Eastern District of Arkansas
Press releases recorded for this federal judicial district.
Helena-West Helena Men Sentenced Following SNAP Benefits Fraud SchemeRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), and Dax Roberson, Acting Special Agent in Charge of the Office of Inspector General Southwest Region of the United States Department of Agriculture (USDA), announced today the sentencings of the two lead defendants in a scheme to defraud USDA and the SNAP food benefit program.
Thursday, United States District Judge Kristine G. Baker sentenced Khalid Alkarsh, 40, of Helena-West Helena, to 16 months in federal prison, and Bakil Mohamed Alqirsh, 27, also of Helena-West Helena, to three years’ probation, with the first 10 months spent in home confinement. In addition, the two are jointly responsible for repaying the USDA $107,486.36 in restitution.
Alkarsh and Alqirsh each pleaded guilty on January 24, 2017, to conspiracy to defraud the USDA of money from the SNAP benefit program. SNAP benefits provide economic assistance for low-income individuals to purchase food. Alkarsh, who owned the Stop and Shop convenience store in Helena-West Helena, and Alqirsh, who was a cashier and manager at the store, allowed SNAP recipients to trade their SNAP benefits for ineligible items such as beer and cigarettes, and for cash. When a SNAP recipient redeemed their benefits for cash, Alkarsh and Alqirsh paid the recipient approximately 60% of the transaction amount, and the Stop and Shop kept 40%.
Alkarsh and Alqirsh were two of 24 individuals initially indicted in the scheme, with the other 22 alleged to be SNAP recipients who improperly redeemed their benefits at the Stop and Shop. Two defendants were later dismissed, and all others have pleaded guilty and either been sentenced or are awaiting sentencing.
The investigation was conducted by the FBI and USDA, and is being prosecuted by Assistant U.S. Attorney Julie Peters.
Operation Dismantles Major Little Rock Drug Rings, 52 Alleged Drug Traffickers Now in CustodyRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), Kenton Buckner, Chief of Little Rock Police Department (LRPD), and Mike Davis, Chief of North Little Rock Police Department (NLRPD) announced today the unsealing of multiple federal indictments following the successful conclusion of an early morning operation that resulted in the arrests of dozens of accused drug and gun dealers in central Arkansas.
Wednesday morning’s operation culminated an 18-month joint investigation into several drug-trafficking organizations, primarily in Little Rock. Twenty-five people were arrested today—joining the 27 people indicted who were already in custody—while nine individuals remain at large. Fifty of the 61 defendants are from Little Rock.
Eight indictments were unsealed Wednesday, including five that alleged drug conspiracies. The largest involved a 33-defendant, 67-count indictment alleging heroin and cocaine conspiracies, both headed by Aaron “Black” Clark, 33, of Little Rock. Other indictments allege cocaine and crack cocaine conspiracies, and contain multiple methamphetamine, fentanyl, heroin, cocaine, and crack cocaine possession and distribution charges, as well as multiple gun charges.
The defendants arrested today will have initial appearances and enter pleas before United States Magistrate Judge Tricia. S. Harris on Friday. Judge Harris will see those who were already in custody on Wednesday, May 31.
“Targeting violent drug dealers remains a priority for my office, as well as for all law enforcement agencies in central Arkansas,” Acting U.S. Attorney Harris said. “Drugs continue to be a prime source of crime and violence in our city, and taking these criminals off the streets has made Little Rock a safer place. A major operation like this is not possible without the help of all agencies involved, particularly the FBI and the Little Rock and North Little Rock Police Departments. And while today’s operation represents a victory against dangerous criminals, it in no way ends our coordinated efforts to ease crime in Little Rock and improve the lives and security of law-abiding citizens in our city.”
In late 2015, the FBI and NLRPD began investigating the drug-trafficking activities of certain North Little Rock gangs. Investigators soon learned the gangs’ source of supply of drugs came from individuals in Little Rock. Through the use of several investigative tactics, including the controlled purchases of drugs, multiple wiretaps, and the execution of search warrants, among other methods, agents with the FBI and LRPD located and identified multiple drug sources of supply, and more than 60 suspects.
Eventually, in November 2016, agents executed a search warrant at the west Little Rock residence of Clark. Agents seized more than $100,000 cash and jewelry, 170 grams of heroin, a marijuana grow operation, and six firearms.
“Today’s arrests show our collective resolve to attack and dismantle these violent drug organizations that destroy our communities and generate fear in its citizens,” FBI SAC Upchurch said. “The FBI and our partners at the United States Attorney’s Office, Little Rock Police Department, North Little Rock Police Department, Arkansas State Police, Arkansas National Guard, and Pulaski County Sheriff’s Office will remain committed to identifying drug traffickers and removing them from the streets to protect our cities.”
Throughout the investigation, agents seized more than two kilograms of cocaine, one kilogram of heroin, more than a pound each of crack cocaine and methamphetamine, and eight ounces of fentanyl. Officers seized these drugs during more than 25 controlled purchases, as well as during the execution of multiple search warrants. In addition, agents seized 25 guns and approximately $241,000 of drug proceeds.
In addition to the work by the FBI’s Met Rock Task Force, local law enforcement assisted in the case. LRPD, for example, was familiar with many of individuals in the drug-trafficking organizations targeted in these federal indictments, and joined the FBI in making the arrests of these defendants a priority.
“Today, the Little Rock Police Department received some much needed assistance from the FBI and U.S. Attorney’s Office,” LRPD Chief Buckner said. “Our collaboration resulted in the indictment of many problem individuals within our city. LRPD is very appreciative of this ongoing partnership—with special thanks to Diane Upchurch and Pat Harris—and will continue to work with our federal partners in the future. This is another example of the work performed as a result of our participation in the Violence Reduction Network.”
“The North Little Rock Police Department initiated an investigation into the illegal sale of cocaine in our city that then revealed the illegal sale of methamphetamine, heroin, and weapons around central Arkansas,” NLRPD Chief Davis said. “The NLRPD contacted the FBI to assist with this investigation. We are grateful for the outcome, and will continue to work with federal agencies to reduce violence in our community and to take illegal drugs and weapons off the streets.”
Several agencies, including the Arkansas State Police, National Guard, and Pulaski County Sheriff’s Office, who each provided manpower and logistical support during the early-morning takedown, also combined to help make the Wednesday morning arrests.
“The Arkansas State Police acknowledges the significance of good teamwork,” said Colonel Bill Bryant, Director of the Arkansas State Police. “The efforts of a multi-jurisdictional team paid off today by stopping these individuals from further criminal acts and strengthening the public’s trust and respect of law enforcement officers who work together to make our cities and towns safer places to live.”
“The National Guard stands shoulder to shoulder in supporting law enforcement to contain the heroin epidemic facing our communities and state,” National Guard Lieutenant Colonel Chuck Vereen said. “Our Counter Drug Program is dedicated to help keep children and families safe, we are all in!”
The primary investigation was conducted by FBI’s Met Rock Task Force, in coordination with the LRPD and NLRPD. Also assisting Wednesday’s operation was the Arkansas State Police, the National Guard, and the Pulaski County Sheriff’s Office. Assistant United States Attorney Benecia Moore is the lead prosecutor on the indictments.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Indictments unsealed Wednesday
U. S. v. Aaron Laray Clark, et al – 4:17-cr-00111-JM
Aaron Laray Clark a/k/a “Black”, 35, Little Rock^^^
Hector Soto, 54, El Paso, Texas***
Elijah Alexander, III, 27, Little Rock***
Jason Michael Banks, 45, Little Rock^^^
John Webster Batton, 38, Searcy^^^
Carlos Eugene Burton, 37, Little Rock
Shannon Allen Cathey, 41, Little Rock
Jeremy Donte Craig, 33, Springdale^^^
Jabari Zaki Cummins, 39, Little Rock
Abreana Laray Daniels, 23, Little Rock***
Lekedric M. Davis, 31, Little Rock
Martin Drew Dehaven, 28, Little Rock
Kevin Dwane Dixon, 36, Little Rock
Alicia Lauren Fullington, 34, Little Rock^^^
Joseph Jamar Handy, 34, Little Rock
Desmond Kentrell Kelley, 23, Little Rock
Lowell John Ladd, 28, Little Rock^^^
Henry Lionell Lee a/k/a “Red”, 43, Little Rock
Antonio L. Lewis, 28, Benton^^^
Dalvin D. Lewis, 40, Little Rock
Marlon Shawn Marbley, Sr. a/k/a “Mob”, 45, Little Rock^^^
Jamal Cornell McCoy, 42, Little Rock***
Kwesi Okang Montague, 38, Little Rock^^^
Rachel Elizabeth Moore, 29, Little Rock^^^
Lucas Todd Murray, 33, Little Rock
Christopher S. Newman, Jr., 26, Jacksonville***
Roderick O. Rainey, 46, Little Rock^^^
Benson Dubois Smith, 31, Little Rock
Christopher Forsean Smith, 33, North Little Rock
Timothy Dewann Smith, 30, Little Rock***
Lionell Tidwell, 41, Greenbriar^^^
Davaris Daquante Whitehead, 26, North Little Rock^^^
Bryan Deshawn Young, 29, North Little Rock^^^U. S. v. Marcus Jermaine Buckner, et al – 4:17-cr-00110-DPM
Marcus Jermaine Buckner, 35, Little Rock
Antonio Louis Bumpers, 28, Little Rock***
Marcus J. Clark, 40, Little Rock
Willie Craig, III, 42, Little Rock^^^
Alvin Dean Withers, Jr., 32, Little Rock^^^U. S. v. Thaddeus Eugene Higgins, Jr. et al – 4:17-cr-00113-KGB
Thaddeus Eugene Higgins, Jr., 28, Little Rock
Fabian A. Bridgewater, 37, Little Rock
Laquina Rena Cheatham, 35, Little Rock^^^
Rodrick Deshawn Cunningham, 38, Little Rock***
Henry Lee Dupree, Jr., 68, Little Rock^^^
Courtney Ray Foster, 34, Little Rock
Brandon Deshawn Higgins, 21, Little Rock^^^
Brian Lamont Higgins, 34, Little Rock
Charles Bernard Higgins, 37, Little Rock^^^
William Frank Jones, 57, Pine Bluff^^^
Clarence Edward Walker, Jr., 28, Little RockU. S. v. Jeremiah Hollis, Sr. a/k/a “Trigg”, et al – 4:17-cr-00114-DPM
Jeremiah Hollis, Sr. a/k/a “Trigg”, 40, Little Rock^^^
Regina Evette Nelson, 47, Little Rock
Abdulah Farig Woods, 31, Little RockU. S. v. Antonio Malone a/k/a “Greenlight”, et al – 4:17-cr-00116-DPM
Antonio Lamont Malone a/k/a “Greenlight”, 37, Little Rock^^^
Christopher Bernard Bell a/k/a “Boonie”, 27, Little Rock
Antonio Dewayne Harris a/k/a “Big Yoke”, 37, Little Rock
Judge Lee Daniels, 26, Little Rock
Michael Princeton Marshall, 31, Little Rock
Terrence Edward Wright, 39, Little RockU. S. v. Hillary Ann Harmon – 4:17-cr-00112-BSM
Hillary Ann Harmon, 34, Little Rock^^^U. S. v. Aaron William Lyman – 4:17-cr-00115-KGB
Aaron William Lyman, 36, North Little Rock^^^U. S. v. Benjamin S. Schreiber – 4:17-cr-00117-BRW
Benjamin S. Schreiber, 32, Little Rock****** Fugitive
^^^ Arrested Wednesday
STATUTORY SENTENCES
Conspiracy to possess with intent to distribute and to distribute more than 1 kilogram of heroin is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Conspiracy to possess with intent to distribute and to distribute more than 100 grams but less than 1 kilogram of heroin is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Conspiracy to possess with intent to distribute and to distribute more than 5 kilograms of cocaine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Conspiracy to possess with intent to distribute and to distribute more than 500 grams but less than 5 kilograms of cocaine is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Conspiracy to possess with intent to distribute and to distribute more than 280 grams of crack cocaine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Conspiracy to possess with intent to distribute and to distribute more than 28 grams but less than 280 grams of cocaine is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Possession with intent to distribute or distribution of more than 50 grams of actual methamphetamine or more than 500 grams of a methamphetamine mixture is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Possession with intent to distribute or distribution of more than 5 grams, but less than 50 grams, of actual methamphetamine is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Possession with intent to distribute or distribution of more than 100 grams, but less than 1 kilogram, of heroin is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Possession with intent to distribute or distribution of more than 28 grams, but less than 280 grams, of crack cocaine is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Possession with intent to distribute or distribution of less than 28 grams of crack cocaine is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Possession with intent to distribute or distribution of less than 500 grams of cocaine is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Possession with intent to distribute or distribution of less than 100 grams of heroin is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Possession with intent to distribute or distribution of less than 50 grams of methamphetamine mixture is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Possession with intent to distribute or distribution of fentanyl is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Possession of a firearm by a felon is punishable by not more than 10 years’ incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 3 years supervised release.
Use of a firearm during and in relation to a drug-trafficking crime is punishable by not less than 5 years, not more than life incarceration in the Bureau of Prisons, consecutive to any other charge, with a possible fine of up to $250,000, and not more than 3 years supervised release.
Use of a communication facility to facilitate a drug trafficking crime is punishable by not more than 4 years incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 1 year supervised release.
Former Pulaski County Sheriff's Office Employee Pleads Guilty, Admits to Stealing Sheriff's Office FundsRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), announced today that former Pulaski County Sheriff’s Office (PCSO) employee Kelvin Hendrix, 48, of Bauxite, pleaded guilty to conspiracy to commit mail fraud. Jennifer Gann, 36, of North Little Rock, who conspired with Hendrix to steal funds from the PCSO, also pleaded guilty to the same charge.
Hendrix and Gann each waived indictment and pleaded to a one-count federal Information. Today’s hearings took place in Little Rock before United States District Court Judge D.P. Marshall Jr., who will sentence Hendrix and Gann on October 12.
As detailed in the change of plea hearings, between April 2011 and April 2016, Hendrix, a former Quartermaster for the Pulaski County Regional Detention Center who worked for the PCSO for 25 years, and Gann, a former employee at Cruse Uniforms & Equipment, devised a scheme to steal funds allocated by the PCSO for the purchase of uniforms and equipment. The pair then used those stolen funds to purchase firearms and other goods from Cruse for personal use.
As the Quartermaster, Hendrix managed the purchase and distribution of uniforms and equipment for all employees working at the jail. All uniforms and equipment for these employees are purchased from Cruse. Gann was the Inside Sales Manager for Cruse and worked for Cruse for 16 years.
Detention Center employees received a uniform and equipment monetary allowance, to be used at Cruse. As part of the scheme, Hendrix provided Gann a list of employees who had not used their entire allowance, and Gann created false purchase invoices for items purportedly purchased by those employees. Based on those false purchase orders, the PCSO remitted payment (via the United States Postal Service) to Cruse. Gann would then produce another invoice showing the items as returned, and credit the value of the items to Hendrix—rather than the PCSO—in the form of a store credit.
As an example, on December 2, 2015, Gann created a purchase invoice with information provided by Hendrix, for the purchase of 42 PCSO tee shirts. The total charged to PCSO in connection with this purchase invoice was $526.47. Gann then created a return of merchandise invoice documenting the return of the 42 shirts, but issued $526.47 in store credit to Hendrix personally. That same day Hendrix purchased two handguns—a Glock Model 43 and a used Glock Model 30—for $553.72, primarily paid for with the store credit.
Hendrix purchased more than 40 firearms in this manner. Hendrix and Gann also admitted in their plea agreements that, throughout the entirety of the scheme, PCSO’s loss amount is between $40,000 and $95,000. The issue of the exact amount of restitution will be determined at sentencing.
The charge of conspiracy to commit mail fraud, pursuant to 18 U.S.C. § 371, carries a statutory penalty of not more than five years’ imprisonment, not more than a $250,000 fine, and not more than three years of supervised release. This case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Benecia B. Moore.
Three Former Arkansas Juvenile Detention Officers Indicted for Conspiracy to Assault Juvenile DetaineesRead the Press Release
The Justice Department announced that three former White River Juvenile Detention Center officers: Will Ray, 26, Thomas Farris, 47, and Jason Benton, 42, have been indicted by a federal grand jury for their roles in a conspiracy to assault juvenile inmates.
The seven-count indictment charges that Ray, Farris, and Benton conspired to assault juvenile detainees, assaulted the detainees, and then tried to cover up their misconduct. The indictment charges that, in some instances, the defendants used pepper spray on juveniles and then, rather than decontaminating them, shut them in their cells to “let them cook.”
In addition to the conspiracy, Ray is charged in Count Two with participating in the Nov. 6, 2013, assault of a fourteen-year-old boy who had been lying asleep on his bunk. According to the indictment, Ray grabbed the boy from his bunk and held him so that another officer could spray the boy in the face with pepper spray.
Farris, in addition to the conspiracy, is charged in Count Three with assaulting a seventeen-year-old juvenile on Nov. 21, 2013, by pepper spraying him in the face.
Counts Four through Seven of the Indictment charged Benton with two assaults and with falsifying incident reports related to those assaults. According to the Indictment, on June 6, 2012, Benton assaulted a sixteen-year-old juvenile by grabbing, shoving, and choking him. The indictment also charges that, on May 19, 2013, Benton deployed pepper spray in the face of a fifteen-year-old juvenile. According to the indictment, none of the juveniles posed a physical threat to anyone nor physically resisted in any way at the time they were assaulted by the officers.
The charges contained in this indictment are simply accusations, and not evidence of guilt.
This case is being investigated by the FBI’s Little Rock Division and is being prosecuted by Assistant U.S. Attorney Julie Peters of the Eastern District of Arkansas and Trial Attorney Samantha Trepel of the Civil Rights Division.
Three Former Arkansas Juvenile Detention Officers Indicted for Conspiracy to Assault Juvenile DetaineesRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), announced today that three former White River Juvenile Detention Center officers, Will Ray, 26, Thomas Farris, 47, and Jason Benton, 42, have been indicted by a federal grand jury for their roles in a conspiracy to assault juvenile inmates.
The White River Juvenile Detention Center is located in Batesville, Arkansas. The seven-count Indictment charges that Ray, Farris, and Benton conspired to and did assault juvenile detainees. The indictment charges that, in some instances the defendants used pepper spray on the juveniles and then, rather than decontaminating them, shut them in their cells to “let them cook.”
“As I have stated before, there is no excuse for correction officers to violate the law,” Acting U.S. Attorney Patrick C. Harris said. “Correction officers who violate the civil rights of others can expect to, and will be, prosecuted.”
“We at the FBI continue to be appalled at what occurred to these minors,” stated Special Agent in Charge Diane Upchurch with the Little Rock FBI Field Office. “Along with our partners at the Justice Department, we are steadfast in our commitment to investigate and punish those responsible for these reprehensible actions.”
In addition to the conspiracy, Ray is charged in Count Two with participating in the November 6, 2013, assault of a fourteen-year-old boy who had been lying asleep on his bunk. According to the indictment, Ray grabbed the boy from his bunk and held him so that another officer could spray the boy in the face with pepper spray.
Farris, in addition to the conspiracy, is charged in Count Three with assaulting a seventeen-year-old juvenile on November 21, 2013, by pepper spraying him in the face.
Counts Four through Seven of the Indictment charge Benton with two assaults and with falsifying incident reports related to those assaults. According to the Indictment, on June 6, 2012, Benton assaulted a sixteen-year-old juvenile by grabbing, shoving, and choking him. The indictment also charges that, on May 19, 2013, Benton assaulted a fifteen-year-old juvenile by pepper spraying him in the face. According to the indictment, none of the juveniles posed a physical threat to anyone nor physically resisted in any way at the times they were assaulted by the officers.
Two former White River Juvenile Detention Center supervisors, Captain Peggy Kendrick, 43, and Lieutenant Dennis Fuller, 40, pleaded guilty on April 26, 2016, in federal court before U.S. District Judge James M. Moody Jr. to conspiring to assault juvenile inmates. Kendrick also pleaded guilty to assaulting a sixteen-year-old girl using pepper spray and to obstructing justice by falsifying an incident report about that assault. The court will set a sentencing hearing date for Kendrick and Fuller after Presentence Investigation Reports are completed.
The maximum potential penalty for a violation of 18 U.S.C. § 241 (Conspiracy Against Rights) is up to ten years imprisonment, up to three years of supervised release, and up to a $250,000 fine. The maximum potential penalty for a violation of 18 U.S.C. § 242 (Deprivation of Rights Under Color of Law) is up to ten years imprisonment, up to three years of supervised release, and up to a $250,000 fine. The maximum potential penalty for a violation of 18 U.S.C. 1519 (Falsification of Records in Federal Investigations) is up to twenty years imprisonment, up to three years of supervised release, and up to a $250,000 fine. Accordingly, Kendrick faces a statutory maximum sentence of 40 years in prison and Fuller faces a statutory maximum sentence of ten years in prison.
This case is being investigated by the FBI’s Little Rock Field Division and the investigation is ongoing. It is being prosecuted by Assistant U.S. Attorney Julie Peters of the Eastern District of Arkansas and Trial Attorney Samantha Trepel of the Civil Rights Division.
An indictment contains only allegations. The defendants are presumed innocent unless and until proven guilty.
Jury Finds Truck Driver Guilty Following Largest Seizure of Methamphetamine in Arkansas HistoryRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Matthew Barden, Assistant Special Agent in Charge, Drug Enforcement Administration (DEA), Little Rock District Office, and Colonel William J. Bryant, Director of the Arkansas State Police, announced today that a federal jury found Javier Leon, 56, of Moreno Valley, Calif., guilty of possessing with the intent to distribute methamphetamine in a case that involved the largest amount of methamphetamine ever seized in Arkansas. Law enforcement located more than 260 pounds of methamphetamine—worth millions of dollars—in the back of Leon’s tractor-trailer while he was traveling through Lonoke in 2015.
United States District Judge James M. Moody, Jr., presided over the four-day trial, which concluded Thursday with the jury verdict. Leon will be sentenced by Judge Moody at a later date.
"This seizure had enough methamphetamine to supply every man, woman, and child in Little Rock," Harris said. "Thanks to the efforts of several law enforcement agencies and agents, this significant amount of methamphetamine will never hit the streets, and never poison our communities. This jury verdict makes clear that whatever level of involvement you have with this drug—as a seller, user, or courier—there will be justice served and punishment delivered."
Testimony during the trial established that the 260 pounds of methamphetamine, broken into user quantities, could have had more than 300,000 individual user amounts, with a potential street value of $7-$8 million.
Leon owned his own 18-wheel tractor-trailer and drove for California furniture shipping company American West. On March 30, 2015, while heading east on Interstate 40, Leon pulled over and parked illegally on an exit ramp in Lonoke. Now-retired Arkansas State Police Corporal Olen Craig made contact with Leon, and the state police then searched the trailer after a drug-detection dog indicated narcotics were present.
Arkansas State Police Corporal Chase Melder located the methamphetamine, which included more than 22 pounds of powder methamphetamine and more than 240 pounds of liquid methamphetamine, amongst a load of furniture destined for Alabama and the Atlanta area. The liquid methamphetamine was contained in multiple five-gallon plastic jugs, similar to the type of jugs used with water coolers.
"Stopping drug traffickers traveling across Arkansas highways is a priority for state troopers, particularly the department’s criminal interdiction unit," Bryant said. "This case represents a major victory in stopping illegal drugs from getting to a destination and our troopers are committed to staying in the fight."
The DEA became involved in the case following the seizure and continued to investigate Leon. In addition to the guilty verdict, the jury found that the 18-wheel tractor-trailer is to be forfeited.
"The federal conviction of Javier Leon sends a strong message to criminals that we take methamphetamine trafficking very seriously in the Eastern District of Arkansas," Barden said. "The DEA will continue working with our law enforcement partners and pursue those who threaten our communities with the distribution of methamphetamine and other illegal and dangerous drugs."
The statutory penalty for possession with intent to distribute more than 500 grams of methamphetamine is not less than 10 years’ imprisonment, not more than life, a $10,000,000 fine, or both.
The investigation was conducted by the DEA, Arkansas State Police, Little Rock Police Department, and Lonoke County Sheriff’s Office. The case was prosecuted by Assistant United States Attorneys Chris Givens and Michael Gordon.
Monticello Man Sentenced to Prison for Theft of Government FundsRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Robert Feldt, Special Agent-in-Charge of the Dallas Field Division of the Social Security Administration, Office of the Inspector General (SSA/OIG), announced today that Thomas “Dale” Sass, 50, of Monticello, was sentenced by United States District Judge Kristine G. Baker to 57 months’ imprisonment for theft of government funds. Sass was also sentenced to three years of supervised release and ordered to pay restitution in the amount of $297,516 to his former sister-in-law.
Sass waived an indictment and pled guilty to one count of theft of government funds on August 25, 2016, arising from his use for himself of money meant for the care of a disabled relative.
Sass, in 1997, became the guardian of his former sister-in-law, who was severely injured in a car accident that left her in a coma for a year and killed her son. Subsequent to the accident, the former sister-in-law began receiving monthly disbursements from the Social Security Administration (SSA) and a private insurance company. Sass received and had control over disbursements made to his former sister-in-law in order to provide for her care.
Sass violated his fiduciary duty and defrauded the SSA by using the victim’s funds for his own benefit. At times, Sass even failed to pay the victim’s caretakers. Sass further defrauded the SSA by forging his brother’s name on the SSA checks in order to continue receiving the SSA money.
Harris stated, “We are vigilant in our prosecution of people who take advantage of the elderly, children, and disabled in our community and this prosecution is one more example of our efforts to protect their well-being and what is in their best interests.”
Robert G. Feldt, Special Agent-in-Charge stated that, “the Social Security Administration, Office of the Inspector General (SSA/OIG) will tirelessly investigate and bring to justice those who commit SSA program fraud and misuse their position of trust to victimize vulnerable beneficiaries.”
This investigation was conducted by the Social Security Administration, Office of the Inspector General and the Arkansas Department of Insurance, Criminal Investigation Division. The case was prosecuted by Assistant United States Attorney Erin O’Leary.
Little Rock "Pimp" Sentenced to More Than 15 Years Imprisonment for Sex Trafficking A MinorRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), announced today Dana “Big Face” Deffenbaugh, 36, of Little Rock, was sentenced to 188 months imprisonment for sex trafficking of a minor.
United States District Judge J. Leon Holmes also sentenced Deffenbaugh, who was known to prostitute multiple women, to 10 years of supervised release.
Deffenbaugh was indicted on two counts of sex trafficking on January 6, 2015. On September 19, 2016, he pleaded guilty to one count of sex trafficking of a minor.
“Sex trafficking is a problem throughout the United States,” Harris said. “The exploitation of a minor causes irreparable harm that is lasting. Even though this sentence does not erase the pain that the defendant has caused, it does send a strong message. There is no hesitation on our part to prosecute Deffenbaugh and criminals like him as vigorously as we can.”
The investigation began in December 2014, when the North Little Rock Police Department received a tip that a minor was being held against her will at a hotel and forced to prostitute by someone known as “Big Face.” The 17-year-old had been introduced to Deffenbaugh, who immediately told her “you my ho” and “you work for me now.” He then supplied the minor with drugs, had sex with her, and told her things such as she “does not exist no more” and “you have no outside life.”
Further investigation revealed that the minor and other female victims who worked for Deffenbaugh were forced to have sex with men who located their services on the now-defunct website Backpage.com. Each female saw an average of 15 customers a day, sometimes as many as 25, often with little to no sleep. The women then had to turn their money over to Deffenbaugh or face beatings. Deffenbaugh referred to himself as “Big Face” in reference to “big face hundred dollar bills.”
“Today’s sentencing of Deffenbaugh should make it clear beyond a shadow of a doubt that engaging in child prostitution and human trafficking of a minor is intolerable and unacceptable,” Upchurch said. “I appreciate the collaborative efforts of the United States Attorney’s Office and the North Little Rock Police Department.”
This investigation was conducted by the FBI and the North Little Rock Police Department. The case was prosecuted by Assistant United States Attorneys Allison W. Bragg and Kristin Bryant.
Two Former Arkansas Juvenile Detention Officers Plead Guilty to Conspiracy to Assaulting Juvenile DetaineesRead the Press Release
The Justice Department announced that two former White River Juvenile Detention Center supervisors, Captain Peggy Kendrick, 43, and Lieutenant Dennis Fuller, 40, pleaded guilty today in federal court to conspiring to assault juvenile inmates. Kendrick also pleaded guilty to assaulting a sixteen-year-old girl using pepper spray, and for obstructing justice by falsifying an incident report about that assault.
According to the guilty pleas, Kendrick, Fuller, and other unnamed former officers assaulted and physically punished juvenile detainees who posed no threat, by means that included spraying them in the face with pepper spray. In some instances, they then shut the compliant juveniles in their cells after pepper spraying them to “let them cook,” rather than immediately decontaminating them. Kendrick also encouraged the juvenile detention officers who unjustifiably assaulted juveniles to falsify their incident reports to cover up the assaults.
“Corrections officers who use excessive force against inmates in their custody violate the Constitution,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “The Justice Department is committed to vigorously investigating and prosecuting officers who break the public trust in this way.”
“When correction officers violate laws and the Constitution, they will be prosecuted. There is no exception,” said Acting U.S. Attorney Patrick C. Harris for the Eastern District of Arkansas. “I understand the difficult job they have, but that is not an excuse for assaulting a juvenile and obstructing an investigation. In fact, there is no excuse for that. That is a crime and we will prosecute the criminals.”
“We at the FBI are appalled at what occurred to these minors,” said Special Agent in Charge Diane Upchurch with the FBI Field Office in Little Rock, Arkansas. “Along with our partners at the Justice Department, we are steadfast in our commitment to investigate and punish those responsible for these incomprehensible actions.”
Kendrick faces a statutory maximum sentence of 40 years in prison; Fuller faces a statutory maximum sentence of 10 years in prison.
This case is being investigated by the FBI’s Little Rock Division and the investigation is ongoing. It is being prosecuted by Assistant U.S. Attorney Julie Peters of the Eastern District of Arkansas and Trial Attorney Samantha Trepel of the Civil Rights Division.
Two Former Arkansas Juvenile Detention Officers Plead Guilty to Conspiracy to Assault on Juvenile DetaineesRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), announced today that two former White River Juvenile Detention Center supervisors, Captain Peggy Kendrick, 43, and Lieutenant Dennis Fuller, 40, pleaded guilty today in federal court before U.S. District Judge James M. Moody Jr. to conspiring to assault juvenile inmates. Kendrick also pleaded guilty to assaulting a sixteen-year-old girl using pepper spray and to obstructing justice by falsifying an incident report about that assault. The White River Juvenile Detention Center is located in Batesville, Arkansas.
According to the guilty pleas to the felony Information, Kendrick, Fuller, and other unnamed former officers assaulted and physically punished juvenile detainees, who posed no threat, by spraying them in the face with pepper spray. In some instances, they then shut the compliant juveniles in their cells after pepper spraying them to “let them cook,” rather than immediately decontaminating them. Kendrick also encouraged the juvenile detention officers, who unjustifiably assaulted juveniles, to falsify their incident reports to cover up the assaults.
Acting U.S. Attorney Patrick C. Harris stated, “When correction officers violate laws and the Constitution, they will be prosecuted. There is no exception. I understand the difficult job they have, but that is not an excuse for assaulting a juvenile and obstructing an investigation. In fact, there is no excuse for that. That is a crime and we will prosecute the criminals.”
“Corrections officers who use excessive force against inmates in their custody violate the Constitution,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “The Justice Department is committed to vigorously investigating and prosecuting officers who break the public trust in this way.”
“We at the FBI are appalled at what occurred to these minors,” said Special Agent in Charge Diane Upchurch with the Little Rock FBI Field Office. “Along with our partners at the Justice Department, we are steadfast in our commitment to investigate and punish those responsible for these incomprehensible actions.”
The maximum potential penalty for a violation of 18 U.S.C. § 241 (Conspiracy Against Rights) is up to ten years imprisonment, up to three years of supervised release, and up to a $250,000 fine. The maximum potential penalty for a violation of 18 U.S.C. § 242 (Deprivation of Rights Under Color of Law) is up to ten years imprisonment, up to three years of supervised release, and up to a $250,000 fine. The maximum potential penalty for a violation of 18 U.S.C. 1519 (Falsification of Records in Federal Investigations) is up to twenty years imprisonment, up to three years of supervised release, and up to a $250,000 fine. Accordingly, Kendrick faces a statutory maximum sentence of 40 years in prison and Fuller faces a statutory maximum sentence of ten years in prison.
The court will set a sentencing hearing date after Presentence Investigation Reports are completed.
This case is being investigated by the FBI’s Little Rock Field Division and the investigation is ongoing. It is being prosecuted by Assistant U.S. Attorney Julie Peters of the Eastern District of Arkansas and Trial Attorney Samantha Trepel of the Civil Rights Division.
IRS Impersonators Steal Nearly $9 Million from Thousands of Victims in Nationwide SchemeRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, J. Russell George, Treasury Inspector General for Tax Administration (TIGTA), and Robert G. Feldt, Special-Agent-in-Charge, Social Security Administration, Dallas Field Division, announced today the unsealing of a superseding indictment and the Tuesday arrests of seven individuals who participated in a nationwide scheme to steal nearly $9 million from unsuspecting taxpayers by impersonating Internal Revenue Service (IRS) agents.
The superseding indictment, returned by a grand jury in the Eastern District of Arkansas on April 4, 2017 and unsealed today, charges 10 individuals with conspiracy to commit wire fraud. Two defendants—Jeniffer Valerino Nuñez and Dennis Delgado Caballero—were also named in 21 counts of wire fraud. Nuñez and Caballero, who were previously arrested in Miami on May 23, 2016, and remain in federal custody, were first named in the original indictment filed on June 8, 2016.
Tuesday’s operation, which lasted into the evening, resulted in the arrest of seven of the individuals named in the superseding indictment. Those seven are all Cuban nationals who were living in south Florida, primarily Miami. Tuesday’s arrests took place in Miami and West Palm Beach, Florida. Lazaro Hernandez Fleitas, 34, of Orlando, remains at large.
“This fraud scheme has victimized thousands of innocent people all across the country, including a number of citizens here in Arkansas,” Harris said. “These defendants pretended to be government employees and scared victims with spurious threats of legal action and imprisonment, and in doing so sought to take advantage of the most vulnerable among us. This indictment reflects our commitment to protecting our citizens from fraud, and holding accountable those who steal from honest citizens.”
In the scheme, individuals purporting to be employees of the IRS would call and threaten victims with legal action, arrest, and imprisonment for a supposed debt owed to the IRS. The callers made these threats and used other methods of intimidation to persuade the victims to wire money utilizing MoneyGram, Walmart-2-Walmart Money Transfer, and other wire-transfer services.
“No legitimate employee of the United States Treasury Department or the Internal Revenue Service will demand that anyone make payments via MoneyGram, Western Union, Walmart-2-Walmart Money Transfer, or any other money wiring method, for any debt to the IRS or the Department of the Treasury,” George said. “Nor will the Department of the Treasury demand that anyone pay a debt or secure one by using iTunes cards or other prepaid debit cards. If you receive one of these calls, hang up immediately and go to the Treasury Inspector General for Tax Administration (TIGTA) scam reporting page to report the call.”
In addition to Arkansas, investigators located wire transfer collections as part of the scheme in the following states: Oklahoma, Colorado, Indiana, Minnesota, Wisconsin, Utah, Idaho, Kansas, Missouri, Florida, Illinois, Iowa, Louisiana, Texas, Tennessee, Mississippi, Alabama, Georgia, South Carolina, North Carolina, Virginia, West Virginia, Maryland, New Jersey, Pennsylvania, Massachusetts, Rhode Island, and New Hampshire, and Washington, D.C. Currently, investigators have identified 7,797 nationwide victims for a total discovered loss amount of $8,958,995.71.
“These arrests demonstrate that TIGTA and its law enforcement partners continue to make significant progress in our investigations related to the IRS impersonation scam that continues to sweep the country,” George said. “Over the past three years, this scam has resulted in reported taxpayer losses of more than $55 million. The scammers are relentless and so are we. Our investigators will not rest until we have brought those responsible for this scheme to justice.”
“The Social Security Administration, Office of the Inspector General (SSA-OIG) is committed to closely working with our law enforcement partners to pursue identity thieves who deceive and defraud American taxpayers,” Feldt said.
The maximum penalties for conspiracy to commit wire fraud and wire fraud is not more than 20 years’ imprisonment, not more than a $250,000 fine, and not more than three years supervised release.
Investigators verified the identity of the suspects and their activities through a variety of investigative methods. TIGTA and the SSA-OIG led the investigation. The case is being prosecuted by Assistant United States Attorneys Hunter Bridges and Jana Harris.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
US v. Caballero et al, Case No. 4:16-cr-124-BRW
Caballero IRS Scam Superseding Indictment
DEFENDANTS
Angel Chapotin Carrillo, 42, Hialeah, Florida
Dennis Delgado Caballero, 39, Miami, Florida
Ricardo Fontanella Caballero, 25, Hialeah, Florida
Elio Carballo Cruz, 40, Miami, Florida
Esequiel Bravo Diaz, 23, Miami, Florida
Lazaro Hernandez Fleitas, 34, Orlando, Florida
Jeniffer Valerino Nuñez, 21, Miami, Florida
Yosvany Padilla, 26, Hialeah, Florida
Alfredo Echevarria Rios, 43, Miami, Florida
Alejandro Valdes, 25, West Palm Beach, FloridaSearcy Man Sentenced to 262 Months' Imprisonment for Production of Child PornographyRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), and Faulkner County Sheriff Tim Ryals, announced today that Mitchell Johnson, 44, of Searcy, was sentenced to 262 months’ imprisonment and ten years of supervised release for production of child pornography.
Johnson was originally indicted in a five-count Indictment on March 2, 2016.Johnson was charged with one count of production of child pornography, two counts of distribution of child pornography, one count of receipt of child pornography, and one count of possession of child pornography. On November 21, 2016, Johnson pleaded guilty to one count of production of child pornography. The remaining counts of the Indictment were dismissed.
In Thursday’s hearing United States District Judge D.P. Marshall, Jr., specifically found that Johnson engaged in sexual contact with a minor. Johnson must also register as a sex offender.
“It is every parent’s worst nightmare to entrust their child to the care of someone else and have them sexually exploited,” Harris said. “What Johnson did to this innocent child is reprehensible and the sentence reflects the gravity of his actions.”
The investigation began in October 2015, when an undercover Faulkner County Sheriff’s investigator (UC) answered an advertisement on Craigslist seeking individuals who were into “family fun, especially dad/son, uncle/nephew.” After answering the advertisement, the UC and Johnson began chatting on the KIK messenger application.
Throughout the course of their conversations, Johnson sent the UC several images of child pornography. One of the images depicted a minor’s erect penis visible above his orange and blue boxer shorts. Johnson described the photograph as the erect penis of an 11-year-old minor who was spending the night at his residence. Johnson told the UC that the minor’s penis became erect when Johnson licked the minor’s nipples while the minor was sleeping.
“Today’s sentence of 21 years is a strong reflection of our repulsion at Johnson’s actions in producing child pornography involving a child under the age of 12,” Upchurch said. “Together with the United States Attorney’s Office for the Eastern District of Arkansas, the Arkansas Attorney General’s Office, the Faulkner County Sheriff’s Office, and the Ouachita Parish in Louisiana, we will continue to be committed to aggressively prosecuting and seeking appropriate punishment for child pornography crimes.”
While investigating Johnson, the FBI received information from the law enforcement in Louisiana that Johnson was engaging in text conversations with another individual and was sending child pornography to that individual. Agents obtained copies of the text messages and determined that Johnson sent the same images of child pornography to the suspect in Louisiana that he sent to the UC.
“The Faulkner County Sheriff’s Office will continue to work diligently, fighting to prevent these types of crimes from occurring in Faulkner County through proactive investigations,” Sheriff Ryals said. “Professional work by the agencies involved paid off in this case, and Mr. Johnson will not be a concern to the citizens for a long time.”
This investigation was conducted by the FBI, the Faulkner County Sheriff’s Office, and the Arkansas Attorney General’s Office. It was prosecuted by Assistant United States Attorney Kristin Bryant.
Jury Finds Pair Guilty on All 40 Counts in Scheme to Steal USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Dax Roberson, United States Department of Agriculture–Office of Inspector General, Special Agent in Charge, Tracey D. Montaño, Special Agent in Charge, IRS-Criminal Investigation, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), announced Thursday that a federal jury has returned guilty verdicts against Jacqueline Mills and Anthony Waits on all 40 counts in which the pair was charged in a multi-million dollar fraud scheme involving money intended to feed hungry children in Arkansas.
The jury found Mills, 41, of Helena-West Helena, guilty of one wire-fraud conspiracy charge, 25 counts of wire fraud, 10 counts of bribery, and 3 counts of money laundering. Waits, 38, of England, was convicted of one count of wire-fraud conspiracy. United States District Court Judge James M. Moody, Jr. presided over the eight-day trial, which concluded Thursday with the jury verdict. Judge Moody will sentence Mills and Waits at a later date.
“This verdict confirms what the evidence has shown from the beginning—Jacqueline Mills and Anthony Waits are thieves who preyed on the most vulnerable members of our society,” Harris said. “Their outrageous behavior—literally stealing millions of dollars intended to be used for feeding hungry Arkansas children—is among the most egregious fraud this office has seen, and we will request a sentence that reflects the seriousness of their conduct.”
Mills and Waits stole more than $4 million from United States Department of Agriculture (USDA) feeding programs administered in Arkansas through the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After approval, they can provide meals as part of the feeding programs, and are reimbursed for the eligible meals they serve.
As proven in trial, Mills, who said she operated 34 feeding sites, submitted grossly inflated numbers of meals purportedly served from her sites. In some cases, no meals were served at all. Co-conspirators Tonique Hatton and Gladys Waits (Anthony Waits’ estranged wife)—who worked for DHS and have already pleaded guilty—assisted Mills in her deception. Hatton and Gladys Waits were responsible for approving Mills’ programs at various times. Mills also made bribe payments to Hatton and Gladys Waits to provide protection from DHS scrutiny. Hatton and Gladys Waits were among more than 50 witnesses who testified during the trial.
Mills was among those who testified, as well. The jury rejected Mills’ testimony that the payments made to Hatton and Gladys Waits were merely gifts—including a $5,000 housewarming gift to Hatton—or reimbursements.
The USDA paid Mills more than $2.7 million on her inflated claims, which included several locations where meals were never served. The jury also found that various property seized from Mills during the investigation were proceeds of the offense and were to be forfeited. This property includes real estate, four vehicles, and more than $490,000 seized from multiple bank accounts.
Anthony Waits was linked to programs that illegally acquired $1.6 million. Anthony Waits recruited multiple feeding program sponsors to submit inflated feeding claims. Those sponsors then paid to Waits substantial portions of the funds they received from the fraudulent claims. Those sponsors, such as Waymon Weeams, James Franklin, Christopher Nichols, and Rueben Nims, gave Waits a percentage of the federal money they received in exchange for Waits’ wife, the DHS employee, approving the inflated claims.
“I want to thank the U.S. Attorney’s office, OIG special agents, and our investigative partners for their hard work on this investigation,” Roberson said. “When the integrity of nutrition programs for needy children is violated by criminal conduct, the Office of Inspector General will pursue justice to the fullest extent of the law.”
“Today’s verdict is a direct result of the excellent partnership IRS, the U.S. Attorney’s office, and our law enforcement partners have in combating violations of federal law,” Montaño said. “Stealing from government-sponsored programs is not a victimless crime; it is a crime against the American public. This case is particularly troubling when you consider this particular government program exists to benefit disadvantaged children. This verdict should serve as a deterrent to those who might contemplate similar fraudulent actions.”
“Today’s verdict is a resounding victory and sends a strong message to individuals who defraud federal programs designed to help disadvantaged children,” Upchurch said. “I appreciate the tireless efforts of the agents and the staff of the Little Rock FBI field office, the United States Attorney’s Office, the USDA-Office of Inspector General, Internal Revenue Service Criminal Investigations, and the United States Marshalls Service for their thorough attention to this case.”
Multiple defendants have already been sentenced for their various roles in the same scheme. Those defendants sentenced include: Kattie Jordan, sentenced to 63 months’ imprisonment on March 15, 2016; Nims, sentenced to 21 months’ imprisonment on November 2, 2016; Hatton, sentenced to 108 months’ imprisonment on January 4, 2017; Franklin, sentenced to 24 months’ imprisonment on January 10, 2017; and Maria Nelson, sentenced to 30 months’ imprisonment on January 31, 2017. Gladys Waits, Nichols, Weeams, Francine Leon, Michael Lee, Alexis Young, Erica Warren, and Harper have all pleaded guilty to conspiring to defraud USDA feeding programs and are awaiting sentencing.
All told, law enforcement has uncovered more than $11 million in fraud related to these USDA Arkansas feeding programs.
“I am pleased that with the help of many outstanding law enforcement agencies and agents, and countless hours of work, we were able to uncover and successfully prosecute this scheme,” Harris said. “At the same time, I am sickened that it could happen at all. I hope this entire case, including this trial, serves as warning for those who try to take advantage of these worthwhile federal programs.”
The statutory penalty for wire fraud and conspiracy to commit wire fraud is not more than 20 years’ imprisonment, not more than a $250,000 fine, or both. The penalty for bribery and money laundering is not more than 10 years’ imprisonment, not more than a $250,000 fine, or both.
Although everyone initially indicted in this scheme has now been convicted, the investigation is still ongoing, and continues to be conducted by the USDA–Office of Inspector General, Internal Revenue Service–Criminal Investigations, Federal Bureau of Investigation, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana K. Harris, Allison W. Bragg, and Cameron McCree.
If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
U.S. Attorney Christopher R. Thyer Announces ResignationRead the Press Release
LITTLE ROCK—As requested by Attorney General Jeff Sessions, United States Attorney Christopher R. Thyer, 47, of Jonesboro, announced his resignation effective March 10, 2017. Mr. Thyer, who has made serving the needs of the poor and crime-affected citizens of eastern Arkansas a priority during his tenure, has been the United States Attorney for the Eastern District of Arkansas since December 31, 2010.
Patrick C. Harris, 64, of Little Rock, who has served as the First Assistant United States Attorney for the past four years, assumed leadership of the office as Acting United States Attorney effective immediately upon Mr. Thyer’s resignation.“Our laws and our law enforcement agencies are meant to do two things: to allow citizens of the United States to fully realize the pursuit of peace and prosperity, and to arrest and prosecute those who criminally interfere with those freedoms,” said Mr. Thyer. “I have seen communities where drugs and violence have stolen even the freedom to go for a walk or play in a park because of the brazenness of violent drug dealers. For more than six years I have had the privilege of working with local, state and federal law enforcement officers and prosecutors to fight these violent drug dealers. This has been a highlight of my professional life for which I am thankful.”
During his tenure, Mr. Thyer has led the U.S. Attorney’s Office for the Eastern District of Arkansas in doing just that. He served on the executive board for the Gulf Coast High Intensity Drug Trafficking Area (HIDTA) program, as well as the executive board of the FBI’s Joint Terrorism Task Force, and has been a key voice in expansion of the Organized Crime Drug Enforcement Task Force (OCDETF) in Arkansas. What Mr. Thyer has said that he is most proud of is his office’s work helping disadvantaged communities to take back their neighborhoods from violent drug dealers. Under Mr. Thyer’s leadership, the U.S. Attorney’s Office for the Eastern District of Arkansas has succeeded in prosecuting many violent drug organizations.
In October 2011, less than a year after Mr. Thyer was sworn in, a Grand Jury indicted 71 defendants in “Operation Delta Blues,” the first of many cases prosecuted by the U.S. Attorney’s Office for the Eastern District of Arkansas aimed at tackling the dual epidemic of drugs and violence in eastern Arkansas and the Delta. “Delta Blues” dismantled an international cocaine ring operating out of West Memphis, Helena, and Marianna, that included five corrupt police officers. The case ended with the conspiracy leader, Sedrick Trice, receiving a 40-year sentence, Demetrius Colbert, who shot an FBI agent, receiving life plus 10 years in prison, and all police officers convicted. Other operations in the same area included “Operation Delta Crossroads” (19 defendants) and “Operation Plastic Castle” (47 defendants).
Under Mr. Thyer’s leadership, the crime-ridden areas where local police most needed federal assistance received that assistance, including Mississippi, Craighead, Crittenden, Phillips, and Lee counties. Since 2013, multiple joint operations between local law enforcement and federal agencies such as the Arkansas State Police, DEA, FBI, and ATF have resulted in arrests of hundreds of criminals and the dismantling of drug networks in those areas. In the past three years in Blytheville alone, the U.S. Attorney’s Office for the Eastern District of Arkansas has teamed with the ATF, DEA, and FBI in four major operations that resulted in the arrest of 127 individuals, including 70 in 2015’s “Operation Blynd Justus.” Also during Mr. Thyer’s tenure, his office successfully prosecuted multiple cases involving Mexican drug cartel members.
The U.S. Attorney’s Office for the Eastern District of Arkansas was on the forefront of recognizing the opioid epidemic in Arkansas. In May 2015, Little Rock was the regional hub of a national DEA effort dubbed “Operation Pilluted.” Mr. Thyer’s office returned six indictments in which 113 defendants were charged, including five doctors, four nurses, and five pharmacists. These multiple cartel and large-defendant drug cases are why the U.S. Attorney’s Office for the Eastern District of Arkansas has routinely ranked among the top-producing OCDETF districts in the nation for its size.
The focus on partnership between federal and local law enforcement agencies has been a hallmark of Mr. Thyer’s tenure. Four years ago, the U.S. Attorney’s Office for the Eastern District of Arkansas reinstituted and coordinated free training for local law enforcement agencies. Under the leadership of Mr. Thyer, the office revamped the Law Enforcement Coordinating Committee’s quarterly newsletter, focusing on activities and achievements of local law enforcement agencies in the district.
In September 2016, Mr. Thyer hosted the national Violence Reduction Network (VRN) 2016 Fall Summit in Little Rock and welcomed Attorney General Loretta Lynch, who delivered opening remarks. The VRN, which focuses in Arkansas on the cities of Little Rock and West Memphis, is a comprehensive approach to reducing violent crime in communities around the country through a hands on approach between local and federal agencies, furthering Mr. Thyer’s efforts in the use of collaborative law enforcement approaches to tackle serious crime.
Mr. Thyer’s local outreach has not been limited to law enforcement agencies. The U.S. Attorney’s Office for the Eastern District of Arkansas recently implemented the district’s first-of-its-kind reading partnership with the Little Rock School District. Assistant United States Attorneys (AUSAs) also regularly meet with prisoners in federal correctional institutions as part of interdisciplinary prisoner reentry programs.
Combatting public corruption has also been a focus of the U.S. Attorney’s Office under Mr. Thyer’s leadership. Always emphasizing the need to earn and keep the public trust, Mr. Thyer has overseen the prosecution of multiple corrupt political figures and law enforcement officers, including:• Martha Shoffner, former Arkansas State Treasurer, who was sentenced to 30 months in prison for extortion and bribery after directing $2 billion in taxpayer money in bond business to a broker for a series of $6,000 payments.
• Former state judge Michael Maggio, who was sentenced to 10 years in prison for accepting bribes.
• Former state representative Hudson Hallum, who, along with West Memphis City Councilman Phillip Wayne Carter and former West Memphis Police Officer Sam Malone, pleaded guilty to conspiracy to commit election fraud in what was the first case in the United States in which state election law violations have been prosecuted under the Travel Act.
• Lu Hardin, former University of Central Arkansas president, who pleaded guilty to wire fraud and money laundering.
• Former Arkansas State Police Lieutenant Sedrick Reed, who was sentenced to 135 months in prison for his role in a cocaine conspiracy.
• Former Little Rock police officer Mark Jones, who was sentenced to 104 months in prison for his role in a marijuana conspiracy.
• Former Searcy Police Chief Jeremy Clark, who resigned and pleaded guilty to possession of hydrocodone.
• Former Bald Knob Police Chief Erek Balentine, who pleaded guilty to possession of a stolen firearm.
• Former Saline County Sheriff Bruce Pennington, who pleaded guilty to wire fraud.Child exploitation is another area that has received top priority. Under Mr. Thyer’s guidance, the U.S. Attorney’s Office for the Eastern District of Arkansas successfully prosecuted the district’s first human sex trafficking case, which resulted in defendant Jermaine Roy receiving a 15-year prison sentence in 2013. Other sex-trafficking convictions soon followed, including Amber Johnson (144 months), Andre Kimball (120 months), and Dana Deffenbaugh (pending sentencing).
Mr. Thyer’s office has been responsible for significant civil award settlements. In 2013, the U.S. Attorney’s Office handled numerous cases involving complex issues of medical treatment and alleged wrongful death, resulting in saving the government approximately $27 million in damages in 2013 alone. In the past five years, the U.S. Attorney’s Office for the Eastern District of Arkansas has recovered approximately $193 million in false claims settlements and civil enforcements, as well as more than $11.5 million in criminal and civil collections.
With a focus on prosecuting cases involving large-scale drug dealing, violent crime, child exploitation, public corruption, healthcare and financial fraud, and civil rights, some of the other notable prosecutions during Mr. Thyer’s time as United States Attorney include:
• To date, 14 people have been indicted in a wide-ranging scheme to steal U.S. Department of Agriculture funds intended to feed hungry children. Eleven people have pleaded guilty and admitted to stealing more than $10 million from at-risk children’s feeding programs, and three are scheduled for trial in a case that is believed to involve more than $20 million in fraud.
• Wallando Onezine received a 10-year sentence for the distribution of heroin which led to the deaths of two Cabot residents.
• Jason Barnwell (20 years), Gary Dodson (15 years), Jake Murphy and Dustin Hammond (54 months) all received significant sentences for civil rights crimes after the firebombing of an interracial couple’s home.
• Lacey Moore received a 16-year prison sentence and was ordered to pay $12.5 million restitution after displacing 79 people by setting seven separate fires at Forrest Place Apartments in Little Rock.
• Dr. Robert Barrow was sentenced to a two-year term of imprisonment following his guilty plea to healthcare fraud after admitting to $2.2 million in fraudulent billing.
• Stephen K. Parks was sentenced to over two years in prison for wire fraud and forfeited money and property worth more than $9 million.
• Kevin Lewis was sentenced to 121 months in prison for bank fraud and ordered to pay $39.4 million in restitution.
• Matthew Hiner received a 25-year prison sentence for sexual exploitation of a minor by a parent.
• Joshua Thornton received a 30-year prison sentence for production of child pornography.Prior to his federal appointment in 2010, Mr. Thyer had been a partner at Stanley & Thyer, P.A., since 2007, and a partner at Halsey & Thyer, PLC from 2005 to 2007. Thyer was with the Mooney Law Firm, P.A., from 1997 to 2005, and a solo practitioner from 1995 to 1997. Thyer also served in the Arkansas House of Representatives as a State Representative for the 74th District from 2003 to 2009. Mr. Thyer graduated from Arkansas State University in 1991 and from the University of Arkansas School of Law in 1995.
Harris, whose distinguished career with the U.S. Attorney’s Office for the Eastern District of Arkansas has spanned the past 31 years, served as the U.S. Attorney’s Office First Assistant for the past four years and Criminal Chief for six years prior to that. He attended the University of Arkansas at Fayetteville and graduated from the University of Arkansas at Little Rock and the William H. Bowen School of Law. Harris has also served as an adjunct law professor at the Bowen School of Law for ten years.
“I am thankful for the opportunity to serve the people of Arkansas and continue to carry out the mission of this office,” Harris said. “I also want to thank Chris Thyer for his commitment to this office for the past six years. I look forward to working with Attorney General Jeff Sessions and the new administration as the Department of Justice renews and strengthens its commitment to combat violent crime.”
The United States Attorney’s Office in the Eastern District of Arkansas includes five divisions and 41 counties within Arkansas. Its primary office is in Little Rock.
Physician Admits to Illegally Distributing 39,000 Pills, Pleads Guilty to Federal ConspiracyRead the Press Release
LITTLE ROCK— Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Stephen G. Azzam, Special Agent in Charge of the Drug Enforcement Administration (DEA) announced today that Dr. Richard Duane Johns, 49, of Little Rock, pleaded guilty to conspiracy to distribute oxycodone without an effective prescription. Dr. Johns was responsible for illegally distributing at least 39,000 pills, with a street value of more than $1,000,000.
Dr. Johns pleaded guilty Thursday to a one-count superseding information before Chief United States District Court Judge Brian S. Miller, who will pronounce sentence at a later date. The conviction carries a maximum possible sentence of 20 years’ imprisonment, $1,000,000 fine, and three years’ supervised release. Dr. Johns was initially charged with 18 others in a federal indictment returned on September 2, 2015.
As part of the plea agreement, Dr. Johns agreed to forfeit $155,620 that constituted proceeds of the conspiracy, and a Ford F250 truck that facilitated the conspiracy. The money and vehicle were seized during the investigation. Additionally, the parties have agreed to litigate at the time of sentencing any additional amount of money that is to be forfeited as proceeds of the conspiracy.
"Dr. Johns, while purporting to be a health-care professional, is nothing more than a common drug dealer," Thyer said. "With opioid abuse continuing to kill at alarming rates, and an opioid epidemic sweeping across the country, the fact that doctors sworn to help people are contributing to the problem is unconscionable. Dr. Johns will soon face the consequences of his illegal actions, and we will continue to aggressively pursue any health care professionals who have similar criminal thoughts in mind."
The conspiracy primarily operated in Lonoke, White, and Pulaski counties. On May 18, 2015, the Lonoke County Sheriff’s Office took Dr. Johns into custody charging him with 187 counts of violating the Arkansas controlled substances act, a class C state felony. The federal indictment later charged Dr. Johns and 18 others in a conspiracy to distribute oxycodone. Dr. Johns was charged in six additional counts of illegal distribution of oxycodone which have been dismissed by the United States as part of the plea agreement.
This investigation began in November 2014 when Lonoke County Sheriff’s detectives responded to an opioid overdose death of an individual outside Cabot. The Sheriff’s Office solicited the assistance of the DEA, and the agencies began a joint investigation to determine the source of the oxycodone which led to the overdose. The investigation determined that 187 fraudulent prescriptions for oxycodone written by Dr. Johns had been filled and distributed since July 2014 in Lonoke County alone. The prescriptions totaled approximately 16,830 oxycodone pills with a street value of $504,900. A total of 38 individuals associated with Dr. Johns were charged with violating the Arkansas controlled substances act in Lonoke County Circuit Court. To date, 17 of those individuals have entered guilty pleas.
"This was a tremendous effort by all our agencies working together to get a drug dealing doctor off the streets before even more people were hurt," Lonoke County Prosecutor Chuck Graham said.
In White County Circuit Court, a total of 15 individuals associated with Dr. Johns were charged with various drug crimes associated with Dr. Johns’ enterprise. All 15 of those individuals have entered guilty pleas.
"This investigation was an excellent show of cooperation between federal, state, and local law enforcement agencies," White County Prosecutor Rebecca Reed said. "Opioid addiction is a serious problem in our community and this case brought the topic to the forefront of substance abuse discussions."
During the course of the ongoing investigation, the DEA determined that Dr. Johns was part of a distribution network spanning several counties in which he would write oxycodone prescriptions in individuals’ names. Co-conspirators would bring names and dates of birth to Dr. Johns with the intent of buying a prescription for oxycodone. Dr. Johns would issue the prescription without examining the individual, and in many cases, without ever having met the individual. Dr. Johns would then sell the fraudulent prescriptions for $500 each.
Prescriptions were filled at local pharmacies, and the oxycodone tablets sold in the community for an average of $30 each. Co-conspirators acknowledged purchasing such fraudulent prescriptions from Dr. Johns since 2011. Dr. Johns pleaded guilty to illegally distributing 39,000 30 mg oxycodone pills from January 1, 2014 to May 2015, with the pills having a street value of over $1,000,000.
"Prescription drug abuse is an epidemic in this country that destroys countless lives," DEA Special Agent in Charge Azzam said. "The DEA is fully committed to the pursuit of any individual who abandons their oath as a medical practitioner. This conviction sends a clear message to all who engage in the illegal distribution of prescription drugs: we will continue to work with our law enforcement partners, the medical community and the public to identify and stop those responsible for endangering lives in our communities and bring them to justice."
Of the 18 individuals federally charged with Dr. Johns, five have pleaded guilty to conspiracy charges, including Vanessa Byrd (plea entered 10/6/16); James Spiker, Jr. (plea entered 10/9/16); Aaron Cochran (plea entered 11/9/16); Randy Byrd (plea entered on 11/21/16); Donna Cearns (plea entered 1/4/17); and Christine Zeman (plea entered 1/23/17). Charles Mason’s charges were dismissed. Only Vanessa Byrd—who received 37 months’ imprisonment—has been sentenced. Trial on the remaining defendants is set for March 27, 2017.
The case against Dr. Johns is part of a larger national effort led by the DEA dubbed Operation Pilluted, an aggressive campaign that targeted the largest sources of illegally diverted pharmaceuticals in Arkansas, Louisiana, Mississippi, and Alabama. The case was investigated by the DEA—Little Rock Diversion Squad, along with the Federal Bureau of Investigation, Arkansas State Police, Central Arkansas Drug Task Force, Lonoke County Sheriff’s Office, White County Sheriff’s Office, and DEA Little Rock Tactical Diversion Squad composed of officers from the Conway Police Department, Beebe Police Department, Little Rock Police Department, Pine Bluff Police Department, Jefferson County Sheriff’s Office, and the Benton Police. Also involved in the investigation were the United States Marshals Service, Little Rock Police Department, and the Saline County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Anne Gardner.
Filed Superseding InformationFormer High School Photographer Pleads Guilty to Internet StalkingRead the Press Release
LITTLE ROCK— Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Raymond R. Parmer, Jr., special agent in charge of Homeland Security Investigations, New Orleans, announced today the guilty plea of Christian Trey Ashcraft, 41, of White Hall. Ashcraft is the owner of Ashven photography and a former high school photographer in the Pine Bluff, Arkansas, area.
On January 5, 2016, Ashcraft was charged with one count of lying to a federal agent and one count of internet stalking. Wednesday, before United States District Court Judge Kristine G. Baker, Ashcraft pleaded guilty to internet stalking in exchange for the dismissal of the count charging him with lying to a federal agent. Judge Baker will sentence Ashcraft at a later date.
The charges in the Indictment are based on an investigation that began in August 2014, when a minor disclosed to the Maumelle Police Department that Seth Ganahl had previously asked her to engage in illicit sexual activity on multiple occasions. A search of Ganahl’s email account revealed that he was emailing with the user of [email protected], who was purporting to be a 15-year-old minor female.
During the email exchange, Ganahl repeatedly asked the user of [email protected] to send him sexually explicit photographs. Agents then developed information that led them to believe that Christian Trey Ashcraft was the real user of [email protected]. Agents interviewed Ashcraft on December 30, 2014, and he denied being the user of [email protected].
On April 15, 2016, Judge Baker sentenced Ganahl to 240 months’ imprisonment for production of child pornography.
On January 13, 2015, agents obtained a federal search warrant for [email protected]. In analyzing the contents of the email account, agents learned that Ashcraft communicated with multiple individuals while posing as different young teenage girls.
Agents also observed that Ashcraft, using [email protected], sent sexually explicit photographs of an adult female, referred to in the Indictment as J.D., pretending to be her to several individuals over a significant period of time. Agents discovered the identity of J.D. and subsequently interviewed her.
During the interview, J.D., who is now in her mid-twenties, disclosed that she met an individual who identified himself as “Chad Reynolds” on a website known as hotornot.com when she was 15-years-old. Between the time J.D. was 15- and 18-years-old, “Chad Reynolds” and J.D. engaged in an online relationship without J.D. ever seeing “Chad Reynolds” in person.
J.D. explained to investigators that after she turned 18, “Chad Reynolds” asked her to take part in a photo shoot at a local hotel. Upon arrival at the hotel, “Chad Reynolds” was not there, but Ashcraft, posing as a photographer friend of “Chad Reynolds,” told J.D. that “Chad” wanted her to start the photo shoot without him there. During the photo shoot the photographer had J.D. take multiple sexually explicit photographs. J.D. identified a photograph of Christian Trey Ashcraft as the photographer.
Soon after the photo shoot, J.D. ended her online relationship with “Chad Reynolds.” After J.D. ended her online relationship, the sexually explicit photographs taken from the hotel room were sent to J.D.’s acquaintances from an individual purporting to be J.D via the [email protected] account.
Ashcraft later admitted to being the user of [email protected] and sending the sexually explicit images of J.D., while pretending to be her. A search of Ashcraft’s computer revealed approximately 800 images of J.D., many of which were sexually explicit.
“As Mr. Ashcraft has learned, you cannot commit crimes and hide behind apparent anonymity on the internet,” Thyer said. “These type of stalking crimes are serious, and can ruin people’s lives. We will continue to seek out and punish those who prey on the innocent and vulnerable on the internet, and continue to ask all parents to closely monitor their children’s internet use.”
Internet stalking, a violation of 18 U.S.C. § 2261A(2)(B), carries a penalty of not more than five years’ imprisonment, not more than three years of supervised release, and a fine of up to $250,000. This investigation was conducted by the Arkansas State Police and HSI. It is being prosecuted by Assistant United States Attorney Kristin Bryant.
Two Gunmen Arrested in Roberson's Fine Jewelry Robbery, All Perpetrators Now in CustodyRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), and Kenton Buckner, Chief of Little Rock Police Department (LRPD), announced today the arrests of the two gunmen who brandished handguns during the midday robbery of Roberson’s Fine Jewelry on September 22, 2015. The arrests are part of the continuing federal and local collaborative commitment to helping prevent violent crime in Little Rock.
Quinshod Shaw, 27, of Oklahoma City, Okla., was arrested Monday afternoon in Norman, Okla., and appeared before United States District Judge Charles B. Goodwin in the Western District of Oklahoma. Also Monday, Darris Denton, 29, Oklahoma City, Okla., was served an arrest warrant while being held in the McAlford Corrections Center in Stringfield, Okla., on unrelated state charges. Following the arrests, a second superseding indictment, which was returned by the Grand Jury on February 7, 2017, was unsealed. This unsealed indictment added Shaw and Denton, who have been identified as the two gunmen who assisted in the robbery, to five previously indicted defendants.
“The arrests that were carried out Monday show our unwavering determination to bring to justice all who commit crimes of violence in our community, no matter where those perpetrators may be hiding, and no matter how long it takes,” Thyer said. “We will use all means necessary—whether it be federal, state, or local resources—to help protect our community.”
On September 22, 2015, Shaw and Denton, along with Tony Gabriel, 49, Oklahoma City, Okla., and Siee Ramon Russell, 38, Oklahoma City, Okla., entered Roberson’s Fine Jewelry, located on Cantrell Road in Little Rock. While Shaw and Denton pointed guns at the employees and a customer, Russell smashed jewelry cases with a hammer and Gabriel grabbed various jewelry, including diamond earrings, bracelets, and rings, and placed it in a bag. The group stole more than $300,000 worth of jewelry.
The four men fled the store and left the scene in a stolen truck, which they abandoned in a nearby neighborhood. In the neighborhood, the group met Lenora Grant, 60, of Oklahoma City, Okla., Jobie Kirk, 51, Oklahoma City, Okla., and Darryl Madden, 52, Moore, Okla., and all co-conspirators drove back to Oklahoma in two vehicles.
The Little Rock Police Department obtained blood samples from broken shards of glass from the smashed cases which identified Russell’s DNA. LRPD also secured a hat which was used by a perpetrator in the robbery and discarded in the abandoned stolen truck. A DNA sample lifted off of the hat identified Gabriel. Surveillance video taken from the store confirmed the actions taken by the defendants.
“The arrests today demonstrate the need to aggressively pursue and prosecute those who commit violent crimes in our community in efforts to make Arkansas a safer place for all,” Upchurch said. “We appreciate the strong commitment of the Eastern District of the United States Attorney’s Office and the Little Rock Police Department.”
An indictment naming Gabriel and Russell was returned April 6, 2016. That original three-count indictment charged both defendants with conspiracy to commit a Hobb’s Act violation (interfering with commerce by means of robbery), aiding and abetting a Hobb’s Act violation, and aiding and abetting brandishing a firearm in furtherance of a crime of violence.
The getaway drivers—Grant, Kirk, and Madden—were named in a first superseding indictment, which contained the same charges and was returned on July 6, 2016. The second superseding indictment, unsealed Monday, also contains the same charges and names the two gunmen, Shaw and Denton.
On October 6, 2016, before United States District Court Judge J. Leon Holmes, Gabriel and Russell each pleaded guilty to aiding and abetting brandishing a firearm in furtherance of a crime of violence, and will be sentenced by Judge Holmes at a later date. In their plea agreements, Gabriel and Russell admitted to the facts of the robbery, including everyone’s individual role.
Kirk, Madden, and Grant are set for trial before Judge Holmes on April 24, 2017. Shaw and Denton will appear before Judge Holmes for plea and arraignment at a later date, after they are transported to Little Rock.
The maximum penalties for brandishing a firearm in furtherance of a crime of violence is not less than seven years, or more than life, imprisonment, not more than $250,000 fine, and not more than five years supervised release. The maximum penalties for conspiracy to commit a Hobbs Act violation (robbery) and commission of a Hobbs Act violation is not more than 20 years’ imprisonment, not more than a $250,000 fine, and not more than three years supervised release.
The FBI and LRPD worked the Roberson case investigation in a joint partnership. The case is being prosecuted by First Assistant United States Attorney Patrick Harris and Assistant United States Attorney Erin O’Leary.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Forty-One VRN Indictments Target Violent Offenders in Pulaski CountyRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, Jeffrey Reed, Resident Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), Larry Jegley, Prosecuting Attorney for the Sixth Judicial District, Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), Kenton Buckner, Chief of Little Rock Police Department (LRPD), and Mike Davis, Chief of North Little Rock Police Department (NLRPD), announced today 41 separate federal cases brought under the Violence Reduction Network (VRN) initiative in recent months.
These VRN cases target some of the most violent offenders in Pulaski County, and highlight law enforcement’s commitment to widespread collaboration between federal and local law enforcement partners in Pulaski County to help reduce violent crime. The United States Attorney’s Office for the Eastern District of Arkansas has worked with the ATF, LRPD, NLRPD, and Sixth Judicial District Prosecuting Attorney’s Office to return 41 indictments charging individuals with various gun and drug crimes, with most of the indictments being returned in the past six months. All 41 defendants are convicted felons, and many have examples of violence in their past.
“The individuals targeted in our VRN initiative are among the most dangerous members of their community,” Thyer said. “Removing them and their guns from the streets of Pulaski County is a top priority, and makes our community a safer place to live. But know this—while we are pleased to announce these 41 indictments, by no means are the law enforcement officers of this community finished with the work of seeking out and stopping those individuals who unfortunately bring gun violence into everyday life.”
The indictments are all part of the VRN initiative, a network Little Rock joined in 2015. The VRN uses a comprehensive approach to reducing violent crime in select communities around the country. Through the VRN, the Justice Department enlists tactical and operational expertise available from its various federal components to assist local police forces in targeted efforts to eliminate the worst criminals from communities. Little Rock, along with West Memphis, will be a part of the VRN through September.
“The pursuit of justice concerning the judicial presentation of 41 defendants through the VRN initiative demonstrates the focus and commitment of the ATF to serve the citizens of the Little Rock and North Little Rock municipalities,” Reed said. “The ATF is committed to working with the Little Rock Police Department, the North Little Rock Police Department, the FBI, the Drug Enforcement Administration (DEA), the United States Marshals Service (USMS), and the United States Attorney Office concerning investigations involving violent offenders who illegally possess firearms within Arkansas. The ATF will continue these investigative efforts with our law enforcement partners in a determined fashion to provide the service expected by the citizens of Arkansas. Note that these collaborative efforts are in the pursuit of a safer living environment for the citizens of both Little Rock and North Little Rock, and that the ATF will be unwavering in that mission.”
The prior convictions of the 41 defendants include manslaughter, rape, aggravated assault, car-jacking, robbery and aggravated robbery, residential burglary, domestic battery, delivery of controlled substances and possession with intent to deliver controlled substances, simultaneous possession of drugs and firearms, and being a felon in possession of a firearm.
Forty of the 41 indictments announced today contain various federal gun charges, including being a felon in possession of a firearm or ammunition, possessing a firearm while under a felony information, and possessing a firearm in furtherance of a drug- trafficking crime (see attached list). In addition, several defendants are charged with stand-alone drug crimes. Four of the defendants are still pending arrest, while the remaining 37 are in various stages of prosecution.
“The Little Rock Police Department is proud of our relationships with The US Attorney's Office and all of our federal partners,” Chief Buckner said. “We have at least one officer assigned to ATF, FBI, DEA, USMS, and IRS. These relationships are essential to providing public safety in the capitol city.”
The indictments primarily stemmed from cases initially investigated by the Little Rock Police Department or the North Little Rock Police Department. Following state arrests in many instances, these cases were then recommended for federal prosecution by the Sixth Judicial District Prosecuting Attorney’s Office. Cases targeted for federal prosecution include those with defendants who have extensive or violent criminal history, or whose present crime is particularly egregious or violent.
Today’s announcement, and the federal and local components’ continued efforts as part the VRN in Little Rock and West Memphis, illustrate the Department of Justice and new administration’s commitment to reducing crime in the nation, as detailed in a series of Executive Orders recently enacted. This commitment to public safety will remain the steadfast mission of the U.S. Attorney’s Office for the Eastern District of Arkansas, and all law enforcement officers in our community who are sworn to protect and serve.
Veterans Affairs Employees Charged with Stealing and Selling Prescription DrugsRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, James W. Werner, Special Agent in Charge of the South Central Field Office of the Department of Veterans Affairs Office of the Inspector General (VAOIG), and Matthew R. Barden, Assistant Special Agent in Charge of the Little Rock District Office of the Drug Enforcement Administration (DEA), announced today the unsealing a federal indictment charging three Veterans Affairs (VA) employees with conspiring to steal prescription medications, including opioids, from the VA John L. McClellan Memorial Veterans Hospital in Little Rock, and conspiring to distribute those drugs.
The superseding indictment, returned by a federal grand jury on Wednesday, charges Satishkumar "Steve" Patel, 44, of North Little Rock, Alisha Pagan, 33, of Mabelvale, and Nikita Neal, 42, of Little Rock with eight counts stemming from a scheme to order oxycodone, hydrocodone, Viagra, Cialis, and promethazine syrup with codeine and divert them from the VA for street distribution.
"This case is an example of government employees using their position of trust to not only steal from the taxpayers of Arkansas, but also to poison the communities we live in with dangerous drugs," Thyer said. "Curbing the illegal distribution of opioids continues to be a primary focus for my office, and it is particularly troubling when the crime is being committed by people in the health-care industry."
This investigation began in June 2016, when VAOIG received a report that large amounts of unaccounted for prescription medications were charged to VA accounts. The VAOIG’s investigation revealed that Patel, a pharmacy technician, used his VA access to a medical supplier’s web portal to order and divert 4,000 oxycodone pills, 3,300 hydrocodone pills, 308 ounces of promethazine with codeine syrup, and more than 14,000 Viagra and Cialis pills, at a cost to the VA of approximately $77,700 dollars, with a street value of more than $160,000. It is alleged that Patel falsified payment invoices to avoid detection.
"This indictment illustrates that the Department of Veterans Affairs Office of Inspector General remains committed to stemming the diversion and abuse of opioids in VA facilities," Werner said.
During the course of the investigation, which included controlled deliveries of oxycodone at the direction of law enforcement, VAOIG and DEA determined that Patel was distributing the medications to pharmacy technician Pagan, who in turn distributed a portion of the drugs to Neal, a pharmacy technician student trainee.
"The abuse of prescription drugs, such as oxycodone and hydrocodone, remains a significant problem in our communities. For the health and safety of our citizens, DEA will continue to target the illegal diversion of these pharmaceuticals, which can result in the tearing apart of families and the destruction of individual lives," Barden said. "It is particularly egregious when the perpetrators of such illegal acts are health care professionals responsible for ensuring that potentially dangerous drugs are dispensed properly. We will continue to work with our law enforcement partners, including those at the Department of Veteran Affairs Office of the Inspector General, to ensure that if a health care provider illegally diverts pharmaceuticals, they will be held accountable for the harm they cause."
All three defendants are charged in a conspiracy to steal the medication, as well as conspiracies to distribute oxycodone and hydrocodone. Patel is also charged in four counts of possession with intent to deliver oxycodone, and Pagan is charged with one count of possession with intent to deliver oxycodone.
Conspiracy to possess with intent to distribute oxycodone and hydrocodone, and possession with intent to distribute oxycodone and hydrocodone is punishable by not more than 20 years’ incarceration in the Bureau of Prisons, with a possible fine of up to $1,000,000, and not less than 3 years supervised release. Conspiracy to steal government property is punishable by not more than five years’ incarceration in the Bureau of Prisons, with a possible fine of up to $250,000, and not more than three years supervised release.
The case against Patel, Pagan, and Neal was investigated by the VAOIG and DEA, and is being prosecuted by Assistant United States Attorney Hunter Bridges.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Jury Finds Former Little Rock Doctors' Office Manager Lynn Espejo Guilty on 25 Federal ChargesRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Tracey D. Montaño, Internal Revenue Service (IRS) Special Agent in Charge, announced today that a federal jury found Lynn Alisa Espejo, 52, of Sherwood, guilty on 15 counts of wire fraud, 6 counts of money laundering, and 4 counts of willfully making and subscribing a false income tax return, all a result of a scheme in which Espejo stole more than $600,000 from her employer.
United States District Judge Kristine G. Baker presided over the seven-day trial, which concluded Wednesday with the jury verdict. Espejo will be sentenced by Judge Baker at a later date.
Espejo served as office manager for Practice Management Services, Inc. (PMSI) and Blanford Medical Services, Inc. (BMSI), corporations that administered business expenses for doctors in Little Rock, from March 2007 through October 2010. The United States presented evidence which proved that Espejo stole approximately $611,099 by wire transfer from PMSI and BMSI to her personal bank accounts while she was employed. Espejo misrepresented these transactions in the accounting software Quickbooks and concealed the wire transfers from the doctors and their accountant. Dr. Paul Zelnick, Dr. James Thrasher, Dr. Bruce Sanderson, and Dr. Scott Brown testified that Espejo was not authorized to take the money, which was consistent with the evidence and the verdict.
"The jury’s verdict is supported by the overwhelming evidence of guilt presented at trial through financial documents and the testimony of the victims of Ms. Espejo’s crimes," Thyer said. "Lynn Espejo lied and cheated her employers out of hundreds of thousands of dollars, and today’s verdict makes clear that people who lie and steal will be held accountable."
In addition to the money stolen by wire transfer, the United States also presented evidence that Espejo obtained a PMSI debit card and used it for personal purchases from Wal-Mart, including grocery items such as snow crab, bacon, and popcorn balls, video gaming devices, school supplies, and a trampoline. Espejo also used stolen money to make payments toward a vehicle, a pool, and new home construction expenses, which comprised the money laundering counts. From 2007 through 2010, Espejo had over $100,000 in legal expenses, over $479,000 in credit card payments, and went significantly over budget on the construction of her house in Sherwood, including the addition of a pool house.
The jury further found Espejo guilty of willfully making and subscribing false income tax returns for tax years 2007 through 2010 due to her failure to report the stolen money as income. Testimony established an additional tax due and owing of $207,941 for tax years 2007 through 2010.
"As this year’s tax filing deadline approaches, today’s conviction of Ms. Espejo is a powerful reminder that income from all sources, including fraud, is taxable," Montaño said. "Through our partnership with the US Attorney’s Office and other law enforcement agencies, IRS Criminal Investigation will continue their aggressive pursuit of those who victimize the public and defraud America's tax system for their own personal gain."
The statutory penalty for wire fraud, a violation of 18 U.S.C. § 1343, is not more than 20 years’ imprisonment, not more than a $250,000 fine, or both, and not more than three years supervised release. The statutory penalty for money laundering, a violation of 18 U.S.C. § 1957, is not more than 10 years’ imprisonment, not more than a $250,000 fine or twice the amount of the criminally derived property involved in the transaction, and not more than three years supervised release. The statutory penalty for willfully making and subscribing false income tax returns, a violation of 26 U.S.C. § 7206(1), is not more than three years’ imprisonment, not more than a $100,000 fine, or both, together with the costs of prosecution, and not more than one year supervised release.
The investigation was conducted by the IRS—Criminal Investigations.
Little Rock Woman Sent to Prison for Role in Scheme to Steal USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced Tuesday that United States District Court Judge J. Leon Holmes sentenced Maria Carmen Nelson, 50, of Little Rock, to prison for her role in a widespread scheme to steal money intended for feeding children in low income areas.
Judge Holmes sentenced Nelson, who pleaded guilty to conspiring to commit wire fraud on August 25, 2016, to 30 months’ imprisonment, to be followed by three years of supervised release. She was also ordered to pay restitution in the amount of $575,917.76.
The United States Department of Agriculture (USDA) feeding programs in Arkansas are administered through the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After they are approved, they can provide meals as part of the feeding programs, and they are reimbursed for the eligible meals they serve.
Nelson is the fifth defendant to be sentenced for her involvement in a scheme to fraudulently obtain USDA program funds intended to feed children in low income areas. Other defendants sentenced include: Kattie Jordan, sentenced to 63 months’ imprisonment on March 15, 2016; Reuben Nims, sentenced to 21 months’ imprisonment on November 2, 2016; Tonique Hatton, sentenced to 108 months’ imprisonment on January 4, 2017; and James Franklin, sentenced to 24 months’ imprisonment on January 10, 2017. Gladys Waits, Christopher Nichols, Waymon Weeams, Francine Leon, Michael Lee, Alexis Young, and Erica Warren have all pleaded guilty to conspiring to defraud USDA feeding programs and are awaiting sentencing. Jacqueline Mills, Dortha Harper, and Anthony Waits are scheduled for trial on March 27, 2017, before United States District Judge James M. Moody, Jr.
Nelson operated as a sponsor for a feeding program through an organization called "Securing Our Future" between approximately March 2012 and March 2015, with approved sites in Little Rock and Malvern, Arkansas. Nelson was recruited to participate by a DHS employee who worked in the section that oversaw the feeding programs. As part of the fraudulent scheme, the number of children who were fed at Nelson’s sites were inflated. Out of the money Nelson received as a result of the inflated claims, Nelson would pay cash back to the DHS employee.
Nelson received a total of approximately $575,917.76 from the feeding program in payment for fraudulent claims. After this money deposited into her account, Nelson withdrew sums of cash and that she paid to the DHS employee. The DHS employee is no longer employed at DHS.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana K. Harris, Allison W. Bragg, and Cameron McCree.
If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
Cabot Man and Former Federal Employee Pleads Guilty to Conflict of Interest Regarding USDA ContractsRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today that Larry Dale Dunkin, 64, of Cabot, pleaded guilty to an Indictment charging him with conflict of interest. Dunkin, a former federal contracting officer for the United States Department of Agriculture (USDA), Natural Resources Conservation Service (NRCS) personally benefited from contracts he awarded to a company in which his wife had a direct financial interest.
Today’s plea hearing took place in Little Rock before Chief United States District Judge Brian S. Miller, who will sentence Dunkin at a later date.
The NRCS, formerly known as the Soil Conservation Service, is an agency of the USDA that provides technical assistance to farmers and other private landowners and managers. It is a relatively small agency, with a mission to improve, protect, and conserve natural resources on private lands through a cooperative partnership with state and local agencies.
During today’s change of plea hearing, Dunkin admitted that in March 2013 he knowingly and willfully awarded a $22,500 contract to Young Enterprises, LLC, a company in which his wife had a direct financial interest. Multiple records indicate that Dunkin’s wife was a part-owner of the company, and the mailing address for Young Enterprises, LLC, on file with the Secretary of State was the same address as the residence of Dunkin and his wife.
Upon Young Enterprise’s completion of the contract, the USDA transferred approximately $22,500 into a bank account jointly owned by Dunkin and his wife.
The statutory penalty for Title 18, United States Code, Section 208, "Acts Affecting a Personal Financial Interest," more commonly known as "conflict of interest," is not more than five years’ imprisonment, not more than three years of supervised release, a fine of not more than $250,000, and a $100 special assessment.
The investigation was conducted by the USDA–Office of Inspector General and is being prosecuted by Assistant United States Attorney Hunter Bridges. If you have knowledge of or suspect fraud related to USDA programs, you may submit online at https://www.usda.gov/oig/hotline.php.
Heber Springs Man Sentenced to 180 Months' Imprisonment for Production of Child PornographyRead the Press Release
LITTLE ROCK-Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Raymond R. Parmer, Special Agent in Charge of Homeland Security Investigations (HSI) New Orleans, announced today that Spencer Goudy, 23, of Heber Springs, was sentenced to 180 months’ imprisonment and five years of supervised release.
Goudy was originally indicted on July 7, 2015, with the sexual exploitation of five minors ranging in ages between 13 and 16 at the time of victimization. Goudy was charged with 4 counts of enticement of a minor to engage in a sex act, 2 counts of production of child pornography, and 1 count of possession of child pornography.
The investigation began in May 2014, when a 13-year-old female disclosed to investigators at the Arkansas State Police Crimes Against Children Division that she was having a sexual relationship with Spencer Goudy. Goudy was arrested and subsequently charged in Cleburne County with Rape of a minor less than 14 years of age, a violation of Arkansas Code Annotated 5-14-103(a)(3)(A). Goudy was also charged in White County with Rape of a minor less than 14 years of age, a violation of Arkansas Code Annotated 5-14-103(a)(3)(A).
Upon Goudy’s arrest, a cellular telephone was seized and later searched pursuant to a federal search warrant. The search of Goudy’s cellular telephone revealed that Goudy used it to entice multiple minor females to engage in sex acts and contained images of minors engaged in sexually explicit conduct.
“Forcing minors to engage in sex and sharing the assaults with others is an unconscionably heinous act,” said Raymond R. Parmer, Jr. “HSI will continue to work with our law enforcement partners to ensure people who prey on children are brought to justice.
On December 2, 2015, Goudy pled guilty to one count of production of pornography in exchange for the dismissal of the remaining counts of the Indictment, as well as dismissal of the state charges.
Today, Goudy was sentenced by Chief United States District Judge Brian S. Miller to 180 months’ imprisonment and five years of supervised release. He must also register as a sex offender.
“A sentence of 15 years will never undo the irreparable harm caused to the victims of Goudy,” said Thyer. “However, this sentence will hopefully deter those individuals who seek to destroy the innocence of Arkansas’ children.”
This investigation was conducted by the Heber Springs Police Department, Arkansas State Police, and Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Kristin Bryant.
Little Rock Man Operating Brothel Out of Home Sent to Prison for Lying to Social Security AdministrationRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Special Agent in Charge Robert Feldt, of the Social Security Administration, Office of Inspector General, announced today that Gary Lemond Shorter, age 61, of Little Rock, was sentenced federal prison for making a false statement to the Social Security Administration.
On Wednesday, United States District Judge Kristine G. Baker sentenced Shorter to 21 months’ imprisonment to be followed by three years of supervised release. Judge Baker also imposed a $500 fine and ordered Shorter to pay restitution to Social Security in the amount of $15,208. Shorter was indicted on September 2, 2015, and on April 28, 2016, he pleaded guilty to making a false statement to the Social Security Administration.
The charges in the Indictment were based upon an investigation which revealed that Shorter was operating a strip club and brothel out of his residence located on Wolfe Street in Little Rock, also known as "the Cat House." Shorter began receiving Social Security Disability benefits in 2011 based on false representations that he could not work.
Shorter hosted "shows" at "the Cat House" where he would charge a $10 admission fee and sell alcohol to patrons. Inside of the house, women would strip for the patrons and were required to pay Shorter a fee from what they earned for stripping. The upstairs of Shorter’s residence was known as "the VIP area," where women would engage in sex acts in exchange for money. Shorter would receive payment from the individuals using the VIP room.
The recommended sentencing range for Shorter was zero to six months’ imprisonment. Based on the egregiousness of Shorter’s conduct, the United States requested a higher sentence.
"A lengthier term than the recommended range was appropriate," Thyer said. "The defendant not only took advantage of the Social Security Administration, but he benefitted from the sexual exploitation of multiple women. This case represents the efforts by my office and the Social Security Administration to find individuals abusing the system and prosecute them.
Judge Baker allowed Shorter to self-report to prison by February 20, 2017.
"The Social Security Administration, Office of Inspector General will vigorously investigate individuals committing fraud against Social Security programs," Feldt said. "This case represents cooperation amongst federal and local agencies to bring to justice those who take advantage of government programs and innocent victims."
The investigation was conducted by the Little Rock Office of the Social Security Administration, Office of Inspector General, and the Federal Bureau of Investigation (FBI). The case was prosecuted by Assistant United States Attorney Kristin Bryant.
Former ICON Communication Senior Vice President Admits to Stealing Company FundsRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today that Blaine Francis Houser, 52, of Dover, the former Senior Vice President of ICON Communications of Russellville, pleaded guilty to mail fraud after admitting that he used company funds for personal reasons.
Houser pleaded guilty on Tuesday before United States District Court Judge Kristine G. Baker to a one-count federal Information charging him with mail fraud. His scheme to defraud ICON Communications began in September 2012, when Houser was Senior Vice President, and continued through April 2015. According to the Information, in September 2012, Houser opened a commercial credit application in the name of ICON Communications with Blue Tarp Financial, Inc. of Portland, Maine. He then made a purchase of tools by mail order from Northern Tool & Equipment Company. He had the invoice sent to ICON Communications at their office in Russellville, but had the tools shipped to his house in Dover. Once the invoice arrived at ICON, the bill was paid with monies from the company.
Following this purchase there were other instances of mail fraud committed by Houser, who agreed as part of a plea agreement to pay restitution in the amount of $255,606.52 to ICON.
Houser will be sentenced by Judge Baker at a later date. Mail fraud carries a maximum statutory sentence of 20 years’ imprisonment, a $250,000 fine, three years of supervised release and $100 special assessment. The case was investigated by the United States Secret Service and is being prosecuted by First Assistant United States Attorney Patrick C. Harris.
Marianna Man Sentenced to Prison in Scheme to Steal USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced Tuesday that United States District Court Judge D. Price Marshall Jr., sentenced James E. Franklin, Jr., 34, of Marianna, to prison for his role in a widespread scheme to steal money intended for feeding children in low income areas.
Judge Marshall sentenced Franklin, who pleaded guilty to conspiring to commit wire fraud on September 16, 2016, to 24 months’ imprisonment, to be followed by two years of supervised release. He was also ordered to pay restitution in the amount of $380,055.36.
The United States Department of Agriculture (USDA) feeding programs in Arkansas are administered through the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After they are approved, they can provide meals as part of the feeding programs, and they are reimbursed for the eligible meals they serve.
Franklin is the fourth defendant sentenced who was charged with involvement in a scheme to fraudulently obtain these USDA program funds intended to feed children in low income areas. Eight others have pleaded guilty and are awaiting sentencing. Jacqueline Mills, Dorothy Harper, and Anthony Waits are scheduled for trial on March 27, 2017, before United States District Court Judge James M. Moody, Jr.
Franklin was a sponsor for a feeding program through an organization called "JL&N Outreach." Franklin had two approved feeding site locations, one in Hughes, Arkansas and the other in Brinkley, Arkansas. Franklin claimed that he fed as many as 244 children a day in Hughes and as many as 287 children a day in Brinkley. According to witnesses, no more than 10 children per day were fed in Brinkley and no more than 15 children per day were fed in Hughes.
Franklin was recruited by Anthony Waits. Waits’ wife, Gladys Waits, worked for DHS and approved Franklin’s application. Franklin paid Anthony Waits approximately 40% of the $380,055.36 Franklin received in the scheme.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana K. Harris, Allison W. Bragg, and Cameron McCree.
If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
Former DHS Employee Sentenced to Prison in Scheme to Steal USDA Funds Intended to Feed Hungry Children & Little Rock Man Pleads Guilty in Same SchemeRead the Press Release
LITTLE ROCK— Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced Wednesday that United States District Court Judge James M. Moody Jr., sentenced Tonique Hatton, 39, of North Little Rock, to prison for her role in a widespread scheme to steal money intended for feeding children in low income areas.
Judge Moody sentenced Hatton, who pleaded guilty to conspiring to commit wire fraud on September 6, 2016, to 108 months’ imprisonment, to be followed by two years of supervised release. She was also ordered to pay restitution in the amount of $7,632,871.77 and to forfeit $17,681.49.
In a separate case also heard Wednesday, Michael Lee, 26, Little Rock, pleaded guilty to an Indictment charging him with wire fraud. The charges stem from a similar scheme to steal money which was intended to feed children. Lee’s plea hearing took place before Chief United States Judge Brian S. Miller, who will sentence Lee at a later date.
The United States Department of Agriculture (USDA) feeding programs in Arkansas are administered through the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After they are approved, they can provide meals as part of the feeding programs, and they are reimbursed for the eligible meals they serve.
Lee was a sponsor for a feeding program through Our Children of Tomorrow. Lee had two approved feeding sites which were located in Arkadelphia and Little Rock. At these two sites, he claimed as many as 800 children. In truth, no more than 30 children were ever fed at the Arkadelphia site and no children were fed at the Little Rock site. Because of the inflated claims, Our Children of Tomorrow received approximately $666,428.07.
Hatton is the third defendant sentenced who was charged with involvement in this scheme to fraudulently obtain USDA feeding program funds. Kattie Jordan was sentenced to 63 months in federal prison on March 15, 2016, and Reuben Nims was sentenced to 21 months in federal prison on November 2, 2016. Gladys Waits, Christopher Nichols, Waymon Weeams, James Franklin, Francine Leon, Maria Nelson, Alexis Young, and Erica Warren have all pleaded guilty to conspiring to defraud USDA feeding programs and are awaiting sentencing. Jacqueline Mills, Dortha Harper, and Anthony Waits are scheduled for trial on March 27, 2017, before Judge Moody.
Hatton worked for DHS and her responsibilities included processing applications from sponsors who applied to participate in the feeding programs, determining their eligibility, and approving their proposed feeding sites. Hatton was responsible for approving the feeding programs for co-defendants Mills and Jordan at various times between January 2012 and August 2014. Mills and Jordan made bribe payments to Hatton to ensure those programs were approved. Some sponsors would claim that hundreds of children were fed at their sites, when few or no children were actually fed there. Hatton also helped Mills and Jordan avoid DHS’s detection of the fraud.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana K. Harris, Allison W. Bragg, and Cameron McCree. If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
Former TSA Employee Sentenced to 20 Years in Prison for Child PornographyRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today that Raymond Kinney, age 55, of Jacksonville, was sentenced to 20 years’ imprisonment for distribution of child pornography. Kinney, a former Transportation Security Administration (TSA) employee, was arrested while attempting to meet who he believed were two minors for sex after contacting them on the internet.
“Protecting the children of Arkansas is one of our highest priorities, and our office will never stop working to bring child predators like Kinney to justice,” Thyer said. “I often emphasize that parents must be aware of the dangers children face online and protect them on the internet just as they would in any other public place, and this case demonstrates exactly why.”
Kinney was arrested in Russellville in January 2015, when he drove to meet two minors with whom he planned to have sex, according to online chats that were recovered from his account. Prior to his arrest, Kinney was a Transportation Security Inspector for the TSA.
The investigation began when officers monitoring a social networking site discovered an individual who was seeking a minor for sexual contact. Officers, posing as minors, began undercover conversations with this individual, later discovered to be Raymond Kinney. Kinney sent several pictures and videos of child pornography over the internet to the undercover officers.
The parties ultimately arranged a meeting at a Russellville motel, and Kinney told the undercover officers about his sexual plans for the two minor children. When Kinney arrived at the hotel, instead of meeting the two minors, he was arrested. A search revealed that Kinney had brought sex toys and children’s clothing with him.
“Child predators come from all walks of life, and parents everywhere must be vigilant because these threats aren’t always easily seen,” Homeland Security Investigations New Orleans Special Agent in Charge Raymond R. Parmer Jr. said “This case shows HSI is committed to investigating and seeking prosecution of dangerous criminals regardless of a person’s position in society in order to protect our children.”
Kinney was indicted in February 2015 and pleaded guilty in May 2016. At his change of plea hearing he admitted to using the online username “luvsyngteengirls” and sending several pictures and videos of child pornography over the internet.
On Wednesday, United States District Judge Susan Webber Wright imposed the sentence of 20 years, the maximum sentence allowed by law, which was jointly recommended by the parties in exchange for the United States not charging Kinney with additional criminal conduct that was also discovered during the investigation, including sexual enticement of a minor.
In addition to his federal sentence, Kinney was also convicted of attempted rape in state court and received a sentence of 244 months, which will run concurrently with his federal sentence.
The investigation was conducted by the Russellville Police Department and Homeland Security Investigations. The case was prosecuted by Assistant United States Attorneys Allison W. Bragg and Kristin Bryant.
Stone County, Arkansas, Chief Sheriff’s Deputy Sentenced to Prison for Instructing Inmates to Assault Another PrisonerRead the Press Release
The Justice Department announced today that Randel Branscum, 56, formerly the chief sheriff’s deputy and jail administrator for the Stone County Sheriff’s Office in Mountain View, Arkansas, was sentenced to 12 months and one day in prison for instructing a group of prisoners to beat another inmate and then arranging for the assault to occur.
As a part of his guilty plea, which occurred on March 2, 2016, Branscum admitted that while acting under his authority as jail administrator, he approached a group of inmates, who were detained together in cell 33 and told them to “handle” the victim. Branscum then moved the victim, who had been housed in a neighboring cell, into cell 33. When the victim realized he was about to be assaulted and attempted to leave the cell, Branscum forced the victim inside and then allowed the victim to be beaten as instructed. During the assault, the victim was repeatedly punched and his head was knocked into a windowsill, causing a head wound and other injuries.
“This corrections officer abused his power to order a violent assault against a prisoner,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We expect and entrust corrections officers with the responsibility to care for and protect inmates in their custody. When corrections officers fail to uphold that oath, their actions corrode our justice system’s fundamental values and create an environment that is more dangerous for inmates as well as officers.”
“This type of abuse of power and authority will never be tolerated by the citizens of Arkansas, or my office,” said U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas. “The public deserves to know that law enforcement and correctional officers are trustworthy and law-abiding citizens, held to high ethical standards. When an officer strays from that standard, as this officer did, they will be held accountable for their illegal actions.”
One of the inmates who carried out the beating, Matthew McConniel, was also sentenced today for the same offense as Branscum and received a term of probation. On May 26, 2016, another inmate who took part in the beating, James Beckham, was also sentenced to probation for the offense. All three defendants were sentenced by Chief U.S. District Judge Brian S. Miller of the Eastern District of Arkansas.
This case was investigated by the FBI. It was prosecuted by Special Litigation Counsel Gerard Hogan, Trial Attorneys Gabriel Davis and Samantha Trepel of the Civil Rights Division’s Criminal Section, and Assistant U.S. Attorney Julie Peters of the Eastern District of Arkansas.
Stone County, Arkansas, Chief Sheriff's Deputy Sentenced to Prison for Instructing Inmates to Assault Another PrisonerRead the Press Release
WASHINGTON – The Justice Department announced today that Randel Branscum, 56, formerly the chief sheriff’s deputy and jail administrator for the Stone County Sheriff’s Office in Mountain View, Arkansas, was sentenced to 12 months and one day in prison for instructing a group of prisoners to beat another inmate and then arranging for the assault to occur.
As a part of his guilty plea, which occurred on March 2, 2016, Branscum admitted that while acting under his authority as jail administrator, he approached a group of inmates, who were detained together in cell 33 and told them to "handle" the victim. Branscum then moved the victim, who had been housed in a neighboring cell, into cell 33. When the victim realized he was about to be assaulted and attempted to leave the cell, Branscum forced the victim inside and then allowed the victim to be beaten as instructed. During the assault, the victim was repeatedly punched and his head was knocked into a windowsill, causing a head wound and other injuries.
"This corrections officer abused his power to order a violent assault against a prisoner," said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. "We expect and entrust corrections officers with the responsibility to care for and protect inmates in their custody. When corrections officers fail to uphold that oath, their actions corrode our justice system’s fundamental values and create an environment that is more dangerous for inmates as well as officers."
"This type of abuse of power and authority will never be tolerated by the citizens of Arkansas, or my office," said U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas. "The public deserves to know that law enforcement and correctional officers are trustworthy and law-abiding citizens, held to high ethical standards. When an officer strays from that standard, as this officer did, they will be held accountable for their illegal actions."
One of the inmates who carried out the beating, Matthew McConniel, was also sentenced today for the same offense as Branscum and received a term of probation. On May 26, 2016, another inmate who took part in the beating, James Beckham, was also sentenced to probation for the offense. All three defendants were sentenced by Chief U.S. District Judge Brian S. Miller of the Eastern District of Arkansas.
This case was investigated by the FBI. It was prosecuted by Special Litigation Counsel Gerard Hogan, Trial Attorneys Gabriel Davis and Samantha Trepel of the Civil Rights Division’s Criminal Section, and Assistant U.S. Attorney Julie Peters of the Eastern District of Arkansas.
Little Rock Man Sentenced to Prison for Role in Stealing USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced Wednesday that United States District Court Judge James M. Moody Jr., sentenced Reuben Nims, 52, of Little Rock, to prison for his role in the widespread scheme to steal money intended for feeding children in low income areas.
Judge Moody sentenced Nims, who pleaded guilty to conspiring to commit wire fraud on March 8, 2016, to 21 months’ imprisonment, to be followed by three years of supervised release. He was also ordered to pay restitution of $182,728.65.
Nims is the second defendant sentenced who was charged with involvement in a scheme to fraudulently obtain United States Department of Agriculture (USDA) program funds intended to feed children in low income areas. Kattie Jordan was sentenced to 63 months in federal prison on March 15, 2016. Gladys Waits, Tonique Hatton, Christopher Nichols, Waymon Weeams, James Franklin, Francine Leon, Maria Nelson, Alexis Young, and Erica Warren have all pleaded guilty to conspiring to defraud USDA feeding programs and are awaiting sentencing. Jacqueline Mills, Dortha Harper, and Anthony Waits are scheduled for trial on March 27, 2017, before Judge Moody.
The USDA feeding programs in Arkansas are administered through the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After they are approved, they can provide meals as part of the feeding programs, and they are reimbursed for the eligible meals they serve.
Nims was a sponsor for a feeding program through his organization called "Blessed Thru Success." Nims had one approved feeding site on Rodney Parham Road in Little Rock, where he claimed as many as 300 children were fed each day. No children were ever actually fed there. Nims was recruited by Anthony Waits. Waits’ wife, Gladys Waits, worked for DHS and approved Nims’ application. Nims paid Anthony Waits approximately 50% of the $182,728.65 Nims received in the scheme.
Previous charges filed in the overall investigation detail alleged fraud involving more than $11 million in USDA feeding program funds.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service.
If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
Owner of Arkansas Juvenile Mental Health Facilities Sentenced to 84 Months in Prions for Bribery SchemeRead the Press Release
WASHINGTON – The owner of two Arkansas mental health companies that provide inpatient and outpatient mental health services to juveniles was sentenced to serve 84 months in prison today for engaging in a scheme to bribe a former deputy director of the Arkansas Department of Human Services (ADHS), announced Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division.
Theodore E. Suhl, 50, of Warm Springs, Arkansas, was previously convicted of two counts of honest services fraud, one count of federal funds bribery and one count of interstate travel in aid of bribery. In addition to his prison sentence, Suhl was ordered to pay a $200,000 fine.
The evidence presented at trial showed that Suhl bribed former deputy director of ADHS, Steven B. Jones, using intermediaries Phillip W. Carter and a local pastor. Beginning in approximately April 2007, Suhl, Jones and Carter periodically met at restaurants in Memphis, Tennessee, or in rural Arkansas in order for Suhl to request assistance for his companies from Jones in his capacity as deputy director of ADHS. Jones agreed to perform official acts that benefitted Suhl and Suhl’s businesses and provided internal ADHS information to Suhl. In exchange for Jones’s agreement to perform official acts, Suhl paid Jones by funneling cash payments through the pastor’s church and providing the bribe payments to Jones in cash so that the transactions would not be easily traceable. Putting Jones on Suhl’s illicit payroll paved the way for more than $1.5 million in profits for Suhl’s juvenile mental health counseling business.
Jones pleaded guilty to federal funds bribery and conspiracy for his involvement in the scheme and was sentenced to 30 months in prison. Carter pleaded guilty to conspiracy to commit federal funds bribery and honest services wire fraud and was sentenced to 24 months in prison.
The FBI’s Little Rock Field Office investigated the case. Trial Attorneys John D. Keller, Lauren Bell and Amanda R. Vaughn of the Criminal Division’s Public Integrity Section prosecuted the case.
Integrity Initiative for November 2016 ElectionsRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas and Kenneth Elser, United States Attorney for the Western District of Arkansas announced today that an Assistant United States Attorney (AUSA) will lead the efforts of their offices in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Hunter Bridges has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Arkansas, and AUSA Denis Dean has been appointed toserve as the DEO for the Western District of Arkansas, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
In a joint statement, United States Attorneys Thyer and Elser said, "Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process."
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and providesthat they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, both United States Attorneys stated that the designated AUSA/DEO will be on duty in this District while the polls are open. He can be reached by the public at the following telephone numbers: 479-783-5125 for the Western District of Arkansas and 501-340-2600 for the Eastern District of Arkansas.
United States Attorneys Thyer and Elser said, "Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division."
The FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at 501-221-9100.
Complaints about ballot access problems or discrimination can be made directly to the Civil Rights Division’s Voting Section in Washington at 1-800-253-3931 or (202) 307-2767.
Northeast Arkansas Roundup Results in 11 Arrests in Methamphetamine Trafficking RingRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; along with Matthew Barden, Assistant Special Agent in Charge of the Drug Enforcement Administration (DEA), Little Rock District Office; and Jeffrey B. Reed, Resident Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), Little Rock Field Office, announced today the unsealing of a multiple- count indictment charging 13 defendants in northeast Arkansas and southeast Missouri with multiple drug and weapons charges.
An investigation into a large-scale drug trafficking organization based in Blytheville resulted in the early-morning arrests of 11 of the 13 defendants on charges involving conspiracy to distribute and distribution of methamphetamine and weapons possession. Six defendants were arrested in the Blytheville and one in Jonesboro, while two were arrested in Missouri towns (Malden and Steele) near Arkansas. Two others were served arrest warrants while incarcerated in the Dunklin County, Missouri, jail. Two of the indicted individuals, Brad Vernon and Joseph Riley, are still at large.
The defendants arrested today will remain in custody and have initial appearances before United States Magistrate Judge Joe. J. Volpe on Thursday.
“We remain resolute in our continuing effort to help the people of northeast Arkansas, and the Delta in general, combat the plague of methamphetamine and gun violence,” Thyer said. “If the drugs dealers won’t go away, neither will we. While past law enforcement operations have slowed the drug trade in northeast Arkansas, now we have people from neighboring states coming into Blytheville to purchase large quantities of meth. Today’s operation, the culmination of a combined, cooperative effort from multiple federal and state law enforcement agencies, makes clear we will not permit this behavior to go unchecked and unpunished.”
Some of the co-conspirators arrested today have been known to law enforcement for several years, dating back to previous drug investigations in Blytheville. This joint DEA-ATF investigation began in mid-2015, with a series of smaller controlled purchases of methamphetamine from targets in Missouri. Eventually, as law enforcement informants increased the amounts of methamphetamine they purchased, these targets brought the informants to their main meth suppliers in Blytheville to buy larger amounts, up to quarter-pounds at a time.
All told, law enforcement directly purchased more than one kilogram (1000 grams) of methamphetamine from the Arther James and Robert Brown drug-trafficking organization (DTO) in 17 controlled purchases. The entire conspiracy involves multiple kilograms of methamphetamine. In addition, agents seized nine firearms from James, Brown, and Antonio McNichols, all of whom are convicted felons. Five of the firearms were seized during the Tuesday morning arrests, while four others were seized during search warrants conducted during the investigation.
“Today’s arrests demonstrate DEA’s relentless effort to reduce violent crime and rid our streets of criminal drug trafficking organizations,” Barden said. “In conjunction with our federal, state and local partners, we continue to work together to end the scourge of drugs and violence that erode the quality of life in our neighborhoods. These arrests send a clear message that our community will not tolerate the heinous activity perpetrated by drug traffickers and shows our commitment to work together to dismantle violent street gangs.”
The indictment was handed down by a federal grand jury on October 6, 2016. The indictment charges 13 defendants in 28 separate counts. The counts include conspiracy to possess with intent to distribute methamphetamine, distribution of methamphetamine, felon in possession of firearms, and the use of a telephone to facilitate a drug trafficking crime. If convicted of conspiracy to distribute more than 500 grams of methamphetamine, defendants will face a sentence of not less than 10 years to life imprisonment.
“The Bureau of Alcohol, Tobacco, Firearms & Explosives Little Rock Field Office, Cape Girardeau Field Office and the DEA Little Rock Field Office worked jointly with the Mississippi County Sheriff’s Office and the Second Judicial District Drug Task Force in an extensive investigation to thwart a drug-trafficking organization in the Mississippi County area of Arkansas,” Reed said. “This joint investigation led to the arrest of several offenders to create a safer environment for the communities of northeast Arkansas.”
The investigation was jointly led by the DEA and ATF, with cooperation and additional assistance from the Second Judicial District Drug Task Force, the Blytheville Police Department, the Mississippi County Sheriff’s Department, the Osceola Police Department, and the Arkansas Highway Police. The case is being prosecuted by Assistant United States Attorney Chris Givens.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
JAMES/BROWN DTO INDICTMENT DEFENDANTS- Arther Lionel JAMES, 38, Blytheville (arrested in Blytheville)
- Brad VERNON, 34, Gosnell (fugitive)
- Adam BAILEY, 35, Kennett, MO (incarcerated in Dunklin, Co., MO, Jail)
- Angeleke BLANKENSHIP, 43, Kennett, MO (arrested in Malden, MO)
- Antonio BRODIE, Blytheville (arrested in Jonesboro)
- Justin BUYS, 31, Blytheville (incarcerated in Dunklin, Co., MO, Jail)
- Heath FOWLER, 40, Blytheville (arrested in Blytheville)
- Keith KEYS, 49, Blytheville (arrested in Blytheville)
- Antonio McNICHOLS, 46, Blytheville (arrested in Blytheville)
- Lewis MILES, 45, Blytheville (arrested in Blytheville)
- Joseph RILEY, 30, Blytheville (fugitive)
- Robert Lamont BROWN, 39, Blytheville (arrested in Blytheville)
- Steven THOMAS, 31, Steele, MO (arrested in Steele, MO)
STATUTORY SENTENCESConspiracy to possess with intent to distribute and to distribute more than 500 grams of methamphetamine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Conspiracy to possess with intent to distribute and to distribute more than 50 grams but less than 500 grams of methamphetamine is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Conspiracy to possess with intent to distribute and to distribute less than 50 grams of methamphetamine is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Distribution of 50 grams or more of actual methamphetamine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Distribution of 5 grams or more of actual methamphetamine is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Distribution of 50 grams or more of methamphetamine mixture is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Distribution of a mixture containing a detectable amount of methamphetamine is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Possession of a firearm by a felon is punishable by not more than 10 years’ incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 3 years supervised release.
Use of a communication facility to facilitate a drug trafficking crime is punishable by not more than 4 years’ incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 1 year supervised release.
Helena Housing Authority Director Arrested, Charged with Theft of Government FundsRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today the arrest of Lionell S. Moss, the executive director of the Helena Housing Authority (HHA), for his role in a scheme to steal government funds. Moss, 58, of Helena–West Helena, is charged in a federal indictment with theft of government funds and theft concerning programs receiving federal funds.
As the executive director for the HHA, Moss was responsible for properly managing the day-to-day operations of the housing authority without waste, fraud or mismanagement. As alleged in the indictment, from October 2011 through January 2015, while serving as executive director, Moss submitted materially false and fraudulent reimbursement requests for sick leave and annual leave, and made personal expenditures using the HHA credit cards. In total, Moss received approximately $57,907.40 from the scheme.
Late Friday afternoon, Moss appeared before United States Magistrate Judge Joe J. Volpe and was released on bond pending trial. If convicted, Moss faces a maximum penalty of 10 years in prison and a fine of $250,000.
This investigation is being conducted by the Housing and Urban Development— Office of Inspector General and the U.S. Marshals Service. Assistant U.S. Attorneys Edward Walker and Cameron McCree are prosecuting the case for the government.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Hospital Orderly Sentenced to Prison for Aggravated Identity TheftRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, Special Agent in Charge Diane Upchurch, of the Little Rock Field Office for the Federal Bureau of Investigations (FBI), and Tracey D. Montaño, Special Agent in Charge of the Internal Revenue Service (IRS) Criminal Investigation Division announced today that United States District Judge Kristine G. Baker sentenced Sir John Ashley Holliday, 28, of Dallas, Texas, to two years in federal prison for aggravated identity theft and theft of government funds, and ordered him to pay $13,191 in restitution to the Internal Revenue Service. Holliday was also ordered to serve three years of supervised release.
Holliday was formerly employed as an orderly at the Arkansas State Hospital, a Little Rock psychiatric facility. At his change of plea hearing before Judge Baker on May 19, 2016, Holliday admitted that he stole patient names and social security numbers that he obtained during his employment at the State Hospital.
Holliday used the stolen information to file fraudulent federal income tax returns in the patients’ names which claimed refunds on wages never actually earned. Holliday then obtained refunds from the fraudulent returns in the form of debit cards totaling $13,191, which he later spent as his own.
Holliday pleaded guilty to aggravated identity theft and theft of government funds. The FBI, IRS–Criminal Investigation Division, and United States Secret Service investigated this matter. Assistant United States Attorney Alexander D. Morgan prosecuted the case for the United States.
Texas Man Pleads Guilty to Conspiracy in Scheme to Steal USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today that Waymon D. Weeams, Jr, 35, of the Dallas-area of Texas, pled guilty to an Information charging him with conspiring to commit wire fraud. Weeams conspired to steal money intended to feed children in low income areas during the school year.
Today’s plea hearing took place in Little Rock before United States District Judge Kristine G. Baker, who will sentence Weeams at a later date.
The United States Department of Agriculture (USDA) funds the Child and Adult Care Feeding Program, which includes an at-risk after school component. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After they are approved, they can provide meals as part of the feeding program, and they are reimbursed for the eligible meals they serve.
Weeams was a sponsor for a feeding program through an organization called “SJ&B Outreach Program.” Weeams had three approved feeding sites which were located in Wynne, Forrest City, and Marianna, Arkansas. Between all three sites, he claimed as many as 872 children were fed each day. No children were ever actually fed at the Forrest City site, and Weeams now says that approximately 10 to 50 children were fed at the other two sites. Because of the inflated claims, SJ&B Outreach Program received approximately $697,236.41 in USDA funds that were intended to feed children in need.
Weeams admitted that he was recruited by Anthony Waits, who has been indicted on similar charges in Case No. 4:14CR00250 JM. Waits’ wife, Gladys King Waits, worked for DHS and approved Weeams’ application. She was charged in the same indictment as Anthony Waits, and in March 2016, she pleaded guilty to conspiracy to commit wire fraud as charged in that indictment. The plan was for Weeams to pay Anthony Waits a percentage of the money Weeams received. Out of the money Weeams received, he withdrew approximately $475,000 in cash. Weeams paid Anthony Waits approximately 40% of the total amount of money he received.
Weeams is the eleventh person to plead guilty concerning the theft of USDA feeding program funds for children. Previous charges filed in this investigation detail alleged fraud involving over $11 million in USDA feeding program funds.
The statutory penalty for conspiracy to commit wire fraud is not more than 20 years imprisonment, not more than a $250,000 fine, or both, and not more than three years supervised release.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg, and Cameron McCree. If you are aware of any fraudulent activity regarding these feeding programs, please email that information to [email protected].
Attorney General Loretta E. Lynch to Deliver Remarks at Violence Reduction Network Fall Summit Opening CeremonyRead the Press Release
WASHINGTON—Attorney General Loretta E. Lynch will deliver opening remarks on the Violence Reduction Network (VRN) and the Justice Department’s work to address violent crime at the VRN Summit in Little Rock, Arkansas, on MONDAY, SEPTEMBER 26, AT 8:30 A.M. CDT. Assistant Attorney General Karol V. Mason of the Justice Department’s Office of Justice Programs and U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas will also participate in the VRN Summit.
Background on the Violence Reduction Network (VRN):
The VRN, launched in 2014, is an effort through the Department of Justice, Office of Justice Programs and Bureau of Justice Assistance to leverage lessons learned, existing government resources, and an all-hands approach to deliver strategic, intensive training and technical assistance to reduce violence. The VRN is specifically designed to complement existing local antiviolence efforts. The sites considered for VRN have violence levels that exceed national averages. They also represent jurisdictions with unique law enforcement and local government structures, enabling implementation and assessment of VRN in distinctly different organizational contexts to help the department create a model for delivery of training and technical assistance.
WHAT: The Justice Department’s 2016 Violence Reduction Network Summit
WHO: Attorney General Loretta E. Lynch
Asst. Attorney General Karol V. Mason of the Office of Justice Programs
U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas
Little Rock Police Chief Kenton Buckner
WHEN: MONDAY, SEPTEMBER 26, 2016
8:30 a.m. CDT
WHERE: Statehouse Convention Center
3rd Floor, Wally Allen Ballroom D
1 Statehouse Plaza
Little Rock, AR 72201
OPEN PRESS (Media Access: 7:30 a.m. CDT / Preset By: 8:15 a.m. CDT)
NOTE: The summit’s opening session is open to the media. All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Please note that media may begin arriving at 7:30 a.m. CDT, and all cameras must be pre-set by 8:15 a.m. For inquiries related to on-site media logistics, contact [email protected] or 202-307-6873.
Heroin and Opioid Awareness WeekRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today the start of the National Heroin and Opioid Awareness Week, which will reinforce the Department of Justice’s three-fold approach to the nationwide opioid and heroin epidemic: 1) prevention and awareness regarding the opioid and heroin problem; 2) enforcement priorities and best practices; and 3) resources that focus on treatment. This week, the Attorney General and other Department of Justice leaders, as well as U.S. Attorney’s Offices across the country, will participate in events designed to highlight and educate the public about the dangers of heroin and opioids.
On Friday, the U.S. Attorney’s Office for the Eastern District of Arkansas will sponsor a forum at North Little Rock High School, at which time health care professionals, enforcement officials, and recovering addicts will speak to students about heroin and opioid abuse.
More Americans now die every year from drug overdoses than in motor vehicle crashes—and most of those involve prescription opioids or heroin. The statistics are sobering: 80% of the world’s supply of opioid medication is used in the United States, while 4.6% of the world’s population lives in the United States. In 2014 more than 27,000 lives were lost to heroin and opioids, and reports from the field indicate that this number has increased in 2015 and this year. While the largest share of this toll comes from the abuse of prescription opioids, the number of deaths from heroin has increased dramatically over the last several years.
A main component of the Department of Justice’s approach to the epidemic is the enforcement prong. The Department and the Eastern District of Arkansas seek to reduce the supply of these deadly substances by working closely with other federal agencies and our state and local partners to prosecute street dealers, gang members who sell drugs, dirty doctors and pharmacists, up to the leaders of the major cartels who move large quantities of heroin and other opioids into the United States.
However, this crisis will not be solved solely through prosecutions. The heroin and opioid epidemic requires a coordinated response across all elements of government and our society, including federal, state and local law enforcement as well as medical and public health authorities, community groups and concerned citizens. Enforcement efforts are much more effective when they are part of a larger strategy that seeks to educate potential drug users and prevent their involvement with opioids in the first place, and focuses on treatment.
The Eastern District of Arkansas and other U.S. Attorneys are finding new and creative approaches to beat back the heroin and opioid epidemic. For example:
- The Drug Enforcement Administration has developed its 360 Strategy that combines targeted enforcement with efforts to fight the diversion of prescription opioids and efforts to build community coalitions against drug abuse.
- The Organized Crime Drug Enforcement Task Forces runs a National Heroin Initiative that provides seed money to federal prosecutors and agents who come up with new approaches to investigate drug trafficking groups and reduce heroin and opioid deaths.
- The Office of Justice Programs is awarding grants to public health authorities to implement and enhance the use of Prescription Drug Monitoring Programs to help track opioid prescriptions and prevent their abuse.
The President has made clear that addressing the prescription opioid and heroin epidemic is a priority for his Administration, and has proposed to invest $1.1 billion in new funding to make sure that every American with an opioid addiction who seeks treatment can get care. These new investments build on the steps the Administration has been taking to:
- promote evidence-based prevention programs;
- increase access to the overdose-reversal medicine naloxone;
- expand access to treatment, including medication-assisted treatment;
- improve opioid prescribing practices;
- carry out targeted enforcement activities; and
- support the millions of Americans in recovery.
States and communities are also working to save lives through innovative partnerships between public safety and public health. For example, first responders are using naloxone to reverse overdoses and prevent deaths; states are strengthening prescription drug monitoring programs which help detect doctor-shopping and overprescribing of opioids; and the criminal justice community is establishing programs that send people with substance abuse problems to treatment rather than jail.
Recovery from opioid and other controlled substance addictions is possible, and many Americans are able to recover because they get the treatment and care they need. But too many still are not able to get treatment. That’s why the President has called on Congress to provide the resources needed to ensure that every American with an opioid addiction who wants treatment can get it and start the road to recovery. This is an epidemic that can be confronted and defeated, but everyone has a role to play in turning the tide of this epidemic:
- Have a meaningful conversation with your family about the dangers of heroin and opioid abuse.
- Get involved in activities in your community against heroin and opioids. Many communities are hosting public forums, town halls, events at schools, vigils, walks, and similar activities.
- Contact law enforcement if you suspect drug-related activity in your neighborhood.
- If you have prescription opioids in your home, make sure they are safely locked away.
- Take advantage of drug take back days sponsored by the DEA, other law enforcement agencies, and some pharmacy chains to safely dispose of your unneeded prescription opioids.
During Heroin and Opioid Awareness Week, Americans can learn more about addiction, join with community members to support evidence-based prevention and treatment programs, and stand with those suffering from addictions or who are in recovery—to let them know they are not alone.
Marianna Man Pleads Guilty in Scheme to Steal USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK— Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced Friday that James E. Franklin, Jr., 34, of Marianna, pleaded guilty to an information charging him with conspiracy to commit wire fraud. Franklin conspired to steal money intended to feed children in low income areas during the school year.
Friday’s plea hearing took place in Little Rock before United States District Judge D.P. Marshall, Jr., who will sentence Franklin at a later date.
The United States Department of Agriculture (USDA) funds the Child and Adult Care Feeding Program, which includes an at-risk, after school component. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After they are approved, they can provide meals as part of the feeding program, and they are reimbursed for the eligible meals they serve.
At Friday’s hearing Franklin admitted that in the summer of 2013, he and Anthony Waits drove to meet a lady named Dorothy Harper at a bank. Harper lived in England and was a sponsor who participated in the feeding program. Waits got out of the vehicle, approached Harper’s vehicle and then returned with a stack of cash. Franklin estimated that it was around $12,000. Harper and Waits have been indicted on similar charges in Case No. 4:14CR00250-JM.
Prior to the trip, Franklin had limited knowledge of the feeding program from Waits. But after Franklin saw the large amount of cash, Waits explained the fraud to him in more detail. Franklin admitted that he agreed to participate with Waits in a fraudulent scheme to obtain money from the feeding program. Gladys Waits, Anthony Waits’ estranged wife, was also indicted on similar charges in Case No. 4:14CR00250-JM. Gladys Waits pleaded guilty to those charges on March 30, 2016.
Franklin was a sponsor for a feeding program through an organization called "JL&N Outreach." In the 2013 and 2014 contract years, Franklin submitted approximately 12 inflated claims for feeding sites in Brinkley, Ark., and Hughes, Ark. In Brinkley, Franklin falsely claimed they served from 217 to 287 children per day. In Hughes, Franklin falsely claimed they served from 184 to 244 children per day. According to witnesses, no more than 10 children per day were fed in Brinkley and no more than 15 children per day were fed in Hughes.
Because of the inflated claims, Franklin received a total of approximately $380,055.36 from DHS. Franklin withdrew in cash approximately $252,000 of the money he received. Franklin paid Anthony Waits approximately 40% of the total amount of money he received.
Franklin is the tenth person to plead guilty concerning the theft of USDA feeding program funds for children. Previous charges filed in this investigation detail alleged fraud involving over $10 million in USDA feeding program funds.
The statutory penalty for conspiracy to commit mail fraud is not more than 20 years’ imprisonment, not more than a $250,000 fine, or both, and not more than three years supervised release.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg and Cameron McCree.
If you are aware of any fraudulent activity regarding these feeding programs, please email that information to [email protected].
Osceola Man Found Guilty of Meth Distribution Following First Trial in Operation Blynd JustusRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and David Shepard, Assistant Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), announced today that a federal jury found James Edward Watson, Jr., 30, of Osceola, guilty of distribution of methamphetamine following a two-day trial. Due to the nature of the charge and his past criminal history, Watson will serve a minimum of 10 years in federal prison.
Following approximately 20 minutes of deliberation the jury returned its verdict to Chief United States District Judge Brian Miller on Tuesday, September 13. Judge Miller will sentence Watson at a later date.
Watson was the first defendant indicted in Operation Blynd Justus to go to federal trial. On August 11, 2015, Watson and 69 other defendants were arrested in a wide-sweeping roundup in Northeast Arkansas as part of a major operation aimed at curbing drug trafficking and gun violence in Blytheville and Mississippi County. Blynd Justus targeted violent and repeat drug and gun offenders and resulted in 40 separate federal indictments. Following the initial roundup, four additional defendants have been indicted on drug charges in the overall case, and federal law enforcement remains active in the area.
"A coordinated effort from multiple law enforcement agencies successfully removed dozens of violent and dangerous drug dealers from the streets of Mississippi County 13 months ago, but the work of protecting these communities continues," Thyer said. "Mr. Watson was a repeat offender who had committed violent acts in the past. Just as the other defendants arrested in Blynd Justus will learn, Mr. Watson now knows that his criminal actions only led to prison time."
"Our resolve has not faltered in our efforts to disrupt violent gang activity and dismantle illegal sales of firearms and drugs in our state," Assistant Special Agent in Charge Shepard said. "We are determined to fight for our community and work hand-in-hand with federal, state and local agencies to achieve this goal."
Watson is a convicted felon who on August 29, 2014, sold three ounces of methamphetamine (approximately 84 grams) to a confidential informant for $3,000. Watson met the informant in Blytheville to purchase and then sell the methamphetamine. Additionally, as detailed in the trial, Watson sold the informant four ounces of counterfeit methamphetamine in a separate transaction in September 2014. The jury found that Watson sold more than 5 grams of actual methamphetamine in the August 29th transaction.
The statutory penalty for distribution of more than 5 grams of actual methamphetamine, a violation of 21 U.S.C. § 841(b)(1)(B), with an enhancement for being previously convicted of a drug felony, is not less than 10 years and not more than life, not more than an $8 million fine, or both, and not less than 8 years of supervised release. Watson’s actual sentence will be determined at a later date.
While Watson is the first defendant indicted in the Blynd Justus operation to go to trial, he is not the first defendant to be convicted. To date, 25 defendants have pleaded guilty. Eight have been sentenced—all to prison time (including James Walton–120 months, Markese Durden–120 months, John Franklin–87 months, Darius Goodman–87 months, Juan Pineda–60 months, Dexter Anderson–48 months, Jarvis Reed–30 months, and Harmanjeet Khatrao–5 months). The others who pleaded guilty are awaiting sentencing. Another three defendants (Derrick Palmore, Andrew Armstrong, and Vincent Talley) are scheduled to change their pleas to guilty on September 16, 2016. The remaining defendants have trials scheduled.
Northeast Arkansas saw an immediate impact as a result of Blynd Justus. According to Blytheville Police Chief Ross Thompson, violent crime went down in six key areas charted by law enforcement. In the six months following the August 2015 takedown Blytheville saw incidents of aggravated assault, robbery, larceny, motor vehicle theft, rape, and murder all decrease as compared to the six months prior, in some cases dramatically. There were seven homicides in Blytheville in the six months prior to Blynd Justus. Following the takedown, there were zero murders in the next seven months.
"The goal of Blynd Justus was to help an ailing community combat drugs and violence, remove dangerous people from the streets, and help the great citizens of Northeast Arkansas sleep a little easier at night," Thyer said. "While we will never eradicate all crime, Blynd Justus serves as a continuing reminder to criminals that you will spend time in prison if you choose to poison and terrorize these communities."
Assistant United States Attorney Benecia Moore prosecuted the case against Watson. The overall Blynd Justus investigation was conducted by the FBI, in partnership with the 2nd Judicial District Drug Task Force, which includes officers from the Blytheville Police Department, the Osceola Police Department and the Mississippi County Sheriff’s Office. The 40 indictments are being prosecuted by a team of multiple Assistant United States Attorneys.
Taxpayers Warned About IRS Telephone Impersonation ScamRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas and Gary Smith, Deputy Special Agent in Charge, Treasury Inspector General for Tax Administration (TIGTA) for the Mid-States Field Division are warning taxpayers about an aggressive impersonation telephone scam targeting taxpayers.
Since October 2013, American taxpayers have been subjected to unprecedented attempts to fraudulently obtain money by individuals impersonating Internal Revenue Service employees. The Treasury Inspector General for Tax Administration (TIGTA) has received reports of over 1.6 million impersonation related calls with over 8,600 victims reporting losses of almost $47 million. Deputy Special Agent in Charge Gary Smith, on behalf of TIGTA, stated, “Victimizing taxpayers by impersonating Internal Revenue Service employees is a serious crime. TIGTA and our law enforcement partners will do everything within our power to ensure that those involved in the impersonation of IRS employees are prosecuted to the fullest extent of the law.”
“My office takes these crimes very seriously,” said U.S. Attorney Thyer. “Those involved in the impersonation of IRS officials will be held accountable, and my office will aggressively pursue and prosecute those individuals committing these crimes against innocent taxpayers when we find them. Please notify TIGTA at 1-800-366-4484 immediately if you feel that you have received one of these calls. You can also file a complaint online on TIGTA’s website, www.tigta.gov. Lastly, please remember that you should never provide your personal information to callers if you are not sure of their identity, and never provide your personal information in response to emails from unsolicited email sources.”
Third Arkansas DHS Employee Pleads Guilty in Scheme to Steal USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today that Tonique Hatton, 39, of North Little Rock, pleaded guilty to one count of conspiring to commit wire fraud and one count of receipt of a bribe in connection with USDA funds intended to feed children in low income areas during the school year and summer.
Today’s plea hearing took place in Little Rock before United States District Judge James M. Moody, Jr., who will sentence Hatton at a later date.
The United States Department of Agriculture (USDA) funds the Child and Adult Care Feeding Program, which includes an at-risk after school component. USDA also funds the Summer Food Service Program. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After they are approved, they can provide meals as part of the feeding program, and they are reimbursed for the eligible meals they serve.
Hatton worked for DHS, and her responsibilities included processing applications from sponsors who applied to participate in the feeding programs, determining their eligibility, and approving their proposed feeding site(s).
Two of Hatton’s co-defendants, Jacqueline Mills and Kattie Jordan, were sponsors of feeding programs from approximately January 2012 to August 2014. Mills was a sponsor and had approved sites in cities including Helena and Marianna, Arkansas. Mills’ programs received more than $2.5 million in federal funds from DHS. Jordan was a sponsor and had approved sites in cities including Dermott, Dumas, Eudora, and Lake Village, Arkansas. Jordan’s programs received more than $3.5 million in federal funds from DHS.
Hatton was responsible for approving the feeding programs for Mills and Jordan at various times between January 2012 and August 2014. Mills and Jordan made bribe payments to Hatton to ensure those programs were approved. Some bribes were provided directly by checks made payable to Hatton or indirectly through payments to her relatives.
In exchange for these bribe payments, Hatton, knowing that these sponsors would submit inflated claims, would still approve their applications which contained the location of the sites and the maximum number of children who would be fed at each site.
During the time in the pending Indictment, Mills and Jordan submitted inflated claims for reimbursement to DHS, claiming that more children were fed at their sites than were actually fed. Because their applications had been approved for a specified number of children that could be fed at the sites, inflated claims were approved and paid by DHS without further scrutiny. Hatton also helped Mills and Jordan avoid DHS’s detection of the fraud.
Hatton is the ninth person to plead guilty concerning the theft of USDA feeding program funds for children. Previous charges filed in this investigation detail alleged fraud involving over $10 million in USDA feeding program funds.
The statutory penalty for conspiracy to commit wire fraud is not more than 20 years’ imprisonment, not more than a $250,000 fine, or both, and not more than three years supervised release. The statutory penalty for accepting bribes is not more than 10 years, not more than a $250,000 fine, or both, and not more than three years supervised release.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison Bragg, and Cameron McCree.
If you are aware of any fraudulent activity regarding these feeding programs, please email that information to [email protected].
Des Arc Couple Pleads Guilty to Bank Fraud and Money LaunderingRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, Tracey D. Montaño, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation Division, and Wanda C. Merritt, Field Office Director of the U.S. Department of Housing and Urban Development (HUD) announced today that Rhonda Williams, 50, and her husband, Gary Williams, 59, both of Des Arc, Arkansas, appeared before Chief United States District Judge Brian S. Miller and pleaded guilty to a 2-count felony information, charging them with conspiracy to commit bank fraud and money laundering. In addition, they have also agreed to forfeit the proceeds of the fraud.
Rhonda Williams was the Executive Director of the Cotton Plant Housing Authority. Gary Williams was the Housing Authority’s Maintenance Supervisor. The Housing Authority received its annual operating funds from HUD in the form of an annual distribution into its account at Signature Bank of Arkansas.
From January 31, 2001 to December 31, 2014, the Williams conspired to execute a scheme to obtain money and property under the custody and control of Signature Bank of Arkansas by means of false and fraudulent pretenses. As part of the scheme to defraud, they made material misrepresentations concerning the reasons for the payment of money intended for use by the Housing Authority, solicited and accepted bribes and kickbacks from Housing Authority contractors, caused the Housing Authority to pay their personal expenses on their Housing Authority credit cards, and took Housing Authority equipment and materials and used them in the construction of their personal residence.
As part of their plea agreements, the defendants agreed that they received more than $52,000.00 from this conspiracy. The full extent of the loss will be litigated at sentencing. The Court has not yet set a date for the sentencing hearing.
This investigation was conducted by IRS-Criminal Investigation Division and the U.S. Department of Housing and Urban Development. Assistant United States Attorney Cameron McCree prosecuted the case for the United States.
Little Rock Woman Pleads Guilty to Conspiracy in Scheme to Steal Feeding Program FundsRead the Press Release
LITTLE ROCK---Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today that Maria Carmen Nelson, 50, of Little Rock, pled guilty to Count I of the Indictment charging her with conspiring to commit wire fraud. The charge relates to a conspiracy to fraudulently obtain United States Department of Agriculture (USDA) program funds intended to feed children in low income areas during the school year.
Today's plea hearing took place in Little Rock before United States District Judge J. Leon Holmes. Judge Holmes will sentence Nelson at a later date.
On October 7, 2015, a Federal Grand Jury indicted Nelson on charges of wire fraud as part of a scheme to fraudulently obtain USDA program funds. The USDA funds the Child and Adult Care Feeding Program, which includes an at-risk after school component. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. Once approved, they can provide meals as part of the feeding program and be reimbursed based on the number of eligible meals they serve.
According to facts read at the plea hearing, Nelson operated as a sponsor for a feeding program through an organization called "Securing Our Future" between approximately March 2012 and March 2015 with approved Sites in Little Rock and Malvern, Arkansas. Nelson was recruited to participate by a DHS employee who worked in the section that oversaw the feeding programs. Nelson and the DHS employee both had an understanding it would be a fraudulent scheme, with each taking a portion of the proceeds. As part of the scheme, the number of children who were fed at Nelson’s sites would be inflated. Out of the money Nelson received as a result of the inflated claims, Nelson would pay cash back to the DHS employee.
Nelson received a total of approximately $575,917.76 from the feeding program in payment for fraudulent claims. Out of this money deposited into her account, Nelson withdrew sums of cash and paid that to the DHS employee. The DHS employee is no longer employed at DHS.
The statutory penalty for conspiracy to commit wire fraud is not more than 20 years’ imprisonment, not more than a $250,000 fine, or both, and not more than 3 years supervised release.
The investigation is ongoing and is being conducted by the USDA-Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigations, and United States Marshals service. If you are aware of any fraudulent activity regarding these feeding programs, please email that information to [email protected].
Jonesboro-Area Drug Trafficking Leader Sentenced to 25 Years in Federal PrisonRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, along with Matthew Barden, Assistant Special Agent in Charge of the Drug Enforcement Administration (DEA), announced today that Joseph Farrell, 39, of Jonesboro, the leader of a multistate drug-trafficking organization, was sentenced to 25 years in prison for conspiracy to distribute methamphetamine.
United States District Court Judge D.P. Marshall, Jr., sentenced Farrell to 300 months in federal prison, to be followed by five years of supervised release, for his role in helping distribute more than 100 pounds of methamphetamine in and around the Jonesboro area. On Wednesday Judge Marshall also sentenced Jesus Cisneros, 46, of San Jose, Calif., to 188 months in prison and five years of supervised release for his role in the conspiracy. Cisneros was one of Farrell’s main sources of methamphetamine.
"Mr. Farrell led a sophisticated, widespread drug organization that put dozens of pounds of methamphetamine into our local communities, enough to poison entire towns," Thyer said. "These defendants today received significant sentences for significant crimes. This office is committed to stopping large-scale drug traffickers and protecting our communities from these criminals."
The indictment charging Farrell and Cisneros, along with 20 other co-conspirators, was handed down by a federal grand jury on October 8, 2014. The investigation that led to the indictment included multiple undercover operations and numerous other law enforcement actions. During the investigation the DEA seized approximately 96 pounds of methamphetamine, which had an estimated street value of more than $1.9 million. Information gathered during the investigation indicated this organization distributed more than 100 pounds of methamphetamine.
Farrell was dealing methamphetamine primarily in the Jonesboro area, selling between 5 and 15 pounds of meth per week. Farrell had sources of supply for methamphetamine in both Blytheville and San Jose, California, and he occasionally received shipments of methamphetamine and marijuana from his source in California through FedEx.
"The combined law enforcement actions that came to bear over the course of this investigation was not by accident, but the result of a strategic and coordinated effort to combat the large-scale methamphetamine trafficking organization managed by Joseph Ferrell," Barden said. "With Ferrell’s 25-year federal prison sentence, this should be a message to those who want to sell drugs—we are going to catch you and put you in prison for a long time if you distribute this poison in our communities. The DEA and all of our law enforcement partners will continue to aggressively investigate, disrupt, and dismantle ruthless criminal organizations involved in drug trafficking and the associated criminal networks that partner with them."
To date, 19 of the original 22 defendants have pleaded guilty. Two defendants have been dismissed from the indictment, and one—Vidal Almonte-Cervantes—is still a wanted fugitive.
The investigation was conducted by the DEA, with assistance from multiple law enforcement agencies, including the Jonesboro Police Department, the Craighead County Sheriff’s Office, Arkansas State Police, and United States Marshal Service. The case is being prosecuted by Assistant United States Attorney Benecia Moore.
Little Rock Doctor Sentenced to Prison for Health Care FraudRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, David Shepard, Assistant Special Agent in Charge for the Little Rock Field Office of the Federal Bureau of Investigation (FBI), and Special Agent in Charge CJ Porter of U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) announced today that Monday evening Dr. Robert Barrow, 63, of Little Rock, was sentenced to two years in federal prison for conspiring to commit health care fraud, bringing to a close a multi-year federal investigation that began because of an anonymous tip.
At the conclusion Monday’s hearing, U.S. District Court Judge J. Leon Holmes, citing the vulnerability of the healthcare system to abusive billing practices by providers and the need to deter other medical professionals, sentenced Dr. Barrow to 24 months’ imprisonment to be followed by three years of supervised release and ordered him to pay $734,936.52 in total restitution, along with a $100 special assessment.
"Those who defraud the healthcare industry do so at their peril," Thyer said. "Dr. Robert Barrow deceived his patients and their insurers, and now he is going to federal prison. His sentence ought to serve as a warning to anyone tempted to cheat the system. Rooting out those who do not heed this warning will continue to be a focus of the United States Attorney’s Office and its partners at the FBI and HHS-OIG."
Dr. Barrow and his wife, Angela Barrow, owned and operated a Little Rock medical clinic named "Your Doctor’s Office." From 2005 to 2012, he associated with a local massage therapist (Billy Marc Young), to whom Dr. Barrow referred patients and for whom Dr. Barrow billed services under his own provider number, as if they were performing physical therapy. During the scheme "Your Doctor’s Office" became a local insurer’s second-highest biller for physical therapy statewide, ahead of hospitals and dedicated rehab facilities. Although Dr. Barrow purported to supervise Young, he billed for Young’s services at times when Dr. Barrow and his wife were on vacation in places like Las Vegas, Hawaii, and London.
At his change of plea hearing on October 13, 2015, Dr. Barrow admitted that he was "willfully blind" to the illegal nature of his billing practices in relation to Young, that he had abused the trust of his patients and their health insurers, and he had billed millions of dollars for Young’s services.
"As a health care provider, Dr. Barrow chose to commit fraud instead of protecting Medicare and other health care programs," FBI ASAC Shepard said. "Dr. Barrow’s sentencing demonstrates our resolve to bring these actions to justice. We appreciate the efforts of the United States Attorney’s Office in the Eastern District to protect taxpayer dollars and ensure that perpetrators of these fraud schemes are held accountable."
The restitution award included over $32,000 to a group of 40 former patients who bore out-of-pocket expenses for Young’s services believing that they were receiving physical therapy. Dr. Barrow’s single largest victim, Arkansas Blue Cross Blue Shield (ABCBS), was awarded over $680,000 in restitution but agreed to subordinate its claim to those of former patients so that they would receive full compensation before ABCBS is repaid.
Dr. Barrow’s co-conspirator, Young, previously pled guilty in case number 4:14-CR-56 DPM to making false statements in connection with health care and was sentenced in December 2015 to serve one year and one day in federal prison.
This case began because of an anonymous tip to a fraud hotline. Patients are encouraged to be vigilant in the fight against health care fraud. Report any suspicious activity to the FBI (1-800-CALL-FBI), HHS-OIG (1-800-HHS-TIPS), and your insurance provider.
The FBI and HHS-OIG jointly investigated this matter over the course of several years. Assistant United States Attorneys Alex Morgan and Shannon Smith prosecuted the case for the United States.
Eight Firearms Arrests Made as Part of Violence Reduction Network Operation in West MemphisRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Jeffrey Reed, Resident Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), announced today the final two arrests of a targeted operation designed to remove violent gun offenders from communities in and around West Memphis. Since Friday, June 17, 2016, eight individuals have been arrested in this ongoing operation, which is part of the Violence Reduction Network (VRN) initiative in West Memphis.
On Thursday, Derrico Dashawn Davis, 27, and Nakia Dejuan Mondy, 41, were arrested in the early-morning operation. They joined several others already in custody, including Marvis Ballard, 31, and Patrick Barrett, 22, who were arrested Wednesday night, and Orlando D. Ingram, 45, Marvin Meux, 43, and Burt Calvin Neely, 29, who were arrested last Friday. Nicco M. Alls, 28, was already in state custody when served the federal arrest warrant. All defendants are from West Memphis except Davis, who is from Osceola.
The eight defendants were named in separate indictments charging them with being felons in possession of firearms. United States Magistrate Judge Beth Deere held initial appearance hearings on the three prior arrests and will hold initial appearances for the newly arrested defendants on Friday.
"These individuals are among the most dangerous members of their community, and removing them and their guns from the streets was a top priority," Thyer said. "I’m pleased that this coordinated effort through the VRN is succeeding in helping make our local communities safer, while at the same time punishing those who believe gun violence is somehow acceptable."
"Through partnerships with ATF, other federal agencies and local law enforcement, the removal of violent offenders from northeast Arkansas has made these communities a safer living environment for their citizens," Reed said.
In 2015, West Memphis was selected to participate in the VRN. The other cities comprising the VRN include: Little Rock; Detroit; Chicago; Compton, California; Flint, Michigan; Wilmington, Delaware; Newark and Camden, New Jersey; and Oakland and Richmond, California. The VRN is a comprehensive approach to reducing violent crime in communities around the country. Through the VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation (FBI), the ATF, the United States Marshals Service (USMS), the Drug Enforcement Administration (DEA), the Executive Office of the United States Attorneys, the Community Oriented Policing Services Office and the Office on Violence Against Women.
On Tuesday, Judge Deere issued an order detaining Meux. Meux was originally arrested by state authorities on October 21, 2015, after West Memphis police officers were dispatched to the 300 block of South 16th Street in West Memphis in reference to two subjects being held at gunpoint while attempting to repossess a car belonging to Meux. While attempting to hook up the car, Meux jumped into the driver’s seat and drove off in the vehicle, with a repossession employee still in the passenger seat. After fleeing a short distance, Meux drove back to his residence. After the employee exited Meux’s vehicle he saw Meux running towards him with a small black gun. The two repossession employees then got into their truck and drove away, while Meux pointed the gun at them.
West Memphis police officers received consent to search the residence and located an SKS assault rifle and a .38 caliber revolver. Meux has been previously convicted of drug offenses and is a high-ranking member of a gang known as the Gangster Disciples in West Memphis.
Ingram, the leader of the Gangster Disciples in West Memphis, was also arrested for his involvement in a shootout occurring in that city.
The federal indictments, unsealed today, were handed up by a Grand Jury on March 8, 2016. The seven separate indictments charge seven defendants with felon in possession of firearms. One complaint, issued by United States Magistrate Judge Beth Deere on June 21, 2016, charges an eighth defendant (Barrett) with being a felon in possession of a firearm and possession of a stolen firearm.
Previous convictions associated with the eight defendants include: murder in the first degree; battery 2nd degree; robbery; residential burglary; sale of a controlled substance; delivery of cocaine; possession of with intent to deliver cocaine; possession of a controlled substance; felon in possession of a firearm; aggravated assault; and hindering apprehension.
As a result of the joint effort, one assault rifle, one rifle, seven handguns, and multiple extended ammunition magazines were seized.
If convicted of being a felon in possession of a firearm, Ingram and Neely will face a sentence of not less than 15 years to life imprisonment due to their prior criminal history. The other six defendants will face a sentence of not more than 10 years imprisonment.
The investigation and prosecution of this case is a coordinated effort through the ATF, DEA, FBI, West Memphis Police Department, Crittenden County Sheriff’s Office, Osceola Police Department, Mississippi County Sheriff’s Office, Jonesboro Police Department, Shelby County Multi-Agency Gang Unit, and Memphis Police Department. The cases are being prosecuted by Assistant United States Attorneys Michael Gordon and Liza Jane Brown.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Post-Plea Deferral Program Offers Second Chance to Some Drug OffendersRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announces a Post-Plea Deferral Program (PPDP) jointly developed by the United States Attorney’s Office, the United States Probation Office and the Federal Public Defender’s office. The goals of the PPDP are to promote community safety, break the cycle of drug addiction-induced crime, and increase the likelihood of successful rehabilitation of drug offenders by implementing a blend of treatment, supervision, appropriate sanctions, and incentives.
On Monday, June 6, 2016, Jeremy Johnson became the first person accepted into the Eastern District of Arkansas’ PPDP. Johnson pleaded guilty to obtaining a Schedule II controlled substance by fraudulent prescription, which carries up to a four-year prison sentence. However, as Johnson is a participant in the PPDP, United States District Court Judge James M. Moody, Jr., deferred acceptance of the plea for a period of 18 months, during which time Johnson must abide by the conditions and requirements of the PPDP. If he successfully completes his program, the United States Attorney will dismiss his charges.
"My office is pleased to participate in this rehabilitative alternative to felony conviction, designed for those who deserve such a break," Thyer said. "The PPDP program is limited in scope, providing individuals with no prior criminal history, or very minor criminal history, whose criminal conduct was motivated primarily by drug addiction, to accept their criminal conduct and prove their rehabilitation over a period of months. Upon successful completion, the individual will have the opportunity to move forward leading a drug-free life without having received a felony record."
The PPDP is a new program designed to give a limited number of offenders charged with minor drug-related offenses who have little or no criminal history and whose illegal conduct was the direct result of an addiction to drugs the opportunity to resolve their federal charges without a felony conviction. This opportunity is available provided they successfully complete an intensive supervision program and show that they are positively contributing to the community through employment and education.
"I think it is wonderful that our district has implemented this program, and the federal defender’s office very much looks forward to participating in it," Federal Public Defender Jenniffer Horan said.
Under the program, a defendant who accepts responsibility for his or her criminal conduct will enter a guilty plea that is deferred by the court for a period of 12 to 18 months. During the deferral period, the defendant will be supervised by the United States’ Probation Office and provided the opportunity to participate in drug treatment and other available services. Upon successful completion of the rehabilitation period, the court will decline to accept the defendant’s guilty plea, and the United States will dismiss the felony charges against the defendant. Successful completion and dismissal of felony charges are not guaranteed upon acceptance into the program, rather, successful completion must be earned by the defendant through showing genuine rehabilitation from drug addiction and positive contribution to the community.
"The program provides defendants, whose criminal activity is directly related to addiction, an opportunity to break the cycle of drug-induced criminal behavior," Chief U.S. Probation and Pretrial Services Officer Eddie Towe said. "One powerful incentive is the chance to avoid a custody sentence and a federal criminal conviction. The parties will use a collaborative approach to recommend responses to violations in an expeditious and consistent manner while also providing encouragement and guidance."
Wynne Woman Sentenced to 12 Years in Prison for Prostituting Her Minor CousinsRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, Special Agent in Charge Diane Upchurch, of the Little Rock Field Office for the Federal Bureau of Investigations (FBI), and Colonel William J. Bryant, Director of the Arkansas State Police, announced today that Amber Johnson, age 30, of Wynne, Arkansas, was sentenced to 12 years imprisonment for sex trafficking of children.
Johnson was indicted on July 7, 2015, for one count of sex trafficking of children, and pleaded guilty on November 3, 2015. On Wednesday, Johnson was sentenced by United States District Judge D.P. Marshall, Jr., to 12 years imprisonment and five years supervised release.
"This defendant took advantage of two young relatives who trusted her," Thyer said. "These young girls turned to her in a time of need, and the defendant instead chose to satisfy her own needs by prostituting these children for money. There is no more important issue to my office than protecting the children of Arkansas, and we will continue to find and prosecute those who take advantage of children."
The charge in the indictment was based upon an investigation that began after two female minors, who were Amber Johnson’s cousins, ran away from their foster home in November 2014. They lived in various hotels, first in Jonesboro and later in North Little Rock, with Johnson and her own two young children. Johnson would leave her cousins, ages 15 and 17, in charge of her two children while she visited other locations to meet men. Johnson would give the men her phone number so they could contact her later to meet for sex.
When the male customers contacted Johnson, she would let them select which girl they wanted to have sex with: the 15-year-old, the 17-year-old, or herself. The men would come to the hotel, pick up the girl they chose, and either rent another hotel room or drive the girl to their home for sex. Johnson began by charging $20, but increased to $50 and sometimes charged $100. She told the Judge Marshall at her change of plea hearing in November that she used the money for hotel rooms, food, and "things we needed." Arkansas State Police located and arrested Johnson on April 29, 2015.
"We’re making the fight against human trafficking a priority and backing up the pledge to place all available resources on the streets and highways searching for the victims used in barter for sex and drugs," Bryant said. "In this case it is noteworthy that state troopers worked alongside civilian investigators of the Crimes Against Children Division, as well as federal, state and local law enforcement agencies and the Arkansas Department of Human Services. It is this commitment of multi-jurisdictional forces that will be necessary to identify and arrest those individuals who would prey on the lives of minors and others who are most vulnerable."
"Forcing young children into prostitution is beyond deplorable and today’s sentencing demonstrates those that commit any form of child exploitation will pay a harsh price for their actions," Upchurch said. "We will continue to pursue and punish these offenders to the fullest extent of the law. We appreciate the unfaltering efforts of the United States Attorney’s Office, the Arkansas State Police, the Jonesboro Police Department and the Arkansas Department of Human Services."
The investigation was conducted by Arkansas State Police and the Little Rock Office of the Federal Bureau of Investigation with assistance from Jonesboro Police Department. The case was prosecuted by Assistant United States Attorney Allison W. Bragg.