District of Colorado
Press releases recorded for this federal judicial district.
Westminster Woman Ordered Held Without Bond Following Indictment and Arrest for the Distribution and Possession of Child PornographyRead the Press Release
DENVER – Sharee Ewudzi-Acquah, age 47, of Westminster, Colorado, who faces child pornography related charges, was ordered held without bond this week by U.S. Magistrate Judge Kristen L. Mix following a contested detention hearing. Ewudzi-Acquah, was indicted by a federal grand jury on October 18, 2016. She was arrested by the FBI on October 20, 2016, which is when she was advised of her rights and the charges pending against her. The detention hearing was held on October 31.
According to the Indictment, Ewudzi-Acquah faces two counts of distribution of child pornography and one count of possession of child pornography. The first count focuses on the time period between September 8, 2015 and October 28, 2015. The second count focuses on the time period between January 20, 2016 and March 13, 2016. Both counts charge that the defendant knowingly distributed child pornography by any means, including computer. The third count states that on July 28, 2016, the date federal authorities executed search warrants, she knowingly possessed child pornography.
During the detention hearing, Assistant U.S. Attorney (AUSA) Valeria Spencer argued that Ewudzi-Acquah was a danger to the community and therefore should be held without bond. In support of her position, AUSA Spencer argued that the defendant traded child pornography with multiple users using a specific cellular telephone App that has the ability for users to trade high volumes of child pornography anonymously. During an investigation into an individual in San Antonio, Texas, agents found evidence of child pornography trading with an individual whose IP address resolved to Westminster, Colorado. Further investigation revealed very graphic sex chats, during which Ewudzi-Acquah sent images and videos of child pornography to the subject in San Antonio. The Westminster IP address also came up during a separate investigation being conducted into a child pornography target in Miami, Florida.
Following the forensic analysis on Ewudzi-Acquah’s phones, agents determined the defendant was using cloud storage, foreign emails, and foreign cloud storage – in both New Zealand and in Russia. During one chat found on one of her devices, the defendant claimed to have molested a relative. In total she had three phones with child pornography on them. Evidence shows that the defendant, who had a long-term job at the University of Colorado, traded child pornography and chatted about child pornography while at work.
If convicted of distribution of child pornography, the defendant faces not less than 5 years, and up to 20 years in federal prison, as well as up to a $250,000 fine per count for each of the two counts. If convicted of possession of child pornography, the defendant faces not more than 10 years in federal prison, and up to a $250,000 fine.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Valeria Spencer.
The charges contained in the Indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Man Who Allegedly Left Destructive Device at Nederland Police Department Indicted by Federal Grand JuryRead the Press Release
DENVER – David Michael Ansberry, age 64, originally from California, was indicted late yesterday by a federal grand jury in Denver, charging him in a one count indictment with Use and Attempted Use of Weapon of Mass Destruction, the U.S. Attorney’s Office and the FBI announced. Ansberry, who was arrested in Chicago, has not yet been transported to Colorado, and therefore no initial court date in Denver has yet been set (EDITOR’S NOTE: We will notify you once a court date has been set).
According to the indictment, on October 11, 2016, Ansberry, a/k/a Jessie Howard, acting without lawful authority, did knowingly use and attempt to use a weapon of mass destruction, namely a destructive device, against a person and property within the United States. If convicted, Ansberry faces any term of years or life in federal prison, and up to a $250,000 fine.
This case was investigated by the FBI, the Boulder County Sheriff’s Office, the Nederland Police Department, and ATF. Substantial assistance was provided by the Boulder County District Attorney’s Office. Ansberry is being prosecuted by Colorado Assistant U.S. Attorney Gregory Holloway and Trial Attorney Mara Kohn with the Counter Terrorism Section of the National Security Division.
The charges contained in the Indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Creator of Software to Facilitate Privacy Invasion and Online Extortion Sentenced to Federal Prison for Conspiracy to Commit Computer FraudRead the Press Release
DENVER – Brandon Bourret, age 41, of Colorado Springs, Colorado, was sentenced yesterday by U.S. District Court Judge Wiley Y. Daniel to serve 29 months in federal prison, followed by 3 years on supervised release after previously pleading guilty to conspiracy to commit computer fraud and abuse, access device fraud, identification document fraud and wire fraud, the U.S. Attorney’s Office and the Denver Division of the FBI announced. Further, the Judge ordered the forfeiture of $49,153 cash plus a substantial amount of computer equipment. Bourret, who appeared at the sentencing hearing free on bond, was ordered to report to a Bureau of Prisons facility within 15 days of designation.
Co-defendant Athanasios Andrianakis previously was sentenced to serve 5 years on probation with the first 15 months in house confinement. While in house confinement Andrianakis is to work for no pay for the victim, Photobucket, as in-kind restitution. Further, Andrianakis was ordered to work 150 hours of community service. He also paid $35,000 to Photobucket, and forfeited cash proceeds of $14,962.22 plus a substantial amount of computer equipment.
Bourret and co-defendant Andrianakis were charged and arrested after breaching the computer services of Colorado-based Photobucket, a company that operates an image and video hosting website. According to court documents, including the stipulated facts contained in the plea agreement, in 2008 Bourret began selling a software application called “PhotoFucket.” The purpose of PhotoFucket was to allow its users to gain access illegally to the private or password protected photo albums of Photobucket’s customers without those customers’ knowledge or consent. As its name suggests, PhotoFucket’s users were primarily interested in finding and stealing nude or sexually-explicit images from those private and password protected albums.
Between July 12, 2012 and August 2, 2013, in response to increased security at Photobucket, Bourret and his co-defendant conspired to find and sell sophisticated ways to continue penetrating the password protections despite Photobucket’s attempts to block the intrusions. The co-conspirators also discussed ways to increase PhotoFucket sales and distribute money from the enterprise among the co-conspirators. Bourret promoted PhotoFucket on his websites, Photofucket.com and PhatThumbs.Photofucket.com, and he published private images that he illegally obtained on the PhatThumbs website.
Bourret also found a way to connect registration email addresses to stolen private images, and he sold those email addresses to PhotoFucket customers knowing that this posed a substantial risk of facilitating online extortion. He dismissed this risk in the interest of profits, saying in one email “I decided to go a little crazy and let PF output an email address for every rip it does . . . It’s better to burn out than to fade away.” Victims of the PhotoFucket scheme reported being extorted and harassed online with their private images.
On July 1, 2014, a search warrant was executed at Bourret’s residence in Colorado Springs, where he hosted the PhotoFucket.com website on a server in his bedroom. Over 9 terabytes of illicit data were seized from that server and the other storage devices recovered in Bourret’s house. Agents determined that the defendant recorded 18,557 instances of his targeting accounts with the PhotoFucket application, and he possessed at least 722 passwords that were associated with other Photobucket.com accountholders.
Photobucket first became aware of the PhotoFucket application in 2013. It immediately contacted the FBI and worked aggressively with law enforcement to fix the exploits, strengthen the security of their product, and bring the two individuals responsible for the violations to justice. The conspiracy ended and PhotoFucket was no longer capable of accessing private Photobucket.com content after July 31, 2013.
Victims of the breach were previously contacted by the government and Photobucket through email messages to their Photobucket.com registration email addresses. None of those victims submitted a restitution request to the court. However, to address the interests raised by some of those victims, the government and the co-defendants, with the assistance of Photobucket, entered into Consent Agreements that created a victims’ assistance fund. The fund is available for identified victims – ie, those who previously received a notification – to obtain services to mitigate the impact of the public disclosure of their private images. These services are to be paid for by the co-defendants according to the terms of the Consent Agreements. More information about the victims’ assistance fund can be found on the U.S. Department of Justice website at http://www.justice.gov/usao-co/photobucket-case.
“Bourret and Andrianakis enriched themselves by preying on people who believed their personal pictures of loved ones and private moments were safe and secure,” said FBI Acting Special Agent in Charge Calvin Shivers, of the Denver Division. “The FBI’s Denver Cyber Task Force investigated the network intrusion perpetrated by the men, who accessed victim accounts without authorization. We thank our law enforcement partners and the US Attorney’s Office for helping bring them to justice.”
This investigation was conducted by the Denver Division of the FBI. This case is being prosecuted by Assistant U.S. Attorney David Tonini.
U.S. Attorney's Office Assigns Dedicated District Election Officer to Handle ComplaintsRead the Press Release
DENVER – Acting United States Attorney Bob Troyer announced today that Assistant United States Attorney Jason St. Julien will lead the efforts of the U.S. Attorney’s Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA St. Julien has been appointed to serve as the District Election Officer (DEO) for the District of Colorado, and in that capacity he 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.
Acting United States Attorney Troyer said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted – and not be stolen by fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, 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.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, Acting United States Attorney Troyer has directed that St. Julien will be on duty in this District while the polls are open. He can be reached by the public at 303-454-0302.
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.
Acting United States Attorney Troyer emphasized, “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.”
Life Care Centers of America, Inc. Agrees to Pay $145 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Rehabilitation CareRead the Press Release
KNOXVILLE, Tenn. – Cleveland, Tennessee-based Life Care Centers of America, Inc. (Life Care) and its owner, Forrest L. Preston, have agreed to pay $145 million to resolve a government lawsuit alleging that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary, and/or skilled, the Department of Justice announced today. This resolution is the largest settlement with a skilled nursing facility chain in the Department’s history, and the largest civil False Claims Act settlement in the Eastern District of Tennessee.
As part of this settlement, Life Care has also been required to enter into a five year chain-wide Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). Life Care owns and operates more than 220 skilled nursing facilities across the country.
“Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” said Nancy Stallard Harr, U.S. Attorney for the Eastern District of Tennessee. “We are committed to working with our federal partners to protect both.”
The settlement, which was based on the company’s ability to pay, resolves allegations that between January 1, 2006 and February 1, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings. Specifically, Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the highest reimbursement category for therapy irrespective of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy to many beneficiaries. Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued. Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period. The settlement also resolves allegations, brought in a separate lawsuit by the United States, that Forrest L. Preston, as the sole shareholder of Life Care, was unjustly enriched by Life Care’s fraudulent scheme.
“This resolution is the largest settlement with a skilled nursing facility chain in the Department’s history,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “It is critically important that we protect the integrity of government health care programs by ensuring that services are provided based on clinical rather than financial considerations.”
“The resolution announced today demonstrates the commitment of the U.S. Attorney’s Office to aggressively pursue providers who utilize fraudulent practices to knowingly put their own financial self-interest over a duty to patients,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “It is imperative that providers make healthcare decisions based upon a patient’s need for services rather than a self-serving desire to maximize financial profit. Our office will continue to investigate fraud allegations, in order to ensure that providers do not compromise the integrity of our public health care programs.”
“Therapy provided in skilled nursing facilities must be medically reasonable and necessary for the individual patient, and we will continue to vigorously investigate companies to prevent fraud and abuse,” said Inspector General Daniel R. Levinson for the U.S. Department of Health and Human Services. “The corporate integrity agreement with Life Care is designed to ensure that Life Care’s provision of therapy services in the future will be determined by the needs of its patients.”
U.S. Attorney Harr noted that the settlement with Life Care resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by Tammie Taylor and Glenda Martin, former employees of Life Care. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The government may intervene and file its own complaint in such a lawsuit, as it has done in this case. The relator share of the recovery in this matter is $29 million.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $31.6 billion through False Claims Act cases, with more than $19.2 billion of that amount recovered in cases involving fraud against federal health care programs. Over the same period of time, the U.S. Attorney’s Office for the Eastern District of Tennessee has recovered more than $90 million through False Claims Act cases, with more than $81 million of that amount recovered in cases involving fraud against federal health care programs.
U.S. Attorney Harr commended and expressed her deep appreciation for the dedication and diligence of the large team that handled this complex and lengthy investigation and litigation, including current and former attorneys, paralegals, investigators and support staff from the Department of Justice’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Offices for the Eastern District of Tennessee, the Southern District of Florida, the District of Colorado, the District of Massachusetts, the District of South Carolina, and the District of the District of Columbia; and HHS Office of Inspector General.
The two qui tam cases are docketed as United States ex rel. Taylor v. Life Care Centers of America, Inc., No. 1:12-cv-64 (E.D. Tenn) and United States ex rel. Martin v. Life Care Centers of America, Inc., No. 1:08-cv-251 (E.D. Tenn). The case against Forrest L. Preston is captioned United States v. Preston, No. 1:16-cv-113 (E.D. Tenn). The claims resolved by the settlement are allegations only; there has been no determination of liability.
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Colorado Springs Man Sentenced to 20 Years in Federal Prison for Felon in Possession of Firearms and Possession of 100 Percent Pure MethamphetamineRead the Press Release
DENVER – Roger Wade Anderson was sentenced last week by U.S. District Court Judge Christine M. Arguello to serve 240 months (20 years) in federal prison, followed by 5 years on supervised release for being a felon in possession of a firearm and for possession of just under 10 pounds of 100 percent pure methamphetamine, Acting U.S. Attorney Bob Troyer and ATF Denver Field Division Special Agent in Charge Ken Croke announced. Anderson, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Anderson was first indicted by a federal grand jury in Denver on March 10, 2016. He pled guilty to the gun and drug crimes on July 18, 2016. He was sentenced by Judge Arguello on October 18, 2016.
According to court documents, including the stipulated facts contained in the defendant’s plea agreement, on July 24, 2015, law enforcement first became aware that an individual named Roger Anderson was distributing large quantities of methamphetamine in the Colorado Springs area. Multiple independent sources confirmed the fact that an individual named Anderson would drive his red Ford F250 truck to Glendale, Arizona to pick up the methamphetamine. During the investigation into Anderson, law enforcement discovered that he would drive several times a month to Glendale, Arizona, stay in a local hotel in a pre-paid room, and would pick up a cooler that had insulation removed so that the methamphetamine was packed in the container’s sides instead.
During one of Anderson’s trips to Arizona, law enforcement conducted surveillance, confirming he left his Colorado Springs home, traveled to Glendale, Arizona, and then drove back to the Colorado Springs area. As the defendant returned to Colorado Springs via I-25, a traffic stop was initiated. During a pat search officers found plastic baggies of methamphetamine in both front pockets. A Colorado Springs Police Officer with a drug certified canine conducted a sniff search of the exterior of the Ford truck. The dog hit on the passenger’s side front door and the driver side of a camper which was in the rear of the truck. Following the obtaining of a search warrant, agents and officers found a cooler in the bed of the pickup truck. When officers removed the cooler and opened it, the cooler contained fish and shrimp which were packed in ice. Officers then removed the liner of the cooler, and observed ten packages of suspected methamphetamine concealed within the cooler. Officers and agents also conducted a search of Anderson’s residence. In addition to finding methamphetamine, amphetamine, and drug paraphernalia, they also found a 12 gauge shotgun in the living room and a .357 revolver in a large black safe. The revolver had been confirmed stolen.
“Methamphetamine is a lethal poison,” said Acting U.S. Attorney Bob Troyer. “Armed dealers bringing that poison into Colorado communities will go to federal prison for a long, long time.”
“Anderson was a major player in the cycle of violence and drugs in southern Colorado, making multiple trips a month to pump more meth into southern Colorado. The number of lives he has ruined, both addicts and their loved ones, is incalculable,” said ATF Special Agent in Charge Ken Croke. “By peddling death, violent criminals like Anderson destabilize the strength of an entire community. Our close partnership with El Paso Sheriff’s Office, Colorado Springs PD and other law enforcement in Southern Colorado is designed to remove the insidious parasite of crime so that innocent citizens can live peacefully in their communities.”
This case was investigated by Colorado Springs office of ATF, the El Paso County Sheriff’s Office and the Colorado Springs Police Department. Anderson was prosecuted by Assistant U.S. Attorney Kurt Bohn.
Sterling Mail Carrier Indicted by Federal Grand Jury for Delay and Destruction of MailRead the Press Release
DENVER – Tayson Adam Hidalgo, age 22, of Sterling, Colorado, was arrested following the return of a one count indictment by a federal grand jury in Denver charging him with delay or destruction of mail, the U.S. Attorney’s Office and the U.S. Postal Service Office of Inspector General announced. Hidalgo appeared before a U.S. Magistrate Judge on October 20, 2016, where he was read his rights and advised of the charge pending against him. He was then released on a $5,000 unsecured bond. He is due next in court on October 25, 2016 at 10:00 a.m. for arraignment.
According to the indictment, returning on October 18, 2016, between October 3, 2014 and April 21, 2016, the defendant, a U.S. Postal Service officer and employee did unlawfully secret, destroy, detain, delay and open letters, post cards, packages, bags and mail entrusted to him and which came into his possession with the intention that he or any carrier deliver the mail to intended recipients.
If convicted of delay or destruction of mail, Hidalgo faces not more than 5 years in federal prison, and up to a $250,000 fine, plus restitution if applicable. The defendant is no longer an employee of the U.S. Postal Service.
Approximately 26,000 pieces of undelivered mail was located during this investigation. The recovered mail was addressed to residents within the city limits of Sterling, Colorado and several local postal routes in Fort Morgan, Colorado. Due to the large volume of recovered mail and its potential impact, a Town Hall Meeting is scheduled for Monday, November 7, 2016 at 6:00 p.m. at Sterling Middle School, 1177 Pawnee Avenue, Sterling, Colorado 80751. Town Hall Meeting attendees will be briefed about the investigation, victim notification, and when the seized mail will be returned to its intended recipients.
If you believe you’re a victim of this crime, please visit the U.S. Attorney’s website at www.justice.gov/usao-co for case updates which will be available starting Monday, October 24, 2016.
Executive Special Agent in Charge Joanne Yarbrough said, “The American public trusts that U.S. Postal Service employees will obey the law. When an employee of the Postal Service violates that trust, the U.S. Postal Service Office of Inspector General (USPS OIG) thoroughly investigates those matters. This type of behavior within the Postal Service is not tolerated and the overwhelming majority of Postal Service employees, which serve the public, are honest, hardworking, and trustworthy individuals who would never consider engaging in any type of criminal behavior. The USPS OIG appreciates the partnership with the U.S. Attorney’s Office in holding accountable anyone responsible for such violations.”
This case was investigated by the U.S. Postal Service Office of the Inspector General and the Sterling Police Department. The defendant is being prosecuted by Assistant U.S. Attorney Jason St. Julien.
The charge contained in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.
Local and Federal Law Enforcement Team up to Indict and Arrest Violent Members of Bloods GangRead the Press Release
DENVER – Eight members of the Bloods street gang have been indicted by a federal grand jury this week on charges of Violent Crimes in Aid of Racketeering (VICAR), Acting U.S. Attorney Bob Troyer, Bureau of Alcohol Tobacco, Firearms & Explosives (ATF) Special Agent in Charge Ken Croke, Denver Police Chief Robert White and Aurora Police Chief Nick Metz announced today. Of the eight indicted, six were previously in custody with the other two recently arrested. This is the first time the VICAR statute has been used in the District of Colorado. Law enforcement employed cutting-edge forensic tools to identify the most violent Bloods gang members, including shell-casing analysis, acoustic gunshot detection technology, and cell phone and social media exploitation.
The VICAR indictment alleges the Bloods are an enterprise whose business is violence, including murder. The indictment charges five counts of violent crimes in aid of racketeering; those violent crimes include conspiracy to commit two different murders, an attempted murder, and two different assaults with a dangerous weapon. The indictment also charges three counts of using firearms to commit violence in aid of the racketeering enterprise. Finally, the indictment charges three counts of unlawful gun possession.
In the early 1970’s, the Bloods gang was formed in Los Angeles, California. The gang initially was comprised of smaller individual street gangs that unified as the Bloods to protect themselves from a larger street gang, the Crips. Over time, Blood gang “sets” developed across the country. Despite differing geographic regions, the sets maintain common tattoos, communication codes, language, and graffiti markings. Members wear the color red to identify themselves as Bloods and to distinguish themselves from members of the Crips, who commonly wear blue and with whom the Bloods have an often lethal rivalry. Bloods are involved in a variety of criminal activities including threats, witness intimidation, aggravated assault, and murder in the District of Colorado. They have operated here since approximately the early 1990’s.
New Bloods members are recruited, generally as juveniles, and are “quoted” into the gang by being beaten by existing Bloods members. Members earn respect by engaging in violence and through a variety of criminal activities including robberies and drug dealing. Members typically tattoo their bodies to identify their membership in, and allegiance to, the Bloods. New recruits are indoctrinated in the Bloods’ rules, which are enforced. One prominent rule encourages Bloods members to confront, fight, and kill rival gang members, particularly the Crips.
Another prominent rule commands silence about gang activity and forbids cooperation with law enforcement. The sanction for violating the code of silence is a “green light.” A “green light” is the signal that the gang approves the beating or killing of someone suspected of cooperating with law enforcement.
The indictment alleges that the defendants participated in the conduct of the Bloods’ business by the following means and methods:
a. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, to preserve, expand, and protect the enterprise’s territory and activities.
b. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, to promote and enhance its prestige, reputation, and position in the community.
c. Members of the Bloods and their associates promoted a climate of fear through intimidation, violence, and threats of violence.
d. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, against various individuals, including known and suspected members of rival gangs and against those who challenged their members or associates.
e. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, to discipline enterprise members and associates who had violated enterprise rules.
f. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, to punish enterprise members and associates who had been disloyal.
g. Members of the Bloods and their associates advertised women, including those under the age of 18, for companionship on websites in order to rob the responding parties.
h. Members of the Bloods and their associates procured and shared firearms for their use and protection.
i. Members of the Bloods and their associates sold controlled substances, including cocaine, ecstasy, codeine, Xanax, and marijuana.
Those charged in the VICAR indictment are: Jason Harris, age 20 (a.k.a. Whoopti, a.k.a. Murder Whoop); Isaac Jonathan Hernandez, age 20 (a.k.a. JB, a.k.a. Hillsidx Hitta); Xavier Davon Claypool, age 22 (a.k.a. X); Michael Byrd, age 22 (a.k.a. Rich Porter, a.k.a. Mike Savage); Theophus Williams, age 20 (a.k.a. Low Chapo, a.k.a. William Theophus), Keandre Mims, age 22 (a.k.a. Hillside Suave); Bryce Wilhite, age 22 (a.k.a. Kapone, a.k.a. Kapone Makaveli Hound, a.k.a. Kapone Poloninethe, a.k.a. Polosaucxtwin Dutch); and Aaron Wilhite, age 22 (a.k.a. Twin NoSurrender NoRetreat). Some defendants face mandatory minimum sentences between seven and ten years, with maximum sentences of up to 20 years. Others face penalties of not more than ten years in federal prison.
Nine additional felons in possession of firearms were previously indicted as part of the ATF’s specific investigation in this Bloods criminal enterprise, including: Brandon Laeraye Nelson, age 28; Dedric Delaine Mayfield, age 39; Isaiah Dumar Claypool, age 25; Keon Anthony Nixon, age 24; Michael Aaron Smith, age 39; Michael Isiah Pierrie, age 22; Michael Lee Sanders, age 38; and Omari Tavon Martin, age 20.
“One violent act can ruin several generations of lives,” said Acting U.S. Attorney Bob Troyer. “The desire for citizen safety is the deepest common bond between communities, law enforcement, and this office. Fueled by teamwork and forensics-led policing, these prosecutions prove our top priority: to ensure safety and restore trust by taking apart violent criminal organizations and removing their members, especially those committing gun violence, from our streets.”
“This historical indictment is a major success for the citizens of Denver and particularly North Park Hill. Over a year ago, ATF, Denver PD, Aurora PD, Lakewood PD and the U.S. Attorney’s Office committed to using the Crime Gun Intelligence Center and NIBIN to target serial gang shooters we believed were responsible for a disproportionate amount of rising gun violence in our community,” said ATF Special Agent in Charge Ken Croke. “Thanks to this partnership, they are no longer anyone’s next door neighbor.”
This case was investigated by ATF, the Denver Police Department, the Aurora Police Department, the Lakewood Police Department and the U.S. Marshals Service.
The charges contained in the Indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
Parker Man Pleads Guilty to Money Laundering in Connection with Stock Trading SchemeRead the Press Release
DENVER – Corey Earl Engelen, age 47, of Parker, Colorado pled guilty last week before U.S. District Court Judge Christine M. Arguello to money laundering announced Acting United States Attorney Robert C. Troyer and IRS Criminal Investigation Special Agent in Charge Steven Osborne. Engelen and his co-defendant Michael Todd Osborn were indicted by a federal grand jury in Denver on February 11, 2015. Engelen is scheduled to be sentenced by Judge Arguello on January 31, 2017.
According to the indictment and plea agreement, Engelen and Osborn were introduced to each other in approximately July 2009. Beginning immediately, Engelen began assisting Osborn by finding and providing funds to pay his bail bondsman on charges in cases unrelated to the crimes charged in the District of Colorado. In October, the two stayed for an extended period in a California hotel. During that time, Engelen helped pay Osborn’s living expenses and began the process of finding an off-shore trust for their future use.
Meanwhile, Osborn developed a scheme to defraud investors. He falsely represented to them that he would use their funds to trade stocks on their behalf. Beginning in December 2009, Osborn instructed investors to wire their funds to accounts held in the name of Infinite One, LLC, which he represented to be the trading accounts he would use for the trades. In fact, the accounts were not trading accounts and were never used for trading. They were merely checking accounts opened and held by Engelen. All of the investors’ funds, $695,000, were deposited directly to Engelen’s Infinite One, LLC accounts, and the investors got nothing in return.
Engelen and Osborn used investors’ funds for their own personal benefit. Engelen used his share of the funds to make his home mortgage and car payments, to cover his day-to-day living expenses, and to travel to Europe and Africa. In June 2010, Engelen engaged in monetary transactions using the investors’ funds, knowing that the funds were the proceeds of some criminal activity. The funds he used were in fact the proceeds of Osborn’s wire fraud. Engelen admitted that on June 2, 2009, when he wired $44,915.76 from the Infinite One account to the account of Dream Motor Cars for the purchase of a Mercedes Benz for Osborn, he chose to avoid learning about what Osborn was actually doing to acquire those funds, and committed the felony offense of engaging in a monetary transaction in property derived from specified unlawful activity, wire fraud.
“If you buy luxury cars with money you know is criminal proceeds, you are laundering money, and we will prosecute you for it,” said Acting U.S. Attorney Bob Troyer.
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money," said Steven Osborne, IRS Criminal Investigation, Special Agent in Charge, Denver Field Office. "IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture and help put a stop to this and other types of white collar crime."
Engelen pled guilty to one count of money laundering which carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000. Osborn pled guilty on February 9, 2016 to wire fraud and money laundering and is scheduled to be sentenced by Judge Arguello on December 1, 2016.
This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service. This case is being prosecuted by Assistant U.S. Attorneys Linda Kaufman and Bishop Grewell.
Romania Extradites Alleged Leader of "ItalianMafiaBrussels" Drug Trafficking Organization to Colorado for ProsecutionRead the Press Release
DENVER – Filip Lucian Simion, 23, was extradited from Romania to Denver, Colorado so he can face drug trafficking and money laundering charges, Acting United States Attorney Bob Troyer, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Denver Division Special Agent in Charge David Thompson and the Denver Division U.S. Postal Inspector in Charge Craig Goldberg announced. On May 5, 2016, Simion was indicted, along with three others, for importation of controlled substances and money laundering. The defendant made his initial appearance today before U.S. Magistrate Judge Kristen L. Mix. Co-defendant Leonardo Cristea, 25, arrived in the District of Colorado pursuant to an extradition order from Romania on July 29, 2016.
The investigation, which was initiated in July of 2013, resulted in numerous seizures of kilogram quantities of MDMA (3,4 methylenedioxymethamphetamine, a Schedule I controlled substance commonly known as Ecstasy) intended for importation into the United States via the mail from various countries in Europe. The 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 only in bitcoin. In 2014 and 2015, several defendants were charged and convicted in the District of Colorado for distribution of MDMA sourced by the organization.
On May 3, 2016, in a joint U.S./European enforcement action, law enforcement dismantled the ItalianMafiaBrussels Drug Trafficking Organization (DTO), arresting ten defendants during early morning raids in Bruges, Belgium and surrounding areas. The extradited defendants, Filip Lucian Simion and Leonardo Cristea, were arrested simultaneously in Bucharest, Romania. The remaining defendants, including two of the defendants named in the U.S. indictment, will be prosecuted in Belgium.
The nine count indictment charges defendants Leonardo Cristea, Ymran Djavatkhanov, Andy Nestor, and Filip Lucian Simion 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 are 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 is 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).
If convicted on any of the counts charged, Filip Lucian Simion and Leonardo Cristea face a maximum possible penalty of 20 years’ imprisonment. The defendants’ criminal history and the amount or weight of the drugs being imported are factors a judge will consider at sentencing.
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, ATF Atlanta, DEA Chicago, Europol, and Eurojust.
The case is being prosecuted by Assistant U.S. Attorney and Digital Currency Crimes Coordinator Michele R. Korver
The charges contained in the Indictment are allegations, and the defendants named are presumed innocent unless and until proven guilty.
Man Believed to Have Placed Improvised Explosive Device in Nederland Shopping Complex ArrestedRead the Press Release
DENVER – David Michael Ansberry, born in 1952, originally from California, was arrested over the weekend in Chicago, Illinois, in connection with the placing of an improvised explosive device in a shopping area in Nederland, Colorado, the FBI, Boulder County Sheriff’s Office (BCSO), the Nederland Police Department, the Boulder County District Attorney’s Office and ATF announced. Ansberry made his initial appearance in Chicago yesterday and will be brought to Colorado to face the charge.
Ansberry, who was identified as the person allegedly placing the device following an intensive investigation by law enforcement, has been charged with attempted destruction of a building or property by means of fire or explosive. If convicted, Ansberry faces not less than 5 years, and not more than 20 years in federal prison, and up to a $250,000 fine.
The investigation is ongoing, but authorities believe based upon the information discovered to date that this was an isolated incident. If members of the public believe they have information regarding this incident they are asked to call the FBI at 303-629-7171.
“Thanks to the tireless work of this team of law enforcement professionals, a man who is charged with placing a dangerous device in a public place is in custody,” said Acting U.S. Attorney Bob Troyer. “The FBI, Boulder County Sheriff’s Office, the Nederland Police Department, and the ATF pulled together, dismantled this explosive device, and tracked down the man who allegedly made and placed it. Outstanding work all around.”
This case was investigated by the FBI, the Boulder County Sheriff’s Office, the Nederland Police Department, and ATF. Substantial assistance was provided by the Boulder County District Attorney’s Office. Ansberry is being prosecuted by Assistant U.S. Attorney Gregory Holloway and Trial Attorney Mara Kohn with the Counter Terrorism Section of the National Security Division.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a violation of federal law has a Constitutional right to be indicted by a federal grand jury. The charges contained in the Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
Ohio Man Who Enticed a Colorado Minor Victim in an Attempt to Produce Child Pornography Convicted Following Two-Week Jury TrialRead the Press Release
DENVER – Rande Brian Isabella, age 59, of Hubbard, Ohio, was found guilty by a jury on October 7, 2016 before U.S. District Court Judge Christine M. Arguello of one count of coercion and enticement of a minor and one count of attempted production of child pornography, Acting U.S. Attorney Bob Troyer and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David Thompson announced. The jury, which deliberated for approximately three hours, acquitted the defendant on two similar counts.
According to the facts presented at trial, between September and December 2013, Isabella communicated via phone and online with a 14 year-old girl in Colorado. Through these communications, he misrepresented his age to her and repeatedly asked for pictures of her as their conversations became increasingly sexual in nature. Ultimately, he was able to persuade her to send him a naked photograph of herself. Isabella told the minor girl that he was her boyfriend and asked her to stay with him if he traveled to Colorado. He sent her a photograph of his own genitalia, encouraging her to respond in kind. She did send him more pictures of herself, some sexual in nature, before she lost her phone. The minor girl’s mother found her phone and discovered these conversations with Isabella. She sought the help of law enforcement, and HSI began investigating the defendant’s online activities.
During the course of the investigation, federal agents determined Isabella’s identity and address. A search warrant was then obtained and executed at his home in Ohio. Agents seized his phone and two of his computers. On his phone, they found the communications with the minor girl and photographs of her that he had saved. On his computer, a forensic analyst found that Isabella had Googled the minor girl shortly after they began communicating and that he had visited her Facebook profile, looking at her friends and photos. He also visited three different websites which showed that the minor girl had competed in 2012 in middle school track races. After viewing those websites, Isabella continued to communicate with the minor girl and saved to his phone the nude image she sent him.
“Producing child pornography victimizes children, it’s as simple as that,” said Acting U.S. Attorney Bob Troyer. “This defendant deservedly faces a minimum of 15 years, and up to life, thanks to the hard work of this elite investigation and prosecution team.”
“Sexual predators of children have a history of being able to charm their way into the trust of the children they prey upon,” said David A. Thompson, special agent in charge of HSI Denver. “However, in the age of the internet, these predators now present a danger to many more children. Parents need to be fully aware of how their children are using their electronic and social media; and all children should be continually reminded that strangers met via the internet may not be who they say they are. HSI has an active Operation Predator program to rescue child victims and criminally investigate their victimizers.”
Isabella faces not less than 10 years, and up to life in federal prison, as well as not more than a $250,000 fine for coercion and enticement of a minor. He also faces not less than 15 years, and up to 30 years in federal prison for attempted production of child pornography.
This case was investigated by HSI. The defendant was prosecuted by Assistant U.S. Attorneys Alecia Riewerts and Celeste Rangel.
Colorado's U.S. Attorney's Office Honors Community PolicingRead the Press Release
DENVER – In honor of National Community Policing Week, and in a show of support for the Community Policing concept, members of Colorado’s U.S. Attorney’s Office, led by Acting U.S. Attorney Bob Troyer, organized and participated in events throughout the state during the past two weeks.
The Colorado U.S. Attorney’s Office was host to Deputy Attorney General Sally Yates, who came to Denver to participate in the Denver Justice Forum. The Forum was an opportunity for many different community leaders to voice their concerns about policing practices. It also provided law enforcement with a chance to address misconceptions. The work of the Forum participants continues as the group will meet again to develop specific strategies to build relationships between community representatives and law enforcement.
Another Community Policing project initiated by the U.S. Attorney’s Office was the “Protecting Houses of Worship” or the PHOW program. This program provides training to security-minded individuals who are responsible for protecting their places of worship, whether it be a church, mosque, synagogue or other faith-based facility. To date, the U.S. Attorney’s Office has hosted nearly a dozen PHOW trainings across much of Colorado.
In addition, multiple representatives from the Colorado U.S. Attorney’s Office, both staff and attorneys, have participated in a number of community based programs in Denver and Aurora, including GRID (Gang Reduction Initiative Denver) and GREAT (Gang Resistance Education and Training). U.S. Attorney’s Office employees have also been teaching community policing related lessons at Gilpin Elementary in Northeast Denver as part of the Project LEAD Program (Legal Education And Decision Making). Project LEAD is program that teaches students about law and the criminal justice system as well as how to make good decisions and stay away from situations that could result in bad decisions. At the end of the program students will then participate in a mock-trial. Finally, representatives from the office attended five “Coffee with a Cop” events this week in locations throughout Metro Denver.
The Department of Justice recently announced awarding a number of grants, including a grant to hire Community Policing Officers. In Colorado the Pueblo Police Department was awarded $875,000 for the COPS Hiring Program. The Department has also dedicated grant money to improve responses to violence, including officer shootings.
“Engaging the community and developing lasting, meaningful relationships with law enforcement is critical to the residents of Denver, as well as to all Coloradoans,” said Acting U.S. Attorney Bob Troyer. “The Justice Forum was an excellent leap toward the goal of restoring trust, removing barriers, and establishing a lasting long-term positive relationship between the police and the community.”
“Strengthening the relationship between law enforcement officers and the communities we serve and protect is one of my top priorities,” said Attorney General Loretta E. Lynch. “During National Community Policing Week, we will be hosting hundreds of events around the country designed to foster dialogue, promote cooperation, and help citizens and law enforcement officers get to know one another as partners in our shared efforts to build stronger, safer, and more just communities for every American.”
Four Men Involved in Lakewood Kidnapping Indicted by Federal Grand JuryRead the Press Release
DENVER – The four men involved in the late August early September kidnapping of an individual have been indicted by a federal grand jury in Denver, the U.S. Attorney’s Office and the Federal Bureau of Investigation (FBI) announced today, in conjunction with the Jefferson County District Attorney’s Office, the Lakewood Police Department and the Jefferson County Sheriff’s Office. The four were originally charged in state court after being arrested for the kidnapping. The state charges were recently dismissed following the federal grand jury returning an indictment focused on the kidnapping. The date and time when the defendants will appear in U.S. District Court in Denver has not yet been determined.
The Indictment, returned by the grand jury on September 27, 2016, was sealed until the court recently granted a motion to unseal. According to that Indictment, beginning in August 2016, and continuing through September 5, 2016, defendants Marco Cota-Tamaura, age 36, Raymundo Maldonado-Salgado, age 22, Jonatan Maldonado-Salgado, age 19, and Hernando Aguilar-Banuelos, age 30, conspired to kidnap a victim, namely A. F.-P., while using a cellular telephone. As a manner and means of the conspiracy, the defendants, acting interdependently; Discussed possible ways to abduct A. F.-P., and to conduct visual surveillance of A. F.-P. in order to carry out the abduction; equipped themselves with weapons and tactical equipment in order to carry out the kidnapping; arranged for, and permitted the use of, various residences and vehicles in order to carry out the kidnapping; used cellular telephones to communicate with each other and make ransom demands; and distributed the ransom money among one another in shares.
In furtherance of the conspiracy, on August 30, 2016, Raymundo and Jonatan Maldonado-Salgado and Marco Cota-Tamaura, and others known and unknown to the federal Grand Jury, traveled to and entered a place of business in Lakewood, Colorado, carrying weapons and wearing masks, forcefully kidnapping A. F.-P. by binding A. F.-P.’s hands and forcing A. F.-P. to exit the store and enter a vehicle driven by the conspirators; between August 30, 2016 and September 3, 2016, A. F.-P. was forcibly held at the residence of Hernando Aguilar-Banuelos, which Hernando Aguilar-Banuelos agreed to vacate so that his co-conspirators could use his residence to hold the victim; between August 30, 2016 and September 2, 2016, Raymundo Maldonado-Salgado used cellular telephones to make ransom demands to A. F.-P.’s father, demanding $200,000 in United States currency; on September 3, 2016, after having made ransom demands, Raymond Maldonado-Salgado and Jonatan Maldonado-Salgado drove to where the demanded ransom money of $200,000 had been placed, and took the money; and on September 3, 2016, after receiving $200,000 in ransom, Raymond Maldonado-Salgado and Jonatan Maldonado-Salgado took A. F.-P. to A. F.-P.’s fathers home and released A. F.-P.
“An elite team from the Lakewood Police Department, the FBI, the Jefferson County Sheriff’s Office, and the Jefferson County District Attorney’s Office worked tirelessly to solve this case and rescue the victim,” said Acting U.S. Attorney Bob Troyer. “The professionalism and partnership of this kind of team are things violent criminals should fear and the public should be proud of.”
All four defendants face one count of Conspiracy to Kidnap and one count of Kidnapping, with both counts carrying a penalty of not more than life in federal prison, and up to a $250,000 fine. All but Marco Cota-Tamaura also face one count of Receipt of Ransom Money, which carries a penalty of not more than 10 years in federal prison, and up to a $250,000 fine. Finally, Raymundo Maldonado-Salgado also faces one count of unlawful reentry in the United States, which carries a penalty of not more than 2 years in federal prison, and up to a $250,000 fine.
This case was investigated by the Lakewood Police Department, the Jefferson County Sheriff’s Office, and the FBI, with substantial support from the Jefferson County District Attorney’s Office.
The defendants are being prosecuted by Assistant U.S. Attorney Garreth Winstead with cooperation from the Jefferson County District Attorney’s Office.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty
Westcliffe Man with Interest in Successful Structural Steel Company Ordered to Pay Creditors, Including the United StatesRead the Press Release
DENVER -- U.S. District Judge Christine M. Arguello recently found that Michael D. Wilhite, of Westcliffe, Colorado, concealed his membership interest in Advance Floor Concepts, LLC (“AFC”), a successful multi-million dollar structural steel company for the purpose of hindering, delaying and defrauding his creditors, Acting U.S. Attorney Bob Troyer announced.
In January 2001, Wilhite pled guilty to one count of wire fraud and aiding and abetting, stemming from his involvement in the 1990’s in a sophisticated scheme to defraud the Bank of New Zeland of approximately $5.18 million. The court sentenced Wilhite to three months’ imprisonment, three years’ supervised release, and ordered him to pay restitution in the amount of $1,741,700. Wilhite stopped making restitution payments in 2004, when his term of supervised release ended. Wilhite presently owes approximately $1,719,078.98.
After conducting a thorough investigation into Wilhite’s financial condition, the United States filed a writ of execution, seeking to sell Wilhite’s membership interest in AFC. Wilhite denied having any interest in AFC and his wife, Mrs. Darla Wilhite, claimed to be AFC’s only member.
According to court documents, and the evidence introduced at trial, Wilhite and Mrs. Wilhite created AFC solely in her name in 1997 to avoid and defraud his creditors, including the United States. Indeed, the court found that Wilhite avoided putting a single asset in his name for over two decades, and expressly admitted at trial that he decided not to co-own AFC with his wife, at least in part because doing so “could have” jeopardized “[his] family’s assets.” The court also found that Wilhite exercised sufficient control over AFC to be deemed an owner. The evidence revealed that Wilhite could hire and fire employees and direct their duties; could adjust AFC’s inventory; authored and implemented memos and policies; “has knowledge of and participates in [AFC’s] financial structure”; and even participated in negotiations to sell the company in 2013.
“Due to the tenacious work of our Asset Recovery Division, victims of Wilhite’s crime will now see justice in the form of additional restitution payments,” said Acting U.S. Attorney Bob Troyer. “We have the ‘Seal Team 6’ of Asset Recovery, and these folks work tirelessly on behalf of victims and the taxpayers every day.”
This matter was handled by the U.S. Attorney’s Office for the District of Colorado’s Asset Recovery Division.
United States Reaches Settlement with Section 8 LandlordsRead the Press Release
DENVER – Bob Troyer, Acting U.S. Attorney for the District of Colorado, today announced that Deborah Conrads and Lawrence Conrads – residential landlords in Cortez, Colorado – have paid $73,650 to resolve allegations that they defrauded the Department of Housing and Urban Development by charging low-income tenants excessive rent in violation of HUD’s Housing Choice Voucher Program.
HUD’s Housing Choice Voucher Program provides low-income families, the elderly, and the disabled with assistance to afford decent, safe and sanitary housing in the private market. Housing choice vouchers are funded by HUD and administered locally by public housing authorities. When a landlord agrees to participate in the Housing Choice Voucher Program, the landlord benefits by receiving housing assistance payments directly from the public housing authority each month to cover a substantial portion of the rent of a unit. In exchange, the landlord agrees, among other things, that the public housing authority will determine the maximum rent for the unit and that the landlord will not receive any payments from the family for rental of the unit other than the family’s portion of the rent authorized by the public housing authority.
In 2001, the Conrads entered into such a housing assistance payment contract with the Housing Authority of the County of Montezuma for one of the Conrads’ rental units in Cortez, Colorado. The United States contends that despite the terms of that agreement, as recently as 2014 the Conrads knowingly charged the tenant family additional unauthorized rent and concealed these side payments from the public housing authority. In one instance, when the housing authority denied the Conrads’ request for a rent increase, the Conrads nonetheless entered into a lease extension that increased the rent paid by the family. Subsequent lease extensions in later years further increased the rent the Conrads were charging the family. The Conrads did not seek approval from the Montezuma Housing Authority for these later increases and did not provide the housing authority with copies of any of the lease extensions. The United States alleges that through this scheme, the Conrads extracted at least $18,000 in excess rent from the family while at the same time the Conrads were cashing housing assistance payments they received from federal funds as Housing Choice Voucher Program landlords.
“When landlords take advantage of the Section 8 program by charging low-income families excessive rent, they undermine HUD’s mission to create strong, sustainable, inclusive communities and quality affordable homes for all,” said Acting U.S. Attorney Troyer. “Landlords who defraud HUD face stiff civil penalties.”
“HUD has been working with the US Attorney’s Office to pursue justice against the abuse of the Housing Choice Voucher Program, a crucial resource intended to assist low income individuals and families with housing costs," said HUD Rocky Mountain Regional Administrator Rick M. Garcia. "Section 8 rental assistance is in high demand in this region, and fraudulent practices within these programs will not be tolerated.”
The claims settled by this agreement are allegations only. In entering into a civil settlement, the Conrads did not admit liability.
The United States Attorney’s Office thanks the Department of Housing and Urban Development, Office of the Inspector General, for their hard work and cooperation that made this recovery possible. The United States was represented in this matter by Assistant United States Attorney Jasand Mock of United States Attorney’s Office in Denver, Colorado.
Parker Businesswoman Pleads Guilty to Embezzling from Employee Benefit PlansRead the Press Release
DENVER – Emily R. Strunk, age 45, of Parker, Colorado, pled guilty last week before U.S. District Court Judge William J. Martinez to wire fraud, money laundering, and embezzlement from an employee benefit plan, the U.S. Attorney’s Office, U.S. Department of Labor Employee Benefits Security Administration and the IRS Criminal Investigation announced. Strunk was indicted by a federal grand jury in Denver on April 7, 2016. Strunk is scheduled to be sentenced by Judge Martinez on January 25, 2017.
According to the facts in the indictment and plea agreement, Strunk was a third-party administrator for employee pension and retirement plans, operating through various businesses including North American Employer Solutions, LLC; BAC Human Resources, LLC; Colorado Benefits Outsourcing, LLC; Benefits Team Administration, LLC; Benefits Administrators & Consultants LLC; and Columbine Employee Benefits Inc. Starting in 2005, and continuing through September 2015, Strunk devised a scheme to fraudulently obtain money from the employee pension or retirement funds of her clients. Strunk would recruit clients, typically small employers, to hire her to be a third-party administrator for the employee pension or retirement plans (“the plans”) the client offered to its employees. Strunk would gain access to the plan assets, either by directly transferring plan assets to bank accounts she controlled or directing her clients to transfer funds to those bank accounts. She also received plan deferrals (or, contributions from plan participants) directly into her checking accounts.
As part of the scheme, Strunk misrepresented the nature of the accounts to which the plan assets were transferred, identifying or representing that the accounts were “trust accounts” in which she kept client funds for purposes of investment in the plans, when in fact the accounts were simply corporate checking accounts. After clients’ funds were deposited into checking accounts Strunk controlled, she did not segregate client funds or track the amounts belonging to her clients. Instead, she used the plan assets for her own personal and business expenses and used her clients’ plan assets to pay off other clients who had terminated her services.
She concealed her fraud by causing a third party record keeper, who provided online account statements to plans and plan participants, to create “tickers” identifying “outside assets” associated with their plans which in fact did not exist. This gave the appearance that funds Strunk stolen from her clients were actually still invested in the plan. Additionally, Strunk filed and/or caused to be filed false Forms 5500 with the Department of Labor for client plans subject to the Employee Retirement Income Security Act (ERISA). She falsely stated the total amount of plan assets and omitted that her fraud and dishonesty caused a loss to the plan, thereby concealing her fraud.
Wire fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000 per count. Money Laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000 per count. Theft from employee benefit plan carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000 per count.
This case was investigated by the Department of Labor Employee Benefits Security Administration (DOL-EBSA) and the Internal Revenue Service – Criminal Investigation (IRS-CI). The case is being prosecuted by the U.S. Attorney’s Office Economic Crimes Section.
ATF and Pueblo Police Department Arrest Two Following Jail Murder-for-Hire PlotRead the Press Release
DENVER – Reina Ashley Gonzales, age 28, of Pueblo, and Ricardo Estevan Suazo, age 26, who was is in the Pueblo County Detention Facility, have been charged by Criminal Complaint with Conspiracy to Commit a Murder-for-Hire facilitated by interstate commerce (land line phones and cell phones), the U.S. Attorney’s Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Pueblo Police Department announced. Both defendants appeared before a Magistrate Judge in U.S. District Court in Denver this afternoon, where they were advised of their rights as well as the charges pending against them. They are due back in federal court in Denver for a preliminary hearing and a detention hearing on October 5, 2016. Pending that hearing, both will remain in federal custody.
According to the affidavit in support of the Criminal Complaint, on September 9, 2016, an ATF Task Force Officer and Pueblo Police Department Detective learned from a former confidential informant that an inmate in the Pueblo County Detention Facility planned to hire an individual to kill a witness in his state criminal case. That inmate was later identified as Ricardo Estevan Suazo. Suazo had previously shot the murder target in the stomach, and was being held in custody for that crime. Suazo had unsuccessfully tried to hire another individual named “Crazy” to commit the murder.
The ATF Task Force Officer, working in an undercover capacity, talked by phone with Suazo, who instructed the agent to contact “his girl” on the outside for instructions on a job (the murder for hire). The undercover task force officer made contact with “the girl,” who turned out to be Reina Gonzales, who talked about hiring the undercover officer to kill the witness scheduled to testify against Suazo. Gonzales said they would pay the undercover $10,000 to pull off the job. Later, the offered amount changed a number of times to carry out the murder.
Eventually Gonzales disengaged the undercover officer, only to later to be directed by Suazo to help bond out another individual incarcerated in the Detention Center who would carry out the murder-for-hire. That individual did not bond out of the facility. Both Suazo and Gonzales were then charged with the murder-for-hire plot.
This case is being investigated by the ATF and the Pueblo Police Department. The defendants are being prosecuted by Assistant U.S. Attorneys Rebecca Weber and Caroline Friedman.
Anyone accused of committing a felony federal offense has a Constitutional right to be indicted by a grand jury. The charged contained in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty
Denver Man Sentenced to 18 Years in Federal Prison for Illegal Possession of a Firearm and Methamphetamine Distribution CrimesRead the Press Release
DENVER – Dillon James Goff, age 32, of Denver, was sentenced late last week by U.S. District Court Judge Philip A. Brimmer to serve 18 years (216 months) in federal prison for firearms violations and methamphetamine trafficking, Acting U.S. Attorney Bob Troyer and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Ken Croke announced. Following his prison sentence, Goff was ordered to serve 5 years on supervised release. The defendant, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Goff was first charged by Criminal Complaint on September 18, 2015. He was indicted by a federal grand jury in Denver on October 19, 2015. He pled guilty before Judge Brimmer on June 9, 2016 to possession of a firearm by a convicted felon, possession with intent to distribute 50 grams or more of actual methamphetamine, and possession of a firearm in furtherance of a drug trafficking offense. He was sentenced on September 16, 2016.
According to court documents, including the stipulated facts contained in the plea agreement, on September 16, 2015, at noon, Denver Police officer Tony Lopez, Jr. conducted a traffic stop of a vehicle being driven by Goff. Officer Lopez noticed Goff acting suspiciously, and then after learning his name, remembered a fellow detective providing information that Goff is known to traffic drugs and carry firearms. After clearing Goff’s name, a warrant for his arrest came up. As a result, the DPD Officer Lopez took Goff into custody. During the search of the defendant, incident-to-arrest, Officer Lopez found $3,953 in cash and a drug ledger in his pockets.
Because of the condition and location of the vehicle, a Denver Police officer ordered that it be impounded. A lawful search of the vehicle then revealed a .380 caliber pistol under the driver’s seat, a black backpack in the rear seat of the car that contained 1,599 grams of 100 percent pure methamphetamine and a 9 mm pistol. A gray backpack was also located, and it contained another 125.5 grams of 97 percent pure methamphetamine, 84.7 grams of heroin, 10 grams of cocaine, and psilocybin mushrooms. Also, officers found a card/ID printer, another $516 in cash and a ballistic vest, all inside the car. In total, the defendant knowingly possessed at least 500 grams of actual methamphetamine with the intent to distribute. Goff, a convicted felon, also knowingly possessed two firearms, both of which were possessed in furtherance of the drug trafficking crime.
Goff has prior felony convictions, including a 2003 conviction in Jefferson County for distribution of a Schedule II controlled substance. In August 2006 his probation on that charge was revoked, and he served six years in the state Department of Corrections. In November 2006 he was charged in Jefferson County with controlled substance special offender deadly weapon and possession with intent to distribute a Schedule II controlled substance. For those crimes he was sentenced to serve 15 years in the state Department of Corrections, although he only served 10 years after completion of state-run “Boot Camp.”
“Thanks to the outstanding police work of Officer Tony Lopez, Jr., and the Denver Police Department in concert with the ATF, an armed drug dealer will spend his next 18 years in federal prison – and there is no possibility of parole this time,” said Acting U.S. Attorney Bob Troyer.
“Denver is cleaner and safer with an established drug dealer like Goff behind bars for the next 18 years,” said ATF Special Agent in Charge Ken Croke. “This sentence illustrates how the valuable partnership between ATF, Denver PD and the U.S. Attorney’s Office can noticeably improve our community.”
This case was investigated by the ATF and the Denver Police Department as part of Denver’s Crime Gun Intelligence Center.
Denver’s Crime Gun Intelligence Center uses cutting-edge technology and a dedicated investigative team to stop shooters and identify their source of crime guns before they can commit further criminal acts. This is a partnership between ATF, Denver Police Department, Aurora Police Department, Lakewood Police Department, the District Attorney’s Offices for Denver, Arapahoe, Adams and Jefferson Counties, and the U.S. Attorney’s Office for the District of Colorado.
This defendant was prosecuted by Assistant U.S. Attorneys Rebecca Weber and Edwin Garreth Winstead, III.
Denver Gang Member Involved in Car Wash Shooting Sentenced to Federal Prison for Being a Felon in Possession of AmmunitionRead the Press Release
DENVER – Dedric Delaine Mayfield, age 39, of Denver, Colorado, was sentenced yesterday by U.S. District Court Judge Lewis T. Babcock to serve 57 months in federal prison for being a felon in possession of ammunition, Acting U.S. Attorney Bob Troyer and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Ken Croke announced. Following his prison sentence, Mayfield was ordered to serve 3 years on supervised release. The defendant, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Mayfield was indicted by a federal grand jury on January 25, 2016. He pled guilty before Judge Babcock to being a felon in possession of ammunition on June 28, 2016. He was sentenced yesterday, September 20, 2016.
According to court documents, including the stipulated facts contained in the plea agreement, on September 22, 2015, in the middle of the afternoon, the defendant and his friend were at a carwash near 35th and Downing in Denver, Colorado, washing a Sports Utility Vehicle (SUV). The carwash was next to a gas station and a convenience store. A group of rival gang members arrived at the carwash. The defendant observed them and signaled for his friend to leave the carwash bay and join him in the open parking lot. His friend did and, shortly thereafter, gunfire erupted. Mayfield’s friend exchanged gunfire with the rival gang members and was struck. The defendant and his friend returned to the carwash bay and got inside the SUV. The defendant took the gun from his friend and then fired the gun repeatedly from the carwash bay. Shell casings fell on and near the SUV. The firearm was not recovered. The defendant drove his friend to the general area of the Denver Health Medical Center and left him for people passing by to take inside for medical care. The defendant’s friend died, as did one of the rival gang members. Investigators recovered 9mm shell casings from the area of the carwash by where the defendant fired the gun. The defendant, a convicted felon, was not allowed to possess ammunition.
“Our mission is community safety,” said Acting U.S. Attorney Bob Troyer. “People should be able to go to a carwash in the middle of the day without bullets flying past their heads. If you're pulling that trigger you’re going straight to federal prison, it is that simple.”
“Two young men died senselessly that day, but when I think back to that shooting, I only think that Mayfield and the other gang members had zero regard for the lives of the people with them in that busy carwash,” said ATF Special Agent in Charge Ken Croke. “They were far too busy being offended by people who wear the wrong clothes and hang with the wrong people to be concerned with anyone but themselves. Putting these types of violent criminals behind bars goes to the core mission of ATF, and is the reason we will keep fighting against violent crime with our local partners, like Denver Police Department. No one should be scared of getting shot while peacefully living their lives.”
This case was investigated by the ATF and the Denver Police Department as part of Denver’s Crime Gun Intelligence Center.
Denver’s Crime Gun Intelligence Center uses cutting-edge technology and a dedicated investigative team to stop shooters and identify their source of crime guns before they can commit further criminal acts. This is a partnership between ATF, Denver Police Department, Aurora Police Department, Lakewood Police Department, the District Attorney’s Offices for Denver, Arapahoe, Adams and Jefferson Counties, and the U.S. Attorney’s Office for the District of Colorado.
Two Marijuana Container Businessmen Charged with Conspiracy to Defraud the U.S. as Part of Securities Fraud Involving Microcap Company FusionPharm, Inc.Read the Press Release
DENVER – William Sears, age 50 of Thornton, Colorado, and Scott Dittman, age 47, now of Boyertown, Pennsylvania, and formerly of Elizabeth, Colorado, were charged by Information yesterday with Conspiracy to Defraud the U.S. as part of a scheme to defraud the U.S. Securities Exchange Commission, the U.S. Attorney’s Office, the Federal Bureau of Investigation (FBI), the Internal Revenue Service – Criminal Investigations and the U.S. Postal Inspection Service announced. Both defendants made their initial appearance before a U.S. Magistrate Judge in U.S. District Court in Denver.
According to the Information, beginning as early as in or about March 25, 2011 and continuing at least through in or about May 15, 2014, the defendants knowingly and willfully conspired, combined and agreed with each other, and with other persons both known and unknown, to defraud the United States and the United States Securities and Exchange Commission ("SEC"), by impeding, impairing, defeating and obstructing the lawful governmental functions of the SEC. The conspiracy includes the offenses of securities fraud, mail fraud and wire fraud.
FusionPharm, Inc. (“FusionPharm”) was a Nevada corporation with its principal place of business at first in Denver, Colorado and later in Commerce City, Colorado. FusionPharm’s principal business was the development, manufacture and sale of steel shipping containers retrofitted and refurbished for use as hydroponic growing pods, branded as “PharmPods,” for indoor plant cultivation, primarily cannabis. Defendant Dittman was the founder, chief executive officer and sole director of FusionPharm but, in fact, operated FusionPharm, and pursued and developed its business, together and in concert with defendant Sears, and the two defendants together beneficially held and controlled the majority of the shares of FusionPharm’s common and preferred stock, which was convertible into the company’s common stock. FusionPharm’s common stock was publicly traded in the over-the-counter markets, primarily through transactions involving networks of securities broker-dealers.
Sears would cause shares of preferred stock of FusionPharm held in the name of Microcap to be converted into shares of FusionPharm common stock and deposited into brokerage accounts established in the name of Microcap. He would induce brokers overseeing these accounts to consider and treat these common shares as unrestricted securities that could be immediately sold in the public securities markets by falsely representing to them that neither he nor Microcap was an affiliate of FusionPharm or a control person of the company. Dittman facilitated the deposit of these shares, and their treatment as unrestricted securities, by executing FusionPharm officer certificates and other documentation affirming that Microcap was not an affiliate of FusionPharm.
Sears would then cause the remainder of these preferred shares to be transferred from Microcap’s name into the names of family members or entities held in the name of family members, in order to make it appear that neither he nor Microcap had shareholdings in FusionPharm in such amounts as to deem either Sears or Microcap to be affiliates or control persons under the federal securities laws or to trigger their disclosure as significant shareholders under reporting guidelines. Sears would thereafter cause portions of the FusionPharm preferred shares that had been transferred into the names of these family members and entities, in turn, to be converted into additional common shares of FusionPharm that could be publicly sold later on or that he and Dittman could later use to raise funds for the company in private sales to select FusionPharm investors.
Sears, working in coordination with another individual, would thereafter cause the FusionPharm common shares that had been deposited into the Microcap brokerage accounts to be sold in the public securities markets and, in consultation with defendant Dittman, would deposit significant portions of the proceeds of these FusionPharm stock sales into operating bank accounts of FusionPharm – both directly and through a series of transactions involving Bayside, Meadpoint or Vertifresh – so that the money could then be used to capitalize and operate the company, as well as be used for the defendants’ own financial support.
Sears and Dittman both face one count of Conspiracy to Defraud the U.S., which carries a penalty of not more than 5 years in federal prison, and up to a $250,000 fine. In addition, Sear also faces one count of Filing a False Income Tax Return. That crime carries a penalty of not more than 3 years in federal prison, and up to a $250,000 fine.
This case was investigated by the FBI, IRS Criminal Investigation, and the U.S. Postal Inspection Service.
This case is being prosecuted by Assistant U.S. Attorneys Kenneth Harmon and Tonya Andrews with Special Assistant U.S. Attorney Scott Mascianica.
Oregon Pastor Indicted for Producing and Transporting Child PornographyRead the Press Release
An Oregon man made his initial appearance in Denver for production and transportation of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Bob Troyer of the District of Colorado.
James Parkhurst, 56, of Portland, Oregon, was arrested in Oregon on Aug. 2, 2016, on a federal criminal complaint charging one count of production of child pornography. He was indicted by a federal grand jury sitting in the District of Colorado on Aug. 23, 2016, and appeared yesterday in U.S. District Court in Denver.
According to the indictment, Parkhurst, a pastor, produced images of child pornography in August 2010 and then transported those images using a means of interstate commerce.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The U.S. Postal Inspection Service investigated this case with assistance from investigative analysts in the Child Exploitation and Obscenity Section’s (CEOS) High Technology Investigative Unit. The U.S. Attorney’s Office of the District of Oregon also provided assistance in the investigation. CEOS Trial Attorney Herbrina D. Sanders and Assistant U.S. Attorney Alecia L. Riewerts of the District of Colorado are prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Oregon Church Executive Director of Camp and Retreat Ministries Indicted in Colorado for Producing and Transporting Child PornographyRead the Press Release
DENVER – An Oregon man made his initial appearance in Denver for production and transportation of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Bob Troyer of the District of Colorado.
James Parkhurst, 56, of Portland, Oregon, was arrested in Oregon on Aug. 2, 2016, on a federal criminal complaint charging one count of production of child pornography. He was indicted by a federal grand jury sitting in the District of Colorado on Aug. 23, 2016, and appeared yesterday in U.S. District Court in Denver.
According to the indictment, Parkhurst, a pastor, produced images of child pornography in August 2010 and then transported those images using a means of interstate commerce.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The U.S. Postal Inspection Service investigated this case with assistance from investigative analysts in the Child Exploitation and Obscenity Section’s (CEOS) High Technology Investigative Unit. The U.S. Attorney’s Office of the District of Oregon also provided assistance in the investigation. CEOS Trial Attorney Herbrina D. Sanders and Assistant U.S. Attorney Alecia L. Riewerts of the District of Colorado are prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
South Carolina Man Pleads Guilty to Using Fake Facebook Profiles to Meet and Then Attempt to Coerce Six Colorado Girls into Taking and Sending Him Explicit PhotographsRead the Press Release
DENVER – Christopher George White, age 37, of McCormick, South Carolina, pled guilty yesterday before U.S. District Court Judge R. Brooke Jackson to six counts of coercion and enticement of a minor, Acting U.S. Attorney Bob Troyer and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David Thompson announced. White, who is in custody, is scheduled to be sentenced by Judge Jackson on December 14, 2016. White’s crimes included using social media, text, and telephone calls to meet, entice, and then threaten minors into taking off clothing or committing sex acts for his own personal pleasure.
According to the stipulated facts contained in the plea agreement, between June 30, 2014 and August 4, 2014 White, targeted child victims ranging from 13 to 14 years of age by using Facebook profiles “Kent Noelle” and “Glenn Black.” White claimed to be a teenage boy while he was truly a 35-year-old man and previously convicted sex offender. He used those profiles and the telephone number 864-602-1614 to correspond with minor girls, including the six minor girls from Colorado. After first befriending them online, and then texting and even talking with the minors by phone, the defendant then began to use harassment, threats of physical harm, and threats to post sexually-explicit photographs of the children or their friends on social media, coercing and attempting to coerce minors to produce and send him child pornography of themselves.
White faces not less than 10 years, and up to life in federal prison, as well as up to a $250,000 fine for each of the six counts of coercion and enticement of a minor. He will also be required to register as a sex offender once released from prison.
It is possible that there are more minor victims of White. If you believe you or your child has been victimized by White via Facebook profiles of “Kent Noelle” and “Glenn Black” please call HSI toll free at 866-347-2423.
This case was investigated by HSI and the Larimer County Sheriff’s Office.
White is being prosecuted by Assistant U.S. Attorneys David Tonini and Gregory Holloway.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Statement by Acting U.S. Attorney Bob Troyer regarding ransom kidnapping incident that concluded this past weekendRead the Press Release
DENVER – Acting U.S. Attorney Bob Troyer released the following statement regarding the alleged ransom kidnapping incident that concluded this past weekend:
“Thanks to the hard work of law enforcement, a man who was kidnapped and held for ransom was safely recovered, and three men allegedly responsible for this crime were arrested. The way law enforcement agencies responded to this rapidly evolving crime shows that collaboration leads to success. Special recognition should go to the Jefferson County District Attorney’s Office, the FBI, the Jefferson County Sheriff’s Office and the Lakewood Police Department, and others, who worked selflessly for the good of the public.
“The U.S. Attorney’s Office has been actively involved in this investigation since the beginning of this crime and is assessing federal charges at this time.”
Parker CPA Indicted for Wire Fraud, Mail Fraud and Aiding and Assisting in the Preparation of False Tax ReturnsRead the Press Release
DENVER – Donald Iley, age 52, of Parker, Colorado, was indicted by a federal grand jury in Denver on August 24, 2016 on charges of wire fraud, mail fraud, and aiding and assisting in the preparation of false tax returns, the United States Attorney’s office and IRS – Criminal Investigation announced. The indictment remained under seal until Iley made his initial appearance on September 7, 2016 in U.S. District Court before U.S. Magistrate Judge Kathleen M. Tafoya.
According to the indictment, from January 2011 through November 2015, Donald Iley was the owner and operator of Iley and Associates (I&A), an accounting and tax preparation firm which provided services to more than 140 businesses in Colorado. For some of I&A’s clients, payroll accounting and payroll tax services were provided, including the preparation of Forms 941, Employer’s Quarterly Federal Tax Returns. An “ACH Deduction Report” was also prepared listing the amount of payroll taxes to be withdrawn from the client’s bank account and paid forward to the Internal Revenue Service. Iley initiated or caused others to initiate an ACH electronic fund transfer from the client’s bank account to a bank account controlled by I&A.
Then Iley caused the Form 941 tax return to be mailed to the client with a cover letter stating the enclosed tax return is a copy for their records and Iley pays the taxes for the client. As part of the scheme, instead of forwarding the funds I&A received from the clients via electronic ACH fund transfers to the IRS, Iley used the money for his own purposes.
In certain instances, Iley prepared and submitted payroll tax returns to the IRS on behalf of some clients showing no payroll taxes due and owing for a given tax period. Iley knew when he submitted these payroll tax returns that the clients did in fact owe payroll taxes.
“Knowingly falsifying documents which are filed with the IRS is a crime,” said Kareem Carter, Acting Special Agent in Charge, IRS Criminal Investigation Denver Field Office. “While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government and their own clients. Individuals who engage in this type of financial fraud should know they will not go undetected and will have to answer for their actions.”
Iley was charged with 12 counts of wire fraud and 2 counts of mail fraud, each of which carries a penalty of up to 20 years in prison. He is also charged with 18 counts of aiding and assisting in the preparation of false tax returns, which each carries a penalty of up to 3 years in prison. Each charge also carries with it a fine of up to $250,000 or twice the amount of gain or loss, whichever is greater.
This case is being investigated by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney J. Chris Larson.
The charges contained in this indictment are allegations, and the defendant is presumed innocent until proven guilty.
Former Thornton Woman Sentenced for Defrauding Health Care ClientsRead the Press Release
DENVER – Kimberly S. Cileno, age 47, formerly of Thornton, Colorado, was sentenced on August 29, 2016 by U.S. District Court Judge Raymond P. Moore to serve 24 months in federal prison for health care fraud, Acting United States Attorney Bob Troyer, James Purcell, Regional Director of the Kansas City Regional Office for the U.S. Department of Labor, Employee Benefits Security Administration and Abel Salinas, Special Agent in Charge of the Los Angeles Regional Office of the United States Department of Labor, Office of Inspector General announced. Following her prison sentence, Cileno was ordered to serve 3 years on supervised release. Cileno was also ordered by Judge Moore to pay $230,831.14 in restitution to the victims.
According to the facts contained in the indictment and plea agreement, Cileno was the owner and operator of EZ Flex, Inc. EZ Flex was a third-party administrator of cafeteria plans, also known as flexible spending plans.
Approximately 36 employers hired the defendant to administer the cafeteria plans they offered to a total of over 500 employees. The employers forwarded the designated deductions to the defendant, and the participants submitted claims for reimbursement of eligible expenses directly to the defendant. The defendant paid these claims by check, made direct deposits into the respective participant’s bank account, or provided reimbursement of claims through debit cards.
Amcheck, a payroll and human resources administrator located in Denver, recommended the services of EZ Flex to its clients looking to establish flexible spending plans for their employees. Amcheck itself contracted with EZ Flex for administration of its own flexible spending plan.
On September 28, 2012, Amcheck contacted the Department of Labor’s Employee Benefits Security Administration (EBSA), to report erratic claims administration by EZ Flex, Inc. Examples of this erratic behavior included reimbursements that were either paid in incorrect amounts or not paid at all, and a lack of responsiveness to clients via telephone or email.
Investigation revealed that between January 12, 2011, and December 10, 2012, the defendant spent over $230,000 in EZ Flex client’s funds on personal purchases, such as home renovations, a vacation, payments to Nutrisystem, and to a knife manufacturer. The defendant also withdrew cash from the flexible spending account, wrote checks from that account for home improvements, and transferred money from that account to a relative’s bank account.
“The people of Colorado should be heartened to hear that our elite prosecutors and Department of Labor investigators keep a close eye on these practices and ensure we punish this kind of rank theft,” said Acting U.S. Attorney Bob Troyer.
“This criminal action demonstrates the Labor Department’s resolve to vigorously enforce the laws to ensure that those who scheme, misappropriate, misrepresent and deceive employee benefit plans for their own financial gain are brought to justice,” said James Purcell, Regional Director of the Kansas City Regional Office for the U.S. Department of Labor, Employee Benefits Security Administration.
“Kimberly Cileno embezzled over $200,000 from participants’ health care funds. Cileno’s conduct deprived plan participants of money they set aside to pay for their health and dependent care expenses. We will continue to work with the Employee Benefits Security Administration and our other law enforcement partners to safeguard health care benefit programs for America’s workforce,” said Abel Salinas, Special Agent in Charge of the Los Angeles Regional Office of the United States Department of Labor, Office of Inspector General.
This case was investigated by agents with the Department of Labor, Employee Benefits Security Administration and Department of Labor, Office of Inspector General.
The case was prosecuted by Assistant United States Attorney Martha Paluch.
Westminster Man Sentenced for Orchestrating a Scheme to Defraud ClientsRead the Press Release
DENVER – Timothy J. Tucker, age 53, of Westminster, Colorado, was sentenced on August 30, 2016 by U.S. District Court Judge Christine M. Arguello to serve 78 months in federal prison for wire fraud and money laundering, Acting United States Attorney Bob Troyer, Federal Bureau of Investigation Acting Special Agent in Charge Calvin Shivers, and IRS Criminal Investigation Acting Special Agent in Charge Kareem Carter announced. Following his prison sentence, Tucker was ordered to serve 3 years on supervised release. Tucker was also ordered by Judge Arguello to pay $1,614,302.87 in restitution to the victims.
According to the facts contained in the indictment and plea agreement, beginning in February 2010 and continuing until late 2013, Tucker devised a scheme to defraud by obtaining advanced fees from individuals and entities who were seeking multimillion-dollar loans. During the course of the scheme, Tucker operated Assured Venture Group (“AVG”) and The Financial Group, LLC (“TFG”), which purported to be in the business of finding funding for multimillion-dollar loans for investment projects through the issuance of corporate bonds.
Tucker told people and entities seeking multimillion-dollar loans that they were required to pay AVG/TFG fees in advance of AVG/TFG performing work to find funding for the requested loans and that the fees would be spent only on underwriting, due diligence, and closing costs related to the requested loans. For some of these loans, Tucker promised that the advanced fees would be placed in an escrow account to falsely reassure the people and entities seeking the multi-million dollar loans that the advanced fees would be spent on only underwriting, due diligence, and closing costs related to the requested loan, as promised.
Between February 2010 and March 2013, AVG/TFG was paid over $1.8 million in fees on twenty-two different projects, both by individuals and entities. Tucker did not secure funding for any of the projects and did not return any fees on twenty of twenty-two projects. The majority of the fees received by AVG/TFG were used for things unrelated to the requested loans, including Tucker’s other businesses.
"We have very sophisticated agents and prosecutors in this federal district," Troyer said. "This is rank theft, and it will be punished."
“Illegal activity involving the investment industry has brought financial ruin to many Americans. Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money,” said Acting Special Agent in Charge Kareem Carter, IRS – Criminal Investigation, Denver Field Office. “Individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable.”
This case was investigated by agents with the Federal Bureau of Investigation (FBI) and the Internal Revenue Service – Criminal Investigation.
The case was prosecuted by Assistant United States Attorney Pegeen Rhyne and Special Assistant United States Attorney Daniel E. Burrows.
Male and Female Child Pornography Production Team Sentenced to a Total of 100 Years in Federal PrisonRead the Press Release
DENVER – Acting U.S. Attorney Bob Troyer and Acting FBI Special Agent in Charge Calvin Shivers announce that U.S. District Court Judge William J. Martinez sentenced Matthew Scott Holt, age 35, to serve 660 months (55 years) and sentenced his co-defendant Jordain Larsen, age 27, to 540 months (45 years). Both defendants were ordered to serve a term of supervised release for the remainder of their lives once released. Each defendant pleaded guilty to three counts of production of child pornography involving three minor victims.
Holt and Larsen were first charged in May of 2015. Larsen pled guilty to three counts of the production of child pornography on January 8, 2016. She was sentenced on April 20, 2016. Holt pled guilty to three counts of the production of child pornography on February 23, 2016, and was sentenced August 17, 2016.
According to court documents, Westminster Police Department executed a search warrant on a residence in Westminster, Colorado after an undercover officer with the Larimer County Sheriff's Office had downloaded an image of child pornography from the residence that showed a woman sexually abusing a very young child. In the days following, WPD found images and videos on Holt’s cell phone showing him sexual abusing a child under the age of two. WPD contacted the FBI. A search of computers seized at the residence revealed that Holt and Larsen produced a total of approximately 600 child pornography images and videos of three children to whom they had access. Two of the children were under the age of two and the third was under the age of nine. The images and videos show either Larsen or Holt molesting the children, or they display the children in a sexually explicit way. Eight of the videos were created when Larsen sexually abused one of the children via the online video platform Skype while video conferencing with Holt. Holt watched and recorded the sessions on his cell phone. Larsen and Holt created other sexually explicit images of the children and sent them to each other. They produced others when engaging in sexual activity with the children while together. Holt also sexually exploited one of the children while on Skype with another unidentified person. On one of Holt’s computer, FBI found approximately 20,000 images of child pornography and four different peer-to-peer trading software programs. FBI also found on Holt’s computer a peer-to-peer profile seeking a “pedo mom” with children between the ages of 2-10 who was willing to Skype.
The Holt and Larsen case was investigated by the Federal Bureau of Investigation (FBI), the Westminster Police Department, and the Larimer County Sheriff's Office.
The defendants were prosecuted by Assistant U.S. Attorney Judith Smith, Chief of the Special Prosecutions Section of the U.S. Attorney’s Office Criminal Division.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Department of Justice Launches Comprehensive Assessment of the Commerce City Police DepartmentRead the Press Release
DENVER, Colo. – The Department of Justice, Office of Community Oriented Policing Services (COPS Office) today announced the launch of an independent and comprehensive review of the Commerce City Police Department. This review, also known as Collaborative Reform Initiative for Technical Assistance (CRI-TA), comes at the request of Commerce City officials and the police department in response to serious internal challenges and concerns pertaining to officer misconduct.
Chief Noble Wray, head of the COPS Office Policing Practices and Accountability Initiative and Acting U.S. Attorney for the District of Colorado Bob Troyer joined Commerce City Mayor Pro Tem René Bullock and Interim Police Chief Lowell Richardson to announce the launch of the collaborative reform process.
“I commend Commerce City for requesting and welcoming this type of candid assessment,” said COPS Office Director Ronald Davis. “I am confident that the process can dramatically improve the internal operations of the department and the quality of service the department provides to the community.”
“A top priority of this office is to develop and maintain strong relationships between the community and law enforcement,” said Acting U.S. Attorney Bob Troyer. “Commerce City leaders are walking that walk by asking for this collaboration with the COPS Office, and that alone is a great step forward.”
CRI-TA serves as an independent and objective process to help transform law enforcement agencies through the analysis of policies, practices, training, tactics, and accountability methods. Using subject matter experts, the COPS Office provides technical assistance based on extensive research and analysis to help enhance and improve an agency’s operating systems and professional culture.
Once the initial assessment phase of the process is completed, the COPS Office will release a report detailing the findings of the assessment, along with specific recommendations to achieve best practices in 21st century policing. During the subsequent 18-months, the COPS Office will continue to work with the police department to help implement the recommendations and will release a progress report and final report.
Commerce City is the 13th city to enter into the collaborative reform process.
The COPS Office, headed by Director Ronald Davis, is a federal agency responsible for advancing community policing nationwide. Since 1995, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 127,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
Colorado Man Sentenced for Production of Child Pornography Including Sexual Exploitation of an InfantRead the Press Release
DENVER – Jamie Sailas, age 31, of Metro Denver, was sentenced today by U.S. District Court Judge William J. Martinez to serve 258 months (over 21 years), followed by 30 years of supervised release for the production of child pornography, Acting U.S. Attorney Bob Troyer and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David Thompson announced. Sailas, who is in custody, was remanded at the conclusion of the sentencing hearing.
According to the stipulated facts contained in the defendant’s plea agreement, Sailas came to law enforcement attention when an HSI agent working in Washington, DC conducted a proactive undercover investigation upon an Internet website that hosted chat rooms. Users of these chat rooms have the ability to upload content to the chat room in the form of pictures and video. While conducting the investigation, the HSI agent came across a link to a video that depicted an adult male engaging in intercourse with a minor female. The investigation led the agent to specific subscriber information which had been submitted to the National Center for Missing and Exploited Children (NCMEC) by the Internet Service Provider. The link was associated with an online storage account that belonged to Jamie Sailas, who at the time resided in Brighton, Colorado. There were nearly 2,900 uploaded file names associated with Sailas’s online storage account, consistent with file names of videos containing child pornography. An email account associated with the online storage account was also determined to belong to Sailas.
During the investigation, the local HSI agent learned that two additional NCMEC reports had been generated regarding Sailas, one which involved the email address associated with the online storage account. A legal search of the defendant’s email account reflected that Sailas used the account to send or receive approximately 5500 images and 240 videos of child pornography. The material included minors as young as infants, with a large majority of content depicting prepubescent minor females. It was ultimately determined that in addition to living in Brighton, the defendant worked at Game Trader in Brighton. Search warrants were executed for Sailas’s home, workplace, and vehicle in November 2014. Numerous electronic devices belonging to Sailas were recovered during the execution of the search warrants. During the forensic examination of the electronic devices recovered during the search warrants, numerous images and videos depicting child pornography were recovered, including an image of child pornography that was recovered from one of Sailas’s cell phones. The image of child pornography depicted his penis in the mouth of an approximately 4-week-old infant. The image was taken by Sailas. The defendant had access to the infant because he was a friend of the child’s mother.
“This defendant’s crimes were as heinous as they get,” said Acting U.S. Attorney Bob Troyer. “This substantial sentence in federal prison is just and proper.”
“The potential sentences for predators who produce child pornography are appropriately the most severe of any child exploitation crime,” said David A. Thompson, special agent in charge of HSI Denver. “Our special agents conducted an especially thorough investigation to ensure that this predator who would sexually molest a 4-week-old infant would be locked away from free society for a long time.”
Jamie Sailas was investigated by HSI with assistance from the Brighton Police Department. He was prosecuted by Assistant U.S. Attorney Alecia Riewerts.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Bob Troyer Takes Helm as Acting United States AttorneyRead the Press Release
DENVER –Bob Troyer became Acting U.S. Attorney at 12:01 a.m. this morning, following the departure of U.S. Attorney John Walsh. Bob served in the Colorado U.S. Attorney’s Office from 1999 to 2004 as a drug and violent-crime prosecutor. For six years after that he worked as a partner in the Denver office of Hogan Lovells, chairing the Colorado litigation department. He returned to the Colorado U.S. Attorney’s Office in October 2010 as the First Assistant U.S. Attorney, the position he has filled for the last six years.
Troyer was born in Colorado and grew up in Maryland. He graduated from Pomona College in 1984 with a BA in English. For several years after college, Bob taught high school English in Washington, D.C. and worked during the summers as a commercial fisherman in Alaska. He then attended Boston College Law School, where he served as the Solicitations Editor for the Boston College Law Review, graduating in 1990. After law school Bob practiced civil litigation at Ropes & Gray in Boston for three years and then moved to Denver to practice at Brownstein Hyatt Farber & Strickland, making partner there in 1997. In 1999 he left to join the criminal division of the Colorado U.S. Attorney’s Office.
“This office is recognized as one of the top U.S. Attorney’s Offices in the entire country, a place where people can perform at their best as they serve all Colorado citizens,” said Troyer. “I aim to keep it that way.”
Statement by U.S. Attorney General Loretta E. Lynch on the Departure of John Walsh from the U.S. Attorney's Office for the District of ColoradoRead the Press Release
WASHINGTON – Attorney General Loretta E. Lynch released the following statement on the planned departure of U.S. Attorney John Walsh of the District of Colorado, effective Aug. 10, 2016:
“U.S. Attorney John Walsh has served the people of the District of Colorado and the entire nation with extraordinary distinction,” said Attorney General Lynch. “For the past six years, John has protected our civil liberties, defended our national security and aggressively and successfully prosecuted organized crime, drug cartels and gang violence. He played a key leadership role on the team that won a landmark $7 billion settlement against Citibank, securing millions for defrauded consumers in the largest settlement in the history of the Colorado U.S. Attorney’s office and one of the largest settlements in the Justice Department’s history. He served as a co-chair of the department’s Residential Mortgage-Backed Securities Working Group, where he led efforts to root out fraud and abuse and hold institutions accountable for the kinds of misleading lending practices that helped cause the 2008 financial crisis. And he has been an outstanding leader of the Attorney General’s Advisory Committee – lending valuable insight and advice to the Justice Department as a whole. The people of Colorado, and the country, are safer thanks to John’s keen judgment, deep empathy and unwavering fidelity to justice. I want to thank John for his exemplary service and I look forward to all that he will accomplish in the years to come.”
Colorado United States Attorney John Walsh to Step Down Following Six Years of ServiceRead the Press Release
DENVER – After six years of service, United States Attorney John Walsh today announced plans to step down from his position effective midnight on Wednesday, August 10, 2016. Over those six years, U.S. Attorney Walsh has been a Colorado and national prosecutorial leader and an aggressive advocate of building strong relationships between federal, state and local law enforcement and between law enforcement and the community. He was appointed to his position by President Barack Obama and confirmed unanimously by the United States Senate, entering on duty August 10, 2010. He is the longest serving U.S. Attorney since the 1980s, and among the longest serving U.S. Attorneys in Colorado history.
“The men and women of the Colorado United States Attorney’s Office, along with their federal law enforcement partners, are unsung heroes who work quietly, fiercely and round-the-clock to do justice and to protect the people of the United States and of Colorado,” said U.S. Attorney Walsh. “The opportunity to work with these dedicated and talented professionals, and to work on their behalf to help further their great mission for our country and our wonderful state, has been the greatest professional honor of my life. And it has been an unexpected additional honor – for which my gratitude will be undying -- to have been given the chance by the Attorney General to work nationally as chair of her advisory committee on behalf of the unsung heroes in U.S. Attorneys’ Offices all over the country who have devoted themselves to that same great task.”
“U.S. Attorney John Walsh has served the people of the District of Colorado and the entire nation with extraordinary distinction,” said Attorney General Loretta Lynch. “For the past six years, John has protected our civil liberties, defended our national security, and aggressively and successfully prosecuted organized crime, drug cartels and gang violence. He played a key leadership role on the team that won a landmark $7 billion settlement against Citibank, securing millions for defrauded consumers in the largest settlement in the history of the Colorado U.S. Attorney’s office, and one of the largest settlements in the Justice Department’s history. He served as a co-chair of the department’s Residential Mortgage-Backed Securities Working Group, where he led efforts to root out fraud and abuse and hold institutions accountable for the kinds of misleading lending practices that helped cause the 2008 financial crisis. And he has been an outstanding leader of the Attorney General’s Advisory Committee – lending valuable insight and advice to the Justice Department as a whole. The people of Colorado, and the country, are safer thanks to John’s keen judgment, deep empathy, and unwavering fidelity to justice. I want to thank John for his exemplary service, and I look forward to all that he will accomplish in the years to come.”
As United States Attorney, Walsh was responsible for overseeing the work of the United States Attorney’s Office for the District of Colorado, which represents the United States in virtually all court matters, criminal or civil, in the United States District Court for the District of Colorado, and in cases from that Court before the United States Court of Appeals for the Tenth Circuit. These matters included criminal prosecutions of federal crimes, civil representation of the United States seeking damages and penalties against law violators, as well as representation of federal government agencies that have been sued. During Walsh’s tenure, the U.S. Attorney’s Office, working both on its own cases and with the Department of Justice and other U.S. Attorney’s Offices, concluded the largest federal penalty cases in Colorado’s history, collecting literally billions of dollars on behalf of American taxpayers and the United States Treasury.
A Commitment to Federal Partnership with State and Local Law Enforcement
During Mr. Walsh’s tenure, the United States Attorney’s Office redoubled its commitment to fostering a strong working relationship between federal law enforcement and state and local law enforcement, including:
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Working with the U.S. District Court, to expand federal law enforcement presence in Grand Junction and Durango, and to establish federal grand juries in both cities;
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Bringing federal law enforcement resources and support to local law enforcement in Southern Colorado, including Pueblo, on key law enforcement challenges;
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Helping to create a close partnership with Denver, Aurora, Lakewood and other Metro Area law enforcement agencies to create and support the Crime Gun Intelligence Center using cutting edge technology to identify, investigate, arrest and prosecute shooters;
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Expanding the Crime Gun Intelligence Center concept to Southern Colorado; and
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Helping to provide close federal support of local law enforcement efforts in cases of mass violence, including the Aurora Theater shooting and Planned Parenthood shooting.
A Commitment to Community Engagement and Outreach
Working with the U.S. Attorney’s Office team, U.S. Attorney Walsh brought an impassioned commitment to fostering law enforcement community engagement and outreach on many levels, including:
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In the wake of the Mother Emanuel Church shooting in Charleston, South Carolina, creating and sponsoring seminars around the state on “Protecting Houses of Worship,” attended by over 1,000 faith community leaders and state and local government and law enforcement leaders;
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Engaging in strong outreach efforts to address and combat hate crimes and civil rights violations against Colorado’s Muslim community and Sikh community;
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Forging a close partnership with the Southern Ute Indian Tribe and Ute Mountain Ute Indian Tribe and federal law enforcement to successfully reduce violent crime rates and other crimes on Colorado’s two Indian reservations; and
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Engaging in extensive outreach to the Latino and Spanish-speaking communities of Colorado; a fluent Spanish speaker, Walsh frequently made presentations to Spanish-speaking audiences, gave interviews to Spanish language media, and in 2014 joined with the Colorado AG’s office in entering into an agreement with the Mexican Consulate in Denver to protect the rights of Mexican nationals who are the victims of crime in Colorado.
A National Role for the U.S. Attorney’s Office for the District of Colorado
Mr. Walsh has been a dedicated advocate for Department of Justice and U.S. Attorneys’ Offices initiatives nation-wide and has worked to bring the great work of the U.S. Attorney’s Office for the District of Colorado into the national limelight. Those efforts have included:
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Serving as one of five national co-chairs appointed by the President to oversee the Residential Mortgage Backed Securities investigations dating from the country’s financial crisis, which included an unprecedented settlement with Citibank settlement of $7 billion – the largest settlement in the history of the Colorado U.S. Attorney’s Office, and at the time, the largest federal civil bank penalty in the nation’s history;
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Supporting and developing a strong national security and anti-terrorism program, resulting in the prosecution of Shannon Conley and other matters; and
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Navigating the complex and conflicting legal environment created by Colorado voters’ approval of marijuana legalization under state law, in partnership with Colorado State government and local law enforcement, with a commitment to protecting public safety.
In this role, Walsh has testified before both Senate and House Committees. He also has participated in White House events on multiple occasions, including a panel discussion in October 2015 with President Obama regarding bi-partisan efforts to reform the federal criminal justice system. In addition, on behalf of the Department, he conducted numerous interviews as a national Department representative with national news organizations.
In January 2015, then-Attorney General Eric Holder appointed Mr. Walsh to serve as Chair of the Attorney General’s Advisory Committee of U.S. Attorneys, stepping into the vacancy left by Loretta Lynch after she was nominated and then confirmed as Attorney General of the United States. In that capacity, he played a key leadership role among U.S. Attorneys nationally on a broad array of issues, including financial crimes, national security, the evolving marijuana landscape, as well as civil rights and anti-hate crime efforts, among others.
Notable Federal Criminal Prosecutions
These six years were also marked by the U.S. Attorney’s Office’s prosecution of notable high profile federal criminal cases. Those cases include:
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The Harold Henthorn murder case in Rocky Mountain National Park.
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The war-crimes related immigration case against Kefelegn Alemu Worku, who was responsible for killings during Ethiopia’s “Red Terror.”
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National Security related cases, including the case against Shannon Conley, and pending cases involving allegations of material support todesignated terrorist organizations, as well as the investigation and response to the case of three high school students who attempted to travel to Syria.
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Powerful anti-gang and anti-gun violence prosecutions in the Denver Metro Area, Colorado Springs and Pueblo in support of state and local law enforcement.
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Dozens of organized crime and cartel-related drug trafficking prosecutions, including:
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The indictment of 80 people in Metro Denver in Operation Double Trouble, where the defendants were indicted following two separate investigations into the distribution of cocaine, crack cocaine, and methamphetamine.Multiple weapons and nearly half a million in cash were seized.This was one of the largest drug busts in Colorado history.
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The indictment of 54 defendants involved in the Gangster Disciples and the Gonzales-Cepeva and Quintero drug-trafficking organizations, for illegally distributing cocaine, heroin, ecstasy and marijuana;
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Operation Chump Change, which resulted in multiple state and federal indictments of a large heroin distribution organization and the seizure of over 250 pounds of brown heroin, 25 pounds of cocaine and multiple vehicles;
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Operation Dark Angel, which resulted in the federal indictment of 22 methamphetamine traffickers and money launderers; and
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Operation Black Rhino, a case where 23 people from two related drug trafficking organizations were indicted for distributing cocaine and methamphetamine.
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The prosecution of the owners of Jensen Farms for distributing cantaloupe contaminated with listeria bacteria, which was responsible for dozens of deaths nationally.
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Cases against nurses stealing drugs from hospitals for their own use, including the cases against Kristen Parker and Rocky Allen.
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Cases involving the detonation of improvised explosive devices, including cases involving the NAACP office in Colorado Springs, Southwest Plaza Mall and the Colorado Mills shopping mall.
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Cyber-intrusion cases, including a denial of service attack on Larimer County Government as well as the hacking of Photobucket.
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Environmental prosecutions, including the case against executives of Executive Recycling, who illegally shipped hazardous electronic waste to China, while claiming to recycle it.
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Cases against doctors overprescribing opioid drugs, fueling addiction and overdose deaths of their patients.
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Complex financial and economic crime cases, including Ponzi schemes, mortgage fraud and investment fraud, as well as defrauding the IRS, including the Philip Lockmiller case in Grand Junction.
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Illegal distribution of “Spice” and other counterfeit drugs and diet supplements manufactured oversees, in countries including China.
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A broad range of sophisticated investigations and prosecutions of child exploitation cases, including production and/or possession of child pornography.
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Prosecution of assaults and murders committed by inmates at Colorado’s many federal prisons, including the ADMAX facility at Florence, Colorado.
Notable Civil Enforcement Actions
Since 2010, the United States Attorney’s Office in Colorado established itself as one of the premier affirmative civil enforcement offices in the country. Working with the Department of Justice’s Civil Division, and in partnership with other U.S. Attorneys’ Offices, the Colorado U.S. Attorney’s Office investigation, litigated and resolved many civil enforcement matters of national significance, recovering billions of dollars on behalf of the United States and victims of illegal conduct. Some of the more significant civil enforcement victories include the following cases:
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Investigation, negotiation and resolution of claims that the nation’s five largest mortgage servicers engaged in widespread abuses when servicing mortgages, such as by using thousands of “robo-signed” affidavits in foreclosure proceedings, culminating in a 2012 landmark $25 billion agreement;
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Investigation, negotiation and resolution of claims against GlaxoSmithKline that it failed to report safety data and used unlawful practices to promote prescription drugs such as Paxil, Wellbutrin, and Advair, resulting in a $3 billion settlement, the largest health care fraud settlement in U.S. history;
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Investigation, negotiation and resolution of claims against Citibank it engaged in fraud in securitizing and selling thousands of home mortgages leading up to the 2008 global financial crisis, resulting in a $7 billion settlement that included a record-setting $4 billion cash penalty, and relief for consumers valued at $2.5 billion;
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Investigation, negotiation and resolution of claims against , one of the nation’s largest dialysis providers, resulting in a global resolution totaling nearly $400 million to resolve claims that it had provided unlawful kickbacks to doctors;
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Investigation, negotiation and resolution of claims against MetLife ($123 million) and underwrote home mortgages insured by HUD despite knowing that the mortgages failed to meet HUD’s requirements; and
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Investigation, litigation and resolution of claims against Evercare Hospice and Palliative Care to resolve claims that it obtained Medicare reimbursement for hospice care even though it knew the patients were not terminally ill, resulting in settlement of $18 million.
In addition, the United States Attorney’s Office has greatly expanded the effectiveness of its efforts to collect restitution, fines and penalties from criminal defendants and civil violators. In the six years from 2005 to 2010, criminal collections totaled $19,759.148.68. In the six years since, 2011 to 2016 (to date -- partial year), criminal collections have totaled $59,885,634.79, over three times greater. Moreover, the United States Attorney’s Office’s Financial Litigation Unit has successfully pursued several sophisticated enforcement actions that were unprecedented in this office, including a fraudulent conveyance action, writs of execution for personal and real property, and nominee liens. These successes have resulted in the collection of millions of additional dollars for American taxpayers.
National Awards for Work of U.S. Attorney’s Office
As a result of these and other cases, since August 2010, the Department of Justice has awarded members of the U.S. Attorney’s Office for the District of Colorado with an unprecedented number of Department awards, including 11 Attorney General’s Awards (awarded for cases of national significance to the Department and the United States) and 21 Director’s Awards (awarded for cases of national significance among the U.S. Attorneys’ Offices).
Budget and Staffing Challenges Addressed
In managing the U.S. Attorney’s Office, Walsh worked diligently to help weather years of budget restrictions, including budget “sequestration,” and extended multi-year hiring freeze and a government shutdown that in combination left the U.S. Attorney’s Office down nearly 20 percent in staff. In 2014 to 2016, he worked to ensure the office bounced back and successfully returned to full strength.
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Mr. Walsh plans to return to the private practice of law in Denver after he steps down.
First Assistant Bob Troyer will become the Acting U.S. Attorney on Mr. Walsh’s departure.
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Justice Department Settles with Colorado Apartment Complex for Discriminating Against Families with ChildrenRead the Press Release
The Justice Department announced today that the owners and manager of the Westland Apartments, a 28-unit apartment complex in Lakewood, Colorado, have agreed to pay $75,000 to settle a lawsuit alleging discrimination against families with children in violation of the Fair Housing Act. The settlement must still be approved by the U.S. District Court of the District of Colorado.
The department’s lawsuit, which was handled jointly by the department’s Civil Rights Division and the U.S. Attorney’s Office of the District of Colorado, was filed on Nov. 9, 2015. The lawsuit alleges that Roger and Eileen Loecher, the owners of the Westland Apartments, and Miriam Yehudah, the resident property manager, implemented a policy of generally excluding families with children from living in the front building at Westland and generally restricting them to apartments in the rear building.
The lawsuit arose from a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by the Denver Metro Fair Housing Center (DMFHC), a non-profit organization that works to promote equal housing opportunities in the Denver metropolitan area. DMFHC sent testers posing as prospective renters to Westland to determine whether they were engaging in discriminatory practices in violation of the Fair Housing Act. As alleged in the complaint, DMFHC’s testing revealed that Westland’s property manager told prospective renters that families with children were generally placed in apartments in the rear building and did not offer prospective renters with children the opportunity to consider available apartments in the front building. DMFHC also filed a lawsuit against the defendants on Dec. 22, 2015. The cases were consolidated on March 3, 2016.
“Steering families with children to a certain part of an apartment complex limits their housing choices, perpetuates housing segregation and clearly violates federal law,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act to ensure equal access to housing for all families.”
“The U.S. Attorney’s Office is committed to enforcing federal civil rights laws in Colorado,” said U.S. Attorney John F. Walsh of the District of Colorado. “Discrimination against families with children hurts Colorado children and is not only unjustified, it is illegal.”
Under the terms of the proposed settlement, the defendants must pay $25,000 to establish a settlement fund to compensate victims who were harmed by their conduct, $45,000 in monetary damages to DFMHC and $5,000 to the United States as a civil penalty. In addition, the proposed settlement prohibits the defendants from engaging in discrimination against families with children in the future. It also requires that they implement a nondiscrimination policy, establish new nondiscriminatory application and rental procedures, receive training on the Fair Housing Act and conduct monitoring and reporting to the department for three years.
Individuals who believe they may have been discriminated against at Westland because they resided with or intended to reside with children should contact the department toll-free at 1-800-896-7743, mailbox 92, or e-mail [email protected]. Westland is located at 9905 West 21st Avenue in Lakewood.
The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Persons who believe that they have experienced unlawful housing discrimination elsewhere can contact the department at 1-800-896-7743, e-mail [email protected] or contact HUD at 1-800-669-9777.
Loecher Consent Order
Two Metro Denver Residents Sentenced to Prison for Defrauding Department of Education Student Loan ProgramRead the Press Release
DENVER – A Metro Denver couple, Raquel A. Espinoza, age 37, and George F. Durbin, age 55, were both sentenced to federal prison by Senior U.S. District Court Judge Wiley Y. Daniel for their involvement in defrauding the U.S. Department of Education student loan program, the Colorado U.S. Attorney’s Office, the U.S. Department of Education, Office of the Inspector General and the U.S. Postal Inspector in Charge in Denver announced. In addition to the federal prison sentence, both defendants were ordered to pay restitution to the Department of Education, the State of Colorado, and various Denver metro area community colleges. They were remanded into custody at the conclusion of the sentencing hearings.
Espinoza and Durbin both pled guilty to one count of mail fraud and one count of aggravated identity theft. Espinoza was sentenced to serve 54 months in federal prison, followed by 3 years of supervised release. She was also ordered to pay restitution to the U.S. Government totaling $262,853.72. Durbin was sentenced to serve 45 months in federal prison, followed by 3 years of supervised release. He was ordered to pay restitution to the U.S. Government totaling $183,806.45. The two defendants are to pay portions of their restitution jointly and severally.
Both defendants were indicted by a federal grand jury on October 22, 2104. Espinoza pled guilty on December 17, 2015. Durbin pled guilty on December 1, 2015. They were both sentenced on March 10, 2016.
According to the stipulated facts contained in both defendants’ plea agreements, defendants Durbin and Espinoza lived together when they concocted a scheme where they would apply for financial aid and enroll in colleges—with no intent to attend—and pocket the financial aid money. As part of the scheme, they enrolled and applied for money not only in their own names, but also in the names of both witting and unwitting third parties. Defendants Espinoza and Durbin applied for and received financial aid under at least twenty-seven different identities, including their own. All of the identities used were the actual identities of friends, acquaintances, family members, or other known persons. In most cases, Defendant Espinoza would present herself as able to assist others in signing up to attend college. She would obtain identifying information from the potential students and promise to obtain financial aid and college enrollment for the person. In return, she or Durbin asked for a portion of the financial aid funds as a fee. Espinoza frequently told persons without a GED or high school diploma that she could still get them enrolled.
Some of the enrollees were in on the scam—they received their money, minus the fee, but never attended classes. Other applicants, however, including applicants connected to Durbin, never heard back from the defendants and were not privy to the scheme. There were also a few instances where Defendants obtained personal information surreptitiously and enrolled people without any cooperation from the victim.
Defendants would fill out online forms in the names of these people, where they would lie or make up information about the applicant’s income, assets, and diploma/GED status. They would also enroll these people at community colleges in the Denver metro area: Arapahoe Community College, Community College of Aurora, Community College of Denver, Front Range Community College, and Red Rocks Community College. When the person was enrolled and approved for financial aid, the Department of Education would disburse financial aid funds to the college in the student’s name. A small amount of financial aid also sometimes came from the State of Colorado. The college would apply the funds to the outstanding balance on the student’s school account -- which generally constituted tuition and fees for the semester. Then, after attendance was verified, the money would be deposited into an account in the student’s name at Higher One, a company with which the community colleges contracted to help manage the distribution of financial aid funds to students.
Once a Higher One account was created, the defendants would access that account, directing the Higher One debit cards to mailing addresses they controlled. To obscure their activities, the two defendants used a combination of various contact information, including at least five different mailing addresses, eleven different phone numbers, and ten different e-mail addresses. Accessing the Higher One account generally required defendants to confirm their identity, which they were usually able to do using the personally identifiable information they had obtained.
Once the defendants received the debit cards or cashed the checks, they would spend the money for their own personal uses. This included, among other things, significant spending at casinos in Colorado—Defendants’ activities resulted in over $22,000 in financial aid funds being spent on gambling and associated fees.
“The defendants not only victimized government college financial aid programs, but victimized students and others by hijacking their personal information and identities to steal financial aid funds,” said U.S. Attorney John Walsh. “Thanks to a team of investigators, the defendants’ scheme to defraud the government, the State, schools and other victims was uncovered, and now they sit in prison as a consequence to their actions.”
"I'm proud of the work of OIG special agents, our law enforcement partners, and the U.S. Attorneys' Office for shutting down this fraud ring and holding Raquel Espinoza and George Durbin and their coconspirators accountable for their criminal actions," said Natalie Forbort, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Western Regional Office. “OIG is committed to fighting student financial aid fraud, and we will continue to aggressively pursue those who participate in these types of crimes."
“The U.S. Postal Inspection Service will continue to vigorously pursue those who utilize the U.S. Mail to perpetrate fraud schemes.” said Craig Goldberg, Inspector in Charge of the U.S. Postal Inspection Service Denver Division. “We are appreciative of the hard work put into this case and our quality law enforcement relationships with the U.S. Department of Education and the Colorado U.S. Attorney’s Office.”
This case was investigated by the U.S. Department of Education, Office of the Inspector General, the United States Postal Inspection Service and the United States Secret Service.
The defendants were prosecuted by Assistant U.S. Attorney Matthew Kirsch, Chief of the U.S. Attorney’s Office Criminal Division, and Special Assistant U.S. Attorney Daniel Burrows.
Denver Man Sentenced for Failure to Pay Millions in Employment TaxesRead the Press Release
DENVER – Lucilious J. Ward, age 65, of Denver, Colorado, was sentenced to serve 26 months in federal prison, followed by 3 years of supervised release by U.S. District Court Judge Lewis T. Babcock for failure to account for and pay over the employment taxes withheld from his employees’ paychecks and making a false claim against the United States, United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Kevin J. Caramucci announced. Ward, who appeared at the hearing free on bond, was ordered to surrender to a U.S. Bureau of Prisons institution within 15 days of designation. In addition to the prison sentence, the defendant was ordered to pay $5,955,231.28 in restitution to the IRS.
Ward was charged first by indictment on October 2, 2012. He pled guilty before Judge Babcock on January 3, 2014. He was sentenced on March 23, 2016. On September 8, 2011, Special Agents with IRS Criminal Investigation executed a search warrant on Ward’s business, Global Access, LLC, dba, Global Transportation (“Global Access”), located at 5455 East 52nd Avenue, Commerce City, Colorado.
According to the facts contained in the Indictment as well as the stipulated facts contained in the plea agreement, since at least 2004, Ward has owned and operated Global Access. Global Access has provided public and private transportation services including hotel and airport shuttles, para transit services, and charter bus tours. Its largest client has been the Regional Transportation District (“RTD”), which contracted with Global Access to provide a portion of RTD’s Access-a-Ride bus services. RTD has paid Global Access more than $35,000,000 during the period 2003 through 2012, and Global Access incurred substantial costs under the RTD contract. During this time, the Internal Revenue Code required Global Access to withhold its employees' shares of Federal Insurance Contribution Act taxes ("FICA" or social security and Medicare taxes) and income taxes (collectively referred to as "employment taxes") from the salaries or wages of its employees, and to account for and pay over the withheld amounts to the IRS.
From January 2005 through the second quarter in 2011, Ward withheld employment taxes from Global Access’s employees’ paychecks. Ward knowingly and willfully failed to file with the IRS Forms 941 (employment tax forms) as required by law and failed to pay to the IRS the employment taxes that Ward had withheld from their paychecks. With the exception of the first quarter of 2008 which was paid in part and filed automatically by a payroll company Ward hired. Ward also failed to pay the required employer’s matching portion of FICA. Rather than paying the IRS the employment taxes owed by Global Access, Ward kept that money in Global Access’s bank account(s) and spent it on a variety of expenses.
At the end of 2008 Global Access’s office manager recommended to Ward that he elect to have a payroll company take care of paying the employment taxes for Global Access; however, defendant Ward declined. Furthermore, a CPA who performed various accounting functions for Global Access and Ward repeatedly told Ward about Global Access’s growing employment tax liability, he needed to pay these taxes, and about the consequences associated with not paying these taxes.
Additionally, in 2010, Ward filed with the IRS an amended personal tax return (Form 1040X) for the tax year 2007 which falsely claimed that $76,479.44 of federal income tax withholdings had been withheld from his paychecks by Global Access and paid to the IRS. At the time Ward filed this Form 1040X, he knew that he and Global Access had not paid to the IRS the $76,479.44. Ward intentionally filed this false return so that he would be assessed a refund of $76,479 to which he was not legitimately entitled.
“Businesses have a legal responsibility to collect and pay employment taxes,” said U.S. Attorney John Walsh. “In this case, the defendant failed to pay employment taxes, and as a result, he was held accountable not only by being sent to federal prison, but also by having to pay millions of dollars to the IRS, payments that could ultimately follow him for the rest of his life.”
“Business owners have a significant responsibility to collect and turn over all withholding taxes to the IRS as this can have an impact on their employees, who may see future benefits such as Social Security, Medicare or Unemployment Compensation reduced or eliminated because of their employers not complying with the law," said Kevin J. Caramucci Acting Special Agent in Charge, IRS Criminal Investigation, Denver Field Office “As this sentence demonstrates, there are real consequences for committing employment tax fraud.”
This case was investigated by IRS-Criminal Investigation and was prosecuted by Assistant U.S. Attorney Pegeen Rhyne.
Colorado Woman and Man Arrested and Charged with Production and Transportation of Child Pornography Involving an InfantRead the Press Release
DENVER –Brandi Leonard, and Richard Hennis, both of Colorado, were arrested for production of child pornography involving an infant victim, U.S. Attorney John Walsh, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David A. Thompson, and Internet Crimes Against Children (ICAC) Commander for Colorado Lieutenant Christina Sheppard of the Colorado Springs Police Department announced.
According to evidence presented in open court, as well as arguments outlined in a public filing, in the course of online chats that occurred between Leonard and Hennis spanning approximately two months, Leonard told Hennis that she had sexually abused an infant. Hennis encouraged Leonard to sexually abuse the infant again, to take pictures of or video the abuse, and to send them to him. She did. Law enforcement recovered the pictures that Leonard produced of the infant from Hennis’s phone.
Around the same time that Leonard was sexually abusing the infant, she was also corresponding by email with nannies4hire.com and care.com, which are websites that provide services including connecting child-care providers with those who need child care.
Finally, during their chats, the two defendants discuss in graphic detail kidnapping, raping, killing and dismembering a child between the ages of 4 and 8 years. Leonard twice during the chat indicated that she didn’t intend to go through with it, yet she continued to engage in such chats with Hennis.
A U.S. Magistrate Judge held a detention hearing for Leonard on March 17th 2016. Leonard was ordered released on bond conditions that included home incarceration. The government appealed the order. Senior U.S. District Court Judge Lewis T. Babcock issued an emergency stay of the release order, and ultimately U.S. District Court Judge R. Brooke Jackson ordered Leonard detained without bond pending a resolution of her case. A U.S. Magistrate Judge held a detention hearing on March 22, 2016 resulted in Hennis also being ordered held without bond.
Leonard is currently charged with one count of Production of Child Pornography, which carries a penalty of not less than 15 years, and not more than 30 years in federal prison, and up to a $250,000 fine. She also faces one count of Transportation of Child Pornography, which carries a penalty of not less than 5 years, and not more than 20 years in federal prison, and up to a $250,000 fine. Hennis faces one count of Production of Child Pornography, which carries a penalty of not less than 15 years, and not more than 30 years in federal prison, and up to a $250,000 fine. He faces one count of Advertisement of Child Pornography, which carries a penalty of not less than 15 years, and not more than 30 years in federal prison, and up to a $250,000 fine. He also faces one count of Transportation of Child Pornography, which carries a penalty of not less than 5 years, and not more than 20 years in federal prison, and up to a $250,000 fine.
This case was investigated by HSI and the Colorado Springs Police Department’s ICAC Unit.
The defendants are being prosecuted by Assistant U.S. Attorney Alecia Riewerts.
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 federal grand jury. The charges contained in the Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood (PSC), 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, PSC 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 PSC, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
Jefferson County Man Sentenced to Twenty Years in Federal Prison for Production of Child PornographyRead the Press Release
DENVER – Daniel Spear, age 50, of Jefferson County, Colorado, was sentenced by U.S. District Court Judge R. Brooke Jackson to serve 240 months (20 years) in federal prison, followed by a life time of supervised release for the production of child pornography, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Spear, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Spear was first charged by Criminal Complaint on November 5, 2014. He was indicted by a federal grand jury on December 2, 2014. He pled guilty before Judge Jackson on May 13, 2015, and was sentenced on March 17, 2016.
According to court documents, including the stipulated facts contained in the plea agreement, the defendant produced child pornography with a minor under his care and control, from approximately November 2012 through November 2014 in Colorado and Idaho. In addition, defendant Spear engaged in sexually explicit conduct, coercing the minor for the express purpose of producing child pornography. In total there were 3.256 unique photographs of child pornography of said minor on an SD card. Further, there were another 503 images of the same minor on his laptop. The minor first admitted to a school counselor and later an FBI child forensic interviewer that she had been sexually molested for two years by Spear, with the first time occurring when she was in 7th grade.
“Defendant’s systematic sexual abuse of a child in his care earned him every second of his 20 year sentence,” said U.S. Attorney John Walsh. “That he turned this horrific abuse into child pornography further proves the justice of this severe sentence.”
“Those who sexually abuse our children to produce child pornography deserve every single day of their prison sentence," said FBI Special Agent in Charge Thomas Ravenelle. "The FBI will continue to work with federal, state and local authorities to remove predators like Daniel Spear from our community and protect children."
This case was investigated by the Federal Bureau of Investigation (FBI).
Spear was prosecuted by Assistant U.S. Attorneys Colleen Covell and Judy Smith.
This case was brought as part of Project Safe Childhood (PSC), 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, PSC 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 PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
Two Mexican Nationals Sent to Federal Prison for Maintaining Marijuana Grow Site on Routt National ForestRead the Press Release
DENVER – Two Mexican Nationals in the country illegally were sentenced by Chief U.S. District Court Judge Marcia S. Krieger to serve federal prison terms for intentionally manufacturing and possessing with intent to manufacturing 50 or more marijuana plants in the Routt National Forest, the U.S. Attorney, the U.S. Forest Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Routt County Sheriff’s Office announced.
The two defendants, Alfonso Rodriguez-Vazquez and Nestor Fabian Sinaloa-Sinaloa, were first charged by Criminal Complaint on August 8, 2015. They were then indicted by a federal grand jury on September 28, 2015. On November 24, 2015, Rodriguez-Vazquez was charged by Information, and then pled guilty to the manufacture of 50 or more marijuana plants. On November 30, 2015, Sinaloa-Sinaloa was also charged by Information, and then pled guilty to the same crime.
On March 7, 2016, Sinaloa-Sinaloa was sentenced by Chief Judge Krieger to serve 33 months in federal prison, followed by 3 years on supervised release. On March 8, 2016, Rodriguez-Vazquez was sentenced by Chief Judge Krieger to serve 30 months in federal prison, followed by 3 years on supervised release. Both appeared at their court hearings in custody, and were remanded at each hearings’ conclusion.
Both defendants were found maintaining a 3/4-acre illegal grow site located in the Buffalo Pass area, northeast of Steamboat Springs, Colorado. The eradication team seized 926 marijuana plants and removed camping gear from the site. The Forest Service also cleaned-up additional trash and other items. The grow was found after suspicious activity was reported to the U.S. Forest Service by a citizen, leading to the discovery of the grow site by law enforcement.
“Growing marijuana on public lands is not only a violation of the drug laws, it is a devastating form of environmental crime,” said U.S. Attorney John Walsh. “The Forest Service and Routt County Sheriff’s Office, with the support of Homeland Security Investigation deserve particular credit for their aggressive law enforcement work, which ensured that these two individuals were arrested and held criminally accountable.”
“Hopefully this sends a message that the Forest Service remains serious about keeping our national forests safe and free from the environmental damage and impacts resulting from marijuana cultivation which remains illegal on national forest lands in Colorado” said U.S. Forest Service Acting Special Agent in Charge, Kent Delbon. “The success of these investigations could not be achieved without the great working partnerships we have in place with our local and federal partners along with the United States Attorney’s Office.”
“Homeland Security Investigations added our unique customs and immigration law enforcement authorities to investigate this case,” said David A. Thompson, special agent in charge of HSI Denver. “Our partnership with other local, state and federal law enforcement agencies helped ensure that these criminals were fully investigated and presented for prosecution, and that their illegal operations were totally dismantled to make the affected public lands and the surrounding communities safer.”
According to the Forest Service, illegal marijuana cultivation poses a public safety risk and also directly harms the environment. The illegal use of pesticides can cause extensive long-term damage to natural resources. For example, the supply of public drinking water for hundreds of miles may be impacted because of one marijuana growing site. Overall, the negative impact of marijuana sites on natural resources is severe. Human waste, trash and the use of pesticides are widespread, contamination from sites affects fish and wildlife habitats, and soil erosion is common. In addition, water usage is extreme because each marijuana plant is estimated to require a gallon of water per day – water that is critical to native vegetation, wildlife and public drinking water sources.
This matter was investigated by the U.S. Forest Service, Homeland Security Investigations, and the Routt County Sheriff’s Office.
The defendants were prosecuted by Special Assistant U.S. Attorney Wayne Paugh.
Forest visitors are urged to be observant while recreating in secluded areas and to back out and contact the U.S. Forest Service Law Enforcement at (303) 275-5266, or your local law enforcement agency if they come across suspicious activities.
Five Larimer County Residents Sentenced for Role in Synthetic Marijuana Distribution RingRead the Press Release
DENVER – The final defendant of five Larimer County residents has been sentenced for the illegal distribution of synthetic marijuana (Spice), U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David A. Thompson announced. Playing a critical role in the investigation was the Northern Colorado Drug Task Force. The sentencings came after the five defendants had earlier pled guilty to conspiracy to distribute a controlled substance and drug distribution related charges. The controlled substance in this case is commonly known as “Spice” – a synthetic type of marijuana. U.S. District Court Judge William J. Martinez accepted the five plea agreements and pronounced all of the sentences.
All five defendants pleaded guilty to one count of conspiracy to defraud the United States and violate the Controlled Substances Act. Dien Le was sentenced to 28 months in federal prison, to be followed by a term of 2 years supervised release, and fined $2,000.00 on March 9th, 2016. Ponlue Pim was sentenced to 44 months in federal prison, to be followed by a term of 3 years’ supervised release, and fined $5,000.00 on October 28th, 2015. Pirun Pim was sentenced to 40 months in federal prison, to be followed by a term of 3 years’ supervised release, and fined $3,500.00 on October 21st, 2015. Ricky Pim was sentenced to 48 months in federal prison, to be followed by a term of 3 years’ supervised release, and fined $6,000.00 on January 7th, 2016. Kenneth Barnes was sentenced to 18 months in federal prison, to be followed by 2 years’ supervised release, and fined $1,000.00 on February 25th, 2016.
On July 19, 2013, HSI agents and Northern Colorado Task Force officers executed search warrants at seven locations, including residences and businesses in Fort Collins. During the course of executing those warrants, agents and officers seized: money from several bank accounts used by the defendants (amounts to be determined), $26,000 in cash, 75 pounds of Spice and the chemicals and dry products to make Spice, thousands of packaging units of Spice for later sale, and several firearms. Spice, the street name, is a mixture of substances containing detectable amounts of XLR-11 and PB-22, also known as synthetic cannabinoid, a Schedule I controlled substance or considered to be analogues to controlled substances. Analogues are chemicals that are substantially similar to the chemical structure of a controlled substance and have stimulant, depressant, or hallucinogenic effects on the central nervous system. These products posed an imminent hazard to the public since many of these products were mislabeled, marketed, or sold openly as “bath salts,” “plant food,” “glass cleaner,” as in this case “tree mulch,” or legal alternatives to controlled substances that nevertheless caused people to hallucinate, overdose, and be hospitalized.
During the spring of 2013, the defendants engaged in knowingly and intentionally possessing with intent to manufacture and distribute mixtures or substances containing synthetic cannabinoid controlled substance. The investigation revealed that Pim/Le/Barnes Organization would order XLR-11 and PB-22, which is a white powder, from China. The organization would have the powder delivered from China to New York City. From there, the illegal substances were sent from New York to Fort Collins. The organization also had a green leafy type substance sent to Fort Collins from San Antonio, Texas. In Fort Collins, Barnes, Le and the Pims took XLR-11 and PB-22 and manufactured them into spice that can cause death to humans. The defendants in this case took the chemicals and mixed them in a solvent which was eventually sprayed onto a fake plant product. The crude way in which the defendants produced the spice in this case is a danger; if the fake cannabinoid is sprayed unevenly, it can create hot spots where the concentration of the chemical is dangerously high. They would then package the product and either sell it to smoke shops in Colorado or send it other smoke shops throughout the United States. The cost of 1.5 gram packets would be $10, and the cost for 3 gram packets would be $20.
The chemicals used by the defendant are manufactured in China, with no Food and Drug Administration or other type of oversight. It can contain substances that are dangerous to an individuals’ health. Some purchase Spice because they cannot purchase marijuana. Both substances are dangerous to an individual’s health, which is why XLR-11 and PB-22, similar to marijuana are now both listed as Schedule I Controlled Substances, which are banned from use.
As recent law enforcement investigations and media publications have shown, the rise of Spice continues to grow. Drug dealers are changing the chemical makeup of Spice faster to change than the laws are changing. The use of synthetic drugs such as the ones created by the defendants in this case are causing deaths throughout the country, harming individuals on a daily basis, and have a high cost on emergency health and long term care. U.S. emergency rooms saw 11,406 visits involving synthetic cannabinoids in 2010; but this number as large as it is may be limited since hospitals are lacking in their abilities to screen for substances. In 2013, almost 30 percent of 10th graders tried marijuana. The far more dangerous use of synthetic cannabis was second only to marijuana, with 7.4 percent of 10th graders admitting to using it. As shown in this case and by law enforcement trying to prevent further harm from synthetics, the system of declaring a new substance illegal isn’t equipped to handle the synthetics problem, because the possibilities of switching one small atom to create a new substance with the same effects are quick, easy, and literally endless. Another danger is the cost of the synthetic drugs are much lower than marijuana, making it more of a financially feasible product regardless of its deadly nature. An ounce of marijuana sells for $300.00 to $500.00 where a package of spice goes for $5.00 to $20.00.
“The resolution of this case is the end to a national drug organization that was producing and disturbing dangerous spice in Colorado and throughout the United States,” said U.S. Attorney John Walsh. “Colorado has been on the cutting edge of Spice related prosecutions, and thanks to HSI and the Northern Colorado Drug Task Force, five individuals importing and manufacturing this dangerous drug are now in prison as a consequence to their criminal actions.”
"These prison sentences represent the end of a lengthy investigation to dismantle this drug trafficking organization by our HSI Special Agents working together with our fellow law enforcement officers,” said Special Agent in Charge David A. Thompson, HSI Denver. “This law enforcement partnership effectively removed dangerous drugs from our local communities, and the criminals responsible for trafficking them.”
This investigation was conducted by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and the Northern Colorado Drug Task Force. The Northern Colorado Drug Task Force is made up of the Fort Collins Police Department, the Loveland Police Department and Colorado Adult Parole.
The defendants were prosecuted by Assistant U.S. Attorney Jeremy Sibert.
U.S. Attorney, IRS Criminal Investigation, and the Treasury Inspector General for Tax Administration Discuss Fraudulent Scams -- Including Scam IRS Calls Threatening ArrestRead the Press Release
DENVER – U.S. Attorney John Walsh, with IRS Criminal Investigation (IRS CI) Special Agent in Charge Stephen Boyd and Treasury Inspector General for Tax Administration (TIGTA) Preston “Cordale” Lamb, discussed IRS fraud scams, focusing on the fraudulent calls threatening arrest if the call recipient fails to pay.
According to TIGTA, which started tracking the threatening phone scam, or variations of it, in October of 2013, they have nationwide received 1,029,601 calls from people reporting receiving the scam phone call. Of that number, 5,508 were victims, who lost a total of $29,100,604.00
In Colorado, according to TIGTA, the state is ranked 13th in the number of victims. There have been 111 victims who have lost $632,000.00.
There was one example of a fraudulent call, and two TIGTA public service announcements (one in English and one in Spanish) that were mentioned during the event. The links to those examples are below:
Sample call (open source): https://www.youtube.com/watch?v=TjQ7K3FwL44
TIGTA PSA (government source): https://www.youtube.com/channel/UC4dSU0BElmzA_o7atb929AA
If an individual receives a call they believe to be suspicious, the best thing to do is hang up. The individual can also call 1-800-829-1040 to see if the IRS is actually attempting to get in contact with them. If they are fairly certain the call is fake, and they have detailed information about the call, or believe they have been victimized by the scam, they can report the call by either calling TIGTA at 1-800-366-4484 or sending an email to [email protected]
Defendants from Northern Colorado Heroin Network Convicted and Sentenced for Their Roles in Drug Trafficking Which Resulted in DeathRead the Press Release
DENVER – Four defendants who were indicted by a federal grand jury in Denver for their roles in the distribution of heroin which resulted in a fatal overdose have all be convicted and sentenced, U.S. Attorney John Walsh, FBI Denver Division Special Agent in Charge Thomas Ravenelle and Longmont Public Safety Chief Mike Butler announced. The four defendants were charged following the March 4, 2013 fatal overdose of an individual in Longmont, Colorado. In their respective plea agreements, all four admitted their roles in the distribution of the heroin which resulted in that fatality. The January 23, 2015 arrests of the four federal defendants were conducted simultaneously with those of 10 other persons who were named in state charges for possession and/or distribution of a schedule I controlled substance.
Brice Alday and his three co-defendants have all pled guilty and were sentenced by U.S. District Court Judge Christine M. Arguello. Lead defendant Brice Alday was sentenced to serve 120 months (10 years) in federal prison for Conspiracy to Distribute Heroin. Danielle Sciortino was sentenced to serve 60 months (5 years) in federal prison for conspiracy to distribute heroin, the use of which resulted in death. Jesse Hervey was sentenced to serve 36 months (3 years) in federal prison for that same charge. Finally, Jacquelynn Bradley was sentenced to serve 5 years’ probation, with the first 8 months in home detention for her role in the conspiracy to distribute heroin.
“Heroin is a deadly drug that is killing young people across all segments of our society,” said U.S. Attorney John Walsh. “This heroin trafficking network sold a dangerous drug that resulted in the death of an individual. Because of their conduct, they will be held criminally accountable. And a word to other heroin dealers – you’re next.”
"The distribution of heroin is a serious matter because in addition to the victim in this case, the drug is killing thousands of people across the country. In fact, heroin abuse is now a full-fledged epidemic in the United States. That's why we will continue to work closely with the United States Attorney's Office to investigate and prosecute heroin traffickers like the defendants in this case," said Denver FBI Special Agent in Charge Thomas Ravenelle.
“This was a great partnership between the FBI, Longmont Police Department, and the U.S. Attorney’s Office, and we could not have pulled off this major investigation without the support and teamwork between these three agencies,” said Longmont Public Safety Chief Mike Butler. “It had a positive impact in our community and sent a strong message that we are taking narcotics investigations seriously.”
This case was investigated by the Federal Bureau of Investigation, Fort Collins Resident Agency and the Longmont Police Department. In addition, the Boulder District Attorney’s Office and the Boulder County Coroner’s Office worked closely with law enforcement in the investigation and prosecution of these defendants.
The federal defendants were prosecuted by Assistant U.S. Attorney Bradley Giles.
Red Feather Lakes Resident Indicted and Ordered Held Without Bond for Distribution and Possession of Child PornographyRead the Press Release
DENVER – Eli Traufield, age 42, of Red Feather Lakes, Colorado, was ordered held without bond by U.S. Magistrate Judge Nina Y. Wang earlier this week after being arrested based on an indictment alleging the distribution and possession of child pornography, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Traufield was indicted on February 23, 2016. He soon thereafter appeared in court, where he was advised of his rights and the charges pending against him. He was then arraigned, and at the detention hearing Magistrate Judge Wang ordered the defendant held without bond because she believed he was a flight risk. Traufield had multiple misdemeanor offenses for which he failed to appear in court.
According to court documents, as well as a proffer before the court, an FBI agent, working in an undercover capacity out of the Minneapolis Field Office, began electronic communications with a Colorado resident who had child pornography to trade. The agent, posing as someone with similar interests, was able to download multiple videos and photos of child pornography images, all provided by the target turned defendant, Eli Traufield. Following additional investigation, Denver FBI agents, after obtaining a search warrant, searched Traufield’s cell phone and found that Traufield had emailed himself child pornography so that he could later download it to a file sharing network so he could share it with others. He also had emailed other people looking for specific child pornography. There were also multiple chats regarding the defendant’s sexual interest in young girls.
The defendant faces two counts of distribution of child pornography. If convicted, Traufield faces not less than 5 years, and not more than 20 years in federal prison, as well as up to a $250,000 fine, per count. He also faces one count of possession of child pornography, which carries a penalty of not more than 10 years in federal prison, and up to a $250,000 fine.
This case was investigated by the Federal Bureau of Investigation (FBI).
The defendant is being prosecuted by Assistant U.S. Attorney Valeria Spencer.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Pueblo Woman Convicted of Conspiracy, Drug Trafficking and Firearm ChargesRead the Press Release
DENVER – A jury in U.S. District Court in Denver late yesterday found Leilani Marie Ontiveras-Martinez, age 34, of Pueblo, guilty of conspiracy, drug trafficking and firearm charges, U.S. Attorney John Walsh, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Ken Croke and Pueblo Police Chief Luis Velez announced. The jury trial was before U.S. District Court Judge William J. Martinez, lasted four days, with the jury deliberating approximately 2 hours before reaching their verdict on the first of two phases. They deliberated a short while longer before returning a guilty verdict on the second of the two phases. Ontiveras-Martinez, who appeared at the trial in custody, is scheduled to be sentenced by Judge Martinez on July 6, 2016.
Ontiveras-Martinez was indicted by a federal grand jury in Denver on October 6, 2014 on charges of conspiracy to distribute a controlled substance, three counts of distribution of a controlled substance, possession of a firearm during a drug trafficking crime, being a felon in possession of a firearm, and being a felon in possession of ammunition.
The defendant is a Pueblo gang member and drug dealer. According to court testimony, she conspired with another person to distribute heroin, and she possessed and distributed heroin, methamphetamine and crack cocaine. The Pueblo Police Department investigated the defendant, and was able to develop enough information to obtain state search warrants for her car, home and person.
After Ontiveras-Martinez went through the drive thru of a fast food restaurant on June 18, 2014, the Pueblo Police Department initiated a traffic stop. Inside her purse law enforcement found 50 grams of heroin, which is worth about $5,000 on the street. In her house officers found in her dresser drawer multiple baggies containing about 150 grams of heroin, which is worth about $15,000 on the street. Also in her dresser drawer, she had baggies containing 113 grams of methamphetamine, worth about $13,000 on the street. In a small safe under Ontiveras-Martinez’s bed authorities found a bundle of cash, as well as another 4.5 grams of heroin, 20 grams of methamphetamine, and 7 grams of crack cocaine. Also within arms’ reach of the drugs in her bedroom, hidden in between the mattress and boxsprings of her bed was a 12 gauge shotgun loaded with three rounds, as well as a plastic baggie with ammunition. In total, Ontiveras-Martinez had well over $30,000 worth of drugs in her purse and in her house.
“This case demonstrates the shared commitment of the U.S. Attorney’s Office and the ATF, working closely with the Pueblo Police Department and other southern Colorado law enforcement agencies to protect the people of the greater Pueblo area,” said U.S. Attorney John Walsh. “This defendant, a gang member and drug dealer in Pueblo, was rightly convicted of drug trafficking and firearm violations following a jury trial, and faces substantial federal criminal prison time.”
“Ontiveras-Martinez committed herself to a life of violent crime a long time ago. She repeatedly promoted drug use and violence in our community and preyed on troubled individuals,” said SAC Ken Croke. “Thanks to the collaborative effort between Pueblo PD, the U.S. Attorney’s Office and ATF, she will be unable to add to her criminal record or continue to negatively impact the citizens of Pueblo.”
“Ms. Ontiveras-Martinez is a career criminal and gang member in the City of Pueblo. She was a high level drug trafficker, dealing in Methamphetamines, Heroin, and Cocaine,” said Pueblo Police Chief Dr. Luis Velez. “Her conviction in Federal Court may be a precursor to similar collaborations in the future between municipal agencies and Federal agencies. I want to thank our Narcotics Officers, our Task Force Officers, and all of the Federal Agents and Prosecutors that took part in this investigation.”
Co-defendant Colter Grant Martinez, age 35, of Pueblo, was sentenced by Judge Martinez to serve 120 months (10 years) in federal prison for firearm and drug offenses. His federal prison sentence was also ordered to be served concurrently with any state imprisonment.
The defendant faces not more than 20 years in federal prison, and up to a $1,000,000 fine for conspiracy to distribute heroin. She faces not more than 20 years in federal prison, and up to a $1,000,000 fine for distribution of crack cocaine. Further, she faces not less than 10 years, and up to life in federal prison, as well as a $10,000,000 fine for distribution of methamphetamine. Ontiveras-Martinez faces not less than 5 years, and up to life in federal prison, as well as a $5,000,000 fine, for distribution of heroin. She faces not less than 5 years, to be served consecutively to any other prison sentence, for possession of a firearm during a drug trafficking offense. Finally, she faces not more than 10 years in federal prison, and up to a $250,000 fine for the one count of being a felon in possession of a firearm and one count of being a felon in possession of ammunition.
This case was investigated by the Pueblo Police Department’s Narcotics Unit and the ATF Gun Task Force.
The defendants were prosecuted by Assistant U.S. Attorneys Kurt Bohn and Jamie Mendelson.
Denver Man Found Guilty Following Jury Trial of Interference with a Flight CrewRead the Press Release
DENVER – U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced that Joseph Wayne Lynch, II was found guilty this week following a three-day jury trial before U.S. District Court Judge Raymond P. Moore of interference with flight crew members and attendants. The jury deliberated for approximately 3 hours before reaching their guilty verdict. Lynch, who is free on bond, is scheduled to appear next for sentencing, which is scheduled for May 16, 2016.
According to evidence submitted during trial, as well as court documents, on August 4th, 2015, Joseph Wayne Lynch boarded U.S. Airways Flight 580 from Philadelphia to Denver. Having missed his previous connection, the airline upgraded Lynch to first class to accommodate the inconvenience. Because of his loud and odd behavior upon boarding, the lead flight attendant limited his alcohol intake. After the flight took off, he swapped seats to sit next to a young lady with whom he wanted to strike up a conversation. He became increasingly upset when the flight attendant denied him further alcoholic beverages, which made him disruptive and threatening. At numerous times during the flight the defendant also had inappropriate physical contact with the flight attendant, including placing his hand on the small of her back repeatedly, and finally grabbing her and kissing her neck. When instructed that his conduct was inappropriate, he then began a slew of profanities directed at flight attendants and passengers. Mr. Lynch was so loud that the plane’s captain heard his rants in the cockpit – over radio traffic and despite noise cancelling headphones. The flight attendants got an ice hammer, a pot of hot coffee, plastic handcuffs and alerted two able-bodied passengers to assist in the event that Mr. Lynch got even further out of hand. When confronted, Lynch responded by repeatedly stating, “Let’s go!” He then promised to bring the airline down. He also (falsely) claimed to be a former Green Beret / Special Forces, and he showed off his purported bullet wounds, along with a photo of his pot farm.
Normally the first class section requires only one flight attendant. Because of the defendant’s misconduct, a second flight attendant was in the first class section for half the flight for safety reasons. Lynch’s continued escalation of threats and inappropriate behavior eventually led to the Captain temporarily turning over flying duties of the aircraft to the first officer, lock-down the cockpit, and notify the airline of the situation and request law enforcement be present at the gate upon arrival. When Denver Police officers arrived, and later an FBI Special Agent, Lynch redirected his threats and anger towards them.
“As everyone who flies on airliners knows, a drunk, abusive passenger acting out against other passengers and the flight crew is not merely an inconvenience, but a serious threat to the safety of everyone on the flight,” said U.S. Attorney John Walsh. “This sort of boorish, abusive and threatening behavior will not be tolerated by the flight crew (and fellow passengers) and constitutes a federal crime that we will prosecute forcefully to protect the flying public. May this case serve as a warning to others.”
The defendant faces not more than 20 years in federal prison, and up to a $250,000 fine.
This case was investigated by the FBI with assistance from the Denver Police Department.
Lynch was prosecuted by Assistant U.S. Attorneys Jason St. Julien and Mark Pestal.
Prosecution of Tax Cases Continues as Filing Season is UnderwayRead the Press Release
DENVER – U.S. Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announce the prosecution of several recent criminal tax offenders in the District of Colorado. With tax filing season in full swing, federal officials remind citizens that it is important to file complete and accurate tax returns and choose wisely when selecting a return preparer. Those who commit tax fraud and related crimes can and will be criminally prosecuted. Recent tax cases prosecuted in the District of Colorado include the following:
Erica Godoy, age 39, of Tucson, AZ pled guilty on February 18, 2016 before U.S. District Court Judge Christine M. Arguello to conspiracy to defraud the IRS. In the State of Colorado and elsewhere in January of 2010 through April of 2014, Erica Godoy and her husband conspired to defraud the IRS in the assessment and collection of personal income taxes for calendar years 2010 through 2013. During this time period, her husband owned and operated a semi-truck which he used to transport illicit loads of narcotics from the Tucson area to the Philadelphia area. Several months into their marital relationship, Godoy learned he was making income from such activity. They conspired together to ensure that the IRS was not aware of the income being generated from the illicit activity. Specifically, Godoy, failed to file any personal income tax returns for calendar years, 2010 through 2013 while her husband filed false income tax returns as "married filing jointly", listing a former ex-wife. Those joint returns, failed include any of the substantial income that he was generating from his illicit drug distribution. Godoy’s failure to file income returns and pay income taxes over the four years resulted in a tax loss to the IRS of $244,674. This case is being prosecuted by Assistant United States Attorney Tim Neff.
Hieu Mattison, age 52, of Lakewood, CO, had his initial appearance on February 18, 2016 before U.S. Magistrate Judge Kristen L. Mix. Mattison was indicted by a Federal Grand Jury in Denver on January 28, 2016 for preparing and filing false income tax returns. From February 2010 through May 2012, Hieu Mattison, falsely prepared and filed with the IRS twenty-four U.S. Individual Form 1040 Income Tax Returns for various taxpayers in calendar years 2009, 2010 and 2011. The returns were materially false and fraudulent. Specifically, the returns included false income and tax credits in an effort to created inflated fraudulent refunds. This case is being prosecuted by Assistant United States Attorney Martha A. Paluch.
Robert and Lorrie Marie Gomez, age 60 and 57, of Henderson, Colorado, pled guilty on February 20, 2016 before U.S. Magistrate Judge Kristen L. Mix to two counts of failing to file tax returns. Robert and Lorrie are husband and wife and have co-owned and operated Gomez Burritos since 2004. Gomez Burritos is a Mexican food restaurant that serves breakfast and lunch six days a week with four storefront locations in the Denver, Colorado metro area since 2004. Between April 2008 and January 2014, Robert and Lorrie failed to pay the IRS Gomez Burritos' payroll taxes, which totaled $484,396. This amount includes both the employees' share that was withheld by Gomez Burritos from its employees' paychecks and the employer's share of payroll taxes. This case is being prosecuted by Assistant United States Attorney Pegeen D. Rhyne.
Kathy Jo Eads, age 58, of Aurora, Colorado, pled guilty on February 24, 2016 to preparing and filing a false income tax return. Beginning in January 2010 and continuing through April 2013, conducting business as Money Matters Financial Services, Eads prepared 33 false federal income tax returns for 15 clients which included either a false Schedule C or a false Schedule C-EZ. All 33 false returns requested refunds, and the IRS paid 28 of them in full and the other five refunds were applied against previous taxes that the taxpayers owed. The 33 false returns resulted in a tax loss of $96,376. Eads charged her clients a return-preparation fee which varied. On one occasion a client went to Eads’ office to get her 2010 refund, and Eads suggested that the client cash the check at a nearby check-cashing business, but the client declined, Eads asked, "Where's my tip?" The client thought the question was a joke and walked out of the office, but Eads became upset and followed her into a parking lot, where she told her, "The only reason I put the business on your tax return was because I wanted a thousand dollars out of it." This case is being prosecuted by an Assistant United States Attorney in the Economic Crimes Section.
“Individuals who commit tax fraud are not only defrauding the government, but they are also stealing from their friends, family and neighbors. We owe it to every American taxpayer to identify and prosecute those who evade their taxes and defraud the IRS,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
For tips on choosing a Tax Professional and filing your return go to www.irs.gov.
The charges contained in the Indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Swedish Medical Center Surgical Tech/Technologist Indicted by Federal Grand Jury in Denver on Charges of Tampering with a Consumer Product and Obtaining a Controlled Substance by DeceitRead the Press Release
DENVER – Rocky Allen, age 28, of Denver, a now former surgical tech/technologist at Swedish Medical Center, has been indicted by a federal grand jury in Denver on charges of tampering with a consumer product and obtaining a controlled substance by deceit, U.S. Attorney John Walsh, Food and Drug Administration’s Office of Criminal Investigations’ Kansas City Field Office Special Agent in Charge Catherine Hermsen, and Drug Enforcement Administration (DEA) Special Agent in Charge Barbra Roach announced. Allen is in custody, and will appear at 2:00 p.m. this afternoon for an initial appearance before U.S. Magistrate Judge Kristen L. Mix in Denver where he will be advised of his rights and the charges pending against him.
According to the indictment, on January 22, 2016, Allen, with reckless disregard for the risk that another person will be placed in danger of bodily injury, and under circumstances manifesting extreme indifference to such risk, tampered and attempted to tamper with a consumer product, namely a syringe containing Fentanyl Citrate, by removing the syringe containing Fentanyl Citrate and replacing it with a similar syringe containing other substance. Further, Allen did knowingly and intentionally acquire and obtain a Fentanyl Citrate, a controlled substance, by deception and subterfuge.
As a result of Allen's action, Swedish Medical Center has asked approximately 3,000 patients who had surgery between August 17, 2015 and January 22, 2016 in the main operating rooms and in the orthopedic operating room on October 28, 2015 to be tested for HIV, Hepatitis B and Hepatitis C free of charge. Swedish Medical Center is following the recommendations for testing from the Health Department and the CDC based on the investigations' focus on an injectable medication.
Allen faces one count of tampering with a consumer product. If convicted on that count, he faces not more than 10 years in federal prison, and up to a $250,000 fine. He also faces one count of obtaining a controlled substance by deceit and subterfuge. If convicted on that count, he faces not more than 4 years in federal prison, and up to a $250,000 fine.
The criminal investigation into Allen’s conduct while working at Swedish Medical Center is ongoing. No additional information about the investigation or this case is available at this time.
This case was investigated by the FDA OCI and the DEA with substantial critical assistance from the Englewood Police Department. The defendant is being prosecuted by Assistant U.S. Attorneys Jaime Pena and Anna Edgar.
The charges contained in this indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Gunsmoke Gun Shop Owner and Former Discovery Channel Star Indicted and Arrested for Conspiracy, Dealing in Firearms without a License and Tax Related ChargesRead the Press Release
Richard Wyatt, 52, of Evergreen, Colorado, surrendered to authorities today on charges of conspiracy, dealing in firearms without a license and tax related charges, U.S. Attorney John Walsh for the District of Colorado, Special Agent in Charge Stephen Boyd for the Internal Revenue Service (IRS) – Criminal Investigations (CI) Denver Division and Special Agent in Charge Ken Croke for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Field Division announced. Wyatt will make his initial appearance before U.S. Magistrate Judge Kristen L. Mix today, where he will be advised of his rights and the charges pending against him. Wyatt was the subject of a 13-count federal grand jury indictment in Denver, Colorado, returned on Feb. 9, 2016.
According to the indictment, Wyatt allegedly illegally sold firearms and he also failed to report over $1.1 million in income. Wyatt operated Gunsmoke, a store in Wheat Ridge, Colorado, that displayed firearm and firearm accessories for sale. Wyatt was the principal decision maker for the store and controlled the store’s bank account. In addition to holding itself out as a business that bought and sold firearms, Gunsmoke provided gunsmithing services. Wyatt aggressively publicized his business by posting videos on YouTube and by appearing in a reality television series that appeared on the Discovery Channel. The reality TV show aired from 2011 through 2012, showing a total of 26 episodes.
On Feb. 17, 2012, Wyatt conspired with others known to the grand jury but not named, to deal in firearms without a license. In April 2012, the defendant surrendered his Federal Firearms License (FFL) due to his violations of federal laws and regulations. After Gunsmoke surrendered its FFL, Gunsmoke changed the address of a store known as Triggers Firearms LLC (Triggers), a federal firearms license, to the Gunsmoke address, although they did not play any role in managing the store or receive any profits. Thereafter, Wyatt continued to operate Gunsmoke as a retail firearms store that also offered gunsmithing services, but never held an ownership interest in Triggers or assumed management of Triggers. Wyatt and other conspirators submitted false paperwork to the ATF to hide that Triggers was acting as a straw licensee for Gunsmoke.
After losing his FFL, the defendant did not apply for or obtain a license to sell firearms from the Gunsmoke premises. Wyatt held a meeting the day before losing his license with his employees to describe how he wanted the business to continue to run. During April 1, 2013 to March 31, 2015, no other person was licensed to engage in the business of dealing in firearms at Gunsmoke, Wyatt directed Gunsmoke employees to enter firearm sales in Gunsmoke’s computer point of sales software system as “miscellaneous” sales rather than firearm sales. Customers who shopped at Gunsmoke were able to look at numerous firearms that were displayed throughout the store. Customers were able to speak with Gunsmoke employees, including Wyatt, about the features of particular firearms. Finally, customers selected and purchased firearms from Gunsmoke and were able to have gunsmithing services performed on firearms at the Gunsmoke premises. After receiving payment for any firearms, Gunsmoke employees directed the customers to another firearm store which had a valid federal firearms license, where the customer filled out the background check paperwork and the customers took possession of the firearm(s) they had purchased at Gunsmoke. Customers who wanted gunsmithing services left their firearms with Gunsmoke. After the gunsmiths at Gunsmoke completed their work, they returned the firearms to the customers. The customers paid Gunsmoke directly for this service. Wyatt, without the FFL license, continued to order new guns for sale to keep the business going.
In addition to the alleged firearms violations, Wyatt failed to pay personal income tax in years 2009, when he made approximately $290,000, in 2010, when he made approximately $123,000, and in 2012, when he made approximately $689,000. Further, in 2010, 2011 and 2012, Wyatt failed to pay corporate taxes. In 2012, Wyatt willfully filed a tax return he knew to be false, stating that he lost money, when in fact he made at least $184,000 that he failed to disclose. The defendant also faces an asset forfeiture count, including but not limited to the forfeiture of firearms and ammunition involved in the commission of the alleged crimes.
Wyatt faces two counts of conspiracy, with each count carrying a penalty of not more than five years in federal prison and up to a $250,000 fine. He faces three counts of dealing in firearms without a license, with each count carrying a penalty of not more than five years in federal prison and up to a $250,000 fine. The defendant faces one count of filing a false tax return, which carries a penalty of not more than three years in federal prison and up to a $100,000 fine. Lastly, Wyatt faces seven counts of failure to file a tax return, each count of which carries a penalty of not more than one year in federal prison and up to a $25,000 fine.
This case was investigated by the IRS-CI and the ATF. The defendant is being prosecuted by Assistant U.S. Attorneys Suneeta Hazra and Anna Edgar, with Assistant U.S. Attorney Tonya Andrews assisting on the asset forfeiture.
The charges contained in this indictment are allegations and the defendant is presumed innocent unless and until proven guilty.
Gunsmoke Gun Shop Owner Richard Wyatt Indicted and Arrested for Conspiracy, Dealing in Firearms Without a License, and Tax Related ChargesRead the Press Release
DENVER – Richard Wyatt, age 52, of Evergreen, Colorado, surrendered to authorities this morning on charges of conspiracy, dealing in firearms without a license, and tax related charges, U.S. Attorney John Walsh, Internal Revenue Service (IRS) – Criminal Investigations (CI) Denver Division Special Agent in Charge Stephen Boyd and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Field Division Special Agent in Charge Ken Croke announced. Wyatt will make his initial appearance before U.S. Magistrate Judge Kristen L. Mix at 2:00 p.m. today, where he will be advised of his rights and the charges pending against him. Wyatt was the subject of a 13-count federal grand jury indictment in Denver, returned on February 9, 2016.
According to the indictment, Wyatt allegedly illegally sold firearms, and he also failed to report over $1.1 million in income to the IRS. Wyatt operated Gunsmoke, a store in Wheat Ridge, Colorado that displayed firearm and firearm accessories for sale. Wyatt was the principal decision maker for the store and controlled the store’s bank account. In addition to holding itself out as a business that bought and sold firearms, Gunsmoke provided gunsmithing services. Wyatt aggressively publicized his business by posting videos on YouTube and by appearing in a reality television series that appeared on the Discovery Channel. The reality TV show aired from 2011 through 2012, showing a total of 26 episodes.
On February 17, 2012, Wyatt conspired with others known to the grand jury but not named, to deal in firearms without a license. In April 2012, the defendant surrendered his Federal Firearms License (FFL) due to his violations of federal laws and regulations. After Gunsmoke surrendered its FFL, Gunsmoke changed the address of a store known as Triggers Firearms, LLC (“Triggers”), a federal firearms license, to the Gunsmoke address, although they did not play any role in managing the store or receive any profits. Thereafter, Wyatt continued to operate Gunsmoke as a retail firearms store that also offered gunsmithing services, but never held an ownership interest in Triggers or assumed management of Triggers. Wyatt and other conspirators submitted false paperwork to the ATF to hide that Triggers was acting as a straw licensee for Gunsmoke.
After losing his FFL, the defendant did not apply for or obtain a license to sell firearms from the Gunsmoke premises. Wyatt held a meeting the day before losing his license with his employees to describe how he wanted the business to continue to run. During April 1, 2013 to March 31, 2015, no other person was licensed to engage in the business of dealing in firearms at Gunsmoke, Wyatt directed Gunsmoke employees to enter firearm sales in Gunsmoke’s computer point of sales software system as “miscellaneous” sales rather than firearm sales. Customers who shopped at Gunsmoke were able to look at numerous firearms that were displayed throughout the store. Customers were able to speak with Gunsmoke employees, including Wyatt, about the features of particular firearms. Finally, customers selected and purchased firearms from Gunsmoke, and were able to have gunsmithing services performed on firearms at the Gunsmoke premises. After receiving payment for any firearms, Gunsmoke employees directed the customers to another firearm store which had a valid federal firearms license, where the customer filled out the background check paperwork and the customers took possession of the firearm(s) they had purchased at Gunsmoke. Customers who wanted gunsmithing services left their firearms with Gunsmoke. After the gunsmiths at Gunsmoke completed their work, they returned the firearms to the customers. The customers paid Gunsmoke directly for this service. Wyatt, without the FFL license, continued to order new guns for sale to keep the business going.
In addition to the alleged firearms violations, Wyatt failed to pay personal income tax in years 2009, when he made approximately $290,000, in 2010 when he made approximately $123,000, and in 2012, when he made approximately $689,000. Further, in 2010, 2011, and 2012, Wyatt failed to pay corporate taxes. In 2012, Wyatt willfully filed a tax return he knew to be false, stating that he lost money, when in fact he made at least $184,000 that he failed to disclose. The defendant also faces an asset forfeiture count, including but not limited to the forfeiture of firearms and ammunition involved in the commission of the alleged crimes.
Wyatt faces two counts of conspiracy, with each count carrying a penalty of not more than 5 years in federal prison, and up to a $250,000 fine. He faces three counts of dealing in firearms without a license, with each count carrying a penalty of not more than 5 years in federal prison, and up to a $250,000 fine. The defendant faces one count of filing a false tax return, which carries a penalty of not more than 3 years in federal prison, and up to a $100,000 fine. Lastly, Wyatt faces seven counts of failure to file a tax return, each count of which carries a penalty of not more than 1 year in federal prison, and up to a $25,000 fine.
This case was investigated by the IRS-CI and the ATF. The defendant is being prosecuted by Assistant U.S. Attorneys Suneeta Hazra and Anna Edgar, with Assistant U.S. Attorney Tonya Andrews assisting on the asset forfeiture.
The charges contained in this indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.