District of Colorado
Press releases recorded for this federal judicial district.
Colorado Springs Man Sentenced to Federal Prison for Distribution and Possession of Methamphetamine and Possession of Firearms in Furtherance of A Drug Trafficking OffenseRead the Press Release
DENVER – Daniel Mata-Armendariz, age 23, of Colorado Springs, was sentenced yesterday by U.S. District Court Judge Christine M. Arguello to serve 120 months in federal prison for distribution and possession with intent to distribute 50 grams or more of methamphetamine and possession of a firearm in furtherance of a drug trafficking offense, U.S. Attorney Jason R. Dunn and HSI Denver Special Agent in Charge Steven Cagen announced. Following his prison sentence, Judge Arguello ordered the defendant to serve 4 years on supervised release. Defendant Mata-Armendariz appeared at the sentencing hearing in custody and was remanded into the custody of the U.S. Marshals at the conclusion of the hearing.
Mata-Armendariz was indicted by a federal grand jury in Denver on February 6, 2018. A superseding indictment was obtained on March 20, 2018. The defendant pled guilty before Judge Arguello on June 5, 2018. He was sentenced on November 13, 2018.
According to the stipulated facts contained in the defendant’s plea agreement, between November 21, 2017, and December 14, 2017, the defendant sold quantities of methamphetamine as well as cocaine and heroin to an undercover law enforcement officer. Prior to November 16, 2017, the undercover officer learned about an individual who sold controlled substances in Colorado Springs. On November 16, 2017, the officer purchased approximately 15.2 grams of methamphetamine from that individual. On November 20, 2017, the officer contacted the individual in order to arrange another sale scheduled for the following day. On November 21, 2017 the individual stated to the officer that he wished to introduce him to the source of supply, who was the defendant.
On November 21, 2017, the defendant offered to sell the undercover officer an ounce of heroin for $1,250. He also asked the undercover officer if he wanted to purchase firearms, such as two AK-47s for $600 each, Glock pistol for $300 to $400, a Mack-10 capable of full automatic fire for $800 or another firearm. Eventually the defendant sold the undercover officer approximately 86.5 grams of methamphetamine. The defendant also showed the officer pictures of firearms on his phone. On November 27, 2017 the defendant sold the undercover officer approximately 14 grams of heroin, 22 grams of cocaine and a 9mm pistol all for $2,000. The officer met again with the defendant on December 6, 2017. The defendant sold him approximately 221.5 grams of methamphetamine for $2,550. Yet again on December 14, 2017 the defendant sold him approximately 113.5 grams of methamphetamine.
On January 1, 2018 the defendant was driving a car in Colorado Springs when he was pulled over by law enforcement. During the lawful traffic stop officers learned that the defendant had an outstanding felony arrest warrant. Officers observed a handgun in plain view between the driver’s seat and the center console. It had a full magazine and a round in the chamber and was readily accessible to the defendant when he sat in the driver’s seat. Officers ran the serial number on the handgun and determined it was reported stolen. Additionally, officers recovered the defendant’s backpack from the car. In the backpack there were several baggies containing controlled substances, including a bag containing approximately 15 grams of heroin, one containing approximately 4.9 grams of cocaine, and five separate baggies containing a total of approximately 69.4 grams of methamphetamine. On January 2, 2018, law enforcement officers executed a search warrant at the defendant’s apartment. During the search numerous firearms and ammunition were recovered, including two AK-47s, and a .40 caliber pistol. The parties stipulated that the defendant sold or possessed with the intent to distribute a total of 490.9 grams of methamphetamine, 29 grams of heroin, and 26.9 grams of cocaine.
This case was investigated by the Colorado Springs Police Department and HSI Denver. The defendant was prosecuted by Special Assistant U.S. Attorney Daniel McIntyre.
Louisville Man Sentenced to Federal Prison for Denver Bank RobberyRead the Press Release
DENVER – A Louisville, Colorado man was sentenced this week by U.S. District Court Judge William J. Martinez to serve 64 months in federal prison for bank robbery, U.S. Attorney Jason R. Dunn and FBI Denver Division Special Agent in Charge Dean Phillips announced. The defendant, Tristan Monroe Eerebout, age 41, was remanded to the custody of the U.S. Marshals Service at the conclusion of the sentencing hearing.
According to the stipulated facts contained in the plea agreement, on March 8, 2017, the defendant robbed the First Bank in downtown Denver. The defendant entered the bank and presented a demand note to the victim teller, saying, “This is a robbery, give me all your money.” The defendant handed the teller a brown paper bag. The teller gave him cash and a GPS tracking device. The defendant fled the bank, heading towards Union Station. He discarded the GPS tracker and then took a bus to Louisville, Colorado. Video surveillance helped law enforcement get a description of the defendant and the direction from the bus stop from which he fled.
A law enforcement officer went into a local movie theater near the Louisville bus stop, looking for the defendant. The officer spoke to theater staff, who recalled that a man matching that description was present at the theater. The defendant had told a movie theater employee that he had been in prison for 10 years for attempting to kill a man. The defendant then purchased a movie ticket with two $20.00 bills, and tipped an employee $25.00, stating that his name was Tristan. Law enforcement entered the theater, found the defendant, and took him into custody.
This case was investigated by the FBI, Denver Police Department and the Louisville Police Department. The defendant was prosecuted by Assistant U.S. Attorney Kurt Bohn.
Colorado Man Sentenced for Production of Child PornographyRead the Press Release
DENVER – Alexander Isaiah Perez, age 22, of Metro Denver was sentenced today to serve 240 months in federal prison, followed by 20 years on supervised release, for the production of child pornography, U.S. Attorney Jason R. Dunn and HSI Denver Special Agent in Charge Steven Cagen announced. The sentence was handed down by Chief U.S. District Court Judge Marcia S. Krieger. Perez appeared at the sentencing hearing in custody and was remanded at its conclusion.
According to the stipulated facts contained in the defendant’s plea agreement, on May 25, 2017, the Homeland Security Investigations (HSI), Cyber Crime Center (C3), Child Exploitation Investigations Unit (CEIU), received information from the INTERPOL Specialist Group on Crimes Against Children regarding a series of images depicting the sexual exploitation of a minor male, later identified as Minor #1, that had been posted on an Internet bulletin board. HSI C3 CEIU took additional investigative steps and forwarded the investigative information received from INTERPOL and the results of their investigation to HSI Denver.
The information relayed by INTERPOL to HSI C3 CEIU reflects that sexually explicit images depicting Minor #1 had been posted by multiple users on “The Bulletin Board” located on an anonymity network known as “The Onion Router” or Tor. Tor was originally designed, implemented, and deployed as a project of the U.S. Naval Research Laboratory for the primary purpose of protecting government communications. Numerous images of Minor #1 were recovered from The Bulletin Board.
During the investigation agents identified another photograph of the defendant taken by the same digital camera that was used to take images posted on The Bulletin Board. Additional images of the defendant were posted on his social networking accounts. Agents determined from one of the defendant’s Facebook accounts that he took a job as a summer camp counselor in Colorado. A search warrant executed at the camp resulted in the seizure of the digital camera identified during the investigation, as well as a laptop and an iPhone, all belonging to the defendant. The investigation revealed that the defendant both took pictures of and live-streamed his sexual abuse of Minor #1. The sexually explicit conduct occurred in the December 2014 to January 2015 time frame.
This matter was investigated by HSI Denver, as well as INTERPOL. The defendant was prosecuted by Assistant U.S. Attorney Alecia L. Riewerts.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Western Slope Man Sentenced for Making False Statement to Firearms DealersRead the Press Release
DENVER – A Grand Junction man was sentenced today by Chief U.S. District Court Judge Marcia S. Krieger to serve 6 months in federal prison followed by 6 months on home detention for making false statements to a firearms dealer, U.S. Attorney Jason R. Dunn and ATF Denver Division Special Agent in Charge Debbie Livingston announced. James Russell Wich, age 32, was first indicted by a federal grand jury in Grand Junction on October 19, 2017. He pled guilty to making a false statement to firearms dealers stating that the firearms were for his own possession when in fact he gave them to two known felons who are drug dealers. The guilty plea was before Chief Judge Krieger on May 31, 2018. He was sentenced on November 6, 2018 in Grand Junction. Wich is free on bond and has 45 days to turn himself in to the federal Bureau of Prisons.
According to the stipulated facts contained in Wich’s plea agreement, on January 26, 2017, law enforcement stopped a vehicle occupied by an individual who had four firearms and 4.68 kilograms of methamphetamine. Two of the four firearms were purchased by Wich ten days earlier.
Additional investigation found that Wich had purchased multiple firearms from four different sources. Further, the investigation revealed a suspected firearm and drug trafficking operation involving a California resident. California law enforcement executed an arrest warrant on the individual’s home on May 31, 2017. During that search eight firearms purchased by Wich were found.
This case was investigated by the ATF with assistance from local authorities. The defendant was prosecuted by Assistant U.S. Attorney Peter Hautzinger.
These enforcement actions and partnerships are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. Learn more about Project Safe Neighborhoods.
Three Western Slope Defendants Sentenced for Various Roles in Methamphetamine and Cocaine Drug TraffickingRead the Press Release
DENVER – Three defendants have been sentenced to serve prison sentences for their respective roles in the distribution of methamphetamine and cocaine, U.S. Attorney Jason R. Dunn and DEA Denver Division Special Agent in Charge William T. McDermott announced. Two remaining defendants have a sentencing hearing pending in January 2019.
Colorado Chief U.S. District Court Judge Marcia S. Krieger, sitting in Grand Junction on November 5, 2018 and November 6, 2018, sentenced
Marco Valdez to serve 120 months in federal prison;
Rigoberto Felix to serve 48 months in federal prison; and,
David Sosa to serve 60 months in federal prison.
According to court documents, in April 2016, the Glenwood Springs branch of the DEA began investigating instances of drug trafficking occurring in Garfield and Mesa Counties. This investigation involved surveillance of targets, controlled purchases of methamphetamine, and wiretaps. The investigation ultimately revealed that the three individuals sentenced this week were part of a larger drug trafficking organization run by Paul Hernandez Contreras – a source of supply of methamphetamine and cocaine from California, and Daniel Tapia-Morales -- a drug distributor who had his own customer base in Colorado. The cases against Contreras and Tapia-Morales are pending.
In addition to drug trafficking, some individuals in this investigation would trade firearms for narcotics. Ultimately, over 3 kilograms of methamphetamine and ½ kilogram of cocaine were seized, as well as firearms and thousands of dollars. The investigation resulted in the indictment of ten individuals, including those mentioned above.
This case was investigated by the DEA Denver Division and TRIDENT, including agents in Mesa and Garfield Counties. TRIDENT is a multi-jurisdictional drug task force funded through Federal, State and Local government funding sources. The defendants were prosecuted by Assistant U.S. Attorney Celeste Rangel.
Colorado Springs Chiropractor Guilty of Conspiracy and Filing False Income Tax ReturnsRead the Press Release
DENVER – United States Attorney Jason R. Dunn and IRS Criminal Investigation Special Agent in Charge Steven Osborne announce that a Denver jury found Thomas Forster Gehrmann, Jr., age 45, of Colorado Springs, Colorado guilty of conspiracy to defraud the United States and guilty of filing three false income tax returns with the Internal Revenue Service. The guilty verdicts were the result of a six-day trial before U.S. District Court Judge R. Brooke Jackson. Defendant Gehrmann was indicted with Eric William Carlson, age 53, also of Colorado Springs, Colorado, on July 22, 2015. Gehrmann will be sentenced on March 19, 2019, by Judge Jackson. Pending sentencing, Gehrmann is free on bond.
According to information contained in the indictment and evidence presented at trial, from January 2007 until September 2011, Gehrmann, Carlson and an unindicted co-conspirator conspired to defraud the Internal Revenue Service. Gehrmann and Carlson filed false U.S. Individual Income Tax Returns for the calendar years 2008, 2009 and 2010 by failing to report the income they diverted from their business. The defendant and others skimmed money from their chiropractic practice business, using the funds for personal use. In total the defendant skimmed just under half a million dollars from their business.
This case was investigated by IRS Criminal Investigation. Gehrmann faces up to 5 years in prison for conspiracy to defraud the United States and 3 years in prison for each count of filing a false tax return. Carlson, who pled guilty to filing a false tax return on October 24, 2018, is scheduled to be sentenced by Judge Jackson on February 8, 2019.
This case was prosecuted by Assistant U.S. Attorneys Suneeta Hazra, Chief of the Criminal Division, as well as Bryan Fields and Conor Flanigan.
U.S. Attorney Announces November 2018 Election OfficerRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced today that Assistant United States Attorney Rebecca Weber will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 6, 2018, general election. AUSA Weber has been appointed to serve as the District Election Officer for the District of Colorado, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
United States Attorney Dunn said, “Every Coloradan must be able to vote without interference, discrimination, or fear of having their vote stolen, and to know that their vote will be counted. The Colorado U.S. Attorney’s Office will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or illiteracy).
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 6, 2018, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Dunn stated that AUSA Weber will be on duty in this District while the polls are open. She can be reached by the public at the following telephone number: 303-454-0332.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at 303-629-7171.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
United States Attorney Dunn said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my office, the FBI, or the Civil Rights Division.”
Mesa County Man Indicted for Removing Paleontological Resources from McInnis Canyons National Conservation AreaRead the Press Release
DENVER – Ricky Lee Armstrong, age 54, of Mesa County, Colorado, appeared in U.S. District Court last week after a federal grand jury in Grand Junction returned a two-count indictment charging him with excavation, removal, and transport of paleontological resources, U.S. Attorney Jason R. Dunn and Bureau of Land Management Special Agent in Charge Gary Mannino announced.
The defendant made his initial appearance before U.S. Magistrate Judge Gordon P. Gallagher, where he was advised of the charges pending against him as well as his rights. He was released on a $10,000 unsecured bond.
According to the indictment, from a date unknown, but no later than July 11, 2018, and continuing to on or about July 13, 2018, the defendant allegedly knowingly excavated and removed paleontological resources located in the McInnis Canyons National Conservation Area, which is located near Grand Junction, Colorado. He then transported the paleontological resources away from the area.
If convicted, Armstrong faces not more than 5 years in federal prison, and a fine of up to $250,000, per count.
This matter was investigated by the Bureau of Land Management (BLM). The defendant is being prosecuted by Assistant U.S. Attorney Jeremy Chaffin.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proved guilty in a court of law.
Controller Pleads Guilty to Filing False Tax ReturnRead the Press Release
DENVER – Stuart M. Jameson, of Colorado Springs, Colorado pled guilty earlier in the month before U.S. District Court Judge Raymond P. Moore to filing a false tax return, announced U.S. Attorney Jason R. Dunn, Internal Revenue Service – Criminal Investigation Special Agent in Charge Steven Osborne, and FBI Denver Division Acting Special Agent in Charge Janeen Diguiseppi. Jameson was charged by information on August 30, 2018, and is scheduled to be sentenced by Judge Moore on January 7, 2019.
According to facts contained in the information and plea agreement, Jameson worked as the Controller at Faricy Ford/Lincoln car dealership between 2006 through mid-November 2017. As part of his duties as controller, Jameson was in charge of the dealership’s payroll. During most pay periods from 2006 through November 2017, Jameson paid himself an amount greater than he was entitled.
When the dealership detected the overpayments, it was determined that Jameson embezzled approximately $400,000 between 2006 and 2017. An outside audit determined the dealership was short $419,751. Additionally, Jameson did not report this additional income on his federal income tax returns.
As part of his plea agreement, Jameson agrees to pay restitution of $419,751 to Faricy Ford/Lincoln car dealership. Jameson also agrees to pay restitution to the IRS of $53,669.
Willfully filing a false federal income tax return carries a penalty of not more than 3 years in prison and a fine of up to $250,000.
This case was investigated by the Internal Revenue Service – Criminal Investigation and the FBI.
This case is being prosecuted by Assistant U.S. Attorney Rebecca Weber.
Jason R. Dunn Sworn in as United States AttorneyRead the Press Release
DENVER -- Jason R. Dunn was sworn in as the United States Attorney for the District of Colorado this morning. Chief United States District Court Judge Marcia S. Krieger administered the oath of office at the U.S. District Courthouse in Denver during a private ceremony witnessed by close family and senior staff. A formal investiture ceremony is being planned for a later date.
“It is an honor to lead the United States Attorney’s Office for the District of Colorado,” said U.S. Attorney Dunn. “Prosecuting federal crime and protecting the interests of the United States in federal court is critically important work. I look forward to working with the members of this great office to advance this mission, in collaboration with our federal, state and local law enforcement partners.”
U.S. Attorney Dunn was nominated by President Donald J. Trump on June 25, 2018, and was unanimously confirmed by the U.S. Senate on October 11, 2018. He replaces Robert “Bob” Troyer, who was acting and then U.S. Attorney for the past two years.
Prior to becoming the United States Attorney, Jason R. Dunn was a partner at Brownstein Hyatt Farber Schreck, heading the political and regulatory law group. Before joining Brownstein Hyatt in 2007, he served the State of Colorado as Deputy Attorney General and Assistant Solicitor General under Colorado Attorney General John Suthers.
Colorado U.S. Attorney’s Opioid Working Group’s Successes Fighting Opioid CrisisRead the Press Release
DENVER – U.S. Attorney Bob Troyer today announces recent successes of the Colorado U.S. Attorney’s Opioid Initiative Working Group. The initiative is bringing both criminal and civil actions against wrongful prescribers and dispensers of opioids. It is comprised of expert civil and criminal staff in the U.S. Attorney’s Office who use sophisticated data analytics to identify doctors and pharmacies unlawfully dispensing opioids. Today’s announcement comes in advance of the Drug Enforcement Administration’s National Takeback Day, on October 27, 2018, at locations throughout Colorado and across the country.
“Reducing opioid deaths is a genuine battle,” announced U.S Attorney Bob Troyer. “Too many in our country battle daily with addiction, and our hearts and our work are for them. Then there are others in our society who prey on the addicted. We are taking this fight to them. The U.S. Attorney’s Office will use all of its resources – both criminal and civil – to identify and stop unlawful prescribers and dispensers of opioids. We fight this battle one prosecution at a time, with all our strength.”
Criminal Prosecutions
U.S. Attorney Troyer announces three separate criminal prosecutions.
- A Colorado doctor, Andrew M. Ho, practicing internal medicine in Denver, Colorado, has been charged with distributing or dispensing controlled substances illegally between September of 2014 and November of 2015. According to the twenty-one count indictment, Dr. Ho illegally prescribed a number of controlled substances, including the opioid Oxycodone, to several patients during the period of the indictment. The prescriptions were given “outside the usual course of professional practice and for a purpose other than a legitimate medical purpose.” If convicted, Dr. Ho faces a potential sentence of up to twenty years, and a fine of up to one million dollars.
- A registered pharmacist, Mary Aronson, owner and operator of St. Vrain Pharmacy in Lyons, Colorado, has been charged with illegal distribution of narcotics in a Federal Indictment which was unsealed on October 17, 2018. According to the indictment, Aronson is charged with illegally distributing oxycodone, amphetamine, and lorazepam between December of 2017, and February of 2018. If convicted, Aronson faces a potential sentence of up to twenty years in prison and a fine of up to one million dollars.
- The U.S. Attorney’s Office also recently announced guilty pleas of two South Denver pharmacists. Both defendants, Stanley Callas and Scott Eskanos, were co-owners of Crown Point Pharmacy, located in Parker, Colorado, and Sky Ridge Pharmacy, located in Lone Tree, Colorado. Callas typically dispensed controlled substances from Crown Point Pharmacy and Eskanos typically dispensed controlled substances from Sky Ridge Pharmacy. Both dispensed morphine, meperidine, and lorazepam to co-defendant Dianna Smithling outside the usual course of professional practice.
Civil Settlement
U.S. Attorney Troyer also joins colleagues from the Eastern District of Pennsylvania and the Western District of Pennsylvania in announcing that Passavant Memorial Homes, and its subsidiaries Passavant Development Corporation, PDC Pharmacy Colorado, PDC Pharmacy Philadelphia, and PDC Pharmacy Pittsburgh, have agreed to pay the United States $1,850,000 to resolve allegations that Passavant dispensed controlled substances to patients without a valid prescription, in violation of the Controlled Substances Act, and, in some cases, submitted claims for the drugs to Medicare and Medicaid, in violation of the False Claims Act. Passavant has implemented a policy change to stop this practice.
Passavant’s pharmacies serve individuals with intellectual disabilities and other mental health needs through community residential programs, residential treatment facilities, intermediate care facilities, and other facilities. In many cases, Passavant bills federal healthcare programs, including Medicare and Medicaid, for dispensing controlled substances to these individuals.
In 2015, an investigation was launched after Passavant voluntarily disclosed to the United States that between January 1, 2009 and December 31, 2014, Passavant had dispensed controlled substances on Schedules III, IV, and V of the DEA Controlled Substances List to patients for a legitimate medical purpose, but without a valid prescription and with only a physician order. In many cases, Passavant submitted claims to Medicare and Medicaid for dispensing these drugs without a prescription. Passavant voluntarily disclosed this information and cooperated with the investigation to identify the nature and scope of the issue.
The civil case was handled by Assistant United States Attorneys Amanda Rocque of the District of Colorado, Mark J. Sherer and Anthony D. Scicchitano of the Eastern District of Pennsylvania, and Colin J. Callahan of the Western District of Pennsylvania. It was investigated by the Drug Enforcement Administration and the Office of Inspector General of the U.S. Department of Health and Human Services.
DEA National Takeback Day
The next DEA National Takeback Day is on October 27, 2018 at 10:00 a.m. at locations throughout Colorado and across the country. Visit www.takebackday.dea.gov.
Individuals Charged with Defrauding Non-Profit Health-Care SystemRead the Press Release
DENVER – A federal grand jury for the District of Colorado returned an indictment on October 11, 2018 charging David Paul Rietz, age 59, of Arvada, Colorado and Richard Scott Cartwright, age 46, of Goodyear, Arizona with mail fraud, wire fraud, conspiracy to commit mail and wire fraud, aiding and abetting, money laundering, and conspiracy to commit money laundering U.S. Attorney Bob Troyer and IRS – Criminal Investigation Special Agent in Charge Steven Osborne announced. Rietz and Cartwright, who appeared at their initial appearances on October 15 and 18, respectively, were released on a personal recognizance bond. They have both entered not guilty pleas. A third defendant, Lyle William Perry, age 59, of Lakewood, Colorado, who was charged by information with conspiracy to commit money laundering on October 12, 2018, also entered a not guilty plea at his arraignment.
According to information contained in the indictment and information, Rietz was an employee of Catholic Health Initiatives (CHI), a nonprofit health-care system with headquarters in Englewood, Colorado, and Cartwright was a principal of Cross IT Group Corporation (Cross IT). Between approximately September 2013 and at least January 2014, Rietz and Cartwright conspired to defraud CHI and split the money obtained from CHI under materially false and fraudulent pretenses. Rietz was responsible for a software integration project at CHI involving use of proprietary software sold by a third-party company. Rietz used his authority to require that software company to use Cross IT as a third-party reseller and to hire Cross IT to implement the software..
In his role as software reseller and IT contractor for CHI, Cartwright submitted twenty-five “quotes” to CHI for software and services, totaling over $72 million. The quotes were based on specifications Rietz provided. Rietz then signed the Cross IT quotes to have them processed through the CHI system. Purchase orders were issued based on the submitted quotes and CHI eventually paid Cross IT $19,884,904.28 in four payments.
After receiving the CHI payments, Cartwright caused funds from the CHI payments to be transferred to bank accounts controlled by Perry, representing the payment was an investment in Perry’s company, Gradum, Inc. Perry then transferred funds to Reitz, falsely representing the payment from Gradum to Rietz were for legitimate purpose, including a “finder’s fee” of $1,760,000 for a real estate development project, the purchase of computer hardware for $590,000, and the purchase of gold coins for approximately $745,000 on behalf of Reitz.
Each count of mail fraud, wire fraud, conspiracy to commit mail and wire fraud, money laundering, and conspiracy to commit money laundering carries a penalty of not more than 20 years in prison, a fine of not more than $250,000 or not more than the greater of twice the gross pecuniary gain or loss from each offense, and restitution.
This case was investigated by Denver Division of the FBI and the Internal Revenue Service – Criminal Investigation.
This case is being prosecuted by Assistant United States Attorney Anna K. Edgar.
The charges contained in the indictment and information are allegations, and the defendants are presumed innocent unless and until proven guilty.
Large Metro Denver Cocaine and Methamphetamine Trafficking Organization Members Indicted and ArrestedRead the Press Release
DENVER – During an early raid this morning, over 100 law enforcement officers arrested members of two separate but related drug trafficking organizations, U.S. Attorney Bob Troyer, FBI Denver Division Acting Special Agent in Charge Janeen Diguiseppi, DEA Denver Division Special Agent in Charge Tim McDermott, and IRS-Criminal Investigations Special Agent in Charge Steven Osborne announced. The Northern Colorado Drug Task Force (NCDTF) also played a critical role in the investigation. Of those indicted, 18 have been arrested (8 of them in Mexico, one in New Mexico, 2 in El Paso) as of the time this press release was issued. The remaining defendants, including 2 in Denver are being sought and will be considered fugitives.
In January 2015, the NCDTF initiated an investigation into the Acosta cocaine trafficking organization. Defendant Omar Chavez-Gutierrez was identified as the head of the Acosta Drug Trafficking Organization (DTO). In March 2017, members of the Denver OCDETF Strike Force started a new investigation into two independent but connected cocaine trafficking organizations. The first DTO was led by Omar Chavez-Gutierrez. The second DTO was directed by Mexican Source of Supply Eduardo Ramon Tarango-Tarango, with assistance from Colorado-based cell head Armando Colacion-Talamantes. The two organizations used a common source of supply, shared distributors, and maintained an overlapping customer base. Both DTOs obtained cocaine from multiple sources in Chihuahua, Mexico. The cocaine crossed the U.S./Mexico border between Juarez and El Paso. Multi-kilogram shipments were transported by couriers to Colorado where the cocaine was delivered to distributors in the Denver metro area, and then sold to lower-level dealers. Bulk cash drug proceeds were hidden in courier vehicles and transported to sources of supply in Mexico.
Based on this information, a federal grand jury in Denver returned five indictments charging 35 defendants with drug trafficking related crimes. During the course of the investigation law enforcement seized approximately 25 kilograms of cocaine, 25 pounds of methamphetamine and $500,000. During today’s raid, an additional 4 kilos of heroin, 1 ¼ kilo of cocaine, $47,000 cash, 5 handguns, 2 rifles (AK-47 and AR-15) and a car were seized.
If convicted, all defendants face multiple drug trafficking charges. Each face not less than 10 years, and up to life, as well as a fine of up to $10,000,000.
This case was investigated by the Denver OCDETF Strike Force, including the FBI, DEA, IRS-CI, the Northern Colorado Drug Task Force and the Colorado Attorney General’s Office. Agencies that assisted with today’s arrests include: the United States Marshals Service, the Aurora Police Department, ATF, ICE, DEA Colorado Springs Residence Office, DEA El Paso, and DEA Las Cruces.
The defendants were prosecuted by Assistant U.S. Attorneys Stephanie Podolak and Zachary Phillips.
The indictments contain allegations, and the defendants are presumed innocent unless and until proven guilty in a court of law.
Two South Denver Pharmacists Plead Guilty to Felony Charges of Illegally Distributing OpioidsRead the Press Release
DENVER – Stanley (Stan) G. Callas, age 66, of Parker, and Scott Alan Eskanos, age 63, of Highlands Ranch, pled guilty today before Senior U.S. District Court Judge Robert E. Blackburn to charges related to the illegal dispensing and distribution of controlled substances, U.S. Attorney Bob Troyer and DEA Denver Division Special Agent in Charge Tim McDermott announced. Both defendants are scheduled to be sentenced by Judge Blackburn on March 14, 2019.
According to the stipulated facts contained in both defendants’ plea agreements, Stanley Callas and Scott Eskanos were co-owners of Crown Point Pharmacy, located in Parker, Colorado, and Sky Ridge Pharmacy, located at in Lone Tree, Colorado. Callas typically dispensed controlled substances from Crown Point Pharmacy and Eskanos typically dispensed controlled substances from Sky Ridge Pharmacy.
Callas pled guilty to illegal distribution of controlled substances on September 13, 2012, when he dispensed morphine, meperidine, and lorazepam to co-defendant Dianna Smithling outside the usual course of professional practice and for a purpose other than a legitimate medical purpose. Specifically, on September 13, 2012, Callas filled prescriptions for 1,500 morphine sulfate IR 30mg tablets; 450 morphine sulfate ER 60mg tablets; 30 morphine sulfate 100mg tablets; 180 injectable meperidine 100mg/ml vials; and 270 lorazepam 2mg tablets. Each prescription was written by co-defendant Dr. John Alan Littleford and purported to be for a 90-day supply. Smithling was Dr. Littleford’s office manager at the Pain & Injury Clinic in Parker, Colorado, when Callas distributed the controlled substances to her.
Based on the numbers of dosage units, the morphine equivalencies, plus the synergistic effects of taking these controlled substances together, Callas knew or should have known these prescriptions were not for a legitimate medical purpose. Callas also filled additional prescriptions well before the prescriptions he filled on September 13, 2012, were scheduled to run out. On October 9, 2012—approximately 26 days into the 90-day supply filled on September 13—Callas filled another prescription for 180 injectable meperidine 100mg/ml vials which was supposed to last for another 90 days. On November 5, 2012—approximately 53 days into the 90-day supply filled on September 13—Callas filled a prescription for 400 more morphine sulfate 30mg tablets and a prescription for 180 morphine sulfate 200mg tablets. Crown Point Pharmacy maintained real-time computer data which was accessible to Callas at every dispensing and made him aware of Crown Point Pharmacy’s dispensing history for each individual to whom he dispensed controlled substances. Callas did not exercise the degree of independent judgment which was required of him by law.
As part of his plea agreement, Callas agrees the Court can consider his distribution of controlled substances on five other occasions—involving more than 3,600 pills of various opioids, amphetamines, and benzodiazepines as well as fentanyl patches and vials of injectable meperidine—as relevant for sentencing in his case.
Eskanos pled guilty to illegal distribution of controlled substances on September 12, 2012, when he dispensed 840 oxycodone 30mg tablets to an individual who presented a prescription written by co-defendant Dr. Littleford outside the usual course of professional practice and for a purpose other than a legitimate medical purpose. Based on the numbers of dosage units and the morphine equivalencies, Eskanos knew or should have known this prescription was not for a legitimate medical purpose. Eskanos deliberately ignored obvious red flags in order to fill illegitimate prescriptions which were presented and which bore Dr. Littleford’s signature. For example, a review of historical data through the Colorado Prescription Drug Monitoring Program (PDMP) or additional investigation with Dr. Littleford’s office would have revealed Dr. Littleford was also writing monthly prescriptions for the same individual for 360 oxycodone/acetaminophen 10mg/325mg tablets; 120 oxycodone 80mg tablets; 240 morphine sulfate ER 100mg tablets; 240 clonazepam 2 mg tablets; and 60 temazepam 15mg tablets, which the individual was filling at a pharmacy called Dale’s Pharmacy. In total, the individual was receiving 1,320 pills of oxycodone per month in addition to morphine and benzodiazepines. Sky Ridge Pharmacy maintained real-time computer data which was accessible to Eskanos at every dispensing and made him aware of Sky Ridge Pharmacy’s dispensing history for each individual to whom he dispensed controlled substances. Eskanos did not exercise the degree of independent judgment which was required of him by law.
As part of his plea agreement, Eskanos agrees the Court can consider his distribution of controlled substances on three other occasions—involving 1,500 pills of oxycodone and diazepam—as relevant for sentencing in his case.
As a term of their pretrial release in April 2016, Callas and Eskanos both agreed they would not be employed in any pharmaceutical capacity. Through their plea agreements, both defendants now agree they will not seek new pharmacy licenses or the return of the pharmacy licenses they previously surrendered pursuant to Non-disciplinary Cessation of Practice Agreements they reached with the Colorado Board of Pharmacy on April 22, 2016.
This case was investigated by the DEA Denver Division.
The defendants are being prosecuted by Assistant U.S. Attorneys Peter McNeilly and Jaime Pena.
Habitual Domestic Violence Offender Sentenced to Federal Prison for AssaultRead the Press Release
DURANGO – Bryan Ace Ponzo, age 36, from the Ute Mountain Ute Indian Reservation surrounding Towaoc, was recently sentenced to serve 129 months in federal prison by Senior U.S. District Court Judge Robert E. Blackburn for assault with a dangerous weapon, U.S. Attorney Bob Troyer, FBI Denver Division Special Agent in Charge Calvin Shivers and the U.S. Bureau of Indian Affairs announced. In addition to pleading guilty to witness tampering, Judge West found Ponzo guilty beyond a reasonable of six contempt charges, ordering an additional 24 months imprisonment. In total, Ponzo will serve 153 months imprisonment. Ponzo and his victim are enrolled members of the Ute Mountain Ute Indian Tribe. According to the public record, Ponzo has an extensive state and tribal criminal history, including numerous assault and domestic violence related offenses.
Ponzo was indicted by a federal grand jury on October 6, 2017. The indictment was superseded by an Information on March 15, 2018. He pled guilty before Judge Blackburn on that same date. He was sentenced on October 9, 2018.
According to the stipulated facts contained in the plea agreement, Ponzo and his wife resided on the Ute Mountain Ute Reservation. On the morning of November 2, 2016, Ponzo and his wife had an argument. He had looked through her Facebook account and questioned her about male friends. During this time, Ponzo grabbed his wife from the couch and forced her to shower. Ponzo then sexually assaulted her on the bed. After Ponzo sexually assaulted his wife, he pulled her off the bed and she hit her head on the floor. Ponzo then went to the closet, grabbed brass knuckles, and threatened his wife with the brass knuckles. Law enforcement accompanied the wife to a hospital in Utah that afternoon, where her injuries were diagnosed and documented.
During the case, Magistrate Judge West issued a No Contact Order holding that Ponzo could not contact his victim directly or indirectly. While in pre-trial custody at La Plata County Detention Facility, Ponzo dialed his wife’s number at least 1,749 times in an attempt to influence her trial testimony. In these recorded calls, Ponzo repeatedly blamed his wife and instructed her to “fix it.”
This case was investigated by the Bureau of Indian Affairs and the Federal Bureau of Investigation. The defendant was prosecuted by Assistant U.S. Attorneys Jason St. Julien and Jeffrey Graves.
La Plata County Inmate Sentenced for Conspiracy to Commit Bank Fraud and Money LaunderingRead the Press Release
DURANGO –Anthony Ryan Lopez, age 30, was sentenced by U.S. District Court Judge Robert E. Blackburn yesterday to serve 24 months incarceration followed by three years of supervised release and ordered to pay restitution of $98,902.76. Lopez pled guilty on June 28, 2018. The sentence was announced by U.S. Attorney Bob Troyer and IRS Criminal Investigation Special Agent in Charge Steven Osborne.
According to the information and plea agreement, Lopez and three co-conspirators, a/k/a The Fraud Squad, routinely committed criminal acts in order to unlawfully obtain credit card numbers and personal identifying information and used that information to fraudulently obtain goods or services.
On October 11, 2015, Durango Police officers arrested Lopez and took him to the La Plata County jail.
Throughout October and November of 2015, each inmate at the jail had an inmate account, which they were able to use for expenses incurred in the jail, such as commissary items and phone calls. The jail also permitted inmates to issue checks drawn against their inmate accounts. Lopez learned that non-inmates could deposit money into inmate accounts using an online kiosk. The kiosk permitted users to deposit funds to an inmate’s account using credit card information.
Between October 12, 2015, and November 23, 2015, Lopez conspired and agreed with his co-conspirators to fraudulently enter stolen personal identifying information and stolen credit card information on the kiosk website in order to deposit funds into Defendant Lopez’s inmate account and other inmates’ accounts. In October and November of 2015, the co-conspirators had possession of at least 36 sets of stolen credit card information.
Lopez knew that, when they entered the required information on the kiosk website, the co-conspirators falsely pretended to be the authorized credit card holders with the authority to direct the requested deposits. In 35 successful transactions, the Fraud Squad fraudulently entered stolen credit card information into the kiosk while pretending to be the authorized credit card holder, which caused banks to deposit a total of $98,902.76 into accounts belonging to Lopez and other inmates.
Lopez used the money from his inmate account for his own purposes, such as purchasing commissary items and making phone calls. In coordination with the other members of the Fraud Squad, Lopez also caused checks to be issued against his inmate account with the intent that the money be used for the benefit of himself and the Fraud Squad.
On November 11, 2015, Lopez willfully caused a check to be issued from his inmate account to a co-conspirator in the amount of $16,000. Lopez knew that these funds were from an illegal source. Lopez willfully caused this check to be issued to a co-conspirator to launder the illegal proceeds. In fact, on November 8, 2015, Lopez told a co-conspirator during a recorded jail call that once money was put into Lopez’s inmate account it was “clean and clear” and that no one could get arrested as a result of that money.
“It’s a special kind of person who sees county jail as a business opportunity for victimizing innocent citizens,” said U.S. Attorney Bob Troyer. “Those special people have proven they qualify for federal prison.”
“Identity theft is a contemptible modern-day menace,” said Steven Osborne, IRS Criminal Investigation Special Agent in Charge. “Law enforcement officers respond to it with every legal resource available. Let this sentence serve as a warning to those who are considering similar conduct.”
This case was investigated by IRS Criminal Investigation and prosecuted by Assistant United States Attorneys Pegeen D. Rhyne and Jeffrey Graves.
U.S. Attorney Bob Troyer Announces Progress in Making Our Communities Safer Through Project Safe NeighborhoodsRead the Press Release
DENVER – One year ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), which Attorney General Sessions has made the centerpiece of the Department’s violent crime reduction strategy. PSN is an evidence-based program proven to be effective at reducing violent crime. Through the District of Colorado’s PSN program, a broad spectrum of stakeholders have worked together to identify the Colorado communities with the most pressing violent crime problems and have developed comprehensive solutions to address them. PSN focuses enforcement efforts on the most violent offenders, particularly serial shooters, and partners with local prevention and reentry programs for lasting reductions in crime. PSN is consistent with the strategy the Colorado’s U.S. Attorney’s Office has developed for several years, using data analysis to target serial shooters.
Throughout the past year, we have partnered with all levels of law enforcement, local organizations, and members of the community to reduce violent crime and make our neighborhoods safer for everyone.
“In Colorado it’s just a very small percentage of people who commit the vast majority of the violent crime,” said U.S. Attorney Bob Troyer. “By identifying and prosecuting those people, we not only reduce the most crime, we do so with the least disruption to communities.”
Marking the one-year anniversary of the revitalized PSN program, here are some of the highlights our work:
Enforcement Actions
Colorado’s PSN program uses three Crime Gun Intelligence Centers in those areas of the state with the worst violent crime problems. Federal, state, and local investigators working with these centers combine forensic analysis related to firearms with a variety of other data to focus investigations on and build cases against the people responsible for the majority of the shootings in their communities. Examples of these cases include:
- Eight members of the Bloods street gang were prosecuted and received sentences of up to 100 months on charges of Violent Crimes in Aid of Racketerring (VICAR). Court documents stated that the Bloods were an enterprise whose business is violence, including murder and using firearms for drug trafficking. Most were felons who were prohibited from possessing firearms. (https://www.justice.gov/usao-co/pr/local-and-federal-law-enforcement-team-indict-and-arrest-violent-members-bloods-gang)
- James Harley Wheeler, age 24, was sentenced to serve 7 years for brandishing a firearm during a marijuana deal that resulted in a shooting death. (https://www.justice.gov/usao-co/pr/denver-man-sentenced-prison-following-federal-firearm-crime)
- Kendall Crockett, age 23, was sentenced to nearly 7 years for stealing firearms from a federal firearm licensee (FFL). This is one of multiple cases where defendants were prosecuted for brazenly stealing firearms from FFLs. (https://www.justice.gov/usao-co/pr/atf-us-attorneys-office-teams-local-law-enforcement-take-down-crews-breaking-gun-stores)
- Aaron Carson Cheek, age 27, was sentenced to serve 7 years for brandishing a firearm while robbing Home Depot. (https://www.justice.gov/usao-co/pr/felon-who-attempted-rob-home-depot-golden-sentenced-federal-prison)
- Daniel Anthony Garcia, age 28, was sentenced to 37 months for illegally entering an occupied home, pistol-whipping a man, and firing a gun to threaten occupants. (https://www.justice.gov/usao-co/pr/pueblo-man-sentenced-federal-prison-illegally-possessing-firearms)
- Jeremy Lee Cabral, age 22, was sentenced to 10 years for firing a gun in a parking lot during an attempted carjacking. (https://www.justice.gov/usao-co/pr/denver-man-sentenced-ten-years-imprisonment-firing-gun-parking-lot-during-attempted)
Community Partnerships
The U.S. Attorney’s Office partners with various community groups to provide education and outreach, including participating in the Colorado Lawyers’ Committee Hate Crime Mock Trial program, offering the Protecting Houses of Worship program to educate faith-based communities about practical security measures, and joining law enforcement at events like Coffee with a Cop. The U.S. Attorney’s Office also participates in re-entry services for people returning to the community after imprisonment, including speaking at Fair Chance job fairs and partnering with the Bureau of Prisons and the United States Probation Office to provide inmates training on job interviewing and resume writing.
These enforcement actions and partnerships are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. Learn more about Project Safe Neighborhoods.
HSBC Agrees to Pay $765 Million in Connection with Its Sale of Residential Mortgage-Backed SecuritiesRead the Press Release
DENVER – U.S. Attorney Bob Troyer announced today that HSBC will pay $765 million to settle claims related to its packaging, securitization, issuance, marketing and sale of residential mortgage-backed securities (RMBS) between 2005 and 2007. During this period, federally-insured financial institutions and others suffered major losses from investing in RMBS issued and underwritten by HSBC. Under the settlement, HSBC will pay the $765 million as a civil penalty pursuant to the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
“HSBC made choices that hurt people and abused their trust,” said Bob Troyer, United States Attorney for the District of Colorado. “HSBC chose to use a due diligence process it knew from the start didn’t work. It chose to put lots of defective mortgages into its deals. When HSBC saw problems, it chose to rush those deals out the door. When deals went south, investors who trusted HSBC suffered. And when the mortgages failed, communities across the country were blighted by foreclosure. If you make choices like this, beware. You will pay.”
“The actions of HSBC resulted in significant losses to investors, which purchased the HSBC Residential Mortgage-Backed Securities backed by defective loans,” said Associate Inspector General Jennifer Byrne of the Federal Housing Finance Agency-Office of Inspector General (FHFA-OIG). “We are proud to have partnered with the U.S Attorney’s Office for the District of Colorado on this matter.”
FIRREA authorizes the federal government to seek civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. The United States alleged that HSBC violated FIRREA by misrepresenting to investors the quality of its RMBS and the due diligence procedures it claimed it would use to ensure that quality. The United States’ allegations are described in the settlement agreement at paragraph 3.
The United States alleged that HSBC had a due diligence process for reviewing the loans HSBC planned to securitize as RMBS, but as early as 2005, an HSBC credit risk manager expressed concerns with HSBC’s due diligence process. HSBC nevertheless touted its due diligence process to potential investors. It told investors that when it purchased pools of subprime loans, HSBC would review at least 25% of the loans in the pool for credit and compliance. It told investors that it selected 20% of the loan pool as an “adverse sample” based on “a proprietary model, which will risk-rank the mortgage loans in the pool.” But on some loan pools, HSBC’s RMBS trading desk influenced how the risk management group selected loans for the adverse portion of the sample, and as a result, the sample was not based on its model. HSBC also told investors that it selected another 5% of the loan pool as a “random sample.” But in some instances, HSBC used a random sample that was less than 5% of the pool, or used a sample that was not random at all.
To review the loans HSBC did select for review, HSBC used due diligence vendors, and HSBC saw the results of the vendors’ reviews of the loans before the deals were issued. Over a one-and-a-half year period, between January 2006 and June 2007, HSBC’s primary due diligence vendor flagged over 7,400 loans as having low grades—more than one out of every four loans the vendor reviewed for HSBC during that time. When HSBC employees saw loans with low grades, they sometimes “waived” those loans through or recategorized the grades to make the due diligence “percentages look better.” They also expressed views about the deals they were issuing. For example, in 2007, an HSBC trader said, in reference to an RMBS that HSBC was about to issue, “it will suck.”
For a loan pool HSBC purchased in 2006, HSBC learned of what employees referred to as an “abnormally large” and “alarmingly” high number of payment defaults. HSBC had purchased the loan pool but had not securitized it yet. Early payment defaults (EPDs)—when a borrower fails to make one of the first few payments on a mortgage—could be, in the words of HSBC’s co-head of RMBS, “an indicator of higher expected loss on the pool.” In an internal email, HSBC’s head of risk management for RMBS wrote that the high EPD rate could be a sign of systemic problems with the pool. Others within HSBC’s risk management group expressed concern that the pool “may be contaminated” and asked whether “they should hold back on the securitization launch until there is further clarity on all the issues….” The next day, the head of HSBC’s whole loan trading risk management group stated that he was “comfortable that we need not make any further disclosures to investors….” HSBC issued the securitization a few days later. A later post-close quality control review indicated that loans that “appear to have fraud or misrep” went into the securitization. HSBC went on to buy and securitize more loans from the same originator, even after the head of HSBC’s due diligence team concluded that the originator had offered “bad collateral.”
After purchasing certain loan pools, HSBC ordered a quality control review but did not wait for the final results before issuing the securitization. On two pools, HSBC received preliminary quality control results before the issuance of the securitization that, according to the quality control vendor, showed indications of fraud in the origination of particular loans, but included those loans in the RMBS anyway. On a loan pool in 2007, HSBC performed post-close due diligence on a sample of loans from that pool. HSBC’s due diligence vendor graded approximately 30% of the loans in the post-close due diligence sample as having the lowest grade. HSBC went on to securitize loans from that same pool without any further credit or compliance review before securitization.
These are allegations only, which HSBC disputes and does not admit.
Assistant U.S. Attorneys Kevin Traskos, Jasand Mock, Ian J. Kellogg, Hetal J. Doshi, and Lila M. Bateman of the District of Colorado investigated this matter, with the support of the Federal Housing Finance Agency’s Office of the Inspector General (FHFA-OIG).
To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html.
Two Intelligence Officials and A Business Owner Indicted for Bid RiggingRead the Press Release
DENVER – Three individuals were indicted by a federal grand jury on a variety of charges relating to procurement fraud and unlawfully disclosing and obtaining bid information concerning a contract estimated to be worth almost $1.5 million, the U.S. Attorney’s Office, in coordination with the National Security Agency (NSA), and the National Reconnaissance Office (NRO) announced.
During times relevant to the indictment, Kevin Kuciapinski, age 43, was an active duty U.S. Air Force Major working at the NRO. Randolph Stimac, age 61, was an employee of the NSA. Both were stationed at the Aerospace Data Facility-Colorado on Buckley Air Force Base. The third defendant, Mykhael Kuciapinski, age 51, was the owner and CEO of Company G, a company that attempted to do business with the U.S. Government. She was also the wife of Kevin Kuciapinski through July 2015.
According to the Indictment, beginning on August 1, 2013, and continuing through November 24, 2015, the defendants conspired with each other to unlawfully obtain and disclose source selection information prior to the award for services related to a contract for services related to NSA, a category of intelligence that involves the collection, processing, and dissemination of foreign communications in order to obtain foreign intelligence necessary to the national defense, national security, or the conduct of the foreign affairs of the United States. The alleged plan and purpose of the conspiracy was for Kevin Kuciapinski and Randolph Stimac to provide a competitive advantage to defendant Mykhael Kuciapinski’s bid or proposal by providing her information and source selection information for the contract in question.
This case was investigated by the NRO Office of the Inspector General, NSA, Defense Criminal Investigative Services, Air Force Office of Special Investigations, and the IRS-Criminal Investigation.
The defendants are being prosecuted by Assistant U.S. Attorney Jeremy Sibert.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
Colorado Receives over $6,000,000 in Grant Awards to Combat Opioid CrisisRead the Press Release
DENVER – The Justice Department as part of National Substance Abuse Prevention Month, and U.S. Attorney Bob Troyer, announced that Colorado will receive $6,227,854 in funds to combat the opioid crisis. This comes at a time when the Colorado U.S. Attorney’s Office is taking a comprehensive approach to fighting illegally dispensed prescription drugs. Nationally, the Department issued over $320 million to address the opioid crisis. The unprecedented funding will directly help those most impacted by the deadliest drug crisis in American history, including victims, children, families, and first responders.
In 2017, more than 72,000 Americans lost their lives to drug overdoses, an increase from the 64,000 overdose deaths in 2016, according to the Centers for Disease Control and Prevention. The majority of these deaths can be attributed to opioids, including illicit fentanyl and its analogues.
October marks two important anti-drug events: Red Ribbon Week and National Prescription Drug Takeback Day. Red Ribbon Week takes place every year between October 23-31 and encourages students, parents, schools, and communities to promote drug-free lifestyles. The Drug Enforcement Administration’s (DEA) National Prescription Drug Take Back Day on October 27 aims to provide an opportunity for Americans to prevent overdose deaths and drug addictions before they start. DOJ expanded on DEA's Drug Takeback Days and collected more than 2.7 million pounds of expired or unused prescription drugs since April 2017.
AWARDS
Comprehensive Opioid Abuse Site-based Program to support our nation’s law enforcement officers and other first responders: The City of Longmont -- $499,922
Comprehensive Opioid Abuse Site-based Program to provide staffing and treatment resources within our nation’s jails and upon reentry to the community: Boulder County -- $861,569
Comprehensive Opioid Abuse Site-based Program to support public safety by information sharing by leveraging information from a variety of public health and safety data sources: Colorado Department of Public Health and Environment -- $1,000,000
Justice and Mental Health Collaboration Program to facilitate collaborations among criminal justice, mental health and substance abuse programs: CO-MO Boulder County -- $346,512
Enhancing Community Responses To the Opioid Crisis: Serving Our Youngest Crime Victims to help youth impacted by the opioids crisis: Illuminate Colorado -- $749,491
Adult Drug Court Discretionary Grant Program: Southern Ute Indian Tribe -- $327,822
Veterans Treatment Courts: Colorado Judicial Department -- $1,581,248
Drug Treatment Courts to Enhance Existing Family Drug Courts: Colorado Judicial Department -- $861,290
In response to the opioid crisis, the U.S. Attorney’s Office for the District of Colorado has taken a novel approach to identify and pursue those prescribers and pharmacies whose abuses contribute to the opioid epidemic in Colorado. First, the office created an internal Opioid Initiative Working Group, with attorneys and staff members from both the Criminal and Civil Divisions, that works strategically to make the most of the office’s civil and criminal tools and expertise. Second, the office has undertaken a unique project to gather, combine, and analyze extensive data to identify unlawful conduct by prescribers and pharmacies.
This opioid working group has prioritized gathering and analyzing data to identify possible patterns of overprescribing and drug diversion. A primary goal is to use data to determine potential targets whose conduct may be unlawful and where pursuit of that target would have a significant impact on opioid abuse in Colorado.
The group has worked to identify “red flags” in the data that might show that a prescriber or pharmacy was writing or filling a medically unnecessary prescription. For example, analysis of the data allowed us to identify prescribers and pharmacies that prescribe or fill the largest number of pills for highly abused prescription drugs such as oxycodone, hydrocodone, or fentanyl.
“The Colorado U.S. Attorney’s Office is a national leader in using data to identify those in the opioid supply chain who cause the most harm to our citizens, and bringing them to justice,” said U.S. Attorney Bob Troyer.
The Attorney General has been resolute in the fight against the drug crisis in America. The Department assigned more than 300 federal prosecutors to U.S. Attorney’s offices and hired more than 400 DEA task force officers; announced the formation of Operation Synthetic Opioid Surge, a new program to reduce the supply of deadly synthetic opioids in high impact areas; and created a new data analytics program called the Opioid Fraud and Abuse Detection Unit to assist 12 prosecutors sent to drug “hot spot districts.” In addition, the Department charged more than 3,000 defendants with trafficking in heroin, fentanyl, or prescription drugs in FY 2017, announced the first-ever indictments of Chinese nationals for fentanyl trafficking, and scheduled variants of fentanyl to prevent illicit drug labs from circumventing the law. In addition, DOJ executed the largest ever health care fraud enforcement action charging more than 600 defendants and proposed rules consistent with President Trump's "Safe Prescribing Plan," requiring a reduction of ten percent in 2019 in manufacturing quotas. The Department dismantled AlphaBay, the largest criminal marketplace on the Internet and has already generated prosecutions in the fight against online drug trafficking through the Joint Criminal Opioid Darknet Enforcement Team (J-CODE).
OJP provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP and its components can be found at: www.ojp.gov.
Leader of Darknet ItalianMafiaBrussels Drug Trafficking Organization Sentenced to 11 Years’ ImprisonmentRead the Press Release
DENVER – U.S. Attorney Bob Troyer announced that on September 26, 2018, U.S. District Court Judge R. Brooke Jackson sentenced Filip Lucian Simion, age 25, to 132 months (11 years) imprisonment for conspiracy to import controlled substances and launder money. Judge Jackson also ordered a personal money judgment against Simion in the amount of $850,000.00.
On May 3, 2016, in a joint U.S./European enforcement action, law enforcement dismantled the ItalianMafiaBrussels Drug Trafficking Organization, arresting ten defendants during early morning raids in Bruges, Belgium and surrounding areas. Filip Lucian Simion and Leonardo Cristea were arrested simultaneously in Bucharest, Romania, and extradited to the District of Colorado in July and October of 2016, respectively.
The nine-count indictment underlying the extraditions charged Filip Lucian Simion, Leonardo Cristea, and others with conspiracies to distribute and import into the United States controlled substances, in violation of Title 21, United States Code, Sections 846 and 963. The defendants were also charged with substantive counts of importation of controlled substances and aiding and abetting, in violation of Title 21, United States Code, Section 952(a), and Title 18, United States Code, Section 2. In addition, Filip Lucian Simion was charged in several counts of distribution of controlled substances by means of the Internet, in violation of Title 21, United States Code, Section 841(h)(1)(A) and conspiracy to launder money, in violation of Title 18, United States Code, Section 1956(h).
The leader of the organization, Filip Lucian Simion, plead guilty in April to one count of conspiracy to import into the United States controlled substances, and one count of conspiracy to launder money.
The evidence from the investigation revealed that from January 2013, through May 3, 2016, members of the conspiracy imported kilogram quantities of MDMA (3,4-methylenedioxymethamphetamine, a Schedule I controlled substance commonly known as Ecstasy) into the United States via the mail from various countries in Europe. The transnational organization operated online as the Darknet vendor “ItalianMafiaBrussels” or “IMB” and used encrypted email and TOR-based online black markets, such as the now defunct Silk Road and Silk Road 2.0, to sell the MDMA, primarily to United States and Canadian customers. The organization accepted payment for the drugs in the cryptocurrency bitcoin. In 2014 and 2015, several defendants were charged and convicted in the District of Colorado for distribution of MDMA sourced by the organization.
“Let there be no mistake. As the internet has grown, so has the long arm of the law,” said U.S. Attorney Bob Troyer. “If you’re harming people in Colorado, no distance is a safe distance. We will find you, we will bring you here, and we will send you to federal prison.”
“The Darknet is a rapidly evolving network that enhances the ability of transnational criminal organizations to move illicit goods worldwide. The anonymity it provides, coupled with the use of cryptocurrencies to launder proceeds made this a complicated investigation. Our special agents were able to call on their expertise, as well as HSI’s broad investigative mandate, to contribute to shutting down the ItalianMafiaBrussels Drug Trafficking Organization. Colorado is safer now that this group will no longer be able to bring illegal narcotics to its cities,” said HSI Denver SAC Steve Cagen.
“This case highlights the broad reach of the law enforcement community when we bring together state, federal and international partners to dismantle worldwide criminal organizations. The U.S. Postal Inspection Service would like to commend all those who came together to bring down one of the world’s largest distributors of illicit drugs,” said Kevin Rho, Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service. “This case sends a clear message that criminals who use the U.S. mail to send illegal narcotics to American citizens are not safe hiding behind cryptocurrency transactions and foreign borders. Postal Inspectors are steadfast in their commitment to protecting the American public, and USPS employees, from the hazards of drugs in the mail,” said Rho.
"This sentence sends a strong message to dark Web merchants of illegal goods that law enforcement is coming for them," said Steven Osborne, Special Agent in Charge of IRS Criminal Investigation.
This case was investigated by the Denver Illicit Digital Economy Working Group, comprised of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Postal Inspection Service, and the Internal Revenue Service, in partnership with the Romanian Central Anti-Narcotics Unit in Bucharest, Romania, and the Belgian Federal Judicial Police, East Flanders Drug Unit in Dendermonde, Belgium. Other United States and international agencies assisting the working group in this investigation included: the Boulder County Drug Task Force, the Arapahoe County Sheriff’s Office, the Boulder County District Attorney’s Office, U.S. Customs and Border Protection offices nationwide, the Department of Justice Office of International Affairs, Europol, and Eurojust.
The case was prosecuted by Michele R. Korver, Digital Currency Counsel at the DOJ Criminal Division’s Money Laundering and Asset Recovery Unit, on detail from the U.S. Attorney’s Office in the District of Colorado.
Pueblo Man Pleads Guilty to Federal Drug ChargeRead the Press Release
DENVER – Robert Ray Deluna, age 26, of Pueblo, Colorado, pled guilty today before U.S. District Court Judge Raymond P. Moore to possession of a controlled substance, U.S. Attorney Bob Troyer and Bureau of Alcohol, Tobacco, Firearms and Explosives Denver Field Division Special Agent in Charge Debbie Livingston announced. Deluna appeared at the hearing in custody, and was remanded at its conclusion. He is scheduled to be sentenced by Judge Moore on December 18, 2018. Deluna was indicted by a federal grand jury in Denver on June 21, 2018.
According to the stipulated facts contained in the defendant’s plea agreement, on March 29, 2018, Colorado Department of Correction Parole Officers in Pueblo were out looking for Deluna for violating the terms of his parole. They found him in the back seat of a vehicle, where he sat with a backpack between his legs.
Pursuant to conditions of his parole, Deluna consented to the search of his property. The parole officers looked inside the backpack and located two electronic scales and baggies. Inside the compartment on the rear of the driver’s seat – directly in front of where he was sitting was a .45 caliber pistol and a zippered bag. Inside the zippered bag were two baggies with Heroin – 4.88 grams in one and .40 grams in the other. Also in the bag was Deluna’s Colorado Identification Card and his Department of Corrections card.
This case was investigated by the Colorado Department of Corrections Office of Parole, the ATF Denver Field Division and the Pueblo Police Department. The defendant is being prosecuted by Assistant U.S. Attorney Kurt Bohn.
This case was brought as part of Project Safe Neighborhoods (PSN), 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. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Office to develop a district crime reduction strategy that incorporates the lessons learned since PSN was launched in 2001.
Postal Service Contract Carrier Sentenced for Theft of Government MoneyRead the Press Release
DENVER – Jimmie Dean Korf, age 49, of Weldona, Colorado, was sentenced late last week by Chief U.S. District Court Judge Marcia S. Krieger for theft of $92,579 as a Postal Service Highway Contract supplier in Morgan County, according to U.S. Attorney Bob Troyer and U.S. Postal Service Office of the Inspector General Acting Special Agent in Charge Steven Stuller.
Chief Judge Krieger ordered Korf to serve 12 months’ probation, requiring him to report to jail every weekend and every holiday. The defendant was indicted on September 27, 2017. He pled guilty on June 13, 2018, and was sentenced on September 20, 2018.
According to the stipulated facts contained in the plea agreement, the Postal Service contracts for over-the-road mail transportation. Korf was a Postal Service Highway Contract supplier, but not a Postal Service employee. He was required to certify the time he was on the road transporting the mail. Between June 2013 and November 2014, Korf illegally received $92,579 from the U.S. Postal Service by forging supervisory signatures on forms to pay him for services he did not provide.
The investigation into the payments began in February 2015 after an employee at the Fort Morgan Post Office alleged her signature had been forged. She looked at copies of the forms and noted that the signature on each form was not hers. She then reported the forgery to the U.S. Postal Service Office of the Inspector General. It was determined that Korf forged the signatures. A subsequent review of the Postal Service’s payment records revealed that the defendant claimed 237 extra trips totaling 53,360 miles. Postal Service documents only support 10 trips totaling 1,584 miles.
“The Postal Service Office of the Inspector General has a long history of doing superlative investigative work to ensure public trust,” said U.S. Attorney Bob Troyer. “Our office is always happy to be on their team.”
“We are gratified to have contributed to this investigation and applaud the exceptional work by the United States Attorney’s Office for both protecting the contracting process and overall program costs,” said Steven Stuller, Acting Special Agent in Charge, U.S. Postal Service Office of Inspector General. “Along with our law enforcement partners, the USPS OIG will continue to aggressively investigate those who would engage in fraudulent activities designed to defraud the Postal Service.”
This case was investigated by the U.S. Postal Service Office of the Inspector General. The defendant was prosecuted by Assistant U.S. Attorney Jason St. Julien.
Weld County Man Sentenced to over 10 Years in Federal Prison for Possession of Child PornographyRead the Press Release
DENVER – Frank Steven Wietecha, Jr., age 49, of Weld County, Colorado, was sentenced late last week by U.S. District Court Judge Philip A. Brimmer to serve 130 months (over 10 years) in federal prison for possession of child pornography, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced. Judge Brimmer ordered Wietecha to serve 15 years on supervised release following his prison sentence. The defendant appeared at the sentencing hearing in custody and was remanded at its conclusion.
Wietecha was indicted by a federal grand jury in Denver on February 7, 2018. He pled guilty to possession of child pornography on May 3, 2018. He was sentenced on September 14, 2018. Wietecha, according to court records, has a prior state misdemeanor conviction for possession of child pornography.
According to the stipulated facts contained in the plea agreement, on November 27, 2017, Wietecha’s daughter was in possession of the defendant’s cell phone and discovered it contained images of child pornography. She surrendered the phone to police. A federal search warrant was obtained to search the device as well as SD cards, which were also recovered.
A forensic review of the cell phone and associated SD cards revealed the presence of child pornography. There were over 1,000 images of child pornography, as well as several thousand images of child erotica. The earliest image located was captured on September 14, 2013. Analysis of the phone also showed internet activity accessing child pornography websites. Wietecha also used his phone to take screen shots of child pornography from his computer.
“Our prosecutors and the FBI leave no stone unturned when it comes to protecting children,” said U.S. Attorney Bob Troyer.
“The FBI remains committed to ensuring those responsible for sexually exploiting innocent children are aggressively investigated and brought to justice,” said Calvin Shivers, Special Agent in Charge of the FBI’s Denver Division. "This sentence demonstrates that those who possess child pornography will be prosecuted to the fullest extent of the law.”
This matter was investigated by the FBI, and the Fort Lupton Police Department with support from the Weld County District Attorney's Office. The defendant was prosecuted by Assistant U.S. Attorney Valeria Spencer.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Veterans Affairs Official Charged with Taking Bribes to Help Business Associates Rig Federal Contracting ProcessRead the Press Release
DENVER – Dwane Nevins, age 54, of Denver, Robert Revis, age 59, and Anthony Bueno, age 43, were arrested today pursuant to warrants issued in connection with an indictment charging them with conspiring to pay and receive bribes in exchange for creating an opportunity to commit a fraud against the United States Department of Veterans Affairs, announced U.S. Attorney Bob Troyer, FBI Special Agent in Charge Calvin A. Shivers, Veterans Affairs Office of Inspector General, Criminal Investigations Division, Central Field Office Special Agent in Charge Gregg Hirstein, and Small Business Administration Office of Inspector General, Special Agent in Charge Kari Overson. The defendants are also charged with paying and receiving bribes, or aiding and abetting the payment of bribes. Dwane Nevins was separately charged in another count with extortion under color of official right and in two counts with violating the federal conflict of interest statute. All three defendants made their initial appearances before U.S. Magistrate Judge Michael E. Hegarty, where they were advised of the their rights and the charges pending against them.
As alleged in the indictment, Dwane Nevins — a small business specialist at the VA’s Network Contracting Office in Colorado — agreed to take bribes offered by Revis, Bueno and an undercover FBI agent to help them manipulate the process for bidding on federal contracts with the VA. Revis and Bueno, working with Nevins, agreed to submit fraudulent bids from service-disabled-veteran-owned small businesses under contract with their consulting company so that federal contracts would be set aside for only those companies. As Bueno allegedly explained, they would then “own all the dogs on the track.” Nevins, Bueno and Revis worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to their consulting company, or by asking their consulting company’s clients to pay Nevins for sham training classes related to federal contracting.
The indictment also alleges that, after complaining about not being paid by Revis and Bueno for his participation in the scheme, Nevins used his official position at the VA to extort approximately $10,000 from an undercover FBI agent, telling the agent that “the train don’t go without me. You know what I mean? I’m the engine. I’m the caboose. I’m the engine room.” Nevins also allegedly told the undercover FBI agent “this is a business and businessmen need to get paid . . . . so I can have my Christmas, you know what I’m saying?”
The indictment alleges that the conspirators attempted to rig the process related to two particular contracts, both of which related to medical equipment and not to the construction of any VA facilities. The first contract related to the procurement of LC bead particle embolization products by a VA hospital in Salt Lake City and the second related to the procurement of durable medical equipment for VA facilities located throughout the region.
The case was jointly investigated by the Federal Bureau of Investigation, the U.S. Department of Veterans Affairs Office of Inspector General, and the U.S. Small Business Administration Office of Inspector General.
The defendants are being prosecuted by Assistant United States Attorney Bryan D. Fields.
The defendants are presumed innocent unless and until proven guilty in a court of law.
Justice Department Awards Ute Mountain Ute Tribe over $1,000,000 to Improve Public SafetyRead the Press Release
DENVER – U.S. Attorney Bob Troyer joined the Department of Justice today in announcing grants to improve public safety in Indian Country. In Colorado, the Ute Mountain Ute tribe received $1,646,931 as a part of this program. Of that amount, $898,918 is for Public Safety and Community Policing (COPS). Also, $748,013 was awarded to the tribe for Justice Systems and Alcohol and Substance Abuse (BJA). The announcement was made at the annual Four Corners Indian Country Conference, which is being held this year in Santa Fe, New Mexico.
“Productivity and prosperity can only grow where crime is reduced,” said U.S. Attorney Bob Troyer. “The U.S. Attorney’s Office in Colorado continues to do all it can to give prosperity on our tribal lands a fighting chance.”
Nationwide, grants were awarded to 133 American Indian tribes, Alaska Native villages, and other tribal designees through the Coordinated Tribal Assistance Solicitation, a streamlined application for tribal-specific grant programs. Of the $113 million, just over $53 million comes from the Office of Justice Programs, more than $35 million from the Office on Violence Against Women, and more than $24.7 million from the Office of Community Oriented Policing Services.
In addition, the Department is in the process of allocating up to $133 million in a first-ever set aside program to serve victims of crime in American Indian and Alaska Native communities. The awards are intended to help tribes develop, expand and improve services to victims of crime by providing funding, programming and technical assistance. Recipients will be announced in the near future.
“With these awards, we are doubling the amount of grant funding devoted to public safety programs and serving victims of crime in Native American communities,” said Principal Deputy Associate Attorney General Jesse Panuccio, who made the announcement during his remarks at the 26th Annual Four Corners Indian Country Conference in Santa Fe, New Mexico. “There is an unacceptable level of violent crime and domestic abuse in American Indian and Alaska Native communities. This increase in resources, together with our aggressive investigation and prosecution of crimes, shows how seriously Attorney General Sessions and the entire Department of Justice take these issues. We are committed to reducing violent crime and improving public safety.”
The Four Corners Conference is facilitated annually by U.S. Attorneys from Arizona, Colorado, New Mexico and Utah to provide a forum for discussion of justice-related topics with a large number of populous and diverse tribal nations located in the region.
CTAS awards cover nine purpose areas: public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; children’s justice act partnerships; services for victims of crime; violence against women; juvenile justice; and tribal youth programs. CTAS funding helps tribes develop and strengthen their justice systems’ response to crime, while expanding services to meet their communities’ public safety needs.
Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in American Indian and Alaska Native communities.
A listing of today’s announced CTAS awards is available at: www.justice.gov/tribal/page/file/1095161/download.
Five Western Slope Defendants Sentenced for Various Roles in Methamphetamine and Cocaine Drug TraffickingRead the Press Release
DENVER – Five defendants have been ordered in the past 48 hours to serve prison sentences for their respective roles in the distribution of methamphetamine and cocaine, U.S. Attorney Bob Troyer and DEA Denver Division Special Agent in Charge William T. McDermott announced. Four remaining defendants have sentencing hearings pending.
Colorado Chief U.S. District Court Judge Marcia S. Krieger, sitting in Grand Junction on September 10 and September 11th, 2018, sentenced:
- Sean Herrera, age 46, to serve 96 months in federal prison, followed by 5 years on supervised release;
- Sergio Gonzalez-Lomeli, age 23, to serve 60 months in federal prison, followed by 4 years on supervised release;
- Brandon Latgiue, age 40, to serve 9 months in federal prison, followed by 3 years on supervised release;
- Ricardo Morales, age 36, to serve 78 months in federal prison, followed by 5 years on supervised release;
- Karinda Sills, age 52, to serve 120 months in federal prison, followed by 5 years on supervised release;
According to court documents, in April 2016, the Glenwood Springs branch of DEA began investigating drug trafficking occurring in Garfield and Mesa Counties. This investigation involved surveillance of targets, controlled purchases of methamphetamine, and wiretaps of telephones and Facebook accounts. The investigation ultimately revealed that Paul Hernandez Contreras was a California source of supply for methamphetamine and cocaine who would bring large quantities of narcotics from California to Colorado. Daniel Tapia-Morales was a distributor for Hernandez Contreras and Tapia-Morales had his own customer base. In addition to drug trafficking, many individuals in the investigation would trade firearms for narcotics. Ultimately, over 3 kilograms of methamphetamine and ½ kilogram of cocaine were seized, as well as firearms and thousands of dollars. The investigation resulted in the indictment of ten individuals, to include the five mentioned above and Tapia-Morales.
Special Agent In Charge Tim McDermott stated, “This case demonstrates the importance of DEA’s relationship with State and Local Task Forces, such as the Two Rivers Drug Enforcement Team (TRIDENT), in order to dismantle and disrupt drug trafficking organizations responsible for poisoning our communities through the sale of methamphetamine, cocaine and firearms.”
This case was investigated by the DEA Denver Division and TRIDENT, including agents in Mesa and Garfield Counties. TRIDENT is a multi-jurisdictional drug task force funded through Federal, State and Local government funding sources. The defendants were prosecuted by Assistant U.S. Attorneys Celeste Rangel and Jeremy Chaffin.
Grand Junction Man Sentenced to Federal Prison for Being Felon in Possession of A FirearmRead the Press Release
DENVER – Michael Batt, age 46, of Grand Junction, Colorado, was sentenced today by U.S. District Court Chief Judge Marcia S. Krieger to serve 29 months in federal prison, followed by 3 years on supervised release for being a felon in possession of a firearm, U.S. Attorney Bob Troyer and Drug Enforcement Administration Denver Division Special Agent in Charge William T. McDermott announced. Batt appeared at the sentencing hearing in custody and was remanded at the hearing’s conclusion.
Batt and four others were indicted by a federal grand jury on December 12, 2016. Batt pled guilty on April 20, 2018. He was sentenced today, September 10, 2018, in Grand Junction, Colorado. Two other defendants were sentenced to 113 months, and 57 months, respectively, for conspiracy to distribute methamphetamine. Two additional defendants will be sentenced later this year.
According to the stipulated facts contained in Batt’s plea agreement, Batt was involved with a number of other individuals involved in the trafficking of methamphetamine along the Western Slope of Colorado. Beginning in November 2015, the Grand Junction DEA and the Grand Valley Joint Drug Task Force began an investigation into a methamphetamine trafficking organization based in Mesa County, Colorado. Agents identified Manuel Arias and Maria Serna as a husband and wife team who were methamphetamine distributors in the Grand Junction, Colorado area. Serna and Arias were also known to deal in firearms. The investigation utilized confidential sources, undercover agents, surveillance and wiretaps.
On September 14, 2016, an undercover agent purchased two firearms from Serna and Arias. One firearm was a .223 Tavor rifle and the other was a Highpoint 9mm handgun. The .223 Tavor rifle was a semiautomatic firearm capable of accepting a large capacity magazine.
The investigation showed that Serna and Arias had obtained both firearms and an accompanying magazine from Michael Batt. Michael Batt is prohibited from possessing firearms due to multiple prior felony convictions. Before Batt provided the firearms to Serena and Arias, the .223 Tavor had been involved in an accidental shooting; the juvenile who fired the accidental shot lived near to Batt and delivered the rifle and magazine to him the day of the accidental shooting, on August 31, 2016. The next day, September 1, 2016, Batt delivered both firearms and the magazine to Arias. Batt was supposed to receive $2,500 from Serna and Arias for the firearms, but he never received the money.
William McDermott, Special Agent In Charge of the DEA Denver Field Division said, “The very powerful addiction of methamphetamine is a major drug problem on the Western Slope. Methamphetamine is actively destroying lives and ravaging our rural communities throughout the Rocky Mountain Region. As seen in this case, guns go hand-in-hand with those who are involved with the distribution of methamphetamine.”
This case was investigated by the DEA Denver Division, including agents in Grand Junction as well as agents and officers of the Grand Valley Joint Drug Task Force. The defendants were prosecuted by Assistant U.S. Attorney Peter Hautzinger.
Minnesota Man Pleads Guilty to Stalking and Interstate CommunicationsRead the Press Release
DENVER – Eric Ronald Bolduan, age 43, of Rochester, Minnesota, pled guilty today before U.S. District Court Judge Christine M. Arguello to stalking and interstate communications, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced. Bolduan, who appeared at the hearing in custody, was remanded at its conclusion. He is scheduled to be sentenced by Judge Arguello on November 29, 2018.
Bolduan was first charged by Criminal Complaint on October 2, 2017. He was indicted by a federal grand jury in Denver on October 24, 2017. He pled guilty today, September 6, 2018.
According to court documents, Bolduan would download images of the victims, mainly current or former university women athletes from various public internet and social networking sites. He would then find online pornographic images of women who resembled the victim. He would upload the victim’s actual, non-pornographic images alongside the pornographic images of the similar looking female to various pornographic websites. He would include the victim’s name, school and contact information. The purpose was to portray the victim as involved in pornography and promiscuous behavior.
The defendant would then email links of those pornographic postings to the victim herself, and to people the victim was associated with, including professors, teammates and family members. Bolduan would then send threatening emails to the victim, discussing how he was stalking her with the ultimate plan to rape, torture and kill her.
This case was investigated by the FBI. The defendant was prosecuted by Assistant U.S. Attorney Valeria Spencer.
ADX Inmate Sentenced for Hiding Contraband on His PersonRead the Press Release
DENVER – Shawn Shields, age 45, and a resident of United States Penitentiary -- Administrative Maximum (ADX) in Florence, Colorado, was sentenced yesterday by U.S. District Court Judge Robert E. Blackburn to serve 37 months in federal prison, to run consecutive to his existing sentence for Second Degree Murder. After completing his prison sentence, Judge Blackburn ordered Shields to serve 3 years on supervised release. The defendant, who appeared at the sentencing hearing in custody, was remanded at its conclusion. The announcement was made by U.S. Attorney Bob Troyer in conjunction with the U.S. Bureau of Prisons Special Investigative Services.
Shields was first indicted on May 5, 2015. After lengthy litigation the defendant participated in a jury trial that started on February 20, 2018. The trial lasted three days, when the jury found the defendant guilty of possessing contraband in prison, namely two homemade weapons known as shanks. He was sentenced yesterday, September 5, 2018.
According to court records as well as statements and testimony given during trial, on March 18, 2015, Shields was incarcerated at ADX in Florence, Colorado. Specifically, he was housed in the J-Unit, a step-down unit at ADX. That morning, Shields and another inmate were working out on the lower tier of the J-Unit. Another inmate was standing near them, but speaking to another inmate through his closed cell door. A correctional officer heard a confrontation between the inmate speaking at the closed cell yelling “come here and I’ll break your jaw” to someone. Inmates started to flee, when Shields quickly walked to his cell where he knelt down and appeared to retrieve an item from a rolled up towel. He then discretely tucked the item into his waistband, and continued to pace the upper tier of the housing unit. After a few minutes the defendant and the inmate involved in the confrontation engaged in a prolonged and casual conversation on the upper level of the housing unit. The unit was shortly thereafter locked down.
Later that morning, investigators from the Special Investigative Services Department, began to conduct an investigation. Inmates involved in the incident were sent through a SecurPASS machine, which is a whole body scanner. When it was Shield’s turn to be scanned, the first few scans showed an object within the lower abdominal area of the defendant’s body. A correctional officer ordered another scan of Shields, this time with his arms raised higher. The object was still visible on the scan. Shields told the officer “if you show it to me on the screen, I will give it up to you.” Upon viewing the image, the defendant was taken into a separate location. There he reached his hand down his pants, and retrieved an unknown object from his rectum. The object, which was covered in blood and feces, was deposited in a plastic bag. After documenting the new found object, it was unwrapped and photographed. It became clear that the unknown object was actually a homemade weapon, commonly referred to as a shank. There was a larger weapon that measured 4.5 inches. There was also a smaller weapon, resembling a razor blade, measuring 1.5 inches.
This case was investigated by the U.S. Bureau of Prisons Special Investigative Services Department. The defendant was prosecuted by Assistant U.S. Attorney Valeria Spencer and Special Assistant U.S. Attorney Clay Cook.
Southern Colorado Man Sentenced for False Statement in the Application and Use of PassportsRead the Press Release
DENVER – A Southern Colorado man, Ronald Ray Horner, age 58, of Huerfano County, was sentenced today by U.S. District Court Judge Philip A. Brimmer to serve 27 months in federal prison, followed by 3 years on supervised release for making false statements in the application and use of passports, U.S. Attorney Bob Troyer, and Angela Brenner, Resident Agent-in-Charge of the U.S. Department of State’s Diplomatic Security Service, Denver Resident Office (DSS) announced. Horner, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
On March 15, 2017, Horner was indicted by a federal grand jury in Denver. On June 18, 2018, Horner was found guilty following a one-day trial. The jury deliberated for about 30 minutes before reaching their verdict.
During the summer of 2016, Horner was indicted in the District of Montana for the offense of Transportation of Child Pornography. As a result of that offense, the defendant appeared in court, and was released on bond, subject to various conditions. Two of those conditions were that he was required to surrender his passport and was ordered not to obtain another one.
On August 9, 2016, the defendant went to the United States Post Office in Walsenburg, Colorado and submitted an application for a passport. He claimed that he had lost his passport, explaining, “Passport was left in suitcase after vacation (Jan 2016). Suitcase had torn seam and was discarded. I forgot the passport was in the suitcase.” The defendant further explained that he threw the suitcase in a dumpster outside the Mini Mart in Walsenburg, Colorado in January 2016. He submitted these forms, along with the requisite forms of identification, as his application for a new passport.
Shortly thereafter, the defendant received a new passport in the mail. He left Colorado, traveled to Mexico on September 3, 2016, and then made his way through multiple countries in South America, including Brazil, Uruguay, and Guyana. He ultimately ended up in Trinidad and Tobago after being deported from Guyana. A DSS Special Agent spoke with Horner in Trinidad and Tobago, confiscated the passport, and arranged for the defendant’s transportation back to the United States. Following the defendant’s return to the United States, he was convicted of Transportation of Child Pornography in Montana and sentenced to 154 months. Judge Brimmer ordered the 27-month sentence in this case to be served consecutively to that sentence.
“This case demonstrates why keeping our passport system secure is so important,” said U.S. Attorney Bob Troyer. “By lying to get a new passport, a person charged with child porn crimes was able to travel to 5 other countries while he was under indictment. We can’t and won’t allow that.”
“The Diplomatic Security Service is firmly committed to making sure that those who commit passport and visa fraud face consequences for their criminal actions,” said Resident Agent in Charge Angela Brenner of the Diplomatic Security Service. “The strong relationship we enjoy with the U.S. Attorney’s Office and other law enforcement agencies around the world is vital towards ensuring the integrity of U.S. travel documents and protecting greater U.S. interests.”
This case was investigated by the U.S. State Department’s Diplomatic Security Service. The defendant was prosecuted by Special Assistant U.S. Attorneys Daniel McIntyre and Assistant U.S. Attorneys Robert Brown and Rebecca Weber.
United States Attorney’s Office Announces an 11 Year Sentence for Defendant Who Provided Material Support to a Terrorist OrganizationRead the Press Release
DENVER – Jamshid Muhtorov, age 42, a lawful permanent resident of the U.S., originally from Uzbekistan, was sentenced today by Senior U.S. District Court Judge John L. Kane to 132 months in federal prison for providing material support to a terrorist organization, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced together with the Assistant Attorney General for National Security Division, John C. Demers.
Muhtorov appeared at today’s hearing in custody and was remanded at its conclusion. Following his incarceration, Muhtorov will be placed on a term of 15 years of supervised release and will be transferred to ICE custody pursuant to an immigration detainer for removal proceedings.
The defendant was first charged by criminal complaint on January 19, 2012, and was arrested at O’Hare International Airport in Chicago, en route to Istanbul, Turkey. He was subsequently indicted by a federal grand jury in Denver, and later convicted by a Denver jury on June 21, 2018, after a 19-day trial. As described in a 40-page Memorandum and Opinion issued by Senior Judge Kane today, Muhtorov desired to support the Islamic Jihad Union, a designated terrorist organization. He swore allegiance to that organization and Muhtorov told his eight year old daughter to “pray for your Daddy to become a martyr….”
“Defending our country from terrorism is a core mission of the Department of Justice,” stated United States Attorney Bob Troyer. “Our prosecutors have devoted years of their professional lives to this critical mission, and the people of our state have every reason to be proud of their dedicated, tireless work.”
"Today’s sentence represents the FBI’s dedication to pursuing those intent on harming the citizens of our communities by providing material support to terrorist organizations” said FBI Denver Special Agent in Charge Calvin Shivers. "The FBI will continue to work through our strong partnership with the U.S. Attorney’s Office to protect our communities from those engaged in these types of activities."
On April 30, 2018, a jury in the U.S. District Court found Muhtorov’s co-defendant, Bakhtiyor Jumaev, guilty of similar charges. Jumaev was sentenced on July 18, 2018 by Judge Kane to 76 months in federal prison, to be followed by 10 years on supervised release.
This case was investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force.
The defendant was prosecuted by Assistant U.S. Attorneys Greg Holloway, Julia Martinez, David Tonini and Beth Gibson.
International Arms Exporter Sentenced to PrisonRead the Press Release
DENVER – Katherine O'Neal, age 43, a former member of the United States Army stationed at Fort Carson, was sentenced today by U.S. District Court Judge William J. Martinez to serve 36 months in federal prison, followed by 3 years on supervised release for smuggling goods from the United States, specifically exporting firearms to the Dominican Republic. The U.S. Attorney’s Office was joined by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On September 1, 2015 a federal grand jury indicted O’Neal for numerous firearm and illegal financing type charges. A superseding indictment was handed down on November 20, 2016, with a second superseding indictment returned on December 5, 2017. A jury found O’Neal guilty on March 6, 2018. O'Neal was acquitted on other counts alleging false information on firearm purchase forms and money laundering.
At trial, before United States District Court Judge William J. Martinez, the Government introduced evidence showing that O'Neal made multiple trips to the Dominican Republic shortly after purchasing firearms in Denver and Colorado Springs, including one trip where she flew from Denver to the Dominican Republic with 11 firearms in her luggage in early June 2015. She declared the firearms to the airline, but did not obtain the required State Department export license. Her bags had been misdirected by the airline and were not on her flight. When the bags arrived later, Dominican Republic officials noticed the handguns during an examination of the baggage. When she arrived at the airport to claim her luggage, she was arrested. The Dominican Republic has a ban on all imported firearms. A Denver jury found her guilty of violating 18 U.S.C. § 554(a), which prohibits smuggling goods from the United States.
“Illegally exporting firearms comes with stiff consequences,” said U.S. Attorney Bob Troyer. “Her consequence was 3 years in federal prison.”
“This is a prime example of how greed and an opportunity to make a quick profit motivate some people to criminal actions,” said Steven Cagen, Special Agent in Charge of HSI Denver. “With 67 offices located in 50 countries, HSI is especially well-equipped to investigate criminal cases around the world.”
“This case was a coordinated effort to put a firearms trafficker behind bars,” ATF Denver Special Agent in Charge Debbie Livingston said. “She is very deserving of this sentence.”
The case was investigated by the U.S. Immigration and Customs Enforcement's Homeland Security Investigations and the Bureau of Alcohol, Tobacco and Firearms, as well as the Dominican Republic, where charges are pending her extradition to that country.
Assistant United States Attorneys Robert Brown and Kurt Bohn are prosecuting this matter for the United States.
Aurora Man Sentenced for Fraud and Money LaunderingRead the Press Release
DENVER -- Justin Manning, age 40, of Aurora, Colorado, was sentenced to serve 22 months of incarceration followed by 3 years of supervised release by U.S. District Court Judge Wiley Y. Daniel for wire fraud and money laundering. Manning was also ordered to pay restitution of $830,000. The sentence was announced by U.S. Attorney Bob Troyer and IRS Criminal Investigation Special Agent in Charge Steven Osborne.
According to information contained in the indictment, between 2012 and 2015, Manning was employed as an asset protection manager and assistant store manager at a local Walmart. In those job positions, Manning had access to blank Money Network Checks used in Walmart’s Money Network System. Beginning in approximately October 2013 and continuing through January 2015, Manning fraudulently filled out money network checks, and caused others to fill out the checks, in the name of third parties in order to deceive other Walmart employees into believing they were legitimate checks. Manning used his management positions to access the store’s deposit bundles in a safe at the store and took cash from those deposit bundles. To hide the fact that he took the cash, defendant Manning created fake loans to one of the store’s cash registers. Manning then placed in those cash registers fraudulent Money Network Checks totaling the same amount as the cash taken so that the total balance would be correct and other Walmart employees would not realize cash had been taken from the safe. Manning also knowingly engaged in a financial transaction utilizing the proceeds of the wire fraud. Specifically, Manning transferred funds between accounts at a financial institution.
“I don’t suggest messing with our white collar prosecutors or IRS Criminal Investigators,” U.S. Attorney Bob Troyer said. “There’s no future in it. Except prison.”
"The role of IRS Criminal Investigation becomes even more important in embezzlement and fraud cases due to the complex financial transactions that can take time to unravel," said Steven Osborne, Special Agent in Charge, Denver Field Office. “This sentence shows there are detrimental consequences for individuals who engage in financial fraud.”
This case was investigated by Internal Revenue Service – Criminal Investigation (IRS CI). This case was prosecuted by Assistant U.S. Attorney Pegeen Rhyne.
Final Defendant Responsible for Theft of Firearms from Cabela's Sentenced to Federal PrisonRead the Press Release
DENVER – Kendall Crockett, aka “Grizzle,” age 23 of Denver, Colorado, was sentenced on August 10, 2018, by U.S. District Court Judge Philip A. Brimmer to serve 80 months in federal prison for theft of firearms from a federal firearm licensee (FFL) and possession of stolen firearms, U.S. Attorney Bob Troyer and ATF Denver Division Special Agent in Charge Debbie Livingston announced. After serving his prison sentence, Judge Brimmer ordered Crockett to serve 3 years on supervised release.
Two other defendants were also sentenced by Judge Brimmer for participating in the same FFL theft as well as an additional FFL theft. Darnell Hudgens, age 24 of Denver, was sentenced to serve 57 months in prison, followed by 3 years of supervised release. He was also ordered to pay $107,558.61 in restitution. Giavanni Edward Miles, age 21 of Denver was sentenced by Judge Brimmer to serve 70 months in prison, followed by 3 years supervised release, and ordered to pay $107,558.61 in restitution, joint and several with defendant Hudgens. All three defendants were members of the Bloods street gang.
The three defendants were first indicted by a federal grand jury in Denver on September 25, 2017. Miles pled guilty on January 1, 2018, and was sentenced on April 12, 2018. Hudgens pled guilty on January 1, 2018, and was sentenced on April 20, 2018. Crockett pled guilty February 21, 2018. All three defendants have since appealed.
According to court documents, including the defendants’ stipulated facts in their plea agreements, on August 21, 2017, at approximately 2:05 a.m., the defendants and another suspect broke into the Cabela’s, a federally licensed firearm dealer, located at 14050 Lincoln Street in Thornton. They stole fifty-six firearms. Surveillance video showed that three suspects ran into the store, grabbed the firearms, and placed them in backpacks they were wearing on their chests. They then ran toward the emergency exit, which was obstructed. They then ran through the front door and continued east through a field. Crockett was waiting as the lookout and getaway driver in a second car, and they fled the scene in that car. After the burglary, the defendants distributed the stolen firearms to fellow Bloods gang members, including gang members who the defendants knew were prohibited from possessing firearms.
“These crimes often take tireless work to investigate and prosecute,” said U.S. Attorney Bob Troyer. “But as this one proves, ATF, our prosecutors, and our local partners do not relent. They find the thieves, and they find the guns. Simple as that.”
“These individuals deserve to be behind bars,” said Debbie Livingston, ATF Denver Special Agent in Charge. “Thefts of this kind will not be tolerated in Denver. I am proud of the work done by our Special Agents and partners that led to their arrest.”
This case was investigated by the ATF. The defendants were prosecuted by Assistant U.S. Attorney Emily May.
This case 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, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Man Sentenced for Illegally Building Road on U.S. Forest Service LandRead the Press Release
GRAND JUNCTION – Earl Bennett, age 72, was recently sentenced by U.S. Magistrate Judge Gordon Gallagher to serve one year of probation and pay $30,000 in restitution for the repair of a road he illegally built on Forest Service land near the Cathedral Peaks Subdivision near Crawford, Colorado. Bennett had previously pled guilty to a Class B Misdemeanor, for constructing a road, trail or other improvement on National Forest System lands without special-use authorization, a contract or an approved operating plan.
According to court documents, including the stipulated facts contained in the plea agreement, on June 28, 2014, Bennett, while President of the Cathedral Peaks Ranch Landowner’s Association (CPRLA), bulldozed a trail and created an unauthorized road on National Forest Service land adjacent to private property of another subdivision landowner. A witness observed the defendant on a bulldozer creating the road on Forest Service land. Later, it was determined that Bennett spent 11 hours using the bulldozer opening the road.
On August 24, 2014, a Forest Service crew went to the site and confirmed there was nearly a mile of newly constructed road on National Forest Service land. The damage included soil and rock removal, erosion damage, hillside weakening, and numerous oak trees cut. The road created a dangerous risk of mudslide and endangers an individual’s home, located below the damaged area.
“Destroying public land is selfish and steals from all of us,” said U.S. Attorney Bob Troyer. “The U.S. Attorney’s Offices works together with the Forest Service and local law enforcement to protect our public land.”
“National forests are public lands; they belong to all of us to enjoy safely and responsibly,” said USDA Forest Service Special Agent in Charge Kent Delbon. “Constructing, placing or maintaining any kind of road, trail, structure, fence, enclosure, communication equipment, or other improvements on National Forest System lands without permission is illegal and harmful to the environment.”
This case was investigated by the U.S. Forest Service. The defendant was prosecuted by Assistant U.S. Attorney Jeremy Chaffin.
Boulder Doctor Pleads Guilty to Bankruptcy FraudRead the Press Release
DENVER – Cathleen Van Buskirk, age 55, from Erie, Colorado, a doctor and surgeon from Boulder, Colorado, pled guilty Friday before U.S. District Court Judge William J. Martinez to Bankruptcy Fraud, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced. Van Buskirk appeared and was released on bond. She is scheduled to be sentenced by Judge Martinez on November 28, 2018. She was indicted by a federal grand jury in Denver on December 4, 2017.
When Van Buskirk filed for bankruptcy in August 2014, she deliberately failed to disclose certain assets and took various steps to conceal her interest in those concealed assets. By her efforts, Van Buskirk concealed somewhere between $250,000-$500,000 worth of property that should have been part of her bankruptcy estate. Among the things, Van Buskirk concealed her property by giving a friend gold and silver coins, foreign currency, a diamond ring, and $48,000 in cash to hold for her. She also routed $170,000 through various shell companies that were registered in the names of others but which Van Buskirk actually controlled.
This case was investigated by the FBI. The defendant was prosecuted by Assistant U.S. Attorney Pegeen Rhyne and Special Assistant U.S. Attorney Daniel E. Burrows.
Three More Florida Residents Sentenced in $6,000,000 Investment FraudRead the Press Release
DENVER – Steven Dykes, age 61, of Fort Lauderdale, Florida, Pasquale Rubbo, age 51, of Coral Springs, Florida, and Angela Monaco, age 45, of Coconut Creek, Florida, were sentenced today by U.S. District Court Judge R. Brooke Jackson for their role in a six-million-dollar investment fraud. The sentences were announced by U.S. Attorney Bob Troyer, Federal Bureau of Investigation Denver Division Special Agent in Charge Calvin Shivers, and the Internal Revenue Service – Criminal Investigation Special Agent in Charge Steven Osborne. U.S. District Court Judge R. Brooke Jackson sentenced Steven Dykes to 108 months imprisonment, Pasquale Rubbo to 106 months imprisonment, and Angela Monaco to 74 months imprisonment. Each of the defendants previously pled guilty to conspiracy to commit fraud and money laundering.
According to court documents, including the stipulated facts contained in the defendants’ plea agreements, from December 2012 to November 2017, along with two other, engaged in a conspiracy to defraud more than thirty mostly elderly investors, including two investors in Colorado, of more than $6,000,000 in an investment fraud scheme. The investment fraud scheme focused on a television production company based in South Florida, VIP Television, LLC, as well as a cleaning product, the “Scrubbieglove,” which was also patented in Florida. Investors sent money to both of these companies as a result of false statements about VIP Television’s merger opportunities and interest in the Scrubbieglove by entities such as QVC, Walgreens, and Bed, Bath & Beyond. All of the defendants except Monaco had previous convictions for similar criminal activity.
Two other members of the conspiracy, Joseph Rubbo and Nicolas Rubbo were previously sentenced in a related case in United States District Court for the District of Colorado to 60 months and 48 months of imprisonment, respectively.“These defendants cheated vulnerable, elderly Coloradans and others out of their hard-earned money. Now they get what they deserve,” said U.S. Attorney Bob Troyer.
“The FBI will continue to work with our law enforcement partners and the United States Attorney’s Office to protect our citizens from those who engage in complex white-collar fraud schemes," said FBI Denver Special Agent in Charge Calvin Shivers. “Today’s sentencing of Steven Dykes, Pasquale Rubbo, and Angela Monaco should send a strong message the FBI will hold those who exploit innocent investors for personal gain accountable for their actions.”
“Investment fraud has brought ruin to many Americans” said IRS Criminal Investigation Special Agent in Charge Steven Osborne. “IRS Criminal Investigation is committed to partnering with other law enforcement agencies to stop financial crimes being committed by people such as Monaco and the Rubbos, and today’s sentence is a reflection of that commitment.”
The case was investigated by the FBI and IRS-CI. The defendants are being prosecuted by Assistant United States Attorneys Hetal J. Doshi and Matthew T. Kirsch.
Boulder Man Sentenced to Federal Prison for Possession of Child PornographyRead the Press Release
DENVER – Robert Dean Mason, age 46, of Boulder, Colorado, was sentenced by U.S. District Court Judge Christine M. Arguello to serve 97 months (over 8 years) in federal prison for possession of child pornography, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced. Following his prison sentence, Mason was ordered to serve 10 years on supervised release. The defendant, who appeared at the hearing on bond, was ordered to voluntarily surrender to a facility designated by the U.S. Bureau of Prisons.
Mason was first charged by Information on January 29, 2018. He pled guilty before Judge Arguello on March 21, 2018. He was sentenced on August 14, 2018.
According to court documents, including the stipulated facts in the plea agreement as well as the government’s sentencing statement, in March of 2015, a FBI-Dallas Child Exploitation Task Force Officer, utilizing an undercover internet connection, operated software capable of receiving files of child pornography from BitTorrent network. BitTorrent is a type of peer-to-peer program that allows individuals to download files from other servers. In October 2016, FBI agents in Denver learned that Mason was known through other investigations as a person who was sharing files of child exploitation material using BitTorrent. From March 21, 2016 through October 8, 2016, ten separate investigators had downloaded 94 “files of interest” from a device utilizing Mason’s home IP address.
On November 3, 2016, FBI agents received a flash drive from a Larimer County Sheriff’s Deputy who had received downloads from Mason while acting in a covert online capacity. The flash drive contained video files and log reports of files received from the defendant’s home IP address, downloaded on July 23, 2016 and September 26, 2016. On November 10, 2016, FBI agents executed a search warrant at Mason’s home. A forensic review of the digital items seized pursuant to the search warrant revealed an encrypted folder containing thousands of images of child pornography, including 4,800 video files.
“The internet can be a playground for child predators,” said U.S. Attorney Bob Troyer. “Our prosecutors, our partners at the FBI, and local law enforcement work tirelessly – with incredible technologic expertise – to find these predators and bring them to justice.”
"Combating the exploitation and victimization of children is one of the FBI's top priorities," said FBI Denver Special Agent in Charge Calvin Shivers. “This sentence demonstrates our commitment to ensuring those responsible for exploiting innocent children are vigorously investigated and brought to justice.”
This case was investigated by the FBI, with assistance from multiple law enforcement agencies, including the Boulder Police Department, the Larimer County Sheriff’s Office, and multiple divisions of the FBI. The defendant was prosecuted by Assistant U.S. Attorneys Valeria Spencer and Alecia Riewerts.
Federal Law Enforcement Targets Marijuana Grown on Federal LandRead the Press Release
DENVER – Federal authorities today announce prosecution results from marijuana grows on federal public land last year, as they prepare for this year’s marijuana harvest season. U.S. Attorney Bob Troyer, U.S. Forest Service Special Agent in Charge Kent Delbon, and Bureau of Land Management (BLM) Special Agent in Charge Gary Mannino announced all three agencies are working together with local law enforcement to make public lands safer, to prevent environmental damage, and to combat illegal marijuana trafficking. Homeland Security Investigations (HSI) provided substantial assistance.
During 2017, Forest Service agents and BLM officers, in concert with local law enforcement, dismantled marijuana operations on public land throughout the state, with several defendants receiving sentences of up to five years in prison. In Colorado, the marijuana growing season typically runs from early summer through the fall, which is when the cases listed below were brought last year:
United States v. Santos Ramirez-Alvarez and Santos Ramirez-Carrillo, Case No. 17-cr-338: On two islands in the Colorado River near DeBeque, Colorado, approximately 9,100 marijuana plants were found growing on BLM land. Water from the Colorado river was diverted to irrigate the grow, while money derived from the grow went to individuals in Sinaloa, Mexico. Two defendants were arrested, charged, and pled guilty to a conspiracy to manufacture and distribute marijuana. They were sentenced to 57 months and 60 months in prison, respectively.
United States v. Fernando Esquivel Herrera, No. 17-cr-402: In the White River National Forest, near Placita, Colorado, approximately 2,700 marijuana plants were found growing on about 8 acres of public land, with another 3,000 plants already harvested. Multiple bottles of WD-40 were found at the site. The defendant was charged with conspiracy to manufacture and distribute marijuana plants, along with other crimes. He was sentenced to 60 months in prison.
United States v. Neil Andrew McKay, No. 17-cr-403: On BLM land near Whitewater, Colorado, approximately 100 marijuana plants were located. The defendant – who was homeless -- was found with a loaded handgun in his possession. He was sentenced to 12 months and 1 day in prison.
United States v. Vincente Medrano Duque, No. 17-cr-320: In the San Isabel National Forest near Rye, Colorado, approximately 7,500 plants were located on a grow affecting approximately four acres. The defendant was charged and pled guilty to conspiracy and possession with intent to distribute marijuana plants, land depredation, and illegal reentry. Sentencing is scheduled for the end of August.
United States v. Danilo Jemenez-Lopez and Margarito Yepez-Sanchez., No. 17-cr-372: In the San Isabel National Forest near Rye, Colorado, approximately 14,000 marijuana plants were located on a grow affecting approximately twelve acres. Two defendants were charged, and one pled guilty to conspiracy to manufacture, distribute, and possess marijuana, as well as land depredation. The case against defendant Jemenez-Lopez is still pending.
United States v. Cutberto Reyes-Martinez, Gildardo Mendez-Arizmendi, Martin Sandoval-Arizmendi, and Pedro Fernando Segovia Rosales., No. 17-cr-375: In the San Isabel National Forest near Salida, Colorado, approximately 4,000 marijuana plants were located on a grow affecting approximately seven acres. Four defendants were charged and pled guilty to conspiracy and possession with intent to distribute marijuana plants. Two defendants were also charged and pled guilty to illegal reentry. The defendants were sentenced individually to 20, 24, 60 and 24 months in prison.
United States v. Virgilio Alain Reyes Cervantes and Erik Pimental Magana Plata, No. 17-cr-431: In the San Isabel National Forest near Rye, Colorado, approximately 9,000 marijuana plants were found on a grow affecting approximately seven acres. Two defendants were charged with conspiracy and possession with intent to distribute marijuana. They were sentenced to 15 and 21 months in prison, respectively.
In addition to the U.S. Forest Service and the Bureau of Land Management, Homeland Security Investigations assisted with a number of the investigations mentioned above.
More than 71,000 marijuana plants were removed from approximately 38 acres of Colorado public lands (not including the islands on the Colorado river) during last year’s growing season. The environmental impact was significant. From marijuana grows in the San Isabel National Forest, for example, the Forest Service estimates that approximately 5,000 pounds of trash and infrastructure were found at each grow site. Man-made reservoirs and numerous structures were built from cut pine timber. Pesticides and other chemicals were also found and removed. It took hundreds of hours to clean up each site to mitigate the environmental harm to the public lands.
“Public lands are just that – they’re public and belong to all of us,” said U.S. Attorney Troyer. “These black marketers abuse our land, our water, our animals and plants. With these prosecutions we motivate black marketers to make less harmful occupational choices.”
“We appreciate the continued support and commitment from the US Attorney’s Office working with the USDA Forest Service along with our state and local partners to dismantle and disrupt illegal marijuana cultivation on public lands,” said Forest Service Special Agent in Charge Kent Delbon. “The continued success of these eradications and prosecutions protects forest visitors, employees, nature, and wildlife from the harmful effects of illegal marijuana cultivation on national forests.”
“Illegal marijuana grows on public lands pose safety and environmental risks to all of us," said Gary Mannino, BLM Colorado Special Agent in Charge. "We will continue to work with local, state and federal agencies to ensure that the public is safe when they recreate on their lands, and that we protect the natural resources in our care.”
“Our special agents from Homeland Security Investigations — along with our law enforcement partners — pooled our unique experience and expertise to effectively investigate each of these marijuana-grow cases,” said Steven W. Cagen, special agent in charge of HSI Denver. “Allowing such criminal activity to exist without aggressive law enforcement invites more crime into our state and into our communities.”
These cases are handled by Assistant U.S. Attorneys who specialize in prosecuting those responsible for illegally growing marijuana, polluting our public lands and selling the marijuana to the black market.
Former Colorado Mortgage Originator, A Subsidiary of Lehman Brothers, Agrees to Pay $41 Million Related to Its Conduct in Originating and Selling Mortgage LoansRead the Press Release
DENVER – Bob Troyer, the United States Attorney for the District of Colorado, announced today a $41 million settlement with Aurora Loan Services, LLC, a subsidiary of Lehman Brothers Holdings, Inc. (“LBHI”), in connection with Aurora Loan Services’ conduct in originating and selling residential mortgage loans from 2004 through 2008. Under the resolution announced today, Aurora Loan Services will pay $41 million as a civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act.
Aurora Loan Services was a mortgage company headquartered in Littleton, Colorado. It worked with correspondent lenders, which made mortgage loans to homebuyers. Aurora Loan Services arranged for the sale of these loans to its parent company, Lehman Brothers Bank. Lehman Brothers Bank sold these loans to its parent, LBHI, a major investment bank. LBHI used the loans to create residential mortgage-backed securities and sold those securities to investors.
The United States alleged the following conduct by Aurora Loan Services. Between 2004 and 2008, Aurora Loan Services represented to potential investors that the loans generally complied with its underwriting standards. It represented that before the loans were purchased from correspondent lenders, the loans had been scrutinized as part of Aurora Loan Services’ quality control review. Investors were also told that the loans went through Aurora Loan Services’ “pre-funding fraud detection” review, a review that identified potential “red flags” in loan files.
In practice, however, Aurora Loan Services knew that these representations were not true for many loans. Aurora Loan Services gave five large correspondent lenders “Platinum” status. Aurora Loan Services gave these Platinum lenders better pricing. Aurora Loan Services also allowed the Platinum lenders to underwrite their own loans, and even to make exceptions by issuing loans that failed to meet the underwriting standards. In 2005, to save time and money, Aurora Loan Services removed the pre-funding fraud detection for all of its five Platinum lenders. Aurora Loan Services also decided to exempt the Platinum lenders from the quality control standards that Aurora Loan Services otherwise imposed on other lenders before their loans were sold. Aurora Loan Services did not tell investors that these five Platinum lenders were exempt from those quality control requirements. The shortcuts and preferential treatment that Aurora Loan Services gave to the five Platinum lenders contributed, among other factors, to the deteriorating quality of some loans purchased from those lenders. Starting in late 2006, the loans purchased from the five Platinum lenders began defaulting at higher rates. Investors who bought LBHI’s residential mortgage-backed securities containing those loans suffered losses.
The settlement agreement is neither an admission of liability by Aurora Loan Services nor a concession by the United States that its claims are not well founded.
Aurora Loan Services has minimal assets and no employees, and will be winding down. As part of the settlement, Aurora Loan Services’ parent company, Aurora Commercial Corporation, has represented that it has not resumed, and will not resume, the origination, underwriting, purchase or sale of mortgage loans. Aurora Loan Services has ceased all mortgage activities.
“Aurora Loan Services’ mortgage misconduct hurt people,” said United States Attorney for the District of Colorado Bob Troyer. “When the mortgages went into foreclosure, families lost their homes and investors lost their savings. Aurora Loan Services is paying for this misconduct and will never be able to do it again.”
Assistant U.S. Attorneys Lila Bateman and Kevin Traskos of the District of Colorado investigated Aurora Loan Services’ conduct, with the support of the Federal Housing Finance Agency’s Office of the Inspector General.
“Aurora Loan Services knowingly put investors at risk, and the losses caused by its irresponsible behavior deeply affected not only financial institutions such as the Federal Home Loan Banks, but also taxpayers, and contributed significantly to the financial crisis,” said Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency-Office of Inspector General’s (FHFA-OIG) Midwest Region. “This settlement illustrates the tireless efforts put forth toward bringing a resolution to this chapter of the financial crisis. FHFA-OIG will continue to work with our law enforcement partners to hold those who have engaged in misconduct accountable for their actions.”
The $41 million civil monetary penalty resolves claims under the Financial Institutions Reform, Recovery and Enforcement Act, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. The settlement covers not only Aurora Loan Services but two other entities related to Aurora Loan Services, Aurora Commercial Corporation, and Lehman Brothers Bancorp, Inc., the holding company of Aurora Commercial Corporation. The settlement does not provide any release from liability to Lehman Brothers Holding Inc., which is in bankruptcy. The settlement also does not release any individuals from potential criminal or civil liability.
To report fraud, go to: http://www.stopfraud.gov.
Colorado Springs Man Found Guilty of Being Felon in Possession of Firearm and Felon in Possession of AmmunitionRead the Press Release
DENVER – Daniel Lovato, age 38, of Colorado Springs, Colorado, was found guilty today of being a felon in possession of a firearm and being a felon in possession of ammunition, U.S. Attorney Bob Troyer and ATF Denver Division Special Agent in Charge Debora Livingston announced. The guilty verdicts were handed down today following a 3-day jury trial before U.S. District Court Judge Raymond P. Moore. The jury acquitted the defendant on a 3rd count. A 4th count was earlier dismissed by the government. Lovato, who appeared at the trial in custody, was remanded at the conclusion of the trial. Sentencing is scheduled for October 25, 2018.
According to facts presented at trial, as well as details included in court documents, on March 3, 2018, the Colorado Springs Police Department (CSPD) responded to a call of shots fired near North Hancock Avenue. Officers learned that a reporting party witnessed the occupants of a 2002 silver Honda shoot at a white Dodge Durango. The Honda then left the scene. A short while later CSPD officers located the Honda and attempted a traffic stop, but the Honda fled. After a brief chase, the Honda slowed to approximately 15 to 20 miles per hour, and Lovato jumped out. The Honda continued to flee. Lovato was taken into custody, and it was determined he was in possession of a loaded .22 caliber handgun and 32 rounds of .22 caliber ammunition in his front pants pocket. An ammunition can with over 200 rounds of ammunition was found within Lovato’s immediate reach. Lovato was previously convicted of a felony, namely first degree assault resulting in serious bodily injury with a deadly weapon, in Lake County, Colorado.
“Our community is safer today, thanks to the hard work of our prosecutors, the ATF and the Colorado Springs Police Department,” said U.S. Attorney Bob Troyer.
“ATF and the Colorado Springs Police Department are working together to reduce violent crime in our communities. With the successful prosecution of Lovato, we are accomplishing that goal,” said ATF Denver Field Division Special Agent in Charge Debora Livingston.
This case was investigated by the Colorado Springs Police Department and the ATF. The defendant was prosecuted by Assistant U.S. Attorneys Jason St. Julian and Beth Gibson.
This case 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, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Boulder Woman Sentenced to 10 Years in Federal Prison for Distribution of Heroin Resulting in DeathRead the Press Release
DENVER – Kirsten Lippold, age 48, of Boulder, Colorado, was sentenced today to serve 10 years in federal prison for distributing heroin resulting in death, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced. The sentence was handed down by U.S. District Court Judge Raymond P. Moore. Following the prison sentence, Judge Moore ordered the defendant to serve 5 years on supervised release. The defendant, who appeared at the sentencing hearing in custody, was remanded at the hearing’s conclusion.
Lippold was indicted by a federal grand jury in Denver on July 13, 2017. She pled guilty on May 9, 2018 to distribution of heroin resulting in death.
According to court documents, Kirsten Lippold distributed heroin, a Schedule I controlled substance, the use of which resulted in an overdose death on or about August 17, 2015. Within the factual basis of her plea agreement, Lippold admitted to selling less than a gram of heroin to the decedent. Nonetheless, that heroin resulted in a fatal overdose, which occurred in Boulder, Colorado. Sentencing proceedings further revealed that the defendant also had prior felony drug convictions. No information about the victim is available for release.
“If you are selling even small amounts of heroin in Colorado, know this: any one of your sales could kill someone. If you don’t care about that, maybe you’ll care about this: you will face mandatory minimum sentences in federal prison, out of state, no parole,” said U.S. Attorney Bob Troyer.
“Ms. Lippold’s sentence represents the FBI’s dedication to pursuing those intent on harming the citizens of our communities, through direct action and general criminal activity,” said FBI Denver Division Special Agent in Charge Calvin Shivers. “The FBI will continue to work through our strong law enforcement partnerships to protect our community from those engaged in crimes of this nature."
The investigation was conducted by the Boulder County Drug Task Force, the City of Boulder Police Department and the Fort Collins Resident Agency of the Federal Bureau of Investigation. The prosecution was handled by Bradley W. Giles, Assistant U.S. Attorney, District of Colorado, Denver.
Colorado Springs Man Found Guilty of Wire Fraud and Securities Fraud Following U.S. District Court TrialRead the Press Release
DENVER – A jury yesterday found Daniel Coddington, age 63, of Colorado Springs, Colorado, guilty of wire and securities fraud, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced. The guilty verdicts came following a 12-day trial before U.S. District Court Judge R. Brooke Jackson in U.S. District Court in Denver. Coddington, who is free on bond, will be sentenced by Judge Jackson on November 9, 2018.
According to court documents and evidence presented during the trial, from at least early 2010 through late 2011, Coddington held himself out to investors and intermediaries to be the principal and owner of a company called Golden Summit Investors Group Ltd. (“Golden Summit”). He operated Golden Summit from Colorado Springs, Colorado. From at least early 2010 through at least late 2011, he described to investors and intermediaries a program through which investor money would be used to purchase collateralized mortgage obligations or CMOs -- an investment consisting of a pool of mortgages organized by maturity and risk. Coddington told investors that the CMOs had face values exponentially larger than their purchase price and market value. According to the defendant, the CMOs would then be “hypothecated” to obtain loans in the amount of a percentage of the face value of the CMO. The amount of these loans would still be exponentially larger than the purchase price and market value of the CMOs (known as the “CMO Trade Program”).
Coddington told most of the investors that, from the proceeds of the loans, the investors would receive pre-trade distributions and that the remainder of the loan proceeds would be placed into an investment program that would yield high returns. From at least 2010 through late 2011, the defendant described to investors and intermediaries that investors who owned CMOs could transfer their CMOs to Golden Summit for the purpose of participating in the CMO Trade Program. In approximately April 2011, the defendant told an investor, who ultimately invested $9,000,000 dollars with Golden Summit that $60,000,000 of the loan proceeds obtained from “monetizing” the CMOs purchased with the investor’s money would be provided to the investor in the form of two non-recourse loans in the amount of $30,000,000 each (known as the “CMO Loan Program”).
Coddington falsely represented to investors and intermediaries that he had the experience and contacts necessary to successfully conduct and complete the CMO Trade Program and the CMO Loan Program. Further, from at least 2010 through at least mid-2011, Coddington falsely told investors and intermediaries that all of the money provided by investors would be used to purchase CMOs that would be used in the CMO Trade Program and the CMO Loan Program. He also falsely told investors and intermediaries that any fees, commissions, compensation, and payments to Golden Summit and its affiliates would be taken only from the profits of the CMO Trade Program and CMO Loan Program and not from investor money placed into the CMO Trade Program and CMO Loan Program.
During that same time, the defendant falsely represented that, once investor money was received into an account controlled by the defendant, all of the stages of the CMO Trade Program would be accomplished quickly and investors would receive their pre-trade distribution within weeks of their investment followed shortly thereafter by the returns on their investments. In or about April 2011, Coddington falsely represented to the investor in the CMO Loan Program that, once the that investor’s money was received into an account controlled by the defendant, the purchase of the CMOs would occur in approximately one banking day. The defendant further falsely represented to that investor that the funding process for the loan on the CMOs would take approximately three banking days from the time the CMOs were obtained.
From at least November of 2010 through at least June of 2011, the defendant diverted substantial amounts of investor money placed into the CMO Trade Program and the CMO Loan Program for his own personal use and for purposes other than for purchasing CMOs. Further, the defendant did not successfully “hypothecate” or “monetize” any CMOs to obtain loans for either the CMO Trade Program or the CMO Loan Program.
From at least October 2010 through April of 2011, Coddington obtained from investors more than $17,000,000 for the CMO Trade Program and the CMO Loan Program. Despite his failure to successfully complete either the CMO Trade Program or the CMO Loan Program, the defendant did not return most of the investors’ money or any CMO purchased with the investors’ money.
From at least early 2010 through late 2011, the defendant also received CMOs from several investors for purposes of participating in the CMO Trade Program. Coddington kept most of the monthly interest that was paid out on those CMOs while the CMOs were in his and Golden Summit’s possession. For purposes of executing the Scheme, the defendant used, and caused to be used, a number of interstate wires, including emails and money transfers.
Coddington faces not more than 20 years in federal prison per count and up to a $5,000,000 fine. The court could also order the defendant to pay restitution to the investment fraud victims.
“Coddington used his fraudulent scheme to steal millions from his victims.” U.S. Attorney Bob Troyer said. “In Colorado, our federal prosecutors and FBI special agents will work tirelessly to prosecute these crimes and protect the public.”
“The FBI is committed to investigating complex white-collar fraud schemes, and we will continue to pursue those who misuse their position of trust to exploit innocent investors.” said FBI Denver Special Agent in Charge Calvin Shivers. “Today’s conviction of Daniel Coddington should send a clear message that exploitation of investors for personal gain will be vigorously investigated and prosecuted.”
This case was investigated by the Federal Bureau of Investigation (FBI).
The defendant was prosecuted by Assistant U.S. Attorneys Pegeen Rhyne and Anna Edgar.
U.S. Attorney Bob Troyer Urges Public to Report Sexual Harassment in Housing to the Department of JusticeRead the Press Release
DENVER – Bob Troyer, U.S. Attorney for the District of Colorado, is urging members of the public to come forward to report incidents of sexual harassment in housing to the U.S. Department of Justice.
“Landlords taking advantage of vulnerable tenants are predators,” said U.S. Attorney Bob Troyer. “Sexual harassment or assault by landlords, property managers, and others in a position of power over tenants’ housing situations is illegal. We know from the stories we have heard across the country that much of this behavior goes unreported. Today, I am encouraging victims and concerned citizens to contact the U.S. Attorney’s Office to report those who engage in this illegal and abusive behavior.”
In October 2017, the Justice Department’s Civil Rights Division announced the Sexual Harassment in Housing Initiative, an effort to combat sexual harassment in housing. On April 12, 2018, Attorney General Jeff Sessions announced the nationwide expansion of that initiative and the formation of a joint task force with the Department of Housing and Urban Development to address this issue. The Justice Department’s initiative seeks to identify barriers to reporting sexual harassment in housing, increase awareness of the Justice Department’s enforcement efforts – both among survivors and those they may report to – and collaborate with federal, state, and local partners to increase reporting and help survivors quickly and easily connect with federal resources.
On July 12, 2018, the U.S. Attorney’s Office for the District of Colorado, in partnership with the Justice Department’s Civil Rights Division, hosted a Community Roundtable in Denver to address the problem of sexual harassment in housing. A range of concerned community members who serve and represent constituencies who may be targets of sexual predators attended to learn about the Fair Housing Act’s protections against sexual harassment, and to start a dialogue about how to combat this problem.
“Our office is working with concerned Coloradans to address this vexing problem, but we need the community’s help to encourage survivors to know their rights and to speak out,” said U.S. Attorney Troyer.
Yesterday, the Justice Department announced the release of a public service announcement (PSA) aimed at raising awareness and reaching victims of sexual harassment in housing. To enhance the effectiveness of the Sexual Harassment in Housing Initiative, the Department has enlisted the assistance of victims to share their experiences and help convey the message that sexual harassment in housing is a violation of civil rights. The Justice Department and the U.S. Department of Housing and Urban Development (HUD) are working together to distribute the PSA. The PSA is posted on the Department’s Youtube channel and HUD’s Youtube channel. Click here for Sexual Harassment in Housing PSA.
Individuals who believe they have been victims of discrimination can call the Civil Rights Division at 1-(844) 380-6178 or e-mail [email protected], or they can contact the U.S. Attorney’s Office for the District of Colorado at (303) 454-0100 (press 4 for the civil duty attorney), or e-mail [email protected]
Man Sentenced After Lying About Writing Threatening Note on Board United Flight from San Diego to DenverRead the Press Release
DENVER – Cameron Elvan Korth, age 22, of Denver, was sentenced late last week by U.S. District Court Judge Raymond P. Moore to serve 18 months in federal prison followed by 4 months in a halfway house for lying to authorities about writing a threatening note aboard an aircraft bound for Denver, announced U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers. After his custodial sentence, the defendant was ordered to spend 3 years on supervised release. Korth appeared at the sentencing hearing in custody and was remanded at its conclusion.
Korth was first charged by criminal complaint on January 17, 2017. He was indicted by a federal grand jury in Denver on February 7, 2017. He pled guilty to providing false information and threats before Judge Moore on April 10, 2018. He was sentenced on July 20, 2018.
According to the stipulated facts contained in the plea agreement, on January 16, 2017, at approximately 8:26 p.m., the FBI was advised of a written bomb threat discovered by a passenger onboard United Airlines Flight 231 in flight from San Diego to Denver. The passenger was later identified as the defendant Cameron Korth. The note stated, “THERE IS BOMBS ON UA 231 DO NOT ATTEMPT TO LAND.” Due to the threat, upon arrival in Denver, Flight 231 was parked on an isolated portion of the airfield away from the DIA Main Terminal and concourses. The passengers were evacuated to waiting buses and the aircraft was searched by the Denver Police Department. No explosives were found.
Mr. Korth was brought to the Denver Police Office in the Airport Office Building at DIA so he could be interviewed about his involvement in the bomb threat incident. Korth was asked to provide a written statement about what had happened on Flight 231 and he voluntarily did so. As he wrote his statement, investigators believed there to be similarities in the letter formation of the words in the bomb threat and the words in the statement. It was then determined that it was Korth who wrote the note on paper he found jammed in the seat back in front of him. He then took the note to one of the lavatories on the aircraft, placed it in the toilet seat cover dispenser, and then pointed it out to one of the flight attendants.
“A written threat like this is a big deal, especially when you’re one of the people traveling in a metal cylinder 30,000 feet above the earth,” said U.S. Attorney Bob Troyer. “Threats like this have real victims. And they will get you real punishment.”
“The FBI and our law enforcement partners take all threats seriously,” said FBI Denver Division Special Agent in Charge Calvin Shivers. “Hoax threats endanger our community and divert limited law enforcement resources. This sentence shows the seriousness of such matters and the FBI will continue to put its resources towards the investigation of such crimes.”
This matter was investigated by the FBI and the Denver Police Department. The defendant was prosecuted by Assistant U.S. Attorney Kurt Bohn.
Metro Denver Man Charged with Wire Fraud After Implementing A Ponzi SchemeRead the Press Release
DENVER – Daniel B. Rudden, age 71, of Denver, Colorado, was charged by criminal complaint with one count of Wire Fraud after implementing a multi-million dollar Ponzi scheme, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced. Rudden appeared yesterday at the hearing pursuant to an arrest warrant and was released on a personal recognizance bond.
According to court records, including the affidavit in support of the Criminal Complaint, on July 9, 2018, a California resident contacted the FBI to report she was defrauded of approximately $300,000 by Rudden. On one occasion, in January 2017, the victim wired $100,000 to Rudden and/or Rudden’s company Financial Visions (FV) at Colorado State Bank and Trust. Rudden told the victim her money would be used to “factor” funeral expenses. According to the victim, Rudden said he loaned people money to pay for funeral expenses until insurance payments were received or other payment arrangements could be made.
The affidavit alleges that Rudden ran his business as a Ponzi scheme and that he received about $55 million from approximately 150 investors located in Colorado and other states.
The matter is being investigated by the FBI, and the defendant is being prosecuted by Assistant U.S. Attorney Martha A. Paluch, Chief of the Economic Crime Section.
A criminal complaint is a probable cause charging document. Anyone accused of committing a felony violation of federal law has a constitutional right to be indicted by a grand jury. The charges in the complaint are allegations and the defendant is presumed innocent unless and until proven guilty.
Denver Business Owner Sentenced for Tax EvasionRead the Press Release
DENVER – Christopher Paul Kelly, age 52, of Colorado Springs, Colorado was sentenced by U.S. District Court Judge William J. Martinez to serve 20 months in federal prison, followed by 3 years of supervised release for tax evasion, announced United States Attorney Bob Troyer and IRS – Criminal Investigation Special Agent in Charge Steven Osborne. Kelly was also ordered to pay restitution of $929,098.39 to the IRS. He was indicted by a federal grand jury on June 7, 2017, and pled guilty on December 7, 2017. The defendant was ordered to report to a prison designated by the Bureau of Prisons on August 15, 2018.
According to information contained in the indictment and plea agreement, from 2001 through 2015, Kelly operated merchant card services businesses, which sold vendors the ability to accept credit card payments. These businesses caused Kelly to earn taxable income, generating tax due of more than $500,000 in tax years 2006, 2007, 2012, and 2013. Between 2008 and 2015, Kelly rented homes as his personal residence and purchased or leased expensive automobiles instead of paying his outstanding tax liabilities. In 2008, Kelly caused J.L. to purchase a Mercedes automobile for $80,346.19, which Kelly paid for and used personally.
Kelly avoided these tax obligations by operating through various different companies, which continued to pay him hundreds of thousands of dollars. When contacted by the IRS regarding the outstanding tax liabilities, Kelly made false statements to the IRS Revenue Officer. Kelly then withdrew the balance of his 401(k) account and cashed out the value of his life insurance account, eliminating the ability to place a levy on these accounts. When the IRS levied Kelly’s U.S. Bank account, Kelly stopped depositing funds into that account and instead started depositing much of his income and paying personal expenses out of a bank account controlled by his common law wife.
“Tax thieves steal from all of us,” said U.S. Attorney Troyer. “Kelly’s decision to cheat the system was actually a decision to spend 20 months behind bars.”
“Tax evasion is not a victimless crime,” said Steven Osborne, Special Agent in Charge, IRS – Criminal Investigation, Denver Field Office. “We all pay when others swindle the government. Mr. Kelly chose to ignore his duty to file and pay his taxes and as a result, he is now a convicted felon with a prison term to serve.”
This case was investigated by the Internal Revenue Service – Criminal Investigation. This case was prosecuted by Assistant U.S. Attorney Pegeen Rhyne with Assistant U.S. Attorney Martha Paluch handling the sentencing hearing.
Denver Man Sentenced to 10 Years in Federal Prison for Bank RobberyRead the Press Release
DENVER – Richard Canada, age 67, of Denver, Colorado, was sentenced by Chief U.S. District Court Judge Marcia S. Krieger to serve 120 months (10 years) in federal prison after earlier pleading guilty to three counts of bank robbery, announced U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers. Chief Judge Krieger ordered the defendant to serve an additional 3 years on supervised release after his prison term. He was also ordered to pay $20,731.40 in restitution. Canada appeared at the sentencing hearing in custody and was remanded after its conclusion.
Canada was indicted by a federal grand jury in Denver on May 7, 2014, and pled guilty before Chief Judge Krieger to three counts of bank robbery on April 10, 2018. He was sentenced on July 10, 2018.
According to the stipulated facts in the defendant’s plea agreement, the defendant robbed three banks:
- On March 28, 2014 at approximately 11:00 a.m., Canada walked into the Chase Bank located at 1125 17th Street in Denver, approaching a teller station. He opened a folder and slid a handwritten note to the teller, which read: “This is a robbery. Empty both drawers. Don’t try anything or I’ll blow (sic) your head.” The defendant demanded the return of the note. He collected cash, placed it in his folder, and quickly exited.
- On April 5, 2014 at approximately 9:44 a.m., Canada walked into the Wells Fargo Bank located at 3155 East 1st Avenue in Denver, waiting in line for a teller. Upon approaching a teller station the defendant slid a note across the counter which read: “If you give me a dye pack, we both die! Give me all of your 50s, 100s, 20s both drawers now!” He eventually told the teller “that’s enough,” taking the money, placing it in a green folder, and walked out of the bank.
- On April 18, 2014 at approximately 9:00 a.m., Canada walked into the Wells Fargo Bank located at 6025 Parkway Drive in Commerce City, approaching the teller as the first customer of the day. He opened a black nylon or cloth binder, and removed a note from the binder. The note ordered the teller to open the drawer and “put everything in the binder.”
“Canada’s conduct terrorized bank employees and ordinary citizens just going about their business,” said U.S. Attorney Bob Troyer. “We don’t tolerate that in Colorado.”
“The conclusion and recent sentencing of this investigation should send a clear signal that bank robberies continue to be a significant problem in our community,” said FBI Special Agent in Charge Calvin Shivers. “I would like to extend my appreciation to the Denver and Commerce City Police Departments, the FBI Safe Streets Task Force, and United States Attorney’s Office for their efforts in this investigation.”
This case was investigated by the FBI’s Rocky Mountain Safe Streets Task Force, with assistance from local law enforcement. The defendant was prosecuted by Assistant U.S. Attorney Peter McNeilly.
This case was brought as part of Project Safe Neighborhoods (PSN), 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. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Office to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
University of Colorado Professor Pleads Guilty to Mail FraudRead the Press Release
DENVER – Oleg Viktorovich Vasilyev, age 50, of Boulder, Colorado, a professor in the Department of Mechanical Engineering at the University of Colorado in Boulder, pled guilty yesterday before U.S. District Judge William J. Martinez to mail fraud and aiding and abetting, U.S. Attorney Bob Troyer and Department of Energy Acting Inspector General April G. Stephenson announced. The defendant had been indicted by a federal grand jury in Denver on September 12, 2017. The sentencing hearing will be held on October 25, 2018, before Judge Martinez.
According to court documents, including the defendant’s plea agreement, in the summer of 2006, Vasilyev submitted an application to the Los Alamos National Laboratory (LANL) to obtain a federal contract worth $234,000.00. The defendant did this without the knowledge or approval of the University of Colorado’s Office of Contracts and Grants (OCG), which customarily would oversee such a contract. Over the next five to six years, Vasilyev caused invoices to be submitted directly to LANL purportedly to pay his salary, as well as the salary of a graduate student. LANL received the defendant’s invoices and forwarded monies to an auxiliary account held by the University of Colorado for Vasilyev. Vasilyev then obtained this money from the auxiliary account by submitting travel vouchers and other requests for reimbursement to the University of Colorado. Vasilyev later admitted that these requests for reimbursement included unallowable costs, such as more than $140,000 for international travel unconnected to any work for LANL. Other unallowable costs included dues, subscriptions, conference registration fees, and out of state travel. Vasilyev agreed to repay the University of Colorado a total of $185,879, but the total actual loss associated with Vasilyev’s fraud remains in dispute.
This case was investigated by the Department of Energy Office of Inspector General. The United States is represented by Assistant U.S. Attorney Jeremy Sibert.