Northern District of Alabama
Press releases recorded for this federal judicial district.
California Man Seeking Sex with Children Sentenced to 18 Years in PrisonRead the Press Release
BIRMINGHAM – A federal judge today sentenced a former Los Angeles County Sheriff's Department employee to 18 years in prison for attempted child enticement and distributing child pornography, announced U.S. Attorney Joyce White Vance and Immigration and Customs Enforcement's Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr.
U.S. District Judge Virginia Emerson Hopkins sentenced MARK ROBIN RAINWATER, 46, for crimes connected to his October flight from California to Birmingham to have sex with two young boys. Rainwater pleaded guilty in January to one count of attempting to entice a child for sexual activity and one count of distributing child pornography. The judge ordered him to serve 20 years supervised release after completing his prison sentence.
"Our children deserve every measure of protection we can give them," Vance said. "We will use every tool we have to find and stop child predators from abusing and torturing children," she said.
"This case shows child sexual predators will be identified and investigated by HSI and its law enforcement partners, regardless of who they are or where they're located," Parmer said. "By coordinating federal, state and local law enforcement efforts, the Alabama Internet Crimes Against Children Taskforce ensured this predator was promptly identified so he can no longer harm innocent children," he said.
Rainwater had worked 14 years in the information technology department of the Los Angeles County Sheriff's Department when, in August 2012, he began communicating via the Internet, e-mail, and instant and text messages with an undercover police officer, according to his plea agreement and other court documents. Rainwater believed he was communicating with a parent willing to allow Rainwater to have sex with his two young boys, ages 13 and 8.
Rainwater was arrested when he arrived at Birmingham's Shuttlesworth International Airport on Oct. 12. Court records show that his luggage contained sex toys and children's toys. Later searches of Rainwater's digital storage media and e-mail accounts revealed 242 videos and more than 4,477 images of child pornography, some of which involved babies, toddlers, and prepubescent children involved in sadomasochistic and lewd and lascivious behavior.
ICE-HSI and the Alabama Bureau of Investigation's Internet Crimes Against Children Task Force investigated this case, and Assistant U.S. Attorney Henry Cornelius prosecuted it.
Birmingham Woman Pleads Guilty to Multi-State Identity Theft ConspiracyRead the Press Release
BIRMINGHAM – A Birmingham woman pleaded guilty today to participating in a multi-state identity-theft and counterfeit-check scheme that included recruiting homeless people to cash the fraudulent checks, announced U.S. Attorney Joyce White Vance, U.S. Postal Inspector in Charge Keith Morris, FBI Special Agent in Charge Richard D. Schwein Jr., and U.S. Secret Service Acting Special Agent in Charge Jeff Anderson.
DAPHNE COLLETTE TATE, 42, pleaded guilty before U.S. District Judge L. Scott Coogler to conspiring with five other people to defraud more than two dozen banks in Alabama, Georgia and Florida. She also pleaded guilty to aggravated identity theft, possessing a business check stolen from the U.S. mail, and possessing a counterfeit check.
Tate was arrested and indicted individually in February. A federal grand jury returned a superseding indictment in March, charging Tate and five other defendants in the multi-state identity-theft conspiracy. Charged along with Tate are her cousin KEITH LAMAR REESE, 46, also of Birmingham, and four Atlanta-area residents, COLUNDRIA SEATS, 36, DEMARIO S. MORMON, 27, CLIFFTON A. MORMON, 31, and BRETT E. FALCONER, 27. The superseding indictment was unsealed April 23.
"In this age of multi-state fraud schemes, it is more important than ever for federal and state law enforcement agencies to coordinate their efforts to best protect the public," Vance said. "My office is privileged to be part of such collaborative efforts that result in prosecuting cases where organized criminal rings operate across city, county, and state lines," she said. "We will continue this mission."
According to the March indictment, Tate and other conspirators conducted their scheme in Alabama, Georgia and Florida between September 2011 and February 2013 as follows:
They obtained account and routing information for various businesses' legitimate checking accounts in at least 25 banks through various means, including stealing checks from the mail and engaging people who had access to account information. Falconer was employed by Regions Bank and accessed the bank's records for the conspiracy during her employment. Falconer provided co-conspirators with information from Regions' accounts and from checks presented at Regions Bank. Other conspirators, including Demario and Cliffton, used that genuine account and routing information to manufacture counterfeit business checks.
Tate, Seats, and Reese would locate people, often the homeless, who had government-issued identification cards and would join the conspiracy as check-cashers. Tate, Seats, Reese and other co-conspirators would transport the check-cashers to locations where they would cash or attempt to cash the counterfeit checks. Members of the conspiracy would divide the proceeds of the successfully cashed checks among themselves.
Each defendant faces a maximum sentence of 30 years in prison and a $1 million fine if convicted of conspiracy to commit bank fraud. Each also faces a potential two-year prison term and $250,000 fine for each count of aggravated identity theft. In addition, a conviction for possessing a counterfeit check carries a maximum sentence of 10 years in prison and a $250,000 fine for Tate, who also faces a possible five years in prison and a $250,000 fine for each count of possessing stolen mail.This case was investigated by the U.S. Postal Inspection Service, the FBI, the U.S. Secret Service, and the Pelham, Trussville and Vestavia Hills police departments, with assistance from Regions Bank corporate investigators. Assistant U.S. Attorney Melissa K. Atwood is prosecuting the case.
While Tate has pleaded guilty to her role in the conspiracy, the remaining defendants are only charged by indictment. The public is reminded that an indictment is merely an accusation. They are presumed innocent and it will be the government's obligation to prove their guilt beyond a reasonable doubt at trial.
Winston County Man Pleads Guilty to Arson at Poultry Company OfficeRead the Press Release
TUSCALOOSA – A Northwest Alabama man pleaded guilty Wednesday to arson for a December fire at a Marshall Durbin office building in Haleyville, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Jeffrey L. Fulton.
CHARLES WILLIAM HEAVNER JR., 43, of Hackleburg, entered his plea before U.S. District Judge L. Scott Coogler to one count of maliciously damaging the Marshall Durbin Field Operations Office with fire on Dec. 4. Heavner is scheduled for sentencing Aug. 14.
He faces a maximum sentence of 20 years in prison and a $250,000 fine.
According to Heavner's plea agreement with the government, the arson unfolded as follows:
Marshal Durban had not provided baby chicks for Heavner to raise because of maintenance problems with the chicken housing facilities on his farm. Heavner was angry about that decision on the morning of Dec. 4 and had threatened physical violence against the company's broiler manager, Joe Bolding. Bolding called an employee at the operations office, warned her of Heavner's threats and told her to lock the office door. As she did so, she saw Heavner pull into the parking lot, take an orange five-gallon bucket and a walking cane from his truck and approach the building with liquid sloshing out of the bucket. She told him he couldn't come in, but after she locked the door he tried to kick it in.
Employees outside the office building were called to help and arrived to find the front of the building on fire. They used fire extinguishers to put out the flames. The orange bucket was recovered in the back of a company truck parked near the building and Heavner's cane and a cigarette lighter were found beside the building. Traces of gasoline were discovered in the bucket.
Heavner fled and was later arrested in Oklahoma.
The ATF, Alabama State Fire Marshal, U.S. Marshals Service, and the Winston County Sheriff's Office investigated the case. Assistant U.S. Attorney Michael W. Whisonant Sr. is prosecuting the case.
Tuscaloosa County Man Indicted for Producing and Possessing Child PornographyRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Tuscaloosa County man on child pornography charges, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Tuscaloosa County Sheriff Billy Sharp.
A five-count indictment filed in U.S. District Court charges MURRY MALONE BAILEY, 63, with producing child pornography between November 2010 and April 2012, and with possessing child pornography in Tuscaloosa County between August 2010 and May 2012.
The maximum penalty for producing child pornography is 30 years in prison and a $250,000 fine. The maximum penalty for possessing child pornography is 10 years in prison and a $250,000 fine.
The Tuscaloosa Sheriff’s Department and the FBI investigated the case, which Assistant U.S. Attorney Amanda Wick is prosecuting.
Members of the public are reminded that an indictment contains only charges. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
Talladega County Man Indicted for Mailing Second Series of Threat LettersRead the Press Release
BIRMINGHAM – A Talladega County man serving more than four years in federal prison for mailing a series of hoax anthrax letters in 2010 has been indicted for mailing another series of threatening letters in 2011, announced U.S. Attorney Joyce White Vance and U.S. Postal Inspector R. Frank Dyer.
A federal grand jury today indicted CLIFTON LAMAR DODD, 41, of Lincoln, on seven counts of using the U.S. Postal Service to send threating letters. Count one of the indictment filed in U.S. District Court charges Dodd with mailing a hoax anthrax letter to then Jefferson County Deputy District Attorney Teresa McClendon on April 4, 2011. Counts two through six charge Dodd with mailing, or causing the mailing of extortion letters on June 15, 2011, that threatened the lives of U.S. District Court Judge L. Scott Coogler, Jefferson County Circuit Court Judge Tommy Nail, lawyers James O'Kelly and Sheila Weil, and Jefferson County Jail inmate Michael Bole. The final count of the indictment charges Dodd with causing an extortion letter to be sent and delivered to former Alabama Sen. Jim Preuitt of Talladega on Sept. 28, 2011.
The June 2011 extortion letters were mailed from Calhoun County, according to the indictment. Dodd was in custody in the Calhoun County Jail at that time, awaiting trial on the federal charges that he sent 23 anthrax hoax letters in 2010. He pleaded guilty to those charges just before trial was to begin in July 2011. Dodd remained in jail awaiting sentencing when, according to the indictment, the September 2011 extortion letter was delivered to Preuitt in Talladega County.
According to today's indictment, the June 2011 letters claimed to be from someone who had been hired to kill the recipients. The letters to judges Coogler and Nail demanded $5,000 from each. The letter to the jail inmate, Bole, stated it was from "your friend from jail," and expressed a promise to kill the people who had done them wrong and said to "be sure the money is their (sic)." The letter specifically mentioned O'Kelly and Judges Coogler and Nail, according to the indictment.
The September 2011 letter to Preuitt stated, "I didn't forget about you. I want my money. All of my money … Get my money or die," according to the indictment.
Preuitt was among the recipients of the 23 anthrax hoax letters Dodd was convicted of mailing in 2010. In December 2011, U.S. District Judge Abdul Kallon sentenced Dodd to 51 months in prison for mailing the hoax threats.
Along with Preuitt, Dodd mailed those letters to U.S. Sen. Richard Shelby at his office in the Robert S. Vance Federal in Birmingham, to two Talladega County state court judges, Talladega County Sheriff Jerry Studdard, several Talladega County Jail inmates who were in the jail at the same time as Dodd, and police investigators from both the Lincoln and Oxford police departments who previously had interviewed Dodd.
The U.S. Postal Inspection Service investigated the current case, which Assistant U.S. Attorney Michael Whisonant Sr. is prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.
Fultondale Woman Indicted for Stealing $47,000 from ATMsRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a former ATM service technician for stealing $47,000 from ATMs around the Birmingham metropolitan area, announced U.S. Attorney Joyce White Vance and U.S. Secret Service Acting Special Agent in Charge Jeffrey L. Anderson.
The indictment filed in U.S. District Court charges KELLY FUCHS, 26, with eight counts of bank larceny for stealing from various automated teller machines between July 2012 and February 2013. Fuchs was employed with Loomis armored-car service as an ATM service technician during that time.
“When people are hired into positions of trust and abuse that position to steal from our financial institutions, it undermines our country’s financial system,” Vance said. “Criminals who do this can expect to be punished with the full force of the law.”
According to the indictment, Fuchs stole eight times from ATMs at seven locations over about seven months. The ATM locations and the amount stolen were: Children’s of Alabama, $6,000; Children’s of Alabama, $5,000; Montclair Road, Birmingham, $10,000; Medical Center East, $4,000; Culver Road, Mountain Brook, $10,000; Odum Road, Gardendale, $6,000; Martin Street, Pell City, $2,000; and Ashville Road, Leeds, $4,000.
The maximum sentence for bank larceny is 10 years in prison and a $250,000 fine.
The U.S. Secret Service and the Birmingham Police Department investigated this case, which Assistant U.S. Attorney Davis A. Barlow is prosecuting.
Members of the public are reminded that the 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.
Birmingham Man Indicted for Multi-Million Dollar Tax SchemeRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Birmingham man in connection with a scheme to collect millions of dollars from the Internal Revenue Service on false tax returns, announced U.S. Attorney Joyce White Vance and IRS Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.
The indictment filed in U.S. District Court charges DOUGLAS ERVIN DENT, 66, with filing 20 false income tax returns in his own name and on behalf of others between April 2008 and October 2009. Dent knew that he and the other taxpayers were not entitled to the $6.2 million in refunds he claimed, according to the indictment. Each false tax return contained a claim that money had been earned by the taxpayer and withheld by various financial institutions on behalf of the taxpayer during the tax year and that the taxpayer was entitled to refund of those withholdings from the IRS when, in truth, no such earnings and withholdings had occurred, the indictment states.
Among the 20 false returns, Dent filed four in his name and one in the name of his deceased mother. The requested refunds on these five returns totaled more than $2.6 million, according to the indictment.
“The false and outrageous tax refunds cited in this case are both a crime and an affront to the millions of hard-working Americans who pay their justly owed taxes each year,” Vance said. “Criminals who scheme to avoid paying taxes or to steal money from the U.S. Treasury will be prosecuted,” she said.
"Return preparers who concoct schemes to steal public money face federal prosecution and time in prison,” Hyman-Pillot said. “Individuals cannot fraudulently enrich their bank accounts at the expense of the United States Treasury and other taxpayers."
If convicted, Dent could face a maximum sentence of five years in prison and a $250,000 fine on each of the 20 counts of making false claims against the government.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent and it will be the government’s responsibility to prove the defendant’s guilt beyond a reasonable doubt at trial.
Maylene Man Sentenced to 14 Years in Prison for Two Suburban Bank RobberiesRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Maylene man to 14 years in prison for two 2012 bank robberies in suburban Birmingham cities, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein.
U.S. District Judge R. David Proctor sentenced TONY JOE WHITE, 42, for the Aug. 22 robbery of a Wells Fargo bank in Homewood and the Aug. 23 robbery of a Regions Bank in Mountain Brook. White pleaded guilty to both bank robberies in January.
According to court records, White walked into the Wells Fargo Bank, approached a teller and demanded money, then reached over the counter and grabbed about $600 before fleeing the bank and leaving in a waiting car driven by another man. The next morning, White entered the Regions Bank, presented a note demanding money and took about $1,500. He left the Mountain Brook bank on a bicycle and was arrested a few minutes later.
The FBI, in conjunction with the Homewood and Mountain Brook Police Departments, investigated the case, which Assistant U.S. Attorney Joseph P. Montminy prosecuted.
Huntsville Army Officer Sentenced for False Statements and Theft of Government PropertyRead the Press Release
BIRMINGHAM – A judge today sentenced a U.S. Army officer to two years’ probation, to include six months of house arrest, and fined him $25,000 for making false statements to a department of the United States and for stealing government property, announced U.S. Attorney Joyce White Vance and Defense Criminal Investigative Service, Southeast Field Office, Special Agent in Charge John F. Khin.
U.S. District Judge Abdul K. Kallon sentenced LT. COL. JAMES O. McLINNAHAM, 45, on three counts of making false statements on official, confidential financial disclosure forms; one count of making false statements in a questionnaire for national security clearance; one count of theft of government property; and three counts of making false statements in work orders submitted to the Army print shop. A federal jury convicted McLinnaham in January. As part of McLinnaham’s sentence, Judge Kallon ordered him to pay $1,600 restitution to the government.
“We should be able to expect honesty and integrity from all government employees, including military personnel,” Vance said. “This case demonstrates our commitment to investigating and prosecuting those who do not live up to the trust that our citizens have placed in them. Government employees will be held accountable for theft and deceit,” she said.
“This field grade officer’s corrupt and unethical conduct was shameful,” Khin said. “DCIS and our partners will relentlessly pursue and bring to justice those who deliberately deprive America’s Warfighters of increasingly limited resources by stealing and abusing taxpayer funds,” he said.
McLinnaham was stationed at Redstone Arsenal in Huntsville. Evidence at his trial showed the he had certified that his financial disclosure forms were true when he had failed to disclose his position with an outside business, and to having received wages and other payments from that business. The evidence also showed that McLinnaham had certified that his questionnaire for national security clearance was true, when he had failed to disclose his association with the same business, a prior marriage, and a prior misdemeanor arrest. The defendant was required to fill out all these forms as part of his official duties with the U.S. Army.
False statements on the work orders related to McLinnaham certifying that posters printed and mounted by the Army print shop were for official purposes when they were actually for his outside business. The theft of government property charge related to the same posters, and to the defendant obtaining a conference table from Redstone Arsenal for which his business received a $400 credit toward the purchase of another conference table from a local furniture store.
The case was investigated by the U.S. Department of Defense Criminal Investigative Service, with assistance from the U.S. Army Criminal Investigation Command, and the Internal Revenue Service, Criminal Investigation Division. Assistant U.S. Attorneys Russell E. Penfield and Terence M. O’Rourke prosecuted the case.
Birmingham Man Sentenced to 20 Years in Prison for Ensley Pharmacy Armed RobberyRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Birmingham man to 20 years and one month in prison for a 2011 armed robbery of an Ensley pharmacy, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge Abdul K. Kallon sentenced WILLIE EDWARDS, 39, for robbing Moore’s Pharmacy on Ensley Avenue in Birmingham on July 30, 2011, and brandishing a gun during the robbery. Edwards pleaded guilty in January to the armed robbery involving controlled substances charge and to the charge of brandishing a gun during a crime of violence. The brandishing charge carries a mandatory seven-year prison sentence that must be served consecutively to any other sentence imposed for the crime.
“This defendant, and the co-defendants in this case, all endangered innocent people in their violent quest to steal one of the most commonly abused prescription substances in our communities -- hydrocodone,” Vance said. This type of violent criminal must be taken off the streets.”
Edwards was charged in the armed robbery along with ANTHONY YOUNG, 21, of Hueytown. Young’s case has been continued.
According to court documents, Edwards entered Moore’s Pharmacy with the other robber and ordered employees to lie down on the floor after a gun was brandished. Edwards and his accomplice took pills and cough syrup containing hydrocodone, a narcotic pain killer.
Edwards and Young were indicted in November, along with Edwards’ cousin, STERLING EDWARDS, 20, also of Birmingham. Sterling Edwards pleaded guilty in February to the Oct. 13, 2011, armed robbery of Campbell’s Pharmacy in Adamsville, and the March 13, 2012, armed robbery of Helena Hometown Pharmacy in Helena. Controlled substances were taken and guns were used in both robberies. Sterling Edwards pleaded guilty to brandishing a gun in the Helena robbery.
Sterling Edwards is scheduled for sentencing May 30.
The FBI and Birmingham Police Department investigated the case. Assistant U.S. Attorney Joseph P. Montminy and Robin B. Mark are prosecuting the case.
Lauderdale County Doctor Sentenced for Health Care and Wire FraudRead the Press Release
FLORENCE – A federal judge today sentenced a Lauderdale County physician to one year and a day in prison for health care fraud totaling about $1 million in connection with billing a health insurer and Medicare for non-reimbursable cosmetic skin treatments, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein.
U.S. District Judge Inge P. Johnson sentenced DIANA K. McCUTCHEON, 55, of Killen, on four counts of health care fraud and two counts of wire fraud. Judge Johnson ordered McCutcheon to pay of restitution of $990,389 to Blue Cross Blue Shield of Alabama and Medicare. She also must pay the same amount to the government as proceeds of illegal activity. McCutcheon agreed to the forfeiture in her plea agreement with the government. She pleaded guilty to the charges in November.
"This defendant carried on a scheme for several years, fraudulently billing private and public insurance plans for payments she was not entitled to," Vance said. "That kind of fraud drives up health care and insurance costs for everyone. It will not be tolerated," she said.
"This is not a victim-less crime'" Schwein said. "Every person who struggles to pay for health care benefits; every older person who worries about Medicare's ability to cover them; every taxpayer who helps fund these programs are all victims. We will continue to work together with our partners to identify and stop those who would line their own pockets with taxpayer money – those who seek to benefit at the expense of our health care system, our economy, and our collective well-being," he said.
McCutcheon conducted her fraud through her medical clinics in Elgin and Lexington in North Alabama. According to court records, she operated a scheme to defraud Blue Cross Blue Shield and Medicare between 2007 and 2011 by fraudulently billing for the removal of multiple skin lesions on patients who had received cosmetic laser and other treatments for various skin conditions. The conditions included sun spots, age spots and wrinkles and were not covered by insurance.The FBI, with assistance from the U.S. Department of Health and Human Services, investigated the case. Blue Cross Blue Shield of Alabama also assisted in the investigation. Assistant U.S. Attorneys Russell E. Penfield and Ramona Albin are prosecuting the case.
Third Adams Produce Official Pleads Guilty in Federal CourtRead the Press Release
BIRMINGHAM – Former Adams Produce Chief Executive Officer SCOTT DAVID GRINSTEAD pleaded guilty today in federal court to fraud against the company, failure to report a felony against the government and failure to file federal income tax returns, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and IRS Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.
Grinstead, 45, of Birmingham, entered his plea before U.S. District Judge Karon O. Bowdre. His sentencing is scheduled Aug. 21.
Federal prosecutors charged Grinstead in January, and he entered a plea agreement with the government at that time. As part of that agreement, Grinstead must pay $450,000 in restitution to the bankruptcy estate of Adams Produce for the benefit of the company’s employees who were not fully paid because of Adams’ abrupt closing and its filing for bankruptcy last year.
Grinstead is the third Adams Produce official to plead guilty to federal charges in connection with fraud at the Birmingham-based company that had been a leading distributor of fresh fruits and vegetables across the Southeast for many years.
DAVID ANDREW KIRKLAND, 44, formerly of Birmingham and now living in Texas, pleaded guilty in March before U.S. District Judge Abdul Kallon to conspiracy to defraud the federal government of several hundred thousand dollars through a scheme to create false invoices and purchase orders. Kirkland is scheduled for sentencing June 27.
Kirkland, director of purchasing for Adams Produce, was charged in the same purchasing fraud scheme as CHRISTOPHER ALAN PFAHL, a purchasing program specialist for Adams. Kirkland was Pfahl’s supervisor. Pfahl, 41, of Birmingham, pleaded guilty in January to conspiracy to defraud the government of $481,000 on produce contracts.
Pfahl and Kirkland engaged in a scheme to create false records that reflected a higher purchasing cost for fruits and vegetables than the company actually paid. The inflated costs were then presented to the U.S. Government, which had agreed to pay a certain amount over Adams’ cost for produce.
The federal government, through the Defense Supply Center Philadelphia, was one of Adams’ customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public school systems, junior colleges and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records.
Grinstead pleaded guilty to misprision of a felony for knowing of the fraud Pfahl and Kirkland were engaged in and allowing it to continue and end slowly, so as to avoid raising red flags with the government, rather than stopping it immediately and reporting it to authorities.
Grinstead also pleaded guilty to wire fraud for wiring hundreds of thousands of dollars from an Adams Produce account to American Express to pay for clothing, jewelry, personal travel for himself and his family, lawn care at his home, and items for a house on Lake Martin. He pleaded guilty to two counts of failure to file a federal tax return, one for 2009 and one for 2010. According to court records, Grinstead had a gross income of about $748,801 for the 2009 calendar year and willfully failed to file an income tax return with the Internal Revenue Service. In 2010 he received about $1,878,700 in gross income and willfully did not file a return with the IRS.
The FBI and the IRS investigated the cases, which are being prosecuted by Assistant U.S. Attorney George A. Martin Jr.
Pinson Man Convicted for Mailing Fictitious Financial InstrumentRead the Press Release
FLORENCE – A federal jury late Tuesday convicted a Pinson man and member of an anti-government Sovereign Citizens group for mailing a fictitious financial instrument to pay off his home mortgage, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
The jury convicted DONALD JOE BARBER, 64, of mailing a fictitious “bonded promissory note” to his mortgage servicing company on March 10, 2008, in a fraudulent effort to satisfy his mortgage. Barber presented the fraudulent $10 million note as if it were a valid financial instrument drawn on a secret U.S. government account. U.S. District Judge Inge P. Johnson scheduled Barber’s sentencing for July 31.
“Self-appointed ‘sovereign citizens’ preach an extremist, anti-government ideology to their followers and teach a myth about American history that is untrue,” Vance said. “They often use this mythical ideology to justify crime. Sovereign citizens may disavow the authority of the U.S. government, but it exists and my office will use it to prosecute those who break the law,” she said.
“The guilty verdict handed down in this case should serve as a deterrent to others who claim to be “sovereign citizens” and attempt to use a redemption scheme to fail to pay just debts,” Schwein said. “All citizens should be wary of individuals or groups that claim they can inform you on secret bank accounts, and should report that activity to the FBI,” he said.
The FBI describes members of the sovereign citizen movement in the U.S. as U.S. citizens who openly reject their citizenship status and claim to exist beyond the realm of government authority. Affiliates may use their self-appointed status to justify threats, violence or crime, including theft and fraud.
The maximum sentence for this crime is 25 years in prison and a $250,000 fine.
The FBI investigated the case, which is being prosecuted by Assistant U.S. Attorneys Ryan K. Buchanan and Michael W. Whisonant Sr.
Federal Judge Sentences Former Social Security Employee to Nearly Six Years in Prison for Fraud and Identity TheftRead the Press Release
BIRMINGHAM – A federal judge this week sentenced a former Social Security Administration service representative to 70 months in prison for access-device fraud and aggravated identity theft, announced U.S. Attorney Joyce White Vance and Social Security Administration, Office of Inspector General, Special Agent in Charge Guy Fallen.
In imposing the nearly six-year sentence on MANUEL "Trey" CHANEY III, U.S. District Judge C. Lynwood Smith explained that the scheme was sophisticated and "far flung."
Chaney, 29, of Birmingham, worked for the Social Security Administration in its Bessemer office when he conducted the fraud between January 2010 and November 2010. He pleaded guilty last year to one count of access-device fraud and one count of aggravated identity theft for using bank routing and account numbers he took from Social Security records to access and steal money from other people's accounts. Chaney used Internet-based payment systems to electronically steal from those accounts and pay his own debts. He made more than 150 of the fraudulent online payments that affected more than 50 target accounts during the 10-month period.
The total value of the transactions exceeded $325,000. Among the creditors that Chaney paid were Alabama Power, Capital One Bank, Citibank, Discover Card, GE Money Bank, GMAC/Ally Bank, HSBC Bank, JP Morgan Chase Bank, and T-Mobile. Chaney must pay $40,857 restitution to his victims, and must forfeit $175,559 to the government as proceeds of his crime.
According to court records, Chaney carried out his fraud as follows:
He used his access to SSA records to identify recently deceased recipients of Social Security benefits from across the southeastern United States. From that pool of individuals, Chaney narrowed the field to those who had been receiving direct deposit of their benefits, as opposed to a paper check, before their death. From that group, Chaney narrowed his target group further by isolating individuals who had received direct deposit of benefits into an account at Wachovia/Wells Fargo Bank, where Chaney conducted his own banking. These became the target accounts Chaney accessed and used to make online payments for his vehicles, utility bills and credit cards, one of which had been used to purchase furniture for Chaney's new home.
The Social Security Administration, Office of Inspector General, with assistance from the U.S. Postal Inspection Service, the U.S. Secret Service, and the Jefferson County Sheriff's Department, investigated the case. Assistant U.S. Attorney Melissa K. Atwood prosecuted the case.
Bookkeeper Sentenced to Prison for Fraud and Aggravated Identity TheftRead the Press Release
BIRMINGHAM – U.S. District Judge C. Lynwood Smith Jr. this week sentenced an Etowah County woman to nearly five years in prison for stealing more than $900,000 from her former employer through fraud and identity theft, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
Judge Smith ordered PEGGY MCGLAUGHN, 68, to serve 57 months in prison, 33 months for the fraud and 24 months for the aggravated identity theft, to be served consecutively to the fraud sentence. McGlaughn also must serve five years’ supervised release after completing her prison sentence and must pay $933,079 in restitution to Bob Roberts & Company, the Etowah County construction company where she worked as bookkeeper and office manager for 24 years. She will be credited $60,750 toward that restitution for two vehicles seized through asset forfeiture proceedings by the FBI.
McGlaughn is scheduled to report to prison in June. She pleaded guilty to the fraud and aggravated identity theft charges in 2011. According to court records, she carried out her scheme to steal from her employer as follows:
From October 2003 until February 2010, McGlaughn obtained the signatures of Bob Roberts & Company principals on company checks and told the principals those checks would be used to pay for company expenses. McGlaughn would make the checks out to another company employee and, unbeknownst to that employee, forge his endorsement on the checks and then present them to a local bank for payment. During the course of her scheme, McGlaughn forged endorsements and cashed more than 100 of the company’s checks, keeping the money for herself.
The FBI investigated the case, and it was prosecuted by the U.S. Attorney’s Office for the Northern District of Alabama.
Three Charged in Scheme to Defraud BP Oil Spill Claims FundRead the Press Release
BIRMINGHAM – Federal prosecutors on Thursday charged three people as part of a conspiracy to fraudulently take money from funds established to pay claims from individuals and businesses harmed by the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
In separate informations filed in U.S. District Court, the U.S. Attorney's Office charged CHRISTOPHER JARRIS ADDISON, 31, of Birmingham, CRYSTAL DAVIS BLACKMON, 27, of Bessemer, and ANDRE CLINTON DALE, 45, of Mobile, with conspiring in 2011 to devise a scheme to defraud the Gulf Coast Claims Facility. Combined, the three defendants were paid nearly $175,000 from the oil spill claims funds. All three defendants have signed plea agreements with the government expressing their intention to plead guilty to the charges.
"The trust fund was designed to help remedy the damage done by the disastrous BP oil spill in 2010," Vance said. "We are going to put criminals who fraudulently divert those funds from the victims of the oil spill in jail," she said.
British Petroleum, which owned the Macondo oil well where the Deepwater Horizon drilling rig exploded, established the Gulf Coast Claims Facility in June 2010 for the purpose of administering and settling claims resulting from the oil spill disaster. A subsidiary of BP established the Deepwater Horizon Oil Spill Trust Fund in August 2010 to pay certain types of claims and expenses from the oil spill, including claims settled through the GCCF.
Addison, Blackmon and Dale all are charged with independently agreeing to provide their Social Security numbers and bank account information to individuals, who are not named in the charging documents, so that those individuals could file fraudulent claims for lost wages to the GCCF. After the fraudulent claims were paid, Addison, Blackmon and Dale each returned part of the money to the individuals who recruited them to participate in the scheme, according to the informations and plea agreements.The GCCF paid Addison $77,942 from the Deepwater Horizon Oil Spill Trust Fund on Aug. 24, 2011, according to the court documents. On Aug. 25, 2011, Addison gave the bulk of the payment to the two individuals who recruited him to the conspiracy, according to the documents.
Blackmon was recruited into the conspiracy by her cousin, who is not named in the court documents. She provided him with her bank account and personal identifying information and on Aug. 2, 2011, received about $47,878 from the GCCF, according to her information and plea agreement. She paid about $35,533 of that to her cousin, according to the documents.
Dale received about $47,678 in claim funds on July 20, 2011. On July 26, 2011, according to his information and plea agreement, he paid $15,000 to one of the individuals who recruited him into the scheme.
The FBI investigated these cases. Assistant U.S. Attorney Henry Cornelius is prosecuting the cases.
Madison County Man Sentenced to 30 Years in Prison for Marijuana Trafficking ConspiracyRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Madison County man to 30 years and five months in prison for his lead role in a North Alabama marijuana-trafficking conspiracy, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Madison-Morgan County High Intensity Drug Trafficking Area Task Force Commander Dewayne McCarver.
U.S. District Judge Karon O. Bowdre sentenced KINGY OSSARIUS HOLDEN, 34, of Toney, on one count of conspiracy to possess and distribute more than 1,000 kilograms, or 2,200 pounds, of marijuana, four counts of distributing marijuana and one count of being a convicted felon in possession of a firearm, a Taurus handgun.A federal jury convicted Holden in August. The jury also convicted three Huntsville men for conspiring with Holden to operate the Huntsville-based drug-distribution ring between 2006 and 2011. Before the trial, eight other defendants in the case had pled guilty to various charges related to marijuana or cocaine distribution.
Holden was the ring-leader of the marijuana-trafficking conspiracy and "profited greatly from his crimes," the government said in its sentencing memorandum to the court. Based on evidence at trial, Holden had no other means of support besides illegal drug distribution and dog fighting and breeding, the memorandum noted.
"Today, federal, state and local law enforcement came together to take a leading drug-trafficker off our streets," Vance said. "I commend them for their work in dismantling this conspiracy and sending nearly a dozen drug dealers to prison," she said.
"This multi-agency investigation dealt a significant blow to this criminal enterprise and has made our communities safer," Schwein said. "The FBI and our law enforcement partners stand united in our commitment to identify, apprehend, prosecute and dismantle drug-trafficking conspiracies so that they are no longer a threat. I particularly want to thank the Madison-Morgan County High Intensity Drug Trafficking Area Task Force whose efforts made this operation a success," he said.
Trial evidence included conversations from federal wire taps which were conducted between July 2011 and September 2011. The wiretaps intercepted calls among all the defendants on trial, and among most of the defendants in the case, in which they discussed the drug trafficking operation. During the course of the investigation, law enforcement seized $483,000, 17 firearms, about nine pounds of marijuana, and about 13 kilograms of cocaine from the illegal drug-distribution ring.
Convicted of the drug-conspiracy at trial, along with Holden, were: MYRON DEWAYNE TIBBS, 35, MICHAEL ARNEZ "Little Mike" BROWN, 33, and WILLIAM DEMETRO "Little Will" HOLDEN, 24, all of Huntsville.
The eight defendants who pleaded guilty before trial and their charges are:
• IVAN FLETCHER, 37, of Toney; convicted felon in possession of a firearm, possession with intent to distribute cocaine, and possessing a firearm in furtherance of a drug-trafficking crime.
• ROY CHRISTIAN LEE, 45, of Huntsville; conspiracy to distribute marijuana and cocaine, possessing a firearm in furtherance of a drug-trafficking crime, and possession with intent to distribute cocaine.
• CEDRICK RAMON "Ced" or "Big Ced" CARROLL, 34, of Tuscumbia; conspiracy to distribute cocaine, possession with intent to distribute powder and crack cocaine, and possessing a firearm in furtherance of a drug-trafficking crime.
• ASHLEY NICOLE CHUNN, 25, of Huntsville; conspiracy to distribute marijuana.
• NATHAN SEARCY WILLIAMS, 30, of Northport; conspiracy to distribute marijuana and four counts of money laundering.
• SHARODE DUROME PICKETT, 32, of Birmingham; conspiracy to distribute marijuana.
• LAMARIC TREVELLE "Akbar" DOUGLAS, 23, of Huntsville; conspiracy to distribute marijuana, and possession with intent to distribute marijuana.
• NAPOLEON LEE INGRAM, 45, of Muscle Shoals; conspiracy to distribute cocaine, and possession with intent to distribute cocaine.The FBI and the Madison-Morgan County High Intensity Drug Trafficking Area Task Force investigated the case. Assistant U.S. Attorneys Laura D. Hodge, Enid D. Athanas and Jennifer Murnahan prosecuted the case.
Former State Trooper Sentenced to One Year in Prison for Depriving Woman of Civil RightsRead the Press Release
BIRMINGHAM – A federal judge today sentenced a former Alabama State Trooper to one year in prison for depriving a woman of her civil rights by coercing her to perform sex acts, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge Virginia E. Hopkins sentenced KEITH WILSON KELLEY, 51, to the maximum prison term under the misdemeanor charge of depriving a person’s civil rights under the color of law, or while acting in the official capacity of a police officer. Kelley must serve one year of supervised release following completion of his prison term.
Kelley was a captain with the State Troopers in September 2007 when the incident occurred in Shelby County. He pleaded guilty to the charge in federal court in December.
According to evidence presented in Kelley’s sentencing hearing today, he violated the civil rights of a 20-year-old college student as follows:
Kelley was behind the young woman in line at a self-service check-out at a discount department store in Pelham in 2007. He saw that she did not scan and pay for all the items she took from the store. Kelley followed her to her car, showed his badge then took her name and phone number. Kelley told the woman that he would see how the store wanted to handle the matter, and would be in touch. He later called her, said the store was leaving the matter to him and that he wanted her to meet him at a gas station.
Kelley was in his patrol car when the woman met him. He searched her for a wire, told her she would be convicted of a felony, but that he could make the case go away. He then coerced her into performing sex acts.
The woman reported the incident to Pelham Police.
According to the government’s sentencing memorandum to the court, the incident was not an isolated act by Kelley, “who during a two-year period brazenly propositioned at least four other women after issuing them traffic tickets in his capacity as a public official.”
The case was investigated by the FBI and Pelham Police. Assistant U.S. Attorney Staci Cornelius prosecuted the case.
Cullman Car Dealer Indicted for Violating Legal Protections for Active-Duty Service MembersRead the Press Release
BIRMINGHAM – A federal grand jury Wednesday indicted a Cullman used car dealer for violating federal protections for active-duty military service members by refusing to reduce the loan interest rate and repossessing the vehicle he sold to a man who was later deployed overseas with the Alabama National Guard, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
A two-count indictment filed in U.S. District Court charges CARL RALPH NUSS, 75, with violating the Servicemembers Civil Relief Act. The act restricts or limits civil actions in the areas of financial management, including rental agreements, security deposits, evictions, installment contracts, credit card interest rates, mortgages, civil judicial proceedings and income tax payments, against service members called to active duty.
Nuss, owner of North Alabama Wholesale Autos in Cullman, sold a 2002 Ford Sport-Trac in February 2011 to the 22-year-old man. The dealership sold the vehicle for $9,746 and, after a $2,200 down payment, financed the balance at 25 percent interest per year, according to the indictment.
In May 2012, the Guardsman, a private first class, was called to active duty in Afghanistan. In July 2012, according to the indictment, Nuss received a letter from the Guardsman requesting that the dealership reduce the interest rate on his car loan from 25 percent to 6 percent, as required by the act. Nuss never reduced the interest rate and, two days after receiving the letter, hired two men to repossess the guardsman’s truck. The two men repossessed the vehicle without a court order, in violation of the Servicemembers Civil Relief Act, the indictment says.
The maximum penalty for each count is one year in prison and a $100,000 fine.
The public is 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.
Three North Carolina Residents Indicted for Access-Device Fraud, Identity TheftRead the Press Release
BIRMINGHAM – A federal grand jury today indicted three North Carolina residents for access-device fraud and aggravated identity theft, U.S. Attorney Joyce White Vance and U.S. Secret Service Acting Special Agent in Charge Jeff Anderson announced.
An indictment filed in U.S. District Court charges RENEE CHARLENE POINTER, 40, TERRENCE DONNELL WOOTEN, 44, and TERRANCE LAVON CAMPBELL, 38, with possessing more than 350 counterfeit debit and credit cards and with aggravated identity theft.
“This case represents a disturbing trend of people from other states coming to the Northern District of Alabama to carry out identity-fraud crimes. Thanks to the diligent effort and cooperation of federal and local law enforcement, we were able to stop this group,” Vance said.
All three defendants face 10 years in custody if convicted of the access-device charge and a mandatory two-year prison term if convicted of aggravated identity theft. Each charge also carries a potential fine of $250,000.
The U.S. Secret Service and the Oxford Police Department investigated the case, with assistance from the Calhoun County District Attorney’s Office. Assistant U.S. Attorney Melissa K. Atwood is prosecuting the case.
Members of the public are reminded that the 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.
Former Judicial Candidate Convicted on Child Enticement & Child Pornography ChargesRead the Press Release
BIRMINGHAM – A federal jury today convicted a Birmingham man and former candidate for a Jefferson County Circuit Court judgeship of attempting to entice a minor to engage in sexual activity and of receiving and possessing child pornography, announced U.S. Attorney Joyce White Vance and Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr.
Following a two-day trial before U.S. District Judge R. David Proctor, the jury deliberated about two hours before convicting CHUCK HUNTER, 59, for using the Internet and a telephone in an attempt to persuade a person he believed to be a 14-year-old boy to engage in a sexual act. The jury also convicted Hunter of receiving child pornography over the Internet, and of possessing child pornography with the intent to view it.
Hunter was immediately taken into federal custody. He is scheduled for sentencing July 9.
“My office is committed to keeping our communities safe, and we continue to work aggressively to prosecute those who would seek to exploit children,” Vance said.
Hunter was arrested in June after an undercover police officer, posing as a 14-year-old boy, responded to an advertisement posted on the Internet seeking people less than 30 years old for sex, according to court testimony. Following several communications in which the Alabama Internet Crimes Against Children Task Force officer continued to identify himself as a minor child, Hunter arranged a meeting at a restaurant in Jefferson County with the person he thought to be 14 years old. Police arrested Hunter when he showed up for the meeting. Following Hunter’s arrest, police obtained a search warrant for his Southside Birmingham home and seized computer media containing images of child pornography, according to testimony.
Hunter had been a candidate for a place on the Jefferson County Circuit Court, but was removed from the November ballot following his arrest.
The Internet Crimes Against Children Task Force and HSI investigated the case. Assistant U.S. Attorneys Daniel J. Fortune and Elizabeth Holt prosecuted the case.
Federal Grand Jury Indicts Four Men in Separate Bank RobberiesRead the Press Release
BIRMINGHAM – A federal grand jury today indicted four men in connection to four separate bank robberies in North Alabama, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
The four men are charged in three separate indictments filed in U.S. District Court. JOHN DAVID VANSTEENIS, 28, of Decatur, and JOSEPH MICHAEL BORDEN, 52, who was homeless, are charged with the Jan. 25 robbery of a Decatur branch of The People’s Bank. Vansteenis and Borden also face a charge of brandishing a firearm, a Glock Model 27 pistol, during the crime of violence.
CHRISTOPHER ALLAN COOPER, 33, of Kentucky, is charged with two bank robberies in Huntsville. He is charged with the Dec. 12 robbery of a Regions Bank branch on Memorial Parkway South, and with the Jan. 8 robbery of a Regions Bank branch on Drake Avenue SW.
CHRISTOPHER BRUCE, 35, of McCalla, also was indicted for two bank robberies. Bruce is charged with the Nov. 16 robbery of First Financial Bank on U.S. Highway 11 North in Vance, and with the Nov. 26 robbery of West Alabama Bank on Alabama Highway 5 in Woodstock.
The FBI investigated these cases, and the U.S. Attorney’s Office for the Northern District of Alabama is prosecuting them. The Vance and Woodstock Police Departments and the Bibb County Sheriff's Department assisted in the case involving Bruce. The Huntsville Police Department assisted in the case that led to the charges against Cooper, and the Hartselle and Decatur Police Departments assisted in the case that led to charges against Vansteenis and Borden.
The bank robbery charge carries a maximum sentence of 20 years in prison and a $250,000 fine. The charge of brandishing a firearm during a crime of violence carries a mandatory sentence of seven years in prison, to be served after completion of any other sentence imposed for the crime.
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.
Huntsville Narcotic Treatment Center Agrees to Pay $95,000 PenaltyRead the Press Release
BIRMINGHAM – A Huntsville-area Methadone treatment center has agreed to pay the United States a $95,000 penalty for numerous record-keeping and inventory violations cited in a 2012 regulatory investigation, announced Acting U.S. Attorney John H. England III and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.The settlement agreement between the U.S. Attorney for the Northern District of Alabama and Metro Treatment of Alabama, doing business as Huntsville Metro Treatment Center, was finalized Monday. The settlement was reached without any filings in U.S. District Court. With payment of the penalty, the government agrees to release Huntsville Metro Treatment Center from all civil liability for violations of record-keeping requirements established under the Controlled Substances Act.
"The $95,000 penalty in this matter represents the largest penalty ever collected in Alabama in a DEA drug diversion investigation," England said. "It is imperative that treatment centers which handle controlled substances keep clear and current records on the shipments and use of those narcotics so that they can be tracked and not diverted for illegal use in our communities," he said.
The Huntsville Metro Treatment Center is a facility registered with the DEA. It is one of several narcotic treatment centers in Alabama owned or operated by Colonial Management Group. The settlement agreement comes in response to allegations by the DEA that the Huntsville center failed to maintain complete and accurate records and inventories of controlled substances dispensed or received.
The violations cited in a DEA Scheduled Regulatory Investigation from March 26, 2012, to June 26, 2012, at the Huntsville center included its failure to account for about 3,423 dosage units of Methadone and failure to accurately complete required DEA forms on multiple shipments of Methadone. The DEA investigation also cited the center for not properly maintaining DEA forms and for a "general failure to maintain complete and accurate records."
The Huntsville center, as part of the settlement agreement, denies any intentional violation of regulations, but states it has altered several record-keeping procedures at the DEA's request.
Birmingham Man Pleads Guilty to Tweeted Threat Against PresidentRead the Press Release
BIRMINGHAM – A Birmingham man pleaded guilty today in federal court to threatening the life of President Barack Obama on the social network Twitter, announced Acting U.S. Attorney John H. England III and U.S. Secret Service Special Agent in Charge Roy Sexton.
JARVIS BRITTON, 25, entered his plea before U.S. District Judge C. Lynwood Smith Jr. The judge in February ruled Britton competent to stand trial. Britton’s sentencing is scheduled June 20.
“Any threat made on the life of the president of the United States is a serious matter that will be prosecuted,” England said.
A federal grand jury indicted Britton in September for knowingly threatening to kill, kidnap or inflict bodily harm on the president by tweeting the message, “Let’s kill the president. F.E.A.R.,” on Sept. 14.
The Secret Service investigated the case, which Assistant U.S. Attorneys Joseph P. Montminy and Daniel J. Fortune are prosecuting.
Judge Orders Prison and $308,554 Restitution for Former Bank OfficerRead the Press Release
BIRMINGHAM – A federal judge today sentenced a former officer at a Birmingham bank to six months in prison, followed by six months home detention, plus three years of supervised release for a five-year fraud through which she stole almost $275,000 from her employer, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge R. David Proctor sentenced ALLISON MCCLELLAN, 40, of Odenville, on one count of computer fraud, and ordered her to pay $308,554 in restitution to SouthPoint Bank where she worked as its loan operations manager. McClellan had agreed to pay that amount in restitution as part of her plea agreement with the government. She pleaded guilty to the computer fraud in November. The restitution reflects the $274,775 she stole from SouthPoint, plus the $33,779 the bank spent in investigative and legal fees related to the crime.
McClellan worked at SouthPoint from 2005 to 2012. She used her computer access as the bank's loan operations manager to defraud the bank between 2007 and 2012.
According to her plea agreement, she used her computer access to fraudulently increase the home equity line of credit she and her husband obtained from the bank in February 2006. She increased the credit line 69 times between October 2007 and April 2012, raising it from $65,000 to $328,000. McClellan also fraudulently increased a personal line of credit she obtained from SouthPoint in 2005, raising it 11 times in 2009 and 2010 to reach a $15,000 credit line.
The FBI investigated the case, and it was prosecuted by Assistant U.S. Attorney Henry Cornelius.
Drug Dealer Sentenced to 30 Years in Prison After Four Years on the RunRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Birmingham man to 30 years in prison on cocaine distribution charges from 2008, charges for which he was convicted in October after evading the law for four years, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.
U.S. District Judge L. Scott Coogler sentenced LAMAR GIBSON, 41, on one count of conspiracy to distribute crack cocaine, one count of distributing crack cocaine and one count of attempting to distribute the drug. Gibson fled after he was indicted in August 2008 and evaded capture until August 2012.
Gibson's co-defendant in the case, Shawn Greer, 44, of Birmingham, pleaded guilty to the charges in November 2008 and was sentenced after Gibson's trial to 15 years in prison.
The two men were convicted of conspiracy and distribution in connection to their sale of about 70 grams of crack cocaine for $1,750 on Feb. 22, 2008. They were convicted of attempting to distribute another 2 ½ ounces of crack cocaine on May 22, 2008.
The DEA investigated the case, and Assistant U.S. Attorney L. James Weil Jr. prosecuted the case.
Computer Printer Technician Sentenced for Defrauding Children’s of AlabamaRead the Press Release
BIRMINGHAM – A federal judge today sentenced a former computer printer service technician at Children’s of Alabama to 27 months in prison for defrauding the hospital of $426,986 by charging it for printer cartridges he sold to another company, 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 JOHN DAVID NICHOLS, 36, of Hueytown, on one count of wire fraud, ordering him to pay $526,943 in restitution and to serve three years of supervised release after completing the prison term. Nichols pleaded guilty to the fraud in October.
According to his plea agreement and other court documents, Nichols worked on site at Children’s of Alabama as a service technician for Tech-Optics Inc. from October 2009 through October 2011. Tech-Optics had a contract with the hospital that included providing preventive maintenance, repair and toner cartridges for printers. Nichols acknowledges that from August 2010 to October 2011, he used Tech-Optics’ computer inventory system to order toner cartridges for Children’s. The hospital paid for the cartridges, but Nichols sold them to an Alabama company, Image Craft, which bought new and used toner cartridges.
Due to Nichols’ scheme, Children’s paid $426,986 to Tech-Optics for items Nichols ordered, and then sold to Image Craft. Children’s ceased payments in December 2011, leaving a balance to Tech-Optics of $140,956, according to court documents. The judge ordered Nichols to pay restitution in those amounts to the two victims.
Between August 2010 and March 2012, Nichols sold about 6,316 items to Image Craft, according to his plea agreement. Of those items, about 4,900 were printer cartridges Nichols charged to Children’s and the remaining items included laptop computers, printers, printer parts and fax machines he had stolen from the hospital. Nichols received $234,525 from Image Craft for the equipment, according to the plea agreement.
The FBI investigated the case, which Assistant U.S. Attorney Henry Cornelius prosecuted.
Pelham Man Sentenced to Three Years in Prison for Laundering Money in Scam with DaughterRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Pelham man to three years and one month in prison for laundering money in a scheme with his daughter that collected more than $400,000 for expenses of a lawsuit that never existed, announced U.S. Attorney Joyce White Vance, Alabama Securities Commission Director Joseph P. Borg, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge C. Lynwood Smith Jr. sentenced PAUL HASKELL LANE JR., 69, to prison and ordered him to pay $343,900 in restitution to 20 victims of the scam he perpetrated with his daughter, Katherine Hope Lane, 28. The judge also ordered Paul Lane to forfeit $10,500 to the government as proceeds of illegal activity. Paul Lane pleaded guilty to the money-laundering charge in August.
"The crime in this case was plotted and executed over more than three years' time. As part of that scheme, Lane peddled a false story about a lawsuit for which his family ostensibly needed money," the government said in its sentencing memorandum to the court. "After Lane seeded the ground, Katherine fertilized and watered it with myriad lies and stories designed to engender additional sympathy and obtain more money from Lane's friends and associates. At critical times, Lane spoke to key money sources (i.e., victims) to ensure that the funds continued to flow to him and Katherine."
Lane's sentencing caps a six-year investigation and prosecution effort by federal and state authorities. In late 2009, Lane and his daughter were separately indicted for wire fraud, mail fraud and money laundering for their roles in a plan to get people in other states to wire money to Lane's bank account. Those who sent money were led to believe it would go toward costs for a personal-injury lawsuit filed by the Lane family after Katherine Lane suffered a brutal assault at work.
The Lanes represented that proceeds from the lawsuit would be used to repay people who donated. Most who provided money also believed that they would get back from the Lanes more money than they sent. Katherine Lane, however, had not been assaulted and the Lanes had no lawsuit.
Over the course of several years, Lane took the money that was wired into his account and gave it to his daughter.
Katherine Lane pleaded guilty in 2010 to wire fraud, aggravated identity theft, and money laundering. She was sentenced in 2011 to seven years and three months in federal prison. Katherine Lane also pleaded guilty to felony state securities fraud charges related to her actions. Her sentence of seven years and three months on the state charges was ordered to run concurrently with the federal sentence.
The Internal Revenue Service, the FBI and the Alabama Securities Commission investigated the case. Assistant U.S. Attorney Melissa K. Atwood prosecuted the case.
Winston County Man Charged with Arson at Poultry Company OfficeRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Northwest Alabama man for arson in connection with a December fire at a Marshall Durbin office building in Haleyville, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Jeffrey L. Fulton.
CHARLES WILLIAM HEAVNER JR., 43, of Hackleburg, is charged in a two-count indictment filed in U.S. District Court. The indictment charges that Heavner maliciously damaged the Marshall Durbin Field Operations Office by means of fire on Dec. 4, and that he knowingly used fire as the means to maliciously damage the poultry company’s field office.
“Trying to burn down a building is a serious and dangerous crime,” Vance said. “In this instance, only quick action prevented terrible damage to property and potential loss of life.”
The maximum sentence for both arson counts is 35 years in prison and a $250,000 fine.
The ATF, Alabama State Fire Marshal, U.S. Marshals Service, and the Winston County Sheriff’s Office investigated the case. Assistant U.S. Attorney Michael W. Whisonant Sr. is prosecuting the case.
Members of the public are reminded that the 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.Tuscaloosa Man Sentenced to Nearly Six Years in Prison for Possessing Child PornographyRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Tuscaloosa man to nearly six years in prison for possessing child pornography obtained over the Internet, announced U.S. Attorney Joyce White Vance, U.S. Immigration and Customs Enforcement Special Agent in Charge Raymond R. Parmer Jr. and Alabama Department of Public Safety Director Hugh B. McCall.
BRUCE HENRY, 37, pleaded guilty before U.S. District Judge Inge P. Johnson to one count of possessing child pornography. Judge Johnson then sentenced Henry to 70 months in prison and ordered that he be taken into custody immediately. He must serve five years of supervised release after completing his prison term.
According to Henry’s plea agreement with the government, he possessed more than 300 images of child pornography that he obtained over the Internet between April 1, 2009, and April 1, 2011. The images are of real children engaged in sexually explicit conduct.
Henry victimized specific children and harmed our society by his illegal conduct, the government said in its sentencing memorandum to the court. Individuals who view and possess child pornography enable and support its continued production by providing the incentive for its creation and distribution, the memorandum notes.
“This defendant did not just look at a few images once in his life, but used technology for years to possess hundreds of images that depict the rape and exploitation of prepubescent children,” according to the memorandum.
ICE and the Alabama Bureau of Investigation investigated the case, and it was prosecuted by Assistant U.S. Attorney Daniel J. Fortune.
Three Atlanta Men Indicted for Trafficking Counterfeit Super Bowl TicketsRead the Press Release
BIRMINGHAM – A federal grand jury today indicted three Atlanta men for trafficking in counterfeit Super Bowl XLVII tickets, announced U.S. Attorney Joyce White Vance and Homeland Security Investigations Special Agent in Charge Raymond R. Parmer Jr.
The grand jury also charged two of the three men with possessing and concealing counterfeit U.S. currency. The fake money and 57 counterfeited tickets were seized following a Jan. 31 traffic stop in Sumter County.
The indictment filed in U.S. District Court charges DWIGHT E. WILCOXSON, 53, ANTHONY A. HUNTER, 47, AND DARRYL A. WESBY, 45, with conspiring to transport and sell, and possessing counterfeit tickets to the Feb. 3 Super Bowl in New Orleans.
The indictment also charges that Wilcoxson, with intent to defraud, possessed and concealed $4,820 in counterfeit $100 and $20 bills on Jan. 31. Hunter faces the same charge for possessing and concealing $2,240 in counterfeit $100 and $20 bills.
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations investigated the case. Assistant U.S. Attorney J. Pat Meadows is prosecuting the case.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Madison Man Indicted for Possessing Guns Despite Prior Mental CommitmentRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Madison County man for possessing 18 guns although he previously had been committed to a mental institution, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Jeffrey L. Fulton.
A two-count indictment filed in U.S. District Court charges JAMES WANN VAUGHAN, 69, with possessing the firearms on Jan. 17 “after having been adjudicated as a mental defective and committed to a mental institution.” The indictment also charges Vaughan with making a false statement to a licensed firearms dealer regarding his prior mental health commitment.
“My office is committed to reducing gun violence and protecting the citizens of North Alabama,” Vance said. “It is a crime for someone who has been committed to a mental institution to possess a firearm and it is illegal for anyone to lie on ATF forms that are required for the legal purchase of a gun. We will enforce these laws,” Vance said.
“ATF continues to lead a collaborative effort to remove firearms from the streets and ensure they are not in the hands of prohibited individuals,” Fulton said.
According to the indictment, when Vaughan purchased a Colt Defender .45-caliber pistol from a Birmingham-area gun store Jan. 14, he falsely stated on a required ATF form that he had not been committed to a mental institution, and that he was born in 1942 and lived in Scottsboro, when he was born in 1943 and lives in Madison.
Madison Police and ATF agents later found the Colt .45, along with 17 other guns at Vaughan’s home. According to the indictment, those guns were: a Winchester Model 94 .30-30-caliber rifle, a Browning Model Mag 20 20-gauge shotgun, a Browning Model Sweet 16 16-gauge shotgun, a Browning Model Lite 12 12-gauge shotgun, a Browning Model Mag 12 12-gauge shotgun, a Browning Model over/under Invector Plus 12-gauge shotgun, a Weatherby Model Mark XXII .22-caliber rifle, a Smith and Wesson Model 66-1 .357-caliber revolver, a Colt Model Frontier Scout .22-caliber revolver, a Smith and Wesson Model 29-2 .44 Magnum revolver, a Smith and Wesson Model Air weight 37 .38-caliber revolver, a Smith and Wesson Model 36 .38-caliber revolver, a North American Arms Corp. Model 22LR derringer, a Ruby Model 1914 .25-caliber pistol, a Western Field 12-gauge shotgun, a Browning BAR 30-06-caliber rifle, and a Weatherby Model 300 mag Mark V .300-caliber rifle.
The maximum penalty for possession of a firearm by someone who has been adjudicated as a mental defective or who has been committed to a mental institution is 10 years in prison and a $250,000 fine. The maximum penalty for making a false statement to a licensed firearms dealer is five years in prison and a $250,000 fine.
The ATF, in cooperation with Madison Police, is investigating the case, and Assistant U.S. Attorney Russell E. Penfield is prosecuting it.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Huntsville Woman Sentenced to 10 Months in Prison for Stealing Children's Social Security BenefitsRead the Press Release
HUNTSVILLE – A federal judge Thursday sentenced a Huntsville woman to 10 months in prison for stealing government property by claiming Social Security benefits for children who did not live with her and spending the money on herself, announced U.S. Attorney Joyce White Vance and Social Security, Office of Inspector General, Resident Agent in Charge Guy Fallen.
DIANE CUTTS OATES, 49, pleaded guilty in October to one count of theft of government property. U.S. District Judge Karon O. Bowdre imposed the prison sentence and ordered Oates to pay more than $38,000 in restitution to the Social Security Administration. She is scheduled to report to prison March 24.
Oates had two children who lived with their father in Tennessee, and the father had custody of the children. Oates applied for child benefits in December 2009 and falsely stated that she and the two children lived together in the same house. Oates received $17,412 in back payments for the children and benefit checks for three more months for a total $38,328 from Social Security.
Oates used deceit to receive Social Security benefits which rightfully belonged to her children, according to the government’s sentencing memorandum. “The defendant’s actions were the height of arrogance and selfishness. These public funds have been put aside to protect citizens from falling through the cracks. This money is not appropriated so a scoundrel like Diane Oates can use the public coffers as her own personal piggy bank,” the government said in its memorandum. “Her children were very much entitled to this money, but they were denied use of it due to their mother’s, this defendant’s, theft.”
The Social Security, OIG, and the U.S. Secret Service investigated this case, which Assistant U.S. Attorney Terence M. O’Rourke prosecuted.
Tuscaloosa Woman Sentenced for Falsely Claiming Disaster BenefitsRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Tuscaloosa woman to eight months home detention as part of 16 months’ probation for fraudulently claiming disaster benefits following the April 27, 2011, tornadoes that struck Tuscaloosa, Birmingham, and other parts of the state, announced U.S. Attorney Joyce White Vance and James E. Ward, special agent in charge, Department of Homeland Security, Office of the Inspector General.
GLORIA L. MCCOY, 32, pleaded guilty in November to falsely stating to the Federal Emergency Management Agency in an application for disaster benefits that she rented an apartment in Tuscaloosa that was damaged by the storm. Based on her representation to FEMA, the agency paid her $9,161 in disaster-relief benefits. U.S. District Judge Virginia Emerson Hopkins ordered McCoy to pay that amount to FEMA in restitution.
DHS-OIG investigated the case, which was prosecuted by the U.S. Attorney’s Office for the Northern District of Alabama.The public can report fraud, waste, abuse or allegations of mismanagement involving disaster relief operations through the National Disaster Fraud Hotline, toll free, at 1-866-720-5721, or by e-mailing [email protected]. The telephone line is staffed by a live operator 24 hours a day, seven days a week.
Walker County Man Sentenced to Two Years in Prison for Disaster FraudRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Walker County man to two years in prison for fraudulently claiming $30,200 in federal disaster relief funds following the April 2011 tornadoes across North Alabama, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Department of Homeland Security, Office of the Inspector General, Special Agent in Charge James E. Ward.
DONNIE LEE BURLESON, 38, must pay $30,200 in restitution to the Federal Emergency Management Agency and serve five years of supervised release after completing his prison term, according to the sentence imposed by U.S. District Judge Sharon Lovelace Blackburn.
Burleson pleaded guilty in June to one count of disaster-benefit fraud for falsely representing to FEMA on May 3, 2011, that he owned a residence in Hackleburg that was destroyed by an April 27, 2011, tornado. Based on Burleson's fraudulent claim, FEMA paid him $30,200 in disaster-relief benefits. The federal funds were paid in connection with the Presidential Disaster Declaration for Alabama that followed the deadly April tornadoes that raked the state, destroying communities in Tuscaloosa, Birmingham, Hackleburg and elsewhere.
Burleson, through his false claim to FEMA, fraudulently diverted disaster benefits to himself that were meant for honest citizens genuinely affected by the storm, the government said in its Sentencing Memorandum. "He sought to parlay the community's devastation and distress into a financial windfall for himself," the memo said.
The FBI and DHS, OIG, investigated the case, which was prosecuted by the U.S. Attorney's Office for the Northern District of Alabama
Third Adams Produce Company Official Charged with FraudRead the Press Release
February 6 , 2013BIRMINGHAM – Federal prosecutors have charged a third Adams Produce Company official in connection with fraud at the bankrupt Birmingham distributor of fresh fruits and vegetables, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
The U.S. Attorney's Office today charged DAVID ANDREW KIRKLAND, the company's director of purchasing, with conspiracy to defraud the federal government of several hundred thousand dollars through a scheme to create false invoices and purchases orders. In a plea agreement also filed today in U.S. District Court, Kirkland agrees to plead guilty to the conspiracy charge.
"This defendant was an officer of Adams Produce Company who joined other employees in a fraud meant to cover the company's deteriorating financial condition," Vance said. "The fraud included cheating the government on contracts involving military bases and schools. The investigation of wrongdoing by former Adams officers and employees continues, and any who have committed crimes will be held accountable," she said.
Kirkland, 44, formerly of Birmingham and now living in Texas, is charged in the same purchasing fraud scheme as Christopher Alan Pfahl, a purchasing program specialist for Adams Produce. Kirkland was Pfahl's supervisor. Pfahl, 41, of Birmingham, was charged in December and pleaded guilty in January to conspiracy to defraud the government of $481,000 on produce contracts.
On Jan. 29, the U.S. Attorney's Office charged Adams Produce Chief Executive Officer Scott David Grinstead, 45, of Birmingham, with fraud against the company, failure to report a felony against the government and failure to file federal income tax returns. The felony that Grinstead is charged with being aware of and not reporting is the purchasing scheme.
According to the charges and plea agreements in the three cases, Pfahl, Kirkland and other employees of Adams Produce engaged in a scheme to create false records that reflected a higher purchasing cost for fruits and vegetables from a national distributor than Adams Produce actually paid. The inflated costs were then presented to the U.S. Government, which had agreed to pay a certain amount over Adams' cost for produce.
The federal government, through the Defense Supply Center Philadelphia, was one of Adams' customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public school systems, junior colleges and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records.
Grinstead is charged with knowing of the fraud against the government and allowing it to continue and end slowly, so as to avoid raising red flags with the government, rather than stopping the fraud and reporting it to authorities. Grinstead also is charged with wire fraud for wiring hundreds of thousands of dollars from an Adams Produce account to American Express to pay for clothing, jewelry, personal travel for himself and his family, lawn care at this home, and items for a house on Lake Martin.
Grinstead faces two counts of failure to file a federal income tax return, one for 2009 and one for 2010. According to the charges, Grinstead had gross income of about $748,801 in 2009 and about $1,878,700 in 2010 and willfully failed to file tax returns with the Internal Revenue Service for either year.
Grinstead has agreed to plead guilty to the charges against him. As part of his plea agreement with the government, he must pay $450,000 in restitution to the bankruptcy estate of Adams Produce for the benefit of the company's employees who were not fully paid when Adams closed abruptly and filed for bankruptcy last year.
The FBI and the Internal Revenue Service investigated the cases, which Assistant U.S. Attorney George A. Martin Jr. is prosecuting.
Tuscaloosa Man Sentenced 18 Months for Possessing and Intending to Distribute SteroidsRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Tuscaloosa man to 18 months in prison for possessing anabolic steroids with the intent to distribute the performance-enhancing drugs, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Special Agent in Charge Clay A. Morris.
U.S. District Judge R. David Proctor sentenced JOHN WADE WALKER, 29, on one count of Possession with the Intent to Distribute a Controlled Substance. Walker pleaded guilty to the charge in April 2012. He is scheduled to report to prison April 10, 2013.
According to Walker’s December 2011 indictment, the steroids recovered at his Tuscaloosa home when he was arrested in August 2011 included: Dromostanolone Prioprionate Trenbolone Enanthate Testosterone Proprionate, Methenolone Enanthate, Testosterone Cypionate, Testosterone Enanthate, Nandrolone Decanoate, Testosterone Proprionate Testerone Isocaproate Testosterone Phenylproprionate, Dromostanolone Proprionate, Trenbolone Enanthate, Boldenone Undecylenate, Testosterone, Stanozolol, Oxymethelone, and Methandrostenolone.
The DEA, in conjunction with the West Alabama Drug Task Force, investigated the case. Assistant U.S. Attorney John B. Felton is prosecuting the case.
Warrior Bank Employee Indicted for EmbezzlementRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Hayden woman for embezzling from the Warrior bank where she worked, announced U.S. Attorney Joyce White Vance and U.S. Secret Service Special Agent in Charge Roy Sexton.
The one-count indictment filed in U.S. District Court charges FRANCES DUCKWORTH, 51, with embezzling from Superior Bank and its successors between November 2009 and August 2012. Duckworth worked as head teller at the Warrior bank branch during that time. The bank is now Cadence Bank.
The indictment seeks to have Duckworth forfeit $202,994 as proceeds of illegal activity.
The embezzlement charge carries a maximum penalty of 30 years in prison and a $1 million fine.
The Secret Service investigated the case, which Assistant U.S. Attorney Henry Cornelius is prosecuting.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Former Town Creek Police Officer Indicted for Using Excessive ForceRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a former Town Creek police officer for violating an individual’s civil rights during the course of an arrest, announced U.S. Attorney Joyce White Vance, Assistant Attorney General Thomas E. Perez, chief of the Department of Justice’s Civil Rights Division, and FBI Special Agent in Charge Richard D. Schwein Jr.
The indictment filed in U.S. District Court charges BRANDON SHANE MUNDY, 32, of Oxford, with striking a man with a dangerous weapon and causing bodily injury during the man’s November 2009 arrest in Town Creek, a small northern Alabama town. Mundy’s action deprived the man, identified as J.T., of the constitutional right to be free from the use of unreasonable force by someone acting under the color of law, according to the indictment.
If convicted, Mundy could face a maximum sentence of 10 years in prison and a $250,000 fine. An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The FBI is investigating the case, and it is being prosecuted by Assistant U.S. Attorney Elizabeth Holt and Justice Department Civil Rights Division Trial Attorney Daniel H. Weiss.
Former Postal Service Employee Indicted for Fraud in Travel ExpensesRead the Press Release
Former Postal Service Employee Indicted for Fraud in Travel Expenses
BIRMINGHAM – A federal grand jury today indicted a former U.S. Postal Service employee for a wire fraud scheme in which he falsified electronic travel vouchers totaling more than $30,000, announced U.S. Attorney Joyce White Vance and Postal Service Office of Inspector General Assistant Special Agent in Charge Christopher Nugent.
The indictment filed in U.S. District Court charges BOBBY W. BRUCE JR., 36, of Gadsden, with submitting 39 false expense vouchers through the Postal Service’s electronic travel expense system. Bruce sought mileage reimbursement between January 2012 and October 2012 for official travel that he never took, according to the indictment. Once the fictitious expense claim was submitted, Bruce used his manager’s computer login information to approve the voucher, the indictment says.
The Postal Service Finance and Account Center in Minnesota approved the falsified vouchers and paid $31,126 as mileage reimbursement into Bruce’s credit union account in Gadsden, according to the indictment.
The indictment seeks to have Bruce forfeit that amount as proceeds of illegal activity.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine.
The U.S. Postal Service Office of Inspector General investigated the case, which Assistant U.S. Attorney Terence M. O’Rourke is prosecuting.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Former Bessemer Housing Authority Bookkeeper Sentenced to 30 Months in PrisonRead the Press Release
BIRMINGHAM – A federal judge today sentenced a former bookkeeper for the Bessemer Housing Authority to 30 months in prison and six months home detention for stealing nearly $200,000 from the agency with forged checks, announced U.S. Attorney Joyce White Vance and Housing and Urban Development Inspector General David A. Montoya.
U.S. District Judge L. Scott Coogler sentenced LAWANA R. LAWRENCE, 50, of Jasper, to six months in prison and six months of home detention for theft of government property, plus two years in prison for aggravated identity theft. Lawrence pleaded guilty to the charges in August. Lawrence also must forfeit $198,700 to the government as proceeds of illegal activity and pay the same amount in restitution.
She is scheduled to report to prison April 8.
“This defendant worked for a government agency whose mission is to help low-income families find affordable rental housing. She undercut that mission and took advantage of her position to steal from the program and the tax payers who support it,” Vance said. “Her abuse of the public trust warrants this sentence.”
HUD governs the rental assistance program and annually provides money to the Bessemer Housing Authority to support it.
Lawrence worked as a bookkeeper for the Bessemer Housing Authority in 2010. From June through September that year, she wrote 28 checks to herself or to the person she was living with and affixed electronic signatures of the Housing Authority’s executive director and its board chairman to the checks, according to Lawrence’s plea agreement with the government. She had access to the signatures on her work computer, but placed them on the checks without authorization.
Between July 6, 2010, and Sept. 13, 2010, Lawrence deposited the checks into a bank account assigned to Lawana R. Lawrence, doing business as Woni’s Bookshelf. Lawrence owned Woni’s, a bookstore in Sumiton, according to the plea agreement. Housing Authority checks deposited into that account totaled $198,700.
The HUD Office of Inspector General, in cooperation with the Bessemer Police Department and the Jefferson County District Attorney’s Office in Bessemer, investigated the case, and it is being prosecuted by the U.S. Attorney’s Office for the Northern District of Alabama.
Federal Prosecutors Charge Adams Produce CEORead the Press Release
BIRMINGHAM – Federal prosecutors today charged the CEO of Adams Produce Company with fraud against the company, failure to report a felony against the government and failure to file federal income tax returns, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and IRS Criminal Investigation Division Acting Special Agent in Charge Veronica Hyman-Pillot.
The U.S. Attorney’s Office charged former Adams Produce Chief Executive Officer SCOTT DAVID GRINSTEAD in a four-count information filed in U.S. District Court. Prosecutors also filed a plea agreement with Grinstead, in which he acknowledges his guilt and agrees to plead guilty.
As part of his plea agreement, Grinstead, 45, of Birmingham, must pay $450,000 in restitution to the bankruptcy estate of Adams Produce for the benefit of the company’s employees who were not fully paid because of Adams’ abrupt closing and its filing for bankruptcy last year.
“This case involves the chief executive officer of a company who allowed officers and employees to continue cheating the government on contracts involving military bases and schools while, at the same time, he continued to steal from the company,” Vance said. “This plea holds him responsible for criminal acts that harmed the government and his company. We are pleased that resolution of this case will bring some compensation to the employees who lost their jobs and did not receive their final paychecks from Adams Produce,” she said. “The investigation of wrongdoing by former officers and employees continues, and any who have committed crimes will be held accountable.”
Grinstead is the second Adams Produce official prosecutors have charged in connection with fraud at the Birmingham-based company that had been a leading distributor of fresh fruits and vegetables across the Southeast for many years. In December, the U.S. Attorney’s Office charged Christopher Alan Pfahl, 41, of Birmingham, with conspiracy to defraud the federal government of several hundred thousand dollars through a scheme to create false invoices and purchase orders. Pfahl was a purchasing program specialist for Adams Produce. He pleaded guilty to the charge last week.
That conspiracy involved Pfahl and other officers and employees of Adams Produce engaging in a scheme to create false records that reflected a higher purchasing cost for fruits and vegetables than the company actually paid. The inflated costs were then presented to the U.S. Government, which had agreed to pay a certain amount over Adams’ cost for produce.
The federal government, through the Defense Supply Center Philadelphia, was one of Adams’ customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public school systems, junior colleges and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records.
One of the charges against Grinstead is misprision of a felony for knowing of the fraud Pfahl and others were engaged in and allowing it to continue and end slowly, so as to avoid raising red flags with the government, rather than stopping it immediately and reporting it to authorities.
Grinstead also is charged with wire fraud for wiring hundreds of thousands of dollars from an Adams Produce account to American Express to pay for clothing, jewelry, personal travel for himself and his family, lawn care at his home, and items for a house on Lake Martin, according to the information.
Grinstead faces two counts of failure to file a federal tax return, one for 2009 and one for 2010. The information charges that Grinstead had a gross income of about $748,801 for the 2009 calendar year and willfully failed to file an income tax return with the Internal Revenue Service. In 2010, according to the information, Grinstead received about $1,878,700 in gross income and willfully did not file a return with the IRS.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine. For misprision of a felony, the maximum sentence is three years in prison and a $250,000 fine. The maximum penalty for failure to file an income tax return is one year in prison and a $100,000 fine.
The FBI and the IRS investigated the case, and it is being prosecuted by Assistant U.S. Attorney George A. Martin Jr.
Birmingham Tax-Preparer Convicted for Aiding Filing of False Tax ReturnsRead the Press Release
BIRMINGHAM -- A federal jury on Thursday convicted a Birmingham tax-preparer for aiding and abetting the filing of false income tax returns, announced U.S. Attorney Joyce White Vance and IRS Criminal Investigation Division Acting Special Agent in Charge Veronica Hyman-Pillot.
The jury convicted SALLY ELIZABETH WYNN, 64, on three counts of aiding and abetting the filing of a false return following a three-day trial before U.S. District Judge R. David Proctor. Wynn was a 30-year professional tax-preparer and owner of Centerpoint Financial Services.
“While most preparers provide excellent service to their clients, a few dishonest return preparers file false tax returns and give the client a false sense of security,” Hyman-Pillot said. “IRS does not endorse or recommend tax preparers, but we do offer guidelines to help the public choose a reliable tax professional. These guidelines are available on the IRS website,” she said. “Taxpayers should choose carefully when hiring a tax preparer. As the old saying goes, ‘If it sounds too good to be true, it probably is.’”
According to evidence at trial, Wynn helped one of her clients hide income from the Internal Revenue Service for the 2005, 2006, and 2007 tax years. The evidence showed that Wynn provided tax-preparation and bookkeeping services to Gonzalez Construction Incorporated and its owner, Jose Gonzalez. As a result, Wynn knew that Gonzalez received at least $340,000 in personal income during each of the years in question. Nevertheless, she prepared tax returns for him that claimed between $55,000 and $66,000 in total income during each of the three years.
Gonzalez still faces criminal charges for his role in these crimes.
Wynn is scheduled for sentencing May 8.
Wynn could face a maximum sentence of three years in prison on each of the three counts of aiding and abetting the filing of a false tax return.
The IRS investigated the case. Assistant U.S. Attorneys Melissa K. Atwood and Robin B. Mark prosecuted the case.
Huntsville Army Officer Convicted of False Statements and Theft of Government PropertyRead the Press Release
HUNTSVILLE – A federal jury today convicted a U.S. Army officer for making false statements to a department of the United States and for stealing government property, announced U.S. Attorney Joyce White Vance and John F. Khin, special agent in charge, Defense Criminal Investigative Service, U.S. Department of Defense.
The jury convicted Lt. Col. James O. McLinnaham, 45, who is stationed at Redstone Arsenal in Huntsville, after a three-day trial before U.S. District Judge Abdul K. Kallon. The jury found McLinnaham guilty of three counts of making false statements on official, confidential disclosure forms; one count of making false statements in a questionnaire for national security clearance; and three counts of making false statements in work orders submitted to the Army print shop.
Evidence at trial showed the defendant had certified that the financial disclosure forms were true when he had failed to disclose his position with an outside business, and to having received wages and other payments from that business. The evidence showed that the defendant had certified that his questionnaire for national security clearance was true when he had failed to disclose his association with the same business, a prior marriage, and a prior misdemeanor arrest. The defendant was required to fill out all these forms as part of his official duties with the U.S. Army.False statements on the work orders related to McLinnaham certifying that posters printed and mounted by the Army print shop were for official purposes when they were actually for his outside business. The theft of government property charge related to the same posters, and to the defendant obtaining a conference table from Redstone Arsenal for which his business received a $400 credit toward the purchase of another conference table from a local furniture store.
“The citizens are entitled to expect honesty and integrity from all government employees, including military personnel,” Vance said. “This case is important because it demonstrates our commitment to investigating and prosecuting those who do not live up to the trust that our citizens have placed in them,” she said.
The defendant faces a maximum sentence of five years in prison and a $250,000 fine for the false statement charges. He also faces a maximum sentence of 10 years in prison and a $250,000 fine for the theft charge.
McLinnaham is tentatively scheduled for sentencing in April.
The case was investigated by the Defense Criminal Investigative Service, with assistance from the U.S. Army Criminal Investigation Command, and the Internal Revenue Service, Criminal Investigation Division. Assistant U.S. Attorneys Russell E. Penfield and Terence M. O’Rourke prosecuted the case.
Closing Attorney Charged with Wire Fraud in Mortgage Loan SchemeRead the Press Release
BIRMINGHAM – Federal prosecutors have charged a Birmingham real estate lawyer with wire fraud in connection with a nearly $1 million mortgage fraud scheme, announced U.S. Attorney Joyce White Vance.
The U.S. Attorney’s Office charged KELVIN LEONARD DAVIS, 41, with four counts of wire fraud for knowingly submitting false mortgage documents and statements to various lenders in order to obtain approval for mortgage loans. At the time of the fraudulent transactions, from October 2007 to January 2012, Davis served as the closing attorney on each of the fraudulent loan transactions.
Davis has agreed to plead guilty to the charges and to forfeit $269,335 to the government as proceeds of the illegal activity.
The charges against Davis were filed in October. Documents in the case were unsealed last week in U.S. District Court.
According to the four-count information charging Davis, and his plea agreement with the government, he carried out his fraud as follows:
Davis submitted false statements with loan documents in order to obtain approval for mortgage loans that would, otherwise, not have been approved. In many instances, Davis, while serving as closing attorney, would use his trust account to provide money to the borrower when a mortgage loan was closing. Davis would recover the money by subtracting the amount he provided from the proceeds he issued to the seller. Davis also would assess the seller a fee, ranging from $1,000 to $6,000, and make checks for the fee payable to Peaceful Valley Homes, a corporation he had formed. Total losses to the various lenders as a result of Davis’ fraud were nearly $1 million.
The maximum sentence for each count is 20 years in prison and a $1 million fine.
The FBI and the Department of Housing and Urban Development, Office of Inspector General, investigated the case, which Assistant U.S. Attorney Robin Mark is prosecuting.