Eastern District of Arkansas
Press releases recorded for this federal judicial district.
Attorney General Sessions and U.S. Attorney Hiland Recognize Law Enforcement Service and Sacrifice During National Police WeekRead the Press Release
LITTLE ROCK—Attorney General Jeff Sessions and Cody Hiland, U.S. Attorney for the Eastern District of Arkansas, recognized the service and sacrifice of federal, state, local, and tribal police officers on the occasion of National Police Week, and commented on the FBI’s 2017 Law Enforcement Officers Killed and Assaulted report.
In support of National Police Week, Hiland and the U.S. Attorney’s Office for the Eastern District of Arkansas publically salutes and honors the service of law enforcement officers in our community and in communities across the nation. To show their support for law enforcement officers, Hiland asks citizens to adorn the front of their homes and local businesses in blue ribbons and/or place blue-tinted light bulbs on their outside lighting for the week.
In 2017, three law enforcement officers in the Eastern District of Arkansas were killed in the line of duty. Yell County Sheriff Lt. Kevin Clyde Mainhart died on May 11, Newport Police Department Lt. Patrick Neal Weatherford died on June 12, and Drew County Deputy Sherriff Timothy Braden died on August 24.
“One officer death is too many,” Attorney General Sessions said. “While we are inexpressibly grateful to have had a decrease in the number of officers killed in the line-of-duty last year, the number is still far too high. At the Department of Justice, we honor the memories of the fallen and we pray for their families. We are also following President Trump's Executive Orders to back the women and men in blue, to enhance law enforcement safety, and to reduce violent crime in America. Those priorities will help keep every American safe, including those who risk their lives for us. As always, we have their backs and they have our thanks.”
“Lt. Mainhart, Lt. Weatherford, and Dep. Sheriff Braden died helping keep the people of Arkansas safe; in other words, doing their job,” Hiland said. “Their sacrifice will never be forgotten. During National Police Week, we honor these brave men, as well as the service of all law enforcement officers across the Eastern District of Arkansas and the nation. It is important that all citizens understand the sacrifices, hazards, and immense responsibilities of each of the men and women in law enforcement who put their lives on the line every day. Our communities, our state, and our country depend on them.”
While recognizing those law enforcement officers who have ultimately paid the price while protecting us, Hiland also remembers Forrest City Police Department Officer Oliver Johnson, Jr., who was tragically killed on April 28 by a stray bullet while off duty and inside his home with his family.
There are more than 900,000 law enforcement officers serving in communities across the United States. Since the first recorded death in 1791, more than 20,000 law enforcement officers in the United States have been killed in the line of duty.
According to statistics collected by the FBI and released Thursday, 93 law enforcement officers were killed in line-of-duty incidents in 2017—a 21 percent decrease from 2016 when 118 law enforcement officers were killed in line-of-duty incidents.
Additionally, in 2017 there were 46 law enforcement officers killed in line-of-duty incidents as a result of felonious acts—this is a 30 percent decrease from 2016, when 66 law enforcement officer were killed in line-of-duty incidents as a result of felonious acts.
For the full comprehensive data tables about these incidents and brief narratives describing the fatal attacks and selected assaults resulting in injury, please see the 2017 edition of Law Enforcement Officers Killed and Assaulted report, available at www.fbi.gov.
In October 1962, Congress passed and President Kennedy signed a joint resolution declaring May 15th as National Peace Officers Memorial Day to honor law enforcement officers killed or disabled in the line of duty. The resolution also created National Police Week as an annual tribute to law enforcement service and sacrifice.
During Police Week, which is observed from Sunday, May 13 to Saturday, May 19, 2018, our nation celebrates the contributions of police officers from around the country, recognizing their hard work, dedication, loyalty and commitment in keeping our communities safe.
The names of all 93 fallen officers nationwide—including Lt. Mainhart, Lt. Weatherford, and Dep. Sheriff Braden—will be formally dedicated on the National Law Enforcement Officers Memorial in Washington, DC, during the 30th Annual Candlelight Vigil on the evening of May 13, 2018. So that people across the country can experience this unique and powerful ceremony, the vigil will be livestreamed beginning at 8:00 p.m. EDT on May 13th. To register for this free online event, visit www.LawMemorial.org/webcast.
Additionally, Tuesday, May 15, 2018, is designated as Peace Officers Memorial Day and in honor of all fallen officers and their families, U.S. flags should be flown at half-staff on this day.
The Candlelight Vigil is one of many commemorative events taking place in the nation’s capital during National Police Week 2018. For more information about other National Police Week events, please visit www.policeweek.org.
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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
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@EDARNEWSFormer Arkansas State Senator and Representative Pleads Guilty to Conspiracy and BriberyRead the Press Release
LITTLE ROCK—Former Arkansas State Senator and State Representative Henry (Hank) Wilkins IV pleaded guilty today to conspiring to accept over $80,000 in bribes in exchange for influencing Arkansas state legislation and transactions, including steering approximately $245,000 in Arkansas General Improvement funds to his co-conspirators. Wilkins also pleaded guilty to devising a scheme to conceal the bribe payments as donations to St. James United Methodist Church in Pine Bluff, Arkansas, where Wilkins also served as a pastor.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Cody Hiland, United States Attorney for the Eastern District of Arkansas, and FBI Special Agent in Charge Diane Upchurch made the announcement following a hearing before Chief United States District Judge Brian S. Miller.
“By misusing his elected office to line his own pockets, Henry Wilkins undermined the integrity of our political process and abused the public’s trust,” said Acting Assistant Attorney General Cronan. “The Criminal Division is committed to rooting out such corruption and holding those responsible accountable for their actions.”
“Public corruption destroys the trust that is necessary for our republic,” Hiland said. “In this case, the citizens of Arkansas were betrayed by Mr. Wilkins, and elected officials who abuse their position for personal gain must be held accountable for that violation of the public trust. Investigating and prosecuting individuals such as Mr. Wilkins is essential to restoring confidence in elected officials. This office will continue to relentlessly pursue anyone who tries to undermine our system of government.”
Wilkins, 64, of Pine Bluff, who represented Arkansas’s House District 17 as a state Representative from 1999 to 2001 and again from 2011 to 2015, and District 5 in the Arkansas Senate from 2001-2011, pleaded guilty before Judge Miller to an information charging him with one count of conspiracy to commit offenses against the United States, namely honest services fraud and bribery.
As part of his plea, Wilkins admitted that from 2010 to 2014, while serving in the Arkansas General Assembly, he accepted a series of bribes from lobbyists and non-profit organizations that were transmitted both in the form of cash and checks funneled from lobbying firms to a discretionary fund held in St. James’ name where Wilkins had access to the deposited funds. In exchange for the cash and check bribes, Wilkins performed, and agreed to perform, official acts in his capacity as an Arkansas legislator including filing shell bills, sponsoring bills, voting in favor of specific legislation, and steering approximately $245,000 in General Improvement funds to entities that funneled bribes to Wilkins through his church.
“Wilkins took an oath to uphold the law and protect the citizens of Arkansas,” SAC Upchurch said. “Instead, Wilkins betrayed the community he swore to protect. We appreciate the commitment made by our partners, the Public Integrity Section of the Department of Justice and the United States Attorneys’ Offices for the Eastern District of Arkansas, the Western District of Arkansas, and the Western District of Missouri.”
The charge of conspiracy to commit crimes against the United States carries a maximum penalty of not more than five years’ imprisonment, not more than a $250,000 fine, and not more than three years supervised release. Judge Miller will sentence Wilkins at a later date.
The FBI investigated this case. Trial Attorney Marco A. Palmieri of the Criminal Division’s Public Integrity Section, Assistant U.S. Attorneys Stephanie Mazzanti and Patrick C. Harris of the Eastern District of Arkansas, and Ben Wulff of the Western District of Arkansas are prosecuting the case. This is a combined investigation with the Public Integrity Section of the Department of Justice, the Eastern District of Arkansas, Western District of Arkansas, and the Western District of Missouri.
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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
Plea Agreement Information
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@EDARNEWSFormer Arkansas State Senator and Representative Pleads Guilty to Conspiracy and BriberyRead the Press Release
Former Arkansas State Senator and State Representative Henry (Hank) Wilkins IV pleaded guilty today to conspiring to accept over $80,000 in bribes in exchange for influencing Arkansas state legislation and transactions, including steering approximately $245,000 in Arkansas General Improvement funds to his co-conspirators, and to devising a scheme to conceal the bribe payments as donations to St. James United Methodist Church in Pine Bluff, Arkansas, where Wilkins also served as a pastor.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Cody Hiland for the Eastern District of Arkansas made the announcement.
Wilkins, 64, of Pine Bluff, Arkansas, who represented Arkansas’s House District 17 as a state Representative from 1999 to 2001 and again from 2011to 2015, and District 5 in the Arkansas Senate from 2001 to 2011, pleaded guilty before Chief U.S. District Judge Brian S. Miller to an information charging him with one count of conspiracy to commit offenses against the United States.
“By misusing his elected office to line his own pockets, Henry Wilkins undermined the integrity of our political process and abused the public’s trust,” said Acting Assistant Attorney General Cronan. “The Criminal Division is committed to rooting out such corruption and holding those responsible accountable for their actions.”
“Public corruption destroys the trust that is necessary for our republic,” said U.S. Attorney Cody Hiland for the Eastern District of Arkansas. “In this case, the citizens of Arkansas were betrayed by Mr. Wilkins, and elected officials who abuse their position for personal gain must be held accountable for that violation of the public trust. Investigating and prosecuting individuals such as Mr. Wilkins is essential to restoring confidence in elected officials. This office will continue to relentlessly pursue anyone who tries to undermine our system of government.”
As part of his plea, Wilkins admitted that from 2010 to 2014, while serving in the Arkansas General Assembly, he accepted a series of bribes from lobbyists and non-profit organizations that were transmitted both in the form of cash and checks funneled from lobbying firms to a discretionary fund held in St. James’ name where Wilkins had access to the deposited funds. In exchange for the cash and check bribes, Wilkins performed, and agreed to perform, official acts in his capacity as an Arkansas legislator including filing shell bills, sponsoring full bills, voting in favor of specific legislation, and steering approximately $245,000 in General Improvement funds to entities that funneled bribes to Wilkins through his church.
The FBI investigated this case. Trial Attorney Marco A. Palmieri of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Stephanie Mazzanti and Patrick C. Harris of the Eastern District of Arkansas and Ben Wulff of the Western District of Arkansas are prosecuting the case. This is a combined investigation with the Public Integrity Section of the Department of Justice, the Eastern District of Arkansas, Western District of Arkansas, and the Western District of Missouri.
Little Rock Man Sentenced to 10 Years in Prison After Attempting to Engage a Minor in Sex ActsRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Acting Homeland Security Investigations New Orleans Special Agent in Charge Thomas M. Annello, announced today the sentencing of David Frazier, 56, of Little Rock, to attempted enticement of a minor to engage in sex acts.
United States District Judge J. Leon Holmes sentenced Frazier to 10 years imprisonment, followed by eight years of supervised release, on Monday.
“Today’s decade-long sentence sends the message that individuals who prey on innocent children over the internet are being monitored, and when caught, will be prosecuted and punished,” Hiland said. “We will use every tool in our arsenal to unmask and bring to justice the individuals who believe they can hide behind the perceived anonymity of the internet to harm children.”
On June 6, 2017, the Arkansas State Police received a complaint from a person who answered a Craigslist advertisement titled “I know your secret.” This person had communicated with the individual who posted the ad. The individual asked the person to communicate through the KIK application and stated his username was “yplover.” During the KIK communications, “yplover” began expressing an interest in having sex with a 7-year-old. “Yplover” explained in graphic detail what he would like to do to the child. The conversation concerned the person and she reported it to law enforcement. During the conversations, “yplover” sent two images of himself. The images depicted David Frazier.
On June 21, 2017, a law enforcement officer, acting in an undercover capacity (“UC”), answered an identical ad on Craigslist titled “I know your secret.” The UC made contact with the individual—identified as Frazier—who posted the ad. Frazier asked the UC to communicate via KIK. Frazier stated that his username was “yplover.” During the communications on Craigslist and KIK, Frazier expressed a desire to have sex with a child. The UC told Frazier that she had an 8-year-old daughter and that she wanted to watch Frazier and the 8-year-old engage in sex.
Frazier asked the UC to send a photograph of her “daughter.” The UC sent a photograph of herself as an 8-year-old. Frazier advised that he thought the UC’s “daughter” was cute and turned him on when the UC sent a picture of her. Frazier said he had thought about printing out the picture and doing a “tribute.” The UC asked Frazier to describe a “tribute.” Frazier later sent the UC a video of himself masturbating onto the picture.
Frazier continued to state in great detail the sex acts he wanted to perform on the UC’s purported 8-year-old daughter. Frazier then asked the UC what the rules would be if he were to meet the UC’s daughter. Frazier and the UC discussed items that the daughter would like as a gift. Frazier mentioned the three of them hanging out together. The UC said, “Then what would happen?” Frazier said, “Something that would let me get close to her.” Frazier continued, “Once she’s comfortable around me, she could sit on my lap while we watch a movie. Something totally innocent…Disney or something.” The UC told Frazier that she liked princess movies. Frazier then said, “We have to do something to move things further…sort of a jump start.” Frazier suggested, “Maybe let her ‘accidentally’ see some porn.” Frazier asked, “How would she react if she saw me naked lol.” Frazier suggested getting a room, and letting the UC bring her there.
Frazier was arrested by HSI agents on September 6, 2017, at his place of employment, pursuant to a warrant based on a criminal complaint charging him with attempted enticement of a minor. During a search of his office, officers located a gun safe, which was later determined to contain two computer thumb drives, a computer hard drive, a bottle of lubricant, a selfie stick, and a sexual stimulation device.
After reviewing Frazier’s cellular telephone and the storage devices found in the gun safe, agents discovered multiple images of child pornography. Agents also located chat messages between Frazier and an individual claiming to be a 14-year-old; in these chats Frazier asks the minor to send a sexually explicit photograph.
A forensic analysis completed on the electronic devices seized from Frazier resulted in the discovery of 23,000 images and videos of child pornography.
“Individuals who seek to sexually exploit minors steal the innocence of childhood and potentially destroy lives,” said Acting Homeland Security Investigations New Orleans Special Agent in Charge Thomas M. Annello. “This case shows HSI investigators are actively working to identity and disrupt child predators, and also to seek prosecution of these criminals wherever they may be found.”
The investigation was conducted by Homeland Security Investigations, the Arkansas Attorney General’s Office—Special Investigations Division, and Benton County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Kristin Bryant.
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District Court Enters Permanent Injunction Against Arkansas Compounding Pharmacy and its CEO to Prevent Distribution of Adulterated DrugsRead the Press Release
The U.S. District Court for the Eastern District of Arkansas entered a consent decree of permanent injunction against defendants Cantrell Drug Company (Cantrell), and James L. McCarley Jr., Cantrell’s co-owner and Chief Executive Officer. The injunction permanently enjoins the defendants from distributing adulterated drugs in violation of the federal Food, Drug, and Cosmetic Act.
The entered permanent injunction stems from a complaint the Department filed in the U.S. District Court for the Eastern District of Arkansas on Feb. 28, at the request of the U.S. Food and Drug Administration (FDA). That complaint alleged, among other things, that the defendants distributed adulterated drugs in interstate commerce.
As part of the permanent injunction, defendants cannot resume manufacturing, processing, or distributing drugs until they comply with specific remedial measures. Those measures include submitting a remedial plan to FDA, which will provide for an independent expert to conduct inspection(s) of defendants’ facility, ensure defendants implement all recommended corrective actions, and ensure that defendants’ manufacturing and distributing of drugs will be in conformity with current good manufacturing practice. The permanent injunction provides that defendants cannot resume manufacturing, processing, or distributing drugs until FDA notifies them in writing that defendants appear to be in compliance with the ordered remedial measures.
“Compounding pharmacies have a responsibility to ensure that they process drugs in a manner that meets the legal standards necessary to ensure the safety and quality of such drugs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will continue to work with FDA to ensure that doctors and patients can rely on the protections in the Food, Drug, and Cosmetic Act.”
According to the complaint filed by the Department on Feb. 28, defendants’ drugs were adulterated because they were prepared, packed, or held under insanitary conditions whereby they may have been contaminated or may have been rendered injurious to health. The complaint also alleged that defendants’ drugs were adulterated because defendants failed to comply with current good manufacturing practice regulations.
Cantrell initiated voluntary recalls of drug products in 2016 and 2017. The 2016 recall, initiated due to lack of sterility assurance, involved 29 lots of unexpired sterile drug products. The 2017 recall, also due to a lack of sterility assurance, encompassed all lots of unexpired sterile drug products that Cantrell had compounded and distributed between Feb. 16, 2017, and July 19, 2017.
“The Food, Drug, and Cosmetic Act is designed to protect the public health,” said U.S. Attorney Cody Hiland for the Eastern District of Arkansas. “This enforcement action demonstrated our commitment to ensuring that when deficiencies are identified, they are properly addressed.”
“As a public health agency, the FDA is committed to fully implementing the regulatory framework set forth by Congress that helps ensure compounded drugs are made under appropriate production standards,” said FDA Commissioner Scott Gottlieb, M.D. “FDA is committed to taking action against compounders who do not comply with the requirements set forth in federal law.”
The government is represented by Trial Attorney Raquel Toledo of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Shannon S. Smith of the U.S. Attorney’s Office for the Eastern District of Arkansas, with the assistance of Associate Chief Counsel, Litigation, Jennifer Kang of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of Arkansas, visit its website at https://www.justice.gov/usao-edar.
Former Arkansas Juvenile Detention Officer Pleads Guilty to Assault on Juvenile DetaineeRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the FBI, announced that former White River Juvenile Detention Center officer Jason Benton, 43, of Batesville, pleaded guilty today in federal court to using pepper spray to assault a 15-year-old boy, and for obstructing justice by falsifying an incident report about that assault.
A federal grand jury indicted Benton on May 5, 2017, on five counts related to violations of civil rights at the detention center. On Wednesday, before Senior U.S. District Judge Billy Roy Wilson, Benton pleaded guilty to deprivation of rights under color of law and falsification of records. The White River Juvenile Detention Center is located in Batesville, Arkansas.
“When law enforcement officers violate the law and the public trust, they will be prosecuted and held accountable,” Hiland said. “There will be no exception. This officer broke his oath to uphold the Constitution, injured a juvenile in the process, and then tried to cover it up. That is a crime, and those who commit crimes will be punished accordingly.”
“The Constitution protects all individuals – including those who are incarcerated – from unjustified force by those acting under color of law,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “We will vigorously investigate and prosecute officers who break the public trust in this way.”
According to the guilty plea, Benton instructed the juvenile, who was locked in his cell, to be quiet. Benton then 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.
“Law enforcement officers are the cornerstone of our system of justice,” FBI Special Agent in Charge Upchurch said. “Benton failed as a law enforcement officer when he used excessive force and then tried to cover-up the assault. We appreciate the steadfast efforts made by the United States Attorney’s Office and the Department of Justice Civil Rights Division in effectively prosecuting this case.”
Benton is the third former officer to plead guilty to charges stemming from assaults on juvenile detainees at the White River Juvenile Detention Center. On April 26, 2017, former White River supervisors Captain Peggy Kendrick, 44, and Lieutenant Dennis Fuller, 40, pleaded guilty to conspiring to assault juvenile detainees. Kendrick also pleaded guilty to assaulting a 16-year-old girl using pepper spray and for obstructing justice. Kendrick and Fuller await sentencing. Two other former White River Juvenile Detention Center officers, Will Ray, 26, and Thomas Farris, 48, are scheduled to begin trial on August 28, 2018, before Judge Wilson in Little Rock on related charges of conspiring to assault and assaulting juveniles.
The maximum potential penalty for a violation of 18 U.S.C. § 242 (Deprivation of Rights Under Color of Law) is 10 years’ imprisonment, three years of supervised release, and a $250,000 fine. The maximum potential penalty for a violation of 18 U.S.C. § 1519 (Falsification of Records in Federal Investigations) is 20 years’ imprisonment, three years of supervised release, and a $250,000 fine.
Benton will be sentenced by Judge Wilson at a later date.
This case is being investigated by the FBI’s Little Rock Field Division and the investigation is ongoing. It is being prosecuted by Assistant U.S. Attorney Julie Peters of the Eastern District of Arkansas and Trial Attorney Samantha Trepel of the Civil Rights Division.
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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
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Benton Filed Indictment
@EDARNEWSMultiple Arrests Dismantle North Little Rock Drug Trafficking OrganizationRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Justin C. King, Assistant Special Agent in Charge of the Little Rock Field Office of the Drug Enforcement Administration (DEA), announced the Tuesday morning arrests of 10 defendants who, along with two other defendants, were charged in a 26-count indictment returned by a federal grand jury on March 6, 2018, and unsealed today.
The overall operation, led by the DEA, was part of the Organized Crime and Drug Enforcement Task Force (OCDETF) case “Wheelin’ and Dealin’,” which focused on the distribution of illegal drugs, including opioids and marijuana, in the North Little Rock area. Along with the 10 arrests Tuesday morning—including one in Clarkson, Washington—one defendant was already in state custody and one defendant was issued a summons to appear in court.
“The opioid epidemic has inflicted an unprecedented toll of addiction and suffering on communities throughout our nation,” Hiland said. “We recognize the Eastern District of Arkansas is not immune to this epidemic, and we will continue to work with the DEA and our law enforcement partners to aggressively pursue and prosecute those who illegally traffic these deadly substances.”
During the course of the investigation law enforcement agents utilized three court-authorized wiretaps, executed three search warrants, and made nine controlled buys and seizures. Agents seized nine firearms, 189 oxycodone pills, 187 alprazolam pills, 61 ecstasy pills, and several pounds of marijuana. The defendants were charged with violations of various drug and firearms laws.
“The arrests and seizures in this investigation are the direct result of outstanding partnerships with federal, state and local law enforcement,” DEA ASAC King said. “DEA, along with our law enforcement partners, will continue to pursue those who threaten our communities through the smuggling and distribution of illegal and dangerous drugs such as prescription drugs and marijuana. The abuse of these drugs can have devastating health and societal effects and these arrests strike a significant blow to the illegal drug trafficking trade in this region.”
The indictment alleges that Michael B. Webb, Jr., directed a drug trafficking organization based in North Little Rock that was responsible for the distribution of marijuana, oxycodone, ecstasy, and alprazolam (Xanax) in Pulaski County and surrounding areas. The indictment further alleges that Terry W. Morrison, aka “T,” supplied Webb’s organization withmarijuana by shipping it through the U.S. mail from the state of Washington to central Arkansas.
“Arresting those who abuse the nation’s mail system by using it to transport illegal narcotics is one of Postal Inspectors’ top concerns,” said Thomas L. Noyes, Inspector in Charge of the Fort Worth Division, U.S. Postal Inspection Service. “We are committed to ensuring the safety of our employees and customers from the violence drug traffickers spread throughout the community. I would like to thank the U.S. Attorney’s Office and the many agencies involved for their hard work and dedication to this case.”
Those defendants arrested or served with a summons will appear before U.S. Magistrate Judge Patricia S. Harris on Wednesday, for plea and arraignment, with the exception of Morrison, who will appear before a federal magistrate judge in the Eastern District of Washington, in Spokane, on Wednesday. Webb, who is in the custody of the Arkansas Department of Corrections, will appear before a federal magistrate judge in the Eastern District of Arkansas at a later date.
These cases were investigated by the DEA Little Rock District Office Tactical Diversion Squad composed of DEA agents and local task force officers. DEA was assisted by the North Little Rock Police Department, United States Postal Inspection Service, Pulaski County Sheriff’s Office, and Arkansas Attorney General’s Medicaid Fraud Control Unit. The case is being prosecuted by Assistant United States 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 athttp://www.justice.gov/edar
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@EDARNEWSDefendants, Charges and Maximum Penalties
United States v. Michael B. Webb, Jr., et al.: 4:18CR00179 KGBMICHAEL B. WEBB, JR., 29, North Little Rock, AR $
ROOSEVELT FRANKS, 48, North Little Rock, AR %
TEASHARA HARRISON, 30, North Little Rock, AR %
REGGIE HORTON, 28, Hot Springs, AR %
MICHAEL JAMES, aka WHITE MIKE, 31, Sherwood, AR %
TERRY W. MORRISON, aka T, 66, Clarkston, WA % @
GARRETT SHEETS, 27, North Little Rock, AR %
REGINALD SMITH, aka RED, 29, Stuttgart, AR %
FRANCES VIDAL, 52, North Little Rock, AR *
STACY VINCENT, aka STACY BOLDEN, 29, North Little Rock, AR %
JEREMY WEBB, 24, North Little Rock, AR %
CHANTES WILLIAMS, 38, Little Rock, AR %% = arrested Tuesday, March 27, 2018
$ = Already in state custody
@ = Arrested in Clarkston, Washington
* = Served with summons to appearSTATUTORY SENTENCES
The offenses of Conspiracy to Possess with Intent to Distribute and Distribution/Possession with Intent to Distribute the Schedule I and II controlled substances identified in the indictment are punishable by not more than 20 years’ incarceration with a possible fine up to $1,000,000, and not less than 3 years’ supervised release.
The offenses of Conspiracy to Possess with Intent to Distribute and Distribution/Possession with Intent to Distribute the Schedule IV controlled substance identified in the indictment is punishable by not more than 5 years’ incarceration with a possible fine up to $250,000, and not less than 1 year supervised release.
The offense of Felon in Possession of a Firearm is punishable by not more than 10 years’ incarceration with a possible file of up to $250,000, and not more than 3 years supervised release.
The offense of Possession of a Firearm in Furtherance of a Drug Trafficking Crime is punishable by not less than 5 years and up to life incarceration, consecutive to any other sentence, with a possible fine of up to $250,000, and not more than 5 years supervised release.
The offense of Use of a Communications Facility in Commission of a Drug Trafficking Crime is punishable by not more than 4 years incarceration, a possible fine of up to $250,000, and not more than 1 year supervised release.The offense of Conspiracy to Launder Monetary Instruments is punishable by not more than 20 years’ incarceration with a possible fine up to $500,000, and not less than 3 years’ supervised release.
The offense of Misprision of a Felony is punishable by not more than 3 years’ incarceration, with a possible fine of up to $250,000, and not more than 1 year supervised release.
Little Rock Man Indicted After Producing Deadly Toxin RicinRead 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 Federal Bureau of Investigation (FBI), announced Wednesday the indictment of Alexander Joseph Jordan, 21, of Little Rock, for possessing the deadly biological toxin ricin.
Jordan was initially arrested on a federal complaint on February 27, 2018. A federal grand jury returned an indictment against Jordan on Wednesday for one count of knowingly possessing ricin without obtaining a registration, as required by the Public Health Service Act. Jordan is currently in federal custody and will be seen by a United States Magistrate Judge at a later date.
“Any time there is information that a deadly substance like ricin is present in our communities, our law enforcement partners will work together to take immediate and decisive action to eliminate the threat,” Hiland said. “Now that the immediate threat to public safety has been contained, we turn our attention to prosecuting the person responsible for creating this dangerous situation.”
According to the complaint affidavit, late on February 22, paramedics and police officers were dispatched to Jordan’s residence on Horseshoe Loop in Little Rock following a 9-1-1 call that described Jordan in distress. In the early morning hours of February 23, officers transported Jordan to the University of Arkansas for Medical Sciences (UAMS), where he stated that he had ingested ricin. Ricin is a highly toxic, naturally occurring protein that is produced in the seeds of the castor oil plant. A dose of purified ricin powder the size of a few grains of common table salt can kill an adult human.
Jordan told police officers at the hospital that he produced two mason jars of the ricin mixture, and the ricin and production materials were still at his house. He stated that he learned how to make the substance on the internet and got the idea from watching the television show Breaking Bad. Jordan said he combined ingredients needed to make the ricin in a blender. Little Rock Fire Department (LRFD) hazardous material (HAZMAT) teams were immediately dispatched to the residence. At the residence LRFD located two small mason jars containing a white substance.
Later on February 23, members of the FBI and Arkansas National Guard Weapons of Mass Destruction, 61st Civil Support Team (CST), executed a federal search warrant at Jordan’s residence. There they located, in addition to the mason jars, a blender in a trash can. Tests conducted by the clinical microbiology supervisor at the public health laboratory at the Arkansas Department of Health on samples from the blender and both mason jars confirmed positive for ricin.
Agents also recovered an Amazon.com receipt for 50 castor beans and paperwork that appeared to be a shopping list and instructions for ricin production.
“Jordan produced and possessed ricin, a deadly and highly toxic substance, which could have severely affected the safety of our citizens,” SAC Upchurch said. “We appreciate the immediate response of our law enforcement partners and their combined and committed efforts to contain the threat and safeguard our community.”
A violation of possessing a select agent, in this case ricin, under Title 18, United States Code, Section 175b(c) and 42 CFR § 73.3, 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.
Multiple agencies, led by the FBI, assisted with this public health issue, including LRFD HAZMAT Team, Arkansas National Guard 61st CST, Saline County Sheriff’s Office, Arkansas State Police, Arkansas Department of Health, and UAMS Police Department. Assistant United States Attorney Stacy Williams is prosecuting the case.
Memphis Rapper Pleads Guilty to Illegally Possessing a Firearm in ArkansasRead the Press Release
LITTLE ROCK—Ricky Hampton, the rapper who goes by the stage name “Finese2Tymes” and has been performing at concerts when violence has broken out multiple times, pleaded guilty in federal court today to a gun possession charge stemming from an incident following a concert in Forrest City.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Jeff Reed, Resident Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF), announced Hampton’s plea, which took place before United States District Court Judge J. Leon Holmes. Hampton pleaded guilty to one count of being a felon in possession of a firearm. The plea agreement called for enhancements because the firearm in question was capable of accepting a high-capacity magazine, and Hampton possessed the firearm in connection with another felony offense.
Hampton was originally arrested on a federal complaint on July 3, 2017. A grand jury then indicted him on July 6, 2017. Kentrell Gwynn, Hampton’s bodyguard, was added as a co-defendant in a superseding indictment on August 3, 2017. Hampton pleaded guilty to the superseding indictment on Monday and will be sentenced by Judge Holmes at a later date.
“Violence has followed this individual, and it is time for that to end,” Hiland said. “The message is clear—if you are a felon in possession a firearm, and especially if you use that firearm to commit other crimes, you will be arrested and prosecuted to the fullest extent of the law.”
The investigation into Hampton showed that on June 24, into the early morning hours of June 25, 2017, Hampton performed at Club Envy in Forrest City. After the concert, a woman in the parking lot stated that she drove to the front of Club Envy at about 2:45 a.m. on June 25 and found her route blocked. She then saw Hampton entering the passenger side of a car as he began to scream at her to move her car. As the woman moved her car in reverse, Hampton aimed a large gun at her and yelled. The gun was still aimed at the woman when she turned her car around. As the woman sped off, her back window was shattered and she was grazed by a bullet on the side of her neck.
Witnesses in the Club Envy parking lot took photographs and videos of this incident and posted them to Facebook. In these photographs Hampton can be seen holding and pointing an “AK-style” pistol, which had a AK-47 rifle barrel, with a pistol grip and no shoulder stock. This type of firearm is commonly referred to as a “Draco.”
On July 1, 2017, Hampton performed at Power Ultra Lounge in Little Rock when a mass shooting occurred and 25 people were injured. The next day, ATF and United States Marshals arrested Hampton at the Side Affects Club in Birmingham, Alabama, following a concert. After the arrest, agents recovered a Century Arms “AK-style” pistol from the vehicle in which Hampton was traveling. This pistol was purchased by Gwynn on May 26, 2017. ATF agents interviewed Hampton, who told them that he “upped the Draco,” referring to raising and pointing the “AK-style” pistol in Forrest City.
The maximum punishment Hampton faces for being a felon in possession of a firearm is not more than 10 years’ imprisonment, a fine not to exceed $250,000, and not more than three years of supervised release.
The primary investigation was conducted by the ATF, with assistance from the U.S. Marshal Service and the Forrest City Police Department. Assistant United States Attorneys Stephanie Mazzanti and Chris Givens are 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 athttp://www.justice.gov/edar
Twitter:
@EDARNEWSUnited States Files Civil Enforcement Action to Stop Arkansas Compounding Pharmacy and CEO from Manufacturing and Distributing Adulterated DrugsRead the Press Release
The United States filed a civil complaint and a motion seeking a preliminary injunction against Cantrell Drug Company and its co-owner and Chief Executive Officer, James L. McCarley Jr., to stop the manufacturing and distribution of adulterated drugs, the Department of Justice announced today.
The complaint, filed in the U.S. District Court for the Eastern District of Arkansas at the request of the U.S. Food and Drug Administration (FDA), alleges, among other things, that defendants distribute adulterated drugs in interstate commerce. According to the complaint, defendants’ drugs are adulterated because they are prepared, packed, or held under insanitary conditions whereby they may have been contaminated or may have been rendered injurious to health. The complaint also alleges that defendants’ drugs are adulterated because defendants fail to comply with current good manufacturing practice regulations.
“The Department of Justice is committed to ensuring that patients receiving compounded drugs are protected by the safeguards established in federal law,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will continue to work actively with FDA to ensure that the law’s protections are fully enforced.”
Cantrell initiated voluntary recalls of drug products in 2016 and 2017. The 2016 recall, initiated due to lack of sterility assurance, involved 29 lots of unexpired sterile drug products. The 2017 recall, also due to a lack of sterility assurance, encompassed all lots of unexpired sterile drug products that Cantrell had compounded and distributed between Feb. 16, 2017, and July 19, 2017.
FDA inspected Cantrell’s facility in 2013, 2016, and 2017, and the agency issued a Warning Letter to Cantrell in 2015. As alleged in the complaint, during the 2017 inspection, FDA documented evidence of insanitary conditions and significant deviations from current good manufacturing practice regulations. For example, as alleged in the complaint, FDA observed that the pharmacy’s own documentation revealed that Cantrell repeatedly recovered several types of microorganisms in the air and on surfaces used for sterile processing, demonstrating that products manufactured in those areas were prepared, packed, or held under insanitary conditions. As alleged in the complaint, on at least 12 occasions between January and May 2017, defendants’ environmental monitoring in one of its clean-room areas detected microbes in excess of their “action limit” (i.e., a level of contamination high enough to trigger a response such as an investigation and corrective action). As noted in the complaint, the contamination consisted of bacteria, including Bacillus oleivorans, Staphylococcus epidermidis, Micrococcus luteus, and Bipolaris spicifera. The presence of any of those organisms in an injectable product administered to a patient could cause serious adverse effects to the patient.
In addition, as alleged in the complaint, FDA found deviations from current good manufacturing practice regulations in the pharmacy’s sterile drug manufacturing operations. For example, the complaint alleges that the pharmacy failed to conduct adequate investigations of microbial contamination found in aseptic processing areas (on surfaces, in the air, and on personnel), as well as spore-forming bacteria detected in areas of the pharmacy used for drug compounding and on operator gloves.
“The Food, Drug, and Cosmetic Act is designed to protect patients from potentially unsafe drugs,” said U.S. Attorney Cody Hiland for the Eastern District of Arkansas. “This action demonstrates our commitment to enforcing these laws. We remain steadfast in our dedication to keeping the citizens of our communities safe by whatever means available under federal law.”
If entered by the Court, the Proposed Order of Preliminary Injunction sought in conjunction with the filed complaint would require defendants temporarily to cease their current operations and to recall and destroy all non-expired drugs manufactured, held, and/or distributed by them. The Proposed Order also provides defendants with a pathway to resume manufacturing and distribution by establishing specific actions defendants must take to remedy their operations.
The government is represented by Trial Attorney Raquel Toledo of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Shannon Smith of the U.S. Attorney’s Office for the Eastern District of Arkansas, with the assistance of Associate Chief Counsel, Litigation, Jennifer Kang of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of Arkansas, visit its website at https://www.justice.gov/usao-edar.
Pine Bluff Man Sentenced to Prison for His Role in Stealing Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced today that United States District Court Judge Kristine G. Baker sentenced Elbert Harris, 58, of Pine Bluff, to federal prison for his role in a widespread scheme to steal money intended for feeding children in low income areas in Arkansas.
Judge Baker sentenced Harris, who pleaded guilty to conspiring to commit wire fraud on October 10, 2017, to 33 months’ imprisonment, to be followed by three years of supervised release. Harris was also ordered to pay $1,084,130.13 in restitution and to forfeit property he bought with money he acquired during the scheme.
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.
Harris was a sponsor for a feeding program through an organization called “Greater Faith Ministries.” Harris had 14 approved feeding site locations, which were located in Pine Bluff, Altheimer, and Wabbaseka. Harris 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. Harris submitted claims of up to 165 children per day at some of his feeding sites, but fewer than 20 children were actually fed at these locations.
Harris is the 16th 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); and ); and Waymon Weeams (15 months imprisonment on February 15, 2018).
Debora Washington was indicted on conspiracy and fraud charges related to this scheme on February 1, 2018, and is awaiting a jury trial in front of United States District Judge J. Leon Holmes. Also, Nigel Hall has pleaded guilty to conspiracy to commit wire fraud in relation to the same feeding programs and is awaiting sentencing before Judge Holmes at a later date.
The investigation is still ongoing and continues to be conducted by the USDA–Office of Inspector General, IRS–Criminal Investigations, and the FBI. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg, and Cameron McCree.
If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
Major Gang Arrests Highlight Pioneering Collaborative State, Local, and Federal Violence Reduction InitiativesRead the Press Release
LITTLE ROCK—Multiple gang members are among the dozens of individuals arrested in a major law enforcement operation targeting violent criminals in central Arkansas. Thursday’s early-morning takedown highlights the coordinated work of federal, state, and local agencies to combat drug and gun crime in Little Rock, and is part of both new and continuing efforts by all law enforcement in the area to address the rise in violent crime.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Stephen G. Azzam, Special Agent in Charge of the New Orleans Field Office of the Drug Enforcement Administration (DEA), announced today’s arrests, as well the unsealing of 13 indictments and two complaints charging 49 individuals with dozens of federal gun and drug-trafficking crimes. The indictments were presented as part of a collaborative violent-crime reduction initiative in the greater Little Rock area.
The overall operation, led by the DEA and assisted by the FBI, resulted in 21 people arrested on Thursday morning and is the product of the combined efforts of the law enforcement agencies comprising the GET Rock task force. Early Thursday morning hundreds of officers from multiple agencies executed arrest warrants for the charged suspects. Nine defendants remain fugitives. Included in the arrests were multiple members of Little Rock’s two dominant gangs—Bloods and Crips. Agents also executed 11 search warrants, which resulted in agents seizing 21 illegally possessed guns, body armor, 9.6 pounds of cocaine, 4 ounces of methamphetamine, 7.2 ounces of crack cocaine 12 ounces of marijuana, 5 grams of heroin, 293 ecstasy pills, and 93 pint bottles of promethazine cough syrup. Agents also seized approximately $50,000 in drug proceeds, 4 cars, and 1 motorcycle.
This operation is 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. 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, and local law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
“Gangs use violence to try to assert a false sovereignty over our neighborhoods, but they will fail,” Attorney General Sessions said. “The Department of Justice is committed to reducing violent crime in America. That’s why we have restored our Project Safe Neighborhoods program, which customizes our crime reduction strategy in each of our 94 U.S. Attorney districts. Federal, state, and local law enforcement in Arkansas has prioritized dismantling gangs—and together we are producing results. Today’s arrests are the next steps toward taking back our streets.”
Hiland made clear that the people arrested in this operation are the type of criminal he is most determined to remove from our communities.
“A team of over 250 agents and officers from law enforcement agencies across our state came together this morning to begin the process of dismantling violent gangs and removing dangerous people from the streets, with the goal of making our community a safer place,” Hiland said. “These agents also took drugs and violent people off the street today—people we believe endanger the lives of law-abiding citizens and endanger the future of our children with their toxic influence. Since I took this position, I have said that targeting violent offenders will be a priority for this office, and we are committed to that priority. Today’s operation is a victory over gang, gun, and drug violence, but is just the start of what the combined resources of these law enforcement agencies can do.”
“These arrests should serve as a warning and send a clear message—we will relentlessly pursue these violent criminals and drug traffickers plaguing our communities and bring them to justice,” Special Agent in Charge Azzam said. “Our neighborhoods deserve to exist without fear and intimidation inflicted by violent drug gangs. These dangerous criminals arrested today were responsible for infesting our communities with more than drugs—they also threatened our citizens with guns and violence. The DEA stands here today with our federal, state, and local law enforcement partners, confident that we have dismantled these violent drug trafficking organizations and made the streets in these communities a safer place to live.”
The DEA served as lead agency while working in conjunction with GET (Gang Enforcement Task Force) Rock during the operation. 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, highlighted by the July 1, 2017, mass shooting at the Power Ultra Lounge in Little Rock that injured 28 people. Nine central Arkansas law enforcement agencies—the U.S. Attorney’s office, FBI, 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 Correction—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.
“With these arrests and indictments, we are serving notice that Arkansas will not tolerate the reign of terror by those who traffic in illegal drugs, illegal guns, and rule by intimidation,” Governor Hutchinson said. “I applaud the work of all of the agencies who participated in this investigation and dangerous round-up of suspects. Our newly formed GET Rock team has demonstrated that cooperation across agencies at all levels is an effective approach to identifying and apprehending gang members and others who threaten the lives of our citizens. These officers have taken great risks on our behalf, and I thank them on behalf of all those whose neighborhoods are a little safer today.”
“Violent street gangs, including the Wolfe Street Crips and the Monroe Street Hustlers, have a long history of crime and violence in the Little Rock community,” FBI Little Rock Field Office Special Agent in Charge Diane Upchurch said. “We are determined to hold accountable these individuals who have paralyzed our community. We appreciate and applaud the efforts of this amazing team of law enforcement agencies.”
Little Rock Mayor Mark Stodola, a former prosecutor, praised the city’s law enforcement officers in the successful operation.
“The impact of today’s arrests will go a long way toward bringing safety back to the streets of Little Rock,” Mayor Stodola said. “Our citizens deserve to live without fear, without the nightly crack of gunfire piercing the darkness of night. Drugs and guns are a deadly mix which often ends in a homicide. Those who insist on mixing the two with criminal activity must be taken off the streets. Our thanks to the 250 law enforcement officers from our federal, state and local law enforcement agencies who, with the actions taken today, are making our streets safer.”
Hiland announces new program designed to produce more federal prosecutions
On Thursday, the heads of federal, state, and local law enforcement agencies attended a press conference announcing these arrests, during which time Hiland also announced a major PSN initiative his office is implementing that is designed to marshal the combined resources of federal and state law enforcement to remove violent, repeat criminals from the streets of central Arkansas.
Overall, violent crime increased approximately 5.52% from 2016 to 2017 in Little Rock, including increases in homicides, rapes, and burglaries. The largest increase was in the number of aggravated assaults, which jumped from 2,229 in 2016 to 2,556 in 2017. Guns are used in a vast majority of these assaults.
At the press conference, Hiland introduced Joann Rhodes, a Little Rock grandmother who was nearly killed last Friday afternoon when a bullet pierced her windshield inches from her head while she was driving on 12th Street in Little Rock. Rhodes also lost a son to gun violence four years ago.
“In response to a continued spike in violent crime, the Little Rock Police Department joined resources with our local, state and federal partners,” LRPD Chief Kenton Buckner said. “Our collective efforts have resulted in a significant takedown of many individuals responsible for crimes in our community. Little Rock is grateful to everyone who has assisted to keep the capital city safe. We remain committed to pursuing the individuals responsible for heinous crimes in our city.”
Recognizing the need to address the acute and immediate threat that gun violence is having on our communities—which includes people like Ms. Rhodes—Hiland seeks to use the full force of his office and federal firearms statutes, which provide significant punishment for repeat offenders and felons who possess guns. Without similar punishments in the state system, it is prosecution in the federal system—which has no parole—that provides a recognizable deterrent for these violent criminals.
“To those who have held our communities hostage to your violence, to those who have declared war in our neighborhoods with little fear of retribution, we are coming for you,” Hiland said. “We will seek your removal by any means available to me under federal law. The announcement of this program is your warning—my office, along with the shared resources of all of our local, state, and federal partners—stands ready to do what needs to be done to take you off the streets, and make our communities safer places. Everyone in the law enforcement community shares this goal.”
Under this PSN initiative, the Eastern District of Arkansas will greatly increase its capacity to federally prosecute violent crimes involving guns and drugs by enlisting the help of attorneys currently working for various state offices. These attorneys will be deputized as Special Assistant United States Attorney’s (SAUSAs) and given authority to prosecute cases in federal court.
Six county prosecuting attorney’s offices (Pulaski, Faulkner, Saline, Jefferson, Lonoke, and White) have offered prosecutors to assist in federal court. Additionally, the Attorney General’s office and the Governor’s office have volunteered attorneys to serve as SAUSAs. In total, approximately 13 SAUSAs will initially serve the Eastern District of Arkansas, allowing the office to prosecute far more cases in federal court.
Hiland’s office has already begun increasing its caseload. In December and January, the U.S. Attorney’s office opened approximately 50 new gun cases, many of which originated with an arrest by a local police department. Thus far in February the office is reviewing another 20 gun cases, and Hiland pledges to work with the Pulaski County prosecutor’s office to review every gun arrest that occurs in Pulaski County for potential federal prosecution.
“I am proud to join U.S. Attorney Cody Hiland in the important fight against violent crime,” Arkansas Attorney General Leslie Rutledge said. “The addition of Special Assistant United States Attorneys will help law enforcement curtail unnecessary violence and lock criminals up for the gun crimes they commit. No Arkansan should live in fear and I am confident that prosecuting and removing dangerous criminals from our streets will make our neighborhoods safer.”
“This initiative will enhance coordination and cooperation among the local, state, and federal agencies tasked with keeping our communities safe, and in reducing gun violence in particular,” Pulaski County Prosecutor Larry Jegley said. “I can say with confidence that prosecutors throughout the counties of the Eastern District of Arkansas welcome this outreach effort and will put it to good use for the public we serve. The violence on our streets must stop, and this is a terrific effort to that end.”
Hiland’s gun initiative would not be possible without the assistance of both the local prosecuting attorney’s offices and the local police departments, as well as federal partners such as the ATF. Many of the cases these SAUSAs will prosecute in federal court will begin with arrests by the LRPD, PCSO, North Little Rock Police Department and the Arkansas State Police, and then move into the federal system with the help of the ATF. The ATF will provide expertise and the logistical and technical support of special agents to allow cases that began with state arrests to proceed in the federal system.
“ATF remains committed to the detection, investigation, and prosecution of individuals who would illegally possess and utilize firearms in crimes of violence,” ATF Little Rock Resident Agent in Charge Jeff Reed said. “We applaud this new effort to enforce federal gun laws on violent criminals who want to take the law into their own hands. ATF will work in lockstep with the United States Attorney’s Office to accomplish the removal of the threat posed by those individuals who would enforce their will upon the citizens of Arkansas by illegally possessing and using of firearms.”
The new SAUSAs are expected to begin prosecuting federal cases in the coming weeks. On Thursday, thirty-one of the 49 defendants included in the operation are charged in two indictments. In 2017, law enforcement identified Clifton Thomas and Marvin Collins as founders of a local Bloods-affiliated gang, Real Hustlers Incorporated (RHI). The gang, known to frequent the area of Monroe and Brown Streets in Little Rock, started as the Monroe Street Hustlers and changed its name to RHI due to mounting and unwanted attention from the LRPD. RHI, which promotes itself as an organization for rap artists, utilizes 5108 31st Street in Little Rock as a music studio, and as a location for distribution of heroin, cocaine, marijuana, oxycodone, and other controlled substances.
The mass shooting at Power Ultra Lounge was precipitated by the rivalry between RHI and the Wolfe Street Crips, which is a local Crips-affiliated gang in Little Rock. Police identified various RHI members as having participated in the Power Ultra Lounge shooting, and in subsequent retaliatory shootings involving Dewquan Johns, James Langford, Rodney Scott, Damien Young, and Edmond Blue (all of whom are indicted as part of this operation), among several others.
The DEA, using court-authorized wiretaps of various phones, identified gang members and the drug and gun crimes the gang was committing. Charges in the Thomas indictment include conspiracies to distribute cocaine, heroin, and marijuana, felon in possession of firearms, and possession of firearms in furtherance of drug trafficking. Included among the defendants is Bilal Johns Muhammad, identified as a long-time leader in RHI, and formerly the Monroe Street Hustlers. Two of Bilal Johns Muhammad’s sons—Bilal Sean Muhammad and Kain Jordan—were also indicted in the case.
The DEA and GET Rock also identified another 18 defendants as part of a drug trafficking organization headed by Robert Turpin III. The investigation revealed that Turpin was distributing ounce quantities of methamphetamine, cocaine, heroin, and marijuana, as well as thousands of oxycodone and alprazolam (Xanax) pills in the central Arkansas area. Turpin was found to be importing pharmaceutical drugs from India for illicit distribution, and during the course of the conspiracy more than 150,000 pills were obtained and distributed.
Furthermore, the Turpin organization was responsible for the transportation and distribution of methamphetamine, cocaine, heroin, marijuana, pharmaceutical controlled substances and money to and from Texas, Massachusetts, and North Carolina using personal and commercial vehicles, the United States Postal Service and FedEx. This organization also trafficked in firearms and has engaged in firearm-related violence in the Little Rock area. Law enforcement agents carried out the operation that resulted in the arrests of 15 of the 18 indicted members of the Turpin organization on February 14, 2018.
Also arrested Thursday morning was Chris Alexander, a member of the Wolfe Street Crips and purported community activist who has promoted anti-gang and violence programs in Little Rock in the past. Alexander, along with fellow gang member Kenya Davis, who is still a fugitive, was indicted on marijuana conspiracy and distribution charges. Alexander was also charged with being a felon in possession of firearms and possession of firearms in furtherance of drug trafficking.
These cases were investigated by the DEA Little Rock District Office Task Force Group 2—composed of DEA special agents and task force officers from the ASP, PCSO, Jefferson County Sheriff’s Office, Saline County Sheriff’s Office, and Benton Police Department. Also involved in the investigation was FBI, ATF, United States Marshals Service, LRPD, North Little Rock Police Department, Arkansas Community Corrections, and the Arkansas National Guard Counter-Drug Task Force. Assistant United States Attorney Anne Gardner is heading the prosecution of these cases.
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 athttp://www.justice.gov/edar
Twitter:
Defendant List Thomas Filed Indictment Turpin Filed Indictment
@EDARNEWSWest Memphis Gang Member Sent to Prison for More Than 17 Years for Illegal Gun PossessionRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Jeffrey Reed, Resident Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), announce that late Thursday multi-convicted felon Marvin Meux, 45, of West Memphis, was sentenced to 210 months in federal prison for his illegal possession of a firearm.
A federal Grand Jury charged Meux with one count of being a felon in possession of a firearm on June 18, 2016, and he pleaded guilty to that count on August 25, 2017. On February 15, 2018, United States District Court Judge James M. Moody, Jr., sentenced Meux to 210 months (17.5 years) in federal prison, to be followed by three years of supervised release. There is no parole in the federal system.
Meux was originally arrested by state authorities on October 21, 2015, after West Memphis police officers were dispatched to an area in West Memphis where two subjects were allegedly being held at gunpoint while attempting to repossess a car registered to Meux. While repossession employees were attempting to hook up the car, Meux jumped into the driver’s seat and drove off in the vehicle, with one of the employees still in the passenger seat. After fleeing a short distance, Meux drove back to his residence. After the employee exited Meux’s vehicle he saw Meux running towards him with a small black gun. The two repossession employees then got into their truck and drove away, while Meux was pointing the gun at them.
During a search of the residence West Memphis police officers located an SKS assault rifle and a .38 caliber revolver. Meux is identified as a member of a gang known as the Gangster Disciples in West Memphis. Judge Moody sentenced Meux pursuant to the Armed Career Criminal Act statute, which mandates enhanced penalties if the defendant had previously been convicted of three or more violent offenses or serious drug offenses.
The investigation was conducted by the West Memphis Police Department and the ATF. The case was prosecuted by Assistant United States Attorneys Liza Brown and Michael Gordon.
Texas Man Sentenced to Prison for His Role in Stealing Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced today that United States District Court Judge Kristine G. Baker sentenced Waymon Weeams, 37, of Rockwall, Texas, to federal prison for his role in a widespread scheme to steal money intended for feeding children in low income areas in Arkansas.
Judge Baker sentenced Weeams, who pleaded guilty to conspiring to commit wire fraud on October 4, 2016, to 15 months’ imprisonment, to be followed by two years of supervised release. He was also ordered to pay $697,236.41 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.
Weeams was a sponsor for a feeding program through an organization called “SJ&B Outreach.” Weeams had three approved feeding site locations, which were located in Wynne, Forrest City, and Marianna. Between all three sites, he claimed as many as 872 children were fed each day. No children were ever actually fed at the Forrest City site, and Weeams now says that approximately 10 to 50 children were fed at the other two sites. Weeams was recruited to participate in the scheme by Anthony Waits. Waits’s wife, Gladys Waits, worked for DHS and approved Weeams’s application. Weeams paid Anthony Waits approximately 40% of the $697,236.41 Weeams received in the scheme.
Weeams is the 15th 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); and Dorothy Harper (33 months imprisonment on January 9, 2018).
Debora Washington was indicted on conspiracy and fraud charges related to this scheme on February 1, 2018, and she is scheduled to be arraigned on these charges next week. Her case will be handled by United States District Judge J. Leon Holmes. Also, Elbert Harris pleaded guilty to wire fraud, and Nigel Hall has pleaded guilty to conspiracy to commit wire fraud in relation to the same feeding programs. Both are awaiting sentencing.
The investigation is still ongoing and continues to be conducted by the USDA–Office of Inspector General, IRS–Criminal Investigations, and the FBI. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg, and Cameron McCree.
If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
Investigators Stop Former Department of Veterans Affairs Employee from Selling Personal Information of Veterans and Federal EmployeesRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced today the unsealing of an indictment charging Phillip Hill, 32, of Benton, a former Department of Veterans Affairs (VA) database manager, with attempting to sell the personal information of veterans and VA employees.
The indictment, returned by a grand jury in the Eastern District of Arkansas on January 9, 2018, and unsealed today, charges Hill with attempted trafficking of access devices (i.e., social security numbers), aggravated identity theft, and possession of device-making equipment. Hill was previously arrested on December 17, 2017, and charged via complaint on December 18, 2017. Today Hill appeared before United States Magistrate Judge Joe J. Volpe and was released on bond. Trial is set for March 5, 2018.
The investigation revealed that Hill offered to sell the personal data of veterans, their dependents, and VA employees for $100,000 to a confidential source working with law enforcement. Hill was terminated by the VA on December 6, 2017. After being fired from the VA, Hill said he could still access the information remotely with a VA computer in his possession, or by stealing a VA server. Hill was arrested outside a secure area at the VA that housed the data he was offering for sale. Law enforcement officers executing a search warrant found a VA computer in Hill’s home.
“Mr. Hill tried to use his position and skills to enrich himself at the expense of veterans who have honorably served our country, and the VA employees working to serve them,” Hiland said. “This indictment reflects our commitment to defending our veterans and federal employees from those who take advantage of their public service by illegally accessing and selling their personal information. It will not be tolerated and will be prosecuted to the fullest extent of the law.”
Law enforcement officers arrested Hill before he could sell the VA data. Through a variety of investigative methods, investigators also discovered that Hill committed aggravated identity theft by using the personal information of another person, and illegally possessed blank identification cards.
The maximum penalty for trafficking in social security numbers is up to 10 years’ imprisonment and three years of supervised release. The penalty for aggravated identity theft is two years’ imprisonment and one year of supervised release. The maximum penalty for possessing access device-making equipment is up to 15 years’ imprisonment and three years of supervised release. Additionally, each of these offenses is also punishable by a fine of not more than $250,000.
The case is being investigated by the Department of Veterans Affairs, Office of Inspector General, and United States Secret Service. It is being prosecuted by Assistant United States Attorneys Ali Ahmad and Hunter Bridges.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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Jacksonville Women Sent to Prison After Embezzling More Than $425,000 from UnionRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Michelle Hussar, District Director for the United States Department of Labor Office of Labor Management Standards, announced today that Chief United States District Judge Brian S. Miller sentenced Jeni May Hughes, 51, of Jacksonville, to 30 months in federal prison for embezzling more than $425,000 from Plumbers and Pipefitters Local Union No. 155 (Local 155).
In addition to 30 months in prison followed by three years of supervised release, Judge Miller ordered Hughes to pay $428,874.47 in restitution. Hughes served as the office manager for Local 155 for more than 15 years. Her official duties included collecting monthly dues from the organization’s roughly 900 members, depositing the funds, and maintaining Local 155’s ledger.
On the eve of an outside audit in March 2016, Hughes abruptly tendered her resignation. In the weeks that followed, auditors gradually uncovered a $428,874.47 shortfall in union receipts. This prompted a formal Department of Labor investigation. It revealed that from January 2005 until her departure in March 2016 Hughes routinely failed to deposit Local 155’s cash dues, instead diverting the funds into her own personal account.
"We are a Local Union made up of hard working men and women who are not looking for a hand out," said Local 155 in a letter to the Court signed by more than 100 of its members. "The money [Hughes] stole came from our members" and was to be used to "train all members, provide[] health insurance, and a pension. The same benefits we provided for her."
The Office of Labor Management Standards makes available labor union reports, compliance tips and other publications on its website, www.dol.gov/olms. The United States Department of Labor conducted the investigation. Assistant United States Attorney Alexander D. Morgan prosecuted the case for the United States.
England Woman Sent to Prison for Role in Scheme to Steal USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced Tuesday that United States District Court Judge James M. Moody Jr., sentenced Dorothy Harper, 52, of England, to prison for her role in a multi-million dollar scheme to steal money intended for feeding children in low income areas.
Judge Moody sentenced Harper on Tuesday to 33 months’ imprisonment followed by three years of supervised release. She was also ordered to pay $1,300,702.29 in restitution. Harper pleaded guilty to one count of conspiracy to commit wire fraud on March 24, 2017.
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.
Harper was a sponsor for a feeding program through an organization called “Kingdom Land Youth Outreach Ministries” between June 2013 and May 2014. Prior to June 2013, Harper met Anthony Waits, who was married to former DHS employee Gladys Waits. Harper agreed to pay Anthony Waits in exchange for Gladys Waits’ assistance in the program. Waits was recently sentenced to 175 months’ imprisonment for his involvement in the fraud after his conviction at trial, while Gladys Waits received a 108-month sentence following a guilty plea.
While Harper was in the program, approximately 15 inflated claims for Harper’s sites were submitted to DHS. The inflated claims reported to DHS higher numbers of children fed than the true number of children who were actually fed. Because of the inflated claims, Harper’s program received just over $1.3 million.
Harper is the 14th defendant to be sentenced for their involvement in a scheme to fraudulently obtain USDA program funds intended to feed children in low income areas. Other defendants sentenced 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 (three 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 19, 2017); and Jacqueline Mills (150 months’ imprisonment on December 6, 2017).
Waymon Weeams has pleaded guilty to conspiring to defraud USDA feeding programs. Elbert Harris has pleaded guilty to wire fraud in relation to the same feeding programs. Both are awaiting sentencing.
In this investigation, law enforcement has uncovered more than $13 million in fraud related to these USDA Arkansas feeding programs. Although everyone initially charged in this scheme has now been convicted, the investigation is still ongoing, and continues to be conducted by the USDA–Office of Inspector General, IRS–Criminal Investigations, and the Federal Bureau of Investigation.
The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg, and Cameron C. McCree. If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
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Attorney General Jeff Sessions Elects Eastern District of Arkansas to Receive New United States Attorney Position to Combat Violent CrimeRead the Press Release
LITTLE ROCK—Attorney General Jeff Sessions has selected the Eastern District of Arkansas to receive additional resources for the fight against violent crime. The district will receive an additional Assistant U.S. Attorney to focus exclusively on violent crime, one of 40 new federal prosecutors in 27 selected locations throughout the United States.
“Led by our 94 United States Attorney’s Offices, Project Safe Neighborhoods (PSN) task forces are hitting the streets across America to apprehend and bring violent criminals to justice,” Attorney General Sessions said. “I have asked Congress for additional PSN funding next year because I believe nothing will be more effective at reducing violent crime. Under this program, I am asking a great deal of our United States Attorneys. I am both empowering them and holding them accountable for results. To put them in the best position to impact and reduce violent crime, it is my privilege to announce that through a re-allocation of resources, we will be enlisting and deploying 40 additional violent crime prosecutors across the United States.”
Cody Hiland, United States Attorney for the Eastern District of Arkansas (EDAR), has made combatting violent crime, particularly gang and gun crimes, a top priority since being sworn into office in October 2017. Hiland will announce new initiatives and programs intended to address the acute violent crime problems facing the EDAR, particularly Little Rock. The addition of a violent crime AUSA will aid in this effort.
“The Attorney General has made curbing violent crime a focal point of his administration, and I am pleased that he has awarded this needed position to our office,” Hiland said. “Violent crime, especially gun crimes, continues to be a plague on our communities. In the coming weeks I will be announcing measures to ensure that people who commit these crimes will be prosecuted with the full force of federal law. We will continue to team with both federal and local law enforcement partners and use all available resources and strategies to keep the law-abiding citizens of the Eastern District of Arkansas safe.”
The EDAR continues to be an active participant in the PSN program, and remains committed to the program’s collaborative and targeted approach to reducing violent crime. The PSN program identifies the most violent locations in a district and the individuals who drive the gun and gang violence. PSN partners then develop and bring cases against those who commit violent crimes. Hiland intends to raise the level of federal involvement in cases involving PSN criminals, including bringing in additional resources to permit an increased number of federal firearm prosecutions.
In addition, through 2018, Little Rock and West Memphis remain a part of the Public Safety Partnership (PSP). PSP is a Department of Justice program designed to enhance support of state and local law enforcement officers and prosecutors in the investigation, prosecution, and deterrence of violent crime, especially crime related to gun violence, gangs, and drug trafficking. PSP builds on lessons learned from a pilot concept known as the Violence Reduction Network and enables cities to consult with and receive coordinated training, technical assistance, and an array of resources from DOJ to enhance local violence reduction strategies.
The Eastern District of Arkansas’ participation in the PSN and PSP programs, which have shared goals of reducing violent crime through collaboration with local and federal law enforcement partners, will enhance the office’s ability to reduce violent crime. The new federal prosecutor in the EDAR will work to further the goals of the PSN and PSP programs.
“Prosecuting those who commit violent crimes will be a priority for this office, and we will use whatever tools we have at our disposal to meet this priority,” Hiland said. “The people and communities we serve deserve nothing less.”
New AUSA Positions Breakdown by District
Northern District of Alabama - 1
Eastern District of Arkansas - 1
Northern District of California - 2
Southern District of California - 1
District of Connecticut - 1
District of Columbia - 1
Central District of Illinois - 1
Northern District of Illinois - 3
Southern District of Indiana - 1
Eastern District of Louisiana - 1
District of Maryland - 3
Western District of Michigan - 1
Eastern District of Missouri - 2
Western District of Missouri - 1
District of Nevada - 2
District of New Mexico - 1
Eastern District of New York - 2
Western District of New York - 1
Northern District of Ohio - 2
Eastern District of Pennsylvania - 1
Middle District of Tennessee - 2
Western District of Tennessee - 2
Eastern District of Texas - 1
Northern District of Texas - 1
Southern District of Texas - 2
Western District of Texas - 1
Eastern District of Wisconsin - 2
# # #IBERIABANK Agrees to Pay over $11.6 Million to Resolve Alleged False Claims Act Liability for Submitting False Claims for Loan GuaranteesRead the Press Release
The Justice Department announced today that IBERIABANK Corporation, IBERIABANK and IBERIABANK Mortgage Company (collectively, IBERIABANK) have agreed to pay the United States $11,692,149 to resolve allegations that they violated the False Claims Act by falsely certifying they were complying with Federal requirements in order to obtain insurance on mortgage loans from the Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD). IBERIABANK Corporation is headquartered in Lafayette, Louisiana, with branches across the Southeast, including Arkansas.
“Mortgage lenders must follow FHA program rules designed to avoid putting federal funds at risk and increasing the chances that borrowers may lose their homes,” said Principal Deputy Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department will continue to hold accountable lenders that knowingly violate material program requirements that cause the government to guarantee ineligible loans.”
During the time period covered by the settlement, IBERIABANK participated as a direct endorsement (DE) lender in the FHA insurance program. A DE lender has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DE lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DE program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DE lenders are, therefore, required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program. FHA rules also prohibit the payment of commissions to lender underwriting staff in order to avoid improper incentives. DE lenders such as IBERIABANK certify compliance with material FHA requirements.
As part of the settlement, IBERIABANK admitted to the following facts:
Between Jan. 1, 2005, and Dec. 31, 2014, IBERIABANK certified for FHA insurance mortgage loans that did not meet HUD underwriting and origination requirements and were, therefore, ineligible for FHA mortgage insurance under the DE program. HUD paid FHA insurance claims on certain of these ineligible mortgages, and these included ones where IBERIABANK’s loan files contained inadequate documentation of the borrower’s income, unresolved appraisal discrepancies concerning declining home values in the relevant neighborhood, and inadequate verification related to the borrower’s down payment.
Between 2005 and 2014, IBERIABANK paid incentive payments to underwriters and others who performed underwriting activities. After a HUD review of IBERIABANK in 2010 notified the Bank that it was not in compliance with the underwriter commission prohibition, IBERIABANK advised HUD that it was no longer paying underwriter commissions. However, the Bank did not disclose to HUD that it was paying underwriters incentive payments and that it continued to do so through 2014.
Between 2005 and 2014, IBERIABANK did not timely self-report material violations of HUD requirements. Internal IBERIABANK audits and reviews during this time period found that the Bank’s quality reviews were not being performed in a timely manner and did not comply with other HUD requirements.
As a result of IBERIABANK’s conduct and omissions, HUD insured loans approved by the Bank that were not eligible for FHA mortgage insurance under the DE Program and that HUD would not otherwise have insured. HUD subsequently incurred losses when it paid insurance claims on those loans.
* * *
“It is troubling when financial institutions, who have fiduciary responsibilities and are expected to conduct themselves as honest brokers, wrongfully exploit federally funded programs,” said Jeremy Kirkland, Acting Deputy Inspector General, HUD Office of Inspector General. “This settlement demonstrates HUD OIG’s commitment to work with our partners, under the False Claims Act, to combat fraud against the Government. Today’s settlement should serve as a cautionary tale that we will continue to aggressively utilize it in pursuit of those that seek to undermine federal housing programs,” he concluded.
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by former employees of IBERIABANK, Kelley R. Shackleford and Karen Mills, who were employed with IBERIABANK in Little Rock, Arkansas. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The whistleblowers will receive a 20 percent share of the recovery.
The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and the U.S. Attorney’s Office for the Eastern District of Arkansas.
The lawsuit is captioned United States ex rel. Shackleford v. IBERIABANK, 4:15-cv-416 (E.D. Ark.). Other than the facts admitted by IBERIABANK, the claims asserted against IBERIABANK are allegations only, and there has been no determination of liability.
IBERIABANK Agrees to Pay over $11.6 Million to Resolve Alleged False Claims Act Liability for Submitting False Claims for Loan GuaranteesRead the Press Release
The Justice Department announced today that IBERIABANK Corporation, IBERIABANK and IBERIABANK Mortgage Company (collectively, IBERIABANK) have agreed to pay the United States $11,692,149 to resolve allegations that they violated the False Claims Act by falsely certifying they were complying with Federal requirements in order to obtain insurance on mortgage loans from the Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD). IBERIABANK Corporation is headquartered in Lafayette, Louisiana, with branches across the Southeast, including Arkansas.
“Mortgage lenders must follow FHA program rules designed to avoid putting federal funds at risk and increasing the chances that borrowers may lose their homes,” said Principal Deputy Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department will continue to hold accountable lenders that knowingly violate material program requirements that cause the government to guarantee ineligible loans.”
During the time period covered by the settlement, IBERIABANK participated as a direct endorsement (DE) lender in the FHA insurance program. A DE lender has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DE lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DE program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DE lenders are, therefore, required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program. FHA rules also prohibit the payment of commissions to lender underwriting staff in order to avoid improper incentives. DE lenders such as IBERIABANK certify compliance with material FHA requirements.
As part of the settlement, IBERIABANK admitted to the following facts:
Between Jan. 1, 2005, and Dec. 31, 2014, IBERIABANK certified for FHA insurance mortgage loans that did not meet HUD underwriting and origination requirements and were, therefore, ineligible for FHA mortgage insurance under the DE program. HUD paid FHA insurance claims on certain of these ineligible mortgages, and these included ones where IBERIABANK’s loan files contained inadequate documentation of the borrower’s income, unresolved appraisal discrepancies concerning declining home values in the relevant neighborhood, and inadequate verification related to the borrower’s down payment.
Between 2005 and 2014, IBERIABANK paid incentive payments to underwriters and others who performed underwriting activities. After a HUD review of IBERIABANK in 2010 notified the Bank that it was not in compliance with the underwriter commission prohibition, IBERIABANK advised HUD that it was no longer paying underwriter commissions. However, the Bank did not disclose to HUD that it was paying underwriters incentive payments and that it continued to do so through 2014.
Between 2005 and 2014, IBERIABANK did not timely self-report material violations of HUD requirements. Internal IBERIABANK audits and reviews during this time period found that the Bank’s quality reviews were not being performed in a timely manner and did not comply with other HUD requirements.
As a result of IBERIABANK’s conduct and omissions, HUD insured loans approved by the Bank that were not eligible for FHA mortgage insurance under the DE Program and that HUD would not otherwise have insured. HUD subsequently incurred losses when it paid insurance claims on those loans.
* * *
“It is troubling when financial institutions, who have fiduciary responsibilities and are expected to conduct themselves as honest brokers, wrongfully exploit federally funded programs,” said Jeremy Kirkland, Acting Deputy Inspector General, HUD Office of Inspector General. “This settlement demonstrates HUD OIG’s commitment to work with our partners, under the False Claims Act, to combat fraud against the Government. Today’s settlement should serve as a cautionary tale that we will continue to aggressively utilize it in pursuit of those that seek to undermine federal housing programs,” he concluded.
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by former employees of IBERIABANK, Kelley R. Shackleford and Karen Mills, who were employed with IBERIABANK in Little Rock, Arkansas. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The whistleblowers will receive a 20 percent share of the recovery.
The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and the U.S. Attorney’s Office for the Eastern District of Arkansas.
The lawsuit is captioned United States ex rel. Shackleford v. IBERIABANK, 4:15-cv-416 (E.D. Ark.). Other than the facts admitted by IBERIABANK, the claims asserted against IBERIABANK are allegations only, and there has been no determination of liability.
Helena Woman Steals Millions of USDA Funds Intended for Children, Sent to Prison for More Than 12 YearsRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, Dax Roberson, Special Agent in Charge, Southwest Region of the United States Department of Agriculture—Office of Inspector General, Tracey D. Montaño, Special Agent in Charge, Internal Revenue Service–Criminal Investigations (IRS-CI), and Diane Upchurch, Special Agent in Charge, Little Rock Field Office for the Federal Bureau of Investigation (FBI), announced Wednesday that United States District Court Judge James M. Moody Jr., sentenced Jacqueline Mills, 42, of Helena, to prison for her role in a multi-million dollar scheme to steal money intended for feeding children in low income areas.
Judge Moody sentenced Mills on Wednesday to 150 months’ imprisonment followed by three years of supervised release. She was also ordered to pay $3,014,276.87 in restitution and to forfeit a number of properties. A jury convicted Mills on 39 different counts, including wire fraud, conspiracy to commit wire fraud, bribery, and money laundering following an eight-day trial in April.
Anthony Waits, who was Mills’ co-defendant in trial, was sentenced on October 18, 2017, to 175 months’ imprisonment and ordered to pay $3,316,280.85 in restitution.
“Mills and Waits stole millions of dollars intended for disadvantaged and hungry children in one of the most egregious examples of fraud this office has prosecuted,” Hiland said. “The significant sentence each received properly reflects the heinous nature of their crime—preying on the most vulnerable members of our society. Since early 2014, this office has vigorously investigated the massive fraud uncovered in this critical feeding program, and we will continue to do so. When criminals steal from children, it’s this office’s stated intention to ensure that they spend significant time in prison.”
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.
“The Office of Inspector General will pursue justice to the fullest extent of the law when it concerns conduct that impacts the integrity of nutrition programs for needy children,” Special Agent in Charge Roberson said.
As proven in trial, Mills, who said she operated 34 feeding sites, submitted inflated numbers of meals purportedly served from her sites. In some cases, no meals were served at all. Co-conspirators Tonique Hatton and Gladys Waits—who worked for DHS and have already pleaded guilty and been sentenced to prison—assisted Mills in her deception. Hatton and Waits were responsible for approving Mills’ programs at various times. Mills also made bribe payments to Hatton and Waits to provide protection from DHS scrutiny. Hatton and Waits were among more than 50 witnesses who testified during the trial.
Mills was among those who testified, as well. The jury rejected Mills’ testimony that the payments made to Hatton and Waits were merely gifts—including a $5,000 housewarming gift to Hatton—or reimbursements.
The USDA paid Mills more than $3 million on her inflated claims, which included several locations where meals were never served. The jury also found that property seized from Mills during the investigation was proceeds of the offense and should be forfeited. This property includes real estate, four vehicles, and more than $490,000 seized from multiple bank accounts.
“Today’s sentencing of Mills marks the continued commitment of the FBI and our partners to aggressively pursue individuals who violate the public’s trust and hold them accountable for their self-serving acts,” Special Agent in Charge Upchurch said. “Stealing millions of dollars intended to feed hungry children is blatantly wrong. I appreciate the stalwart efforts of the United States Department of Agriculture, IRS, FBI, and the U.S. Attorney’s Office for the Eastern District of Arkansas.”
Mills is the 13th defendant to be sentenced for their involvement in a scheme to fraudulently obtain USDA program funds intended to feed children in low income areas. Other defendants sentenced include: Anthony Waits; Kattie Jordan (63 months’ imprisonment on March 15, 2016); Reuben Nims (21 months’ imprisonment on November 2, 2016); 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 (three 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); and, Francine Leon (34 months’ imprisonment on September 21, 2017).
Waymon Weeams and Dorothy Harper have pleaded guilty to conspiring to defraud USDA feeding programs. Elbert Harris has pleaded guilty to wire fraud in relation to the same feeding programs. All three are awaiting sentencing.
In this investigation law enforcement has uncovered more than $13 million in fraud related to these USDA Arkansas feeding programs.
“IRS-Criminal Investigation is committed to aggressively pursuing individuals who engage in corruption at the expense of hardworking Americans taxpayers,” Special Agent in Charge Montaño said. “Ms. Mills not only bribed DHS employees to receive government contracts to feed disadvantaged children, she then used those funds to line her own pockets. Today’s sentence demonstrates the government’s determination to ensure that individuals attempting to defraud the government will be held accountable. We are proud to have worked with our law enforcement partners to bring this case to a successful resolution.”
Although everyone initially charged in this scheme has now been convicted, the investigation is still ongoing, and continues to be conducted by the USDA–Office of Inspector General, IRS–Criminal Investigations, and FBI. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg, and Cameron C. McCree.
If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
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Little Rock Man Sentenced to 96 Months in Prison for Illegal Possession of Firearm Used in ShootingRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Jeffrey Reed, Resident Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), announced today that five-time convicted felon Andre Smalley, 33, of Little Rock, was sentenced to 96 months in federal prison for his illegal possession of a firearm.
A grand jury charged Smalley with one count of being a felon in possession of a firearm on May 6, 2015, and he pleaded guilty to that count on May 19, 2017. On Wednesday, United States District Court Judge D.P. Marshall, Jr., sentenced Smalley to eight years in prison, to be followed by three years of supervised release. There is no parole in the federal system.
“Andre Smalley is a dangerous, repeat offender who should not be free on the streets of Little Rock, and this sentence properly reflects the seriousness of his crime,” Hiland said. “Prosecuting repeat offenders who terrorize our community by engaging in gun violence will be one of this office’s top priorities. Dangerous criminals who illegally possess and use firearms should know there will be a spot in a federal prison waiting for them.”
At his change of plea hearing Smalley admitted that he possessed a gun during a fight on April 5, 2015. On that evening, Little Rock police officers responded to a fight in progress with shots fired at Our Community Market, located at 1901 Wright Avenue in Little Rock. While in route, communications relayed to officers that there was a male subject lying on the ground suffering from a gunshot wound and there were people trying to load him into a vehicle. Upon arrival, officers located what appeared to be a crime scene, but found that both the victims and suspects had fled the area prior to officers’ arrival.
Following witnesses’ descriptions, and with the aid of security camera footage, officers identified Smalley as one of the people involved in the fight. Footage showed Smalley appear to shoot a gun at victims. Two victims eventually went to the hospital with gunshot wounds.
A short time later, officers located a vehicle matching the description of one of the vehicles seen at Our Community Market during the fight. Smalley was driving the vehicle. Following the execution of a search warrant, officers located a Ruger 9mm handgun, which was consistent with the description of the gun used in the shooting. Additionally, three expended shell cartridges located at Our Community Market were forensically determined to have been fired from the Ruger pistol that was recovered from Smalley.
The investigation was conducted by the Little Rock Police Department and the ATF. The case was prosecuted by Assistant United States Attorneys Edward Walker and Kristin Bryant.
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Sherwood Woman Sentenced to 45 Months in Prison for Wire Fraud, Money Laundering, and Tax FraudRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Tracey D. Montaño, Internal Revenue Service (IRS) Special Agent in Charge, announced today that United States District Judge Kristine G. Baker sentenced Lynn Alisa Espejo, 53, of Sherwood, to 45 months in federal prison for her role in a scheme in which she stole more than $600,000 from her employers.
On February 8, 2017, after a seven-day trial, a federal jury found Espejo guilty on 4 counts of filing false tax returns, 15 counts of wire fraud, and 6 counts of money laundering. On Friday, Judge Baker, in addition to the prison time, imposed three years of supervised release and $2,500 in special assessment penalties. Restitution in this type of case is mandatory, and Judge Baker announced that she will determine the amount of restitution Espejo must pay the IRS and issue an order at a later time.
“Today’s sentence reflects the seriousness of Ms. Espejo’s crimes,” Hiland said. “She stole hundreds of thousands of dollars from people who trusted her, and then repeatedly lied about it. These financial and tax-related crimes hurt not just the actual victims Ms. Espejo stole from, but also all citizens who are honest and pay their taxes as they should.”
From 2007-2010, Espejo served as office manager for Practice Management Services, Inc. (PMSI) and Blanford Medical Services, Inc. (BMSI), corporations that administered business expenses for doctors in Little Rock. Espejo was responsible for managing PMSI's general financial ledger. During her employment, Espejo stole approximately $611,099 by wire transfer from PMSI and BMSI to her personal bank accounts. Espejo misrepresented these transactions in the accounting software Quickbooks and concealed the wire transfers from the doctors and their accountant. Espejo used stolen money for personal expenses such as making payments toward a vehicle, a pool, and construction expenses on a new house.
In addition to the money stolen by wire transfer, Espejo obtained a PMSI debit card and used it for personal purchases from Wal-Mart, including grocery items such as snow crab, bacon, and popcorn balls, video gaming devices, school supplies, and a trampoline.
During this same time period, Espejo filed false tax returns with the IRS in which she failed to report the stolen money as income on her tax returns. These returns resulted in a tax loss of approximately $207,941 for tax years 2007 through 2010.
“Ms. Espejo’s employers entrusted her to ethically and responsibly manage their business’ financial affairs, but instead she decided to divert funds for her personal benefit,” Montaño said. “IRS Criminal Investigation Special Agents are experts in unraveling complex tax fraud and money laundering schemes utilizing our forensic accounting skills. These specialized skills coupled with our partnership with the U.S. Attorney’s Office are key to the identification, investigation, and prosecution of these types of white collar crimes.”
This case was investigated by the IRS Criminal Investigation. Assistant United States Attorneys Stephanie Mazzanti and Jamie Dempsey prosecuted the case for the United States.
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Veterans Administration Employees Plead Guilty to Conspiring to Steal and Sell Prescription DrugsRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, James W. Werner, Special Agent in Charge of the South Central Field Office of the Department of Veterans Affairs Office of the Inspector General (VAOIG), and Anthony Lemons, Acting Assistant Special Agent in Charge of the Little Rock District Office of the Drug Enforcement Administration (DEA), announced today that Nikita Neal, 43, of Little Rock, a former student trainee at the VA John L. McClellan Memorial Hospital in Little Rock, pleaded guilty to conspiring to steal and distribute the prescription opioid oxycodone. Neal’s co-conspirators, pharmacy technicians Alisha Pagan, 34, of Mabelvale, and Satishkumar “Steve” Patel, 45, of North Little Rock, pleaded guilty to the same charge in August and September, respectively.
United States District Judge J. Leon Holmes accepted Neal’s plea on Thursday. A superseding indictment, returned by a federal grand jury in February 2017, charged the trio with eight counts stemming from a scheme in which the three ordered oxycodone, hydrocodone, Viagra, Cialis, and promethazine syrup with codeine and then diverted the controlled substances from the VA for street distribution.
This investigation began in June 2016, when VAOIG received a report that large amounts of unaccounted-for prescription medications were charged to VA accounts. Patel, a pharmacy technician, used his VA access to a medical supplier’s web portal to order and divert 4,000 oxycodone pills, 3,300 hydrocodone pills, 308 ounces of promethazine with codeine syrup, and more than 14,000 Viagra and Cialis pills, at a cost to the VA of approximately $77,700 dollars, with a street value of more than $160,000. Patel then falsified payment invoices to avoid detection.
During the course of the investigation, which included controlled deliveries of oxycodone at the direction of law enforcement, VAOIG and DEA determined that Patel was distributing the medications to Pagan, also a pharmacy technician, who in turn distributed a portion of the drugs to Neal.
Once Patel ordered the narcotics, he communicated with Pagan via text message to arrange transfer of the drugs to Pagan. After obtaining the drugs, Pagan then delivered the drugs to others, including Neal. Neal in turn passed on the drugs to a street-level distributor.
Pagan pleaded guilty on August 2, 2017, and Patel pleaded guilty on September 28, 2017. All three will be sentenced by Judge Holmes at a later date.
Conspiracy to possess with intent to distribute oxycodone is punishable by up to 20 years’ imprisonment, with a possible fine of up to $1,000,000, and not less than three years of supervised release.
The case against Patel, Pagan, and Neal was investigated by the VAOIG and DEA, and is being prosecuted by Assistant United States Attorney Hunter Bridges.
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Leader of Major Heroin and Cocaine Drug Rings Pleads Guilty to ConspiracyRead 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 Federal Bureau of Investigation (FBI), announced today that Aaron Clark, 36, of Little Rock, has pleaded guilty to his involvement in a major conspiracy to distribute heroin.
Clark, also known as “Black,” entered his guilty plea today before United States District Court Judge James M. Moody, Jr., who will sentence Clark at a later date.
A federal grand jury indicted Clark on May 5, 2017, in a 33-defendant, 67-count indictment involving heroin and cocaine conspiracies, both headed by Clark. The indictment resulted in the arrests of dozens of accused drug and gun dealers in central Arkansas.
In late 2015, the FBI and North Little Rock Police Department began investigating the drug-trafficking activities of certain North Little Rock gangs, including the “Self Made Gangsters” (SMG) street gang. Investigators soon learned the gangs’ main source of supply of drugs came from individuals in Little Rock.
Between July and October 2016, NLRPD conducted four controlled purchases of heroin from Clark. Using wiretaps and other sources, agents then confirmed that Clark was purchasing kilogram quantities of heroin and cocaine from a supplier in Texas. On Tuesday, Clark admitted to selling this heroin in ounce and gram quantities as well as larger multi-ounce and kilogram quantities.
In November 2016 agents executed a search warrant at Clark’s west Little Rock residence. Agents seized more than $100,000 cash and jewelry, 178 grams of heroin, a marijuana grow operation, and six firearms. In May 2017, another search warrant at Clark’s new residence revealed over $55,000 cash, marijuana, drug paraphernalia, and 1.7 kilograms of methamphetamine labeled “ice” and stored in an oven.
Throughout the investigation, agents seized more than two kilograms of cocaine, one kilogram of heroin, more than five pounds of methamphetamine, one pound of crack cocaine, and eight ounces of fentanyl. Officers seized these drugs during more than 25 controlled purchases, as well as during the execution of multiple search warrants. In addition, agents seized 25 guns and approximately $241,000 of drug proceeds.
The maximum punishment Clark faces for conspiracy to distribute heroin is not less than 10 years’ imprisonment, not more than life, a fine not to exceed $10,000,000, and not less than five years of supervised release.
The primary investigation was conducted by FBI’s Met Rock Task Force, in coordination with the Little Rock and North Little Rock Police Departments. Assistant United States Attorney Benecia Moore is the lead prosecutor on the indictment.
# # #Little Rock Owner of Chicot Game Room Pleads Guilty to Tax Evasion and Operating an Illegal Gambling BusinessRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Tracey D. Montaño, Special Agent in Charge, Internal Revenue Service—Criminal Investigation (IRS-CI), announced today that Allan Siebert, 75, of Little Rock, agreed to waive indictment and pleaded guilty to a two-count federal information charging him with tax evasion and operating an illegal gambling business.
Today’s plea hearing took place before United States District Judge J. Leon Holmes, who will sentence Siebert at a later date. As part of a plea agreement with the United States, Seibert will pay $331,821 in restitution to the IRS. In addition, Seibert will forfeit two pieces of real property and more than $1 million representing the proceeds of the illegal gambling operation.
"For nearly a decade this defendant broke the law, but today his illegal conduct caught up with him," Hiland said. "Mr. Seibert not only defrauded the United States, he also exploited the hundreds of people he took money from over the years with his illegal gaming machines. This case should send a message to the Eastern District of Arkansas that our office will not tolerate this type of behavior."
From at least August 2007 to May 2017, Siebert owned and operated the Chicot Game Room, an illegal gambling business. This business used various gaming devices that were illegal under the laws of Arkansas.
Between January 2012 and October 2016, Siebert evaded paying $331,821 in federal income tax that he owed by withholding cash from his business deposits, funneling business receipts into his personal properties, and causing his accountant to prepare false U.S. Individual Income Tax Returns for tax years 2012, 2013, 2014 and 2015.
"No matter the source of income, all income is taxable, including illegal gambling proceeds," Montaño said. "Everyone has a responsibility to file correct and accurate tax returns. The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS Criminal Investigation’s enforcement strategy. We will vigorously investigate those individuals who knowingly and willfully evade their tax obligation."
"The Little Rock Police Department has had a long-standing relationship with our federal partners," Little Rock Assistant Chief Wayne Bewley said. "We entered into a partnership with the IRS recently. We look forward to continuing this relationship and continued success as we fight a variety of crimes within Little Rock."
The maximum penalties for tax evasion are not more than five years’ imprisonment, a $100,000 fine, and three years’ of supervised release. The penalty for conducting an illegal gambling business is not more than five years’ imprisonment, a $250,000 fine, and three years’ of supervised release.
This case was investigated by the IRS—CI and the Little Rock Police Department. Assistant United States Attorney Cameron McCree prosecuted the case for the United States.
Anthony Waits Sent to Prison for More Than 14 Years for Role in Stealing USDA Funds Intended for ChildrenRead the Press Release
LITTLE ROCK—Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced Thursday that United States District Court Judge James M. Moody Jr., sentenced Anthony Waits, 38, of England, to prison for his role in a multi-million dollar scheme to steal money intended for feeding children in low income areas.
Judge Moody sentenced Waits on Wednesday following a hearing that went into the evening to 175 months’ imprisonment followed by three years of supervised release. He was also ordered to pay $3,316,280.85 in restitution. A jury convicted Waits of conspiracy to commit wire fraud following an eight-day trial in April.
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.
Waits, not a sponsor himself, recruited sponsors to participate in the feeding program. The sponsors he recruited then paid a percentage of the money they received from the program back to Waits. Five sponsors who Waits recruited have pleaded guilty to their involvement and admitted to making payments to Waits. The sponsors who Waits recruited received over $3.3 million in federal funds meant to feed children, and many testified at trial that they paid Waits approximately 40 percent of what they received.
Anthony Waits’ estranged wife, Gladys Waits, worked for DHS. She was responsible for processing applications from sponsors who applied to participate in the feeding programs, determining their eligibility, and approving their proposed feeding sites. Gladys Waits also helped these sponsors avoid DHS’s detection of the fraud.
Gladys Waits received bribe payments from some sponsors, both directly through checks made payable to her and indirectly through checks made payable to relatives, including Anthony Waits. Anthony Waits recruited sponsors Reuben Nims, James Franklin, Christopher Nichols, Waymon Weeams, and Dortha Harper to participate.
Anthony Waits is the 12th defendant to be sentenced for his involvement in a scheme to fraudulently obtain USDA program funds intended to feed children in low income areas. Other defendants sentenced include: Kattie Jordan (63 months’ imprisonment on March 15, 2016); Nims (21 months’ imprisonment on November 2, 2016); Tonique Hatton (108 months’ imprisonment on January 4, 2017); 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); Nichols (three 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); and, Francine Leon (34 months’ imprisonment on September 21, 2017).
Weeams and Harper have pleaded guilty to conspiring to defraud USDA feeding programs and are awaiting sentencing. Jacqueline Mills was convicted along with Anthony Waits on April 6, 2017, following the jury trial and will be sentenced on December 6, 2017.
In this investigation law enforcement has uncovered more than $11 million in fraud related to these USDA Arkansas feeding programs.
Although everyone initially indicted in this scheme has now been convicted, the investigation is still ongoing, and continues to be conducted by the USDA–Office of Inspector General, Internal Revenue Service–Criminal Investigations, Federal Bureau of Investigation, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana K. Harris, Allison W. Bragg, and Cameron McCree.
If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
Jacksonville Man Sentenced to 20 Years for Sexual Exploitation of a MinorRead 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 Cameron Dee Neal, 34, of Jacksonville, was sentenced to 240 months or 20 years in federal prison for sexual exploitation of a minor.
United States District Court Judge D. Price Marshall, Jr. sentenced Neal on Thursday following an investigation that revealed Neal had sexually exploited and produced child pornography of a six year-old girl. Judge Marshall also ordered Neal complete 10 years of supervised release and ordered to pay $18,776 in restitution to the victim.
The investigation began on December 14, 2015, when HSI agents in Boston discovered 75 images of a minor child, some of which were child pornography, being shared on the internet through a photo-sharing website. These images were uploaded to the website on December 12, 2015.
The images contained a prepubescent female, approximately six years old, in various stages of undress and nudity. The images were taken at various times of the day and night and some of the images appear to have been taken when the victim was sleeping. In some images the victim is wearing adult underwear and the focus of these images is the victim’s buttocks and vagina. There are also images of the victim in the shower and on the toilet, as well as images of the victim (dressed) at venues outside a home.
On December 18, 2015, agents were able to identify the six-year old minor. Agents interviewed her at her school where she stated that Neal took pictures of her in her bedroom, but told her the pictures were a “secret” because “no one wants to see pictures of my naked bottom and private.” The minor stated that Neal would give her old, stretchy panties to wear for the pictures.
That same day agents arrested Neal, who provided a statement. Neal admitted that he took nude photographs of the minor and uploaded them to Imgsrc.com. Neal stated that he had been taking photographs of the minor for approximately 6 months. Neal admitted that he told the minor how to pose in some of the pictures, including bending over and wearing her mother’s thong underwear. Neal also stated that he told the minor not to tell anyone about the pictures and that he was aroused when he took them.
“Taking advantage of innocent children in this way is a heinous crime,” Hiland said. “This young child’s photos were shared to the world, and she will have to live with that forever. Today’s sentence sends a strong message that this behavior, in addition to being morally reprehensible, has significant consequences.”
Neal admitted that he looked for child pornography on the internet and that in the previous six months he had uploaded approximately 50 images of child pornography. HSI agents showed Neal 11 pornographic photographs of the minor, and he admitted that he took each of them and uploaded them to the internet.
“Child pornography steals the innocence of children and destroys lives,” Parmer said. “The production of child pornography is the most heinous aspect of this illegal activity. Sexual abuse scars children for life, and HSI will continue to work with our state and local law enforcement partners to identify the perpetrators of these horrendous acts and seek justice on behalf of their victims.”
Neal was indicted on January 5, 2016, in a two-count indictment charging him with sexual exploitation of a minor and distribution of child pornography. On May 19, 2017, Neal pleaded guilty to sexual exploitation of a minor.
There is no parole in the federal system. When Neal is released upon completion of his 20-year sentence, he will serve 10 years of supervised release. Conditions of his supervised release include registering as a sex offender and no contact with minors under the age of 18.
The case was investigated by HSI and the Arkansas State Police. It was prosecuted by Assistant United States Attorney Kristin Bryant.
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Russellville Operations Results in 44 Federal Defendants Charged with Multiple Drug and Gun Crimes (more than 25 pounds of methamphetamine, 69 firearms seized)Read the Press Release
RUSSELLVILLE—Cody Hiland, United States Attorney for the Eastern District of Arkansas, Anthony Lemons, Acting Assistant Special Agent in Charge of the Little Rock District Office of the Drug Enforcement Administration (DEA), William McCrary, Assistant Special Agent in Charge, New Orleans Field Division, Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF), and David Gibbons, Prosecuting Attorney for the Fifth Judicial District of Arkansas, announced today the unsealing of a federal indictment charging 44 defendants in a major operation aimed at disrupting drug and gun crime in Pope and Yell Counties. The indictment was returned by a federal grand jury on October 3, 2017, and was unsealed today following a coordinated roundup of the charged defendants.
In total, including defendants charged in state courts, law enforcement obtained arrest warrants for 70 defendants associated with the case, and arrested 27 individuals early Wednesday morning. Eighteen federal and two state defendants were already in custody. Twenty-three defendants, including 11 federal fugitives and 12 state fugitives, remain at large.
During Wednesday morning’s arrest operation law enforcement also seized 46 guns, bringing the total number of firearms seized in the investigation to 69.
“Targeting violent, armed drug dealers will be a priority for my office, as well as for all law enforcement agencies in central Arkansas,” Hiland said. “Law enforcement at all levels is committed to working together to help rid these communities of drugs and those who are responsible for their distribution. Today’s operation is a perfect example of that coordination. Our collective goal is to return these communities to their law-abiding citizens, and taking these criminals off the streets has made Pope and Yell Counties safer places to live and work. Today’s arrests are a victory against these dangerous criminals, but know that our commitment to finding and stopping gun and drug crime all across the Eastern District of Arkansas will continue long after today.”
During the nearly two-year 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.
Among the 44 federal defendants are nine people who are avowed white supremacists, including eight members of the New Aryan Empire (NAE) and one member of the White Aryan Resistance (WAR). The NAE slogan is “To The Dirt,” which is in reference to the rule that members must remain in the NAE until they die. These groups are Arkansas white supremacist organizations, which began as prison gangs.
This Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, named “To The Dirt,” began in early 2016, when local law enforcement officials started investigating various crimes being committed by the NAE, including the distribution of methamphetamine. It soon became apparent that the methamphetamine trafficking in this area went far beyond only NAE members, and the Fifth Judicial District Drug Task Force enlisted the help of the DEA and ATF.
“The DEA is committed to working with our federal, state and local law enforcement partners to target all levels of drug trafficking organizations that are responsible for drug trafficking and related violence in our communities,” said Stephen G. Azzam, Special Agent in Charge of the DEA’s New Orleans Field Division, which includes the Eastern District of Arkansas. “Our neighborhoods deserve to exist without fear and intimidation inflicted by all violent drug gangs, including the New Aryan Empire. Today’s arrests should significantly impact the violent drug related activity that has wreaked havoc throughout the Eastern District of Arkansas.”
From January 2016 through October 2017 multiple agencies at the local, state, and federal level coordinated dozens of controlled purchases of methamphetamine from individuals associated with the NAE, as well as others distributing drugs in Russellville. While more than 25 pounds of methamphetamine were actually seized in Arkansas, the investigation revealed that hundreds of pounds of methamphetamine had been trafficked from California for distribution in central Arkansas in the course of this conspiracy. Arrest warrants have been issued for two of the main methamphetamine suppliers in California, who lived in Sacramento and Los Angeles and remain fugitives at this time.
Early Wednesday morning 200 law enforcement officers, including more than 150 tactical officers, helped execute the arrest warrants for those defendants in Arkansas in a targeted takedown that resulted in arrests on multiple charges, including conspiracy to possess with intent to distribute and to distribute meth, distribution of methamphetamine, use of a firearm in relation to a drug trafficking crime, and felon in possession of a firearm. Most of the defendants are residents of Pope County (see attachment for complete list of defendants and charges).
A majority of the 44 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.
“This almost two-year collaborative effort between ATF, DEA, U.S. Postal Inspectors, Pope County Sheriff’s Office, Arkansas State Police, Arkansas Highway Police, Russellville Police Department, 5th Judicial Drug Task Force, and other state and local law enforcement partners is a shining example of ATF’s commitment to reducing violence in our communities,” ATF Asst. Special Agent in Charge McCrary. “The armed drug trafficking conspiracy dismantled today was a plague on Russellville and the surrounding communities, and the prosecution and incarceration of its leaders and participants will make these communities safer.”
“The present operation is just the latest example of the long history of successful cooperation between federal agencies and the state, county, local, and DTF law enforcement personnel of the Fifth District,” said Fifth Judicial District Prosecuting Attorney David Gibbons said. “From the criminal histories of most of those arrested during this operation, it is clear that in some cases state prosecution alone does not have the resources or reach to eliminate those who make a living from drug distribution. This operation will subject those individuals who have made a career of criminal activity to federal prosecution and prison time. As a result, our communities should be safer, healthier, and more pleasant places in which to raise our families.”
In addition to the methamphetamine and firearms recovered, during the investigation agents with the U.S. Postal Inspection Service and the Conway Police Department seized approximately $65,000 from this drug trafficking organization, which conspirators attempted to ship through the U.S. mail from Arkansas to California for payment for methamphetamine. All told, agents seized more than $70,000 in drug proceeds, as well as a Porsche Carrera seized in California that was used to aid methamphetamine distribution in California.
Those arrested today will be arraigned in federal court in Little Rock before United States Magistrate Judge Patricia S. Harris beginning at 10 a.m. on Friday.
The investigation was conducted by DEA and ATF, in partnership with the Pope County Sheriff’s Office, Yell 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.
Wednesday’s arrest operation included the assistance of DEA, ATF, U.S. Postal Inspection Service, United States Marshal’s Service, Arkansas Highway Police, Arkansas National Guard Counter Drug Unit, Arkansas State Police, Arkansas Community Corrections, Pope County Sheriff’s Office, Yell County Sheriff’s Office, Fifth Judicial Drug Task Force, and the Russellville Police Department.
The case is being prosecuted by Assistant United States Attorneys, Liza Jane Brown and Kristin Bryant. An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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To The Dirt defendant listSTATUTORY SENTENCES
Conspiracy to possess with intent to distribute and to distribute more than 500 grams of methamphetamine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Distribution of 50 grams or more of actual methamphetamine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Distribution of 5 grams or more of actual methamphetamine is punishable by not less than 5 years, not more than 40 years’ incarceration in the Bureau of Prisons with a possible fine of up to $5,000,000, and not less than 4 years supervised release.
Distribution of a mixture containing a detectable amount of methamphetamine is punishable by not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Possession of a firearm by a felon is punishable by not more than 10 years’ incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 3 years supervised release.
Use of a firearm in relation to a drug-trafficking crime is punishable by not less than 5 years’ incarceration, not more than life, in the Bureau of Prisons, consecutive to any other conviction, with a possible fine of up to $250,000, and not more than 3 years supervised release.
“TO THE DIRT” FEDERAL FUGITIVE LIST1. TROY R. LOADHOLT, aka Tricky, 36, Russellville
2. APRIL M. TEETER, aka April Crain, 37, Russellville
3. BRITTANY FERGUSON, aka Brittany Gideon, 26, Russellville
4. RALPH A. ROSS, aka R.A., 53, Atkins
5. BRITANNY S. CONNER, 32, San Pedro, California
6. KATHRINE R. ROSS, aka Katie, 26, Russellville
7. CHRISTOPHER S. HELMS, 34, Dardanelle
8. PAULA S. ENOS, 44, Russellville
9. WESLEY W. PIERSON, 53, Charleston
10. JAMES NICHOLAS GEORGE, aka Nick, 37, Dardanelle
11. KEITH C. SAVAGE, aka K.C., 36, BellevilleCody Hiland Takes Office as United States Attorney for the Eastern District of ArkansasRead the Press Release
LITTLE ROCK—Cody Hiland has taken the oath of office to become the United States Attorney for the Eastern District of Arkansas. Mr. Hiland was nominated by President Donald Trump on June 29, 2017, and confirmed by the U.S. Senate on September 28, 2017. He took the oath of office today at 1:30 p.m. from United States District Court Judge J. Leon Holmes, and began work immediately after the ceremony.
"It is both an honor and a privilege to be chosen to serve as the United States Attorney, and I am eager to begin leading the important work of this office," Mr. Hiland said. "I also look forward to working with the dedicated public servants in our office, our exceptional law enforcement partners on the federal, state, and local levels, and the community. At a time when we are seeing the national crime rate continue to rise, myself and everyone in this office is committed to ensuring safer communities for the citizens of the Eastern District."
As U.S. Attorney, Mr. Hiland is the top-ranking federal law enforcement official in the Eastern District of Arkansas, which includes five divisions and 41 counties within Arkansas, with its primary office in Little Rock. He oversees a staff of 59 employees, including 28 attorneys and 31 non-attorney support personnel. The office is responsible for prosecuting federal crimes in the district, including crimes related to terrorism, public corruption, child exploitation, firearms, and narcotics. The office also defends the United States in civil cases and collects debts owed to the United States.
Mr. Hiland, 45, a Conway native, has lived in Arkansas his entire life. He received his J.D. from the William H. Bowen School of Law in Little Rock and his undergraduate degree from the University of Central Arkansas. Prior to assuming his current role, Mr. Hiland was elected prosecuting attorney for the 20th Judicial District of Arkansas in 2010, and re-elected in 2014.
Before beginning a career in law enforcement Mr. Hiland was a partner at Hiland, Thomas & Cox, PLLC; a staff attorney and rural and community liaison for the Arkansas Public Service Commission; the program director for the Arkansas Transitional Employment Board; and a legislative liaison and aide to Gov. Mike Huckabee.
Mr. Hiland will continue to live in Conway with his wife, Jana, and their four children, Claire, Caity, John Reagan, and Ethan.
Mr. Hiland succeeds Patrick C. Harris, who had served as acting U.S. Attorney since Christopher Thyer’s resignation on March 13, 2017.
Pine Bluff Man Pleads Guilty to Stealing More Than $1 Million in USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK— Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, announced today that Elbert Harris, 57, of Pine Bluff, pleaded guilty to an information charging him with wire fraud. Harris stole more than $1 million intended to feed children in low income areas.
Friday’s plea hearing took place before United States District Judge Kristine G. Baker, who will sentence Harris at a later date.
The United States Department of Agriculture (USDA) funds the Child and Adult Care Feeding Program, which includes an at-risk, after school component. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After they are approved, they can provide meals as part of the feeding program, and they are reimbursed for the eligible meals they serve.
At Friday’s hearing, Harris admitted that between 2012 and 2015, he was a sponsor for the feeding program through “Greater Faith Ministries,” which had feeding locations in Pine Bluff, Altheimer, and Wabbaseka. Harris operated 14 feeding sites. He falsely claimed that he served up to 175 children at some of his feeding sites, greatly inflating the number of children who were actually served. Harris submitted approximately 44 claims. Because of the inflated claims, Harris received a total of approximately $1,390,961.05 from DHS.
Harris is the 14th person to plead guilty concerning the theft of USDA feeding program funds for children. In addition to those who have pleaded guilty, two defendants have been convicted at trial. Previous charges filed in this investigation detail fraud involving more than $10 million in USDA feeding program funds.
The statutory penalty for wire fraud is not more than 20 years’ imprisonment, not more than a $250,000 fine, or both, and not more than three years supervised release.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, and Internal Revenue Service–Criminal Investigations. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg and Cameron McCree.
If you are aware of any fraudulent activity regarding these feeding programs, please email that information to [email protected].
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Little Rock Man Pleads Guilty to Attempted Enticement of a Minor to Engage in Sex ActsRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Homeland Security Investigations Special Agent in Charge Raymond R. Parmer, Jr., announced today the guilty plea of David Frazier, 56, of Little Rock, to attempted enticement of a minor to engage in sex acts.
Frazier entered his guilty plea today in front of United States District Judge Kristine G. Baker, and remains in custody. His sentencing will be set at a later date.
On June 6, 2017, the Arkansas State Police received a complaint from a person who answered a Craigslist advertisement titled “I know your secret.” This person had communicated with the individual who posted the ad. The individual asked the person to communicate through the KIK application and stated his username was “yplover.” During the KIK communications, “yplover” began expressing an interest in having sex with a 7-year-old. “Yplover” explained in graphic detail what he would like to do to the child. The conversation concerned the person and she reported it to law enforcement. During the conversations, “yplover” sent two images of himself. The images depicted David Frazier.
On June 21, 2017, a law enforcement officer, acting in an undercover capacity (“UC”), answered an identical ad on Craigslist titled “I know your secret.” The UC made contact with the individual—identified as Frazier—who posted the ad. Frazier asked the UC to communicate via KIK. Frazier stated that his username was “yplover.” During the communications on Craigslist and KIK, Frazier expressed a desire to have sex with a child. The UC told
Frazier that she had an 8-year-old daughter and that she wanted to watch Frazier and the 8-year-old engage in sex.
Frazier asked the UC to send a photograph of her “daughter.” The UC sent a photograph of herself as an 8-year-old. Frazier advised that he thought the UC’s “daughter” was cute and turned him on when the UC sent a picture of her. Frazier said he had thought about printing out the picture and doing a “tribute.” The UC asked Frazier to describe a “tribute.” Frazier later sent the UC a video of himself masturbating onto the picture.
Frazier continued to state in great detail the sex acts he wanted to perform on the UC’s purported 8-year-old daughter. Frazier then asked the UC what the rules would be if he were to meet the UC’s daughter. Frazier and the UC discussed items that the daughter would like as a gift. Frazier mentioned the three of them hanging out together. The UC said, “Then what would happen?” Frazier said, “Something that would let me get close to her.” Frazier continued, “Once she’s comfortable around me, she could sit on my lap while we watch a movie. Something totally innocent…Disney or something.” The UC told Frazier that she liked princess movies. Frazier then said, “We have to do something to move things further…sort of a jump start.” Frazier suggested, “Maybe let her ‘accidentally’ see some porn.” Frazier asked, “How would she react if she saw me naked lol.” Frazier suggested getting a room, and letting the UC bring her there.
Frazier was arrested by HSI agents on September 6, 2017, at his place of employment, pursuant to a warrant based on a criminal complaint charging him with attempted enticement of a minor. During a search of his office, officers located a gun safe, which was later determined to contain two computer thumb drives, a computer hard drive, a bottle of lubricant, a selfie stick, and a sexual stimulation device. A federal grand jury indicted Frazier on September 12, 2017, on one count of attempted enticement of a minor.
After reviewing Frazier’s cellular telephone and the storage devices found in the gun safe, agents discovered multiple images of child pornography. Agents also located chat messages between Frazier and an individual claiming to be a 14-year-old; in these chats Frazier asks the minor to send a sexually explicit photograph.
“As people continue to be emboldened by the perceived anonymity they believe the internet provides them, their actions become more and more despicable,” Harris said. “Frazier’s conduct is among the most egregious we have seen.”
Attempted enticement of a minor to engage in sex acts carries a statutory penalty of not less than ten years’ imprisonment, not more than life imprisonment, a $250,000 fine, and five years to life of supervised release.
“This case demonstrates the determination of our agents and our law enforcement partners to investigate and arrest those that violate our nation’s laws,” Parmer, Jr. “HSI will not stop working for the victims of these crimes and ensure we bring to justice those who would continue to attack and terrorize our children.”
The investigation was conducted by Homeland Security Investigations, the Arkansas Attorney General’s Office—Special Investigations Division, and Benton County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Kristin Bryant.
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Former State Judge Pleads Guilty to Dismissing Cases in Exchange for Personal Benefits and Tampering with a WitnessRead the Press Release
LITTLE ROCK—A former Arkansas state judge pleaded guilty today to wire fraud and witness tampering for perpetrating a seven year-long fraud and bribery scheme in which he dismissed cases on his docket in exchange for personal benefits, and then bribed a witness in an attempt to obstruct an official investigation into the scheme. Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division made the announcement.
O. Joseph Boeckmann, 71, of Wynne, Arkansas, pleaded guilty to one count of wire fraud and one count of witness tampering. The plea was entered before U.S. District Judge Kristine G. Baker of the Eastern District of Arkansas. Boeckmann has been on home detention since his arrest in October 2016 and will remain on home detention until he is sentenced at a later date.
According to admissions made in connection with his plea, from 2009 to 2015, Boeckmann served as a district judge for the First Judicial Circuit of Arkansas. Boeckmann admitted to corruptly using his official position to dismiss traffic citations and misdemeanor criminal charges for young men in exchange for acts that he claimed were “community service,” but which actually benefited Boeckmann himself. Among other things, Boeckmann admitted that on some occasions he took official action to order these individuals to perform “community service” and used his access to these individuals during their purported “community service” to take photographs of them in compromising positions. In other cases, Boeckmann dismissed pending charges against defendants in exchange for sexually related conduct.
Boeckmann admitted that the corrupt use of his office defrauded the State of Arkansas and its citizens of their right to Boeckmann’s honest services and also defrauded various cities and counties in Arkansas, as well as the State of Arkansas and the Arkansas courts, of money and property that they should have received as fines or fees from the individuals whose cases were fraudulently dismissed.
In addition, Boeckmann admitted that during his scheme he instructed various individuals not to tell anyone about their “community service” sentences. After Boeckmann learned he was under investigation, Boeckmann also arranged to pay a witness to change his testimony. Specifically, Boeckmann admitted that in the fall of 2015, he learned of a witness who had provided information to the Arkansas Judicial Discipline and Disability Commission (JDDC) regarding Boeckmann’s practice of imposing personally beneficial “community service” sentences. Boeckmann admitted that he directed another individual to pay the witness to write a letter recanting the information the witness gave to the JDDC. According to his admissions, Boeckmann did this in order to prevent that witness from providing truthful information about Boeckmann to law enforcement and to influence, delay, and prevent that witness’s testimony in an official proceeding.
The FBI investigated this case with assistance of the Arkansas State Police and the Arkansas Judicial Discipline and Disability Commission. Trial Attorneys Peter Halpern, Jonathan Kravis, and Simon Cataldo of the Criminal Division’s Public Integrity Section prosecuted the case, with assistance from Special Prosecutor Jack McQuary of the State of Arkansas Office of the Prosecutor Coordinator
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101.
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Attorney General Jeff Sessions Announces Reinvigoration of Project Safe Neighborhoods and Other Actions to Reduce Rising Tide of Violent CrimeRead the Press Release
LITTLE ROCK—Today, Attorney General Jeff Sessions announced several Department of Justice actions to reduce the rising tide of violent crime in America. Foremost of those actions is the reinvigoration of “Project Safe Neighborhoods,” a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.
In announcing this recommitment to Project Safe Neighborhoods, the Attorney General issued a memo directing United States Attorneys to implement an enhanced violent crime reduction program that incorporates the lessons learned since Project Safe Neighborhoods launched in 2001.
The PSN program strives to identify the most violent locations in the district and the individuals who drive the gun and gang violence in our cities. PSN partners then develop and bring cases against those who commit violent crimes. Ultimately, the coordinated effort ensures that the most violent offenders are prosecuted in the legal venue that provides the most certain and appropriate penalty.
In a statement on the program, the Attorney General said: “According to the FBI, the violent crime rate has risen by nearly seven percent over the past two years, and the homicide rate has risen by more than 20 percent. We cannot be complacent or hope that this is just an anomaly: we have a duty to take action.
“Fortunately, we have a President who understands that and has directed his administration to reduce crime. The Department of Justice today announces the foundation of our plan to reduce crime: prioritizing Project Safe Neighborhoods, a program that has been proven to work.
“Let me be clear – Project Safe Neighborhoods is not just one policy idea among many. This is the centerpiece of our crime reduction strategy.
“Taking what we have learned since the program began in 2001, we have updated it and enhanced it, emphasizing the role of our U.S. Attorneys, the promise of new technologies, and above all, partnership with local communities. With these changes, I believe that this program will be more effective than ever and help us fulfill our mission to make America safer.”
The United States Attorney’s office for the Eastern District has participated in the PSN program since its inception in 2001, and continues to engage in programs aimed at curbing violent crime in Pulaski County and surrounding areas. For example, for the past 18 months the U.S. Attorney’s office has collaborated with the Sixth Judicial District Prosecuting Attorney’s office to target for federal prosecution those violent criminals with significant criminal history involved in gun crimes. In addition, since July the U.S. Attorney’s office has actively participated in the violent crimes task force GET Rock, aimed at combatting the upswing in local gang violence.
“This office remains committed to implementing policies to enhance the Project Safe Neighborhoods framework,” said Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas. “We continue to believe that PSN’s collaborative and targeted approach to enforcement efforts will result in the greatest reduction in violent crime. This reinvigoration of PSN emphasizes strong federal involvement, building partnerships with local law enforcement and community stakeholders, targeted enforcement in those areas most affected by violent crime, and outreach efforts designed to prevent violent crime before it occurs. We look forward to continuing our work with local, state and federal law enforcement partners to target criminal organizations and aggressively remove violent offenders from the streets.”
The Attorney General also announced the following Department of Justice initiatives to help reduce violent crime:
- Additional Assistant United States Attorney Positions to Focus on Violent Crime – The Department is allocating 40 prosecutors to approximately 20 United States Attorney’s Offices to focus on violent crime reduction.
- More Cops on the Streets (COPS Hiring Grants) – As part of our continuing commitment to crime prevention efforts, increased community policing, and the preservation of vital law enforcement jobs, the Department will be awarding approximately $98 million in FY 2017 COPS Hiring Grants to state, local, and tribal law enforcement agencies.
- Organized Crime and Drug Enforcement Task Force’s (OCDETF) National Gang Strategic Initiative –The National Gang Strategic Initiative promotes creative enforcement strategies and best practices that will assist in developing investigations of violent criminal groups and gangs into enterprise-level OCDETF prosecutions. Under this initiative, OCDETF provides “seed money” to locally-focused gang investigations, giving state, local, and tribal investigators and prosecutors the resources and tools needed to identify connections between lower-level gangs and national-level drug trafficking organizations.
- Critical Training and Technical Assistance to State and Local Partners –The Department has a vast array of training and technical assistance resources available to state, local and tribal law enforcement, victims groups, and others. To ensure that agencies in need of assistance are able to find the training and materials they need, OJP will make available a Violence Reduction Response Center to serve as a “hot line” to connect people to these resources.
- Crime Gun Intelligence Centers (CGIC) – The Department has provided grant funding to support a comprehensive approach to identifying the most violent offenders in a jurisdiction, using new technologies such as gunshot detection systems combined with gun crime intelligence from NIBIN, eTrace, and investigative efforts. These FY 2017 grants were awarded to Phoenix, AZ, and Kansas City, MO.
- Expand ATF’s NIBIN Urgent Trace Program – The Department will expand ATF’s NIBIN Urgent Trace Program nationwide by the end of the year. Through this program, any firearm submitted for tracing that is associated with a NIBIN “hit” (which means it can be linked to a shooting incident) will be designated an “urgent” trace and the requestor will get information back about the firearm’s first retail purchaser within 24 hours, instead of 5 to 6 business days.
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Perryville Pharmacist Sent to Prison for 10 Years, to Pay $850,000 for Role in Pill SchemeRead the Press Release
LITTLE ROCK— Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Stephen G. Azzam, Special Agent in Charge of the Drug Enforcement Administration (DEA) New Orleans Field Division, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI) announced today that Christopher Grant Watson, 44, of Perryville, a former pharmacist and owner of Perry County Food and Drug Store, will be spending the next 10 years in federal prison.
United States District Court Judge James M. Moody sentenced Watson to a statutory maximum 120 months’ imprisonment for Watson’s lead role in a conspiracy to unlawfully distribute prescription opioid pills from his drug store, his participation in a scheme to defraud Medicare/Medicaid, and a structuring offense. Watson was also ordered to pay a monetary judgement in the amount of $850,000 representing unlawful proceeds from the offense, which includes $54,000 in restitution to Medicare/Medicaid.
On October 5, 2016, Watson pleaded guilty to conspiracy to dispense hydrocodone without an effective prescription, healthcare fraud (resulting from falsely billing Medicare Part D for patients’ claims), and structuring bank account cash deposits to avoid bank reporting requirements. Judge Moody sentenced Watson to the statutory maximum on all three charges—60 months on the drug conspiracy and structuring charges, and 120 months on the healthcare fraud—and ordered the sentences to run concurrently.
Christopher Watson was a trusted local pharmacist upon whom his community depended,” Harris said. “Instead, he helped spread poison and addiction in his community. His criminal actions contributed to one of the largest health epidemics Arkansas is facing. This office is committed to rooting out all bad actors in the healthcare industry, and we will continue to aggressively pursue investigations into crimes such as Watson’s.”
In July 2014, as part of the national effort, the DEA New Orleans Field Division launched an aggressive campaign that targeted the largest sources of illegally diverted pharmaceuticals in Arkansas, Louisiana, Mississippi, and Alabama. This effort, dubbed Operation Pilluted, involved the extensive investigation of rogue practitioners, pharmacists, and other DEA Registrants, as well as the aggressive pursuit of more traditional criminal organizations involved in the distribution of pharmaceuticals. Under the auspices of Operation Pilluted, concerted efforts were initiated to heighten community awareness concerning the perils of prescription drug diversion and the strategic implementation/strengthening of associated diverted pharmaceutical laws.
On May 6, 2015, a Grand Jury returned a superseding federal indictment against Watson and 27 others following a year-long investigation initiated by the DEA and the Arkansas State Police (ASP). Watson and his father, Tommy Watson, owned and operated the Perry County Food and Drug store, and Christopher Watson was the managing pharmacist at that location. Christopher Watson sold tens of thousands of Schedule II, III, and IV pills and other pharmaceuticals from the pharmacy shelves after hours and forged prescriptions to account for the missing pills, and filled fraudulent prescriptions presented by pharmacy customers. A pharmacy audit showed more than 49,000 oxycodone pills missing and more than 72,000 hydrocodone pills missing.
Tommy Watson, 68, pleaded guilty to misprision of a felony (concealing knowledge of a felony from authorities) on February 1, 2017, and on August 30, 2017, he was sentenced to two years’ probation and a $50,000 fine.
“The abuse of prescription drugs remains a significant problem in communities across the nation, including here in the Eastern District of Arkansas,” said Azzam, Special Agent in Charge of the DEA New Orleans Field Division, which includes the Little Rock District Office. “For the health and safety of our citizens, the DEA will continue to target the illegal diversion of these pharmaceuticals, which can destroy lives. It is particularly appalling when the perpetrator of such illegal acts is a health care professional, like this pharmacist, responsible for ensuring that potentially dangerous drugs are dispensed properly. We hope that the sentence Christopher Watson received in this case serves as a reminder to anyone who might illegally divert pharmaceuticals that they will be held accountable for the harm they cause.”
The operation resulted in the issuance of an Immediate Suspension Order to the Perry County Food and Drug store by the Administrator of DEA on the grounds that the pharmacy constituted an imminent danger to public health and safety. The employees of the pharmacy were prohibited from possessing and/or dispensing controlled substances pending a federal administrative hearing. Following the hearing, the pharmacy’s DEA Registration was permanently revoked on January 26, 2015.
“Watson used his position as a pharmacist, a position of trust, to illegally distribute drugs to members in his community,” Upchurch said. “It’s this kind of illegal activity that allows the opioid epidemic to metastasize throughout our country. I am proud of and appreciate the work conducted by the FBI, U.S. Attorney’s Office for the Eastern District, DEA—Little Rock Tactical Division Squad, Conway Police Department, IRS, Arkansas State Police, and our other law enforcement partners as they continue to investigate and bring to justice individuals conducting this type of illegal practice.”
The $850,000 judgment represents proceeds Watson received from his illegal sales of hydrocodone and other pharmaceuticals, at the price of $2 per hydrocodone pill and $15 per oxycodone pill. Additionally, Watson received $54,000 from Medicare after billing Medicare patient accounts for high dollar pharmaceuticals which the patients never received.
“The role of IRS-CI in narcotics investigations is to follow the money and unravel complex financial transactions,” said Tracey D. Montaño, Special Agent in Charge, IRS Criminal Investigation. “Mr. Watson executed a scheme to defraud the Medicare system for his own personal financial gain, and while doing so illegally distributed narcotics into the community, contributing to a growing and concerning epidemic. IRS Criminal Investigation is proud to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”
Of the 28 original defendants, 23 have pleaded guilty. Charges were dismissed on five defendants.
This case was investigated by DEA—Little Rock Tactical Diversion Squad, which includes officers from the Conway Police Department, Beebe Police Department, Little Rock Police Department, Pine Bluff Police Department, Jefferson County Sheriff’s Office, and the Benton Police Department. Also involved in the investigation were the FBI, Arkansas State Police, IRS—Criminal Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), United States Secret Service, United States Marshals Service, and the Perry County Sheriff’s Office.
Woman Sent to Prison for Scheme to Steal USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, announced Thursday that United States District Court Judge James M. Moody, Jr., sentenced Francine Leon, 49, of Wheatley, to prison for her role in a scheme to steal money intended for feeding children in low income areas.
Judge Moody sentenced Leon, who pleaded guilty to conspiring to commit wire fraud on February 25, 2016, to 34 months’ imprisonment, to be followed by one year of supervised release. She was also ordered to pay restitution in the amount of $1,003,630.00.
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.
Leon is the tenth defendant to be sentenced for her involvement in a scheme to fraudulently obtain USDA program funds intended to feed children in low income areas. Other defendants sentenced include: Kattie Jordan, 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; Alexis Young, 18 months’ imprisonment on August 18, 2017; and Erica Warren, 18 months’ imprisonment on August 18, 2017.
Waymon Weeams and Dortha Harper have pleaded guilty to conspiring to defraud USDA feeding programs and are awaiting sentencing. Jacqueline Mills and Anthony Waits were convicted on April 6, 2017, following a jury trial and are also awaiting sentencing.
Leon operated as a sponsor for a feeding program through an organization called "Brighter Kids, Brighter Futures." At times during the period charged in the Information, Leon had approved sites in Cotton Plant, Wheatley, Poplar Grove, Morrilton, Brinkley and West Helena. In the 2012, 2013, and 2014 contract years, claims, which had inflated numbers of children fed, were submitted to DHS for reimbursement. Leon received a total of approximately $1,003,630. Leon withdrew approximately $534,710 in cash and paid a portion to two DHS employees.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation and the Internal Revenue Service–Criminal Investigations. If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
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Two Women Sentenced for Conspiracy in Scheme to Steal Feeding Program FundsRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, announced today that Erica Warren, 38, of Little Rock, and Alexis Young, 38, of Bryant, were sentenced to federal prison for conspiring to commit mail fraud. The charge relates to a conspiracy to fraudulently obtain United States Department of Agriculture (USDA) program funds intended to feed children in low income areas during the school year.
Today’s sentencing hearings took place in Little Rock before Chief United States District Judge Brian S. Miller.
The USDA funds the Child and Adult Care Feeding Program (CACFP), which includes an at-risk after school component. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. Once approved, they can provide meals as part of the feeding program and be reimbursed based on the number of eligible meals they serve.
Warren operated as a sponsor for a feeding program through an organization called “Write of Passage.” At times during the period charged in the Information, Warren had sites in Little Rock. Young worked for DHS, and part of her job was to determine eligibility of sponsors to participate in the feeding programs. Young was responsible for reviewing and approving Warren’s sites.
Warren and Young admitted that they conspired to form “Write of Passage” to obtain funds fraudulently from the feeding program. This was done by inflating the number of children fed on claims submitted to DHS. “Write of Passage” was paid $253,817.44. Warren and Young both shared in the proceeds from these inflated claims as Warren paid Young cash and indirectly by checks made payable to one of Young’s relatives.
Warren and Young were both sentenced to 18 months’ imprisonment, to be followed by two years supervised release. They were ordered to pay restitution, joint and several with each other, in the amount of $253,817.44.
The statutory penalty for conspiracy to commit wire fraud is not more than 20 years imprisonment, not more than a $250,000 fine, or both, and not more than three years supervised release.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris and Allison W. Bragg. If you are aware of any fraudulent activity regarding these feeding programs, please email that information to [email protected].
Former Searcy Business Owner Sentenced to Prison for False Statement to Social Security AdministrationRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Robert G. Feldt, Special Agent-in-Charge, Social Security Administration(SSA), Office of the Inspector General, announced today that Julie Anna DeLarm, formerly known as Julianna England, 51, appeared before United States District Court Judge Billy Roy Wilson and was sentenced to 24 months in prison for making a false statement to the Social Security Administration.
Julie Anna DeLarm had been approved for Social Security Disability benefits in March 2009. Starting in 2011, she assisted in operating a bakery out of her house in Searcy. In January 2014, the bakery moved to a Searcy storefront called “Tookies.” In March 2014, a Social Security Administration employee who was familiar with DeLarm saw her working at the bakery. In May 2014, DeLarm submitted a “Continuing Disability Review Report” to the SSA that falsely stated that she had not worked since the date of her last medical decision from the SSA.
The sentence imposed yesterday will run consecutive to a sentence she is currently serving for her federal conviction out of California for wire fraud for embezzling more than $360,000 from her employer between 2000-2007. DeLarm was also ordered to pay restitution in the amount of $62,003. Special Agent-in-Charge Robert G. Feldt stated that “the Social Security Administration, Office of the Inspector General, will tirelessly investigate and bring to justice those who commit fraud against Social Security programs.”
This investigation was conducted by SSA-Office of the Inspector General and the Searcy Police Department. Assistant United States Attorney Jana Harris prosecuted the case for the United States.
Couple Sent to Prison for Scheme to Steal HUD Funds Intended for the Cotton Plant Housing AuthorityRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Tracey D. Montaño, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation Division, and Phyllis G. Robinson, Special Agent in Charge, U.S. Department of Housing and Urban Development (HUD)—Office of Inspector General, announced today that Chief United States District Judge Brian S. Miller sentenced Rhonda Williams, 50, and her husband, Gary Williams, 59, both of Des Arc, Arkansas, to prison for their role in a scheme to steal money intended for use by the Cotton Plant Housing Authority.
On September 2, 2016, Rhonda Williams and Gary Williams appeared before Judge Miller and pleaded guilty to conspiring to commit bank fraud and money laundering. Today, Judge Miller sentenced Rhonda Williams to 37 months’ imprisonment, to be followed by three years of supervised release. In the same hearing, Judge Miller sentenced Gary Williams to 24 months of federal prison, to be followed by three years of supervised release. The Williams were jointly ordered to pay restitution of $732,177.80 and to forfeit $145,000 in cash seized from their home, the money in four bank accounts, a boat, and an SUV.
“These defendants took public money that was meant to provide affordable housing to a low income population, and instead used it for their own personal gain,” Harris said. “This case is an example of how our office will continue working tirelessly to protect the public and eliminate this unacceptable fraud, waste, and abuse.”
The Cotton Plant Housing Authority received its annual operating funds from HUD in the form of an annual distribution. Rhonda Williams served as the Executive Director of the Housing Authority and Gary Williams was the Housing Authority’s Maintenance Supervisor.
From January 31, 2001 to December 31, 2014, the Williams conspired and executed a scheme where they used false and fraudulent pretenses to receive funds that were intended for use by the Housing Authority. As part of the conspiracy, the Williams lied about the reasons for the payment of Housing Authority money, and solicited and accepted bribes and kickback payments from Housing Authority contractors. In addition, the Williams caused the Housing Authority to pay for their personal expenses on their Housing Authority credit cards, and took Housing Authority equipment and materials and used them in the construction of their personal residence.
“IRS-Criminal Investigation remains committed to its pursuit of individuals who engage in corruption at the expense of hardworking Americans,” Montaño said. “As employees of the Cotton Plant Housing Authority, Rhonda and Gary Williams’ actions violated public trust by using their position to enrich themselves at the expense of American taxpayers. Today’s sentence demonstrates the government’s determination to ensure that trust is not broken.”
This investigation was conducted by IRS-Criminal Investigation Division, the HUD - Office of Inspector General, and the Benton Police Department. Assistant United States Attorneys Cameron McCree and Edward Walker prosecuted the case for the United States.
Major Investigation in West Memphis Results in Dozens of Defendants Charged with Multiple Drug and Gun Crimes in 25 IndictmentsRead the Press Release
WEST MEMPHIS—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Matthew Barden, Assistant Special Agent in Charge of the Little Rock District Office of the Drug Enforcement Administration (DEA), William McCrary, Assistant Special Agent in Charge, New Orleans Field Division, Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF), and Scott Ellington, Prosecuting Attorney for the Second Judicial District of Arkansas, announced today the simultaneous unsealing of 25 federal indictments charging 43 defendants in a major operation aimed at curbing drug trafficking and gun violence in West Memphis and Crittenden County. The indictments were returned by a federal grand jury on July 6, 2017 and July 11, 2017, and were unsealed today following a coordinated roundup of the charged defendants.
In total, including defendants charged in state courts, law enforcement obtained arrest warrants for 50 defendants, and arrested 26 individuals early Tuesday morning. Eleven defendants were already in state custody. Thirteen defendants, including 11 federal fugitives, remain at large.
“Drug and gun crime has been overrunning the entire Arkansas Delta for some time, and the epidemic has hit West Memphis and Crittenden County hard,” Harris said. “Law enforcement at all levels is committed to helping rid this community of drugs, and is working together to find and stop these criminals. Our collective goal is to return these communities to their law-abiding citizens. Today’s major operation is a huge step toward this goal, but know that our commitment to helping this part of the state will continue long after today.”
The Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, named Money Don’t Sleep, began in 2015, with a goal to target steadily increasing drug and gun crime in Crittenden County. Early Tuesday morning 200 law enforcement officers, including more than 300 tactical officers, helped execute the arrest warrants in a targeted takedown that resulted in the arrests of these defendants on multiple federal firearm and drug charges. Most of the defendants are residents of West Memphis (see attachment for complete list of defendants and charges).
“Nothing is more important than the safety and security of our communities,” said Stephen G. Azzam, Special Agent in Charge of DEA’s New Orleans Field Division, which includes the Eastern District of Arkansas. “This operation is one of the largest Domestic Cartel Initiative DEA has conducted and represents one of the most powerful attacks we have launched against a drug trafficking organization, having an immediate impact in this region. The resulting arrests clearly demonstrate the combined strength that federal, state and local law enforcement agencies bring to bear in the battle against these domestic cartels and strike a significant blow to their drug trafficking organizations. By working together, we are leveraging our respective resources and expertise to achieve results that we could not accomplish on our own. Our combined, concentrated efforts are making communities in West Memphis, Arkansas, and across the nation, safer by disrupting the flow of dangerous drugs to our neighborhoods.”
From September 2015 through May 2017, agents with the DEA and West Memphis Police Department coordinated more than 50 controlled purchases of controlled substances, resulting in the acquisition of more than six pounds of methamphetamine and 11 illegally possessed firearms, several of which were stolen. Also, more than 10 ounces of crack cocaine and 20 ounces of cocaine were purchased in the investigation. A majority of the 43 federal defendants are convicted felons, many with violent histories.
“The men and women of ATF are extremely proud of the outcome of today’s collaborative law enforcement efforts to make West Memphis and the surrounding areas of Crittenden County a safer place,” ATF Asst. Special Agent in Charge McCrary said. “ATF is committed to working with our partners to address the violence that plagues these communities.”
“I want to thank Chief Oakes and the West Memphis Police Department for their investment in time and willingness to work with our federal partners in bringing this operation to fruition,” Scott Ellington said. “I also want to thank the Arkansas State Police, Highway Police, and Arkansas Community Corrections for their assistance and manpower in today’s major operation. Our community is worth fighting for, and I believe in West Memphis and Crittenden County. Cleaning up this community begins with holding people accountable for their actions. Today, with the help of the DEA and other federal and state partners, we took a big step toward taking back our community from the criminals who choose to sell drugs and guns, rather than contribute to it in a positive manner.”“Today, the West Memphis Police Department, along with federal, state, and local law enforcement partners, conducted an enforcement operation targeting violent drug traffickers operating in West Memphis,” West Memphis Police Captain Robert Langston said. “This operation was conducted by over 300 law enforcement personnel, with many of them coming from Little Rock, St. Louis, New Orleans, and Atlanta. The arrest of these violent drug dealers will make West Memphis a safer place for our citizens, said of the West Memphis Police Department.”
During the investigation, with assistance from the U.S. Postal Inspection Service, agents also intercepted more than six pounds of methamphetamine being sent to defendants through the mail.
“The U.S. Postal Inspection Service is committed to the safety and security of the mail, postal employees and customers through disruption of narcotics trafficking using the U.S. Mail,” Thomas L. Noyes, Inspector in Charge of the Fort Worth Division said. “I want to commend the U.S. Attorney’s Office, West Memphis Police Department, DEA and our law enforcement partners involved in this investigation for their tenacious efforts to prevent illegal substances and related violence from invading our neighborhoods.”
The counts in today’s unsealed indictments include conspiracy to possess with intent to distribute methamphetamine, distribution of methamphetamine, possession with intent to distribute methamphetamine, conspiracy to possess with intent to distribute crack cocaine and cocaine, possession with intent to distribute crack cocaine and cocaine, distribution of crack cocaine and cocaine, use of a firearm in relation to a drug trafficking crime, felon in possession of a firearm, felon in possession of ammunition, selling firearm to a felon, and theft of mail by a United States Postal Service employee. (See attached defendant/indictment list)
Those arrested today will be arraigned in federal court in Little Rock before United States Magistrate Judge Jerome T. Kearney beginning at 10 a.m. on Thursday.
The investigation was conducted by DEA, in partnership with the ATF, and the West Memphis Police Department. Tuesday’s arrest operation included the assistance of DEA, ATF, Federal Bureau of Investigation, United States Probation and Parole, United States Postal Inspection Service, United States Postal Service Office of Inspector General, United States Marshall Service, Arkansas Highway Police, Arkansas National Guard Counter Drug Unit, Arkansas State Police, Arkansas Community Corrections, and the West Memphis Police Department.
The 40 indictments are being prosecuted by a team of multiple Assistant United States Attorneys, headed by Liza Jane Brown and Michael Gordon. An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Money Don't Sleep Federal Indictments/DefendantsSexual Exploitation of 15-Month-Old Baby Nets Searcy Woman 20 Years in PrisonRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Special Agent in Charge Diane Upchurch, of the Little Rock Field Office for the Federal Bureau of Investigation (FBI), announced today that Lacy Brooks, 31, of Searcy, was sentenced to 20 years’ imprisonment for producing live pornographic videos of a 15-month-old baby.
Brooks was charged in a superseding indictment on January 5, 2017, with one count of production of child pornography and one count of distribution of child pornography. On January 10, 2017, on the day trial was to begin, Brooks pleaded guilty to both counts of the superseding indictment. On Thursday, United States District Judge Billy Roy Wilson sentenced Brooks to 20 years’ imprisonment, and 10 years of supervised release.
The charges in the superseding indictment were based on an investigation that began in Tyler, Texas, when FBI agents arrested Brian Casper, who admitted that he requested child pornography from mothers he met on dating websites. A search of Casper’s phone revealed a series of screenshots dated August 25, 2015, which appeared to have been taken while Casper was using the Skype application and chatting with a female using the screen name “Lacy.” The screenshots depicted a baby, naked from the waist down, exposing her genitals. Some of the screenshots showed the baby lying naked on an open diaper underneath the buttocks of the baby. There were also multiple screenshots showing a sex toy being placed on the exposed genitals of the baby.
Further examination of the individual’s phone revealed multiple messages between Casper and Brooks on the KIK messaging application. During the course of the KIK messages, Brooks engaged in sexually explicit conversations with Casper, during which Casper told Brooks that “I love your videos,” and, “I hope that your coochie and her’s are mine. I love you so much.” Brooks responded, “Yes baby we are yours,” followed by a photograph of a baby lying on an open diaper displaying her genitals.
Casper subsequently pleaded guilty to the federal charge of conspiracy to produce child pornography and was sentenced in the Eastern District of Texas to 336 months’ imprisonment.
On September 22, 2015, Brooks was arrested and provided a Mirandized statement. Brooks admitted to meeting Casper online, communicating with him on the KIK application, and using Skype to send the individual live recordings of herself inappropriately touching the baby. Brooks admitted to placing the sex toy against the baby.
“The sexual exploitation of a baby for the gratification of someone Brooks met on the internet is disgusting and violates all sense of human decency,” Harris said. “Protecting children who cannot protect themselves remains a top priority of our office and we will relentlessly prosecute those who violate the trust that children inherently put in them.”
“The FBI is dedicated to investigating any instance where a young child is victimized for the sexual gratification of an adult,” SAC Upchurch said. “We’d like to thank the U.S. Attorney’s office for their continued work on these crimes. We’d also like to thank our FBI partners in the Dallas division, Tyler resident agency, as well as our state and local partners that assisted in the investigation.”
The investigation was conducted by the FBI field office in Little Rock and resident agency in Tyler, Texas, as well as the White County Sheriff’s Office, Arkansas State Police, and the White County Prosecuting Attorney’s office. The case was prosecuted by Assistant United States Attorneys Erin O’Leary and Kristin Bryant.
Rapper's Bodyguard Arrested on Gun Charges Related to Little Rock Shooting; Hampton Appears in CourtRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Jeffrey B. Reed, Resident Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and Kenton Buckner, Chief of Little Rock Police Department (LRPD), announced today the arrest of Kentrell Dominique Gwynn, 25, of, Memphis, in connection with shootings in Forrest City and Little Rock, Arkansas. The arrest of Gwynn, who served as rapper Ricky Hampton’s bodyguard, marks the first charges filed in connection with the mass shooting at the Power Ultra Lounge in Little Rock.
ATF agents and LRPD officers arrested Gwynn on a federal complaint early Tuesday morning in Memphis. Gwynn pleaded not guilty Tuesday afternoon in Little Rock before United States Magistrate Judge Jerome Kearney to multiple firearms-related charges. According to the criminal complaint filed Tuesday, Gwynn is charged with providing a firearm to convicted felon or an unlawful user of a controlled substance, in violation of 18 U.S.C. § 922(d)(1) and (3), providing armed security to a convicted felon, in violation of 18 U.S.C. § 922(h)(1) and (2), and conspiracy to commit those crimes, in violation of 18 U.S.C. § 371.
Also on Tuesday, Hampton, 25, of Memphis, who goes by the stage name “Finese2Tymes,” appeared before Judge Kearney on a federal indictment charging him with being a felon in possession of a firearm, in violation of 18 U.S.C. 922(g)(1). Hampton was originally charged in a criminal complaint alleging the same charge on July 3, 2017. The indictment is connected to a shooting that occurred at Club Envy in Forrest City on June 25, 2017. Hampton was also on stage at Power Ultra Lounge in Little Rock in the early-morning hours on July 1, 2017, when 25 people were shot. A shell casing found at the scene of the Power Ultra Lounge shooting has been preliminarily matched to a firearm in Gwynn’s possession on July 2, the date Hampton was arrested.
“With gun violence continuing to rise in our communities, the United States Attorney’s office is firmly committed to removing these criminals from the streets as quickly as possible,” Harris said. “The shooting at Power Ultra Lounge was a horrific event that no community should have to experience. As the investigation into the events of that night continues, people associated with the shooting, including Kentrell Gwynn, will be brought to justice.”
“The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Little Rock Field Office and the Little Rock Police Department in conjunction with ATF Memphis Field Office arrested Kentrell Gwynn on Federal firearms charges associated with the mass shooting at the Power Ultra Lounge located in Little Rock, Arkansas and the shooting incident that transpired in Forrest City, Arkansas,” ATF RAC Reed said. “This is in keeping with ATF’s continued efforts to bring alleged armed violent offenders to justice. ATF remains committed to its law enforcement partners and the citizens of Arkansas in these endeavors.”
“The collective efforts between the Little Rock Police Department and our federal partners led to the arrest of a dangerous criminal and another illustration of the benefit of state, local and federal agencies working together to get these individuals off the street,” LRPD Chief Buckner said. “By no means does this arrest signal the end of the investigation into the shooting at Power Ultra Lounge, but rather it demonstrates our commitment to bringing those involved to justice whenever possible.”
Tuesday’s complaint alleges that Gwynn was with Hampton on July 2, 2017, when Hampton was arrested in Birmingham, Alabama, on state felony charges related to the Forrest City shooting. Gwynn, who was driving a vehicle with Hampton as a passenger, was wearing a Springfield XD, .40-caliber pistol in a thigh holster. The firearm was loaded with nine rounds of Sig Sauer .40-caliber ammunition.
Also on the seat with Gwynn was a Glock 23, .40-caliber pistol. In the backseat was a loaded Century Arms RAS47, 7.62 x 39 mm, AK-style pistol, similar to the one seen in videos of the Forrest City shooting. Gwynn claimed ownership of all three firearms. Gwynn also told investigators that he was Hampton’s bodyguard, and was with him on stage at the Power Ultra Lounge concert during the shooting.
Investigators determined that Gwynn purchased the Century Arms pistol on May 26, 2017, in Memphis. A pawn ticket in the vehicle showed that Gwynn purchased the Glock 23 in Memphis on July 1, 2017. Both firearms were purchased at the American Loan Company, a Federal Firearms Licensee in Memphis. According to the complaint affidavit, investigators viewed security footage from American Loan Company. The video showed Hampton and Gwynn enter the gun store and pick out a firearm. Gwynn completed the paperwork on the firearm while Hampton stood close to him. Hampton can be seen leaning close into Gwynn and saying something to him as Gwynn counts out money for the purchase of the Glock 23 and .40-caliber ammunition.
Additionally, investigators viewed multiple Facebook posts of Hampton in possession of a firearm consistent in appearance with the Century Arms pistol, purchased by Gwynn. When he was arrested on July 2, Hampton stated that during the Forrest City shooting he “pulled out the Draco,” referring to the AK-style pistol purchased by Gwynn, but did not shoot it.
According to the complaint, spent .40-caliber Sig Sauer brand casings were recovered from the stage of Power Ultra Lounge after the shooting on July 1. An Arkansas State Crime Lab Firearm and Toolmark examiner has since examined shell casings fired from the Springfield XD 40, .40-caliber pistol recovered from Gwynn on July 2, as well as a spent .40-caliber round recovered from the Power Ultra Lounge shooting in Little Rock. It was determined that there is a preliminary match of the shell casings.
The penalties for providing a firearm to convicted felon or an unlawful user of a controlled substance, providing armed security to a convicted felon, or being a felon in possession of a firearm is not more than 10 years’ imprisonment, not more than three years supervised release, and not more than a $250,000. The penalties for federal conspiracy is not more than five years’ imprisonment, not more than three years supervised release, and not more than a $250,000 fine.
The Hampton and Gwynn cases are being prosecuted by Angela Jegley and Chris Givens. A complaint or indictment contain only allegations. A defendant is presumed innocent unless and until proven guilty.
Gwynn Filed Complaint, Affidavit Hampton IndictmentFormer DHS Employee Sent to Prison for Scheme to Steal USDA Funds Intended to Feed Hungry ChildrenRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, announced Monday that United States District Court Judge James M. Moody, Jr., sentenced Gladys Waits, 37, of Little Rock, to prison for her role in a scheme to steal money intended for feeding children in low income areas.
Judge Moody sentenced Waits, who pleaded guilty to conspiring to commit wire fraud on March 30, 2016, to 108 months’ imprisonment, to be followed by three years of supervised release. She was also ordered to pay restitution in the amount of $9,669,269.66.
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.
Waits is the eighth defendant to be sentenced for her involvement in a scheme to fraudulently obtain USDA program funds intended to feed children in low income areas. Other defendants sentenced include: Kattie Jordan, 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; and Christopher Nichols, 3 years’ probation on May 16, 2017.
Waymon Weeams, Dortha Harper, Francine Leon, Alexis Young, and Erica Warren have all pleaded guilty to conspiring to defraud USDA feeding programs and are awaiting sentencing. Jacqueline Mills and Anthony Waits were convicted on April 6, 2017, following a jury trial and are also awaiting sentencing.
Gladys Waits worked for DHS and her responsibilities included processing applications from sponsors who applied to participate in the feeding programs, determining their eligibility, and approving their proposed feeding sites. Waits was responsible for approving the feeding programs for Mills, Jordan, Nims, Franklin, Nichols, Weeams, and Harper at various times between August 2012 and August 2014. The sponsors submitted claims with inflated numbers of children fed. Waits also helped these sponsors avoid DHS’s detection of the fraud.
Gladys Waits received bribe payments from some sponsors, both directly through checks made payable to her and indirectly through checks made payable to relatives, including her husband, Anthony Waits. Anthony Waits recruited sponsors Nims, Franklin, Nichols, Weeams and Harper to participate and they paid a percentage of the proceeds they received from the programs back to Anthony Waits.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg, and Cameron McCree.
If you are aware of any fraudulent activity regarding feeding programs, please email that information to [email protected].
Twenty-Four Charged in Arkansas as Part of Largest Nationwide Health Care Fraud Enforcement Action in Department of Justice HistoryRead the Press Release
WASHINGTON—Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced today the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts—including the Eastern District of Arkansas. Among the defendants were 115 doctors, nurses and other licensed medical professionals, all alleged to have participated in health care fraud schemes involving approximately $1.3 billion in false billings. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.
In Arkansas, Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas and Stephen G. Azzam, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) New Orleans Field Division, who oversees the DEAs’ Little Rock District Office, announced the unsealing of three indictments charging 24 defendants in schemes intended to divert pharmaceutical pills to the streets.
“The abuse of prescription medication, particularly opioids, is one of the largest health and crime problems Arkansas is facing,” Harris said. “This epidemic must be attacked on multiple fronts—by stopping the criminal doctors and medical professionals from writing medically unnecessary prescriptions, and by preventing the common drug dealers from diverting these pills to the hands of other addicts and dealers, either by writing fraudulent prescriptions or stealing dangerous drugs from pharmacies. The defendants in the cases announced by my office today illegally put hundreds of thousands of pills on the streets, and they must be stopped. The Eastern District of Arkansas joins the Justice Department’s resolve to aggressively pursue and prosecute all manner of health care and prescription pill crime.”
In the first Arkansas case, 4:16-cr-00278-KGB, charges stem from an early-morning burglary on February 25, 2016, of the Health-Way pharmacy in Beebe. On December 7, 2016, the four suspects in the burglary, Albert Ray Ferguson, Jr., Thristian Davante Duplechin, Corry Wayne Cornett, and Cory Jermaine Lewis, all from Houston, Texas, were charged with conspiracy to break in a business premises registered with the DEA to dispense controlled substances.
Following the arrest of the initial four defendants, an ongoing investigation by the DEA Tactical Diversion Squad uncovered a network of individuals who were traveling between states to commit pharmacy burglaries. During the investigation, the DEA canvased law enforcement agencies from nearby states for similar pharmacy burglaries, and developed evidence linking eight additional defendants to the defendants from Beebe. Physical and electronic evidence from numerous burglaries in several states, including Arkansas, Nebraska, Indiana, Illinois, Iowa, Kentucky, Virginia, and Texas, showed that the individuals involved were members of local street gangs in the Houston area.
These gangs stole more than 120,000 Schedule II pills during these burglaries, with a street value of at least $1,050,000. On July 6, 2017, a superseding indictment was returned in the Eastern District of Arkansas adding an additional count charging the other gang members with conspiracy to possess with intent to distribute Schedule II, III and IV controlled substances.
In case 4:17-cr-176-BSM, a federal Grand Jury charged Erik Edson Turner and two others with conspiracy to possess with intent to distribute Schedule II controlled substances without an effective prescription. Beginning in 2015, Turner fabricated prescriptions to fraudulently obtain oxycodone 30 mg tablets from pharmacies. Turner sold some of the oxycodone to Spencer Daniel King, who eventually joined Turner in the conspiracy to obtain the drug by using fraudulent prescriptions. In 2016, Michael Joseph “Joey” Carbonero was recruited by Turner to assist in the scheme. Over the course of two years, Turner and individuals working on his behalf obtained thousands of oxycodone pills with a street value in excess of $150,000. These cases are being prosecuted by Assistant United States Attorney Anne E. Gardner.
In the third case, 4:17-cr-00184 BSM, the DEA Tactical Diversion squad uncovered a sophisticated prescription-forgery operation headed by Michael McClellan, 32, of North Little Rock. In this scheme, McClellan created fraudulent prescriptions using computer templates that either McClellan or other individuals then filled at local pharmacies.
The investigation into McClellan’s operation began following a break-in at McClellan’s home. When police arrived, they discovered numerous pieces of drug paraphernalia and other indicators of illegal activity. The DEA obtained a search warrant for the computers in McClellan’s home, and an analysis of these computers revealed the extent of the operation.
Agents also located drug ledgers in McClellan’s home that, coupled with the information from the computers, revealed the names of nearly 100 people whose identification was used to obtain fraudulent prescriptions. All told, since the conspiracy began in 2012, more than 74,000 pills were obtained from these forged prescriptions. McClellan and the eight other main individuals in the organization are charged with conspiracy to possession with intent to distribute Schedule II controlled substances. This cases is being prosecuted by Assistant United States Attorney Chris Givens.
“The diversion and abuse of prescription drugs pose a significant threat to the health and safety of our communities across the nation, including here in Arkansas,” Special Agent in Charge Azzam said. “Today, more people die from opioid-related causes than from gun homicides. This unprecedented collaboration between all law enforcement agencies represented in this region exemplifies the continuing unified goal of keeping our neighborhoods safe and secure. The indictment of these individuals will undoubtedly convey a strong and unified message to those criminals who continue to engage in activities, such as these pharmacy burglaries, threatening the safety of our citizens.”
Nationwide, today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.
The charges announced today aggressively target schemes billing Medicare, Medicaid, and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 91 Americans die every day of an opioid related overdose.
“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” Attorney General Sessions said. “Amazingly, some have made their practices into multimillion dollar criminal enterprises. They seem oblivious to the disastrous consequences of their greed. Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start. The consequences are real: emergency rooms, jail cells, futures lost, and graveyards. While today is a historic day, the Department's work is not finished. In fact, it is just beginning. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”
“Healthcare fraud is not only a criminal act that costs billions of taxpayer dollars - it is an affront to all Americans who rely on our national healthcare programs for access to critical healthcare services and a violation of trust,” Secretary Price said. “The United States is home to the world’s best medical professionals, but their ability to provide affordable, high-quality care to their patients is jeopardized every time a criminal commits healthcare fraud. That is why this Administration is committed to bringing these criminals to justice, as President Trump demonstrated in his 2017 budget request calling for a new $70 million investment in the Health Care Fraud and Abuse Control Program. The historic results of this year’s national takedown represent significant progress toward protecting the integrity and sustainability of Medicare and Medicaid, which we will continue to build upon in the years to come.”
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed.
The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent unless and until proven guilty.
Additional documents related to this announcement are available here: https://www.justice.gov/opa/documents-and-resources-july-13-2017.
16-278 Indictment 17-176 IndictmentJury Finds Mother Guilty of Smuggling Methamphetamine and Cash Inside Car SeatsRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Matthew Barden, Assistant Special Agent in Charge, Drug Enforcement Administration (DEA), Little Rock District Office, announced today that a federal jury found Elsa Solis, 38, of Batesville, guilty of conspiracy to possess with intent to distribute methamphetamine, possession with the intent to distribute methamphetamine, and misprision in a case that involved smuggling 2.5 kilos of methamphetamine and $19,000 cash inside two car seats.
United States District Judge Kristine G. Baker presided over the three-day trial, which concluded Wednesday with the jury verdict finding Solis guilty on all counts. Solis will be sentenced by Judge Baker at a later date.
“It is reprehensible that a mother would use her children to attempt to conceal her methamphetamine smuggling,” Harris said. “This conspiracy involved multiple kilos of methamphetamine intended to poison our communities, and the hard work of everyone involved ensured a jury verdict which completes the successful dismantling of this dangerous drug trafficking organization.”
Solis is the final member of the charged conspiracy to be convicted. The individuals charged in the conspiracy included Solis and her boyfriend, Ivan Pedraza, as well as six others. Pedraza previously pleaded guilty to conspiracy and possession with intent to distribute methamphetamine. The other six defendants also previously pleaded guilty to various charges associated with the case.
Testimony during the trial established that prior to the discovery of the loaded car seats on July 19, 2015, Homeland Security Investigations and the DEA intercepted two packages which contained 18 kilograms of methamphetamine that were mailed from Mexico and addressed to the addresses of individuals involved in the conspiracy.
Evidence at trial included recorded wiretap phone calls between Pedraza and Solis. The phone calls were in Spanish and translations were provided to the jury. DEA Special Agent LeAnn Bakr explained to the jury how a wiretap is obtained, how calls are monitored, and that 11 such calls were selected and translated for the trial.
In the recorded calls the jury heard Solis agreeing to buy acetone, which is used by methamphetamine traffickers to rid the substance of impurities before sale. The recorded calls also documented a trip to Dallas taken by Pedraza, Solis, and her two children in July 2015. The jury heard calls that discussed how Pedraza and Solis needed to buy new car seats, since the others were left in Batesville. One call recorded Pedraza talking about how one car seat left behind was still loaded with “stew.” Former DEA Task Force Officer Ryan Temple, now with North Little Rock Police Department testified that “stew” was a code word for methamphetamine.
Officer Temple also provided surveillance during Solis and Pedraza’s trip to Dallas. He testified that Solis, Pedraza, and her two children drove to Dallas in a Honda Pilot on a Friday, and arrived in the Dallas area after midnight, only to leave early on Sunday morning less than 36 hours later.
Calls intercepted during the Dallas trip recorded Solis asking Pedraza if he had “fixed” everything while she had waited at the hotel pool and arcade with her children. Agents also overheard Pedraza planning the delivery with other co-conspirators and discussing how much methamphetamine was ready to be delivered when he returned to Arkansas.
Officer Temple testified that he and his surveillance team witnessed Pedraza receive the methamphetamine at the hotel after agents intercepted a call that stated that the co-conspirator would arrive at the hotel with a blender box.
After the Honda left the Dallas area that early Sunday morning, Arkansas State Police Trooper Timothy Callison performed a traffic stop on the vehicle as it entered Saline county. The trooper located methamphetamine, which totaled to 2.5 kilos, and $19,000 in cash, in the bottom of the car seats, which he noticed were abnormally heavy. The trooper was able to remove the bottoms of the car seats—discovering the methamphetamine and cash—with a drill that was also located in the vehicle. The trooper testified that the drill had only one bit, and it fit perfectly with the car seat screws, needing no adjustments. More than $1,700 cash was later found in Solis’ purse when she was in custody.
Law enforcement later located approximately $40,000 and more methamphetamine in subsequent search warrants executed on two homes related to the conspiracy in Batesville and one home in Little Rock.
The statutory penalty for conspiracy to possess with intent to distribute and for possession with intent to distribute more than 500 grams of methamphetamine is not less than 10 years’ imprisonment, not more than life, a $10,000,000 fine, or both, and not less than five years of supervised release. The statutory penalty for misprision, which makes it a crime to have knowledge that a crime is being committed while taking a step to conceal and not report the crime, is not more than three years’ imprisonment, a $250,000 fine, and one year of supervised release.
The investigation was conducted by the DEA, with assistance from the Arkansas State Police and other local agencies. The case was prosecuted by Assistant United States Attorneys Erin O’Leary and Allison Bragg.
Sherwood Man Arrested on Child Pornography Charges Stemming from Online Participation in Sexual Exploitation of ChildrenRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Homeland Security Investigations Special Agent in Charge Raymond R. Parmer, Jr., announced today the arrest of William Thomas Murry, III, 60, of Sherwood, on multiple charges of possession and receipt of child pornography.
A federal grand jury indicted Murry on July 6, 2017, on one count of possession of child pornography and four counts of receipt of child pornography. In late 2015 and early 2016, HSI agents learned that an individual was participating in an online chatroom that was involved in the sharing of live child rapes and recorded child pornographic videos and pictures through webcam streaming. While this individual’s face was never visible, his bare torso and genitals were visible, as well as the background of what appeared to be an office with several distinguishing features.
Agents were able to determine that the IP address being utilized by the individual in the chatroom returned to the Kawasaki Sports Center at 5922 South University Ave., Little Rock. At the time, Murry owned the Kawasaki Sports Center.
On November 22, 2016, HSI/LR, Little Rock Police Department, and Arkansas Attorney General’s Office, Special Investigations Division (AG/SID), executed a federal search warrant at the Kawasaki Sports Center.
Agents observed Murry’s office and determined it was the location where the individual was engaged in viewing child pornography in the online chatrooms. Murry also physically resembled the individual in the chatroom. After waiving his Miranda rights, agents interviewed Murry, who admitted to using the online network, but denied looking at child pornography.A forensic exam was conducted on Murry’s work computer and his home laptop.
Murry’s work computer contained 65 still images and two video files containing child pornography. The computer also contained evidence of the online network. Murry’s home laptop contained 33 still images and four video files of child pornography. It also contained evidence of the online network.
Agents interviewed all the other employees of Kawasaki and eliminated them as the individual in the online chatroom.
“Too often people like Murry think they can hide behind a computer and receive gratification from watching children being sexually exploited,” said Harris. “This indictment sends the message that this depravity will not be tolerated.”
Possession of child pornography carries a maximum statutory penalty of 10 years’ imprisonment, a $250,000 fine, and five years to life of supervised release. Receipt of child pornography carries a statutory penalty of five to 20 years’ imprisonment, a $250,000 fine, and five years to life of supervised release.
“No one is above the law when it comes to child exploitation,” Parmer, Jr. said. “HSI will continue working with our partner law enforcement agencies to ensure we find and arrest anyone involved in these heinous transnational crimes.”
Today, Murry turned himself into Homeland Security agents and was seen by United States Magistrate Judge Jerome T. Kearney. Judge Kearney released Murry on conditions to include electronic monitoring, no unsupervised contact with minors, and monitored internet access.
The investigation was conducted by Homeland Security Investigations and the Arkansas Attorney General’s Office, Special Investigations Division. The case is being prosecuted by Assistant United States Attorney Kristin Bryant.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Jonesboro Man Sentenced to More Than 21 Years on Multiple Child Pornography ChargesRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, announced today that Steven Thorpe, 44, of Jonesboro, will spend more than 21 years in federal prison for advertising child pornography.
A federal grand jury indicted Thorpe on April 8, 2015, for one count of advertising child pornography and one count of possession of child pornography. On August 15, 2016, he pleaded guilty to possession of child pornography, and on February 9, 2017, he pleaded guilty to advertising child pornography.
Chief United States District Court Judge Brian S. Miller imposed the sentence of 262 months for both counts. There is no parole in the federal system. When Thorpe is released upon completion of his 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 under the age of 18.
The investigation into Thorpe’s crimes began in June 2014, when two people brought Thorpe’s phone and computer to the Jonesboro Police Department and reported that they had seen sexually explicit photos of a minor on Thorpe’s phone. Jonesboro police obtained a search warrant, and when they searched the phone, investigators found over 20,000 images of child pornography.
The United States Secret Service then obtained a search warrant for Thorpe’s laptop computer, which contained over 1,400 images of child pornography. In addition to the photos of children being sexually abused, agents also discovered that Thorpe had accessed online chatrooms through a computer program called Gigatribe. In these chats, Thorpe advertised to other users that he had child pornography available, including “doctor/patient, dad/son, hidden cams, massage,” and “getting caught, locker/school rooms, and public videos.” Thorpe would then send other users a link to a folder containing his child pornography along with his password, “boys777.”Thorpe is still facing multiple state charges, including pending sexual assault and additional possession of child pornography charges in Craighead County.
The case was investigated by the Jonesboro Police Department and United States Secret Service, and was prosecuted by Assistant United States Attorneys Allison W. Bragg and Kristin Bryant.
Complaint Filed Against Rapper Ricky L. Hampton, aka Finese2Tymes, for Felon in Possession of a FirearmRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Jeffrey B. Reed, Resident Agent-in-Charge of the Little Rock Field Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), announced today that a Complaint has been filed against Ricky L. Hampton, 25, of Memphis, Tennessee, for felon in possession of a firearm in violation of 18 U.S.C. 922(g)(1).
The complaint alleges that on June 25, 2017, Ricky L. Hampton, aka “Finese2Tymes” was at Club Envy in Forrest City, Arkansas. As Hampton, a Memphis rapper, was leaving the club, he began screaming at a person in a car that he believed was blocking his way. As Hampton got into his car, he continued screaming at the person to move out of his way. Hampton became impatient with that person in the other vehicle and pointed an AK-style pistol at that person. As that person drove away, Hampton fired a shot that shattered the rear window and struck the driver of the other vehicle in the neck. The weapon Hampton used, a Century Arms, model RAS 47, 7.62 caliber pistol, has been recovered by law enforcement.
Hampton was convicted in Tennessee of felony aggravated robbery, for which he was sentenced to eight (8) years in prison.
Acting U.S. Attorney Patrick C. Harris and Jeffrey B. Reed, Resident Agent-in-Charge jointly stated that, “Through the collaborative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Marshals Service, the Federal Bureau of Investigation, the Forrest City Police Department, the First Judicial Circuit States Attorney’s Office, and the United States Attorney’s Office, this alleged violent offense will proceed through the judicial process. The U.S. Attorney’s Office and ATF are committed to working with federal, state and local partners to address violent firearm offenses within the state of Arkansas.”
This investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), U.S. Marshals Service, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Angela Jegley and Cameron McCree.
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Former Dumas Police Officer Sold Drugs in Uniform, Sentenced to More Than 10 Years in PrisonRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), announced today that James Edgerson, 39, of Dumas, was sentenced to 135 months in federal prison for his role in a large-scale drug conspiracy.
On October 7, 2015, a federal Grand Jury returned an indictment charging Edgerson, who was a police officer at the time he committed his crimes, and five other people in a conspiracy to distribute methamphetamine, cocaine and crack cocaine, and marijuana. Edgerson also faced multiple drug distribution charges, as well as charges related to selling the drugs while carrying his police-issued firearm.
On February 2, 2017, Edgerson pleaded guilty to his role in the drug conspiracy. Edgerson also admitted to possessing a firearm and abusing his position of trust as a police officer. Today, Chief United States District Judge Brian S. Miller sentenced Edgerson to 135 months’ imprisonment, five years of supervised release, and a $100 special assessment.
“Police officers take an oath to protect and serve their communities,” Harris said. “Edgerson’s significant sentence reflects his absolute violation of this oath, and his abuse of the trust placed in him by members of his community. This sentence also demonstrates that no one is above the law, and people who sell drugs will be prosecuted, regardless of their position in society.”
Edgerson admitted to participating in the conspiracy from May 2015 through through September 2015. While he was working as a police officer for the Dumas Police Department, James Edgerson bought and sold cocaine, methamphetamine, and marijuana along with Kendrick Lamar Edgerson, Gregory Lamont Charles, Steven Sherrod Miles, Eli Haynes III and Rodney Lariel Edgerson.
James Edgerson obtained multi-ounce quantities of methamphetamine from Haynes for resale and redistribution to other individuals. For example, on August 25, 2015, James Edgerson called Haynes to arrange the purchase of methamphetamine. James Edgerson then traveled to meet Haynes in the Arlington, Texas, area, and purchased approximately nine ounces of methamphetamine. James Edgerson also purchased pound quantities of marijuana from Rodney Edgerson.
James Edgerson also sold drugs numerous times, including times while in uniform. As one example of multiple transactions, James Edgerson sold an informant nine ounces of cocaine for $11,300 on August 31, 2015, telling the source that he makes $50 on each ounce. On June 16, 2015, he completed a deal while in uniform and standing next to his police cruiser.
“James Edgerson betrayed the trust we place in police officers and the sentencing today is an indication of his total disregard for the citizens and law enforcement in our communities,” Upchurch said. “I commend the United States Attorney’s Office of the Eastern District and the Arkansas State Police for their efforts, and the great work of our FBI team.”
Charles, Miles, Haynes, and Rodney Edgerson have all previously pleaded guilty. Kendrick Edgerson has trial pending on September 11, 2017.
This investigation was conducted by the FBI and Arkansas State Police. It is being prosecuted by Assistant United States Attorneys Julie Peters and Edward Walker. All defendants are innocent unless and until proven guilty.
"Despicable" Actions Lead to 24 Months in Prison for Former High School PhotographerRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, and Raymond R. Parmer, Jr., special agent in charge of Homeland Security Investigations New Orleans, announced today that Christian Trey Ashcraft, 42, of Pine Bluff, the owner of Ashven photography and a former high school photographer in the Pine Bluff, Arkansas area, was sentenced to 24 months’ imprisonment for internet stalking.
On January 5, 2016, a federal Grand Jury returned an indictment charging Ashcraft with one count of lying to a federal agent and one count of internet stalking. On February 22, 2017, Ashcraft pleaded guilty to internet stalking. Ashcraft’s conduct spanned from January 2005 to December 2014.
Today, United States District Judge Kristine G. Baker sentenced Ashcraft to 24 months’ imprisonment, three years of supervised release, and a $1,000 fine. In sentencing Ashcraft, Judge Baker told Ashcraft that only one word could describe his almost decade-long actions—“despicable.” The sentence of 24 months was the top end of the advisory federal sentencing guideline range for this crime.
“Ashcraft’s sentence shows that people who commit cowardly acts behind a computer screen will be identified and prosecuted,” Harris said. “I agree with the Court that Ashcraft’s conduct was despicable, and he is now being held accountable for using the internet to torment a young, innocent victim.”
At his change of plea hearing on February 22, 2017, Ashcraft admitted to using the e-mail account [email protected] to send sexually explicit photographs of an adult female he was pretending to be—referred to in the Indictment as J.D.—to several individuals over a significant period of time. Agents then discovered the identity of J.D. and subsequently interviewed her.
During the interview, J.D., who is now in her mid-twenties, disclosed that she met an individual who identified himself as “Chad Reynolds” on a website known as hotornot.com when she was 15-years-old. Between the times J.D. was 15- and 22-years-old, “Chad Reynolds” and J.D. engaged in an online relationship without J.D. ever seeing “Chad Reynolds” in person. J.D. admitted to sending “Chad Reynolds” sexually explicit photographs of herself while she was a minor.
J.D. explained to investigators that after she turned 18, “Chad Reynolds” asked her to take part in a photo shoot at a local hotel. Upon arrival at the hotel, “Chad Reynolds” was not there, but Ashcraft, posing as a photographer friend of “Chad Reynolds,” told J.D. that “Chad” wanted her to start the photo shoot without him. During the photo shoot, the photographer had J.D. take multiple sexually explicit photographs. J.D. identified a photograph of Christian Trey Ashcraft as the photographer.
Soon after the photo shoot, J.D. ended her online relationship with “Chad Reynolds.” After J.D. ended her online relationship, the sexually explicit photographs taken from the hotel room were sent to multiple acquaintances of J.D. from an individual purporting to be J.D. via the [email protected] account.
Ashcraft later admitted to being the user of [email protected] and sending the sexually explicit images of J.D., while pretending to be her. A search of Ashcraft’s computer revealed approximately 800 images of J.D., many of which were sexually explicit.
During the investigation, agents learned that Ashcraft communicated via [email protected] with multiple individuals while he posed as young teenage girls.
This investigation was conducted by the Arkansas State Police and HSI. It is being prosecuted by Assistant United States Attorney Kristin Bryant.