Eastern District of Arkansas
Press releases recorded for this federal judicial district.
Jury Finds Memphis Man Guilty of Attempted Enticement and Traveling for Sex with a ChildRead the Press Release
LITTLE ROCK— A Memphis man has been convicted of traveling to Conway with plans to have sex with a 12-year-old girl and her mother, who turned out to be an undercover male police officer.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced that a federal jury found Michael Willins, 40, of Memphis, guilty of traveling with the purpose of having sex with a minor as well as attempting to entice a minor to engage in a sex act. In addition to making plans to have sex with the mother and child, Willins had asked the undercover officer to send nude photos of the hypothetical minor.
The jury returned their verdict Thursday evening after deliberating for less than an hour. United States District Judge Kristine Baker presided over the two-day trial, and Judge Baker will sentence Willins at a later date.
“This defendant not only had the desire to sexually abuse a child, but he also demonstrated his willingness to act on that depravity by driving three hours to follow through with his perverse plan,” stated U.S. Attorney Hiland. “This verdict shows that those who would prey upon children will be held accountable for their actions.”Testimony during the trial established that in October 2016, an undercover officer with the Faulkner County Sheriff’s Office responded to a Craigslist ad that claimed to be “looking for really taboo female.” The ad was posted by Michael Willins, who began communicating with the undercover officer, a male pretending to be a 33-year-old woman with a 12-year-old daughter. The two exchanged emails and messages in which Willins expressed his interest in having sex with the mother as well as the child.
On October 13, 2016, Willins left his workplace in Memphis, filled a prescription for one Cialis pill, and drove to an apartment complex in Conway, Arkansas. When he arrived at what he believed was the home of the mother and daughter, he was met by Faulkner County Sheriff’s deputies. They found condoms in Willins’ pocket and a strap-on sex toy in his car, which he had discussed using in messages with the undercover officer.
The statutory penalty for enticement of a minor is not less than 10 years imprisonment with a possibility of up to life imprisonment. The statutory penalty for travel with the intent to engage in illicit sexual conduct is not more than 30 years imprisonment. Both offenses of conviction include a penalty of not more than a $250,000 fine and not less than five years of supervised release.
The investigation was conducted by the Faulkner County Sheriff’s Office, and the case was prosecuted by Assistant United States Attorneys Kristin Bryant and Joan Shipley.
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Former Volunteer Sheriff's Deputy Sentenced to 30 Months in PrisonRead the Press Release
LITTLE ROCK— A former volunteer Sheriff’s Deputy with the Arkansas County Sheriff’s Office has been sentenced to 30 months in federal prison for extorting confidential informants to steal an ATV and firearms. Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the FBI’s Little Rock Field Office, announced today’s sentence.
Charles David Chastain, 48, of Stuttgart, was sentenced today by United States District Judge Leon Holmes. Chastain was employed as a volunteer Auxiliary Sheriff’s Deputy for the Arkansas County Sheriff’s Office. He was assigned to the Tri-County Drug Task Force, where he utilized confidential informants to develop drug cases in Arkansas County and surrounding areas.
“Law enforcement officers and their families make sacrifices every day to protect and serve our communities. Unfortunately, when an officer is found to have abused their position, the trust and respect that law enforcement works so hard to maintain is undermined. A violation of that sacred public trust will not be tolerated,” said U.S. Attorney Hiland. “Today’s sentence is a reflection of the fundamental principle that no one is above the law, and an officer who abuses his position will be held accountable.”
A federal jury convicted Chastain in February of Hobbs Act extortion, attempted Hobbs Act extortion, and receipt of a firearm with intent to commit a felony. Testimony during the trial established that two confidential informants worked for Chastain in an effort to reduce criminal charges. In the fall of 2017, Chastain asked those informants to steal an ATV for him. One of the informants went to a duck hunting club in Clarendon and stole a Browning Edition, Polaris Ranger 900 ATV valued at just under $25,000. The informant stole the ATV in exchange for favorable treatment from Chastain concerning criminal charges, but the informant also reported the theft to the FBI. Testimony indicated that both informants were concerned Chastain would refuse to give them credit for their cooperation if they did not meet his demands.
Trial testimony also indicated that in December of 2017, Chastain asked one of the informants to commit another burglary, this time with the goal of stealing firearms from a storage unit in Arkansas County. Text messages admitted at trial showed that the informant asked if there were cameras at the storage unit, and Chastain replied, “Long sleeve shirts and a mask would make it a moot point.” The informant did not commit that burglary, and instead worked with the FBI and the Arkansas State Police to obtain three firearms to offer for sale to Chastain.
Evidence at trial showed that the informant told Chastain the firearms were stolen and included a Chinese Type 56-1, which is similar to an AK-47 rifle, a Colt M16 A1, and a Winchester M14. Chastain agreed to buy the purportedly stolen firearms from the informant for $300. He was arrested shortly thereafter with those rifles in his possession. Investigators later executed a search warrant at Chastain’s shop, where they located the stolen Polaris Ranger.
In addition to 30 months in prison, Judge Holmes sentenced Chastain to one year of supervised release following his term of imprisonment. The case was investigated by the FBI with assistance from the Arkansas State Police.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online athttp://www.justice.gov/edar
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@EDARNEWSMemphis Area Man Pleads Guilty to Paying KickbacksRead the Press Release
LITTLE ROCK – A Memphis area man has pleaded guilty to paying kickbacks to generate sales of high-dollar compounded prescription drugs. Bradley Fly, 34, of Germantown, Tennessee, pleaded guilty on Wednesday before Chief United States District Judge Brian S. Miller. Cody Hiland, United States Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the FBI, and C.J. Porter, Special Agent in Charge of the Dallas Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG) announced the guilty plea.
Fly, a veteran of the medical sales industry based in Memphis, promoted high-dollar compounded prescription drugs on behalf of Brad Duke, who previously pled guilty to conspiring to violate the Anti-Kickback Statute last fall. Fly earned 35% of what insurers paid as commission. When Fly learned that TRICARE, the military health insurer, would pay tens of thousands of dollars per month per patient for compounded drugs, Fly concentrated his efforts on generating prescriptions for those beneficiaries covered by TRICARE.
Fly used subordinates to find TRICARE beneficiaries to receive the drugs. Among his subordinates were Individual 1 and Individual 2, who were both already TRICARE beneficiaries, as were their spouses. In violation of the Anti-Kickback Statute, Fly paid both Individual 1 and Individual 2 in exchange for agreeing to receive prescription compounded drugs for themselves and their spouses. TRICARE paid upwards of $500,000 for these prescriptions, earning Fly over $185,000 in commission.
If you or someone you know was approached about getting compounded prescription drugs, please contact [email protected].
Violating the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), is punishable by up to five years imprisonment, a fine of not more than $250,000, and up to three years of supervised release. This case was investigated by the FBI and HHS-OIG, and prosecuted by Assistant United States Attorneys Alexander D. Morgan and Patrick C. Harris.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
http://www.justice.gov/edarTwitter:
@EDARNEWSLittle Rock Community Activist Sentenced to 10 Years in Prison for Drug, Gun CrimesRead the Press Release
LITTLE ROCK—A Little Rock man who is a self-professed former longtime gang member who turned toward community activism later in life has been sentenced to prison on drug and gun charges. On Friday, Chris Alexander, 42, was sentenced to 10 years in prison by United States District Court Judge D.P. Marshall Jr., after admitting to selling large quantities of marijuana and possessing guns.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced the sentence. After being indicted on multiple gun and drug charges on February 6, 2018, Alexander pleaded guilty on January 16, 2019, to single counts of distribution of marijuana and possession of a firearm in furtherance of a drug-trafficking crime. His 120-month total sentence includes 60-month sentences on each count, to run consecutively. Judge Marshall also sentenced Alexander to three years of supervised release.
Alexander, who said in the hearing on Friday that he started an organization intending on teaching Little Rock youth the dangers of gangs and violence, admitted that he sold a pound of marijuana to a confidential informant in 2017. On September 8, 2017, Little Rock Police officers were attempting to execute an arrest warrant on Alexander when he was found in possession of multiple rifles and another eight pounds of marijuana. At the sentencing hearing Alexander told Judge Marshall that he was selling marijuana to help finance his community youth programs.
The FBI’s GET ROCK Task Force, working in partnership with the Little Rock Police Department, investigated this case. Assistant United States Attorney Chris Givens prosecuted the case.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
http://www.justice.gov/edarTwitter:
@EDARNEWSArsonist Convicted of Burning Conway Apartment Complex Sentenced to 15 Years in PrisonRead the Press Release
LITTLE ROCK—David Hartsell, who admitted to starting the fire that ultimately destroyed the Germantown Apartment Complex in Conway and injured multiple people, will serve 15 years in prison after being sentenced on Thursday.
United States District Court Judge D.P. Marshall Jr., sentenced Hartsell, 52, of Conway, to 180 months’ imprisonment, followed by five years of supervised release, and ordered him to pay $378,541 in restitution. Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Stephen Bridgmon, Acting Resident Agent in Charge of the Little Rock Field Office of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) announced the sentence.
Hartsell set the fire, which destroyed the 12-unit apartment complex, on February 27, 2017. A federal grand jury indicted Hartsell on two counts—malicious destruction of property by mean of fire, with injury, and possession of a destructive device in furtherance of a crime of violence—on July 11, 2017. He pleaded guilty to Count 1, the arson charge, on March 7, 2019.
“This 15-year sentence demonstrates the seriousness of the defendant’s actions,” stated U.S. Attorney Hiland. “Hartsell’s reckless behavior placed innocent people, including several small children, in the path of a raging fire. He also permanently displaced numerous families from their homes. This senseless destruction will not be tolerated.”
An ATF investigation concluded that the fire began in Hartsell’s own apartment in the Germantown complex. Hartsell used a flammable liquid to start the fire. After the fire was extinguished, the Conway Fire Department located what appeared to be two “Molotov cocktails,” or containers with incendiary liquid with wicks attached, in Hartsell’s apartment.
At Thursday’s sentencing hearing, ATF Special Agent Warren Newman (who is also a trained medic) testified about the significant danger the fire posed to the Germantown occupants, as well as the serious injuries sustained by some of the residents. According to Newman, the fire started around 4 a.m., when most of the occupants were asleep. It spread from Hartsell’s apartment to other apartments rapidly, and quickly engulfed one whole side of the complex. The residents on the second (top) floor had only one means of getting down—a staircase which was engulfed in flame. Because of this, residents had to jump from the second floor.
SA Newman stated that he conducted interviews with multiple people, including one individual who had to break out a window and tie bedsheets together to get down. That tenant’s adult dog and five newborn puppies died in the fire. Another family on the second floor had to jump from their window. One woman fractured five vertebrae in the fall. Her husband then had to drop their young children out the window to people waiting to catch them below.The most serious injury occurred when an upstairs tenant who had no other means of escape from his apartment had to run through his front door and a wall of flame and jump from the balcony. According to SA Newman, this individual suffered significant burns over most of his body, and suffered a serious heart injury from the impact of the fall. He required hospitalization for more than a year, and SA Newman stated he still suffers from his injuries.
The ATF, including the agency’s National Response Team, and Conway Fire Department and Conway Police Department investigated this case. Assistant United States Attorney Chris Givens prosecuted the case.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
http://www.justice.gov/edarTwitter:
@EDARNEWSU.S. Military Dependent Sentenced to Prison for Attempted Voluntary Manslaughter and Other Charges Stemming from an Assault of Several U.S. Airmen on a Military Base in JapanRead the Press Release
A Colorado man was sentenced to prison yesterday in connection with an attack on three U.S. Air Force airmen and resisting military police who attempted to restrain him.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Cody Hiland of the Eastern District of Arkansas and Colonel Kirk B. Stabler of the U.S. Air Force Office of Special Investigations made the announcement.
Rodrigo Pineda Gomez, 44, of Colorado Springs, Colorado, was sentenced to 30 months in prison followed by one year of supervised release by U.S. District Judge James Moody Jr. The sentence follows an April 2019 jury verdict finding Gomez guilty of various charges stemming from the assault, including one count of attempted voluntary manslaughter, one count of assault with a dangerous weapon, three counts of assault by striking, beating, or wounding, one count of resisting a federal officer and one count of making a false statement to law enforcement.
According to the superseding indictment and evidence presented at trial, on Dec. 31, 2016, on Misawa Air Base in Japan, the defendants, Rodrigo Gomez and his son, Miguel Gomez, assaulted three U.S. Air Force airmen. During the assault, defendant Rodrigo Gomez attempted to kill one of the airmen by attempting to snap his neck and stomping on his head repeatedly while he was on the ground. He subsequently resisted arrest after law enforcement arrived, and then later made a false statement about the incident. Co-defendant Miguel Gomez also assaulted one of the airmen. At the time of the assault, defendant Rodrigo Gomez was the dependent spouse and Miguel Gomez the son of an active duty service member assigned to the base. Their last known U.S. address at the time of indictment was Jacksonville, Arkansas.
The investigation was conducted by the U.S. Air Force Office of Special Investigations. Trial Attorney Frank Rangoussis of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Stacy Williams of the Eastern District of Arkansas are prosecuting the case.
Cabot Man Sentenced to 35 Years in Prison for Child PornographyRead the Press Release
LITTLE ROCK—A Cabot man was sentenced Tuesday on charges of attempted enticement of a minor, attempted production of child pornography, and possession of child pornography. United States District Court Judge Susan Webber Wright sentenced Robert Nathan Hensley, 57, to 420 months in federal prison. Cody Hiland, the United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the FBI Little Rock Field Office, announced today’s sentencing.
During an online investigation in 2017, investigators placed an advertisement on Craigslist titled “young, fresh, petite.” The advertisement received hundreds of responses, and an undercover officer began texting some of those who responded to the ad, including Robert Hensley.
The undercover officer told Hensley he had a 14-year-old daughter, and Hensley told the officer to “bring her to me” because he had a “machine” that he would use to have sex with the child. Hensley also asked the undercover officer if he would “want to sell her” and offered $3,000 to buy the minor, stating, “She gets a lifetime of bondage and sex.” He also asked for nude photos of the minor.
Officers arranged to meet Hensley and drove to Cabot. Hensley provided his home address, where officers arrived and arrested him. They located a computer at his residence, which was examined and found to contain images of child pornography. On November 2, 2017, a grand jury indicted Hensley on charges of attempted enticement of a minor, attempted production of child pornography, and possession of child pornography. On March 5, 2019, Hensley was convicted by a jury on all counts.
“This defendant’s attempt to purchase a 14-year-old girl for sex is depraved behavior and will not be tolerated,” said U.S. Attorney Hiland. “Today’s lengthy sentence means this defendant is no longer free to prey upon the most vulnerable among us. Our office will continue to aggressively investigate and prosecute those who seek to victimize children.”
Before the 2017 investigation, Hensley had already been convicted of two sexual crimes involving minors. He had a 1996 conviction for sexual solicitation of a child and a 2003 conviction for criminal attempt to engage children in sexually explicit conduct. His prior convictions increased the mandatory minimum sentence in his case to 35 years. In addition to 35 years in prison, Judge Wright also sentenced Hensley to a lifetime of supervised release following his term of imprisonment.
The investigation was conducted by the FBI. The case is being prosecuted by Assistant United States Attorney Kristin Bryant.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
http://www.justice.gov/edarTwitter:
@EDARNEWSFormer Arkansas State Senator Jeremy Hutchinson Pleads Guilty to Bribery and Tax Fraud Charges in Multi-District InvestigationRead the Press Release
Former Arkansas State Senator Jeremy Hutchinson pleaded guilty today before U.S. District Judge Kristine G. Baker to accepting multiple bribes and tax fraud in connection with a multi-district investigation spanning the Eastern and Western Districts of Arkansas and the Western District of Missouri.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Cody Hiland for the Eastern District of Arkansas, U.S. Attorney Duane (DAK) Kees for the Western District of Arkansas and U.S. Attorney Timothy A. Garrison for the Western District of Missouri made the announcement.
Hutchinson, 45, of Little Rock, Arkansas, was previously a state senator and representative prior to resigning after he was charged in the Eastern District of Arkansas in a 12-count federal grand jury indictment with eight counts of wire fraud and four counts of filing false tax returns. The indictment alleges that from 2010 through 2017, Hutchinson stole and misappropriated thousands of dollars in state campaign contributions for his own personal use and then filed false federal income tax returns from 2011 to 2014 to conceal his conduct. Hutchinson was also previously charged in a 32-count federal grand jury indictment in the Western District of Missouri for his role in a multi-million-dollar public corruption scheme that involved embezzlement, bribes and illegal campaign contributions for elected public officials. Pursuant to his plea agreement, Hutchinson agreed to plead guilty to Count 1 of the Western District of Missouri superseding indictment, charging him with conspiracy to commit federal program bribery; Count 9 of the Eastern District of Arkansas indictment, charging him with filing a false tax return; and to an information filed in the Western District of Arkansas, charging him with conspiracy to commit federal program bribery.
As part of his plea, Hutchinson admitted that he was hired as outside counsel by an unidentified individual who owned and operated orthodontic clinics throughout the State of Arkansas, and in exchange for payments and legal work, Hutchinson pushed legislation beneficial to the individual. Hutchinson admitted that he was provided legal work to conceal the corrupt nature of his arrangement and that he would have never been hired by the individual if not for his position as an elected official. Hutchinson further admitted as part of his plea that in 2011, he stole over $10,000 in state campaign funds for his own personal use and also falsified his 2011 tax returns, including failing to report $20,000-per-month-payments he received from one law firm and other sources of income he knowingly and intentionally concealed from his taxes.
Count 1 of the Western District of Missouri superseding indictment, which Hutchinson, pursuant to his plea agreement, is expected to plead guilty to after today’s hearing before Judge Baker, alleges that Hutchinson and other elected officials accepted bribes in the form of monthly legal retainers and other things of value, from employees and executives of Preferred Family Healthcare Inc. (formerly known as Alternative Opportunities Inc.), a Springfield, Missouri-based healthcare charity. In exchange for the bribes, Hutchinson admitted that he and other elected officials provided favorable legislative and official action for the charity, including directing funds from Arkansas’s General Improvement Fund (GIF).
The multi-district investigation was conducted by the FBI, IRS Criminal Investigations, and the Offices of the Inspectors General from the Departments of Justice, Labor, and the Federal Deposit Insurance Corporation. The cases are being prosecuted by Trial Attorneys Marco A. Palmieri and Sean F. Mulryne of the Criminal Division’s Public Integrity Section; Assistant U.S. Attorneys Stephanie Mazzanti and Patrick Harris from the Eastern District of Arkansas; Assistant U.S. Attorneys Ben Wulff and Aaron Jennen of the Western District of Arkansas and Steven M. Mohlhenrich of the Western District of Missouri.
Little Rock Man Sentenced to 15 Years in Prison for Child PornographyRead the Press Release
LITTLE ROCK—A Little Rock man was sentenced Thursday for possessing and distributing child pornography that showed children as young as one year old being sexually abused. Kenneth Laren Harvey, 49, of Little Rock, was sentenced to 180 months in federal prison by U.S. District Judge James M. Moody, Jr. The United States Attorney for the Eastern District of Arkansas, Cody Hiland, announced today’s sentencing.
During an online investigation in 2017, detectives downloaded child pornography from an IP address that officers traced to Harvey’s residence. The child pornography that detectives downloaded from Harvey included numerous videos depicting sexual acts being performed on children under the age of 12. Some of the videos were over 30 minutes long.
Based on those downloads, investigators obtained a search warrant for Harvey’s home. Officers seized multiple electronic devices, and forensic examination revealed that Harvey possessed over 2,000 images of child pornography. The images included depictions of sadism and masochism, as well as sexual acts being performed on children as young as one to three years old. During the search, detectives also discovered a peephole in Harvey’s shower, which he used to secretly film women.
“The sexual abuse of any child is abhorrent, but the degree of depravity in this case is especially disturbing because of the infant victims involved,” said U.S. Attorney Hiland. “These images are reprehensible, and collectors of child pornography like this defendant only create demand for more children to be abused. Our office will continue to prosecute those who perpetuate the horrors of the child pornography industry.”
Harvey was indicted by a federal grand jury on January 9, 2018, in an indictment that charged him with one count of possession of child pornography and three counts of distribution of child pornography. In addition to 15 years in prison, Harvey was ordered to pay $2,000 in restitution. Judge Moody also sentenced Harvey to ten years of supervised release following his term of imprisonment.
The investigation was conducted by the Little Rock Police Department and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Kristin Bryant.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
http://www.justice.gov/edarTwitter:
@EDARNEWSOperation "Money Don't Sleep" Leads to Multiple Arrests in West MemphisRead the Press Release
WEST MEMPHIS—A major arrest operation took place this morning in West Memphis when 22 were arrested as part of a federal drug investigation. United States Attorney for the Eastern District of Arkansas Cody Hiland and Assistant Special Agent in Charge Justin King of the DEA Little Rock Field Office announced today’s arrests.
Operation “Money Don’t Sleep,” run by the Organized Crime Drug Enforcement Task Force, is an ongoing investigation focused on lowering violent crime that stems from the distribution of illegal drugs. The goal of the operation is to identify and dismantle multiple drug trafficking organizations that distribute cocaine and methamphetamine.
Today’s arrests conclude the second phase of the investigation that was initiated in 2015 by the DEA Little Rock District Office and the West Memphis Police Department. The first phase of “Money Don’t Sleep” previously resulted in the arrests of 50 defendants in July 2017. With those drug traffickers removed, new distributors emerged to fill the void left in the drug market, leading to this morning’s arrests.
Law enforcement began early this morning by searching for over 25 suspects, all of whom were indicted for federal drug trafficking crimes. Thirty-two defendants were indicted in the case, and five of those were already in custody when this morning’s roundup began. In addition to the 22 arrests, authorities seized one firearm this morning. Over a two-year period, investigators seized 1.2 kilograms of actual methamphetamine, 12 firearms, and over $8000 cash. In addition, a search warrant executed prior to today’s arrests resulted in law enforcement seizure of half a pound of methamphetamine, $7500 cash, and a firearm.
“This operation is a perfect example of the continued pressure we will apply to drug distributors,” stated Cody Hiland, United States Attorney for the Eastern District of Arkansas. “We arrested and prosecuted 50 targets in the first phase of this operation, and today we came back for more. Criminals should not mistake these arrests for a completed operation, because law enforcement will come back as many times as necessary to uphold law and order in West Memphis and the surrounding communities.”
“Drug trafficking is one of the primary drivers of violent crime across the United States, and the city of West Memphis is no exception,” stated DEA Assistant Special Agent in Charge Justin King. “This operation focused on those drug dealers who preyed upon the good people in West Memphis and the surrounding counties by selling drugs and committing acts of violence. Drug dealing and violent crime often walk hand in hand, spreading fear and destruction wherever they go, and we in law enforcement have an obligation to put a stop to those who destroy our communities.” King went on to say, “DEA is committed to its partnerships with the other dedicated federal, state and local law enforcement officers who work in and around this region of Arkansas in our ongoing efforts to make it a safer and better place for our families and children.”
The DEA Little Rock District Office and West Memphis Police Department were assisted by several participating agencies, including the Bureau of Alcohol, Tobacco, Firearms, and Explosives; United States Marshals Service; Federal Bureau of Investigation; United States Federal Probation; Arkansas State Police; Crittenden County Sheriff’s Office; Arkansas Department of Community Corrections; and the Counter Drug Program of the Arkansas National Guard.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at:
http://www.justice.gov/edar
Twitter:
@EDARNEWS
Mexican National Indicted for Being an Alien Unlawfully in the United States in Possession of A FirearmRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a two-count indictment today against Ismael Huazo-Jardinez, 33, a Mexican citizen residing in Yuba City, CA, charging him with two counts of possessing a firearm while being an alien unlawfully in the United States, U.S. Attorney McGregor W. Scott announced.
According to court documents, Huazo-Jardinez is suspected of having been the driver in a fatal car accident that killed three people, the parents and one child of a family of four, when the vehicle crashed into their mobile home as they slept, on May 4, 2019, in Sutter County. Huazo-Jardinez was arrested at the scene of the accident. Authorities impounded the vehicle, a Chevrolet Avalanche registered to Huazo-Jardinez, and later recovered a handgun from the vehicle’s center console. A database query revealed that the handgun had been reported stolen in Boise, Idaho.
According to court documents, a Beretta handgun was found during a search of Huazo-Jardinez’s residence. Huazo-Jardinez is alleged to be a citizen and national of Mexico who has twice been removed from the United States and has not been granted permission to return. As an alien unlawfully in the United States, Huazo-Jardinez is prohibited by federal statute from possessing a firearm.
This case is the product of an investigation by the California Highway Patrol, Sutter County Sheriff’s Department, and U.S. Immigration and Customs Enforcement's (ICE) Enforcement and Removal Operations (ERO). Assistant United States Attorneys James Conolly and Shea Kenny are prosecuting the case. The Sutter County District Attorney’s Office is prosecuting Huazo-Jardinez in the state case related to the May 4, 2019 fatal car accident.
This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN was reinvigorated in 2017 as part of the Department of Justice's renewed focus on targeting violent criminals, directing all U.S. attorney's Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
If convicted, Huazo-Jardinez faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Little Rock ATF Recognized for Federal Gun InvestigationsRead the Press Release
LITTLE ROCK—An increase in federal gun prosecutions resulted in an award for the Little Rock Field Office of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). Cody Hiland, United States Attorney for the Eastern District of Arkansas, recognized the Little Rock ATF office on June 4, 2019, for its efforts during an award presentation, at which time Hiland thanked the office for its assistance in prosecuting the largest increase in Project Safe Neighborhood (PSN) cases of any U.S. Attorney’s office in the nation.
ATF leaders including Acting Resident Agent in Charge Stephen Bridgmon, Acting Special Agent in Charge Kristen deTineo, and Assistant Special Agent in Charge Will McCrary were present to receive special recognition from the U.S. Attorney’s Office. According to a plaque presented at the ceremony, the Little Rock ATF Field Office was recognized “in appreciation for their outstanding assistance to the United States Attorney’s Office in the investigation and prosecution of the greatest increase of PSN cases for a district in fiscal year 2018.”
“ATF in Little Rock has done an outstanding job of making our communities safer,” stated U.S. Attorney Hiland. “Investigating and prosecuting felons with guns is a top priority, and we could not successfully remove these criminals from our streets without the historic, tireless work of the ATF agents who are willing to go the extra mile.”
In 2018, the U.S. Attorney’s Office for the Eastern District of Arkansas prosecuted 83% more cases than in 2017, the largest increase in the nation. Many of these new cases were gun cases prosecuted in partnership with the ATF. The U.S. Attorney’s Office opened 290 ATF cases, and 167 of those resulted in an indictment. Through May 2019, the U.S. Attorney’s Office has indicted 63 ATF cases. Because many cases include multiple defendants, a total of 83 defendants have been indicted as part of ATF prosecutions so far in 2019.
“ATF’s top priorities are to protect the public and remove violent criminals from our streets,” Acting Special Agent in Charge deTineo said. “Initiatives such as Project Safe Neighborhood demonstrate ATF and its federal, state and local law enforcement partners’ commitment to pursuing and bringing to justice those that seek to disrupt communities and harm law abiding citizens. Our agents and task force officers are well deserving of recognition for their dedication to this endeavor.”
Prosecutions resulting from ATF investigations are part of Project Safe Neighborhood, a nationwide initiative that brings together federal, state, local and tribal law enforcement officials, prosecutors, and community leaders to identify the most pressing violent crime problems in a community and develop comprehensive solutions to address them.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSLittle Rock Man Pleads Guilty to Lying on Loan Applications, Lenders Lose $3.3 MillionRead the Press Release
LITTLE ROCK – A Little Rock man pleaded guilty today to making false statements on loan applications, costing banks and lenders over $3.3 million. Cody Hiland, 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, announced the guilty plea of Marcus Shane Sweetin, 46, of Little Rock. Sweetin entered his plea earlier today before United States District Judge James M. Moody, Jr.
Sweetin pleaded guilty Thursday to an Information charging him with one count of making a false statement on a loan application. Sweetin operated Sweetin Farms LLC, which farmed two parcels of land in Arkansas County and Prairie County. In April 2013, Sweetin applied for a loan from AgHeritage Farm Credit Services that sought to recoup money his company allegedly spent acquiring a Case 290 Magnum Tractor. The tractor itself was to serve as collateral, and in support of the loan, Sweetin gave AgHeritage an invoice from an equipment dealer reflecting the tractor had been purchased outright and a copy of the company check that had supposedly been used to pay.
The tractor had not been purchased outright but had actually been financed through another lender. The real tractor bore a different serial number, and the check and invoice Sweetin provided in support of the loan were both fabricated. During his plea hearing, Sweetin acknowledged this was only one of several instances where he lied to lenders in order to secure loans for his farming operation. At various points, he sought purchase money for farming equipment financed elsewhere using fictitious serial numbers and invoices, he overstated farmable acreage and understated debt to secure crop loans, and he double pledged collateral. All told, these false statements secured loans that occasioned over $3.3 million in losses to AgHeritage, BancorpSouth, and Regions Bank.
Judge Moody will sentence Sweetin at a later date. Making false statements on loan applications is punishable by up to 30 years’ imprisonment. The case was investigated by the FBI and prosecuted by Assistant United States Attorney Alexander D. Morgan.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
http://www.justice.gov/edarTwitter:
@EDARNEWSDardanelle Man Sentenced to More Than 21 Years in Prison for Meth Conspiracy: Defendant Distributed Methamphetamine to Members of White Supremacist GangRead the Press Release
LITTLE ROCK—A Yell County man was sentenced Monday for his role in a methamphetamine conspiracy that involved members of a white supremacist gang. Daniel Adame, 32, of Dardanelle, was sentenced to 262 months in federal prison by Chief U.S. District Judge Brian S. Miller. Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced today’s sentencing.
Judge Miller also sentenced Adame, who pleaded guilty to conspiring to distribute methamphetamine on January 30, 2019, to five years of supervised release following his term of imprisonment.
In 2016, local and federal agencies initiated a joint investigation to identify, infiltrate, and dismantle drug trafficking organizations in Russellville. Agents identified multiple individuals who were trafficking methamphetamine in the Pope County area. The investigation revealed that Adame shipped firearms to another suspect in exchange for pound quantities of methamphetamine. The methamphetamine was shipped to the Russellville area. Adame would then distribute methamphetamine to others in Pope and Yell Counties. Adame supplied methamphetamine to known members and associates of the New Aryan Empire (NAE), a white supremacist organization that began as a prison gang.
"Today’s sentence in Operation ‘To the Dirt’ reflects the significance of this crime," said Cody Hiland, United States Attorney for the Eastern District of Arkansas. "Distribution of methamphetamine to anyone, but especially to members of this violent gang that has plagued the River Valley, will result in a lengthy prison term. We will continue to investigate and prosecute methamphetamine distribution in this as well as other corrupt organizations."
Adame was charged on October 3, 2017, in a federal indictment that charged 44 people from the Pope County area with numerous gun and drug violations. The case is named "To The Dirt," a reference to the NAE slogan referring to the rule that members must remain in the NAE until they die.
After Adame pleaded guilty, a federal grand jury returned a superseding indictment on February 5, 2019, which named 11 additional defendants and added charges for the defendants’ involvement in acts involving attempted murder, kidnapping, maiming, and conspiracy to distribute methamphetamine. Adame is the first defendant to be sentenced in Operation "To the Dirt."
The investigation included the Bureau of Alcohol, Tobacco, and Firearms, the Drug Enforcement Administration, and the Federal Bureau of Investigation, as well as the Pope County Sheriff’s Office and the Russellville Police Department. The case is being prosecuted by Assistant United States Attorney Liza Brown.
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
Twitter:
@EDARNEWS
U.S. Military Dependant Convicted of Attempted Voluntary Manslaughter and Other Charges Stemming from an Assault of Several U.S. Airmen on a Military Base in JapanRead the Press Release
After a three day trial, a federal jury in Little Rock, Arkansas, convicted a man who was then-residing on the Misawa Air Base, a military base in Japan, of multiple charges, stemming from the assault of three U.S. Air Force airmen and resisting military police who attempted to restrain him.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Cody Hiland of the Eastern District of Arkansas and Colonel Kirk B. Stabler of the U.S. Air Force Office of Special Investigations made the announcement.
Rodrigo Pineda Gomez, 44, who was residing in Japan, was convicted of one count of attempted voluntary manslaughter, one count of assault with a dangerous weapon, three counts of assault by striking, beating, or wounding, one count of resisting a federal officer, and one count of making a false statement to law enforcement.
This verdict follows the earlier guilty plea on April 19 of Miguel Gomez, 21, the son of Rodrigo Gomez and himself a participant in the assault, to one count of assault by striking, beating or wounding.
The presiding judge, U.S. District Judge James Moody, Jr., has yet to set a sentencing date.
According to the superseding indictment and evidence presented at trial, on Dec. 31, 2016, on Misawa Air Base in Japan, the defendants, Rodrigo Gomez and his son, Miguel Gomez, assaulted three U.S. Air Force airmen. During the assault, defendant Rodrigo Gomez attempted to kill one of the airmen by attempting to snap his neck and stomping on his head repeatedly while he was on the ground. He subsequently resisted arrest after law enforcement arrived, and then later made a false statement about the incident. Co-defendant Miguel Gomez also assaulted one of the airmen. At the time of the assault, defendant Rodrigo Gomez was the dependent spouse and Miguel Gomez the son of an active duty service member assigned to the base. Their last known U.S. address at the time of indictment was Jacksonville, Arkansas.
The investigation was conducted by the U.S. Air Force Office of Special Investigations. Trial Attorney Frank Rangoussis of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Stacy Williams of the Eastern District of Arkansas are prosecuting the case.
Former Captain of Arkansas Juvenile Detention Center Sentenced to Prison for Conspiracy to Assault Juvenile DetaineesRead the Press Release
Former Captain of the White River Regional Juvenile Detention Center, Peggy Kendrick, 45, was sentenced yesterday to prison for her role in conspiring to assault juvenile inmates, assaulting a 16-year-old juvenile, and obstructing justice by falsifying incident reports about that assault. Kendrick, who served as captain and administrator of the detention center, and was in charge of its daily operations, was sentenced to 84 months in prison and three years of supervised release, announced Assistant Attorney General Eric Dreiband of the Department of Justice’s Civil Rights Division, U.S. Attorney Cody Hiland of the Eastern District of Arkansas, and Special Agent in charge Diane Upchurch of the FBI Little Rock Field Office.
“This defendant abused her power as Captain and attempted to cover up the assault of young inmates under her care and custody,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Department of Justice will continue to aggressively enforce our nation’s laws and hold officers who break the law and mistreat inmates accountable.”
“As former Captain of the facility, this defendant was in a position of trust. Her behavior towards these children violated that trust, and the sentence shows these actions will not go unpunished,” said U.S. Attorney for the Eastern District of Arkansas Cody Hiland.
“We are morally, constitutionally, and legally obligated to treat juvenile inmates humanely. The sentencing reflects our commitment to investigate the mistreatment of inmates by the people in charge of them,” stated Special Agent in Charge Diane Upchurch with the Little Rock FBI Field Office. “We appreciate the efforts of our partners at the Justice Department’s Civil Rights Division and the United States Attorney’s Office for the Eastern District of Arkansas and the FBI.”
On April 26, 2017, Kendrick pleaded guilty in federal court to conspiring to assault juvenile inmates at the White River facility. According to the plea documents, Kendrick assaulted and physically punished juvenile detainees who posed no threat, including by spraying them in the face with pepper spray. In some instances, she then shut the compliant juveniles in their cells after pepper spraying them to “let them cook,” or continue suffering the effects of the pepper spray, rather than immediately decontaminating them. Kendrick also encouraged other juvenile detention officers to unjustifiably assault juveniles and to falsify their incident reports to cover up the assaults.
Kendrick also pleaded guilty to assaulting a 16-year-old girl by pepper spraying her in the face for failing to follow directions. At the time, the girl, who was in the detention center as part of the “Families in Need of Service” program and had not been charged with any crime, was standing in the back corner of her cell with her arms folded, and not posing a physical threat to anyone or physically resisting in any way. Kendrick covered up the assault by writing an incident report falsely claiming that the girl had clenched her fist and stepped toward Kendrick in an aggressive manner.
Kendrick was sentenced yesterday by United States District Court Judge James M. Moody Jr. On March 14, Judge Moody sentenced Dennis Fuller, 41, who served as Kendrick’s lieutenant, to 36 months in prison for his role in the conspiracy.
This case was investigated by the FBI’s Little Rock Division. Trial Attorneys Samantha Trepel and Michael J. Songer of the Justice Department’s Civil Rights Division, and Assistant United States Attorneys Julie Peters and Pat Harris of the U.S. Attorney’s Office for the Eastern District of Arkansas prosecuted the case.
Drasco Man Indicted for Failing to Pay over Employment TaxRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Tamera Cantu, Special Agent in Charge of the IRS-Criminal Investigation Dallas Field Office, announced today the indictment of Chris Michael Guidry, 44, of Drasco, for allegedly failing to pay over employment tax.
Guidry appeared today before United States Magistrate Judge Jerome T. Kearney, and was released on bond. Trial is set for May 13, 2019.
Guidry was the sole member and owner of Top Drive Solutions, LLC, and the sole officer of TDS Corp., which were oil and gas consulting businesses. Guidry exercised control over every aspect of Top Drive Solutions’ and TDS Corp’s business affairs and had the responsibility to collect, truthfully account for, and pay over their payroll taxes to the Internal Revenue Service.
Guidry was required to withhold from the wages of his employees the employees’ share of FICA taxes and income taxes, to account for the taxes, and to pay the withheld amounts over to the United States.
The indictment, which was returned by a grand jury on April 3, 2019, charges Guidry with 11 felony counts of willful failure to pay over tax. According to the indictment, throughout the calendar years 2012, 2013, 2014, 2015, and 2016, Top Drive Solutions and TDS Corp. withheld taxes from its employees’ paychecks, including federal income taxes, Medicare, and Social Security taxes, but failed to pay those withheld taxes to the IRS.
It is alleged that Guidry then caused Top Drive Solutions and TDS Corp. to make thousands of dollars of expenditures for his own personal benefit while, at the same time, failing to pay over to the IRS at least $663,872.41 in payroll taxes withheld from his employees’ paychecks.
The investigation was conducted by IRS Criminal Investigation. This case is being prosecuted by Assistant United States Attorney Chris Givens from the Eastern District of Arkansas.
An indictment only contains allegations. A defendant is presumed innocent unless and until proven guilty.
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
https://www.justice.gov/usao-edar
Twitter:
@EDARNEWS
Jury Finds Bryant Man Guilty of Receiving, Distributing, Advertising, and Possessing Child PornographyRead the Press Release
LITTLE ROCK— A Bryant man has been convicted of five child pornography offenses, including receiving and attempting to distribute images of child pornography as well as advertising and possessing those images.
Cody Hiland, U.S. Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the FBI’s Little Rock Field Office, announced that a federal jury found Joseph Keck, Jr., 61, of Bryant, guilty of five separate counts of child pornography. Keck was convicted of receiving and attempting to distribute child pornography images through a peer-to-peer internet program. He was also convicted of advertising those images to other users and of possessing images of child pornography.
United States District Judge James M. Moody, Jr., presided over the two-day trial, which concluded Tuesday with the jury verdict finding Keck guilty on all counts. Keck will be sentenced by Judge Moody at a later date.
“This verdict shows that we will not tolerate this deplorable, criminal conduct,” said U.S. Attorney Hiland. “Child pornographers create a market for the sexual abuse of children, and we will continue to aggressively prosecute this conduct in order to protect society’s most vulnerable victims—our children.”
Testimony during the trial established that in 2016, the FBI learned that an individual was sharing child pornography over the internet from a residence in Bryant, Arkansas. Investigation revealed that Keck stayed at this residence when not working as a truck driver. On May 9, 2016, the defendant arrived at the residence in a white Astro van, and the FBI obtained his two laptop computers, his external hard drive, and his cell phone. Forensic examination revealed tens of thousands of pictures and videos of child pornography. Those devices also contained evidence that Keck had downloaded child pornography and saved it to his computer.
Trial testimony also indicated that Keck used a file sharing program called Gigatribe to exchange images and videos with other users. Through his twelve Gigatribe accounts, the defendant downloaded and shared tens of thousands of videos and images of child pornography. He also advertised the contents of his child pornography collection by offering his password to other Gigatribe users. Evidence at trial included Keck’s Gigatribe chat logs, in which he told other users his name was Joe, he was a truck driver, and he liked young boys ages 12-16.
The statutory penalty for advertisement of child pornography is not less than 15 years imprisonment and not more than 30 years imprisonment. The statutory penalty for receipt and distribution of child pornography, as well as attempted distribution, is not less than 5 years imprisonment and not more than 20 years imprisonment. For possession of child pornography, the statutory penalty is not more than 10 years imprisonment. Each of the five offenses of conviction include a penalty of not more than a $250,000 fine and not less than five years of supervised release.
The investigation was conducted by the FBI, and the case was prosecuted by Assistant United States Attorneys Kristin Bryant and Michael Gordon.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSTwo Former Arkansas Juvenile Detention Officers Sentenced to Prison for Assaulting Juvenile DetaineesRead the Press Release
Two former White River Regional Juvenile Detention Center officers, including a former supervisor, Lieutenant Dennis Fuller, 41, and Officer Jason Benton, 44, were sentenced to prison for their roles in conspiring to assault juvenile inmates, assaulting juveniles, and obstructing justice by falsifying incident reports about the assaults. Fuller was sentenced to 36 months in prison and two years of supervised release, and Benton was sentenced to 30 months in prison and two years of supervised release, announced Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division, U.S. Attorney Cody Hiland of the Eastern District of Arkansas, and Special Agent in charge Diane Upchurch of the FBI Little Rock Field Office.
On April 26, 2017, Fuller and former Captain Peggy Kendrick, who will be sentenced on a later date in April, pleaded guilty in federal court to conspiring to assault juvenile inmates at the White River facility. On May 16, 2017, Benton pleaded guilty to using pepper spray to assault a 15-year-old boy, and for obstructing justice by falsifying an incident report about that assault. Fuller was sentenced today by United States District Court Judge James M. Moody Jr., and Benton was sentenced today by Senior United States District Court Judge Billy Roy Wilson, both of the Eastern District of Arkansas.
“These defendants egregiously abused their powers by assaulting teenagers in their custody,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Department will not tolerate such abuses, and will continue to vigorously enforce our nation’s laws and hold officers who break the public trust in this way accountable.”
“The needless abuse of juveniles in custody is reprehensible. These officers had a responsibility to follow the law, but they instead chose to victimize children who were placed under their watch. Today’s sentences send a message that those placed in positions of authority will not be allowed to abuse that authority,” said U.S. Attorney for the Eastern District of Arkansas Cody Hiland.
“Law enforcement officers should always hold themselves to the highest standards. These corrections officers failed to do that by abusing juveniles in their custody and care. Their actions will not be tolerated. This should be a warning to any corrections officers who exploit their position of authority and violates the civil rights of those in their custody,” stated Special Agent in Charge Diane Upchurch with the Federal Bureau of Investigation in Little Rock, “I appreciate the hard work of the FBI employees, the Justice Department’s Civil Rights Division, and the USAO of the Eastern District of Arkansas in this case.”
According to the plea documents, Kendrick and Fuller assaulted and physically punished juvenile detainees who posed no threat, including 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,” or continue suffering the effects of the pepper spray, rather than immediately decontaminating them. Kendrick also encouraged other juvenile detention officers to unjustifiably assault juveniles and to falsify their incident reports to cover up the assaults. Benton, one such officer, assaulted a 15-year-old boy, who was locked in his cell, for failing to be quiet. Benton had the juvenile’s cell door opened and ordered the juvenile to come out of his cell with his mattress. The juvenile picked up his mattress as instructed. As the juvenile turned to face the cell door, holding the mattress in both arms, Benton pepper sprayed the juvenile in the face from a distance of a few inches. Benton continued spraying the juvenile as he tried to turn his head away from the spray. Benton then took the juvenile to the ground. Benton covered up the assault when he falsified an incident report, saying that the juvenile had attempted to lunge at him with his fists clenched, when in fact the juvenile had posed no physical threat.
This case was investigated by the FBI’s Little Rock Division. Trial Attorneys Samantha Trepel and Michael J. Songer of the Justice Department’s Civil Rights Division, and Assistant United States Attorneys Julie Peters and Pat Harris of the United States Attorney’s Office for the Eastern District of Arkansas prosecuted the case.
Missouri Resident Who Illegally Possessed Gun in Arkansas, Threatened to Kill Law Enforcement Officers, Receives 10-Year Prison SentenceRead the Press Release
LITTLE ROCK—A Missouri resident overheard on jail calls threatening to kill law enforcement officers and witnesses was sentenced today to federal prison for 10 years for possessing a firearm in Arkansas. Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced that multi-convicted felon Jimmy David McVay, 34, of Steele, Mo., was sentenced to the statutory maximum 120 months in prison for his illegal possession of a firearm in Blytheville in 2016.
On May 4, 2018, a grand jury returned an indictment charging McVay, who has also lived in Blytheville, with one count of being a felon in possession of a firearm, one count of threatening witnesses in a federal proceeding, and one count of threatening to assault a Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) special agent. McVay pleaded guilty to being a felon in possession of a firearm on October 3, 2018. Today, United States District Court Chief Judge Brian S. Miller sentenced McVay to10 years in prison, followed by three years of supervised release. There is no parole in the federal system.
“Jimmy David McVay illegally possessed guns on numerous occasions, and threatened to harm witnesses and law enforcement officers on numerous occasions,” Hiland said. “This significant sentence properly reflects the seriousness of his crime. Any time an individual combines illegal gun possession with violence—threats or otherwise—they should know there will be a spot in a federal prison waiting for them.”
At his change of plea hearing, McVay admitted that he possessed a Ruger .357 revolver during the filming of a rap video in Blytheville in July 2016. According to evidence presented at McVay’s sentencing hearing today, officers recovered the Ruger revolver seen in the video from a body of water in Pemiscot County, Mo.
At the sentencing hearing, an ATF special agent testified that on July 26, 2016, approximately three weeks after the video in Blytheville was produced, Steele, Mo., Police Chief Billy Joe Stanfield attempted to pull over McVay in McVay’s vehicle in Steele. McVay fled, and during the pursuit, McVay crossed a bridge in Pemiscot County, Mo., and threw the firearm out his window and into the water below.
Law enforcement divers eventually located the Ruger revolver, which was loaded with the hammer cocked back, in the water.
Also at today’s sentencing hearing, Judge Miller heard numerous recorded jail calls in which McVay threatened to harm the local and federal law enforcement officers involved in his cases, as well as harm any witnesses who may have spoken to police about McVay’s illegal activities. The ATF agent also testified about numerous Facebook posts McVay made involving threats to witnesses who may appear before the grand jury, including both civilians and federal agents.
The investigation was conducted by the Cape Girardeau, Mo., ATF Field Office, as well as the Pemiscot County, Mo., Sheriff’s Department, the Steele, Mo., Police Department, and the Caruthersville, Mo., Police Department. The case was prosecuted by Assistant United States Attorney Chris Givens.
This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSOperation "Press Your Luck" Leads to Dozens of Arrests in Helena-West HelenaRead the Press Release
HELENA-WEST HELENA—The United States Marshals Service announced today an arrest operation targeting violence in the Delta. Operation “Press Your Luck” began this morning in Helena-West Helena, resulting in multiple cooperating law enforcement agencies arresting 44 suspects thus far in an ongoing investigation.
Operation “Press Your Luck, led by the United States Marshals Service (USMS), is designed to target fugitive gang members and other violent criminals wanted on arrest warrants for egregious violent criminal offenses. The goal of the operation is to provide communities in the Delta region with immediate relief from violent gang-related crime.
Fugitive task forces began Operation “Press Your Luck” early this morning by searching for more than 60 suspects, all of whom had outstanding arrest warrants for crimes including rape, murder, aggravated assault, kidnapping, sex offenses, and other crimes. Authorities began a sweep of the area, concentrating their efforts in Phillips County and nearby locations including several targets in Arkansas County and Saint Francis County, as well as neighboring communities in Mississippi. The operation is ongoing and law enforcement will continue to seek additional wanted suspects, beyond those arrested today.
“Today’s arrests signify the presence of federal law enforcement in Helena-West Helena and the surrounding communities,” said Cody Hiland, United States Attorney for the Eastern District of Arkansas. “When local communities in our district reach out for help from federal authorities to stem the tide of violence, we will swiftly and forcefully respond. Criminals in the Delta now know that we will not tolerate their violence and disregard of the law.”
“We are committed to working with our federal, state, and local partners to address those wanted for crimes of violence and fleeing justice,” said Jay L. Tuck, Chief Deputy United States Marshal for the Eastern District of Arkansas. “The Marshals’ collaborative efforts, through our fugitive task forces, place us in a unique position to arrest violent offenders and help make cities like Helena-West Helena safer.
“The citizens of this community and the entire Delta region should not be worried to sit on their porch, allow children to play in a park, or take a family walk. We will continue to assist these communities and take back the streets from gang members and violent offenders, paving a successful path for future generations.”
The USMS was assisted by several participating agencies, including the Drug Enforcement Agency; Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Arkansas Department of Community Correction; Arkansas State Police; National Guard Counterdrug Aviation; and MEMS STAR Team.
This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSTexas Man Sentenced to Prison for Bank Fraud After Obtaining over $2 MillionRead the Press Release
LITTLE ROCK—A Texas man was sentenced today for defrauding an Arkansas bank by creating fraudulent invoices. Matthew Beasley, 47, of McKinney, Texas, was sentenced to 36 months in federal prison by U.S. District Judge D.P. Marshall, Jr.
Beasley served as President of a construction company in Conway, Arkansas, known as Cobas, Inc. Cobas maintained a line of credit with Centennial Bank. When Cobas performed construction work for other companies, Cobas would send invoices for the work they had performed. While waiting for those invoices to be paid, which could take up to 60 days, Cobas would submit the invoices to Centennial Bank, which would advance a percentage of the invoice amount to Cobas.
In August of 2016, Beasley began submitting fraudulent invoices to Centennial Bank in order to receive advance payments. He submitted several fraudulent invoices each month from August through December of 2016, resulting in a total of 17 fraudulent invoices for approximately $2,911,617.
Beasley pleaded guilty to an Information charging him with one count of bank fraud on September 18, 2018. In addition to 36 months in prison, Judge Marshall sentenced Beasley to two years of supervised release following his term of imprisonment. Beasley was also ordered to pay $2,019,773.36 in restitution.
The case was investigated by the United States Postal Inspection Service – Office of Inspector General and Conway Police Department. The case was prosecuted by Assistant United States Attorney Jana Harris.
This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSLittle Rock Man Sentenced to Prison for His Role in Stealing Money Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—A Little Rock man was sentenced for his role in a scheme that defrauded a government program intended to feed Arkansas children in low income areas. Nigel Hall, 49, of Little Rock, was sentenced to 27 months in federal prison by U.S. District Judge J. Leon Holmes.
Judge Holmes also sentenced Hall, who pleaded guilty to conspiring to commit wire fraud on February 12, 2018, to three years of supervised release following his term of imprisonment. Hall was also ordered to pay $882,657.95 in restitution. 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.
“Stealing money from a program designed to feed hungry children is reprehensible,” said Cody Hiland, United States Attorney for the Eastern District of Arkansas. “These funds were intended to provide food for children in Arkansas, not to line the pockets of those who commit fraud. Today’s sentence sends a message that we will find and prosecute those who abuse these programs and take advantage of the most vulnerable among us.”
Hall was a sponsor for a feeding program through an organization called “Creative Minds.” Hall had four approved feeding site locations, which were located in Little Rock, North Little Rock, Mabelvale, and Woodson. Hall submitted fraudulent claims to DHS, claiming to have fed many more children than were actually fed, and then DHS would reimburse him for that amount. Hall submitted claims of up to 846 children per day at some of his feeding sites, but at two of those sites, no children were fed. At a third location, fewer than 50 children were actually fed.
Hall is the 17th defendant sentenced who was charged in connection with a scheme to fraudulently obtain USDA program funds intended to feed children in low income areas. Other defendants include: Kattie Jordan (63 months imprisonment on March 15, 2016); Reuben Nims (21 months imprisonment on November 2, 2016); Tonique Hatton (108 months imprisonment on January 4, 2017); James Franklin (24 months imprisonment on January 10, 2017); Maria Nelson (30 months imprisonment on January 31, 2017); Michael Lee (30 months imprisonment on May 1, 2017); Christopher Nichols (3 years probation on May 16, 2017); Gladys Waits (108 months imprisonment on July 17, 2017); Alexis Young (18 months imprisonment on August 18, 2017); Erica Warren (18 months imprisonment on August 18, 2017); Francine Leon (34 months imprisonment on September 21, 2017); Anthony Waits (175 months imprisonment on October 20, 2017); Jacqueline Mills (150 months imprisonment on December 6, 2017); Dorothy Harper (33 months imprisonment on January 9, 2018); Waymon Weeams (15 months imprisonment on February 15, 2018); and Elbert Harris (33 months imprisonment on February 28, 2018).
Debora Washington, Zina Lambert, and Cedric Maxwell have been charged in separate cases with conduct related to this scheme and are awaiting a jury trial.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Dax Roberson, Special Agent-in-Charge of the USDA – Office of Inspector General, Southwest Region, announced today’s sentencing. The investigation is still ongoing and continues to be conducted by the USDA–Office of Inspector General and the FBI. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg, and Cameron McCree.
This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line at:
http://www.justice.gov/edarTwitter:
@EDARNEWSJury Finds Volunteer Sheriff's Deputy Guilty of Extortion, Obtaining Stolen ATV and FirearmsRead the Press Release
LITTLE ROCK— A volunteer Sheriff’s Deputy with the Arkansas County Sheriff’s Office has been convicted of extorting confidential informants to steal an ATV and firearms.
Cody Hiland, U.S. Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the FBI’s Little Rock Field Office, announced that a federal jury found Charles David Chastain, 48, of Stuttgart, guilty of Hobbs Act extortion, attempted Hobbs Act extortion, and receipt of a firearm with intent to commit a felony.
United States District Judge Leon Holmes presided over the two-day trial, which concluded Tuesday with the jury verdict finding Chastain guilty on all counts. Chastain will be sentenced by Judge Holmes at a later date.
“Law enforcement in this district work tirelessly and selflessly,” said Hiland. “They respond at a moment’s notice and are willing to sacrifice their lives for total strangers because of a calling to serve their fellow man.”
“The actions of one officer are not an indictment against an entire profession,” Hiland continued. “However, no individual is above the law, and our office will seek justice wherever injustice is found, especially with those we trust to serve and protect our communities. This guilty verdict would not have been possible without the hard work of our Assistant United States Attorneys.”
Chastain was employed as a volunteer Auxiliary Sheriff’s Deputy for the Arkansas County Sheriff’s Office. He was assigned to the Tri-County Drug Task Force, where he utilized confidential informants to develop drug cases in Arkansas County and surrounding areas.
Testimony during the trial established that two confidential informants worked for Chastain in an effort to reduce criminal charges. In the fall of 2017, Chastain asked those informants to steal an ATV for him. One of the informants went to a duck hunting club in Clarendon and stole a Browning Edition, Polaris Ranger 900 ATV valued at just under $25,000. The informant stole the ATV in exchange for favorable treatment from Chastain concerning criminal charges, but the informant also reported the theft to the FBI. Testimony indicated that both informants were concerned Chastain would refuse to give them credit for their cooperation if they did not meet his demands.
Trial testimony also indicated that in December of 2017, Chastain asked one of the informants to commit another burglary, this time with the goal of stealing firearms from a storage unit in Arkansas County. Text messages admitted at trial showed that the informant asked if there were cameras at the storage unit, and Chastain replied, “Long sleeve shirts and a mask would make it a moot point.” The informant did not commit that burglary, and instead worked with the FBI and the Arkansas State Police to obtain three firearms to offer for sale to Chastain.
Evidence at trial showed that the informant told Chastain the firearms were stolen and included a Chinese Type 56-1, which is similar to an AK-47 rifle, a Colt M16 A1, and a Winchester M14. Chastain agreed to buy the purportedly stolen firearms from the informant for $300. He was arrested shortly thereafter with those rifles in his possession. Investigators later executed a search warrant at Chastain’s shop, where they located the stolen Polaris Ranger.
The statutory penalty for Hobbs Act extortion, as well as attempted Hobbs Act extortion, is not more than 20 years imprisonment, not more than a $250,000 fine, or both, and not more than three years of supervised release. The statutory penalty for receipt of a firearm with intent to commit a felony is not more than 10 years imprisonment, not more than a $250,000 fine, and not more than three years of supervised release.
The investigation was conducted by the FBI, with assistance from the Arkansas State Police.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at:
http://www.justice.gov/edarTwitter:
@EDARNEWSMultiple White Supremacist Gang Members among 54 Defendants Charged in RICO IndictmentRead the Press Release
Dozens of members of a white supremacist gang allegedly responsible for multiple acts of violence were charged in a superseding indictment unsealed today in the Eastern District of Arkansas.
The indictment alleges that the New Aryan Empire (NAE) is a racketeering enterprise, which committed violent acts—attempted murder, kidnapping, and maiming—in support of its organization and its wide-ranging drug-trafficking operation.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Cody Hiland for the Eastern District of Arkansas, Special Agent in Charge Diane Upchurch of the FBI Little Rock, Arkansas Field Office, Assistant Special Agent in Charge Justin King of the U.S. Drug Enforcement Administration (DEA) Little Rock District Office and Acting Resident Agent in Charge Warren Newman of the Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF) Little Rock District Office, made the announcement.
“According to the allegations in the indictment announced today, New Aryan Empire associates maintained their criminal enterprise by engaging in multiple acts of violence — including kidnapping and attempting to murder one informant, and stabbing and maiming two others suspected of cooperating with law enforcement,” said Assistant Attorney General Benczkowski. “I want to thank our federal, state, and local law enforcement partners for vigorously investigating this vicious criminal organization.”
The case, named “To The Dirt,” which is in reference to the NAE slogan referring to the rule that members must remain in the NAE until they die, began in 2016 when ATF assisted the Pope County Sheriff’s Office in a murder investigation. The murder involved members of the NAE, a white supremacist organization that began as a prison gang and has since expanded beyond the prisons. Investigators learned that several members of the NAE conducted meetings in Pope County and became involved in methamphetamine distribution.
On Oct. 3, 2017, the grand jury handed down an indictment charging 44 people from the Pope County area with numerous gun and drug violations. Since that indictment, one defendant—Daniel Adame, 32, of Russellville, Arkansas —has pleaded guilty to conspiracy to distribute methamphetamine. The superseding indictment, which was returned by a federal grand jury on Feb. 5, 2019, named 11 additional defendants and added charges for the defendants’ involvement in acts involving attempted murder, kidnapping, maiming, and conspiracy to distribute methamphetamine.
Thirty-five defendants are in either state or federal custody, while 16 were previously released on federal bond. Troy R. Loadholt, 37; Jeffrey G. Howell, 34; and Amos Adame, 46, all from Russellville, remain fugitives. April Howell, 29, and Amanda Rapp, 37, both of Russellville, and Courtney Talley, 32, of Dardanelle, Arkansas, were arrested Tuesday morning. Most of the defendants are residents of Pope and Yell Counties, Arkansas.
“The violence and hatred alleged in this superseding indictment have no place in society,” said U.S. Attorney Hiland. “We are committed to helping our communities remain free from these types of crimes using every resource available, including the powerful RICO statutes when appropriate. The significant charges in this case represent the hard work of our state and federal law enforcement agencies, and this office’s commitment to removing violent, repeat offenders from the streets.”
The superseding indictment alleges that between May 2014 and May 2016, NAE associates Marcus Millsap, 51, of Danville, Arkansas, and James Oliver, 47, of Russellville, as well as NAE President Wesley Gullett, 29, of Russellville, solicited several NAE members and associates to murder the confidential informant responsible for Millsap being charged with drug trafficking. According to the indictment, NAE members believed this informant had provided information about Millsap to law enforcement. In January 2016, two known members of NAE attempted to murder the confidential informant, but were unsuccessful. The superseding indictment further alleges that between May 28, 2017 and June 6, 2017, members and associates of NAE kidnapped, stabbed and maimed two individuals in retaliation for the individuals providing information to law enforcement about another NAE member. During the kidnapping, the victims were forced to write apology letters to the NAE member and his girlfriend.
The indictment charges 17 of the 54 defendants with crimes under the Racketeer Influenced and Corrupt Organizations Act (RICO) and Violent Crimes in Aid of Racketeering statute (VICAR). These racketeering-based statutes provide criminal penalties up to life imprisonment for acts performed as part of a criminal organization, and support charges for those who only ordered or assisted others to carry out the illegal acts. The superseding indictment alleges that from 2014 to the present, the New Aryan Empire functioned as a criminal enterprise to achieve its objectives, including illegal activities that affect interstate commerce.
The charges in the superseding indictment include conspiracy to violate RICO, kidnapping in aid of racketeering, maiming in aid of racketeering, assault with a dangerous weapon in aid of racketeering, and attempted murder in aid of racketeering, as well as multiple methamphetamine and firearm violations (see attachment for complete list of charges and penalties).
“Today’s superseding indictment of over 50 people reflects the FBI’s firm resolve to root out criminal organizations who espouse hate and bigotry, and whose members sell drugs and commit violent acts such as attempted murder, kidnapping, and aggravated assault,” said FBI Special Agent in Charge Upchurch. “We appreciate and applaud the steadfast efforts of our partners at the U.S. Attorney’s Office for the Eastern District of Arkansas, the ATF, DEA, Pope County Sheriff’s Office, Fifth Judicial District Drug Task Force, Russellville Police Department, Arkansas State Police, Conway Police Department, U.S. Postal Inspection Service, and FBI in arresting these individuals who are determined to destroy our communities.”
In addition to the violent acts, law enforcement officials investigated the NAE’s methamphetamine trafficking organization. During the coordinated federal and state investigation, law enforcement agents made 59 controlled purchases of methamphetamine, seizing more than 25 pounds of methamphetamine, as well as 69 firearms and more than $70,000 in drug proceeds.
“Historically, Aryan gang members and associates are a source of drugs, violence, and crime throughout this region,” said DEA Assistant Special Agent in Charge King. “Several members and associates of these gangs are charged in a RICO conspiracy as a result of law enforcement collaboration and a determined goal of making our communities safer from gang violence and drug trafficking. This effort, as part of Operation To The Dirt, is a promise to our citizens of the continued commitment of law enforcement at the federal, state and local levels to keep our streets safe.”
Wesley S. Gullett, 29, and Kevin M. Long, 23, both of Russellville, Arkansas; Lesa A. Standridge, 54, of Dover, Arkansas; and Christopher S. Helms, 35, of Dardanelle, Arkansas are charged with being a felon in possession of a firearm. Among the 69 guns seized, include handguns, rifles, shotguns, and several high-capacity assault-style rifles.
“These indictments are the result of an unprecedented collaboration by the ATF, FBI, and DEA Little Rock Field Offices, Pope County Sheriff’s Office, Russellville Police Department and 5th Judicial Drug Task Force,” said ATF Acting Resident Agent in Charge Newman. “This case reflects a major disruption of the New Aryan Empire organization that affected the whole Arkansas River Valley area. As a result of this collaborative effort, we have effectively dismantled this violent, drug-dealing organization and sent a clear message that the ATF and our law enforcement partners have an unwavering commitment to hold those individuals accountable who insist on creating an atmosphere of violence and fear in our communities.”
The three arrested today will be arraigned at 3 p.m. CST in federal court in Little Rock, Arkansas before U.S. Magistrate Judge Beth Deere.
The investigation was conducted by FBI, ATF, and DEA, in partnership with the Pope County Sheriff’s Office, Fifth Judicial District Drug Task Force, Russellville Police Department, Arkansas State Police, Conway Police Department and U.S. Postal Inspection Service. The case is being prosecuted by Trial Attorney Marianne Shelvey of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Liza Jane Brown of the Eastern District of Arkansas.
An indictment is merely an accusation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Multiple White Supremacist Gang Members Among 54 Defendants Charged in RICO IndictmentRead the Press Release
Charges including Solicitation to Commit Murder, Kidnapping, Maiming, and Conspiracy to Distribute Methamphetamine
RUSSELLVILLE—Dozens of members of a white supremacist gang allegedly responsible for multiple acts of violence were charged in a superseding indictment unsealed today.
The indictment alleges that the New Aryan Empire (NAE) is a racketeering enterprise which committed violent acts—including attempted murder, kidnapping, and maiming—in support of its organization and its wide-ranging drug-trafficking operation.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Cody Hiland, U.S. Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the FBI’s Little Rock Field Office, Justin King, Assistant Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Little Rock District Office, and Warren Newman, Acting Resident Agent in Charge Bureau of Alcohol, Tobacco, Firearms, & Explosives’ (ATF) Little Rock District Office, announced the Tuesday morning arrests of the final three defendants and the unsealing of the 54-defendant superseding indictment.
“According to the allegations in the indictment announced today, New Aryan Empire associates maintained their criminal enterprise by engaging in multiple acts of violence—including kidnapping and attempting to murder one informant, and stabbing and maiming two others suspected of cooperating with law enforcement,” Assistant Attorney General Benczkowski said. “I want to thank our federal, state, and local law enforcement partners for vigorously investigating this vicious criminal organization.”
The case, named “To The Dirt,” which is in reference to the NAE slogan referring to the rule that members must remain in the NAE until they die, began in 2016 when ATF assisted the Pope County Sheriff’s Office in a murder investigation. The murder involved members of the NAE, a white supremacist organization that began as a prison gang and has since expanded beyond the prisons. Investigators learned that several members of the NAE conducted meetings in Pope County and became involved in methamphetamine distribution.
On October 3, 2017, the grand jury handed down an indictment charging 44 people from the Pope County area with numerous gun and drug violations. Since that indictment, one defendant—Daniel Adame, 32, of Russellville—has pleaded guilty to conspiracy to distribute methamphetamine. The superseding indictment, which was returned by a federal grand jury on February 5, 2019, named 11 additional defendants and added charges for the defendants’ involvement in acts involving attempted murder, kidnapping, maiming, and conspiracy to distribute methamphetamine.
Thirty-five defendants are in either state or federal custody, while 16 were previously released on federal bond. Troy R. Loadholt, 37, Jeffrey G. Howell, 34, and Amos Adame, 46, all from Russellville, remain fugitives. April Howell, 29, and Amanda Rapp, 37, of Russellville, and Courtney Talley, 32, of Dardanelle, were arrested Tuesday morning. Most of the defendants are residents of Pope and Yell Counties (see attachment for complete list of defendants and charges).
“The violence and hatred alleged in this superseding indictment have no place in society,” U.S. Attorney Hiland said. “We are committed to helping our communities remain free from these types of crimes using every resource available, including the powerful RICO statutes when appropriate. The significant charges in this case represent the hard work of our state and federal law enforcement agencies, and this office’s commitment to removing violent, repeat offenders from the streets.”
The superseding indictment alleges that between May 2014 and May 2016, NAE associates Marcus Millsap, 51, of Danville, and James Oliver, 47, of Russellville, as well as NAE President Wesley Gullett, 29, of Russellville, solicited several NAE members and associates to murder a confidential informant. According to the indictment, NAE members believed this informant had provided information about Millsap to law enforcement.
In January 2016, two known members of NAE attempted to murder the confidential informant, but were unsuccessful. The superseding indictment further alleges that between May 28, 2017, and June 6, 2017, members and associates of NAE kidnapped, stabbed, and maimed two individuals in retaliation for the individuals providing information to law enforcement about another NAE member. During the kidnapping, the victims were forced to write apology letters to the NAE member and his girlfriend.
The indictment charges 17 of the 54 defendants with crimes under the Racketeer Influenced and Corrupt Organizations Act (RICO) and Violent Crimes in Aid of Racketeering statute (VICAR). These racketeering-based statutes provide criminal penalties up to life imprisonment for acts performed as part of a criminal organization, and support charges for those who only ordered or assisted others to carry out the illegal acts. The superseding indictment alleges that from 2014 to the present, the NAE functioned as a criminal enterprise to achieve its objectives, including illegal activities that affect interstate commerce.
The charges in the superseding indictment include conspiracy to violate RICO, kidnapping in aid of racketeering, maiming in aid of racketeering, assault with a dangerous weapon in aid of racketeering, and attempted murder in aid of racketeering, as well as multiple methamphetamine and firearm violations (see below for complete list of charges and penalties).
“Today’s superseding indictment of over 50 people reflects the FBI’s firm resolve to root out criminal organizations who espouse hate and bigotry, and whose members sell drugs and commit violent acts such as attempted murder, kidnapping, and aggravated assault,” FBI SAC Upchurch said. “We appreciate and applaud the steadfast efforts of our partners at the United States Attorney’s Office for the Eastern District of Arkansas, the ATF, DEA, Pope County Sheriff’s Office, Fifth Judicial District Drug Task Force, Russellville Police Department, Arkansas State Police, Conway Police Department, United States Postal Inspection Service, and FBI in arresting these individuals who are determined to destroy our communities.”
In addition to the violent acts, law enforcement officials investigated the NAE’s methamphetamine trafficking organization. During the coordinated federal and state investigation, law enforcement agents made 59 controlled purchases of methamphetamine, seizing more than 25 pounds of methamphetamine, as well as the 69 firearms and more than $70,000 in drug proceeds.
“Historically, Aryan gang members and associates are a source of drugs, violence, and crime throughout this region,” DEA ASAC King said. “Several members and associates of these gangs are charged in a RICO conspiracy as a result of law enforcement collaboration and a determined goal of making our communities safer from gang violence and drug trafficking. This effort, as part of Operation To The Dirt, is a promise to our citizens of the continued commitment of law enforcement at the federal, state and local levels to keep our streets safe.”
A majority of the 54 federal defendants are convicted felons, many with violent histories. Among the 69 guns seized include handguns, rifles, shotguns, and several high-capacity assault-style rifles. Wesley S. Gullett, 29, and Kevin M. Long, 23, both of Russellville; Lesa A. Standridge, 54, of Dover; and Christopher S. Helms, 35, of Dardanelle, are charged with being a felon in possession of a firearm.
“These indictments are the result of an unprecedented collaboration by the ATF, FBI, and DEA Little Rock Field Offices, Pope County Sheriff’s Office, Russellville Police Department and 5th Judicial Drug Task Force,” ATF Acting RAC Newman said. “This case reflects a major disruption of the New Aryan Empire organization that affected the whole Arkansas River Valley area. As a result of this collaborative effort, we have effectively dismantled this violent, drug-dealing organization and sent a clear message that the ATF and our law enforcement partners have an unwavering commitment to hold those individuals accountable who insist on creating an atmosphere of violence and fear in our communities.”
Those arrested today will be arraigned at 3 p.m. in federal court in Little Rock before United States Magistrate Judge Beth Deere.
The investigation was conducted by FBI, ATF, and DEA, in partnership with the Pope County Sheriff’s Office, Fifth Judicial District Drug Task Force, Russellville Police Department, Arkansas State Police, Conway Police Department, and United States Postal Inspection Service. The case is being prosecuted by Trial Attorney Marianne Shelvey of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Liza Jane Brown of the Eastern District of Arkansas.
Tuesday’s arrest operation included the assistance of FBI, ATF, Pope County Sheriff’s Office, Fifth Judicial Drug Task Force, Russellville Police Department, and Arkansas State Police.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
# # #
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWS
To The Dirt II Defendant ListLittle Rock Husband and Wife Sentenced on Multiple Charges Related to Tax FraudRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, Kevin Caramucci, Acting Special Agent in Charge of the IRS-Criminal Investigation Dallas Field Office, and Gary Smith, Special Agent in Charge, Southern Field Division, Treasury Inspector General for Tax Administration (TIGTA), announced that Chief United States District Judge Brian S. Miller has sentenced John and Wendy Dunn for their roles in defrauding the IRS.
In Monday’s hearing, Judge Miller sentenced John Dunn, 64, of Little Rock, to 33 months’ imprisonment, followed by three years of supervised release and ordered him to pay $437,053.84 in restitution to the IRS on one felony count of conspiracy to defraud the government. In a hearing today, Judge Miller then sentenced Dunn’s wife, Wendy Dunn, 51, of Little Rock, to five years of probation and ordered her to pay $127,401.18 in restitution after she earlier pleaded guilty to five misdemeanor counts for willful failure to file tax returns.
According to public records, from approximately November 2001 through September 2016, John Dunn conspired with others to defraud the United States for the purpose of obstructing the IRS in the assessment and collection of income taxes. Since at least 2002, John Dunn and Wendy Dunn, operated a quasi-financial consulting business; however, they failed to file business and personal tax returns reporting this income.
During an interview in September 2011, John Dunn lied to federal agents when he said he timely filed his federal income tax returns each and every year and accused the IRS of hiding his returns. John Dunn also falsely told federal agents that neither he nor his wife had been employed for many years, but that a family inheritance allowed them to live in their $500,000 residence.
John Dunn utilized a false social security number on his bank accounts to disguise his ownership and made numerous false and frivolous complaints against IRS employees in order to thwart the IRS’ collection and investigative efforts.
John Dunn filed bankruptcy, and with the assistance of co-defendant Nina Sue Williams, created fake tax returns with small amounts of income that he backdated and provided to the United States Bankruptcy Court to conceal his business activities and true earnings. In addition, John Dunn wrote the word “Gift” in the memo line of client checks he received for services in order to disguise the true nature of the payments. He also attempted to persuade these clients to make false statements to federal investigators to prevent his prosecution.
John and Wendy Dunn both pleaded guilty in June 2018. Nina Sue Williams pleaded guilty in May 2018 to making a false statement to the IRS and willfully failing to file income tax returns. In November 2018, Williams was sentenced to 24 months in prison and ordered to pay $103,201 in restitution to the IRS.
The investigation was conducted by IRS Criminal Investigation and TIGTA.
# # #
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
Twitter:
@EDARNEWSDallas-Area Woman Becomes Seventh Person to Plead Guilty in Multi-Million Dollar TRICARE Kickback SchemeRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the FBI, and Artie DeLaneuville, Acting Special Agent in Charge of the Dallas Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG), announced the guilty plea today of Jennifer Sorenson, 41, of McKinney, Texas, to conspiring to violate the Anti-Kickback Statute.
In October of this year, Brad Duke, 44, of Little Rock, pleaded guilty to orchestrating a conspiracy to violate the Anti-Kickback Statute that involved an unnamed Medical Assistant and five unnamed Patient Recruiters. All six have since pleaded guilty before Chief United States District Judge Brian S. Miller, culminating with Sorenson’s guilty plea today. The group includes Charlotte Leija, 38, of Conway (previously identified as Medical Assistant 1) and Michael “Chance” Beeman, 49, of Maumelle, Michael Sean Brady, 50, of Little Rock, Jason Greene, 31, of Nashville, Tennessee, Brian Means, 44, of Fort Smith, and Sorenson (previously identified as Patient Recruiters 1, 2, 3, 4, and 5, respectively).
Duke marketed drugs for a Mississippi compounding pharmacy, earning commission whenever affiliated doctors prescribed its drugs. For a time in 2014 and 2015, TRICARE (our military’s health insurer) paid exorbitant sums—up to tens of thousands of dollars per patient, per month—for certain compounded drugs. Duke sought to capitalize on this by paying one set of kickbacks to Patient Recruiters to send him TRICARE beneficiary information and another set of kickbacks to Leija to rubber stamp prescriptions in their names. In less than one year, the scheme generated over $10 million in compound drug prescriptions for over 100 TRICARE beneficiaries hailing from as far west as Chula Vista, California, to as far east as Foxborough, Massachusetts.
At guilty pleas over the previous weeks, Leija admitted inserting the name of the Little Rock doctor for whom she worked onto prescriptions without his knowledge, while Patient Recruiters acknowledged using a variety of methods to round up TRICARE beneficiaries, such as offering them cash and gift cards to receive the drugs and paying subordinates (including current and former members of the military) to recruit still more TRICARE beneficiaries on their behalf. For her part, during today’s hearing Sorenson admitted engaging a network of subordinates that included a member of the Army National Guard, through which she recruited over 20 TRICARE beneficiaries for Duke.
All seven co-conspirators pled guilty to conspiring to violate the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), which is punishable by up to five years in prison, a fine of not more than $250,000, and up to three years of supervised release. To date, Judge Miller has ordered nearly $3 million in forfeiture, of which almost $1.4 million has already been recovered. Sentencing will take place before Judge Miller in 2019.
If you or someone you know was approached about getting compounded prescription drugs, please contact [email protected].
This case was investigated by the FBI and HHS-OIG, and prosecuted by Assistant United States Attorney Alexander D. Morgan.
# # #
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSU.S. Attorney's Office Announces Federal Initiative Aimed at Curbing Mail TheftRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced a joint statewide federal initiative with a goal to catch and federally prosecute mail thieves this holiday season and beyond.
During Monday’s press conference, Hiland was joined by Duane “DAK” Kees, United States Attorney for the Western District of Arkansas, Mona Hernandez of the United States Postal Inspection Service, and representatives from multiple local police departments to announce “Operation Porch Pirate.” The initiative brings together local police departments and the federal government to provide greater accountability—and deterrence—for would-be mail thieves.
“We know that mail thieves do not take off for the holidays,” Hiland said. “In fact, this is their busiest time of the year. We want to work closely with our local partners to bring these thieves to justice. This is a crime having a significant impact on our local communities and it is a painful one to hard-working families. By marshaling the resources of law enforcement agencies on multiple levels, we want to hit back at those stealing Christmas packages.”
Also on Monday, Hiland announced the unsealing of the first complaint from Operation Porch Pirate, which involves charges against Michael Crutchfield, 57, of North Little Rock. According to the federal complaint, on November 30, 2018, an individual returned home to find Crutchfield parked in driveway of the residence. This homeowner saw Crutchfield throw several packages over a fence into a neighboring yard. Little Rock Police Department detectives later confirmed these packages were stolen from another residence. Two of the packages were delivered by the U.S. Postal Service, bringing the case within the jurisdiction of the federal government.
Crutchfield was initially arrested at the scene on state charges. The federal complaint charges Crutchfield with a violation of Title 18, United States Code, Section 1708, Theft or Receipt of Stolen Mail Matter, a felony. Upon arrest for this charge, Crutchfield will be arraigned by a United States Magistrate Judge and faces a maximum penalty of five years in prison and a fine of up to $250,000. Acting Little Rock Police Chief Alice Fulk said that many mail theft cases, including the case against Crutchfield, could end up as misdemeanor charges if only prosecuted in the state system.
“We appreciate being able to partner with the U.S. Attorney’s Office in prosecuting stolen mail and package cases,” Chief Fulk said. “This crime effects the quality of life for our residents. Anything we can do to strengthen the penalty for this is a positive. This initiative is very similar to the way we handle gun cases. It showcases the tremendous collaboration between the U.S. Attorney’s Office, the state Prosecutor’s Office and the Little Rock Police Department. We will take a case and pursue charges in the venue where an offender can get the most appropriate sentence.”
In addition to the federal complaint issued against Crutchfield, Hiland and Kees explained that their offices would be regularly reviewing mail theft cases submitted by local law enforcement agencies for possible federal prosecution. In addition to the Little Rock Police Department, also in attendance on Monday were officers from the Sherwood Police Department and Fort Smith Police Department, all of whom have made recent state arrests for charges related to mail theft.
Under the umbrella of Operation Porch Pirate, after a local agency makes a state arrest, the case file will be referred to the United States Postal Inspection Service, which will in turn send the case to the United States Attorneys’ Offices for review for federal prosecution.
“Our message to thieves this holiday season is simple: If it’s not yours, don’t take it,” U.S. Postal Inspector Hernandez said. “Today’s announcement should serve as a warning to would-be thieves that there are significant consequences for anyone who intends to steal mail. Protecting our employees, our customers, and the U.S. Mail is a top priority for the Postal Inspection Service, and we are committed to bringing mail thieves to justice.”
Hiland said that while Operation Porch Pirate is beginning during the holidays, as long as criminals keep trying to steal other people’s mail, his office will be ready and willing to prosecute, regardless the season.
“I am a firm believer that crime goes up when the cost to the criminal comes too cheap,” Hiland said. “The goal of Operation Porch Pirate is to make the decision to steal Christmas presents from the porches of people who pay the bills around here a very painful one. We know we can’t get them all, but we are going to evaluate each case our law enforcement partners present to us and work with our local prosecutors with a goal of holding these thieves accountable.”
A criminal complaint contains only allegations. A defendant is presumed innocent unless and until proven guilty.
# # #
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSDEA Special Agent Arrested on Bribery and Drug Conspiracy ChargesRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced today’s arrest of Nathan Koen, 42, of Conway, on federal bribery and drug conspiracy charges.
Koen, who had worked in the Drug Enforcement Administration’s Little Rock Field Office as a group supervisor since September 2016, was arrested on a federal complaint charging him with accepting bribes in connection with his duties, and for being part of a conspiracy to distribute controlled substances. Koen appeared before United States Magistrate Judge Beth Deere Tuesday afternoon and was detained following his initial appearance.
According to the federal complaint charging him, Koen accepted multiple cash payments from a known drug dealer from 2016 to 2018, in exchange for providing information which assisted the drug dealer’s criminal activities.
The bribery crime with which Koen is charged is punishable by up to 15 years’ imprisonment, while the drug distribution charge is punishable by up to life in prison. Assistant United States Attorneys Benecia Moore and Chris Givens are prosecuting the case, which is being investigated by the FBI.
A complaint contains only allegations. A defendant is presumed innocent unless and until proven guilty.
# # #
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
Twitter: @EDARNEWSWest Memphis Men Sent to Prison for More Than a Decade for Illegal Gun and Drug PossessionRead the Press Release
LITTLE ROCK—Two West Memphis men recently convicted of gun and drug crimes have each sentenced to more than a decade in federal prison. Cody Hiland, United States Attorney for the Eastern District of Arkansas, and William McCrary, Assistant Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), New Orleans Field Division, announced today that Jeremy Briscoe, 36, and Carlton Daniels, Jr., 42, both of West Memphis, have been sentenced to 151 and 180 months, respectively, after searches revealed guns and drugs in their homes.
A federal Grand Jury charged Briscoe with being a felon in possession of a firearm, using a firearm in furtherance of a drug trafficking crime, and drug trafficking charges. On August 20, 2018, Briscoe pleaded guilty to possession with intent to distribute cocaine, with an enhanced penalty for also illegally possessing a firearm. On Wednesday, United States District Court Judge Susan Webber Wright sentenced Briscoe to 151 months (12.5 years) in federal prison, to be followed by three years of supervised release. There is no parole in the federal system.
Similarly, Daniels was charged with being a felon in possession of a firearm, as well as other drug and gun charges. On June 21, 2018, Daniels pleaded guilty to being a felon in possession of a firearm, and because of his multiple prior felony convictions, faced a mandatory 15 years in prison. United States District Court Chief Judge Brian S. Miller sentenced Daniels to 180 months, to be followed by three years of supervised release, on October 15, 2018.
"Drug crimes and convicted criminals who illegally possess guns are a plague on all communities, but especially in tight knit communities like West Memphis," Hiland said. "These significant sentences should continue to send the message that we will seek to punish to the fullest extent of the law convicted criminals who illegally possess guns and drugs. And, in communities like West Memphis, we will continue to work with our local law enforcement partners in our efforts to hold these criminals accountable."
As stated during Briscoe’s change of plea hearing, on May 2, 2016, the West Memphis Police Department executed a search warrant at Briscoe’s residence after previously buying crack cocaine at the house. Inside the home officers found a loaded shotgun, two sets of digital scales with powdery residue on them, and crack cocaine.
Daniels’s case also began as a West Memphis Police Department investigation. On September 21, 2016, officers conducted a search of Daniels’s residence after a report that Daniels had threatened someone with a firearm. During the search, officers found a Smith and Wesson .40-caliber handgun and a Ruger 9mm handgun, as well as cocaine.
"These convictions and sentences are an example of the ATF’s commitment to working with our law enforcement partners in identifying and apprehending the violent criminals that prey upon the vulnerable and who threaten the safety of our communities," ASAC McCrary said. "The ATF and our partners will continue to aggressively investigate and prosecute those who victimize our neighbors, and undermine the safety and security of our neighborhoods."
These cases are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Former Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The investigations were conducted by the West Memphis Police Department and the ATF. The cases were prosecuted by Assistant United States Attorneys Stacy Williams and Michael Gordon.
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
Twitter:
@EDARNEWS
Little Rock Man Arrested on Child Pornography Charges Following Online InvestigationRead the Press Release
LITTLE ROCK—A federal investigation into certain online child exploitation chatrooms has resulted in the arrest of Harold "HL" Moody, Jr. Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Jere T. Miles, Special Agent in Charge of the Homeland Security Investigations (HSI) New Orleans Field Division, announced today the unsealing of a criminal complaint charging Moody, 39, of Little Rock, with distribution and possession of child pornography. Moody worked as the special events coordinator for Pulaski County Youth Services.
Moody was arrested Monday evening and appeared before United States Magistrate Judge Joe J. Volpe on Tuesday morning, at which time he was remanded to federal custody. A trial date will be set at a later time. Law enforcement officers also executed a search warrant at Moody’s residence on Monday.
HSI was conducting an undercover investigation into child exploitation chatrooms when agents discovered an individual later identified as Moody distributing child pornography. The undercover agents involved in the investigation observed Moody in these chatrooms on at least five occasions.
According to the complaint affidavit, on August 29, 2018, Moody was present in a chatroom when child pornography was being displayed. Agents observed Moody in the chatroom, via his webcam. Moody’s face was clearly visible and the undercover agent observed what appeared to be an office setting in the background.
That same day, undercover agents again observed Moody in a chatroom where child pornography was being displayed. Moody appeared to be in the same office.
On September 7, 2018, Moody was again visible on camera and observed in the chatroom actually distributing child pornography. Among the images that Moody distributed was a video that depicted a nude, adult, male performing oral sex on two nude, pre-pubescent males. According to the complaint, Moody then follows the video with the following chat message sent to all participants of the chatroom: "not the version i thought." Another user requests, via chat message, that Moody play more videos. Moody responds via chat message, "I’ve heard of White privilege but never Perv privilege – i am not the Juke Box at Waffle House...I do not play on demand..."
On September 9, 2018, and October 12, 2018, Moody was again in the chatroom distributing child pornography.
Distribution of child pornography carries a penalty of not less than 5 years and not more than 20 years imprisonment, not less than 5 years to life of supervised release, and a fine of up to $250,000. Possession of child pornography carries a penalty of not more than 10 years imprisonment, not less than 5 years to life of supervised release, and a fine of up to $250,000.
This investigation was conducted by Homeland Security Investigations. It is being prosecuted by Assistant United States Attorneys Kristin Bryant and Allison Bragg.
A complaint or indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
Twitter:
@EDARNEWS
IRS Impersonator Scam Leader Sentenced to 135 Months in Prison After Stealing Millions of Dollars; Co-Conspirators Also ImprisonedRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, Gary Smith, Special-Agent-in-Charge, Southern Field Division, Treasury Inspector General for Tax Administration (TIGTA), and Robert G. Feldt, Special-Agent-in-Charge, Social Security Administration (SSA), Dallas Field Division, announced today the sentencing of five defendants involved in an IRS impersonation scheme that netted millions of dollars from unsuspecting victims.
On Thursday, United States District Judge Billy Roy Wilson sentenced Yosvany Padilla, 27, of Hialeah, Fla., the leader of the conspiracy, to 135 months’ imprisonment, followed by two years of supervised release, and ordered the repayment of nearly $9 million in restitution. Padilla, in addition to personally collecting threat-induced wire transfers sent by victims believing they were paying owed taxes, supplied co-conspirators with false identification documents and coordinated the collection of wire transfers by other members of the conspiracy.
Also on Thursday, Judge Wilson sentenced Jeniffer Valerino Nuñez, 22, and Esequiel Bravo Diaz, 24, both from Miami, to federal prison. Nuñez, who collected more than $1.3 million in wire transfers from more than 1,050 victims, was sentenced to 47 months’ imprisonment, followed by three years of supervised release, and repayment of nearly $2.5 million in restitution. Diaz, who collected approximately $115,000 from 350 victims, was sentenced to 47 months’ imprisonment, followed by two years’ supervised release, and repayment of nearly $115,000 in restitution.
“These criminals stole millions of dollars from thousands of innocent people, using fear, threats, and intimidation to carry out this scam,” Hiland said. “This criminal behavior is unconscionable and will not be tolerated. The prison sentences handed down today represent some measure of accountability for IRS imposters who violated the most vulnerable among us, including honest citizens here in Arkansas. Our office will continue to remain vigilant in working with our law enforcement partners to root out these schemes, and punish those responsible to the fullest extent of the law.”
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. Investigators have identified 6,282 nationwide victims for a total loss currently calculated at $10,735,762.61. Multiple fraudulent wire transfers were collected in Arkansas, as well as in at least 28 other states.
“Over the last several years, American taxpayers have been subjected to unprecedented attempts to fraudulently obtain money by individuals impersonating Internal Revenue Service employees,” TIGTA SAC Smith said. “Victimizing taxpayers by impersonating IRS 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. Today’s significant sentencings should serve notice to those who engage in this type of criminal activity that they will be held accountable.”
Another of the scheme’s co-conspirators, Dennis Delgado Caballero, 40, of Miami, collected more than $1.1 million in wire transfers from 950 different victims and recruited others into the scheme. On September 27, 2018, Judge Wilson sentenced Caballero to 72 months’ imprisonment, followed by three years of supervised release, and repayment of approximately $2.5 million in restitution.
Angel Carrillo, 43, of Hialeah, Fla., collected more than $1.3 million in wire transfers from more than 750 people. On Tuesday, Judge Wilson sentenced Carrillo to 72 months’ imprisonment, followed by three years of supervised release, and repayment of the $1.3 million as restitution.
“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,” SSA SAC Feldt said.
Three other defendants (Elio Carballo Cruz, Alejandro Valdes, and Alfredo Echevarria Rios) have pleaded guilty to the scheme and await sentencing, while one (Ricardo Fontanella Caballero) is set for trial on December 11, 2018.
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.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line at:http://www.justice.gov/edar
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@EDARNEWSFour Plead Guilty in Multi-Million Dollar TRICARE SchemeRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the FBI, and Artie DeLaneuville, Acting Special Agent in Charge of the Dallas Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG), announced today the guilty pleas of Brad Duke, 43, of Little Rock, Charlotte Leija, 38, of Conway, Michael "Chance" Beeman, 48, of Maumelle, and Michael Sean Brady, 50, of Little Rock, to conspiring to violate the Anti-Kickback Statute. Duke pleaded guilty on October 3, while Leija, Beeman, and Brady all pleaded guilty on Wednesday before Chief United States District Judge Brian S. Miller, who will sentence the group at a later date.
As has been widely reported, TRICARE (our military’s health insurer) paid nearly $2 billion for compound prescription drugs in 2015—an eighteen-fold increase over previous years—prompting investigations around the country.
Duke, who worked as a medical sales representative in Little Rock, promoted prescription pain cream, scar cream, and supplements for a Mississippi-based compounding pharmacy, earning a share of whatever the pharmacy was paid on prescriptions issued by affiliated doctors. After learning TRICARE would pay tens of thousands of dollars per month per patient for compounded drugs, Duke focused upon generating prescriptions for those with TRICARE insurance.
Duke paid patient recruiters, including Beeman and Brady, to find TRICARE beneficiaries to receive prescriptions, telling them a doctor would sign the prescriptions without consulting patients. Patient recruiters forwarded beneficiary insurance information to Duke, which he then routed to local medical assistant Charlotte Leija, whom Duke paid to file the prescriptions under the name of the doctor for whom she worked.
In less than one year, the scheme generated over $10 million in compound prescriptions for over 100 TRICARE beneficiaries hailing from as far west as Chula Vista, Calif., to as far east as Foxborough, Mass. Duke paid patient recruiters more than $2 million to find the beneficiaries and over $250,000 to Leija to issue the prescriptions.
“Duke’s scheme resulted in millions of dollars of fraud and waste to our taxpaying citizens,” U.S. Attorney Hiland said. “This office is determined to root out the criminal fraud in our nation’s health care programs.”
Under the terms of their plea agreements, Duke, Leija, Beeman, and Brady each face up to five years in federal prison and together will forfeit nearly $1.9 million in illicit proceeds. More charges involving additional defendants are expected.
“These pleas are a reflection of Duke’s greed to promote prescriptions for compounded drugs in a kickback scheme for his own profit,” stated SAC Upchurch. “The United States Attorney’s Office, HHS-OIG, and the FBI will aggressively pursue providers who violate the law for personal gain.”
“Any time fraudulent claims are submitted for payment, the nation’s health insurance programs suffer,” said Acting SAC DeLaneuville. “Along with our law enforcement partners, this office will continue the important mission of protecting the financial integrity of our nation’s health care systems, and bringing to justice those individuals who deliberately manipulate those systems to obtain federal dollars to which they are not entitled, especially funds designated for providing vital health care services to our military veterans.”
If you or someone you know was approached about getting compounded prescription drugs, please contact [email protected].
The crime of conspiring to violate the Anti-Kickback Statute, 42 U.S.C. § 1320a- 7b(b), is punishable by up to five years in prison, a fine of not more than $250,000, and up to three years of supervised release. This case was investigated by the FBI and HHS- OIG, and prosecuted by Assistant United States Attorney Alexander D. Morgan.
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
Twitter: @EDARNEWS
Twenty White County Defendants Charged with Wire Fraud for Unemployment Benefits SchemeRead the Press Release
LITTLE ROCK— Twenty defendants from White County have been charged in a conspiracy to commit wire fraud by allegedly obtaining unemployment insurance benefits to which they were not entitled in Arkansas and 15 other states.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Steven Grell, Special Agent-in-Charge, Dallas Region, U.S. Department of Labor Office of Inspector General, announced today the unsealing of an indictment returned by a federal grand jury charging the 20 defendants, including Mark King, aka “Big Head,” the alleged ringleader of the conspiracy. On Wednesday, King, 53, of Judsonia, and two other defendants (Alan Gentry and Benjamin Bradley) were arrested. Also, Natalie Floyd was already in federal prison, and Mark Scheffler was in the Arkansas Department of Corrections, both on unrelated charges.
Those arrested today will be seen Thursday by United States Magistrate Judge Beth Deere for plea and arraignment. The remaining defendants will be served with a summons to appear in federal court at a later date.
“Our office is committed to protecting the integrity of important federal programs,” U.S. Attorney Hiland said. “We will continue to work with the Office of Inspector General to investigate and prosecute anyone attempting to take advantage of these programs, which ultimately hurts taxpayers and those who truly need assistance.”
The charge stems from an investigation by the United States Department of Labor, in collaboration with the United States Attorney’s Office for the Eastern District of Arkansas, that began in the spring of 2016. Local law enforcement in the White County area also assisted in the effort.
The indictment alleges that the wire fraud conspiracy took place from June 2012 through August 2017. According to the indictment, King created employer business accounts in 16 states, including Arkansas, using fictitious business names. These fictitious businesses all had addresses in Arkansas. King then falsely reported to the various state unemployment agencies in these 16 states that the fictitious companies had paid wages to him and the other indicted and unindicted co-conspirators for work performed, when, in fact, that was not true. In turn, King and the other co-conspirators and unindicted co-conspirators then made claims for unemployment benefits and, because King did not contest the unemployment benefits on behalf of the fictitious businesses, these conspirators were paid by the Department of Labor.
“An important mission of the Office of Inspector General is to investigate allegations of fraud related to the U.S. Department of Labor’s Unemployment Insurance programs,” Special Agent-in-Charge Grell said. “We will continue to work with our law enforcement partners to safeguard benefits intended for unemployed American workers,”
The indictment alleges that some of the co-conspirators claimed unemployment benefits while incarcerated, contrary to the eligibility requirement that a claimant must be available for work and actively seeking employment. The conspiracy resulted in a monetary loss exceeding $500,000.
The maximum statutory penalty for the charge is up to 20 years’ imprisonment, a fine of not more than $250,000, and supervised release of not more than three years.
The case is being investigated by the Department of Labor, Office of Inspector General, with assistance from the White County Sheriff’s Office, the Judsonia Police Department, the Searcy Police Department, and the Bald Knob Police Department. It is being prosecuted by Assistant United States Attorney Angela Jegley.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
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@EDARNEWSConway Man Indicted After Firing Multiple Shots in Local Post OfficeRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Thomas L. Noyes, Inspector in Charge, Fort Worth Division, U.S. Postal Inspection Service, announced today the indictment of Stephen Gregory Potts, 46, of Conway, after he allegedly fired multiple shots in a Conway post office.
A federal complaint charging Potts was first issued on Monday. A federal grand jury then returned an indictment against Potts on Tuesday for one count of assaulting a United States Postal Service employee, one count of using a firearm during and in relation to a crime of violence, and one count of possessing a firearm in a federal facility. Potts is currently in custody and will be seen by a United States Magistrate Judge at a later date.
According the allegations in the complaint affidavit, on September 29, 2018, Potts, armed with a handgun, entered the Conway Main Post Office around 12 p.m. when there were four employees on duty. According to witnesses at the scene, Potts initially appeared to be filling out a mailing label. Potts then tried to follow two employees through a workroom door, past the counter. When told he could not go through the door, Potts pulled out a gun and climbed over the counter. At that point, a supervisor stepped between Potts and the two employees, who left to call 9-1-1 and then hid in a bathroom.
Potts then fired the first shot and attempted to light some mail on fire. According to the complaint affidavit, Potts eventually fired five or six shots, striking no one, but missing the supervisor’s shoulder by six inches. When Potts walked behind some equipment, the supervisor ran out of the building. Eventually Conway Police officers arrived and took Potts into custody, where he remains.
The maximum penalty for assaulting a United States Postal Employee, a violation of 18 U.S.C. § 111(a)(1), is not more than 20 years in prison, not more than three years of supervised release, and a $250,000 fine. The maximum penalty for discharging a firearm during and in relation to a crime of violence, a violation of 18 U.S.C. § 924(c), is not less than 10 years in prison, consecutive to the underlying charge, not more than five years supervised release, and a $250,000 fine. The maximum penalty for possession of a firearm in a federal facility, a violation of 18 U.S.C. § 930(b), is not more than five years in prison, not more than three years of supervised release, and a $250,000 fine.
This case was investigated by U.S. Postal Inspection Service and the Conway Police Department. The case is being prosecuted by Assistant United States Attorney Jordan Crews. An indictment or complaint contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
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@EDARNEWSMultistate Drug Organization Dismantled; 31 Defendants Face Federal Drug and Firearms ChargesRead the Press Release
LITTLE ROCK—In arrest operations that stretched across the country for the past week, law enforcement officers have arrested multiple defendants in an effort to disrupt a transnational drug-trafficking organization responsible for distributing hundreds of pounds of methamphetamine in central Arkansas.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Justin C. King, Assistant Special Agent in Charge of the Drug Enforcement Agency (DEA) Little Rock Field Office, announced the arrests and the unsealing of a federal indictment charging 31 defendants with 53 counts that include federal drug, firearm, and money laundering offenses. This afternoon, two defendants in California were arraigned on money laundering charges, bringing the total number of people arrested thus far to 23. In operations that began last Thursday, the DEA and its law enforcement partners have arrested four people in California and 19 in central Arkansas. Of the 19 local defendants served with arrest warrants, four were already in state custody and two in federal custody. Eight defendants remain fugitives, four in Arkansas and four in California.
This drug-trafficking organization is alleged to be led by Eric Baldwin, 29, and Nicholas Robinson, Jr., 23, both of Little Rock. The indictment named 23 defendants from the central Arkansas area—where the drugs were distributed—and eight defendants from southern California, which is alleged to be the source of the drugs.
“This criminal organization stretched from Arkansas to California, and was responsible for distributing large quantities of illegal drugs here in our neighborhoods, ”U.S. Attorney Hiland said. “This indictment demonstrates that our federal reach does not stop at the Arkansas border. If you sell illegal drugs in Arkansas, we will prosecute you. If you send illegal drugs to Arkansas, we will prosecute you. Our goal continues to be to ensure criminals pay a consistent, painful cost for hurting our people and poisoning our communities.”
This ongoing investigation was the result of several law enforcement agencies, led by the DEA, attacking the drug-trafficking organization on multiple fronts. During the course of the investigation in 2017 and 2018, the DEA utilized three court-authorized wiretaps to intercept hundreds of drug-trafficking calls. Law enforcement officers, including DEA agents and local police departments, conducted more than a dozen controlled purchases of drugs, resulting in seizures of more than 1.5 kilograms of methamphetamine, as well as oxydocone and ecstasy pills.
In addition, the DEA worked closely with the U.S. Postal Inspection Service once agents discovered the organization’s primary method for getting drugs into Arkansas— the U.S. mail. Agents intercepted more than 15 packages, which contained 13 kilograms of methamphetamine and four kilograms of marijuana. Additional operations, including the execution of search warrants and state arrests, led to the seizure of another 7.5 kilograms of methamphetamine, 8 kilograms of marijuana, 7 firearms, and more than $25,000 in drug proceeds.
The DEA also conducted an extensive financial investigation which revealed what is alleged to be the organization’s method of payment for the drugs—Wal-Mart to Wal- Mart wire transfers from Arkansas to California. During the investigation, it is alleged that individuals associated with this organization sent more than $250,000 to California for the purchase of controlled substances.
“The wreckage caused by drugs affects everyone,” DEA ASAC King said. “No matter the amounts of drugs they sell, drug dealers breed crime in our neighborhoods and are a danger to our children. The arrests in this multi-jurisdictional investigation demonstrate to the citizens of central Arkansas and across the nation that federal, state, and local law enforcement can come together and accomplish great things. It should also serve as a warning to drug dealers here and beyond—regardless of your innovative tactics, we will arrest you and prosecute you to the fullest extent of the law.”
The investigation was conducted by the DEA, in conjunction with the United States Postal Inspection Service, and with assistance from multiple agencies, including: Bureau of Alcohol, Tobacco, Firearms & Explosives, Arkansas State Police, Little Rock Police Department, Pulaski County Sheriff’s Office, Benton Police Department, Saline County Sheriff’s Office, Conway Police Department, Faulkner County Sheriff’s Office, First Judicial District Drug Task Force, Central Drug Task Force, Arkansas Department of Community Corrections, and the Arkansas National Guard Counter Drug Task Force. The agencies assisting on arrest operations include: the FBI, U.S. Marshal Service, Office of Inspector General-Social Security Administration, North Little Rock Police Department, Jacksonville Police Department, and the Office of the Arkansas Attorney General.
The charges in today’s unsealed indictment include conspiracy to distribute methamphetamine, marijuana, and oxycodone; distribution and possession with intent to distribute methamphetamine, marijuana, and oxycodone; possession of a firearm in furtherance of a drug trafficking crime; felon in possession of a firearm; use of a phone to facilitate a drug-trafficking crime; and conspiracy to commit money laundering offenses.
The maximum penalty for the drug charges is not less than 10 years in prison and up to life imprisonment, and a $10,000,000 fine. The maximum penalty for possessing a firearm in furtherance of a drug-trafficking crime is not less than five years in prison and up to life imprisonment, and a $250,000 fine. The maximum penalty for being a felon in possession of a firearm is 10 years in prison, and a $250,000 fine. The maximum penalty for using a phone to facilitate a drug-trafficking crime is not more than four years in prison, and a $250,000 fine. The maximum penalty for money laundering is not more than 20 years in prison, and a $500,000 fine.
Trial is set for October 22, 2018, before Chief District Judge Brian S. Miller. The case, docketed as Case No. 4:18-cr-00466 BSM, is being prosecuted by Assistant U.S. Attorney Chris Givens. The defendants charged include:
Khambria Allen, 22, Little Rock, AR %
Eric Baldwin, 29, Little Rock, AR $
John Bowman, 34, Bryant, AR
John Christopher Burch, 46, Conway, AR *
Justin Collins, 29, Augusta, AR
Kamie Collins, 31, Augusta, AR
Jason Flowers, 36, Little Rock, AR %
Windell Fountain, 50, Victorville, CA %
Jennifer Gosnell, 27, Conway, AR
Blake Gray, 36, Judsonia, AR
Deketric Harper, 23, Judsonia, AR %
Roderick Isom, 35, Little Rock, AR
Aundre Lamar Jones, 31, Los Angeles, CA ^
Patricia Janae Kennon, 30, Los Angeles, CA %
Chad Lane, 23, Mabelvale, AR *
Robert McIntosh, III, 35, Little Rock, AR
Lewis Miles, 47, Blytheville, AR $
Aaron Lynn Parks, 35, Conway, AR *
Deaundry Peoples, 27, Little Rock, AR *
Ryan Rielly, 28, Benton, AR
Joseph Riggins, Jr., 27, Little Rock, AR
Nicholas D. Robinson, Jr., 23, Little Rock, AR %
Nicholas D. Robinson, Sr., 46, Little Rock, AR
Christopher Sanders, 39, Burbank, CA ^
Francis Andre Scott, 35, Los Angeles, CA %
Lemar Devon Steward, 23, Benton, AR
Autumn Talley, 30, Paramount, CA ^
April Treat, 30, Greenbrier, AR
Lorene Wilhite, 51, Los Angeles, CA^
Ortez Williams, 25, Benton, AR
George Perry Wright, 35, North Hollywood, CA %
$ already in federal custody
* already in state custody
^ arrested in California
% fugitive
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar Twitter:
@EDARNEWS
Russellville Man Sentenced to 22 Years in Prison for Production of Child PornographyRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, along with Raymond R. Parmer, Jr., Special Agent in Charge of the Homeland Security Investigations (HSI) New Orleans Field Division, announced today that Carson Arcia, 33, of Russellville, was sentenced to 22 years in federal prison for production of child pornography.
United States District Court Judge D. Price Marshall, Jr., sentenced Arcia on Wednesday following an investigation that revealed Arcia had produced child pornography of an infant girl. Judge Marshall also ordered that Arcia remain on supervised release for the rest of his life.
The investigation began on May 11, 2015, when HSI agents discovered images of child pornography being shared on the internet through a photo-sharing website. Agents were able to trace those images to Arcia and obtained a search warrant for his home.
On July 23, 2015, agents conducted a search of Arcia’s home. Arcia admitted to using the internet to download child pornography, and he told agents he was in possession of over one thousand images and videos of child pornography. Agents collected three laptop computers, four hard drives, and a number of other electronic devices. Forensic examination of those devices revealed more than 1800 still photos and more than 600 videos of child pornography.
Among those videos, agents discovered that some of them had been created by Arcia himself. The videos show a progression of deviant sexual behavior. Initially, Arcia went to stores, laundromats, and other locations, where he would sneak up behind women and film up their skirts. He later began masturbating at these locations, and filmed his actions.
More recent videos on his computer included Arcia approaching children in public locations. Arcia would stand near children while the children were in shopping carts or standing with their parents. He would put his penis in front of the children’s faces and film their reaction.
Several videos depicted two young girls, approximately two to three years old. Arcia videoed himself holding candy in his hand to entice a little girl, and then putting his penis in his hand next to the candy. The image that Arcia pleaded guilty to producing was a video of himself with a female baby, described as an infant, on a changing table. Arcia pushed the baby’s diaper to the side, focused his camera on the area exposed, and masturbated next to the baby, touching her leg with his penis.
Arcia was indicted on August 1, 2017, in a three-count indictment charging him with production of child pornography, receipt and distribution of child pornography, and possession of child pornography. On April 30, 2018, Arcia pleaded guilty to production of child pornography.
There is no parole in the federal system. When Arcia is released upon completion of his 22-year sentence, he will remain on supervised release for the rest of his life. Conditions of his supervised release include registering as a sex offender and having no contact with minors.
The case was investigated by HSI and prosecuted by Assistant United States Attorney Allison Bragg.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line athttp://www.justice.gov/edar
Twitter:
@EDARNEWSArkansas State Senator Jeremy Hutchinson Indicted on Wire and Tax Fraud ChargesRead the Press Release
LITTLE ROCK—A federal grand jury indicted current Arkansas State Senator Jeremy Hutchinson for allegedly devising a scheme to steal thousands of dollars in campaign contributions—spending them on personal luxuries and expenses—and then falsifying state campaign finance reports and tax filings as part of the scheme.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Cody Hiland for the Eastern District of Arkansas, Special Agent in Charge Diane Upchurch of the FBI Little Rock Field Office, and Special Agent in Charge Tamera Cantu of IRS Criminal Investigation (IRS–CI) Dallas Field Office, made the announcement after the indictment was unsealed today.
Hutchinson, 44, of Little Rock, has been a State Senator since 2011 and first became involved in elected politics as a State Representative in 2000. The 12-count indictment charges Hutchinson with eight counts of wire fraud and four counts of filing false tax returns. Hutchinson is scheduled to appear before U.S. Magistrate Judge Patricia S. Harris on September 18 at 10 a.m.
"Jeremy Hutchinson allegedly diverted contributions from his Arkansas State Senate campaigns to pay for an array of personal expenses," said Assistant Attorney General Benczkowski. "The charges in this case demonstrate the commitment of the Department and our law enforcement partners to investigate and prosecute those involved in alleged campaign-related misconduct."
"This indictment by the grand jury represents serious charges, and we look forward to preparing our case and presenting it to a jury of 12 people who we trust to do justice in this matter," said U.S. Attorney Hiland.
"The indictment of Jeremy Hutchinson represents our commitment to vigorously investigate allegations of public corruption by elected officials," said FBI Special Agent in Charge Upchurch. "We appreciate the efforts of the U.S. Attorney’s Offices for the Eastern and Western Districts of Arkansas, IRS-CI, FBI, and the Criminal Division of the Department of Justice’s Public Integrity Section."
"The grand jury’s indictment of Mr. Hutchinson demonstrates the collective resolve of IRS-CI to enforce our nation’s tax laws," said IRS-CI Special Agent in Charge Cantu.
Counts one through eight of the indictment charge Hutchinson with wire fraud related to falsified state campaign finance reports and soliciting campaign donors with fraudulent intent. Counts nine through 12 charge Hutchinson with tax fraud for allegedly filing false tax returns from 2011 to 2014.
The maximum penalties for violation of 18 U.S.C. § 1343 (wire fraud), as charged in counts one through eight is not more than 20 years’ imprisonment, a fine of not more than $250,000, and not more than three years of supervised release. A violation of 26 U.S.C. § 7206(1) (filing false tax return), as charged in counts nine through 12, carries a maximum penalty of three years’ imprisonment, a fine of not more than $100,000, together with the costs of prosecution, and not more than one year of supervised release.
The investigation into Hutchinson was conducted by the FBI and IRS-CI. The case is being prosecuted by Assistant United States Attorneys Stephanie Mazzanti and Patrick Harris from the Eastern District of Arkansas, Assistant United States Attorney Ben Wulff from the Western District of Arkansas, and Trial Attorney Marco Palmieri of the Criminal Division of the Department of Justice’s Public Integrity Section.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
Twitter:
@EDARNEWS
Arkansas State Senator Jeremy Hutchinson Indicted on Wire and Tax Fraud ChargesRead the Press Release
A federal grand jury in Little Rock, Arkansas indicted current Arkansas State Senator Jeremy Hutchinson yesterday for allegedly devising a scheme to steal thousands of dollars in campaign contributions—spending them on personal luxuries and expenses—and then falsifying state campaign finance reports and tax filings as part of the scheme.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Cody Hiland for the Eastern District of Arkansas, Special Agent in Charge Diane Upchurch of the FBI Little Rock Field Office, and Special Agent in Charge Tamera Cantu of IRS Criminal Investigation (IRS–CI) Dallas Field Office, made the announcement.
Hutchinson, 44, of Little Rock, has been a State Senator since 2011 and first became involved in elected politics as a State Representative in 2000. The 12-count indictment charges Hutchinson with eight counts of wire fraud and four counts of filing false tax returns. Hutchinson will appear before U.S. Magistrate Judge Patricia S. Harris on Sept. 18.
“Jeremy Hutchinson allegedly diverted contributions from his Arkansas State Senate campaigns to pay for an array of personal expenses,” said Assistant Attorney General Benczkowski. “The charges in this case demonstrate the commitment of the Department and our law enforcement partners to investigate and prosecute those involved in alleged campaign-related misconduct.”
“This indictment by the grand jury represents serious charges, and we look forward to preparing our case and presenting it to a jury of 12 people who we trust to do justice in this matter,” said U.S. Attorney Hiland.
“The indictment of Jeremy Hutchinson represents our commitment to vigorously investigate allegations of public corruption by elected officials,” said FBI Special Agent in Charge Upchurch. “We appreciate the efforts of the U.S. Attorney’s Offices for the Eastern and Western Districts of Arkansas, IRS-CI, FBI, and the Criminal Division of the Department of Justice’s Public Integrity Section.”
“The grand jury’s indictment of Mr. Hutchinson demonstrates the collective resolve of IRS-CI to enforce our nation’s tax laws,” said IRS-CI Special Agent in Charge Cantu.
Counts one through eight of the indictment charge Hutchinson with wire fraud related to falsified state campaign finance reports and soliciting campaign donors with fraudulent intent. Counts nine through 12 charge Hutchinson with tax fraud for allegedly filing false tax returns from 2011 to 2014.
The investigation was conducted by the FBI and IRS-CI. The case is being prosecuted by Trial Attorney Marco Palmieri of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Stephanie Mazzanti and Patrick Harris from the Eastern District of Arkansas and Ben Wulff from the Western District of Arkansas.
An indictment contains only allegations. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Central Arkansas Drug Organization Dismantled; Eleven Defendants Face Federal Drug and Firearms ChargesRead the Press Release
LITTLE ROCK—A collaboration of federal, state, and local law enforcement officers arrested multiple defendants Thursday in an early-morning operation that dismantled a significant drug-trafficking organization responsible for distributing kilograms of cocaine and other controlled substances in central Arkansas.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Scott Reinhardt, Assistant Special Agent in Charge of the Little Rock Field Office of the FBI, announced the arrests and the unsealing of a federal indictment charging 11 defendants with federal drug and firearms offenses in the central Arkansas area. Seven defendants were arrested Thursday morning, while one defendant was already in federal custody. Larry Clark, 36, of Little Rock, Jalisha Johnson, 28, of North Little Rock, and Bridgette Williams, 43, of North Little Rock, remain fugitives.
During the course of the investigation in 2018, law enforcement utilized four court-authorized wiretaps, intercepting hundreds of drug-trafficking calls. Law enforcement agents conducted controlled buys totaling more than a kilogram of cocaine, and during search warrants executed in June 2018 seized approximately 7 kilograms of cocaine, 3.5 kilograms of marijuana, 13 firearms—including two SKS semi-automatic rifles and a Kel-Tec CNC PLR-16 semi-automatic pistol—and approximately $9,540 in cash. Previously, in February 2014, the Arkansas State Police stopped a vehicle on Interstate 40 in Pope County and seized approximately $328,000 in cash from a courier for the drug trafficking organization.
During Thursday morning’s arrest operation agents seized another 13 ounces of cocaine.
“Today’s operation took down a significant drug trafficking organization which has been operating for years in central Arkansas,” Hiland said. “These are dangerous, repeat offenders who should not be walking our streets and spreading poison in our community. I am a firm believer in the notion that crime flourishes when there is little cost to the criminal for his destructive behavior. My goal is to ensure criminals pay a consistent, painful cost for continuing to hurt our people. Today’s joint federal, state and local operation allowed us to make significant progress in our effort to accomplish that goal.”
The arrests resulted from a FBI GET Rock task force investigation. GET Rock was formed at the request of Arkansas Governor Asa Hutchinson in response to the escalation in gang and gun violence in Little Rock. Nine central Arkansas law enforcement agencies—the U.S. Attorney’s office, FBI, Drug Enforcement Administration (DEA), Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), U.S. Marshal’s Service, Little Rock Police Department (LRPD), Pulaski County Sherriff’s Office (PCSO), Arkansas State Police (ASP), and Arkansas Community Corrections—comprise GET Rock, which is coordinated out of the FBI Little Rock field office and continues to serve as the clearinghouse for all gang-related law enforcement actions in Little Rock.
“The operation today dismantled a group of criminals who destroy and tear at the fabric of our neighborhoods and cities,” stated FBI Assistant Special Agent in Charge Reinhardt. “Thank you to the Little Rock Police Department, North Little Rock Police Department, Arkansas State Police, Pulaski County Sheriff’s Office, Arkansas Department of Community Corrections, Arkansas Air National Guard, and the United States Attorney’s Office for the Eastern District of Arkansas.”
The defendants include two individuals with prior federal convictions for drug trafficking and one with a prior federal conviction for being a felon in possession of a firearm. Four of the 11 are currently on state parole or federal supervised release. Multiple defendants have previously been convicted of state felonies, including murder. One defendant previously convicted of state drug trafficking offenses had a 40-year sentence commuted in 2003.
Based on the investigation, it is alleged that between April 2017 and June 2018, the defendants distributed cocaine, crack cocaine, and marijuana in Little Rock, North Little Rock, Wrightsville, Woodson, and Hensley. The investigation is ongoing.
The defendants arrested today will appear before U.S. Magistrate Judge Jerome T. Kearney on August 10, 2018, at 2:00 p.m. for plea and arraignment.
The charges in today’s unsealed indictments include conspiracy to distribute and possess with intent to distribute cocaine, crack cocaine, and marijuana; distribution and firearm in furtherance of a drug trafficking crime; and felon in possession of a firearm.
The maximum penalty for the drug charges is not less than 10 years in prison and up to life imprisonment, and a $10,000,000 fine. The maximum penalty for possessing a firearm in furtherance of a drug-trafficking crime is not less than five years in prison and up to life imprisonment, and a $250,000 fine. The maximum penalty for being a felon in possession of a firearm is 10 years’ imprisonment and a $250,000 fine.
The case, docketed as Case No. 4:18CR00357 JM, is pending before U.S. District Judge James M. Moody Jr.; the trial date will be announced at plea and arraignment.
The defendants charged include:JOHN GARNER, aka PETER MORRIS, aka UNC, age 50, of Hensley
JAMES RICHARDS, aka RICHIE RICH, age 49, of Wrightsville
CEDRIC BRADLEY, aka CED, age 44, of Little Rock
LARRY CLARK, age 36, of Little Rock
ANTWAN HARDAWAY, age 34, of Newport
JALISA JOHNSON, age 28, of North Little Rock
ISAAC MAY, age 39, of Sweet Home
LAQUENTIN NICHOLS, age 39, of Little Rock
CHRISTOPHER SEALS, aka POPEYE, age 43, of Little Rock
JASPER VICK, age 37, of Little Rock
BRIDGETTE WILLIAMS, age 43, of North Little RockThe investigation was conducted by the FBI with the assistance of the LRPD, NLRPD, ASP, PCSO, Arkansas Department of Community Corrections, and Arkansas Air National Guard. The case is being prosecuted by Assistant U.S. Attorney Julie Peters.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSGrenada Lake Medical Center to Pay More Than $1.1 Million to Resolve False Claims Act Allegations Involving Medically Unnecessary Psychotherapy ServicesRead the Press Release
The Justice Department announced today that Grenada Lakes Medical Center (GLMC), a publicly-owned hospital which at various times has been operated by the University of Mississippi Medical Center and by the Grenada Lake Medical Center Board of Trustees, has agreed to pay more than $1.1 million to resolve False Claims Act allegations that the hospital sought and received reimbursement from Medicare for services that were not medically reasonable or necessary.
The settlement resolves allegations that, beginning in January 2005 and continuing until April 2013, the hospital submitted claims for Intensive Outpatient Psychotherapy (IOP) services that did not qualify for Medicare reimbursement. The IOP services in question were performed on GLMC’s behalf by Allegiance Health Management (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, but billed to Medicare by GLMC directly.
“Hospitals that participate in the Medicare program are responsible for ensuring that the services performed at their facilities or on their behalf reflect the medical needs of patients rather than the desire to maximize profit,” said Acting Assistant Attorney General Chad A. Readler for the Civil Division. “The Department of Justice will continue to hold accountable those who misspend taxpayer funds by providing medically inappropriate services.”
Today’s settlement with GLMC follows a recent settlement with Allegiance, as well as previous settlements with more than twenty other hospitals where Allegiance provided IOP services.
“We will not tolerate hospitals that place profit over legitimate patient care by billing for medically unnecessary services,” said C.J. Porter, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General. “In coordination with our partners, we will continue to investigate these cases and ensure taxpayer funds are used as intended.”
The settlement with GLMC resolves certain allegations in a lawsuit filed in the Eastern District of Arkansas under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The lawsuit was filed by Ryan Ladner, who formerly worked for Allegiance as a Program Manager at the Inspirations Outpatient Counseling Center located at Wesley Medical Center in Hattiesburg, Mississippi. Mr. Ladner will receive approximately $195,000 as his share of the GLMC settlement.
This, and prior settlements in this matter, were the result of a coordinated effort by the Civil Division of the Department of Justice, the United States Attorney’s Office for the Eastern District of Arkansas, and the Department of Health and Human Services, Office of Audit Services and Office of Inspector General.
The claims settled by the current agreement are allegations only, and there has been no determination of liability. The lawsuit is captioned U.S. ex rel Ladner v. Allegiance Health Management, Inc., et al, No. 4:10-CV-170 (E.D. Ark.).
Chinese Nationals Charged with Conspiracy to Steal Rice TechnologyRead the Press Release
LITTLE ROCK—Two rice researchers from China have been charged in a conspiracy to steal rice production technology in an alleged attempt to bring this proprietary science back to China.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the FBI’s Little Rock Field Office, announced the indictment of Liu Xuejun, 49, and Sun Yue, 36, both of China, for conspiracy to steal trade secrets and conspiracy to commit interstate transportation of stolen property.
A federal grand jury returned an indictment against Liu and Sun on Friday for their involvement in the theft of rice seeds designed for use in the medical field. The rice seeds were developed by a company called Ventria Bioscience, which used technology to create rice seeds that contained certain proteins. These proteins could then be removed from the rice and used in medicines and pharmaceutical products. Ventria, which is headquartered in Colorado and has a rice production facility in Kansas, has invested approximately $75 million in developing the intellectual property behind these rice seeds.
"These rice seeds may be small, but the research and investment that went into the science that made them possible is of great value," Hiland said. "We remain vigilant in our efforts at protecting both intellectual and real property from theft by other nations, and it is our intention to present our case to an Arkansas jury based on the crimes alleged in the indictment."
Liu and Sun visited the United States in 2013. At that time, they both worked at the Crops Research Institute in Tianjin, China. Liu was a professor, and Sun was a research associate. They came to the United States to visit several rice research and production facilities, and their visit included a stop at the Dale Bumpers National Rice Research Center in Stuttgart.
Their trip was organized by Weiqiang Zhang, who was a rice breeder at Ventria in Kansas, and Wengui Yan, who worked at the Dale Bumpers Rice Research Center in Stuttgart. When Liu and Sun ended their trip, they flew to Honolulu, Hawaii, on their way back to China. At the Honolulu airport, U.S. Customs and Border Protection found stolen rice seeds in Liu and Sun’s luggage, including seeds from the Dale Bumpers National Rice Research Center as well as seeds from the Ventria rice production facility in Kansas.
"Today’s indictment of Liu and Sun should not go unnoticed by those who seek to steal our trade secrets and technology," FBI SAC Upchurch said. "This type of crime is consistent with China’s social and economic five-year plan to modernize their seed industry. We appreciate the efforts of the United States Attorney’s Office and together we will remain steadfast in protecting the United States’ intellectual property."
The two rice researchers who helped organize Liu and Sun’s trip to the United States were convicted of their involvement in the scheme in a connected case in the District of Kansas (see link to press release below). Zhang, 47, was convicted at trial and sentenced to 10 years’ imprisonment. Yan, 63, who worked in Stuttgart, pleaded guilty and was sentenced to one year in prison.
A violation of conspiracy to commit theft of trade secrets, under Title 18, United States Code, Section 1832, carries a maximum penalty of not more than 10 years’ imprisonment, not more than a $250,000 fine, and not more than three years of supervised release. A violation of conspiracy to commit interstate transportation of stolen property, under Title 18, United States Code, Section 371, carries a maximum penalty of not more than five years’ imprisonment, not more than a $250,000 fine, and not more than three years of supervised release.
The case was investigated by the FBI, and is being prosecuted by Assistant United States Attorney Allison W. Bragg. An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Link to related Kansas case:
https://www.justice.gov/usao-ks/pr/two-agricultural-scientists-chinacharged-stealing-trade-secrets
This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
Twitter: @EDARNEWS
Little Rock Trio Pleads Guilty to Wire Fraud; Exploited Program Assisting Distressed BusinessesRead the Press Release
LITTLE ROCK—Three Little Rock men pleaded guilty to participating in a fraudulent scheme that generated over $1 million in illicit profits by exploiting a government program designed to help distressed businesses. Mark Gregory Jackson, Sr., 61, Jimmy Don Winemiller, Jr., 53, and Don “Terrell” Stephens, Jr., 39, each of Little Rock, all pleaded guilty to conspiracy to commit wire fraud today before Chief United States District Judge Brian S. Miller.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, Michael T. Gavin, Special Agent in Charge of the Memphis Field Office of the FBI, T.J. Gaylor, Special Agent in Charge for the Central Region of the Office of the Inspector General for the U.S. Small Business Association (SBA-OIG), and Paul W. Walton, Special Agent in Charge for the Southwest Region of the Office of the Inspector General for the U.S. General Services Administration (GSA-OIG), announced today’s guilty pleas.
“This case is a great example of how the FBI works with fellow law enforcement agencies to target those who criminally engage in fraud for personal gain,” Michael T. Gavin, Special Agent in Charge, FBI-Memphis Field Office said. “The FBI will diligently continue our efforts to pursue those engaged in criminal activity that impacts the integrity of U.S. Government programs and we will continue working together to bring them to justice, so that they may be held accountable for their actions.”
The fraudulent scheme grew out of the Federal Surplus Property Donation Program, through which qualifying non-profits, veterans organizations, municipal agencies, and disadvantaged business can acquire government surplus at below-market rates unavailable to the general public. Recipients submit requests explaining how they will use the surplus property and further promise not to sell, lease, or rent it out. The trio exploited the program by acquiring surplus under false pretenses only to sell it in the open market at a steep markup.
Jackson (doing business as Kingridge Enterprises) gained access to the surplus donation program by submitting forms featuring forged signatures that falsely claimed his disadvantaged nephew owned and operated Kingridge. In truth, the nephew did no work for Kingridge, collected no salary, and exercised zero control—he lived over 100 miles away from its Little Rock office and was employed elsewhere fulltime.
Once in the surplus donation program, Jackson proceeded to fraudulently acquire surplus (usually heavy-duty construction equipment) for sale. Much of it was sold to Winemiller (doing business as Cow Lake Construction), an equipment dealer who proceeded to sell it (again) at a still greater markup to peer equipment dealers or construction outfits. At various times, Winemiller enlisted the aid of Stephens to find buyers and paid him a fee for brokering deals.
Over the course of the scheme, Jackson acquired hundreds of pieces of surplus for $1.5 million, which he sold for over $2.5 million. Under the terms of his plea agreement, Jackson faces up to 20 years’ imprisonment and will forfeit $1,028,142.40. For their part, Winemiller and Stephens each face up to five years’ imprisonment and will forfeit $250,000.00 and $125,697.05, respectively.
“The privilege afforded to SBA 8(a) Program participants to access low-cost equipment through the Federal Surplus Property Program gives these small businesses a unique opportunity to compete and grow,” said T.J. Gaylor, Special Agent in Charge, SBA-OIG. “When a company exploits such a program for personal enrichment and does so at the expense of other small businesses, they must be held accountable to protect the integrity of the program. OIG appreciates the commitment of our federal law enforcement partners and the U.S. Attorney’s Office in combating fraud against small business programs.”
“In this case, a federal program was compromised by defendants who were motivated by personal, financial gain,” said Paul W. Walton, Special Agent in Charge, GSA-OIG. “Working with our law enforcement partners, the General Services Administration Office of Inspector General will continue to investigate fraudulent activity to protect the integrity of this important GSA program.”
Assistant United States Attorney Alexander D. Morgan prosecuted the case for the United States following a multi-year investigation by FBI-Memphis, SBA-OIG, and GSA-OIG.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter: @EDARNEWS
Convicted Felon Who Possessed Ammunition Sentenced 100 Months in Federal PrisonRead the Press Release
LITTLE ROCK—Mario Green, a multi-convicted felon, will spend the next 100months in federal prison for illegally possessing ammunition. Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced the sentence, which was handed down today by United States District Judge James M. Moody, Jr.
Green, 35, of Monticello, pleaded guilty to one count of being a felon in possession of ammunition on December 12, 2017. At that hearing, Green admitted that on July 25, 2016, he got into an argument with a female acquaintance while at a residence in Jacksonville. After ripping a cell phone out of this acquaintance’s hand, the acquaintance alleged that Green punched her in the face and pulled out a gun, telling her that he would kill her. When police officers arrived, they found a non-functioning firearm in the couch that was loaded with nine rounds of Remington .25 caliber ammunition and five rounds of Winchester .25 caliber ammunition.
Green admitted that he had previous convictions for aggravated assault and terroristic threatening, as well as a previous conviction for being a felon in possession of a firearm, and could not legally possess ammunition. Green also has convictions for misdemeanor battery and domestic battery.
At Thursday’s sentencing hearing, Judge Moody noted Green’s violent, repeat criminal history in pronouncing the 100-month sentence, which will result in more than eight years in prison without the possibility of parole.
The investigation into Green was conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the Jacksonville Police Department. Assistant United States Attorney Kristin Bryant is prosecuting the case.
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Little Rock Heroin and Cocaine Dealer Receives 30-Year Prison Sentence, Will Forfeit More Than $170,000Read the Press Release
LITTLE ROCK—Aaron “Black” Clark, who sold kilograms of heroin and cocaine out of his west Little Rock home, will spend the next 30 years in federal prison. Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the FBI, announced the sentencing of Clark, 35, of Little Rock, on Thursday morning. Clark was arrested on May 24, 2017, as part of a major operation targeting several drug-trafficking organizations in central Arkansas.
United States District Court Judge James M. Moody sentenced Clark to 360 months’ imprisonment to be followed by five years of supervised release after Clark pleaded guilty to conspiracy to possess with intent to distribute heroin, count one of a 67-count indictment that charged 33 people in Clark’s drug-trafficking organization. In addition to the prison sentence, Clark forfeited $174,034 in cash, a diamond necklace, a Toyota Avalon and Dodge Charger, and seven firearms.
Clark, who has previously been convicted of federal drug crimes in Texas, pleaded guilty on October 26, 2017. At that hearing, Clark admitted that he was selling cocaine and heroin to dozens of people in the Little Rock area. Clark’s primary supplier was from El Paso, Texas. Based on multiple wiretaps on Clark’s phones, law enforcement agents were aware that he was obtaining and selling kilograms of cocaine for $31,500 each, as well as large quantities of heroin, marijuana, and methamphetamine.
“Little Rock is a safer place with Aaron Clark in federal prison for 30 years,” Hiland said. “This repeat criminal made a living selling deadly drugs on our streets and spreading his toxic, destructive influence within our community. Removing violent, repeat offenders like Clark will continue to be a priority for this office in the coming weeks and months, and criminals who want to engage in similar activities should look at today’s sentence and know similar consequences await you.”
“It is our goal to maximize the intensity of the pressure applied to repeat criminals in our district,” Hiland continued. “To that end, this office saw a record 73 indictments returned last month by a federal grand jury. That number is a very tangible reflection of our efforts to partner with local law enforcement to combat pervasive criminal activity in our hometown communities by unapologetically seeking the removal of repeat criminals to federal prison.”
On November 17, 2016, agents executed a search warrant at Clark’s west Little Rock residence. Agents seized more than $115,000 cash, jewelry, the two vehicles, 170 grams of heroin, a marijuana grow operation, and six firearms. Clark was not arrested at that time, and agents discovered that he continued to distribute narcotics.
After the November search warrant, Clark moved to a new west Little Rock residence. In May 2017, agents executed a search warrant at the new residence, as well as at an apartment Clark used to distribute narcotics. At these residences, agents seized another $55,353 cash, 1.7 kilograms of methamphetamine, marijuana, drug paraphernalia, a handgun, assorted ammunition, and a press used to package narcotics.
“Today’s sentencing of Clark illustrates the FBI’s commitment to work with our partners to prosecute individuals who sell dangerous drugs in our communities,” FBI SAC Upchurch said. “We extend our gratitude to the United States Attorney’s Office for the Eastern District of Arkansas and the FBI’s MET Rock Task Force which includes our law enforcement partners at the Little Rock Police Department and North Little Rock Police Department.”
In addition to Clark, five other defendants from his indictment have pleaded guilty and been sentenced. Four others are awaiting sentencing following their guilty pleas, and one defendant has a change of plea hearing scheduled. Twenty-two defendants are facing a pending trial on August 20, 2018. Hector Soto, believed to be Clark’s El Paso supplier, remains a fugitive.
The primary investigation into Clark was conducted by FBI’s Met Rock Task Force, in coordination with the Little Rock Police Department and North Little Rock Police Department. Assistant United States Attorney Benecia Moore is prosecuting the case.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSU.S. Attorney's Office for the Eastern District of Arkansas Indicts 73 Cases in June, Including 39 Gun CasesRead the Press Release
LITTLE ROCK—Following a week in which more than 50 defendants appeared before United States Magistrate Judge Joe J. Volpe for their first appearance in federal court, today Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced the filing of 73 indictments in the month of June.
Thirty-nine of the 73 indictments involve gun crimes, filed as part of the Project Safe Neighborhoods (PSN) initiative. Hiland’s announcement illustrates his office’s commitment to prosecuting gun crimes and removing dangerous criminals from the streets.
“As I said back in February, when I announced that our office’s top priorities will include the successful prosecution of gun crimes, we will not slow down or back off our commitment to take dangerous individuals off the streets and put them in prison by any means available to us under federal law,” Hiland said. “The days of dangerous criminals illegally possessing guns with impunity are over. I am proud of the partnership and hard work between our office and the federal, state and local agencies we work with every day. These indictments are a product of that hard work and a reflection of the cooperative relationship necessary to turn these cases into indictments.
“It’s important to note the work is just beginning. Law enforcement will continue to make cases and we will continue to process them for prosecution. We’re anxious for these criminals to face justice in the federal system where parole is not an option.”
In 2017, the U.S. Attorney’s Office (USAO) for the Eastern District of Arkansas (EDAR) indicted 62 cases in which a gun charge was the primary crime charged. Throughout 2017, the highest number of PSN indictments filed in any one month was 15 in July. By contrast, through the first six months of 2018, the EDAR has indicted 89 PSN cases, with June’s 39 indictments being the highest one-month total so far. In 2017, the USAO EDAR opened a total of 106 PSN cases; 174 PSN cases have been opened in the office in the first six months of 2018, with more indictments expected. The USAO EDAR opened a total of 438 cases in 2017. Through June, Hiland’s office has opened 456 cases in 2018.
Hiland’s office is receiving aid in handling this additional caseload by the addition of 12 Special Assistant United States Attorneys (SAUSAs). Four SAUSAs who have completed their background checks have been assigned 15 cases thus far.
Additionally, Hiland announces the hiring of Gerald “Bart” Dickinson to serve as a violent crimes prosecutor. Dickinson is currently chief counsel at the Arkansas Office of Medicaid Inspector General and previously served as a gang and violent crimes prosecutor in Little Rock from 2001 through 2007. He also served as chief deputy prosecutor in Lonoke County, and worked for the Arkansas Attorney General’s office. Dickinson, who has been assisting as a SAUSA, will begin full-time work when cleared by the Department of Justice.
PSN is a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department of Justice’s renewed focus on targeting violent criminals, and directed all U.S. Attorney’s Offices to work in partnership with federal, state, and local law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Each of these PSN cases is first opened by the USAO for investigation in consultation with a local or federal law enforcement partner. Following investigation, an Assistant U.S. Attorney presents the case to a grand jury for potential indictment. A federal indictment is a formal charging document that is presented to a grand jury, which then determines whether probable cause exists for the alleged crimes.
Following indictment, a defendant will appear before a United States Magistrate Judge. The Magistrate Judge then informs the defendant of the charges against him, the possible punishment, and determines whether the defendant will remain detained, or released on bond.
In addition to the 39 gun cases filed in June, the U.S. Attorney’s office indicted 13 cases involving drug-trafficking crimes, 10 involving immigration crimes, 4 involving crimes against children, 2 fraud cases, and 1 identity theft case.
The new gun cases primarily originated in Little Rock and surrounding Pulaski County. Charges include felon in possession of firearms, possession of a firearm in furtherance of a drug-trafficking crime, and unlawful drug user in possession of firearms.
The Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF) has been a key partner with the U.S. Attorney’s office in developing these PSN cases. In addition, many of the 39 new PSN cases began as state cases following arrests by the Little Rock Police Department, North Little Rock Police Department, Pulaski County Sheriff’s Office, Arkansas State Police, and other local agencies. The FBI, through its GET Rock gang task force, and Arkansas Community Correction has also provided significant resources and assistance to this prosecution push. Throughout this initiative, which will continue indefinitely, the U.S. Attorney’s office has been working closely with Larry Jegley and the Sixth Judicial District Prosecuting Attorney’s office, as well as other state prosecutor’s offices.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edar
Twitter:
@EDARNEWSGirlfriend Admits Crime in Attempt to Save Boyfriend; Gets ArrestedRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Mary Downie, Acting Resident Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), announced today’s arrest of Nicole Blakely, who admitted during a recent trial that she possessed firearms while using illegal drugs.
Blakely, 39, of Little Rock, was arrested on a federal complaint for being an unlawful drug user in possession of a firearm, in violation of Title 18, United States Code, Section 922(g)(3). She appeared before United States Magistrate Judge Joe J. Volpe Thursday afternoon and was detained following her initial appearance.
Last week, during the federal criminal trial of Blakely’s boyfriend, Torrioan Neal, Blakely was called as a witness to testify on Neal’s behalf. The charges against Neal included possession with intent to distribute marijuana. Prior to her testimony, her lawyer informed the Court that he had advised her against testifying; she acknowledged that advice to the Judge, indicated that she understood the potential consequences, and insisted on testifying anyway.
According to the federal complaint charging her, Blakely then testified that she was a regular drug user and that she had purchased all the marijuana the police had found in her house. Blakely stated during the trial that the day law enforcement officers located marijuana and a gun in Neal and Blakely’s residence she had gotten off work at 7:00 a.m. When she arrived home, Blakely testified, she smoked marijuana. She also testified that she was the owner of a pistol the police found in the house.
The jury found that Neal was guilty of possessing the marijuana with the intent to distribute it, despite Blakely’s claims that the marijuana was hers alone. Neal now faces a potential sentence of up to 10 years in prison.
The crime with which Blakely is charged is also punishable by up to 10 years imprisonment. Assistant United States Attorney Kristin Bryant is prosecuting the case, which is being investigated by the ATF.
A complaint contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSThree Osceola Defendants Facing Federal Drug and Firearms Charges in Ongoing InvestigationRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the FBI, announced today the unsealing of a federal indictment and arrests of three defendants charged with committing federal drug and firearms offenses in Osceola.
James Cordell Scott, 30, and Sedrick Askew, 36, both of Osceola, were arrested Tuesday in their hometown. Marquette Lamar Smith, 38, also of Osceola, was arrested in Fayetteville. Askew and Scott appeared before U.S. Magistrate Judge Joe J. Volpe on Tuesday for plea and arraignment. Smith will make an initial appearance before U.S. Magistrate Judge Erin L. Wiedemann in the Western District of Arkansas on Wednesday at 11:00 a.m., and will then appear before Judge Volpe for plea and arraignment at a later date.
The arrests resulted from the continuation of an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, Operation Blynd Justice, worked jointly with the FBI, Second Judicial District Drug Task Force, Blytheville Police Department, Osceola Police Department, and Arkansas Community Correction. During the course of the investigation in 2017, law enforcement utilized a Title III court-authorized wiretap, intercepting hundreds of drug-trafficking calls. Law enforcement agents conducted controlled buys totaling more than 200 grams of crack cocaine, and during search warrants executed in Osceola in August 2017, seized two loaded firearms, and quantities of cocaine, crack cocaine, methamphetamine, and approximately $1,500 in cash.
“If you illegally possess guns and drugs in the Eastern District of Arkansas, we are coming for you,” Hiland said. “The individuals arrested this morning endangered and poisoned the Osceola community, and it is my hope that the law-abiding citizens of that community can rest a little easier tonight. But, to be clear, there is work that remains to be done and we intend to do it.”
Based on the investigation, it is alleged that between January and August 2017, Marquette Lamar Smith, Sedrick Askew, and James Cordell Scott distributed crack cocaine and cocaine in Osceola, including from a highly-trafficked “yellow house” on Second Street in Osceola. The investigation continued after August 2017 and is ongoing, with more arrests expected.
“Today’s arrests play an important role in keeping our communities safe,” FBI SAC Upchurch said. “We will continue to focus on violent offenders who bring illegal drugs and guns into our neighborhoods. We appreciate the efforts of the Office of the United States Attorney for the Eastern District, the Second Judicial District Drug Task Force, Blytheville Police Department, Osceola Police Department, and Arkansas Community Correction. Together, we are committed to identifying and removing these dangerous criminals from our communities.”
“I am very pleased with the arrests made this morning and I am very appreciative of the hard work that went into this investigation,” Osceola Police Chief Ollie Collins said. “This type of investigation is made possible by the cooperative efforts of our local, state, and federal agencies. The long hours and dedicated investigative work that made this investigation possible is indicative of our commitment to making our streets safer. Drug sales and the associated crime has saturated our communities for far too long. The Osceola Police Department and the Second Judicial District Drug Task Force will continue to cooperate with our federal partners in our efforts to disrupt the supply and sales of controlled substances in our city.”
The charges in today’s unsealed indictment include conspiracy to distribute and possess with intent to distribute cocaine and crack cocaine; distribution and possession with intent to distribute cocaine, crack cocaine, and methamphetamine; possession of a firearm in furtherance of a drug trafficking crime; and felon in possession of a firearm. The maximum penalty for the drug charges is not less than five years in prison, not more than 40 years, and a $5,000,000 fine. Possessing a firearm in furtherance of a drug-trafficking crime has a minimum sentence of five years, and a maximum of life, and the maximum penalty for being a felon in possession of a firearm in not more than 10 years’ imprisonment.
The case, docketed as Case No. 4:18CR00325 DPM, is pending before U.S. District Judge D. Price Marshall, with a trial scheduled for July 30, 2018.
The investigation was conducted by FBI, the Second Judicial District Drug Task Force, Blytheville Police Department, Osceola Police Department, and Arkansas Community Correction. The case is being prosecuted by Assistant U.S. Attorney Julie Peters.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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This news release, as well as additional information about the office of the United States Attorney for the Eastern District of Arkansas, is available on-line at
http://www.justice.gov/edarTwitter:
@EDARNEWSAllegiance Health Management to Pay More Than $1.7 Million to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – The Justice Department announced today that Allegiance Health Management, Inc., (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, and four hospitals owned and operated by Allegiance (collectively, the Allegiance Defendants), have agreed to pay more than $1.7 million to resolve False Claims Act allegations that the Allegiance Defendants submitted, and caused other hospitals to submit, claims for reimbursement from Medicare for services that were not medically reasonable or necessary.
Beginning in 2005, Allegiance entered into arrangements with numerous hospitals located throughout the Southeastern United States to provide Intensive Outpatient Psychotherapy (IOP) services to patients on the hospitals’ behalf. At each of these hospitals, Allegiance established an Inspirations Outpatient Counseling Center at which Allegiance employees and those acting under the direction and control of Allegiance were responsible for, among other things, identifying potential patients, creating patient treatment plans, and performing IOP services. This settlement resolves allegations that at each of the Inspirations Outpatient Counseling Centers, Allegiance provided IOP services to Medicare beneficiaries that did not qualify for Medicare reimbursement because: 1) the patients’ medical condition(s) did not necessitate IOP treatment; 2) the patients’ treatments were not provided pursuant to an individualized treatment plan designed to help individual patients address specific mental health needs and reach achievable goals; 3) the patients’ progress was not being adequately tracked or documented; 4) the patients received an inappropriate level of treatment; or 5) the therapy provided was primarily recreational or diversional in nature, and was not therapeutic.
“The Department of Justice recognizes the value of accessible mental healthcare, but will not tolerate companies that seek to exploit our most vulnerable populations by delivering inappropriate or worthless services” said Acting Assistant Attorney General Chad D. Readler for the Civil Division. “The Department of Justice is committed to holding accountable those who waste taxpayer dollars and place profit above the legitimate needs of patients.”
“Federal funding for mental health services must be wisely and prudently spent,” said United States Attorney Cody Hiland for the Eastern District of Arkansas. “Allegiance sought this taxpayer money by targeting and taking advantage of vulnerable members of our population who sought mental health treatment, including those in the Eastern District of Arkansas. This office is dedicated to pursuing all appropriate remedies against companies who behave in such a manner.”
The Allegiance defendants that are party to this settlement are: Allegiance Health Management, Inc.; Allegiance Behavior Health Center of Plainview, LLC; Allegiance Specialty Hospital of Kilgore, LLC; North Metro Medical Center a/k/a Allegiance Hospital of North Little Rock, LLC, and Sabine Medical Center a/k/a Allegiance Hospital of Many, LLC. The United States previously reached settlements with more than twenty other hospitals in this matter.
“Medicare funds must be targeted to those with a legitimate need,” said Special Agent in Charge CJ Porter for the Office of Inspector General of the U.S. Department of Health and Human Services. “Entities that bill for needless services – as alleged here – cheat taxpayers and threaten the integrity of government health programs.”
The settlement with Allegiance resolves a lawsuit filed in the Eastern District of Arkansas under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed by Ryan Ladner, who formerly worked for Allegiance as a Program Manager at the Inspirations Outpatient Counseling Center located at Wesley Medical Center in Hattiesburg, Mississippi. Mr. Ladner will receive approximately $300,000 as his share of the current settlement.
This and prior settlements in this matter were the result of a coordinated effort by the Civil Division of the Department of Justice, the United States Attorney’s Office for the Eastern District of Arkansas, and the Department of Health and Human Services, Office of Audit Services and Office of Inspector General.
The claims settled by the current agreement are allegations only, and there has been no determination of liability. The lawsuit is captioned U.S. ex rel Ladner v. Allegiance Health Management, Inc., et al, No. 4:10-CV-170 (E.D. Ark.).