally supplying controlled substances, announced U.S. Attorney Joyce White Vance, DEA Assistant Special Agent in Charge Clay A. Morris and Alabama Law Enforcement Agency Secretary Spencer Collier.
DEA agents this morning arrested ERNEST ALBERT CLAYBON, 72, on charges that he distributed methadone without a legitimate medical purpose. A federal grand jury indicted Claybon April 30 on five counts of distributing methadone "outside the scope of professional practice and not for a legitimate medical purpose" between November 2014 and January 2015. Claybon was arrested at his family medicine practice in Midfield.
In a separate case, The U.S. Attorney's Office charged PETER ALAN LODEWICK, 73, a physician at Lodewick Diabetes Center on Montclair Road, in a one-count information filed in U.S. District Court. The information charges that Lodewick assisted someone else in acquiring the narcotic painkiller, oxycodone, by "misrepresentation, fraud, forgery, deception, and subterfuge." Lodewick has entered a plea agreement with the government acknowledging the charges against him and stating his intention to plead guilty. Prosecutors filed the plea agreement in District Court today.
A third physician in north Alabama, MUHAMMAD WASIM ALI, 50, who owns a pain clinic in Jasper, was indicted last month on charges of illegally distributing narcotic painkillers for other than legitimate medical purposes.
Charges against the three doctors resulted from DEA's 15-month Operation Pilluted in Alabama, Arkansas, Louisiana and Mississippi, focused on reducing trafficking and abuse of pharmaceuticals.
"Alabama leads the nation in the number of per capita prescriptions for opioid painkillers, which are extremely addictive and often abused," Vance said. "The proper use of these drugs for pain management is important, but their abuse is deadly. Prescription-drug abusers often shift to heroin abuse and this tragic trend contributes to our epidemic overdose death rates. We must ensure that doctors don’t turn into illegal drug dealers," she said.
“Prescription drug abuse is the fasting-growing drug problem in the country," Morris said. "We trust our doctors to heal our bodies, not poison our communities. We will not tolerate or accept illegal prescribing, and we will bring justice to those who condone or participate in this type of practice," he said.
According to Lodewick's plea agreement, he issued about 390 prescriptions for controlled substances between January 2013 and December 2014 to a group of pill-seekers led by the doctor's housekeeper. In May 2013, Lodewick discovered that three individuals in the group were pharmacy-shopping and wrote them letters terminating their physician-patient relationship, but continued to write them opiate prescriptions, according to the plea agreement.
Lodewick voluntarily surrendered his DEA registration, ending his ability to prescribe controlled substances, in January, according to his plea agreement. He is scheduled to be arraigned on his charges Thursday.
Claybon was arraigned today.
The maximum penalty for the aiding and abetting charge against Lodewick is four years in prison and a $250,000 fine.
The maximum penalty for each distribution charge against Claybon is 20 years and a $1 million fine.
DEA, ALEA and Internal Revenue Service, Criminal Investigation, investigated the cases being prosecuted by the U.S. Attorney's Office for the Northern District of Alabama.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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U.S. Attorney Charges Former Police Dispatcher for Unauthorized Use of Crime ComputersRead the Press Release
BIRMINGHAM -- Federal prosecutors today charged a former police dispatcher with unauthorized use of law enforcement computers for non-law enforcement purposes, announced U.S. Attorney Joyce White Vance, U.S. Secret Service Special Agent in Charge Craig Caldwell, and Alabama Secretary of Law Enforcement Spencer Collier.
The U.S. Attorney's Office charged DERRICK R. THOMAS, 38, of Warrior, with one count of unauthorized access to a protected computer to query law enforcement databases between 2011 and 2014 while he worked as a dispatcher for the Gardendale Police Department. Thomas queried the Alabama Criminal Justice Information Center and the National Crime Information Center on at least four individuals for other than law enforcement purposes at the request of someone who was not a law enforcement officer, according to the information filed in U.S. District Court.
Thomas has entered a plea agreement with the government acknowledging the actions charged and stating his intention to plead guilty. The plea agreement also was filed in court today.
The entity formerly known as ACJIC operates a data center to provide information to Alabama law enforcement and the criminal justice community. ACJIC, which operates in Montgomery, connects via a secure connection to criminal justice information systems for all 50 states, as well as NCIC. NCIC is an electronic clearinghouse of crime data maintained by the FBI and used by criminal justice agencies nationwide.
According to Thomas' plea agreement, he logged into the ACJIC/NCIC system on multiple occasions in order to gather and provide information to an acquaintance who was not a law enforcement officer. By doing so, Thomas engaged in unauthorized public dissemination of personal information. Thomas knew he was authorized to use the ACJIC/NCIC system only for law enforcement purposes and that accessing it for other purposes was a crime, according to the plea agreement.
The maximum penalty for unauthorized access to a protected computer is five years in prison and a $250,000 fine.
The Secret Service investigated the case with the assistance of the Alabama Law Enforcement Agency, which Assistant U.S. Attorney Erica Williamson Barnes is prosecuting.
Remlap Man Sentenced to 25 Years in Prison for String of 2012 Armed RobberiesRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Remlap man to 25 years in prison for a string of armed robberies in northeastern Jefferson County in October 2012, including one in which a store customer was shot. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Steven Gerido announced the sentence.
U.S. District Judge Karon O. Bowdre sentenced JAMEY LEE MATTHEWS, 41, to 25 years in prison, in accordance with a binding plea agreement Matthews entered with the government. The judge also ordered Matthews to pay $202,000 in restitution for medical expenses to the man he shot, and $6,000 to the stores he robbed.
Matthews pleaded guilty in October 2014 to four counts of robbery under the federal Hobbs Act, which involves robbery affecting interstate commerce, one count of armed pharmacy robbery, and one count of discharging a firearm during a crime of violence.
He committed the Hobbs Act robberies at Mike's Quick Stop on the Pinson Valley Parkway on Oct. 11, 2012, Dollar General in Trafford on Oct. 15, 2012, Winn Dixie supermarket on Old Springville Road and Roger's Gas Station in Clay, both on Oct. 19, 2012. He committed the armed pharmacy robbery at Tyner's Pharmacy on Chalkville Road in Birmingham on Oct. 15, 2012. Matthews discharged a firearm during the robbery at Roger's Gas Station.
According to Matthews' plea agreement, he brandished a firearm during all the robberies, but fired a gun as he ran out of Roger's and employees and customers from the gas station chased him. A customer was struck five times and testified during the sentencing hearing that he still has two pellets in his hip.
Authorities charged Matthews with the robberies after he was found, seriously injured, beneath a remote bluff in Remlap on Oct. 20, 2012. After he was flown to UAB for treatment, Blount County Sheriff's deputies found a pick-up truck at the top of the bluff that was registered to Matthews' mother, according to the plea agreement. Four firearms, a customer's check written to Roger's on Oct. 19, and pill bottles from Tyner's Pharmacy were found in the truck. Ballistics tests later matched shell cases recovered from the Roger's robbery to a Rossi .410-caliber shotgun found in the truck, the plea agreement says.
The FBI and ATF investigated the case, which Assistant U.S. Attorney John B. Felton prosecuted.
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U.S. Attorney Charges Huntsville Man with Crossing State Line for Sex with ChildRead the Press Release
BIRMINGHAM -- Federal prosecutors today charged a Huntsville man with crossing the Alabama state line with the intent to engage in a sexual act with a child younger than 12, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
The U.S. Attorney's Office charged CHARLES WALKER DUNNAVANT, 32, in a one-count information filed in U.S. District Court. According to the charge, Dunnavant crossed the state line in April 2013 in order to engage in a sex act with a child. Dunnavant entered a plea agreement with the government, which was filed under seal.
The maximum penalty for the charge is 30 years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney Mary Stuart Burrell is investigating.
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Pharmacy Technician Indicted for Mail Fraud in Prescription Reimbursement SchemeRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted a former Madison County pharmacy technician for mail fraud in connection with a prescription drug insurance reimbursement scheme, announced U.S. Attorney Joyce White Vance and U.S. Postal Inspector Frank Dyer.
A five-count indictment filed in U.S. District Court charges HOLLY L. CHAMPION, 29, of Madison, with five counts of mail fraud between February 2011 and June 2012 when she worked for Star Discount Pharmacy in Meridianville in Madison County. According to the indictment, Champion submitted false prescription information to her insurance provider, Blue Cross and Blue Shield of Alabama, causing the company to mail her checks totaling about $7,600 as reimbursement for prescription drugs she never purchased.
Champion entered false prescription information on herself and family members into the pharmacy's automated prescription dispensing system so it would generate a claim number, which she then submitted to Blue Cross seeking up to 80 percent reimbursement for the cost of the fake prescriptions, according to the indictment.
The maximum penalty for each mail fraud count is 20 years in prison and a $250,000 fine.
The U.S. Postal Inspection Service investigated the case, which Assistant U.S. Attorney Davis A. Barlow is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Jasper Physician Indicted for Illegally Dispensing NarcoticsRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted a physician and owner of a Jasper neurology and pain clinic on illegal drug distribution charges for dispensing narcotic painkillers for other than legitimate medical purposes. U.S. Attorney Joyce White Vance, Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris and Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillott announced the charges.
An indictment filed in U.S. District Court charges Dr. MUHAMMAD WASIM ALI, 50, of Vestavia Hills, with 10 counts of unlawfully distributing controlled substances "outside the scope of professional practice and not for a legitimate medical purpose" to three people working undercover with law enforcement. Ali owns and practices at the Walker Rural Health Care/Jasper Neurological Care clinic. DEA agents arrested Ali and searched his clinic on March 27.
The 10 distribution counts charge 10 instances that Ali illegally dispensed oxycodone, an opioid painkiller, to three undercover agents between August 2014 and November 2014. According to the indictment, Ali dispensed 1,100 oxycodone pills to the three people within those three months.
"Narcotic painkillers have an important and legitimate use in medical treatment, but Alabama leads the nation in the number of prescriptions per capita for opioid painkillers," Vance said. "Opiates are extremely addictive, and the use and abuse of opioid painkillers often lead to the abuse of and addiction to heroin, which is killing people in record numbers," she said. "Physicians who provide these dangerous narcotics without justifiable medical reasons must be stopped."
"The use and abuse of prescription opioid pain relievers for non-medical reasons is at epidemic levels across the United States, and Alabama is no exception," Morris said. "The DEA enjoys outstanding relationships with the vast majority of DEA registrants, including physicians; however, physicians who have abandoned their duties and the Hippocratic Oath cannot be tolerated. Those whose sole purpose is to profit from the addictions of others will be stopped," he said. "The abuse of opioid-based drugs is deadly. DEA remains committed to removing all drug sources of supply from our communities."
“The federal laws that regulate structuring requirements are in place to detect and stop those knowingly and willfully structuring to conceal their illegal activities,” Hyman-Pillot said. “Individuals who structure currency transactions are attempting to circumvent the law. This type of suspicious behavior will be thoroughly investigated in an effort to reveal underlying criminal activity,” she said.
The indictment against Ali also charges him with two counts of illegally possessing with intent to distribute controlled substances on March 27. One count charges illegal possession with intent to distribute hydrocodone, oxycodone and fentanyl, and a second count charges illegal possession with intent to distribute amphetamine salts and oxycodone.
The indictment's 13th count charges Ali with structuring currency transactions totaling about $151,480 at Wells Fargo Bank between July 10, 2014, and Dec. 8, 2014, in order to avoid the requirement that banks report transactions of $10,000 or more to the U.S. Treasury.
The maximum penalty for the distribution counts is 20 years in prison and a $1 million fine. The maximum penalty for financial structuring is 10 years in prison and a $500,000 fine.
The DEA and IRS-CI investigated the case, which Assistant U.S. Attorney Elizabeth A. Holt is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Huntsville Police Officer indicted for Excessive Force in 2011 ArrestRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted a Huntsville police officer for using excessive force during a 2011 arrest, announced Acting Assistant Attorney General Vanita Gupta of the Justice Department's Civil Rights Division, U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
A two-count indictment filed in U.S. District Court charges that BRETT M. RUSSELL, 48, of Huntsville, assaulted a man during a Dec. 23, 2011, arrest, thereby depriving the man of his constitutional right not to be subjected to excessive force by someone acting in the official capacity of a police officer, or "under color of law." The indictment also charges that Russell obstructed justice by making false statements and concealing information in the incident report he filed on the arrest.
"We are fully committed to investigating, and prosecuting where appropriate, the use of excessive force by law enforcement officers," Vance said.
The indictment identifies the subject of the arrest by the initials, "G.H." According to the indictment, Russell falsely stated in his incident report that G.H. kicked at officers, attempted to head-butt officers while they transported him to Russell's vehicle, that he was told to stop resisting several times but would not comply, and that he was transported to the Huntsville metro jail "without incident." Russell omitted from his report that he "had struck G.H. with his fist and kneed G.H. in the body," the indictment says.
The maximum penalty for deprivation of civil rights under color of law is 10 years in prison and a $250,000 fine. The obstruction of justice count carries a maximum penalty of 20 years in prison and a $250,000 fine.
The investigation by the Florence Resident Agency of the FBI is ongoing. Assistant U.S. Attorney Xavier O. Carter Sr. and DOJ Trial Attorney Carroll McCabe are prosecuting the case.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Federal Inmate at Talladega Indicted for Assaulting Correctional OfficerRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted an inmate at the Federal Correctional Institution in Talladega for assaulting a correctional officer at the prison in May 2014, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
The one-count indictment filed in U.S. District Court charges that CORNELIUS MOORE, 39, assaulted a correctional officer engaged in official duties, and that the assault involved physical contact.
The charge carries a maximum sentence of eight years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney Frank M. Salter is prosecuting.
Federal Grand Jury Indicts Hoover Man for Producing and Possessing Child PornographyRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Jefferson County man on multiple charges of producing child pornography, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Hoover Police Chief Nick Derzis.
A six-count indictment filed in U.S. District Court charges MICHAEL JAMES MORGAN, 61, of Hoover, with possessing and producing child pornography in 2014 that involved a child under 12 years old.
The maximum penalty for producing child pornography is 30 years in prison and a $250,000 fine, per count. The maximum penalty for possessing child pornography is 20 years in prison and a $250,000 fine.
The FBI and the Hoover Police Department investigated the case, which Assistant U.S. Attorney Jacquelyn Hutzell is prosecuting.
An indictment contains only charges. A defendant is presumed innocent of the charges unless and until proven guilty.
Former Community Health Clinic CFO Pleads Guilty in Scheme to Defraud Millions from GovernmentRead the Press Release
BIRMINGHAM -- The former financial officer of two non-profit health clinics in Alabama for the poor and homeless pleaded guilty today to multiple federal charges related to a scheme to defraud millions of dollars from the clinics and the federal government health agencies that provide most of their funding.
TERRI McGUIRE MOLLICA, 48, of Birmingham entered her plea before U.S. District Judge Karon O. Bowdre. She is scheduled for sentencing Sept. 11. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Regional Office Special Agent in Charge Derrick L. Jackson, announced Mollica's guilty plea.
As part of the plea, she must voluntarily forfeit $938,211 that the government seized last year from her investment and credit union accounts. Mollica acknowledged those funds are proceeds of illegal activity.
A federal grand jury indicted Mollica late last year on 74 counts related to the scheme to defraud the government through the two health care clinics, Birmingham Health Care and Central Alabama Comprehensive Health Inc., five counts of filing false tax returns, and three counts related to her scheme to defraud a life insurance company.
Mollica pleaded guilty to 19 counts related to the fraud against the government -- six counts of wire fraud affecting a financial institution, eight counts of mail fraud affecting a financial institution and five counts of money laundering. She pleaded guilty to four counts of filing false tax returns and to one count of mail fraud and one count of aggravated identity theft related to the insurance fraud.
Mollica's crimes, as outlined in court records, are as follows:
Mollica was the chief financial officer of the non-profit Birmingham Health Care from April 2005 through November 2008. She also performed fiscal duties for Central Alabama Comprehensive Health Inc. CACH is a non-profit clinic in Tuskegee intended to provide primary and preventative health care to people in east Alabama, regardless of their ability to pay. BHC's chief executive officer served for a time as the chief executive officer of the Tuskegee clinic and, in 2008, BHC took over fiscal responsibility of CACH.
Between January 2008 and March 2012, Mollica aided others in diverting about $11 million in federal grant money, assets and property of BHC and CACH to numerous private entities using "Synergy" in the name. Mollica and others retained authority over the affairs of BHC and CACH as they operated the Synergy entities. Mollica then conducted financial transactions to transfer money from the private entities to herself and others, illegally receiving about $1.7 million through the scheme.
BHC began receiving grants from the Health Resources and Human Services Administration, an arm of the U.S. Department of Health and Human Services, more than 20 years ago. Federal grants administered by HRSA and HHS constitute the overwhelming majority of BHC and CACH funding.
Mollica and others misrepresented and concealed information from HRSA to ensure the agency would continue to grant money to the Birmingham and Tuskegee community health clinics.
The maximum penalties for the offenses charged are as follows:
- mail fraud related to the health clinics, 30 years in prison and a $1 million fine;
- mail fraud related to insurance fraud, 20 years in prison and a $250,000 fine;
- wire fraud, 30 years in prison and a $1 million fine;
- money laundering (counts 56, 60 & 68), 20 years in prison and a $500,000 fine, or twice the value of the property involved;
- money laundering (counts 70 -73) involving criminally derived property valued at more than $10,000, 10 years in prison and a $250,000 fine;
- aggravated identity theft, mandatory two years in prison added to any sentence imposed for the underlying felony and a $250,000 fine;
- filing a false tax return, three years in prison and a $100,000 fine.
The FBI, IRS and HHS-OIG investigated the case. Assistant U.S. Attorneys Tamarra Matthews Johnson and Melissa Kay Atwood are prosecuting the case.
Court Approves Consent Order to Further Desegregate and Address Racial Inequalities in Huntsville City SchoolsRead the Press Release
WASHINGTON – The U.S. District Court for the Northern District of Alabama has approved a consent order filed by the U.S. Department of Justice and the Huntsville City Schools to reconfigure school attendance zones, improve access to quality course offerings and address racial discrimination in student discipline, among other areas.
In a 29-page opinion approving the consent order, U.S. District Judge Madeleine Hughes Haikala of the Northern District of Alabama called the plan a “game-changer” in the effort to finally eliminate the effects of state-mandated racial segregation in Huntsville. As the court noted, “the record demonstrates that full and faithful execution of the proposed consent order will enable the district to eliminate the effects of segregation “root and branch” and will pave the way toward a declaration of unitary status…. Now it is up to the district to act.”
The consent order, which amends the longstanding desegregation order in Hereford v. Huntsville Board of Education, resolves the parties’ dispute over the district’s 2014 plan to redraw student attendance zones. The department objected to the plan because it did not further desegregation or remedy racial inequalities in students’ access to quality academic offerings. The consent order was approved by the court after a far-reaching investigation by the department and months of mediation. It will require the district to provide equal educational opportunities to African-American students by:
- revising attendance zones and growing and strengthening magnet programs to improve diversity at many of its schools;
- expanding access for African-American students to pre-kindergarten, gifted programs, advanced course offerings such as Advanced Placement and International Baccalaureate, academic after-school programs, and college counseling;
- implementing measures to promote faculty and administrator diversity;
- ensuring that all students are aware of and can equally participate in extracurricular activities;
- creating positive, inclusive school climates, and ensuring that student discipline is fair, non-discriminatory and does not unnecessarily remove students from classrooms;
- establishing a desegregation advisory committee of students and parents to advise the district and inform the court about implementation of the consent order;
- providing professional development for teachers on such topics as strategies for teaching students from diverse backgrounds, understanding implicit bias and supporting positive student behavior; and
- continuously monitoring racial disparities to ensure meaningful and sustained improvement in student performance, students’ access to courses and rates of student discipline and other areas.
Judge Haikala’s opinion approving the consent order spoke directly to the students saying, “The consent order begins and ends with the district’s students – all of its students…The district believes in you and in your potential for success. We all do…. Think about how much the City of Huntsville will benefit from the contributions that you will make in the years ahead as teachers and engineers, as doctors and lawyers, as artists and musicians. You are an integral part of your community and have so much to offer.”
“This agreement provides for comprehensive remedies that are long overdue for African-American students in Huntsville,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We at the Civil Rights Division look forward to working with the district, the students and the community to implement the consent decree, instill equity and fairness in Huntsville schools, and strengthen the education provided to all students.”
“All of our children deserve the best possible educational opportunities,” said U.S. Attorney Joyce White Vance of the Northern District of Alabama. “Our communities and our future are strengthened and improved when parties come together, as the Justice Department and Huntsville City Schools did here, to ensure that all children have equal access to quality education.”
The department will monitor and enforce the district’s compliance. The school district may seek a declaration of unitary status and dismissal of the case when it can demonstrate sustained compliance with the terms of the consent order.
The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race and other factors in public schools, is a top priority of the department’s Civil Rights Division. Additional information about the Civil Rights Division of the department is available on its web site at www.justice.gov/crt.
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Former U.S. Army Colonel Pleads Guilty to False Statements and Conflict of Interest in Connection with Helicopter Procurement ContractsRead the Press Release
TUSCALOOSA – A former colonel in the U.S. Army pleaded guilty today in federal court for criminal misconduct arising from his duties associated with various helicopter procurement contracts at Redstone Arsenal in Huntsville.
U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, Special Inspector General John F. Sopko for Afghanistan Reconstruction, Deputy Inspector General for Investigations James B. Burch of the Defense Department’s Defense Criminal Investigative Service (DCIS), and Frank Robey, director of the U.S. Army Criminal Investigation Command's (CID) Major Procurement Fraud Unit made the announcement.
NORBERT VERGEZ, 49, formerly of Mesa, Ariz., pleaded guilty before U.S. District Judge L. Scott Coogler to the three counts of a government information filed last week: two counts charging false statements and one count charging conflict of interest. No sentencing date has been set.
“Colonel Vergez placed his own financial ambitions and personal loyalties above his duties as a member of the armed forces,” Vance said. “In doing so, he betrayed the U.S. Army values of honesty, integrity and selfless service, which are hallmarks of military service. This prosecution highlights our commitment to hold responsible those who, by word and deed, corrupt the government contracting process.”
According to his plea agreement, Vergez served from 2010 to 2012 as the program manager for “Non-Standard Rotary Wing Aircraft” (NSRWA), a component of the Army located at Redstone Arsenal, which was responsible for contracts involving certain “non-standard” helicopters, including the Russian-made Mi-17.
Vergez pleaded guilty to three instances of making false statements and using false writings in communicating with the Department of Defense Office of Inspector General (DODIG) in connection with a DODIG audit of a Mi-17 overhaul contract administered in part by NSRWA. One aspect of the audit had to do with the role NSRWA played in certain contract disputes that involved various contractors and subcontractors in the contracting chain, including a third-tier subcontractor known as Avia Baltika Aviation Ltd. (AVB). Vergez admitted in his plea agreement that on two occasions he made or caused his office to make false representations to DODIG that his office had no direct contact with AVB concerning its subcontract on the Northrop Grumman contract, when, as Vergez then knew, he and his direct subordinates at NSRWA had significant direct contacts with AVB related to its subcontract.
Vergez also admitted that on Feb. 1, 2012, he directed a subordinate official to create and sign a document bearing the typed date Dec. 5, 2011, representing that a $3.67 million claim by AVB under the contract was reasonable. As a result of this backdating, it falsely appeared that the subordinate official had approved the $3.67 million payment before directions were given to Northrop to make that payment. That document was then provided to DODIG in response to its requests for supporting documentation surrounding this attempt to have Northrop pay AVB.
According to the plea agreement, Vergez admitted that he engaged in a criminal conflict of interest by taking official acts as a government official to assist a helicopter manufacturing company in negotiating a “foreign military sale” and adjusting a contract so that the company received payment faster than originally agreed upon at a time when Vergez was negotiating future employment with that company.
Vergez further admitted that he made false statements in his “Confidential Financial Disclosure Report,” a government ethics form, for the year 2012, by not disclosing that his wife had received a Rolex wristwatch from the wife of a representative of AVB; that he had accepted an offer of employment with a private company; and that he had received a $30,000 check from that company.
The Special Inspector General for Afghanistan Reconstruction (SIGAR), DCIS, CID and the FBI investigated the case. Department of Justice Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section (on detail from SIGAR) and Assistant U.S. Attorneys Henry Cornelius and Ramona Albin are prosecuting the case.
Federal Judge Sentences Tax Preparer to 12 Months in Prison for Filing False ReturnsRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a former Birmingham tax-return preparer to 12 months in prison and ordered her to repay $44,080 to the Internal Revenue Service for filing false returns, announced U.S. Attorney Joyce White Vance and IRS, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge R. David Proctor sentenced KRISTIE E. SYKES on two counts of aiding in the preparation of a false return. Sykes, 44, of Birmingham, pleaded guilty to the charges in September. Sykes worked at the the now-defunct tax preparation business, VIP Tax Services, on Bankhead Highway in Birmingham. Proctor ordered Sykes to serve a year of supervised release following her prison term. Among special conditions of that release, the judge ordered Sykes to pay the restitution to the IRS and to refrain from assisting or aiding others in the preparation of taxes.
Sykes must report to prison July 15.
According to court records, Sykes orchestrated a tax refund scheme through VIP Tax Services. During the time Sykes professionally prepared tax returns, from 2008 to 2010, she filed false tax returns on behalf of taxpayer clients who retained VIP’s services, often including numerous false items on client’s returns in order to maximize their refunds.
Sykes pleaded guilty to two counts of preparing a false federal tax return while operating a tax preparation service by adding a false First-time Homebuyer Credit, a false dependent, false net losses and false deductions -- including for tuition and fees, medical and dental expenses, gifts to charity and job expenses, to clients’ returns.
In her plea agreement, Sykes also admitted to causing 11 false U.S. tax returns for 10 of her clients to be filed with the IRS for the tax years 2007-2009. Those returns contained fictitious dependents, inflated deductions, false income and expenses, and false education credits, and First-Time Homebuyer Credits or Residential Energy credits. Some of the false deductions and credits also enabled the defendant’s clients to falsely claim the Earned Income Credit, the Additional Child Tax Credit, and the Making Work Pay Credit. The total loss to the government was $49,411.
In a related case, JANICE FOY, 52, of Snellville, Ga., who owned and operated VIP, was sentenced in September 2014 to seven months in prison after pleading guilty to a two-count indictment charging her with one count of subscribing to a false federal tax return and one count of aiding in the preparation of a false return.
As part of their plea agreements, both women agreed to be permanently enjoined from aiding or assisting others in the preparation of taxes.
IRS-CI investigated the case, which Assistant U.S. Attorney Chinelo Dike-Minor is prosecuting.
Etowah County Man Sentenced to 80 Years in Prison for Producing, Possessing Child PornographyRead the Press Release
BIRMINGHAM -- A federal judge today sentenced an Etowah County man to 80 years in prison for exploiting two young children to produce child pornography, and for possessing about 1,500 pornographic videos and images of other children, announced U.S. Attorney Joyce White Vance, Homeland Security Investigations New Orleans Acting Special Agent in Charge Cindy M. Johnson and Etowah County Sheriff Todd Entrekin.
U.S. District Judge Virginia Emerson Hopkins sentenced VICTOR GRAY DINGLER, 33, to the 80-year prison term, to be followed by a lifetime of supervised release. Dingler pleaded guilty in November to five counts of producing child pornography between 2008 and 2014, and to two counts of possessing child pornography involving children younger than 12.
Some of the pornography Dingler produced involved a 3-year-old child. The second victim was an elementary school student in Etowah County, according to court records. The Alabama Department of Education was instrumental in helping law enforcement locate that child in September 2014, after HSI received a series of images that originated from a website located by Danish National Police. One of the images included a blanket bearing an Alabama university logo, according to court records.
“The government sought a sentence that would put this defendant behind bars for the rest of his life because of the serious and appalling nature of his crimes against young children," Vance said. "He has acknowledged that he sexually abused two young children, and that he produced and distributed pornographic images of his exploitation. His victims will have to live the rest of their lives with the memories of what he did to them, and with the knowledge that he memorialized his abuse in images and videos, some that travelled around the world," she said.
"Individuals who produce child pornography are directly responsible for what is, in plain language, the rape of children. Child pornography steals the innocence of children and destroys lives," Johnson said. "Sexual abuse scars children for life, and HSI will continue to use all the tools in its arsenal to identify the perpetrators of these horrendous acts and seek justice on behalf of their victims,” she said.
"We are pleased with the sentence given to this predator today," Entrekin said. "His disgusting behavior and abusive actions have taken away the innocence of young victims; something no one, no matter the age, should ever endure. I appreciate the cooperation among Homeland Security Investigations and the office of U.S. Attorney Joyce Vance in bringing this case to a close.”
The victimization of the innocent children depicted in the pornographic pictures Dingler possessed "continues to live on with an insidious vitality through the perverted behavior of people like the defendant, who each and every time they distribute and receive an image of a naked child, proliferate the available quantity of the material," the government said in its sentencing memorandum.
The Department of Homeland Security-HSI and the Etowah County Sheriff's Department investigated the case, which Assistant U.S. Attorneys Jacquelyn Hutzell, Xavier Carter and Daniel J. Fortune prosecuted.
Former Jeweler Sentenced to Nearly Four Years in Prison for Laundering Money by Pawning Diamonds Falsely Reported StolenRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Vestavia Hills man to three years and nine months in prison for laundering money by pawning a 3-carat diamond that was among a cache of jewels he collected a $2.6 million insurance payment on in 2004 after reporting them stolen in a Mountain Brook Jewelry store robbery.
U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, U.S. Secret Service Special Agent in Charge Craig Caldwell, Vestavia Hills Police Chief Dan Rary and Mountain Brook Police Chief Ted Cook announced the sentence.
U.S. District Judge Karon O. Bowdre sentenced JOSEPH HAROLD GANDY, 65, in accordance with a binding plea agreement the former jeweler entered with federal prosecutors. As part of his sentence, Gandy must pay $20,000 in restitution to the jewelers where he pawned the diamonds. He also must forfeit to the government nearly all the diamonds and jewelry the FBI recovered from him, which includes a rare Blue Diamond worth at least $620,000. The Blue Diamond was among about $1.5 million worth of diamonds and jewelry Gandy falsely reported stolen in 2004. In 2013, Gandy sent a friend to pawn some of those diamonds he had reported stolen.
The U.S. Attorney's Office charged Gandy in October with one count of money laundering for pawning property worth more than $10,000 that he obtained through a criminal act, wire fraud, which he committed when he submitted an insurance claim on diamonds falsely reported as stolen. Prosecutors also charged Gandy with one count of being a convicted felon in possession of firearms for 99 weapons seized in a search of his Vestavia Hills home in November 2013. Gandy is prohibited from possessing weapons because of a 1989 federal mail fraud conviction. Gandy pleaded guilty to both federal counts in November.
Vestavia Hills Police seized the 99 weapons at Gandy's house. The state is prosecuting him on weapons charges and on drug charges based on prescription drugs also seized at his residence in the November search. A state court hearing is scheduled later this month. The Vestavia Hills police are handling forfeiture of the firearms.
According to court documents, Gandy's federal crime unfolded as follows:
Gandy was an owner and the operator of Denman-Crosby Jewelry Store in Mountain Brook in 2004. In December of that year, he reported that two unidentified men robbed the store at gunpoint. At the time, Denman-Crosby was promoting a loose diamond sale for Christmas. It had many diamonds and other jewelry in on consignment from jewelers in New York and elsewhere. The store carried a $2.6 million insurance policy. Gandy had increased the coverage amount with XL Specialty Insurance Company a few weeks before the robbery.
In January and March of 2005, Gandy used interstate wire transmissions to submit insurance claims from the robbery. He included a detailed inventory of jewelry worth about $2.8 million that he reported stolen. XL Specialty paid the policy's limit of $2.6 million.
In July 2013, Gandy began sending a friend to jewelry stores in Jefferson County to pawn diamonds he had reported stolen in 2004. The first effort ended when the jeweler requested documentation on a 1.59-carat diamond, mounted in a platinum setting, and attempted to examine the stone closely. The concern was that the diamond might bear a laser inscription useful in tracing its history. Subsequently, Gandy examined 10 to 12 diamonds under a microscope and selected stones that bore no inscription.
On July 26, 2013, Gandy sent his friend to a Birmingham jewelry store to pawn a 3.01-carat emerald-cut diamond he said was worth about $43,000. Gandy said he wanted at least $15,000 for the stone. The store accepted the diamond in exchange for a $12,000 loan. The diamond was one Gandy reported stolen in the Denman-Crosby robbery. He gave his friend $2,000 for making the transaction.
Between August and November of 2013, Gandy's friend pawned two more diamonds: a 3.45-carat cushion-cut diamond for $8,000; and a 2.16-carat round diamond for $2,000. Both stones were on the stolen inventory list Gandy provided the insurance company in 2005. Gandy gave his friend $1,880 after receiving the $8,000 for the 3.45-carat diamond.
The FBI, Secret Service, Vestavia Hills and Mountain Brook police departments investigated the case. Assistant U.S. Attorney George A. Martin Jr. is prosecuting the case.
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Former Community Health Clinic CFO Agrees to Plead Guilty in Scheme to Defraud Millions from GovernmentRead the Press Release
BIRMINGHAM -- The former financial officer of two non-profit health clinics in Alabama for the poor and homeless has agreed to plead guilty to multiple federal charges related to a scheme to defraud millions of dollars from the clinics and the federal government health agencies that provide most of their funding.
Prosecutors today filed a plea agreement in U.S. District Court with TERRI McGUIRE MOLLICA, 48, of Birmingham. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Regional Office Special Agent in Charge Derrick L. Jackson, announced the agreement.
As part of the agreement, Mollica agrees voluntarily to forfeit $938,211 that the government seized last year from her investment and credit union accounts. Mollica acknowledges those funds are proceeds of illegal activity.
A federal grand jury indicted Mollica late last year on 74 counts related to the scheme to defraud the government through the two health care clinics, Birmingham Health Care and Central Alabama Comprehensive Health Inc., five counts of filing false tax returns, and three counts related to her scheme to defraud a life insurance company.
In her agreement with prosecutors, Mollica agrees to plead guilty to 19 counts related to the fraud against the government -- six counts of wire fraud affecting a financial institution, eight counts of mail fraud affecting a financial institution and five counts of money laundering. She also agrees to plead guilty to four counts of filing false tax returns and to one count of mail fraud and one count of aggravated identity theft related to the insurance fraud. Mollica's plea hearing is scheduled April 27.
Mollica's crimes, as outlined in her indictment and plea agreement, are as follows:
Mollica was the chief financial officer of the non-profit Birmingham Health Care from April 2005 through November 2008. She also performed fiscal duties for Central Alabama Comprehensive Health Inc. CACH is a non-profit clinic in Tuskegee intended to provide primary and preventative health care to people in east Alabama, regardless of their ability to pay. BHC's chief executive officer served for a time as the chief executive officer of the Tuskegee clinic and, in 2008, BHC took over fiscal responsibility of CACH.
Between January 2008 and March 2012, Mollica aided others in diverting about $11 million in federal grant money, assets and property of BHC and CACH to numerous private entities using "Synergy" in the name. Mollica and others retained authority over the affairs of BHC and CACH as they operated the Synergy entities. Mollica then conducted financial transactions to transfer money from the private entities to herself and others, illegally receiving about $1.7 million through the scheme.
BHC began receiving grants from the Health Resources and Human Services Administration, an arm of the U.S. Department of Health and Human Services, more than 20 years ago. Federal grants administered by HRSA and HHS constitute the overwhelming majority of BHC and CACH funding.
Mollica and others misrepresented and concealed information from HRSA to ensure the agency would continue to grant money to the Birmingham and Tuskegee community health clinics.
The maximum penalties for the offenses charged are as follows:
- mail and wire fraud, 20 years in prison and a $250,000 fine;
- money laundering (counts 56, 60 & 68), 20 years in prison and a $500,000 fine, or twice the value of the property involved;
- money laundering (counts 70 -73) involving criminally derived property valued at more than $10,000, 10 years in prison and a $250,000 fine;
- aggravated identity theft, mandatory two years in prison added to any sentence imposed for the underlying felony and a $250,000 fine;
- filing a false tax return, three years in prison and a $100,000 fine.
The FBI, IRS and HHS-OIG investigated the case. Assistant U.S. Attorneys Tamarra Matthews Johnson and Melissa Kay Atwood are prosecuting the case.
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Trussville Tax Preparer Sentenced to a Year in Custody for Tax FraudRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Trussville woman to six months in prison and six months home confinement for preparing fraudulent tax returns for herself and others in a Tarrant business she ran with her sister, announced U.S. Attorney Joyce White Vance and IRS, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge Abdul K. Kallon sentenced LUGENIA L. "Gigi" CONNER, 32, on five counts of preparing fraudulent tax returns and one count of making a false return. Conner pleaded guilty to the charges in January. The judge ordered Conner to pay $56,908 in restitution to the IRS. She must report to prison June 12.
"Tax return preparers who concoct schemes to collect inflated refunds are stealing from the U.S. Treasury and cheating the millions of hard-working Americans who pay their due share of taxes each year," Vance said. "The U.S. Attorney's Office will continue to work with the IRS to prosecute tax fraud and protect the sanctity and integrity of the tax system."
“Refund fraud is an egregious offense that affects honest taxpayers. Lugenia Conner blatantly stole from the United States Treasury for personal gain,” Hyman-Pillot said. “As we embark upon the close of filing season, I hope this sentence sends a message that the Internal Revenue Service Criminal Investigation Division has a zero-tolerance policy for refund fraud. Anyone who chooses to play a role in this crime will be investigated and ultimately prosecuted,” she said.
A federal grand jury last year indicted Conner and her sister, KANESHIA L. "Kiki" CONNER-GOODGAME, 35, of Birmingham, on charges that they worked together in their Taxes 'N More business to prepare fraudulent tax returns for the 2008 tax year, often falsely claiming a credit for first-time homebuyers.
Conner-Goodgame pleaded guilty in January to two counts of preparing fraudulent tax returns and one count of making a false return. She is scheduled for sentencing May 27.
Both sisters acknowledged in plea agreements with the government that they owned and operated Taxes 'N More and worked there as tax preparers, inflating refunds for their clients in 2009 by falsifying information submitted on clients' 2008 returns. The sisters claimed the First Time Home Buyer's Credit of up to $7,900 on returns they prepared for other taxpayers, knowing those taxpayers were not entitled to the credit. The women also prepared third-party tax returns claiming itemized deductions or business expenses that clients neither had provided information for, nor were entitled to receive. Both women also assisted taxpayers with the illegal practice of buying and selling dependents.
Conner and Conner-Goodgame also created and submitted 2008 personal tax returns on which they claimed the homebuyers' credit, knowing they were not entitled to that deduction.
IRS Criminal Investigation investigated the case, which Assistant U.S. Attorneys Amanda Wick and Robin Beardsley Mark are prosecuting.
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UA Student Charged with Unauthorized Access to University ComputerRead the Press Release
BIRMINGHAM -- The U.S. Attorney's Office has charged a Childersburg woman with unauthorized access to a University of Alabama computer to steal student loan funds from fellow students, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and University of Alabama Police Chief Tim Summerlin.
Federal prosecutors on Friday filed a one-count information in U.S. District Court charging BRIANA JACKSON, 22, with one count of unauthorized access to a protected computer. The government, today, filed a plea agreement with Jackson in which she acknowledges the criminal activity and agrees to plead guilty to the charge and to pay $9,598 in restitution.
"Breaches in computer security are a fact of life in today's Internet world and quick response to an intrusion is imperative to minimize the damage," Vance said. "An alert and committed investigator in the University of Alabama Police Department, working with the FBI, prevented large financial loss in this case and led to the charges and plea agreement with the defendant," she said.
“Cybercrime is a top priority for the FBI, and everyone needs to understand that if they have a computer that is connected to the Internet, that computer is, at some point, going to be under attack," Stanton said. "This case highlights the need to always be wary of e-mails and attachments -- even from people you think you know, as it may be a phishing scheme or contain malicious code.”
The FBI offers tips to protect against computer intrusions at: http://www.fbi.gov/scams-safety/computer_protect.
"The successful outcome in this case is a direct result of the diligent and tenacious efforts of UA and federal law enforcement personnel working collaboratively to solve this crime and limit the loss to the victims," Summerlin said. "It highlights the strength of the relationships that exist between UA, the FBI, and the U.S. Attorney’s Office.”
According to Jackson's plea agreement, she conducted the intrusion into the university's computers as follows:
On April 15, 2011, Jackson created the e-mail address, [email protected], and began using that account and others to send e-mails to Alabama students, falsely claiming the message was from the University of Alabama Housing Department. She sent the e-mails to about 60 students, many of them her friends or acquaintances, asking that they reply with their "My Bama" university account username and password. More than 40 students responded with that information.
Jackson used the information she collected with her phishing e-mails to access at least 25 user accounts between July 27, 2013, and Aug. 13, 2013. In doing so, Jackson obtained information from a protected computer in order to illegally obtain money from others' federal and state student loan funds.
Jackson tried to get the money by changing direct bank deposit information for seven accounts and reroute those students' loan funds to Green Dot reloadable money cards she controlled. Two of her attempts were successful and she transferred $9,598 to a Green Dot card she registered in the name of another student whose personal identifying information she had obtained without permission. Jackson used that same student's information to establish a Western Union account.
Jackson got $1,001 in cash from the Green Dot card through an ATM withdrawal and a Western Union transfer. The University of Alabama was able to freeze the account before more was removed.
The maximum sentence for accessing a protected computer is five years in prison and a $250,000 fine.
The FBI and UA Police investigated the case, which Assistant U.S. Attorney Erica Williamson Barnes is prosecuting.
Former Senior Living Center Employee Charged with ID Theft and $335,000 FraudRead the Press Release
BIRMINGHAM -- The U.S. Attorney's Office today charged a former Hoover senior living center employee with using the identity of a resident with dementia, without authorization, to steal more than $300,000 from the resident's bank and credit accounts, announced U.S. Attorney Joyce White Vance and U.S. Secret Service Special Agent in Charge Craig Caldwell.
Federal prosecutors charged SHOSTOCKA KEYA WARD, 43, of Vestavia Hills, with bank fraud and aggravated identity theft in an information filed in U.S. District Court. Prosecutors also filed a plea agreement with Ward, in which she acknowledges the charges and agrees that she will plead guilty to one count of bank fraud and one count of aggravated identity theft. She also agrees to pay restitution of $335,214 and to forfeit that same amount to the government as proceeds of illegal activity.
According to Ward's plea agreement, her fraud included writing more than $70,000 in unauthorized checks to herself and using one of the victim's credit cards for expenses including financing her own wedding, applying money to someone's prison account, making car and private school tuition payments, and taking trips to Las Vegas, Chicago, Tunica, Miss., and Gatlinburg, Tenn.
According to the government's charging document and Ward's plea agreement, she worked at Galleria Woods as a resident assistant or a transportation coordinator from about August 2010 to January 2014. In 2011, Ward became acquainted with the victim, a Galleria Woods resident who was 75 years old, had no immediate family, few visitors and an out-of-town family friend who served as her power of attorney, but was not actively involved in her daily care or the management of her daily finances.
Ward began assisting the victim with transportation, errands, bill payments and other financial issues, and gained access to the victim’s purse, mail, financial statements, checkbook, and debit and credit cards, according to the information. Ward maintained her relationship with the victim during her employment at Galleria Woods as the victim’s mental and physical condition declined and she became incapable of managing her financial affairs, according to the charges against Ward.
Between Oct. 11, 2011, and Feb. 13, 2014, Ward carried out a scheme to defraud eCO Credit Union of money in the victim’s account through various means and without the victim’s authorization, according to the information and plea agreement. Ward used the victim’s checks for her own benefit, often forging her signature, and obtained a check/ATM card on the eCO account, according to the charges. Ward used the checks and the debit card to obtain cash and to pay for goods and services worth more than $120,000, according to the information. She also used the victim’s Chase Bank, State Farm Bank and Macy's Department Store credit cards for hundreds of thousands of dollars in personal expenses and purchases, and paid portions of those bills with money from the victim's credit union account to continue the scheme.
The maximum prison penalty for bank fraud is 30 years. The penalty for aggravated identity theft is a mandatory two years in prison, which must be served after completion of any other prison sentence imposed for the crime.
U.S. Secret Service investigated the case, which Assistant U.S. Attorney Erica Williamson Barnes is prosecuting
Former Madison Police Officer Indicted on Use of Unreasonable Force Against a Man he was QuestioningRead the Press Release
BIRMINGHAM – Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division, U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton today announced the indictment of a Madison police officer for using unreasonable force against a man he was attempting to question in February.
The one-count felony indictment filed in U.S. District Court charges that ERIC SLOAN PARKER, 26, of Toney, while acting in his official capacity as a police officer on Feb. 6 in Limestone County, injured a man by slamming him to the ground. The indictment identifies the victim only by initials, "S.P."
"Police officers are sworn to uphold the law and protect the public. The public must be able to trust the police," Vance said. "Law enforcement officers who violate their oath to protect and use excessive force must be brought to justice."
According to the indictment, Parker's actions deprived the victim of his right under the U.S. Constitution to be secure from unreasonable searches and seizures, which includes the right to be free from unreasonable force by someone acting under color of law.
An indictment is only an allegation and does not constitute evidence of guilt on the part of the defendant.
The FBI investigated the case. First Assistant U.S. Attorney Robert O. Posey, Assistant U.S. Attorney Russell E. Penfield and DOJ Trial Attorney Henry C. Leventis of the Civil Rights Division and are prosecuting the case.
U.S. Attorney's Office, Law Enforcement Partners Crackdown on Deception, Fraud in Auto Sales, Financing and LeasingRead the Press Release
BIRMINGHAM -- The U.S. Attorney's Office for the Northern District of Alabama, the Federal Trade Commission, and multiple law enforcement partners today jointly announced the results of Operation Ruse Control, a nationwide and cross-border crackdown to protect consumers when they buy a car. The yearlong sweep encompassed 252 enforcement actions in the United States and Canada. The federal prosecution of eight Birmingham car dealership employees is part of the sweep.
The U.S. Attorney's Office in Birmingham, working with the FBI and the Internal Revenue Service, Criminal Investigation Division, obtained guilty pleas over the past year from three sales managers, two finance managers and three salesmen at Serra Nissan in Birmingham to a conspiracy to boost auto loans and vehicle sales through fraudulent means. Fraudulent representations submitted to lenders by the Serra Nissan employees included inflated buyer's income, straw purchasers who could qualify for loans, and non-existent vehicle accessories listed in order to boost a loan amount.
The Birmingham cases were among actions from the FTC and more than 30 law enforcement partners at the federal, state and local level in the U.S. and Ontario, Canada. The enforcement actions include both civil and criminal charges of deceptive advertising, automotive loan application fraud, odometer fraud, deceptive add-on fees, and deceptive marketing of car title loans.
"The defendants from Serra Nissan defrauded auto loan lenders by falsifying customer information on loan applications, which also harmed customers by inflating the value of the vehicles they bought or saddling them with loans the dealership officials knew they could not afford," Vance said. "These predatory practices in providing auto loans, often to people with credit problems or insufficient income, threaten consumer safety and the stability of the auto loan industry."
“For most people, buying a car is one of the largest purchases they’ll make,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Car ads must be truthful, loan terms must be clear, and dealer practices must be honest. That’s why our partners are working together to crack down on deceptive marketing about car sales, leasing and financing.”
“The FBI is proud to have been a part of Operation Ruse Control," said FBI Special Agent in Charge Roger C. Stanton. "Consumers should expect honesty when purchasing a vehicle not fraud and deceit. If dealers cross the line and engage in illegal activity they should know the FBI, along with our partners, will be right behind them to hold them accountable and bring them to justice."
"These defendants lined their pockets with money gained through deceptive and misleading practices," said Veronica F. Hyman-Pillot, special agent in charge, IRS Criminal Investigation. "Thanks to the agents who worked this investigation, the defendants' actions did not go undetected and they will be held accountable," she said. “We will do everything within our power to assist our law enforcement partners with identifying and stopping illegal practices that affect unsuspecting consumers.”
D. SCOTT BURTON, 36, of Odenville, MICHAEL J. WILKINSON, 56, of Moody, TERRY W. HENDERSON, 39, of Pleasant Grove, ROLAND W. RILEY, 28, and DWIGHT A. PERRY, 44, both of Birmingham, ABDUL ISLAM MUGHAL, 48, of Trussville, GERALD R. SHEPARD, 56, of Pinson, and JEFFREY R. GREEN, 33, of Porterdale, Ga., all have pleaded guilty to the conspiracy to defraud financial institutions, Nissan North America and Serra Nissan customers between August 2010 and October 2013 by fraudulently increasing vehicle sales in order to boost personal profits. The eight defendants are scheduled for sentencing between May and July.
Mughal, Shepard, and Burton were sales managers at Serra Nissan, Green and Wilkinson were finance managers, and Perry, Henderson and Riley were salesmen. In addition to the conspiracy pleas, Mughal also pleaded guilty to bank fraud, Shepard to bank fraud and filing a false federal income tax return, and Green to failure to file an individual tax return.
Consumers in the market for a new or used vehicle should read the FTC’s Are Car Ads Taking You for a Ride? and Buying and Owning a Car.
MEDIA CONTACT:
Peggy Sanford
Public Information Officer
U.S. Attorney's Office
Northern District of Alabama
205-244-2020U.S. Attorney to Moderate Panel of Experts on Cybercrime and SecurityRead the Press Release
BIRMINGHAM -- U.S. Attorney Joyce White Vance on Monday will moderate a panel of cyber security experts discussing cybercrime and what businesses can do to minimize the threat of intrusion into their computer systems.
In conjunction with the non-profit technology association, TechBirmingham, the U.S. Attorney's Office is presenting the Panel on Cybercrime and Cyber Prevention: The Partnership between Government and Business. The event will be from 8:30 a.m. to 11 a.m. in the Alabama Power Headquarters Auditorium, 600 18th Street North, in Birmingham.
The panelists include:
Lt. Gen. Ronald L. Burgess Jr., who retired from the U.S. Army as director of the Defense Intelligence Agency and now works for Auburn University as senior counsel for national security programs, cyber programs and military affairs;
David H. Laufmann, chief of the Counterespionage Section in the National Security Division of the Department of Justice;Jenny Durkan, former U.S. Attorney in Seattle, who ran the cyber program for U.S. Attorneys nationwide and is now global chair of the Cyber Law and Privacy Group;
Michele Cantley, who recently retired as chief information security officer at Regions Bank.
The panel will address the nature of cyber threats, possible prevention and mitigation steps, and best practices for working with federal law enforcement.
"Cybercrime is becoming pervasive and it is important to build awareness and plan in advance of an event," Vance said. "This is true, despite the nature or size of your organization, if you have information on your system you wish to protect," she said.
The event is free to attend. For more information and to register visit: techbirmingham.com/events/
VA Hospital Union Official Arrested for Stealing from UnionRead the Press Release
BIRMINGHAM -- Federal authorities on Wednesday arrested the former president of the federal employees union at Birmingham's Veterans Affairs Hospital on charges she embezzled more than $132,000 from the local chapter.
A federal grand jury last month indicted STEPHANIE HICKS, 43, of Birmingham, on bank fraud, forgery and aggravated identity theft charges. U.S. Attorney Joyce White Vance, U.S. Department of Veterans Affairs, Office of Inspector General, Special Agent in Charge Monty Stokes, and U.S. Department of Labor, Office of Labor-Management Standards, Investigator Hollis Lindley Jr. announced the indictment, which was unsealed following Hicks' arrest.
"Union members elect officials to represent them and protect their interests," Vance said. "A labor union official who chooses, instead, to live the high life by stealing from local members has committed a crime and should prepare to go to prison."
"This indictment is a testament to the excellent interagency cooperation with the U.S. Department of Labor and the U.S. Department of Justice," Stokes said. "As president of the local union, Hicks represented Local 2207, with more than 400 VA members. VA OIG will continue to pursue those that abuse their positions of trust and steal from innocent victims."
"OLMS aggressively investigates allegations of financial mismanagement by union officers," Lindley said. "Union members have an expectation that their elected officers are using the union funds for legitimate union purposes," he said. "This particular case was severe in the amount of money stolen and in the degree of concealment."
Hicks was elected president of the American Federation of Government Employees, Local 2207, AFL-CIO, at the Birmingham VA Hospital in July 2007 and served until July 2013 when members elected a new president. The local collects dues biweekly from its more than 440 members. During Hicks' tenure, the local maintained the money in two bank accounts -- a general operating account and a legal fund account, first at Wachovia Bank and, following a merger, at Wells Fargo Bank, according to the indictment.
From at least Jan. 1, 2008 until July 26, 2013, Hicks schemed to defraud the banks, using her position as Local 2207 president to conduct unauthorized transactions taking money from the union's accounts to use for her personal benefit, the indictment charges.
Those transactions included writing checks to herself for travel that did not take place, forging the name of other Local 2207 officers and members on checks she wrote to herself, and making unauthorized debit card purchases and cash withdrawals, according to the indictment.
To conceal her fraud, Hicks did not maintain records of the financial transactions, as required by federal law and Local 2207's constitution and bylaws, nor did she seek approval for the expenditures, the indictment charges.
The indictment brings eight bank fraud, eight forged security and three aggravated identity theft counts against Hicks.
The maximum prison penalty for bank fraud is 30 years and for forged securities, 10 years. Both charges carry a $250,000 fine. The penalty for aggravated identity theft is two years in prison, in addition to any time received as punishment on the other charges.
Veterans Affairs, OIG, and the Department of Labor, OLMS and OIG, investigated the case, which Assistant U.S. Attorney Xavier O. Carter is prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.