Northern District of Alabama
Press releases recorded for this federal judicial district.
Attorney General Holder Announces Birmingham One of Six Pilot Sites for National Initiative for Building Community Trust and JusticeRead the Press Release
WASHINGTON – As part of the Department of Justice’s ongoing commitment to strengthening the relationship between law enforcement and the communities they serve and protect, Attorney General Eric Holder announced Birmingham, Ala.; Ft. Worth, Texas; Gary, Ind.; Minneapolis, Minn.; Pittsburgh, Pa.; and Stockton, Calif., to be the first six cities to host pilot sites for the National Initiative for Building Community Trust and Justice. As part of a larger effort, the National Initiative team will work with each pilot site to assess the police-community relationship as well as develop a detailed site-specific plan that will enhance procedural justice, reduce bias and support reconciliation in communities where trust has been eroded.
“The Department of Justice is committed to using innovative strategies to enhance procedural justice, reduce bias and support reconciliation in communities where trust has been eroded,” said Attorney General Holder. “By helping to develop programs that serve their own diverse experiences and environments, these selected cities will serve on the leading edge of our effort to confront pressing issues in communities around the country.”
"We are always committed to engaging with the community to ensure that we are serving them and hearing their concerns," said United States Attorney Joyce White Vance. "We want to do a good job of listening, so that we can work together to make the community safe. We appreciate the opportunity to be one of the six pilot sites in this initiative, and the recognition from Washington that we are trying to get it right down here," she said.
"We are truly honored that DOJ would select Birmingham as one of six national pilot sites," said Birmingham Police Chief A.C. Roper. "The mayor and I actually started discussing this initiative several months ago and knew there would be over a hundred cities vying for the limited opportunities.
"We are all aware of the modern day issues and national discussion on policing in America," Roper said. "Although we've worked extremely hard building bridges in our communities, we saw this initiative as an opportunity to strengthen relationships, increase public cooperation, and improve the perception of police legitimacy across our city," he said. "We truly recognize that the Birmingham Police Department cannot be successful without community support and community trust. This three-year project will allow us to serve as a national police model and increase our capacity to serve our citizens."
Attorney General Holder also announced that the Department of Justice is providing additional training and technical assistance to police departments and communities that are not pilot sites. Through the Office of Justice Program’s Diagnostic Center (www.OJPDiagnosticCenter.org), police departments and community groups can request training, peer mentoring, expert consultation and other types of assistance on implicit bias, procedural justice and racial reconciliation. Additionally, the initiative launched a new online clearinghouse that includes up-to-date information about what works to build trust between citizens and law enforcement. The clearinghouse can be found at www.trustandjustice.org.
“Restoring trust where it has eroded is one of the defining public safety challenges of our day,” said Assistant Attorney General Karol V. Mason of the Office of Justice Programs. “Trust-building is the responsibility of the police and the community, and the National Initiative’s goal is to build the bridge that will define a new era in public safety.”
The Justice Department established the National Initiative for Building Community Trust and Justice as part President Obama’s groundbreaking launch of the My Brother’s Keeper initiative, which seeks to create opportunities for all young people in this country—regardless of their background—to improve their lives and reach their full potential.
The three-year grant has been awarded to a consortium of national law enforcement experts from John Jay College of Criminal Justice, Yale Law School, the Center for Policing Equity at UCLA and the Urban Institute. The initiative is guided by a board of advisors which includes national leaders from law enforcement, academia and faith-based groups, as well as community stakeholders and civil rights advocates. In a holistic approach, the initiative simultaneously addresses the tenets of procedural justice, reducing implicit bias and facilitating racial reconciliation. The initiative complements and is advised by other Justice Department components such as the Office of Justice Programs, the Office of Community Oriented Policing Services, the Office on Violence Against Women, the Civil Rights Division and the Community Relations Service.
Four Serra Nissan Employees Plead Guilty to Auto Loan Fraud ConspiracyRead the Press Release
BIRMINGHAM -- Four former Serra Nissan employees charged in connection with a conspiracy at the Birmingham car dealership to fraudulently boost loan approvals and car sales pleaded guilty today in federal court, 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.
D. SCOTT BURTON, 36, of Odenville, MICHAEL J. WILKINSON, 56, of Moody, TERRY W. HENDERSON, 39, of Pleasant Grove, and ROLAND W. RILEY, 28, of Birmingham, entered their pleas before U.S. District Judge Virginia Emerson Hopkins. All eight defendants charged in 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 have now pleaded guilty.
DWIGHT A. PERRY, 44, of Birmingham, and ABDUL ISLAM MUGHAL, 48, of Trussville, pleaded guilty last year, and GERALD R. SHEPARD, 56, of Pinson, and JEFFREY R. GREEN, 33, of Porterdale, Ga., pleaded guilty earlier this year. The eight defendants are scheduled for sentencing between May and July.
"Predatory practices in providing auto loans to people with credit problems or insufficient income is akin to the fraud in mortgage lending," Vance said. "We are engaged in rooting out this fraudulent activity that threatens consumer safety."
Mughal, Shepard, and Burton were sales managers at Serra Nissan, Green and Wilkinson were finance managers, and Perry, Henderson and Riley were salesmen. All eight have pleaded guilty to the conspiracy. In addition, 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.
According to court records, the Serra Nissan employees involved in the conspiracy used various means to carry out their fraud and obtain auto loans that, otherwise, would not have been approved. Those means included the following:
• Creating or altering documents to submit to financial institutions to show inflated income for prospective buyers.
• Directing finance managers and salesmen to submit fraudulent documents to financial institutions to misrepresent proof of a customer's residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount. The defendants and others had a financial incentive to increase a loan amount in order to increase commissions paid to certain employees.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify.The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine. The minimum penalty for aggravated identity theft is two years in prison.
The IRS and the FBI investigated the case, which Assistant U.S. Attorneys Amanda S. Wick and Robin Beardsley Mark are prosecuting.
Huntsville Man Indicted in Conspiracy to Bribe Police Officer ArrestedRead the Press Release
BIRMINGHAM - Federal authorities today arrested a Huntsville man on charges he conspired with Huntsville Police Officer Lewis Hall in efforts to fix cocaine trafficking charges against an individual arrested by another Huntsville officer, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Huntsville Police Chief Lewis Morris.
A federal grand jury last week indicted CEDRIC DUANE RYANS, 42, on charges of conspiracy, bribery and obstruction of justice. The FBI arrested Ryans this morning.
The indictment charges that Ryans conspired with Hall to pay a second officer $5,000 if that officer would claim a July 29 vehicle search he conducted, which resulted in drug-trafficking charges against an "Individual A," was unlawful, thereby making the criminal case against that individual go away. The Huntsville officer who conducted the vehicle search and, subsequently, assisted in the investigation of Hall and Ryans, is identified only as "Cooperating Officer."
Hall pleaded guilty to the conspiracy Feb. 24 and is scheduled for sentencing July 14. According to Ryans' indictment, Ryans provided Hall money to bribe the Cooperating Officer.
On July 31, Ryans and Hall discussed offering the Cooperating Officer a bribe to tell other law enforcement officers that his search of Individual A's vehicle, which uncovered about three ounces of cocaine, was unlawful, according to Ryans' indictment. Hall offered the $5,000 bribe to Cooperating Officer that same day. On Aug. 12, Ryans gave Hall cash to deliver to Cooperating Officer, and Hall delivered $1,000 to the officer, according to Ryans' indictment. Ryans gave Hall more cash on Aug. 24 to pay the officer, the indictment says.
On Sept. 8, Ryans discussed the "fixed case" with Individual A, and Hall had two other conversations in November with Cooperating Officer about what the officer was supposed to say when asked about the search of Individual A's vehicle, the indictment says.
The bribery count charges Ryans with corruptly agreeing to give $5,000 to the Cooperating Officer, an agent of the City of Huntsville and its police department, which received more than $10,000 in federal benefits within one year, to influence the officer in how he reported the July 29 vehicle search.The obstruction of justice count charges Ryans with offering the bribe with the intent to delay or prevent the reporting of a felony or possible felony offense and the violation of conditions of supervised release by Individual A. According to Hall's plea agreement with the government, Individual A was on supervised release following a 15-year prison sentence for conspiracy to distribute a controlled substance when the Cooperating Officer pulled him over on a traffic stop July 29.
The maximum penalty for conspiracy is five years in prison and a $250,000 fine. The maximum penalty for the bribery count is 10 years in prison and a $250,000 fine, and the maximum for the obstruction count is 20 years in prison and a $250,000.The FBI investigated the case in conjunction with the Huntsville Police Department. Assistant U.S. Attorney George A. Martin Jr. is prosecuting the case.
Federal Grand Jury Indicts Two Birmingham Men in Separate Business RobberiesRead the Press Release
BIRMINGHAM -- A federal grand jury late Friday indicted two Birmingham men in unrelated armed robberies of businesses in 2013 and 2014, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, and Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Glenn N. Anderson.
Separate indictments filed in U.S. District Court charge WILLLIAM BROWNLOW, 26, with two 2013 robberies in Talladega, and TOMMY LEON STEWART, 28, with two Birmingham area robberies in 2014.
The three-count indictment against Brownlow charges him with robbing both the Shoe Show on East Battle Street in Talladega and the Wesco gas station and convenience store on Fort Lashley Avenue in Talladega on Nov. 12, 2013. The indictment also charges Brownlow with brandishing a firearm during the Wesco robbery.
The three-count indictment against Stewart charges him with robbing a CVS Pharmacy on Center Point Parkway in Center Point on Oct. 21, 2014, and a CVS Pharmacy on Alabama Highway 75 in Pinson on Oct. 29, 2014. The indictment also charges Stewart with brandishing a firearm during the Oct. 29 robbery.
The maximum prison penalty for the robbery charge is 20 years. The charge of brandishing a firearm during a crime of violence carries a minimum mandatory prison sentence of seven years, which must be served after completion of any other sentence imposed for the crime.
ATF investigated the case against Brownlow. FBI investigated the case against Stewart. Assistant U.S. Attorney John B. Felton is prosecuting both cases.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Huntsville Police Officer Pleads Guilty to Conspiracy to Fix Cocaine Trafficking ChargesRead the Press Release
BIRMINGHAM - A Huntsville police officer pleaded guilty today in federal court to taking part in a conspiracy to fix cocaine trafficking charges against an individual arrested by another Huntsville officer, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Huntsville Police Chief Lewis Morris.
LEWIS BERNARD HALL, 45, of Meridianville, Ala., entered his guilty plea to the conspiracy before U.S. District Judge R. David Proctor. His sentencing date has not been set.
“A corrupt police officer poisons the public's trust in law enforcement. Most officers work hard to protect their communities and are willing to put their lives on the line in that service," Vance said. "Our communities need and deserve police officers with that integrity. The conduct of individuals like this defendant is not worthy of the badge and I applaud the work of the Huntsville Police Department and the FBI in bringing Mr. Hall to justice."
"While the majority of police officers serve and protect the public with honor, there are those few, like Mr. Hall, who violate the public’s trust and bring dishonor to their badge," Stanton said. "Simply stated, there is no place in law enforcement for individuals who lack integrity, lie, and violate the very laws they are sworn to uphold."
In his plea, Hall acknowledged that he conspired with someone identified in court documents as "Individual B" to pay a fellow police officer $5,000 if that officer would claim a July 29 vehicle search he conducted, which resulted in drug-trafficking charges against "Individual A," was unlawful, thereby making the criminal case against Individual A go away. The Huntsville officer who conducted the vehicle search and, subsequently, assisted in the investigation of Hall is identified only as "Cooperating Officer."
According to Hall's written plea agreement with the government, Individual A was on supervised release following a 15-year prison sentence for conspiracy to distribute a controlled substance when the Cooperating Officer pulled him over on a traffic stop July 29. The officer searched the passenger compartment of the vehicle, found about three ounces of cocaine, and took Individual A into custody on a charge of trafficking cocaine, according to the plea agreement.
Hall admits in his plea that on July 31, he and Individual B discussed offering the Cooperating Officer a bribe to tell other law enforcement officers that his search of Individual A's vehicle was unlawful. Hall offered the bribe to the Cooperating Officer on July 31, paid him $1,000 on Aug. 12, and had two follow-up conversations in November about what the officer was supposed to say when asked about the search of Individual A's vehicle, the indictment says.
The maximum penalty for the conspiracy charge is five years in prison and a $250,000 fine.The FBI investigated the case in conjunction with the Huntsville Police Department. Assistant U.S. Attorney George A. Martin Jr. is prosecuting the case.
###Huntsville Pharmaceutical Distribution Facility Agrees to Pay $300,000 PenaltyRead the Press Release
HUNTSVILLE -- A Huntsville pharmaceutical distribution facility has agreed to pay the federal government $300,000 to settle allegations that it failed to maintain complete and accurate records and inventories of controlled substances, including opioid painkillers, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Special Agent in Charge Clay A. Morris.
Generics Bidco and the U.S. Attorney for the Northern District of Alabama finalized the settlement agreement this week. The settlement was reached without any filings in U.S. District Court. With the payment of the penalty, the government agrees to release Generics from all civil liability for violations of records keeping under the Controlled Substances Act.
"The $300,000 penalty in this matter represents the largest penalty collected in Alabama in a DEA compliance investigation," Vance said. "It is imperative that pharmaceutical companies, and all facilities registered with DEA to handle controlled substances, keep clear and current records on receipt and distribution of those narcotics so that they can be tracked and not at risk of being diverted for illegal use in our communities," she said. "I applaud the DEA for its diligent work to ensure all facilities registered with the agency comply with the strict record-keeping and control mechanisms of the Controlled Substances Act."
DEA conducted an accountability audit of Generics for Dec. 12, 2012, through July 14, 2014, and raised allegations that the business violated record-keeping provisions of the Controlled Substances Act by not keeping separate bi-annual inventories of Schedule II controlled substances and the less restricted Schedule III-V substances. DEA also charged that Generics did not keep records readily available, and that the audit showed substantial error in the accounting of the Schedule II and III drugs hydrocodone, carisoprodol, oxycodone and Meperitab.
Generics, as part of the settlement agreement, denies any intentional violation of regulations, but states it has updated several record-keeping procedures and has taken other voluntary measures to assist with compliance. The company cooperated fully in the DEA audit and follow-up proceedings.
Madison County Man Pleads Guilty to Producing, Possessing and Distributing Child PornographyRead the Press Release
HUNTSVILLE – A Madison County man pleaded guilty today in federal court to multiple charges of producing child pornography, some of it taken with cameras he had hidden 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.
JEREMY JOSEPH NELSON, 42, entered his guilty plea before U.S. District Judge Madeline H. Haikala to the seven counts of an indictment filed against him in November. The indictment charged him with producing child pornography between 2012 and 2014, with possessing child pornography depicting children under age 12, and with distributing child pornography. His sentencing is scheduled June 9.
Nelson acknowledged in his guilty plea that, for several years, he used hidden cameras to surreptitiously 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.
Nelson's plea agreement with the government states that in exchange for his guilty plea to the indictment, the government agrees not to file additional charges for attempted production, receipt or possession of child pornography for images taken by Nelson at the dance studio before Oct. 7, 2014. Those images could have resulted in more than 130 additional criminal counts, according to the plea agreement.
The maximum penalty for producing child pornography is 30 years in prison and a $250,000 fine. It carries a minimum mandatory sentence of 15 years in prison. The maximum penalty both for possessing and distributing child pornography is 20 years in prison and a $250,000 fine, but the distribution charge carries a mandatory minimum prison sentence of five years.
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.Fugitive for Nearly Three Decades Arrested in Alabama Applying for Social Security NumberRead the Press Release
BIRMINGHAM -- A 28-year fugitive from Arizona soon will be returned to the Grand Canyon State following his arrest this month in Alabama, where he applied for a Social Security card under an assumed identity.
U.S. Attorney Joyce White Vance, Social Security Administration, Office of Inspector General, Special Agent in Charge Thomas J. Caul, U.S. Secret Service Special Agent in Charge Craig Caldwell and U.S. Marshal Chester M. Keely announced the arrest and extradition of STANLEY SHANE SELF, 74. Self has been a fugitive from Arizona since 1986 when a state court jury in La Paz County, Ariz., convicted him on three felony counts of child molestation in 1982.
"This man skirted justice for many years, but he did not escape it," Vance said. "Thanks to an alert Social Security employee in Albertville and swift investigation by Social Security OIG and Secret Service agents, Self will soon face the punishment for his crimes committed more than 30 years ago in Arizona."
"The Office of the Inspector General has no higher priority than to protect the integrity of the Social Security programs, in this case the issuance of a Social Security Number," Caul said. "The Social Security employees who identified the potential fraud, the U.S. Attorney's Office, the Secret Service and the Gulf Coast Regional Fugitive Task Force are to be commended for taking a serious felon off the street."
Self had been living for years under the stolen identity of Terry Harlan Martell, a Utah resident who died in 1987, according to court records. Self presented a Rhode Island birth certificate and an Oklahoma driver's license in Martell's name when he applied for a Social Security number in Albertville on Jan. 5, according to an affidavit supporting the criminal complaint charging him with making a false statement to a federal agency. Special agents with the Social Security Administration's OIG arrested Self on the complaint Feb. 3.
A federal magistrate judge in the Northern District of Alabama on Wednesday granted the government's motion to dismiss the false statement charges against Self so that he can be returned to Arizona. The government's motion said Self is being held on an Arizona warrant resulting from his 1986 convictions and that the La Paz County Sheriff's Office has arranged to transport Self to Arizona.
According to the affidavit filed in federal court in Alabama, a clerk in the Albertville SSA office searched agency databases for Terry Harlan Martell when Self applied for a Social Security number in that name. The data searches showed a Social Security number had been issued to Martell in 1963, and that Martell died in February 1987, according to the affidavit. Further investigation confirmed that the Rhode Island Department of Public Health issued a copy of Martell's birth certificate in March 1987, and that Oklahoma first issued a driver's license to Self, as Martell, in 1995.
Self was living in Hollywood, Ala., in Jackson County, when he was arrested. He previously had lived in the Birmingham area, with addresses listed in Vestavia Hills and Mulga.
SSA-OIG investigated the case, with assistance from the Secret Service and U.S. Marshals.
###Community Book Discussions Aim to Spark Conversations, Understanding Across Racial DivideRead the Press Release
Local civic and social organizations are breaking racial, ethnic and religious boundaries by discussing Tanner Colby's Vestavia Hills-based book, Some of My Best Friends Are Black: The Strange Story of Integration in America. Discussions begin Sunday throughout the metro area.
The effort is the brainchild of Bettina Byrd-Giles, chief executive officer of Bethesda Life Center Inc. in Ensley, who has worked with race relations efforts in Birmingham for more than 20 years. As Bethesda's CEO, she has seen the devastating effects of de facto segregation first hand. Byrd-Giles sought and received support in organizing the community discussions from the Community Affairs Committee of REV Birmingham and U.S. Attorney Joyce White Vance.
"One of the many lessons we have learned from the tragedy in Ferguson is that communities have to be unafraid to talk openly about the difficult and sometimes painful issue of race," Vance said. "Open discussion can diminish the lack of racial tolerance and understanding," she said. "I am proud to be part of a community where so many people, from so many walks of life, are willing to come together with people they don't know in order to build better relationships and, ultimately, a stronger community."
"The doors are open; let us continue to dialogue truthfully. It is about more than just color, it is how and why people see what they see in others," said CAC Co-Chairwoman Alice Westery. At the pilot discussion Feb. 4 at the CAC Race Relation Round Table on Some of My Best Friends are Black, "the group that I facilitated continued to bring up the need to understand that black people, and all minorities, can feel it when they are not accepted or properly acknowledged as a human being with human rights," Westery said.
This year's annual Martin Luther King Jr. Unity Breakfast, where Colby was the keynote speaker, kicked off the February community book discussion. Participants have two avenues to get involved with the discussion. The first option is to organize a discussion in which one group invites a similar group or organization of a different culture to participate. The plan is for groups to have as much in common as possible, and facilitators will assist the discussion. The expectation is that these discussions will yield specific action steps to address de facto segregation. These matched group discussions are taking place Sunday through Feb. 21, and at least 20 are registered.
Some of the pairings include Sisters Chaverim, which is a group of Jewish and African American leaders. The Birmingham Alumnae Chapter of Delta Sigma Sorority Inc. is hosting The Junior League of Birmingham. The Rotary Club of Birmingham is hosting several African American civic leaders at a discussion at Taj India restaurant. The Vestavia community is also planning a discussion.
A second option is for people to join an open discussion in one of several metro area locations Feb. 22 - 28. The events will be led by experienced race relations facilitators who were former Anytown, AL, or National Coalition for Community Justice staff. There are two discussions targeted to the under-40 crowd. For locations and times, please visit Birmingham Magic City Crossings at this site: https://www.eventbrite.com/d/local/magic-city-crossings/. There is no cost for participating, but it is requested that participants read at least Parts I & II of Some of My Best Friends are Black.
The anticipated outcome is to discuss how the community remains segregated, despite the strides of the Civil Rights Movement to eliminate legalized racial segregation. Participants will be asked what they can do, personally and collectively, to address de facto segregation in the Birmingham metro area. The results will be collected by the facilitators and discussed to see what the next steps will be.
For more information, please contact Bettina Byrd-Giles [email protected]
###Former Non-Profit Health Clinics CEO Arrested on 112-Count IndictmentRead the Press Release
BIRMINGHAM – Federal agents this morning arrested JONATHAN WADE DUNNING, former chief executive officer of two non-profit health clinics for the poor and homeless, based on a 112-count superseding 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, Internal Revenue Service-Criminal Investigation Division 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
The superseding indictment against Dunning, 51, of Hoover, was unsealed this morning following his arrest at a resort hotel in Hoover. The indictment includes charges of a seven-year conspiracy, wire fraud, bank fraud and money laundering related to Dunning’s involvement with Birmingham Health Care (BHC), Central Alabama Comprehensive Health (CACH), Birmingham Financial Federal Credit Union (BFFCU), and a group of for-profit businesses known as the “Synergy Entities.” Over the years, according to the charges, BHC and CACH received millions of dollars in federal grant funds through the Health Resources & Services Administration (HRSA) to further their missions of providing healthcare services to underserved populations.
According to the superseding indictment, Dunning was the CEO of BHC and CACH for a period of time and left those jobs to run his for-profit businesses. Even after leaving as CEO, however, Dunning continued to exercise control over BHC and CACH, according to the Superseding Indictment. It is further alleged that Dunning served as president, board chairman, and/or loan officer at BFFCU during a period between October 2008 and October 2011.
The superseding indictment charges that, from these various positions, Dunning participated in a conspiracy and executed schemes to defraud that deprived BHC, CACH, and others of substantial resources, including federal funds. The indictment further alleges that Dunning engaged in money laundering. The indictment seeks forfeiture of all proceedings of the alleged crimes.
"Criminals don't get to live lavish lifestyles by stealing federal money meant to provide healthcare to the poor and the homeless," Vance said. "My office will vigorously prosecute health care fraud; working to ensure that these funds go to the people they are intended to help, and to see that criminals go to jail.”
“The allegations against Mr. Dunning are disturbing, and yet another shocking example of abusing the public’s trust," Stanton said. "There is simply no acceptable level of corruption and the FBI and our partners will continue to bring to justice those who choose to line their pockets with stolen tax dollars.”“Jonathan Dunning is charged with defrauding agencies that received government funding," Hyman-Pillot said. "He is accused of misusing his authority and laundering money to businesses he controlled. He orchestrated a scheme fueled by greed and deceit that ultimately affects all taxpayers,” she said. “IRS Criminal Investigation specializes in complex financial investigations and we take pride in exposing money laundering schemes where individuals attempt to conceal the nature of their proceeds. Anyone who facilitates or participates in such schemes will be investigated and brought to justice.”
"The indictment and arrest of Mr. Dunning display our agency's commitment to ensuring that individuals who are accused of defrauding government programs intended for our nation's most vulnerable citizens answer for their actions," Jackson said. "To divert money from these programs to one's own personal use must come with serious consequences."
FBI, IRS-CID, and HHS-OIG investigated the case, which Assistant U.S. Attorneys Tamarra Matthews-Jonson and Melissa K. Atwood are prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty in court.
Huntsville Pharmaceutical Distribution Facility Agrees to Pay $300,000 PenaltyRead the Press Release
HUNTSVILLE -- A Huntsville pharmaceutical distribution facility has agreed to pay the federal government $300,000 to settle allegations that it failed to maintain complete and accurate records and inventories of controlled substances, including opioid painkillers, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Special Agent in Charge Clay A. Morris.
Generics Bidco and the U.S. Attorney for the Northern District of Alabama finalized the settlement agreement this week. The settlement was reached without any filings in U.S. District Court. With the payment of the penalty, the government agrees to release Generics from all civil liability for violations of records keeping under the Controlled Substances Act.
"The $300,000 penalty in this matter represents the largest penalty collected in Alabama in a DEA compliance investigation," Vance said. "It is imperative that pharmaceutical companies, and all facilities registered with DEA to handle controlled substances, keep clear and current records on receipt and distribution of those narcotics so that they can be tracked and not at risk of being diverted for illegal use in our communities," she said. "I applaud the DEA for its diligent work to ensure all facilities registered with the agency comply with the strict record-keeping and control mechanisms of the Controlled Substances Act."
DEA conducted an accountability audit of Generics for Dec. 12, 2012, through July 14, 2014, and raised allegations that the business violated record-keeping provisions of the Controlled Substances Act by not keeping separate bi-annual inventories of Schedule II controlled substances and the less restricted Schedule III-V substances. DEA also charged that Generics did not keep records readily available, and that the audit showed substantial error in the accounting of the Schedule II and III drugs hydrocodone, carisoprodol, oxycodone and Meperitab.
Generics, as part of the settlement agreement, denies any intentional violation of regulations, but states it has updated several record-keeping procedures and has taken other voluntary measures to assist with compliance. The company cooperated fully in the DEA audit and follow-up proceedings.
Conspirators in Gulf Oil-Spill Fund Fraud SentencedRead the Press Release
BIRMINGHAM -- A federal judge today sentenced three south Alabama family members to prison for running a scheme to steal more than $3 million from the claims fund established by British Petroleum for victims of the 2010 Deepwater Horizon oil spill, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
The FBI investigated this case. Assistant U.S. Attorneys Henry Cornelius, Jacquelyn M. Hutzell and Xavier O. Carter are prosecuting the case.
U.S. District Judge Sharon Lovelace Blackburn sentenced MARCELLA TRUSS, 53, to 12 years and one month in prison. The judge also ordered Truss to pay $1.9 million in restitution and to forfeit that same amount as proceeds of illegal activity. Judge Blackburn sentenced Truss' husband, MARTEE DAVIS, 42, to 13 years and three months in prison. The judge ordered Davis to be responsible for the same restitution and forfeiture as Truss. Judge Blackburn sentenced Truss' brother, HOWARD LENARD CARROWAY, 42, to 8 years in prison. Truss and Davis lived in Grand Bay, Ala., and Birmingham, and Carroway lived in Mobile during the course of the scheme.
The overall conspiracy involved the filing of more than 50 fraudulent claims, in the names of 37 people, over about 18 months with the Gulf Coast Claims Facility, according to the government's sentencing memoranda for the three defendants. The conspirators executed their scheme by wire, mail and in person in three states, spanning four jurisdictions, according to the government. The scheme involved the repetitive and coordinated use of emails, phones, and a variety of falsified documents, including tax and payroll records.
"Stealing money intended to help disaster victims recover is a serious and heartless crime, as today's sentences reflect," Vance said. "These defendants saw a disaster that blackened and fouled the Gulf of Mexico, spoiled much of its coastline and damaged or destroyed the livelihoods of thousands of people, and they chose to exploit the tragedy for their own criminal profit. We place a high priority on investigating and prosecuting such fraud to ensure that funds available to help victims of natural and man-made disasters do not fall into the hands of criminals," she said.
“Relief funds meant to assist individuals, businesses and communities are essential in order to restore normalcy after a disaster," Stanton said. "This process is hampered by those few, like today’s defendants, who wish to defraud and siphon relief and disaster funds away from those who are most at need. The FBI, along with its law enforcement partners, will continue to investigate and bring to justice those who defraud the government for their own personal gain,” he said.
A federal jury in October found Truss, Davis and Carroway guilty of conspiracy to commit wire and mail fraud between August 2010 and December 2011 for filing false claims with BP Gulf Coast fund. Evidence at trial showed the oil spill fund paid almost $2 million on the fraudulent claims. The jury also convicted the trio of aggravated identity theft in carrying out the scheme.
The jury further found Truss guilty on 31 counts of wire fraud for submitting, or causing to be submitted, false claims to the GCCF, and on one count of mail fraud related to a check received as part of the scheme. It convicted Davis on three wire fraud counts.
The jury convicted Truss and Davis of laundering money stolen from the GCCF. It found Carroway guilty on five wire fraud counts and on two counts of obstructing justice for telling recruits in the scheme to lie to prosecutors.
BP owned the Macondo Oil Well where the Deepwater Horizon drilling rig exploded in 2010. The company established the GCCF in June 2010 to administer and settle claims made against it by individuals or business for losses, damages or other costs resulting from the massive oil spill.
Truss, Davis and Carroway originally were charged along with two other people, Truss' son, Robert Truss III, 26, of Houston, and Cedric Dion Ravizee, 37, of Birmingham. Robert Truss pleaded guilty last year to conspiracy, money laundering, wire fraud and mail fraud, and Ravizee pleaded guilty to one count of wire fraud.
In total, 20 people have been convicted in the Northern District of Alabama on charges related to the scheme to defraud the GCCF. Marcella and Robert Truss, Davis and Carroway recruited the 16 other defendants to provide personal information that was used to file false claims. Those recruited then received claim payments and provided a portion of the payments to the ringleaders. The 17 remaining defendants in the fraud are to be sentenced this week.
All of the fraudulent claims submitted to the GCCF falsely stated that the individual had worked for a company called Built by Request and had lost wages because of the Deepwater Horizon incident. Marcella Truss owned BBR and dissolved the company after the scheme played out.Federal Judge Sentences Three Women to Prison for Tax FraudRead the Press Release
BIRMINGHAM -- A federal judge on Monday sentenced three members of a Birmingham-area tax-fraud ring to years in prison for filing false tax returns in other people's names, announced U.S. Attorney Joyce White Vance and Internal Revenue Service-Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.Chief U.S. District Judge Karon O. Bowdre sentenced LATOSHIA SHEVELL HOLLIS, 39, to eight years and four months in prison; ANGELA GERNIAL BENNETT, 52, to five years and three months in prison; and KENNETHEA LASHELLE PARKS, 33, to two years in prison. The three Birmingham women all pleaded guilty last year to one count of conspiracy to defraud the government by filing false income tax returns. Together, they must pay $234,202 in restitution to the government.
During the sentencing hearings, the judge noted that it had become a popular "get rich quick scheme" in some criminal quarters to file fake tax returns in order to get the IRS to unwittingly send refund money to the criminals.
The group in which Hollis, Bennett and Parks participated sought nearly $900,000 in stolen tax-refund money over two years, and successfully received about $234,000. The conspiracy gathered personally identifying information on other people and used it to file false federal income tax returns in the names of at least 30 individuals for the 2008 tax year and at least 118 individuals for the 2009 tax year.
Hollis and Parks had extensive criminal histories, the judge noted, and said it is "time the community realizes that these crimes do not pay in the long run.""People who engage in tax fraud steal from each of us who pay our taxes as required," Vance said. "Monday's sentences punish these criminals for their fraud and theft and send the message to others who might think about participating in similar misdeeds that prison is the price they could pay," Vance said.
"Internal Revenue Service Criminal Investigation continues to make identity theft and refund fraud a top priority," Hyman-Pillot said. "Angela Bennett, Latoshia Hollis and Kennethea Parks stole from the United States Treasury and had no regard for the victims of their schemes. Our agency has a zero-tolerance policy for this type of criminal behavior," she said. "Monday's sentencing comes on the brink of tax-filing season, and I hope it serves as a warning to those who are considering similar criminal activities."
IRS-CID investigated the case, which Assistant U.S. Attorney Melissa K. Atwood prosecuted.
FBI Arrests Defendants Charged with Trafficking Heroin and Other Drugs in Jefferson CountyRead the Press Release
FBI agents today arrested five of six Jefferson County, Alabama, men indicted by a federal grand jury in November on charges they operated an illegal organization trafficking heroin, cocaine, prescription painkillers and other drugs in the western part of the county. The sixth defendant already was in custody in Jefferson County on state charges related to the drug-trafficking organization.
U.S. Attorney Joyce White Vance, FBI Acting Special Agent in Charge Robert E. Haley III, Jefferson County Sheriff Mike Hale, Hueytown Police Chief Chuck Hagler and Special Agent in Charge Veronica Hyman-Pillot of the Internal Revenue Service Criminal Investigation Division announced today's arrests.
The November indictment charges Ladaryl Keith "Eric" Spriggs, 30, Michael "Mike" Watson Jr., 28, Boris Bernard "Buck" Edwards, 45, and Marquis Rashad "Bobo" Abernathy, 23, all of Brighton, Alabama, as well as Damien Jamaar "Two for 15" Scott, 29, of Bessemer, Alabama, and Antione Rashun "Twan" Bell, 29, of Birmingham, Alabama, with conspiring to distribute heroin, cocaine, marijuana, oxycodone, codeine, hydrocodone, suboxone and alprazolam between August 2013 and Nov. 17, 2014.
Arrested today were Spriggs, Watson, Abernathy, Edwards and Bell. Scott was already in custody.
"The indictment and arrests of these defendants reflects my office's commitment to work with law enforcement to battle the country's epidemic problem of heroin and opioid painkiller abuse on the supply side," said U.S. Attorney Vance. "There have been at least 123 heroin overdose deaths in Jefferson County, alone, in 2014. As a community, we must wage battle on many fronts, including seeking more education and awareness about opiate abuse and more addiction treatment options."
“This investigation shows the FBI’s resolve to target organizations that are bringing heroin and other dangerous drugs into the Birmingham area," said FBI Acting Special Agent in Charge Haley. "Today, along with our law enforcement partners, we were able to remove dangerous people from the streets and take another step toward making our community safer.”
"The drug trade is a deadly business and none more deadly than heroin," said Sheriff Hale. "This investigation and subsequent number of arrests will certainly have a positive impact in our area, as these are major players in this deadly game. Lives will be saved because of it. I want to thank United States Attorney Joyce Vance and her team, along with all of the federal and local enforcement partners for their commitment to this initiative. We are a powerful force working together and we are committed to continuing this fight.”
"The heroin problem is a metro-wide epidemic that needs a cooperative response from law enforcement, on all levels, across the area," said Police Chief Hagler. "The leadership shown by the U.S. Attorney’s Office on this issue has been both welcomed and effective. I’m sure I speak for all my fellow police chiefs when I say we appreciate Joyce Vance’s efforts in helping to spearhead a multi-agency law enforcement strategy to deal with this threat to all our communities."
According to the indictment, Spriggs, Watson and Abernathy are charged with trafficking more than 1,000 grams of heroin as part of the conspiracy, and Scott's, Bell's and Edwards' participation in the conspiracy involved more than 100 grams of heroin.
Count 2 of the indictment charges Spriggs and Watson with possessing and intending to distribute heroin and oxycodone from a Fairfield, Alabama, house located within 1,000 feet of a public school, Fairfield High School, on July 17.
Count 3 charges Spriggs, Scott and Watson with possessing and intending to distribute heroin on August 8.
The remaining 11 counts variously charge all defendants, except Scott, with using a telephone to facilitate a drug-trafficking crime.
The indictment seeks a forfeiture judgment of at least $1 million from the defendants as proceeds of illegal activity.
The maximum penalty for conspiracy to distribute drugs illegally is 20 years in prison and a $1 million fine. Conspiracy to distribute more than 1,000 grams of heroin carries a penalty of 10 years to life in prison and a $10 million fine, and conspiracy to distribute 100 grams or more of heroin carries a penalty of five to 40 years in prison and a $5 million fine.
The maximum penalty for possessing with intent to distribute heroin or oxycodone is 20 years in prison and a $1 million fine. The maximum penalty doubles for distribution within 1,000 feet of a school.
The maximum penalty for using a telephone to facilitate a drug-trafficking crime is four years in prison and a $250,000 fine.
The FBI's Safe Streets Task Force investigated the case, in conjunction with the Jefferson County Sheriff's Office, Hueytown Police and IRS-CID. Assistant U.S. Attorney Gregory R. Dimler is prosecuting the case.
The public is reminded that an indictment contains only charges. Defendants are presumed innocent unless and until proven guilty.
FBI Arrests Defendants Charged with Trafficking Heroin, Other Drugs in Jefferson CountyRead the Press Release
BIRMINGHAM -- FBI agents today arrested five of six Jefferson County men indicted by a federal grand jury in November on charges they operated an illegal organization trafficking heroin, cocaine, prescription painkillers and other drugs in the western part of the county. The sixth defendant already was in custody in Jefferson County on state charges related to the drug-trafficking organization.U.S. Attorney Joyce White Vance, FBI Acting Special Agent in Charge Robert E. Haley III, Jefferson County Sheriff Mike Hale, Hueytown Police Chief Chuck Hagler and Internal Revenue Service, Criminal Investigation Division, Special Agent in Charge Veronica Hyman-Pillot announced today's arrests.
The November indictment charges LADARYL KEITH "Eric" SPRIGGS, 30, MICHAEL "Mike" WATSON JR., 28, BORIS BERNARD "Buck" EDWARDS, 45, and MARQUIS RASHAD "Bobo" ABERNATHY, 23, all of Brighton, DAMIEN JAMAAR "Two for 15" SCOTT, 29, of Bessemer, and ANTIONE RASHUN "Twan" BELL, 29, of Birmingham, with conspiring to distribute heroin, cocaine, marijuana, oxycodone, codeine, hydrocodone, suboxone and alprazolam between August 2013 and Nov. 17, 2014.
Arrested today were Spriggs, Watson, Abernathy, Edwards and Bell. Scott was already in custody.
"The indictment and arrests of these defendants reflects my office's commitment to work with law enforcement to battle the country's epidemic problem of heroin and opioid painkiller abuse on the supply side," Vance said. "There were at least 123 heroin overdose deaths in Jefferson County, alone, in 2014," she said. "As a community, we must wage battle on many fronts, including seeking more education and awareness about opiate abuse and more addiction treatment options.""This investigation shows the FBI's resolve to target organizations that are bringing heroin and other dangerous drugs into the Birmingham area," Haley said. "Today, along with our law enforcement partners, we were able to remove dangerous people from the streets and take another step toward making our community safer."
"The drug trade is a deadly business and none more deadly than heroin," Hale said. "This investigation and subsequent number of arrests will certainly have a positive impact in our area, as these are major players in this deadly game. Lives will be saved because of it. I want to thank United States Attorney Joyce Vance and her team, along with all of the federal and local enforcement partners for their commitment to this initiative. We are a powerful force working together and we are committed to continuing this fight," he said."The heroin problem is a metro-wide epidemic that needs a cooperative response from law enforcement, on all levels, across the area," Hagler said. "The leadership shown by the U.S. Attorney's Office on this issue has been both welcomed and effective. I'm sure I speak for all my fellow police chiefs when I say we appreciate Joyce Vance's efforts in helping to spearhead a multi-agency law enforcement strategy to deal with this threat to all our communities."
According to the indictment, Spriggs, Watson and Abernathy are charged with trafficking more than 1,000 grams of heroin as part of the conspiracy, and Scott's, Bell's and Edwards' participation in the conspiracy involved more than 100 grams of heroin.
Count 2 of the indictment charges Spriggs and Watson with possessing and intending to distribute heroin and oxycodone from a Fairfield house located within 1,000 feet of a public school, Fairfield High School, on July 17.
Count 3 charges Spriggs, Scott and Watson with possessing and intending to distribute heroin on Aug. 8.
The remaining 11 counts variously charge all defendants, except Scott, with using a telephone to facilitate a drug-trafficking crime.
The indictment seeks a forfeiture judgment of at least $1 million from the defendants as proceeds of illegal activity.
The maximum penalty for conspiracy to distribute drugs illegally is 20 years in prison and a $1 million fine. Conspiracy to distribute more than 1,000 grams of heroin carries a penalty of 10 years to life in prison and a $10 million fine, and conspiracy to distribute 100 grams or more of heroin carries a penalty of five to 40 years in prison and a $5 million fine.
The maximum penalty for possessing with intent to distribute heroin or oxycodone is 20 years in prison and a $1 million fine. The maximum penalty doubles for distribution within 1,000 feet of a school.
The maximum penalty for using a telephone to facilitate a drug-trafficking crime is four years in prison and a $250,000 fine.
The FBI's Safe Streets Task Force investigated the case, in conjunction with the Jefferson County Sheriff's Office, Hueytown Police and IRS-CID. Assistant U.S. Attorney Gregory R. Dimler is prosecuting the case.The public is reminded that an indictment contains only charges. Defendants are presumed innocent unless and until proven guilty.
Two Serra Nissan Managers Charged in Loan Fraud ConspiracyRead the Press Release
BIRMINGHAM -- Federal prosecutors today charged two former managers at Serra Nissan in connection with a conspiracy at the Birmingham car dealership to boost loan approvals and car sales fraudulently, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Richard D. Schwein Jr.
The U.S. Attorney's Office filed a three-count information in U.S. District Court charging former Serra Nissan sales manager GERALD R. SHEPARD, 56, of Pinson, with conspiracy, bank fraud and subscribing to a false tax return. The U.S. Attorney filed a separate two-count information charging JEFFREY R. GREEN, 33, of Porterdale, Ga., a former Serra Nissan finance manager, with conspiracy and failure to file an individual tax return. A federal grand jury indicted Shepard on similar charges in August, but he has agreed to plead guilty to the charges filed today. The government agrees to dismiss the August indictment when Shepard is sentenced on the new charges.
"These defendants are charged with conspiring to defraud customers and financial institutions who trusted the dealership to provide truthful information during the vehicle financing process," Vance said.
"Car-buyers who trusted this dealership to honestly handle their vehicle financing and financial institutions that provided loans through the dealership all became victims of fraud perpetrated to increase vehicle sales," Schwein said. "The public can expect that the FBI will continue to aggressively investigate loan fraud to protect consumers and the nation's financial system."
"The charges against these two defendants clearly illustrate that all individuals who engage in these types of illegal activities will be held accountable for their actions," Hyman-Pillot said. "These defendants not only manipulated the system and falsified documents with the intention of increasing profits at the expense of others; they also ignored the federal tax laws with regards to their own personal income tax returns."
Prosecutors charged both Shepard and Green with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions and Serra Nissan customers by submitting false information to lenders to increase vehicle sales in order to boost personal profits.
The information filed against Shepard also charges him with submitting a false tax return for 2012. The information against Green charges him with failing to file his Individual Income Tax Return with the IRS for tax year 2012.
The charges against these Serra Nissan managers follow federal charges earlier this year against six other sales managers, finance managers and salesmen at Serra Nissan, including Abdul Islam Mughal, D. Scott Burton, Michael J. Wilkinson, Dwight A. Perry, Terry W. Henderson, Jr., and Roland W. Riley. Mughal, 48, of Trussville, pleaded guilty in July to conspiring with other Serra Nissan salesmen and managers to sell more cars by falsifying loan documents in order to defraud customers and financial institutions. Mughal also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions between January 2012 and October 2013. Mughal is scheduled for sentencing May 21, 2015. The charges against Burton, Wilkinson, Perry, Henderson, and Riley are pending and that case is scheduled for trial March 16, 2015.According to the charges against Shepard and Green, they and other members of the conspiracy participated in various means to carry out their fraud and obtain auto loans that, otherwise, would not have been approved. Those means included the following:
• Creating or altering documents to submit to financial institutions to show inflated income for prospective buyers.
• Directing finance managers and salesmen to submit fraudulent documents to financial institutions to misrepresent proof of a customer's residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount. The defendants and others had a financial incentive to increase a loan amount in order to increase commissions paid to certain employees.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify.The defendants and others also defrauded customers and financial institutions by quoting a customer an inflated monthly vehicle loan payment so that a finance manager could add a warranty and gap insurance without the customer realizing it, according to the indictment.
The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine. The maximum penalty for subscribing to a false tax return is 3 years in prison and a $100,000 fine. The maximum penalty for failing to file an individual tax return is 1 year in prison and a $25,000 fine.
The IRS and the FBI investigated the case, which Assistant U.S. Attorneys Amanda S. Wick and Robin B. Mark are prosecuting.
The public is reminded that an information contains only charges. Defendants are presumed innocent unless and until proven guilty.
U.S. Attorney Charges Hoover Man for Ponzi Scheme That Bilked Millions from InvestorsRead the Press Release
BIRMINGHAM -- Federal prosecutors today charged a Hoover man with fraud and money laundering in connection with an illegal Ponzi scheme that caused investors to lose more than $3 million,announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., Alabama Securities Commission Director Joseph P. Borg and Hoover Police Chief Nick Derzis.The U.S. Attorney's Office charged BRYAN W. ANDERSON, 40, with one count each of wire fraud, money laundering and securities fraud. The office filed the charges in U.S. District Court, along with a plea agreement in which Anderson acknowledges the charges and agrees to plead guilty to them. As part of his plea agreement, Anderson also agrees to pay restitution of about $3.1 million to victim investors. He also agrees to forfeit that same amount to the government, as proceeds of illegal activity, along with another $368,000, which is the amount cited in the money laundering charge.
"For years this defendant lied about investment options, risks and potential returns so that unwitting investors would continue to put their hard-earned money into his fraudulent scheme," Vance said. "When his Ponzi scheme collapsed, as they always do, the people who trusted him lost millions. I applaud the hard work of the FBI, Alabama Securities Commission and Hoover Police Department, along with Assistant U.S. Attorney J. Patton Meadows, which led to the prosecution of this case."
“This case is a classic Ponzi scheme, as Anderson used false promises and fake returns to steal millions of dollars from his victims," Schwein said. "Consumers looking to invest are encouraged to review www.investor.gov , which helps investors recognize scams and avoid fraud. The public can be assured that the FBI will continue to use our resources and work closely with our partners to expose perpetrators and vindicate the victims of complex financial frauds.”
"The Alabama Securities Commission is gratified to see justice imposed for the crimes that Bryan Anderson committed against innocent citizens of Alabama and other states; of course, no punishment can take away the loss and hurt to the investors who were victimized," Borg said. "We are grateful and want to thank the Hoover Police Department, the FBI and the U.S. Attorney's Office for the Northern District of Alabama, in addition to the ASC staff, for successfully partnering together to ensure justice was served in this case. The strong law enforcement response to this crime should serve as notice to other scammers out there that they should stay out of Alabama or expect prosecution and imprisonment."
“I am very pleased with our department’s response in this case," Derzis said. "After taking the initial report, Hoover investigators realized the extent of the fraud and contacted the Alabama Securities and Exchange Commission, along with the FBI. With these agencies working together, we were able to obtain Mr. Anderson's agreement to plead guilty to his crimes and to repay the victims.”
According to the government's charging information and its plea agreement with Anderson, he conducted his investment scheme as follows between 2009 and May 30, 2014:
During most of that time, Anderson was a registered financial broker working, first, with MetLife Securities, from October 1998 to February 2012, then with Pruco Securities, from February 2012 to Sept. 13, 2012, when Pruco terminated his employment.As part of his scheme to defraud investors, he solicited them to invest in stock options that he said employed various trading strategies. The stock options he described were not registered securities, and Anderson was not authorized to solicit investor money for the funds.
Anderson also offered investments in a company he owned, 360 Properties. Beginning about 2009, Anderson falsely represented to certain 360 Properties investors that their returns would come from leased property income, when there were no leased properties. Some of the investors believed the 360 Properties investments were affiliated with MetLife, and Anderson did nothing to correct that false belief.
Between January 2009 and January 2014, Anderson's false investment promises caused about 18 individual and family investors to deliver more than $8.4 million to Anderson, which he deposited into an account he and his wife held at BancorpSouth, a bank based in Tupelo, Miss. When Anderson's investment scheme collapsed in May 2014, about 12 investors lost about $3.1 million.
Anderson was operating a Ponzi scheme with investor funds, paying returns to existing investors with money from new investors, as well as paying personal expenses. He transferred investor money from one of his and his wife's bank accounts to another, making only a small percentage of the investments he had promised investors.
The wire fraud count charges that Anderson caused an investor, identified in court documents by the initials K.C., to wire transfer $571,378 from the investor's Wells Fargo bank account to Anderson's BancorpSouth account in the name of 360 Properties on Jan. 15, 2014.
The money laundering count charges that Anderson took $368,000 of the $571,378 received from K.C. and on Jan. 15 transferred it by wire to a second BancorpSouth account. According to the charge, the $571,378 was "criminally derived property" obtained through wire fraud. It is a violation of federal law to engage in a monetary transaction involving money or property worth more than $10,000 that was obtained through a criminal act.
The securities fraud count charges that Anderson, on Aug. 20, 2013, fraudulently obtained $100,000 from an investor, identified by the initials T.M., by falsely representing that he would invest the money in a specific type of hedge fund. T.M. wired the money from an account at Bryant Bank to one of Anderson's BankcorpSouth accounts and Anderson took the money and used it for non-investment purposes.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine. The maximum penalty for the money laundering charge is 10 years in prison and a $250,000 fine, and the maximum penalty for the securities fraud charge is five years in prison and a $10,000 fine.
The FBI, ASC and the Hoover Police Department investigated the case, which Meadows is prosecuting.
Federal Grand Jury Indicts Huntsville Police Officer on Bribery ChargesRead the Press Release
BIRMINGHAM - A federal grand jury today indicted a Huntsville police officer in connection with a conspiracy to fix cocaine trafficking charges against an individual arrested by another Huntsville officer, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Huntsville Police Chief Lewis Morris.
A four-count indictment filed in U.S. District Court charges LEWIS BERNARD HALL, 45, of Meridianville, Ala., with conspiracy, bribery, obstruction of justice and making a false statement to investigators. According to the charges, Hall conspired with someone identified in the indictment as "Individual B" to pay a fellow police officer $5,000 if that officer would claim his July 29 vehicle search that resulted in drug-trafficking charges against "Individual A" was unlawful, thereby making the criminal case against Individual A go away. The Huntsville officer who conducted the vehicle search and, subsequently, assisted in the investigation of Hall is identified in the indictment as "Cooperating Officer."
"Our community expects and deserves police officers who will protect citizens and uphold the law, not tarnish their badge and work to protect criminals," Vance said. “The U.S. Attorney's Office prosecutes public corruption cases to punish those who violate the law and the public trust and to reinforce the need and expectation of integrity in government and police service."
"Public corruption is the FBI’s number one criminal priority for a reason," Schwein said. "It tears at the fabric of our democracy and works to undermine the public’s trust and confidence in the government. The FBI will continue to aggressively investigate violations of that trust committed by any public official, regardless of position.”"The Huntsville Police Department contacted the FBI as soon as we learned of possible corruption and we assisted the FBI in its investigation," Morris said. "I want to assure the public that this indictment addresses the actions of one police officer, and the Huntsville department will diligently address any other issues that might come to our attention. We value the working relationship we enjoy with the FBI and the U.S. Attorney's Office and appreciate their attention to this case."
According to the indictment's conspiracy count, on July 31, Hall and Individual B discussed offering the Cooperating Officer a bribe to tell other law enforcement officers that his search of Individual A's vehicle, which uncovered about three ounces of cocaine, was unlawful. Hall offered the bribe to the Cooperating Officer on July 31, paid him $1,000 on Aug. 12, and had two follow-up conversations in November about what the officer was supposed to say when asked about the search of Individual A's vehicle, the indictment says.
The bribery count charges Hall with corruptly offering the bribe to an agent of the City of Huntsville and its police department, which received more than $10,000 in federal benefits within one year, to influence the Cooperating Officer in how he reported the July 29 vehicle search.The obstruction of justice count charges Hall with offering the bribe with the intent to delay or prevent the reporting of a felony or possible felony offense and the violation of conditions of supervised release by Individual A.
The false statement count charges Hall with knowingly making a false statement to an FBI agent on Dec. 8, saying he did not give money to the Cooperating Officer in connection with that officer's reporting of his search of Individual A's vehicle.
The maximum penalty for both the conspiracy and the false statement charges is five years in prison and a $250,000 fine. The maximum penalty for the bribery count is 10 years in prison and a $250,000 fine, and the maximum for the obstruction count is 20 years in prison and a $250,000.
The FBI investigated the case in conjunction with the Huntsville Police Department. Assistant U.S. Attorney George A. Martin Jr. is prosecuting the case.
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Former Winston County Deputy Pleads Guilty to Extorting Manufacture of MethamphetamineRead the Press Release
BIRMINGHAM -- A former Winston County sheriff's deputy pleaded guilty today in federal court to using his police authority to extort a woman to cook methamphetamine, and to causing her to manufacture and distribute the drug at the home where she lived with a minor child, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
GRADY KEITH CONCORD, 42, of Lynn, entered his guilty pleas before U.S. District Judge Abdul K Kallon to one count of extortion under color of official right, one count of manufacturing methamphetamine and one count of manufacturing and distributing methamphetamine on premises where children are present or reside. The U.S. Attorney's Office filed the charges against Concord in November.
"Sheriff's deputies are supposed to protect people from harm. Instead, this defendant broke the law and coerced a woman into violating the law and manufacturing methamphetamine for him in a way that put lives, including a child's, in danger," Vance said. "Most law enforcement officers serve honorably, but we will prosecute those who break the law."
"We entrust law enforcement officers with certain powers and authority, which they are expected to wield with the utmost integrity," Schwein said. "Mr. Concord's actions breached the public trust and dishonored the badge that he once carried. This case shows that abuse of that power and authority will not be tolerated."
According to his plea, Concord was a Winston County Sheriff's deputy in July 2013 when he approached a woman living in the town of Nauvoo and pressured her to manufacture methamphetamine for him. Concord used the illegal drug and arranged to supply the woman with pseudoephedrine, a necessary ingredient of methamphetamine, in exchange for a portion of the finished product.
Concord disputes the woman's claim that he threatened her with an arrest warrant unless she agreed to the arrangement, but he concedes that because he was a sheriff's deputy, she may have felt that she "had no choice but to accept his offer," he acknowledged in his plea agreement with the government.
On several occasions between July 2013 through June 2014, Concord delivered pseudoephedrine to the woman's home, where she manufactured the methamphetamine, and where he picked up the illegal drug, he acknowledged during his guilty plea today. Concord obtained decongestant pills containing pseudoephedrine from the sheriff's office evidence room, and he and his wife both bought the pills, according to his plea.
Concord acknowledged that he knew the woman had two sons who lived with her, and that one of them was a minor.
He faces a maximum penalty of 20 years in prison and a $250,000 fine on the extortion count and a maximum penalty of 20 years in prison and a $1 million fine on the count of manufacturing methamphetamine. Any sentence imposed for the manufacture of methamphetamine where minors reside or are present must be served consecutively to any other sentence imposed. The maximum penalty for that count is 20 years in prison and a $2 million fine.
As part of Concord's plea agreement, he must surrender all law enforcement certifications and not seek future employment in law enforcement or custodial oversight, including as a correctional or probation officer or bail bondsman.
The FBI, State Bureau of Investigation, agents of the Lauderdale County Drug Task Force assigned to the FBI's Safe Streets Task Force, the Winston/Marion County District Attorney's Office, with the cooperation of the Winston County Sheriff's Office and the Lynn Police Department, investigated the case. Assistant U.S. Attorney Tamarra Matthews Johnson is prosecuting the case.
Federal Grand Jury Indicts Madison County Man for Producing and Possessing Child PornographyRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Madison County man on multiple charges of producing child pornography, announced U.S. Attorney Joyce White Vance, Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr. and Etowah County Sheriff Todd Entrekin.
A six-count indictment filed in U.S. District Court charges JEREMY JOSEPH NELSON, 42, of Huntsville, with producing child pornography between 2012 and 2014, and with possessing child pornography depicting children under age 12.
The first four counts of the indictment charge that Nelson did "use, persuade, induce, entice and coerce a minor" to engage in sexually explicit conduct so he could produce a visual depiction of the conduct. Count 1 states the crime took place at a Huntsville dance studio. Counts 5 and 6 charge Nelson with possessing child pornography on computer, computer disk or videotape.
The Alabama State Bureau of Investigation arrested Nelson in October on state charges of producing child pornography by hiding cameras in the bathrooms of three Huntsville businesses.
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 Department of Homeland Security and the Alabama SBI investigated the case, which Assistant U.S. Attorneys Jacquelyn Hutzell and Daniel Fortune are 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.
###North Alabama U.S. Attorney's Office Collects $7.5 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2014Read the Press Release
BIRMINGHAM - U.S. Attorney Joyce White Vance announced today that the Northern District of Alabama collected $7.5 million in criminal and civil actions in Fiscal Year 2014. Of this amount, the office collected $3.2 million in criminal actions and $4.3 million in civil actions.
Additionally, the Northern District worked with other U.S. Attorney's Offices and components of the Department of Justice to collect an additional $117.8 million in cases pursued jointly. The $117.8 million was collected in civil actions.
U.S. Attorney General Eric Holder announced today that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney's offices and the main litigating divisions in that same period."Every day, the Justice Department's federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people," Holder said. "Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And this result shows the fruits of the Justice Department's tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis."
"Seeking justice is the primary objective of the U.S. Attorney's Office," Vance said. "The people in my office pursue that goal every day, working to put criminals behind bars and to ensure that money taken through wrongful action is returned to the federal government and the American taxpayer. In addition, we try to be good stewards of the public trust and the funding our office is given to do our work. The $117.8 million we recovered this past year, working with other districts and the Civil Division, as well as the $7.5 million our office recovered independently, exceeds the budget of this office more than tenfold," she said.
The Northern District of Alabama's two largest independent collections came in false claims settlements with health care providers. The district collected $3.93 million from the parent company of Hospice Compassus as part of an agreement to settle allegations that the company submitted false claims to Medicare for patients treated at its hospice facilities. The district also collected $1.2 million from American Family Care Inc. to settle allegations that it knowingly submitted claims to Medicare for outpatient office visits that it billed at higher than appropriate rates.
The Northern District of Alabama worked with the Justice Department's Civil Division and U.S. Attorney's Offices in north Georgia, eastern Pennsylvania and eastern Kentucky to secure a $150 million payment to the federal government from Amedisys, one of the nation's largest home health providers. Amedisys made the payment as part of a settlement to resolve allegations that some of its offices improperly billed Medicare for ineligible patients and services.
The U.S. Attorneys' Offices, along with the department's litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department's Crime Victims' Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney's office in north Alabama, working with partner agencies and divisions, collected $2.2 million in asset forfeiture actions in FY 2014. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Etowah County Man Pleads Guilty to Producing, Possessing Child PornographyRead the Press Release
BIRMINGHAM -- An Etowah County man pleaded guilty today in federal court to producing child pornography involving two children in north Alabama, announced U.S. Attorney Joyce White Vance, Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr. and Etowah County Sheriff Todd Entrekin.
VICTOR GRAY DINGLER, 33, entered his guilty plea before U.S. District Judge Virginia Emerson Hopkins to five counts of producing child pornography between 2008 and 2014. Dingler also pleaded guilty to two counts of possessing child pornography involving children younger than 12. Sentencing is scheduled Feb. 26.
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.Dingler faces a possible sentence of 15 to 30 years in prison on each production of child pornography count, and a maximum of 20 years in prison on each possession count. Both charges carry a maximum $250,000 fine.
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 are prosecuting.
Ohatchee Man Sentenced to 20 Years in Prison for Child ExploitationRead the Press Release
BIRMINGHAM -- A federal judge today sentenced an Ohatchee man to 20 years in prison for receiving, possessing and distributing child pornography, announced U.S. Attorney Joyce White Vance and the Alabama Law Enforcement Agency.
U.S. District Judge Abdul K. Kallon sentenced KENDALL ADAM HESTER, 29, on the child pornography charges. A federal jury convicted Hester in August. He has remained in custody since his conviction. Judge Kallon ordered Hester to remain on supervised release for 20 years following completion of his prison term.
Hester searched the Internet and downloaded child pornography using peer-to-peer computer software, according to court records. In December 2012, law enforcement agents found 342 videos of child pornography on a computer and compact disks at Hester's home. The videos showed graphic sexual acts involving children under age 12, some as young as 2 or 3 years old, and included sadistic sexual acts involving bondage, according court documents.
The Alabama Law Enforcement Agency investigated the case, which Assistant U.S. Attorneys Chinelo Dike-Minor and Daniel J. Fortune prosecuted.
Federal Prosecutors Charge Former Winston County Deputy with Extorting Manufacture of MethamphetamineRead the Press Release
BIRMINGHAM -- Federal prosecutors today charged a former Winston County sheriff's deputy with using his police authority to extort a woman to cook methamphetamine, and with causing her to manufacture and distribute the drug at the home where she lived with a minor child, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.The U.S. Attorney's Office charged GRADY KEITH CONCORD, 42, of Lynn, with one count of extortion under color of official right, one count of manufacturing methamphetamine and one count of manufacturing and distributing methamphetamine on premises where children are present or reside. Concord has agreed to plead guilty to the charges. Prosecutors filed the three-count information and Concord's plea agreement in U.S. District Court.
According to those documents, Concord was a deputy with the Winston County Sheriff's Office in July 2013 when he approached a woman who lived in the town of Nauvoo and pressured her to manufacture methamphetamine for him. Concord was a methamphetamine user and arranged to supply the woman with pseudoephedrine, a necessary ingredient of the illegal drug, in exchange for a portion of the finished product.
Concord disputes the woman's claim that he threatened her with an arrest warrant unless she agreed to the arrangement, but he concedes that because he was a sheriff's deputy, she may have felt that she "had no choice but to accept his offer," his plea agreement states.
On several occasions between July 2013 through June 2014, Concord delivered pseudoephedrine to the woman's home, where she manufactured the methamphetamine, and where he picked up the illegal drug, according to his plea agreement. Concord obtained decongestant pills containing pseudoephedrine from the sheriff's office evidence room, and he and his wife both bought the pills, the plea agreement states.
Concord knew the woman had two sons who lived with her, and that one of them was a minor, according to the plea agreement.
He faces a maximum penalty of 20 years in prison and a $250,000 fine on the extortion count and a maximum penalty of 20 years in prison and a $1 million fine on the count of manufacturing methamphetamine. Any sentence imposed for the manufacture of methamphetamine where minors reside or are present must be served consecutively to any other sentence imposed. The maximum penalty for that count is 20 years in prison and a $2 million fine.
As part of Concord's plea agreement, he must surrender all law enforcement certifications and not seek future employment in law enforcement or custodial oversight, including as a correctional or probation officer or bail bondsman.
The FBI, State Bureau of Investigation, agents of the Lauderdale County Drug Task Force assigned to the FBI's Safe Streets Task Force, and the Winston/Marion County District Attorney's Office, in cooperation of the Winston County Sheriff's Office and the Lynn Police Department investigated the case. Assistant U.S. Attorney Tamarra Matthews Johnson is prosecuting the case.
Former Community Health Clinic CFO Indicted for Scheme to Defraud Millions from GovernmentRead the Press Release
BIRMINGHAM -- Federal agents today arrested the former financial officer of two non-profit health clinics for the poor and homeless on multiple 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, was arrested on an 82-count indictment returned by a federal grand jury last week. The indictment charges Mollica with wire fraud, mail fraud, money laundering, aggravated identity theft and filing false income tax returns. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., IRS 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 charges after a judge unsealed the indictment following Mollica's arrest.Mollica was the chief financial officer of Birmingham Health Care from April 2005 through November 2008. She also performed fiscal duties for Central Alabama Comprehensive Health Inc., 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, identified in the indictment by the initials J.D., served for a time as the chief executive officer of the Tuskegee clinic and, in 2008, BHC took over fiscal responsibility of CACH.
The indictment charges that between January 2008 and March 2012, Mollica aided and abetted J.D. and others in diverting about $11 million in federal grant money, assets and property of BHC and CACH to private entities created by J.D. Mollica then conducted financial transactions to transfer money from the private entities to herself, J.D. and others, according to the indictment. It charges that she illegally received about $1.7 million through the scheme.
"Federal funds meant to provide healthcare to the poor and the homeless are not a moneybox for criminals," Vance said. "My office will vigorously prosecute health care fraud, working to ensure these funds go to the people they are intended to help, and that criminals go to jail."
"If you are stealing tax dollars to line your own pockets, you should be looking over your shoulder," Schwein said. "The FBI and our partner agencies are right behind you, ready to hold you to account and make you answer for your crimes.""Today's arrest demonstrates that individuals who engage in corrupt behavior will be held accountable for their actions," Hyman-Pillot said. "The allegations against Terri Mollica and others are deplorable. This is a classic example of abusing power while in a position of trust. These individuals made a profit by defrauding the government and will be brought to justice," she said.
"It's both unconscionable and illegal when scammers defraud federal grant programs designed to assist those in need and then pocket the funding to enrich themselves, as Terri Mollica is accused of doing," Jackson said. "Such greed-fueled fraud cheats both taxpayers and those in need, but our hardworking investigators and law enforcement partners are committed to making sure that such fraudsters are held accountable for their actions," he said.
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, according to the indictment.
J.D. incorporated numerous private companies using "Synergy" in the name. He also incorporated Integrated Health Systems of Alabama in 2006 and later reconstituted it as Integrated Health Systems Alliance in July 2008. In late 2008, J.D. left his position as CEO at BHC "purportedly to operate" his private companies, according to the indictment. In October 2008, Mollica became the chief financial officer of Synergy Medical Solutions. She also served as CFO of IHSA, and had access to the financial accounts of the other Synergy entities, the indictment says.
Mollica faces 21 wire fraud counts for interstate wire transfers between November 2009 and June 2011. The transfers were from a Wachovia Bank account for one of the Synergy entities or from a BHC account at Regions Bank to Mollica, or to accounts she controlled.
Mollica faces 34 mail fraud counts for mailing checks drawn on a BHC account at Regions Bank and mailed to a Birmingham post office box that she controlled, or drawn on one of the Synergy accounts and mailed to out-of-state post office boxes for E-Trade or Wells Fargo. Most of the checks from the Synergy accounts were for more than $20,000.
Mollica faces 13 money-laundering counts for taking money obtained through either the wire or the mail fraud and, in an attempt to disguise the source of the money, depositing it into a Wells Fargo Bank account she owned. All the cashier's checks listed in money laundering counts 56 through 68 were deposited between August 2011 and March 2012, involved amounts less than $6,000, and were made payable to "Loan Trans - Wells Fargo."
Mollica faces six other money-laundering counts charging she used criminally derived funds of more than $10,000 in transactions with a financial institution. The indictment lists four $25,000 transactions between November 2010 and May 2012, and one $30,000 transaction in March 2012.
Mollica faces five counts of filing false federal income tax returns for the calendar years 2008 through 2012, charging her with not reporting $1.7 million received through the scheme to defraud the government. According to the indictment, she owes the IRS more $500,000 for those tax years.
Separate from the scheme to defraud the government and the community health clinics, Mollica faces two mail fraud counts and an aggravated identity theft count in a scheme to defraud Globe Life and Accident Insurance Company. According to the indictment, Mollica took out a life insurance policy on her brother-in-law, but stated the insured was her brother. When the man died, Mollica sent letters to the insurance company demanding payment and submitted an amended death certificate bearing a forged signature of the certifying physician.
The indictment seeks to have Mollica forfeit to the government more than $900,000 seized from financial accounts in her name, as well as any money held in stock trading accounts in the name of three separate minor children, and a money judgment for the total amount involved in the fraud scheme.
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 56-68), 20 years in prison and a $500,000 fine, or twice the value of the property involved;
• money laundering (counts 69-74) 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.
Former Community Health Clinic CFO Indicted for Scheme to Defraud Millions from GovernmentRead the Press Release
BIRMINGHAM -- Federal agents today arrested the former financial officer of two non-profit health clinics for the poor and homeless on multiple 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, was arrested on an 82-count indictment returned by a federal grand jury last week. The indictment charges Mollica with wire fraud, mail fraud, money laundering, aggravated identity theft and filing false income tax returns. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., IRS 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 charges after a judge unsealed the indictment following Mollica's arrest.Mollica was the chief financial officer of Birmingham Health Care from April 2005 through November 2008. She also performed fiscal duties for Central Alabama Comprehensive Health Inc., 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, identified in the indictment by the initials J.D., served for a time as the chief executive officer of the Tuskegee clinic and, in 2008, BHC took over fiscal responsibility of CACH.
The indictment charges that between January 2008 and March 2012, Mollica aided and abetted J.D. and others in diverting about $11 million in federal grant money, assets and property of BHC and CACH to private entities created by J.D. Mollica then conducted financial transactions to transfer money from the private entities to herself, J.D. and others, according to the indictment. It charges that she illegally received about $1.7 million through the scheme.
"Federal funds meant to provide healthcare to the poor and the homeless are not a moneybox for criminals," Vance said. "My office will vigorously prosecute health care fraud, working to ensure these funds go to the people they are intended to help, and that criminals go to jail."
"If you are stealing tax dollars to line your own pockets, you should be looking over your shoulder," Schwein said. "The FBI and our partner agencies are right behind you, ready to hold you to account and make you answer for your crimes.""Today's arrest demonstrates that individuals who engage in corrupt behavior will be held accountable for their actions," Hyman-Pillot said. "The allegations against Terri Mollica and others are deplorable. This is a classic example of abusing power while in a position of trust. These individuals made a profit by defrauding the government and will be brought to justice," she said.
"It's both unconscionable and illegal when scammers defraud federal grant programs designed to assist those in need and then pocket the funding to enrich themselves, as Terri Mollica is accused of doing," Jackson said. "Such greed-fueled fraud cheats both taxpayers and those in need, but our hardworking investigators and law enforcement partners are committed to making sure that such fraudsters are held accountable for their actions," he said.
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, according to the indictment.
J.D. incorporated numerous private companies using "Synergy" in the name. He also incorporated Integrated Health Systems of Alabama in 2006 and later reconstituted it as Integrated Health Systems Alliance in July 2008. In late 2008, J.D. left his position as CEO at BHC "purportedly to operate" his private companies, according to the indictment. In October 2008, Mollica became the chief financial officer of Synergy Medical Solutions. She also served as CFO of IHSA, and had access to the financial accounts of the other Synergy entities, the indictment says.
Mollica faces 21 wire fraud counts for interstate wire transfers between November 2009 and June 2011. The transfers were from a Wachovia Bank account for one of the Synergy entities or from a BHC account at Regions Bank to Mollica, or to accounts she controlled.
Mollica faces 34 mail fraud counts for mailing checks drawn on a BHC account at Regions Bank and mailed to a Birmingham post office box that she controlled, or drawn on one of the Synergy accounts and mailed to out-of-state post office boxes for E-Trade or Wells Fargo. Most of the checks from the Synergy accounts were for more than $20,000.
Mollica faces 13 money-laundering counts for taking money obtained through either the wire or the mail fraud and, in an attempt to disguise the source of the money, depositing it into a Wells Fargo Bank account she owned. All the cashier's checks listed in money laundering counts 56 through 68 were deposited between August 2011 and March 2012, involved amounts less than $6,000, and were made payable to "Loan Trans - Wells Fargo."
Mollica faces six other money-laundering counts charging she used criminally derived funds of more than $10,000 in transactions with a financial institution. The indictment lists four $25,000 transactions between November 2010 and May 2012, and one $30,000 transaction in March 2012.
Mollica faces five counts of filing false federal income tax returns for the calendar years 2008 through 2012, charging her with not reporting $1.7 million received through the scheme to defraud the government. According to the indictment, she owes the IRS more $500,000 for those tax years.
Separate from the scheme to defraud the government and the community health clinics, Mollica faces two mail fraud counts and an aggravated identity theft count in a scheme to defraud Globe Life and Accident Insurance Company. According to the indictment, Mollica took out a life insurance policy on her brother-in-law, but stated the insured was her brother. When the man died, Mollica sent letters to the insurance company demanding payment and submitted an amended death certificate bearing a forged signature of the certifying physician.
The indictment seeks to have Mollica forfeit to the government more than $900,000 seized from financial accounts in her name, as well as any money held in stock trading accounts in the name of three separate minor children, and a money judgment for the total amount involved in the fraud scheme.
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 56-68), 20 years in prison and a $500,000 fine, or twice the value of the property involved;
• money laundering (counts 69-74) 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.
Huntsville Insurance Broker Indicted for Defrauding CustomersRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted a Huntsville insurance broker for mail fraud in a scheme to divert customers' insurance premiums to his own benefit, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
A one-count indictment filed in U.S. District Court charges that DAVID RANDALL "RAND" MULLINS, 45, caused Travelers Insurance Company to mail a policy cancellation notice for one of Mullins' customers from the company's office in Hartford, Conn., to Mullins' home address in Huntsville.
Mullins was an independent insurance broker and owner of Mullins Insurance Agency in Huntsville, which provided commercial, residential, automobile and workers compensation insurance. At least a dozen insurance companies, including Travelers, appointed Mullins to act on their behalf.
According to the indictment, it was part of Mullins' scheme to change customers' mailing addresses, without their knowledge, to his home address. The address changes ensured that those customers would not receive statements and notices sent from Travelers and other insurance companies.
Mullins conducted his fraud between January 2010 and December 2013 as follows, according to the indictment:
Mullins opened a bank account to receive customers' insurance premium payments, but also used the account to pay personal expenses. Without informing customers, he changed their premium payment schedules from annual payments to monthly payments. Mullins collected the full annual premium payment from the customer, deposited it into his bank account, and then sent the insurance provider a monthly payment. He used the difference for personal expenses.
Customers did not receive late payment or cancellation notices, or notices of the unauthorized changes to their payment plans or addresses because Mullins had diverted their mail from Travelers and other insurance companies to his address.
Mullins could face a maximum penalty of 20 years in prison and a $250,000 fine if convicted of the mail fraud.
The FBI 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.
Farmer Indicted for Falsifying Harvest Loads at Farmers CooperativeRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted a north Alabama farmer for making false statements about harvest loads delivered to the Alabama Farmers Cooperative in Decatur, announced U.S. Attorney Joyce White Vance, U.S. Secret Service Special Agent in Charge Craig Caldwell and U.S. Department of Agriculture, Office of Inspector General-Investigations, Special Agent in Charge Karen Wilcox-Citizen.
TOMMY MIRREL RABY Jr., 52, of Toney, is charged in a one-count indictment filed in U.S. District Court. Raby, aided by others, falsely reported harvest loads he made to the cooperative in Decatur between November 2009 and March 2013, according to the indictment.
Raby's indictment follows the July indictments of four employees of the Alabama Farmers Cooperative for making false statements concerning harvest weight loads. Court documents in those cases show the cooperative lost nearly $1.3 million because those employees inflated or completely fabricated grain weight tickets issued to Raby.
The AFC employees indicted were AARON BLAKE WILLIAMS, 25, and TYLER THOMAS GLAZE, 26, both of Decatur, JAMES EDWARD TOON JR., 35, of Elkmont, and JOSHUA WAYNE HOLT, 32, of Hartselle. All four have pleaded guilty to the charge.
Holt, Williams, Glaze and Toon all acknowledge in plea agreements with the government that they aided each other in creating false weight tickets for Raby. All five divided proceeds of the scheme, according to the plea agreements.
The farmers' cooperative is licensed under a federal act that is regulated by a division of the U.S. Department of Agriculture.
The maximum penalty for making false statements to the government is five years in prison and a $250,000 fine.The Secret Service and USDA, OIG, 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.
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$555,587 Fraudulent Tax Refund Brings Federal Indictment for Madison WomanRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted a Madison woman on charges related to a scheme to obtain fraudulent tax refunds that included a $555,587 federal income tax refund deposited into her bank account, announced U.S. Attorney Joyce White Vance, IRS Criminal Division Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Richard D. Schwein Jr.
A three-count indictment filed in U.S. District Court charges ANGELIQUE B. HARRIS, 48, with theft of government property, wire fraud and money laundering.
“Combating this type of tax refund scheme is a priority of the Justice Department because it harms the individuals whose identities are misused, as well as all U.S. taxpayers who fund the U.S. Treasury," Vance said. "Stealing from the IRS is stealing from every honest citizen who works hard and pays the taxes they owe. Such criminal conduct will be prosecuted," she said.
“Refund fraud is an egregious offense that affects honest taxpayers," Hyman-Pillot said. "Individuals who participate in refund schemes are stealing from the United States Treasury for personal gain. Internal Revenue Service Criminal Investigation has a zero-tolerance policy for refund fraud," she said. "Anyone who chooses to play a role in this crime will be investigated and ultimately prosecuted.”
“This type of fraud ultimately costs us all in some way," Schwein said. "That is why the FBI will continue working closely with our partners at IRS Criminal Division to hold scam artists and fraudsters to account.”
Count One of the indictment charges that Harris, aided by others who are not named, stole U.S. Treasury refunds between February 2013 and February 2014.
Count Two charges that Harris, again aided by others, committed wire fraud on Oct. 23, 2013, by causing the IRS to transfer a fraudulent $555,587 tax refund electronically from outside of Alabama to Harris' bank account at Iberia Bank in Huntsville. According to the indictment, Harris opened the Huntsville bank account and a fraudulent tax return in the name of a couple, identified in the indictment as “P. and A. O.,” was filed. The fraudulent tax return prompted the $555,587 IRS refund.
Count Three charges Harris with money laundering for using proceeds of the wire fraud on Oct. 28, 2013, to purchase a 2013 Lexus ES350 luxury automobile from a Huntsville dealership.
The indictment seeks to have Harris forfeit proceeds of the money laundering, including the Lexus.
The maximum penalty for theft of government property and money laundering is 10 years in prison and a $250,000 fine. The maximum penalty for wire fraud is 20 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.
The public is reminded that and indictment contains only charges and a defendant is presumed innocent unless and until proven guilty.
Former Fugitive Heroin Dealer Sentenced to Nearly Five Years in PrisonRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Birmingham man and former federal fugitive to four years and nine months in federal prison for dealing heroin, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.
U.S. District Judge Abdul K. Kallon sentenced PATROPIUS FOSTER, 35, on one count of conspiracy to distribute heroin in Jefferson County between October 2012 and May 2013. The judge also sentenced Foster for two counts of distributing heroin, once on March 19, 2013, and again on April 17, 2013, and on two counts of using a telephone to facilitate drug trafficking on the March date. Foster pleaded guilty to the charges in July. He has remained in custody since his arrest last year.
Foster was among 49 people indicted in 2013 as part of an ongoing initiative between law enforcement and the U.S. Attorney's Office to attack the supply side of the spiraling heroin problem in north Alabama. Foster remained a fugitive from September 2013, when most of the defendants were arrested, until April 2014 when he was arrested in Atlanta.
Of the 49 people indicted in the 2013 sweep, 40 have pled guilty and one defendant was convicted at trial. Foster brings to 39 the number of those defendants who have been sentenced. One defendant pleaded guilty to selling heroin that caused a death and received a 20-year sentence. The remaining sentences have ranged from probation for first-time offenders to 12 1/2 years for the dealers who qualified as career offenders under the Federal Sentencing Guidelines.
Law enforcement agencies working with DEA in the months-long investigation leading to the 2013 indictments and arrests included the Hoover, Pelham, Gardendale, Vestavia Hills, Tuscaloosa, Hueytown, Bessemer and Pleasant Grove police departments, Marshall County Drug Task Force, Gulf Coast HIDTA Task Force, Alabama Beverage Control Board, Alabama Bureau of Investigation, Jefferson and Shelby County sheriff's offices, and district attorney's offices for Jefferson, Shelby and Tuscaloosa counties and the Bessemer Cutoff. Assistant U.S. Attorney L. James Weil Jr. is prosecuting the cases.
Federal Election Officer Available on Election Day to Field Complaints of Election Fraud and Voting Rights AbusesRead the Press Release
BIRMINGHAM -- U.S. Attorney Joyce White Vance announced today that Assistant U.S. Attorney Pat Meadows will lead the efforts of her office in connection with the Justice Department's nationwide Election Day Program for the Nov. 4 general elections.
Meadows will serve as the District Election Officer for the Northern District of Alabama. In that capacity, he is responsible for overseeing the district's handling of complaints of election fraud and voting rights abuses, in consultation with Justice Department headquarters in Washington, D.C.
"Every citizen must be able to vote without interference or discrimination, and to have that vote counted without it being stolen because of fraud," Vance said. "The department's long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local contacts within the department so the public can report possible election fraud and voting rights violations while the polls are open on Election Day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protection for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, it may violate federal voting rights law to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that those actions are designed to uncover illegal voting. Further, federal law protects the right of voters to mark their own ballot or to choose someone to assist them.
The voting franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on Nov. 4, and to ensure that such complaints are directed to the appropriate authorities, Meadows will be on duty in the Northern District while the polls are open. The public can reach him at the following number: (205) 244-2001.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The phone number for the local FBI field office is (205) 326-6166.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division's Voting Section in Washington, D.C., by phone at 1-800-253-3931 or (202) 307-3961, by e-mail to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
"Ensuring free and fair elections depends in large part on the cooperation of the American electorate," Vance said. "It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my office, the FBI or the Civil Rights Division."Postal Clerk Pleads Guilty to Stealing Prescription Painkillers from Mail and Burglarizing Post OfficeRead the Press Release
BIRMINGHAM -- A former U.S. Postal Service clerk in Tuscaloosa pleaded guilty today to stealing prescription painkillers from the mail and to breaking into the Skyland Post Office, announced U.S. Attorney Joyce White Vance, Postal Service Office of Inspector General Special Agent in Charge Max Eamiguel, of the Southern Area Field Office, and Postal Inspection Service Team Leader Frank Dyer.
NICHOLAS STEVEN DAVIS, 42, of Tuscaloosa, entered his guilty plea before U.S. District Judge L. Scott Coogler. Davis admitted stealing a medical parcel containing about 180 tablets of hydrocodone from the mail on July 6, 2012, while he worked as a distribution clerk at the Skyland Post Office. The parcel was addressed to someone on Lake Lurleen in Coker, Ala.
Davis also pleaded guilty to breaking into the Skyland Post Office on June 15, 2014, intending to commit theft, after he was fired from the Postal Service.
The maximum penalty for the charges Davis pleaded guilty to is five years in prison and a $250,000 fine. No sentencing date has been set.
The Postal Service OIG and the Postal Inspection Service investigated the case, which Assistant U.S. Attorney Frank Salter is prosecuting.
Large-Scale Birmingham Cocaine Dealer Gets 23-Year Federal Prison SentenceRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Birmingham man to more than 23 years in prison for his role in a large-scale cocaine trafficking conspiracy, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.
U.S. District Judge R. David Proctor sentenced ARTAVIS “Tav” DESMOND MCGOWAN, 41, to 23 years and four months in federal prison for conspiring to possess with the intent to distribute, and distributing cocaine.
A federal jury convicted McGowan on the charges in November 2013, following a six-day trial. The judge found that McGowan had been involved in trafficking at least 15 to 50 kilograms, or 33 to 110 pounds, of cocaine.
"McGowan and his conspirators were prime movers of dangerous and illegal drugs in our community," Vance said. "They enriched themselves, while tearing apart neighborhoods and lives with the violence, death and addiction that accompany drug-trafficking and drug abuse. Today's sentence takes a major dealer off the streets for 23 years," she said.
"McGowan was a leader in a large-scale drug-trafficking organization that sold dangerous drugs in our community," Morris said. "This sentence should send a clear message to all drug traffickers that their actions will not be tolerated. Our job in law enforcement is to make the community safer by taking dangerous criminals off the streets. Our state and local counterparts joined the DEA and the U.S. Attorney's Office in devoting tireless energy to investigating and bringing McGowan to justice."
On Oct. 5, 2011, DEA agents seized six bricks of cocaine and other drugs, including large amounts of heroin, from a home at 1156 Skyline Drive in Birmingham. Agents also seized $341,679 in cash from the house. McGowan and his confederates used the home as a “stash” house where they removed cocaine from drug “load” vehicles driven from Austin, Texas, to Birmingham. The basement of the home also was used to process drugs and money.
Evidence at trial also showed McGowan’s fingerprints were found on two of the 46 kilogram wrappers found in the trash in the basement of the Skyline Drive home. In May of this year, DEA agents executed a search warrant at 108 Page Ave. in Birmingham and found McGowan with more than $61,000 in cash.
The DEA investigated the case, which Assistant U.S. Attorney Gregory R. Dimler prosecuted.Florence Couple Sentenced to Hundreds of Years in Prison for Producing Child PornographyRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Florence couple to hundreds of years in prison for exploiting and sexually abusing a minor child in their custody to produce images of child pornography, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.U.S. District Judge L. Scott Coogler sentenced PATRICIA ALLANA AYERS, 34, to 1,590 years in prison and her husband, MATTHEW DAVID AYERS, 42, to 750 years in prison. The government had requested those sentences, the maximums possible.
The couple pleaded guilty in June to multiple charges related to 53 pornographic images of the child produced between the summer of 2010 and January 2013, when the child was six to nine years old. The images included photographs of the adults engaged in sex acts with the child. Patricia Ayers pleaded guilty to 53 counts of producing child pornography, and Matthew Ayers pleaded guilty to 25 counts of production.
"I have been on the bench since 1998, and this is the worst case I have personally dealt with, including murders," Judge Coogler told the defendants. "You robbed this child of her childhood and her soul, and a maximum sentence is the only sentence appropriate."
"The stern sentences imposed on this couple today reflect the abhorrent nature of their abuse and exploitation of a young child in their care," Vance said. "Children must be protected from sexual exploitation, and we remain committed to prosecuting child pornography cases. I thank the FBI for its diligent work on this disturbing case," she said.
"The crimes the Ayers have admitted to are disturbing, inexcusable and sickening," Schwein said. "The Internet has a depraved and dark side which the Ayers lived in, bringing a child for whom they were responsible with them. I am proud of the work of the FBI on this case, and I applaud the sentences handed down today, as the Ayers will spend the rest of their natural lives behind prison bars," he said.
In their plea agreements with the government, both Ayers acknowledged that they took photographs of the child engaged in lewd and lascivious poses and that they each engaged in sexual acts with the child that the other adult photographed. Patricia Ayers sent pornographic images of the child by e-mail to a man in Texas and told him in e-mail messages that she would bring the child to Texas so that he could have sexual relations with the child, according to the plea agreements.
Following today's hearing, the couple was returned to custody in Lauderdale County where they face state child pornography, rape and sexual abuse charges.
Anyone with information about the potential sexual exploitation of children should report it to law enforcement immediately. The National Center for Missing and Exploited Children operates the Cyber Tip Line in partnership with the FBI and other federal authorities. If you have information, call the tip line at 1-800-THE-LOST.
The FBI investigated this case, which Assistant U.S. Attorney Mary Stuart Burrell prosecuted.
Morgan County Man Sentenced to 6.5 Years in Prison for Possessing Child PornographyRead the Press Release
BIRMINGHAM -- A federal judge on Wednesday sentenced a Morgan County Man to more than six years in prison for possessing child pornography obtained over the Internet, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
WALTER SCOTT SIMPSON, 42, of Danville, pleaded guilty in July to one count of possessing child pornography. U.S. District Judge R. David Proctor sentenced Simpson to 6 1/2 years in prison, followed by 15 years of supervised release. The judge ordered Simpson into custody following the hearing.
Simpson used the Internet and a peer-to-peer file-sharing software program to possess and access images of child pornography between January 2011 and May 2012, according to his plea agreement with the government. A sentencing document the government filed Tuesday states Simpson used his computer, the Internet and the file-sharing program to possess at least 25,443 images of child pornography, which included images of children under 12 years old engaged in sexually explicit conduct, and images depicting sadistic and masochistic conduct with prepubescent children.
Undercover law enforcement officers received child pornography in January 2012 from a computer using peer-to-peer software, according to Simpson's plea agreement. The FBI tracked the computer to Simpson's Danville residence, where agents executed a search warrant for computer media in May 2012 and found the child pornography, the plea agreement states.
The FBI investigated the case, which Assistant U.S. Attorney Daniel J. Fortune prosecuted.
Three Convicted of Conspiracy to Defraud Gulf Oil Spill FundRead the Press Release
BIRMINGHAM -- A federal jury on Monday convicted three people of conspiracy and fraud for their family run scheme to steal more than $3 million from the claims fund established by British Petroleum for victims of the 2010 Deepwater Horizon oil spill, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
Following a two-week trial before U.S. District Judge Sharon Lovelace Blackburn, the jury deliberated about seven hours and returned guilty verdicts on all 55 counts against MARCELLA TRUSS, 53, her husband, MARTEE DAVIS, 42, both of Grand Bay, Ala., and Marcella Truss' brother, HOWARD LENARD CARROWAY, 42, of Mobile. Sentencing dates have not been set.
All three were convicted of conspiracy to commit wire and mail fraud occurring between August 2010 and December 2011 for filing false claims with the Gulf Coast Claims Facility. Evidence at trial showed the oil spill fund paid almost $2 million on the fraudulent claims. The jury also convicted Truss, Davis and Carroway of aggravated identity theft in carrying out the scheme.
The jury convicted Truss on 31 counts of wire fraud for submitting, or causing to be submitted, false claims to the GCCF and on one count of mail fraud related to a check received as part of the scheme. Davis was convicted on three wire fraud counts.
Truss and Davis were convicted of laundering money stolen from the GCCF. Carroway was convicted on two counts of obstructing justice for telling recruits in the scheme to lie to prosecutors. He also was convicted on five wire fraud counts.
BP owned the Macondo Oil Well where the Deepwater Horizon drilling rig exploded in 2010. BP established the GCCF in June 2010 to administer and settle claims made against the company by individuals or business for losses, damages or other costs resulting from the massive oil spill.
"The people convicted Monday saw a disaster that harmed the Gulf of Mexico, much of its coastline and thousands of people, and their choice was to exploit the disaster and steal from the fund intended to help its victims," Vance said. "We place a high priority on investigating and prosecuting fraud related to natural and man-made disasters to ensure that funds available to help victims of those tragedies do not fall into the hands of criminals," she said.“Those who seek to scam benefits intended for honest citizens genuinely affected by disasters can expect the FBI to be right behind them, and ultimately to face the same result as those convicted today,” said Schwein.
Truss, Davis and Carroway originally were charged along with two other people, Truss' son, Robert Truss III, 26, of Houston, and Cedric Dion Ravizee, 37, of Birmingham. Robert Truss pleaded guilty in August to conspiracy, money laundering, wire fraud and mail fraud. Ravizee pleaded guilty in June to one count of wire fraud.
This week's guilty verdicts bring to 20 the number of people convicted in the Northern District of Alabama on charges related to the scheme to defraud the GCCF. Marcella and Robert Truss, Davis and Carroway recruited the 16 other defendants to provide personal information that was used to file false claims. Those recruited then received claim payments and provided a portion of the payments to the ringleaders.
All of the claims falsely stated that the individual had worked for a company called Built by Request and had lost wages because of the Deepwater Horizon incident. Marcella Truss owned BBR and dissolved the company after the scheme played out.
The maximum penalty for conspiracy is five years in prison and a $250,000 fine. The maximum penalty for wire fraud and mail fraud is 20 years in prison and a $250,000 fine. The penalty for aggravated identity theft is two years in prison added to any sentence imposed for the underlying felony. The maximum penalty for obstruction of justice is 20 years in prison and a $250,000 fine.The money-laundering charge for which Davis was convicted carries a maximum penalty of 20 years in prison and a maximum fine of $500,000, or twice the value of the money involved in the crime, whichever is greater. The money-laundering charge for which Marcella Truss was convicted carries a maximum penalty of 10 years in prison and $250,000 fine.
The FBI investigated this case. Assistant U.S. Attorneys Henry Cornelius, Jacquelyn M. Hutzell and Xavier O. Carter are prosecuting the case.
###Jefferson County Receives DOJ Funding to Establish Alabama’s First Day Reporting CenterRead the Press Release
BIRMINGHAM – The Department of Justice has awarded the Alabama Board of Pardons and Paroles a Second Chance Act grant of $687,176 to establish a Day Reporting Center in Birmingham, announced U.S. Attorney Joyce White Vance and Pardons and Paroles Executive Director Cynthia Dillard.
The Day Reporting Center will deliver services to people on parole from state prisons to help them successfully return to society and reduce the likelihood of Birmingham area probationers committing new crimes.
“This grant demonstrates the Department of Justice’s commitment to helping states that are on the path to curbing criminal recidivism," Vance said. "The day reporting center will follow best practices that have curtailed the rate at which new crimes are committed by ex-offenders in other areas," she said. “Jefferson County contributes more inmates to state prisons than any other county in Alabama, so starting here is a strong step in the right direction.”
Since 2010, Vance has worked with state and local agencies and community organizations through the North Alabama Reentry Council to reduce crime by increasing successful reentry outcomes for newly released offenders.
Through the Department of Justice’s Smart on Crime initiative, the department promotes a holistic approach to reducing crime – prevention, enforcement and reentry. Smart on Crime prioritizes crime reduction efforts that are committed to data-driven, evidenced-based methodology, and that are collaborative efforts among all stakeholders. The DRC will collaborate with community-based service providers to improve reentry outcomes for ex-offenders.
The DRC services will include employment options, education, substance abuse rehabilitation, and behavioral training, all which have been proven to increase the chances that an ex-offender will avoid re-offending and returning to prison.
Community-based reentry services, such as DRCs, are effective in reducing criminal recidivism and are more cost-efficient, compared to incarceration. The Birmingham center will be modeled after DRCs in Georgia, where only 7 percent of DRC participants reoffend. Alabama’s current ex-offender recidivism rate is about 35 percent. The projected daily cost of the Birmingham center is a fraction of the $43 a day for each inmate within Alabama’s prison system.
Reentry programs that have proven effective in other states towards reducing crime and prison populations are a topic being reviewed by the Alabama Prison Reform Task Force. Taskforce Chairman, State Sen. Cam Ward, R-Alabaster, said, "Community-based, reentry services are the key component to reducing recidivism in our corrections system. These programs are crucial to the reform efforts under way in Alabama."
State Sen. Arthur Orr, R-Decatur, a taskforce member, added, "We are appreciative of the Department of Justice’s support to help us reduce recidivism among our inmates under community supervision. The improved supervision measures created by this grant will not only help our prison overcrowding situation in Alabama, but also help newly released individuals get on the right track."
Congress created the Second Chance Act in 2008. It has received broad bipartisan support within Congress, and from former President George W. Bush and President Barack Obama. The Second Chance Act is the first-of-its-kind legislation that authorizes federal grants to government agencies and nonprofit organizations to provide support strategies and services designed to reduce recidivism by improving outcomes for people returning from prisons, jails and juvenile facilities.
The Second Chance Act is administered by the Office of Justice Programs within the Department of Justice.
Decatur Among Pilot Sites for DOJ-Funded Intensive Probation Supervision ProgramRead the Press Release
DECATUR – The Department of Justice has awarded the Alabama Board of Pardons and Paroles $370,000 through a Bureau of Justice Assistance grant to develop four intensive supervision pilot programs across Alabama, announced U.S. Attorney Joyce White Vance and Pardons and Paroles Executive Director Cynthia Dillard.
The pilot programs will take place in local Pardons and Paroles offices in Mobile, Montgomery, Decatur and Greenville. Those cities are in counties that collectively contribute more than 20 percent of inmates annually admitted to the Department of Corrections. Within the four pilot programs, individuals deemed moderate- to high-risk to reoffend will receive intensive supervision by local Pardons and Paroles officers and will be subject to swift, certain sanctions if they violate the terms and conditions of release.
Swift and certain sanction programs are intended to: (a) improve supervision strategies that reduce recidivism; (b) promote and increase collaboration among agencies and officials who work in community corrections and related fields; (c) enhance the offender's perception that the supervision decisions are fair, consistently applied and consequences are transparent; and (d) improve the outcomes of individuals participating in these initiatives.
Alabama’s program will be based upon Hawaii’s Opportunity Probation and Enforcement program. Within three months of its implementation, the HOPE program led to an 83 percent reduction in failed drug tests, 71 percent reduction in missed appointments with probation officers, and a 70 percent reduction in the revocation rate for participating probationers.
“Programs like HOPE have led to lower recidivism rates around the country by taking action before a probationer becomes a repeat offender," Vance said. "Swift and certain sanctions ensure that probationers and parolees receive prompt attention and additional supervision at the first indication of misconduct.”
As nearly 40 percent of inmates coming into Alabama prisons each year are individuals who were unsuccessful in their probation or parole supervision, the Alabama Prison Reform Taskforce is currently examining methods to improve the success rates of parolees and probationers. State Sen. Cam Ward, R-Alabaster, chairman of the Prison Reform Task Force, said, "The reform efforts underway in Alabama seek to develop programs such as this, that are proven to reduce recidivism in corrections systems. By making community supervision work better, we will make our communities safer and save taxpayer dollars."
State Sen. Arthur Orr, a member of the Prison Reform Taskforce, and whose district includes Decatur, said, "We are appreciative of the Department of Justice’s support to help us reduce recidivism among our inmates under community supervision. By working together, we not only help our prison overcrowding situation in Alabama but also, and more importantly, we help newly released individuals get on the right path through the improved supervision measures funded by this grant."
UA Law School Students Work with Alabama Board of Pardons and Paroles and U.S. Attorney to Assist Ex-OffendersRead the Press Release
TUSCALOOSA – The Public Interest Law Institute of the University of Alabama School of Law is beginning a monthly legal service project to assist individuals under the supervision of the Tuscaloosa office of the Alabama Board of Pardons and Paroles.
Law students will hold the first legal clinic on Tuesday. The students will compile intake reports and send them to volunteer lawyers and local community service programs. Issues most likely to be addressed include child support, identification, employment assistance and housing.
Annually, more than 3,000 Alabamians on community supervision fail to successfully reenter society after being released from prison. People who violate conditions of probation or parole comprise 40 percent of the Alabama Department of Corrections' annual admissions.
Cynthia Dillard, executive director of the Alabama Board of Pardons and Paroles stated, “The Board of Pardons and Paroles is excited about this opportunity to partner with University of Alabama Law School volunteers to assist offenders with addressing some of the significant barriers to successful supervision and reentry. This program will serve as a model for other jurisdictions in Alabama with similar resources.”
Ex-offenders reentering society routinely encounter barriers to accessing housing, education, employment, healthcare, transportation, and community support services. Ninety-five percent of Alabama’s 30,000 inmates will eventually be released into communities.
Since 2010, U.S. Attorney Joyce White Vance and the North Alabama Reentry Council have been working with federal, state and community agencies to improve reentry outcomes for ex-offenders within Alabama. The council has focused on identifying both barriers to reentry and resources available to ex-offenders, and addressing gaps in services.
“We have to be smart on crime as well as tough on crime," Vance said. "Providing the guidance ex-offenders need to return to productive lives will make our communities safer and help reduce the high rate of overcrowding in our prisons that is stressing state budgets. The Tuscaloosa clinic will help ex-offenders overcome barriers to reentry, for instance helping them regain their driver’s licenses so they can get a job," she said. "This is the essence of being smart about how our criminal justice system can work.”
If you have questions about the legal clinic, or if you believe your organization has expertise or resources that could improve outcomes for ex-offenders re-entering society, please e-mail the U.S. Attorney’s Office community outreach coordinator at [email protected], or call 205-244-2019.
Former Jeweler Faces Federal Money Laundering Charges for Pawning Diamonds Falsely Reported Stolen in 2004Read the Press Release
BIRMINGHAM -- Federal prosecutors today charged a Vestavia Hills man with money laundering for pawning a 3-carat diamond in 2013 that was among a cache of jewels he collected $2.6 million in insurance money 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 Richard D. Schwein Jr., 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 charges against JOSEPH HAROLD GANDY.
The U.S. Attorney's Office charged Gandy, 64, 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 that had not been stolen. Prosecutors also charged Gandy with one count of being a convicted felon in possession of firearms for the 99 weapons seized at his Vestavia Hills home in November 2013. Gandy is prohibited from possessing weapons because of a 1989 federal mail fraud conviction.
The FBI recovered jewelry during the search of Gandy's home and, as part of a plea agreement with the government, he also turned over a portion of the approximate $1.5 million worth of diamonds and jewelry he falsely reported stolen in 2004. Among those jewels is a rare Blue Diamond worth at least $620,000.
"This defendant revealed decade-old criminal acts, and committed a new crime when he brought forth valuable, but fraudulently obtained diamonds to pawn," Vance said. "Thanks to the committed and cooperative efforts of the Mountain Brook and Vestavia Hills police departments, the FBI and the Secret Service, Mr. Gandy avoided, but did not escape justice."
"This case illustrates the great cooperation among law enforcement at all levels," Schwein said. "I want to extend my personal appreciation to the Vestavia Hills and Mountain Brook police departments, the U.S. Secret Service, and my agents for their outstanding work. It was their diligent investigative efforts that brought this case to where it is today," he said.
"I commend the cooperative between the FBI and our investigators," Rary said. "Interagency cooperation is essential in today's environment, especially in complex investigations such as these."
Prosecutors filed the charges and the plea agreement with Gandy in U.S. District Court.
According to the plea agreement, Gandy's 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.
Gandy's plea agreement is a "binding plea agreement" in which the government and Gandy stipulate that a 45-month prison sentence is appropriate. If the court rejects the plea agreement, either party may declare it null and void.
As part of the agreement, the government would recommend Gandy be required to pay $20,000 in restitution to the jewelers where he pawned the diamonds, and that he forfeit to the U.S. government all the jewels seized and recovered in the case. Vestavia Hills Police seized the 99 weapons at Gandy's house and has state charges pending against him. The city police are handling forfeiture of the firearms.
The government acknowledges in the plea agreement that it has no evidence or information to suggest Gandy is violent or has been engaged in previous violent behavior. The agreement notes that Gandy, through his lawyer, related that, except for older firearms he bought before his 1989 conviction or that were passed down from his father and grandfather, the firearms at his house belonged to his son who died in 2004.
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
Two Serra Nissan Managers and Three Salesmen Charged in Loan Fraud ConspiracyRead the Press Release
BIRMINGHAM -- A third sales manager, a finance manager, and three salesmen who work, or previously worked at Serra Nissan face federal charges in connection with a conspiracy at the Birmingham car dealership to fraudulently boost loan approvals and car sales, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and FBI Special Agent in Charge Richard D. Schwein Jr.
A federal grand jury last week indicted D. SCOTT BURTON, 36, of Odenville, MICHAEL J. WILKINSON, 56, of Moody, DWIGHT A. PERRY, 44, of Birmingham, TERRY W. HENDERSON, JR., 39, of Pleasant Grove, and ROLAND W. RILEY, 28, of Birmingham, on conspiracy, bank fraud, wire fraud, and aggravated identity theft charges. A federal judge unsealed the indictment after the defendants were arrested today and appeared in court.
"As managers and salesmen in a car dealership, these defendants falsified customer information used to make loans, defrauding the banks who trusted the dealership to present truthful information during the vehicle financing process, and harming customers by fraudulently inflating the value of the vehicles they purchased," she said. "This type of fraud is the auto-industry equivalent of the mortgage fraud that contributed to the financial meltdown, and could threaten the security of our financial markets," Vance said.
"Today's arrest clearly illustrates that individuals who engage in these types of illegal activities will be held accountable for their actions," Hyman-Pillot said. "These defendants clearly took advantage of the people in their community, as well as financial institutions. They manipulated the system and falsified documents with the intention of increasing profits at the expense of others."
“This case is significant to the FBI not merely because of the loss amounts, but also because of the many victims left in the wake of this scheme who had trusted the defendants with handling their vehicle financing,” Schwein said
The 11-count indictment charges the defendants with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions, Nissan North America and Serra Nissan customers by fraudulently increasing vehicle sales in order to boost personal profits.
The indictment also charges Wilkinson, Burton, Perry and Riley with bank fraud for fraudulent loan information submitted to financial institutions in October 2012. Defendants Wilkinson, Perry and Henderson also are charged with wire fraud for fraudulent information submitted to automotive financing companies such as Nissan Motor Acceptance Corporation and Santander Consumer USA.
The final count of the indictment charges Perry and Henderson with aggravated identity theft for the unlawful use of a customer's Alabama-issued personal identification card during the commission of the bank and wire fraud, and the conspiracy to commit those crimes.
The indictment of these five defendants follows federal charges earlier this year against two other sales managers at Serra Nissan, Abdul Islam Mughal and Gerald R. Shepard. Mughal, 48, of Trussville, pleaded guilty in July to conspiring with others, including Serra Nissan salesmen, general managers, sales managers and finance managers, to sell more cars by falsifying loan documents in order to defraud customers, Nissan North America and financial institutions. Mughal also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions between January 2012 and October 2013. Mughal is scheduled for sentencing May 5, 2015.
According to the indictment against the five defendants, they and other members of the conspiracy participated in various means to carry out their fraud and obtain auto loans that, otherwise, would not have been approved. Those means included the following:
• Creating or altering documents to submit to financial institutions to show inflated income for prospective buyers.
• Directing finance managers and salesmen to submit fraudulent documents to financial institutions to misrepresent proof of a customer's residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount. The defendants and others had a financial incentive to increase a loan amount in order to increase commissions paid to certain employees.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify.The defendants and others also defrauded customers and financial institutions by quoting a customer an inflated monthly vehicle loan payment so that a finance manager could add a warranty and gap insurance without the customer realizing it, according to the indictment.
The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine. The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine. The minimum penalty for aggravated identity theft is 2 years in prison.
The IRS and the FBI investigated the case, which Assistant U.S. Attorney Amanda S. Wick is prosecuting.
The public is reminded that an indictment contains only charges. Defendants are presumed innocent unless and until proven guilty.
U.S. Attorney Joyce White Vance Addresses Alabama Prison Reform TaskforceRead the Press Release
MONTGOMERY – In a meeting of the Alabama Prison Reform Taskforce, U.S. Attorney Joyce White Vance affirmed the Department of Justice’s support for the taskforce to conduct the process of Justice Reinvestment. Since 2010, Vance has collaborated with state criminal justice agencies through the North Alabama Reentry Council in an effort to implement best practices to improve public safety by reducing criminal recidivism.
Vance told taskforce members that federal and state prosecutors are diligent in their prosecution of criminals, but, she added, "We can't just be tough on crime. We must also be smart."
“The Department of Justice does not support Justice Reinvestment only because it is cost-efficient," Vance said. "Justice Reinvestment reduces crime and lowers criminal recidivism by giving offenders the support and training to get off drugs and get jobs.”
The Alabama Prison Reform Taskforce is a legislatively created body of representatives from a multitude of Alabama’s governmental agencies, which is charged to work with the Council of State Governments to implement Justice Reinvestment policies.
Justice Reinvestment is a data-driven process where jurisdictions evaluate current practices in criminal justice and redesign policies to become more effective in reducing crime and costs. Justice Reinvestment initiatives have been implemented in 17 states, saving a projected $4.6 billion over 10 years, Vance said. For 2014 alone, the Department of Justice has committed $85 million for Justice Reinvestment initiatives.
"We have a narrow timeframe for action," Vance said. "But, through your action, we can achieve the level of success that other states have reaped."
Federal Grand Jury Indicts Two Men in Separate Child Exploitation CasesRead the Press Release
BIRMINGHAM -- A federal grand jury today indicted two men in unrelated child exploitation cases that both involved production of child pornography, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., and Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr.
A four-count indictment filed in U.S. District Court charges ELLIS ORRELL ATKINSON IV, 37, of Huntsville, with one count of producing child pornography, two counts of possessing child pornography and one count of receiving child pornography.
The indictment charges that Atkinson, who was convicted in state court in Madison County in 2002 for possessing child pornography, used a child to engage in sexually explicit conduct in June 2013 so he could photograph it.
The indictment also charges that Atkinson possessed child pornography involving children younger than 12 in July 2013 and May 2013, and that he received child pornography over the Internet in November 2012.
A separate seven-count indictment charges an Etowah County man, VICTOR GRAY DINGLER, 33, with producing child pornography between 2008 and 2014, and with possessing child pornography depicting children younger than 12. Some of the child pornography produced involved a 3-year-old, according to the indictment.
Each production of child pornography charge against Dingler carries a maximum penalty of 30 years in prison and a $250,000 fine. The possession of child pornography charges each carry a maximum sentence of 20 years in prison and a $250,000 fine.
Atkinson, because of his prior child pornography conviction, faces a maximum sentence of 50 years in prison and a $250,000 fine on the production count and 40 years in prison and a $250,000 fine on the receipt count, as well as the 20 years in prison and a $250,000 fine on each possession count.
The FBI investigated the case against Atkinson, which Assistant U.S. Attorney Mary Stuart Burrell is prosecuting.
The Department of Homeland Security-HSI and the Etowah County Sheriff's Department investigated the case against Dingler, which Assistant U.S. Attorneys Jacquelyn Hutzell and Xavier Carter are 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 guilt beyond a reasonable doubt at trial.
U.S. Attorney Urges Awareness of Threats of Violence in the WorkplaceRead the Press Release
BIRMINGHAM -- U.S. Attorney Joyce White Vance said the thoughts and prayers of the U.S. Attorney's Office are with UPS employees and the families of those who died today in a shooting at the company's customer service center and warehouse in Inglenook.
"It is a tragedy that, too often, someone decides to settle a workplace dispute with a gun and innocent people suffer and die," Vance said.
U.S. Attorney Vance encourages anyone who is aware of a threat of violence in a workplace or school to contact the local police department, sheriff or federal law enforcement.
Former Auto Parts Factory Manager Pleads Guilty to Fraud for Stealing and Selling PartsRead the Press Release
BIRMINGHAM -- A former manager at an automobile parts manufacturer in Vance pleaded guilty today to mail fraud in connection to parts he stole from the company and sold for personal profit, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
SAMUEL LANE WOODWARD, 40, of Tuscaloosa, entered his guilty plea to one mail fraud count before U.S. District Judge Sharon Lovelace Blackburn. His sentencing date has not been set.
As part of Woodward's plea agreement with the government, he is to pay T.W. Fitting-N.A. $46,051 in restitution. The government also seeks to have Woodward forfeit that same amount as proceeds of illegal activity.
Woodward was acting plant manager at T.W. Fitting from Nov. 1, 2011, to Aug. 1, 2012, and production manager from Aug. 1, 2012, to Dec. 11, 2012, when the company terminated his employment, according to his plea agreement.
T.W. Fitting assembled Tire Pressure Monitoring System valves and sold wheel rims. An FBI investigation revealed that Woodward stole TPMS valves and wheel rims from the factory in 2012 and sold them for personal profit to a business associate in Georgia. Woodward acknowledged in his plea agreement that the Georgia man mailed him a $12,050 check as payment for valves and wheel rims stolen from T.W. Fitting.
The maximum sentence for mail fraud is 20 years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney Elizabeth A. Holt is prosecuting.
Federal Judge Sentences Tax Preparer to Seven Months in Prison for Filing False ReturnsRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a former Birmingham tax-return preparer to seven months in prison and ordered her to repay $70,045 to the IRS 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 Sharon Lovelace Blackburn sentenced JANICE E. FOY on one count of subscribing to a false federal tax return and one count of aiding in the preparation of a false return. Foy, 52, of Snellville, Ga., pleaded guilty to the charges in May. Foy owned and operated the now-defunct tax preparation business, VIP Tax Services, on Bankhead Highway in Birmingham. Blackburn ordered Foy to serve a year of supervised release following her prison sentence. Among special conditions of that release, the judge ordered Foy to pay restitution to the Internal Revenue Service and to refrain from assisting or aiding others in the preparation of taxes.
"An integral part of the agency's mission involves detecting and stopping fraudulent refund claims," Hyman-Pillot said. "IRS Criminal Investigation identified and investigated the filing of false tax returns submitted by Janice Foy, and as a result Ms. Foy will serve time in jail for her actions. Special Agents work year-round to investigate and root out dishonest return preparers like Ms. Foy," she said.According to court records, Foy orchestrated a tax refund scheme through VIP Tax Services. During the time Foy 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.
Foy pleaded guilty to one count of subscribing to a false U.S. tax return for claiming a First-time Homebuyer Credit of $7,500 on her own 2008 tax return, knowing she was not entitled to that deduction. She also pleaded guilty to one count of preparing a false federal tax return while operating a tax preparation service by adding false education credits, child tax credit and the First-time Homebuyer Credit to a client's return.
In her plea agreement, Foy also admitted to causing 26 false U.S. tax returns for 20 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, dependent care expenses, 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 and the Additional Child Tax Credit. The total loss to the government was $90,798.
In a related case, KRISTIE SYKES, 42, of Birmingham, who worked at VIP, pleaded guilty on Monday to two counts of a five-count indictment charging her with aiding in the preparation of false federal tax returns.
IRS-CI investigated the case, which Assistant U.S. Attorney Chinelo Dike-Minor is prosecuting.
DEA Prescription Drug Take-Back Day Sept. 27(Ridding Home of Unused Drugs Discourages Abuse and Addiction)Read the Press Release
BIRMINGHAM -- U.S. Attorney Joyce White Vance and DEA Assistant Special Agent in Charge Clay A. Morris are encouraging residents of North Alabama to take advantage of DEA's next nationwide Prescription Drug Take-Back Day on Sept. 27 to properly dispose of unused prescription drugs.
It is critical to get unused, unwanted and expired prescription drugs out of family medicine cabinets before they can fall into the hands of children and others who might use them to fuel addiction. A new U.S. Drug Enforcement Administration regulation that will permit the establishment of long-term drop-off sites for disposal of prescription pills will go into effect later this year, permitting return of unused medication on an ongoing basis.
The U.S. Attorney and DEA, along with representatives of local law enforcement and the public health and addiction prevention and treatment communities, held a press conference today at the U.S. Attorney's Office in Birmingham to encourage people to take action at this last nationwide take-back day, rather than waiting for the permanent process to come online."Prescription drug abuse and heroin addiction, both at record rates in our community, are strongly linked," Vance said. "Each of us has the responsibility to take every step possible to prevent access and addiction to these drugs and bring down our unacceptably high overdose death rates," she said.
"Cultivating a habit of removing prescriptions from our medicine cabinets that are no longer necessary is a vital step in curtailing easy access, as there are many reports that children have their first contact with opiates at home, in the guise of prescription medication," Vance said.
"Over the past several years, Alabama has seen a significant increase in the use and abuse of opiate-based prescription drugs," Morris said. "Unfortunately, the untreated abuse of opiate-based drugs will lead to the beginning of a cycle of addition that will end in the use of heroin. As we all know, heroin overdose deaths are at record numbers in the Birmingham area," he said."The Prescription Drug Take-Back Initiative sponsored by DEA is one step in a comprehensive plan to remove a simple and often overlooked source of supply of drugs from potential abuse. I would urge parents, educators, civic organizations, faith-based organizations and all citizens to partner with law enforcement and help remove unused pharmaceuticals from the reach of the most vulnerable of potential drug abuse victims...our children," Morris said.
The DEA's ninth nationwide take-back event will give the public a convenient opportunity to prevent pill abuse and theft by ridding their homes of potentially dangerous drugs until more permanent drop-off sites are established after the agency's new regulation takes effect Oct. 9. The DEA currently has no plans to sponsor more nationwide Take-Back Days after Sept. 27, as authorized collectors, such as pharmacies, hospitals and clinics, begin offering the drop-off service.
The temporary collection sites will be open from 10 a.m. to 2 p.m. on Sept. 27. Local sites can be found on the DEA website at: http://www.deadiversion.usdoj.gov/drug_disposal/takeback/ . The service is free and anonymous, no questions asked. DEA, however, cannot accept liquids or needles.
Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. In addition, Americans are now advised that flushing unused medicines down the toilet, or throwing them in the trash, pose potential environmental and health hazards.
Last April, Americans turned in 390 tons (over 780,000 pounds) of prescription drugs at nearly 6,100 sites operated by the DEA and more than 4,400 of its state and local law enforcement partners. Combined with DEA's previous Take-Back events, the agency and its partners have taken in more than 4.1 million pounds, or 2,100 tons, of pills.
The new DEA regulation announced last week by U.S. Attorney General Eric Holder should enhance the public's ability to properly dispose of prescription drugs. The new policy authorizes pharmacies, hospitals and clinics to serve as authorized drop-off sites for unused medications. The new rule also enables long-term care facilities to collect controlled substances turned in by residents of those facilities, and it allows prescription drug users everywhere to directly mail in their unused medications to authorized collectors.
In 2011 alone, more than half of the 41,300 unintentional drug overdose deaths in the United States involved prescription drugs, and hazardous opioid pain relievers led to about 17,000 of those deaths, Holder said. Young people are especially susceptible to these dangers. The attorney general noted that nearly four in 10 teens who have misused or abused a prescription drug have obtained it from their parents' medicine cabinet.
Federal Judge Resentences Birmingham Officer to A Year and A Day in Prison for Using Excessive ForceRead the Press Release
BIRMINGHAM – A federal judge today changed a sentence of probation to one year and day in prison for a Birmingham Police officer convicted of using excessive force when he beat a handcuffed defendant in 2007, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge Inge P. Johnson resentenced COREY L. HOOPER for depriving the civil rights of Martez Gulley when he repeatedly struck the man with his hands and fists while Gulley was handcuffed and secured in the backseat of a patrol car on Sept. 6, 2007. A federal jury convicted Hooper, 36, in 2012 for depriving Gulley's civil rights while Hooper operated under his authority as a police officer. Hooper must report to prison Dec. 1
The 11th U.S. Circuit Court of Appeals, ruling on a government appeal of the probationary sentence, vacated it in May and returned the case to the federal district court for resentencing. Prosecutors challenged the probationary sentence as unreasonable, arguing it did not satisfy the need for general deterrence of the crime of excessive use of force by police officers. The appeals court held that the original five-year probationary sentence was "substantively unreasonable," and that the district judge had "expressly declined to consider the need for Hooper's sentence to adequately deter other police officers from using excessive force."
"Most police officers honor their oaths, day in and day out, to uphold the law and protect the public, but this defendant disgraced his badge and harmed a person he was sworn to protect," Vance said. "Today's sentence reflects that abusing the authority of a police badge is a serious crime and it will be punished accordingly. I thank the FBI for its hard work investigating and compiling evidence in this case. My office remains committed to aggressive civil rights enforcement."
"This case is representative of the FBI's commitment to enforce and protect civil rights," Schwein said. "While the vast majority of law enforcement officers uphold and obey the law, in those rare instances where serious transgressions occur and the public's trust is violated, citizens should know that the FBI will conduct a complete investigation to preserve and restore that trust," he said.According to court records in the case, the blows Hooper struck caused Gulley serious injury. Gulley's "slight size in comparison to Hooper and his medical history made him particularly vulnerable to the heavy face blows delivered by Hooper during the attack," the government said in its 2013 sentencing memorandum.
The government also argued that Hooper committed perjury when he testified that he punched Gulley only after Gulley kicked at him from the patrol car. "Had the jury believed Hooper's version was truthful, they could have decided that the level of force used by Hooper was justified, or they could have decided they were not satisfied beyond a reasonable doubt that Hooper was guilty of using excessive force under the circumstances. The jury's guilty verdict reflects they did not believe Hooper's made-up version of the events."
The FBI investigated the case, which Assistant U.S. Attorney J. Patton Meadows prosecuted.
Alabama Man Pleads Guilty to Threatening African-American Man and A Restaurant ManagerRead the Press Release
WASHINGTON – Jeremy Heath Higgins, 28, a resident of Quinton, Alabama, pleaded guilty today before U.S. District Judge Madeline Haikala to two counts of federal civil rights violations, announced the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Northern District of Alabama.
As part of the plea proceedings, Higgins admitted that on June 14, 2013, he approached and threatened an African-American man at the Alabama Rose Steakhouse, a restaurant in Quinton, Alabama, because the man was present at the restaurant with a white woman. Soon after, the couple left the bar. A manager at the Alabama Rose Steakhouse confronted Higgins because of his behavior toward the African-American man and ordered Higgins to leave the restaurant. As Higgins was being escorted from the bar, he used racial slurs, shouted a racial slur at the restaurant manager, and threatened to burn down the Alabama Rose Steakhouse. Later that evening, Higgins returned to the restaurant and threatened the restaurant manager by painting graffiti on the restaurant’s front exterior and fence.
Sentencing in this case is set for January 9, 2015.“Threatening an individual over their race or a business for its acceptance of others has no place in a civilized society,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “The Department of Justice will vigorously prosecute those who seek to intimidate others with these types of hateful threats.”
“Access to public places, like restaurants, has been at the core of the civil rights struggle,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama. “Unlike the lunch counters of the 1960s, the restaurant in this case welcomed and sought to protect the rights of its African American customer. In prosecuting this case, we make clear our commitment to enforcing the civil rights of individuals and the businesses who seek to serve all, without regard to the color of their skin.”
This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Robin B. Mark of the Northern District of Alabama and Trial Attorney David Reese of the Justice Department’s Civil Rights Division.
###Tuscaloosa County Freight Broker Charged with Bribing Guard Officials to Get Transport ContractsRead the Press Release
BIRMINGHAM -- Federal prosecutors have charged a Tuscaloosa County freight broker with bribing two National Guard officials to steer military transport contracts totaling $441,698 to the two Alabama companies he represented, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Frank Robey, director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit.
The U.S. Attorney's Office late Friday charged DANIEL BOYD, 60, of Vance, in a four-count information filed in U.S. District Court. The information charges Boyd with two counts of bribery and two counts of mail fraud in the scheme to illegally obtain shipping contracts for Crimson Express and U.S. Transport. He has entered an agreement with the government to plead guilty to the charges.
One of the National Guard officials Boyd is charged with bribing, Timothy Wooten, 52, a traffic management specialist for the Guard Bureau's U.S. Property and Fiscal Office in South Carolina, pleaded guilty in June to three wire fraud counts and one count of accepting bribes to steer freight contracts to an Alabama broker. Boyd's information and plea agreement reference Wooten as T.W.
Boyd also is charged with bribing a traffic management specialist for the Guard's U.S. Property and Fiscal Office in Florida. The Florida official is identified in the court documents as K.T.
K.T.'s and T.W.'s duties with the National Guard Bureau included procuring funding for and arranging the movement of personnel, items and equipment. Their duties also involved managing the transportation with their respective states, in coordination with the Department of Defense, Department of the Army, National Guard Bureau and active duty installations.
According to Boyd's plea agreement, he and K.T. agreed in January 2011 that Boyd would hire K.T. when he left his National Guard service at the end of February 2011. During that February, K.T. used his position to award transportation contracts to Boyd's Crimson Express, and Boyd paid K.T. about 50 percent of the commissions he received on those contracts.
Boyd reached his bribery agreement with Wooten in October 2011, according to Boyd's and Wooten's plea agreements. In exchange for Wooten using his position to award contracts to Boyd's companies, Boyd paid Wooten about 25 percent of the commissions he received on the contracts.
Boyd received total commissions of about $156,386 on the $441,698 in transportation contracts the two Guard officials awarded to Crimson Express and U.S. Transport, according to Boyd's plea agreement. In exchange, Boyd paid bribes of about $20,252 to K.T. and about $29,742 to Wooten, Boyd acknowledges in his plea agreement.
The two Guard traffic management specialists were able to steer the contracts to Boyd's companies by overriding the government's electronic system that generated a list of "Best Value Carriers" for a freight shipment so that they could manually select a company for the contract, according to court records.
Boyd acknowledges in his plea agreement that he had his wife write checks to Wooten's wife to pay the bribes he promised. The U.S. Postal Service delivered those checks from Alabama to Lexington, S.C., where Wooten lived.
The FBI and Army CID, MPFU, investigated the case, which Assistant U.S. Attorney Tamarra Matthews Johnson is prosecuting.