District of Colorado
Press releases recorded for this federal judicial district.
Former Woodland Park Residents Found Liable for $884,666.09 in Unpaid U.S. Small Business Administration Loan GuaranteesRead the Press Release
DENVER – U.S. Magistrate Judge Craig Shaffer recently ruled that Robert and Marcia Konczak are liable to the United States in the sum of $884,666.09 arising from SBA loan guarantees that they failed to pay and fees associated with collection efforts, U.S. Attorney John Walsh announced. The Konczaks were sued in March 2014 by the U.S. Attorney’s Office on behalf of SBA for their outstanding debt, after the SBA and the Department of Treasury did not succeed in their attempts to collect the debt.
According to court documents, in 2003, “Konczak’s Koncepts,” a Woodland Park restaurant company run by the Konczaks, obtained a $684,000 loan from the SBA under its “504 loan program.” Under that program, the United States, acting through the SBA, guaranteed 100 percent of the Konczaks’ debt through a debenture. As part of the loan terms, the Konczaks also guaranteed the loan, making them personally liable for the debt. When Konczak’s Koncepts failed in 2007, it also defaulted on its obligation to repay the loan. The SBA then honored its debenture and paid the loan off, assumed the debt, and attempted to recover on the Konczaks’ guarantees.
But the Konczaks refused to pay. After several years of unsuccessful collection efforts, the SBA referred the matter to the U.S. Attorney’s Office for enforcement. After a trial, U.S. Magistrate Judge Shaffer ruled that the Konczaks are liable for the full amount of the loan guarantees, plus other mandatory statutory fees resulting from the SBA and Department of the Treasury’s collection efforts.
This case was handled by Assistant U.S. Attorneys Juan G. Villaseñor and Elizabeth M. Froehlke of the office’s Civil Division.
Man Who Placed Improvised Explosive Device at Colorado Springs Building Pleads GuiltyRead the Press Release
DENVER – Thaddeus Cheyenne Murphy, age 44, of Colorado Springs, Colorado, pled guilty this morning before U.S. District Court Judge William J. Martinez to damage to a building by means of fire and explosion and felon in possession of a firearm, U.S. Attorney John Walsh, FBI Denver Division Special Agent in Charge Thomas Ravenelle and ATF Denver Division Acting Special Agent in Charge David Booth announced, in conjunction with the Colorado Springs Police Department. Judge Martinez is scheduled to sentence Murphy on November 3, 2015 at 2:00 p.m. Murphy, who appeared at the hearing in custody, was remanded at its conclusion.
Murphy was first charged by Criminal Complaint on February 20, 2015. He was indicted by a federal grand jury in Denver on February 23, 2015. He pled guilty today, August 3, 2015. According to the stipulated facts contained in the plea agreement, on January 6, 2015 at 10:48 a.m., the Colorado Springs Police Department (“CSPD”) received a 911 call about an explosion that occurred at 603 S. El Paso Street in Colorado Springs, Colorado. The caller said someone tried to blow up the building by putting stick of dynamite next to a container of gasoline and lighting it. He, along with others, reportedly heard a huge explosion inside the building. When one of the building’s occupants went outside, he saw a gas can sitting next to the building where the explosion happened.
The explosion occurred at the northeast (back) corner of the building. The building houses two businesses, including Mr. G’s Hair Design Studios and the Colorado Springs Chapter of the National Association for the Advancement of Colored People (“NAACP”). The business closest to the explosion was Mr. G’s Hair Design Studios. The NAACP was on the south side of the building opposite the blast site. Also on the building was a sign that read “Income Tax”, but that business had not been active for some time.
Investigators arrived and examined the scene of the blast. The building had charring on its side and a concrete wall about six feet away had also been damaged. The resultant damage was minimal. At the blast site itself, investigators found a piece of metal pipe as well as a piece of a road flare and the gas can. The gas can, which was about ¾ full, failed to ignite. Analysis of the material recovered from the scene showed that the device used to cause the explosion and fire at the building was an improvised explosive device (“IED”) commonly known as a pipe bomb.
Witnesses told investigators that the person who placed the bomb was a white male, in his 30s or 40s, either bald or close shaved hair with a medium to heavy build. Witnesses also described the suspect vehicle as a white truck with a black or dark colored hood. They said the tailgate of the truck was up before the blast, but was left down after the blast driving away from the scene. Through investigation, agents found surveillance video from a residence in a neighborhood near. The video showed a distinctive white Ford truck with a black hood driving toward the location with its tailgate up shortly before the blast; and, the same distinctive truck driving away from the location with its tailgate down right after the blast.
A Colorado Springs Police Department detective familiar with the investigation found a truck matching the description, and investigators found that it matched the truck from the surveillance video. Investigators observed the truck parked at the defendant’s residence, and found that the truck was registered to the defendant. In reviewing the defendant’s driver’s license photo, investigators also found the defendant matched the description of the suspect given by the witnesses. A records check of the defendant’s criminal history showed that he had previously been convicted of two felony thefts, crimes punishable by a term exceeding one year.
Agents from the FBI-JTTF obtained a search warrant for the defendant’s truck and residence. When they executed the warrant, agents found seven (7) firearms inside the residence, including two assault rifles, a handgun, two shotguns, and a WWII era Russian made battle rifle. A homemade silencer was found with the firearms as well. Investigators also found components left over from the defendant’s IED, including the remaining road flares, galvanize pipe, “Dragon’s Breath” shotgun shells, and duct tape.
Agents determined that the defendant made the pipe bomb in his garage out of galvanized pipe and a “Dragon’s Breath” shotgun shell. He placed the pipe bomb, along with a gas can, on the back side of the building and lit the bomb fuse with a road flare. The defendant told investigators that he placed the bomb in an effort to get back at his former accountant who had failed to return the defendant’s calls. The defendant admitted that he knew he was not allowed to possess firearms because he was a convicted felon.
Murphy faces not less than 5 years, and up to 20 years in federal prison for arson of a building, and not more than 10 years in federal prison for being a felon in possession of a firearm. There is also a fine of not more than $250,000 for each of the two counts.
This case was investigated by the FBI’s Colorado Springs Joint Terrorism Task Force, the ATF, and the Colorado Springs Police Department with support from the El Paso County Sheriff.
The defendant is being prosecuted by Assistant U.S. Attorney Gregory Holloway.
Grand Junction business owner pleads guilty to income tax evasionRead the Press Release
DENVER – Michael E. Ho, age 69, of Grand Junction, Colorado, pled guilty today before U.S. District Court Judge Christine M. Arguello to income tax evasion, United States Attorney John Walsh, IRS Criminal Investigation Special Agent in Charge Steven Osborne announced. Judge Arguello is scheduled to sentence Ho on October 28, 2015 at 3:00 p.m. Ho was indicted by a federal grand jury in Denver on October 28, 2014, and was arrested on November 13, 2014.
According to the indictment and plea agreement, Ho owned and managed a dental clinic formerly known as Skyline Dental located in Grand Junction, Colorado from approximately 1999 through at least 2004 in which he employed licensed dentists to provide dental services to patients. Skyline Dental operated as a “d/b/a” for the parent corporation “Five-O Enterprises” which HO owned and controlled starting in the year 2001. In February of 2004, the State Board of Dental Examiners enjoined the Ho from owning and operating Skyline Dental Clinic based as Ho was never licensed to practice dentistry and the State Board took the position that only licensed dentists are permitted to own Dental Clinics.
Ho sold the practice in December 2004 to a licensed Dentist and Ho was hired to manage the clinic. In 2006, Ho and the owner had a business dispute which resulted in the dentist defaulting on his purchase agreement with Ho. Ho then sold the practice to a different dentist in November of 2006 for $3.5 million hereby Ho was paid a salary for managing the dental practice. In 2010, the Dentist rescinded his contracts with H. Ho in turn converted Skyline Dental clinic to a non-profit corporation, Colorado Community Dental Services “CCDS”, which allowed it to operate under state law without a dentist as its owner An Asset Purchase Agreement was executed between Five-O Enterprises and CCDS in the amount of $2 million. HO continued to manage Colorado Community Dental Services but did not receive a salary and did not hold a position on the Board of Directors.
During this same period, Ho also operated Preventative Dental as a d/b/a of Five-O Enterprises which sold dental plans to individuals and were then able to receive discounted dental services by the designated provider, Skyline Dental and later Colorado Community Dental Services. Ho received the income from Preventative Dental.
Ho evaded income tax due and owing by committing affirmative acts of evasion. Between 2006 and 2011, the Government has determined that $235,450 is the total tax due and owing by Ho. In an attempt to evade assessment of taxes by the IRS, Ho took a series of steps to include, but are not limited to, utilized multiple bank accounts (a personal account and business accounts) which he commingled funds from his various income producing activities making the assessment of tax difficult; he received interest income from the sale of Skyline Dental and did not report the interest income to his accountant in the years 2008 and 2009 when he received interest income of $156,005 and $67,225, respectively; he did not report the income from the sale of discount dental plans to his accountant and thus the income from Preventative Dental was not reported on his tax returns; he deposited cash receipts from Skyline Dental and Colorado Community Dental Services to his personal bank accounts in 2010 and 2011 and did not report the income on his tax returns.
Ho pled to one count of income tax evasion which 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 Internal Revenue Service – Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Tim R. Neff.
Arkansas man sentenced to 15 years in federal prison for traveling to Colorado with the intent to engage in illicit sexual conduct with childrenRead the Press Release
DENVER – Donnie Waldo, Jr., age 48, of Dover, Arkansas, was sentenced today by U.S. District Court Judge Raymond P. Moore to serve 180 months (15 years) in federal prison for traveling with intent to engage in illicit sexual conduct with children, U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David Thompson announced. Following his prison term, Judge Moore also ordered Waldo to serve 10 years on supervised release. The defendant, who appeared at the hearing in custody, was remanded at its conclusion.
Waldo was charged by Criminal Complaint on November 10, 2014. He was indicted by a federal grand jury in Denver on November 17, 2014. The defendant pled guilty on March 20, 2015.
According to court documents, starting in October of 2014, an undercover HSI agent initiated an investigation targeting individuals using a specific website to sexually exploit children. The free website allows users to create profiles and post pornographic videos and pictures based on their sexual interests. The website included groups called “incest,” “jailbait” and “teen”. Members can post advertisements in the “classified” section seeking to meet members with the same sexual interests, such as incest and rape.
During the course of the investigation the undercover agent came across an advertisement on the website, which stated: “I am a 47 year old man I am 6’3” tall weight 220 lbs at the present time I am married but me and my wife cant have children together I am interested in finding a woman to have an incest relationship with I want to start an incest family with a nice woman who is seeking the same thing I want a woman who is interested in me breeding her if this is you then lets talk” (sic).
On October 2, 2014, an undercover HSI agent working in an online undercover capacity in Greeley as a single mother with two young daughters responded to the advertisement. The undercover agent in the single mother persona and the target conducted numerous chats online – mostly involving the prospect of him having a sexual relationship with the undercover agent’s persona and her two daughters, ages 10 and 14. During one of the chats, the target allegedly stated that he wanted a “very open relationship . . . openly having sex with you (the single mother persona) and both daughters” and further discussed that he wanted to impregnate the single mother’s persona and both daughters.
Further investigation revealed that the ad was posted by Arkansas resident Donnie Waldo. Waldo made arrangements with the single mother persona to travel to Denver to meet and engage in sexual relations with the mother and her two daughters. On November 10, 2014, Waldo boarded a flight from Little Rock, Arkansas to Atlanta. In Atlanta, he boarded a flight to Denver, where he was arrested by HSI agents.
“Defendant’s chilling conduct – he travelled to Colorado with the hope and intention of sexually abusing two young children – earned him every minute of the 15 year sentence imposed by the Court,” said U.S. Attorney John Walsh.
“HSI special agents aggressively pursue sexual predators who target children, which preemptively rescues untold future victims,” said David A. Thompson, special agent in charge of HSI Denver. “This significant prison sentence awarded to Donnie Waldo will undoubtedly save some children the horror of being sexually victimized.”
This case was investigated by HSI. The defendant was prosecuted by Assistant U.S. Attorney Alecia L. Riewerts.
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."
ADX inmate convicted of three counts of assault, resisting and impeding a federal employeeRead the Press Release
DENVER – Ishmael Petty, age 46, an inmate at the USP Florence Administrative Maximum Security Prison (ADX) in Florence, Colorado, was found guilty today following a two day jury trial of three counts of assault, resisting and impeding a federal employee using a dangerous weapon resulting in bodily injury, the U.S. Attorney’s Office, the Federal Bureau of Investigation (FBI) and the Federal Bureau of Prisons (BOP) announced. The jury deliberated for one hour and twenty minutes before reaching their unanimous guilty verdicts. The jury trial was heard before U.S. District Court Judge Philip A. Brimmer. Petty is scheduled to be sentenced by Judge Brimmer on October 30, 2015.
Petty was indicted by a federal grand jury on January 27, 2015. The jury trial began on July 13, 2015. It concluded today, July 14, 2015.
According to court documents, and evidence presented at trial, on September 11, 2013, Petty, who was serving a life sentence at ADX for killing his 71 year old cell mate at the United States Penitentiary Pollock in Louisiana, attacked two BOP librarians and a case manager as they were delivering books to his cell. At ADX there is an outer door, a secure area, and then an inner door before entering the actual cell. While the BOP employees believed that Petty was in his cell, he was in fact hiding in the area between the outer and inner doors. He was wearing self-made body armor, consisting of cardboard box like material, and had a weapon, specifically a shank. When the attack began, Petty threw hot sauce in the eyes of one BOP librarian, and then attacked the other librarian. The third BOP employee, a case manager, quickly came to their aid and called for help. One of the BOP employees used their baton to try and subdue Petty. Petty ultimately took control of two batons and used them in his attack. Once the call for help was made Petty went back into his cell.
Prior to Petty’s life sentence for killing his cellmate, he was sentenced to federal prison for 420 months for an elaborate armed bank robbery in Mississippi where he was wearing a police officer’s uniform.
“Defendant stands convicted of a cowardly and brutal assault on defenseless staff at ADX. The defendant, who was serving time at ADX for murdering his cellmate at another prison, ambushed and brutally assaulted two staff librarians, using his much greater size to injure the older of the two severely and permanently,” said U.S. Attorney John Walsh. “Only the courageous intervention of a third staff member prevented the defendant from killing that librarian.”
Petty, who is currently serving a life sentence, faces not more than 20 years in prison, and up to a $250,000 fine per count for each of the three counts of conviction.
This case was investigated by the FBI with support from the Federal Bureau of Prisons.
This trial was handled by Assistant U.S. Attorneys Colleen Covell and Rebecca Weber.
Thornton resident sentenced to 97 months in federal prison for pssession of child pornographyRead the Press Release
DENVER – Kevin Dale Harlow, age 55, of Thornton, Colorado, was sentenced earlier this week by U.S. District Court Judge Wiley Y. Daniel to serve 97 months (just over 8 years) in federal prison for possession of child pornography. Following his prison sentence, Harlow was ordered to serve 10 years on supervised release and register as a sex offender. Further, he was ordered to pay $22,000 in restitution to several victims of his crime (children who were pictured in the child pornography). Harlow, a member of a Lutheran Church leading a 6th grade boys confirmation class, possessed 3,257 unique child pornography images and 316 unique child pornography videos.
The sentence was announced by U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Denver Special Agent in Charge David Thompson. Harlow was indicted by a federal grand jury in Denver on November 4, 2014. He pled guilty before Judge Daniel on April 23, 2015. He was sentenced on July 7, 2015.
According to the stipulated facts contained in the plea agreement, an ICE HSI special agent, working in an official capacity conducting online undercover investigations, was able to access a specific peer-to-peer file-sharing network. The special agent was able to obtain a list of files reportedly being shared, including 36 files with names indicative of child pornography. Approximately 15 files depicting child pornography were downloaded through the peer-to-peer file-sharing network by the undercover special agent on that date.
During the investigation it was determined that the files were being shared from a residence in Thornton, Colorado. In March 2013, the same undercover agent was able to download an additional 26 files of child pornography that were being made available from the same residence. While the investigation continued, an ICE HSI agent learned that a Sergeant from the Johnstown Police Department had also initiated an investigation related to the specific address targeted by ICE HSI. The Johnstown Sergeant was also using a law enforcement computer to conduct online undercover activities. The Sergeant was able to download over 80 image files and more than 15 video files all consistent with child pornography.
Based on this information, a federal search warrant was obtained and executed at the Thornton residence of Kevin Harlow. It was determined that Harlow was a member of a Lutheran Church and was a leader for the 6th grade boys confirmation class. When the search warrant was executed, Harlow was in the process of downloading child pornography. Numerous computers and digital media were seized during the search warrant execution. The investigation also revealed that the search terms Harlow used included: teens, preteens, girls, boys, and ages such as 7, 9, and 12. Investigators learned he had a preference for images of children between 10 and 14 years old.
The forensic examination of the computers and digital media seized from Harlow reflected that child pornography was possessed on more than 10 of the devices recovered. These devices contained 3,257 unique child pornography images and 316 unique child pornography videos. The National Center for Missing and Exploited Children (NCMEC) reported that 554 of the image files possessed by Harlow depict minor victims previously identified to law enforcement. Some of the material portrayed sadistic or masochistic conduct or other depictions of violence.
“Children are victimized in the production of child pornography, and people who possess child pornography fuel that victimization,” said U.S. Attorney John Walsh. “The tough sentence handed down by the court in this case is further supported by the fact that this defendant was working closely with children and young people at the same time he was engaged in the collection of child pornography.”
“This significant prison sentence represents the serious criminal nature of child pornography, and the resulting permanent trauma inflicted on its young and helpless victims,” said David A. Thompson, special agent in charge of HSI Denver. “Our HSI special agents are specially trained to identify, locate and pursue prosecution against these child predators, and rescue their victims.”
This case was investigated by HSI along with the Johnstown Police Department.
Harlow was prosecuted by Assistant U.S. Attorney Alecia Riewerts, the Project Safe Childhood Coordinator for the District of Colorado.
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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (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.projectsafechildhood.gov.
Fort Collins man is sentenced to prison for tax evasion and ordered to pay the IRS over $200,000 in restitutionRead the Press Release
DENVER – Brian E. Annis, age 56, of Fort Collins, Colorado was sentenced yesterday by U.S. District Court Judge Christine M. Arguello to serve 9 months in federal prison, for income tax evasion, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Gilbert R. Garza announced. Following his prison sentence, Annis was ordered to serve 3 years each on supervised release. He was also ordered by Judge Arguello to pay $ 206,324.63 in restitution to the IRS. Annis pled guilty on September 26, 2014 and was indicted by a federal grand jury in Denver on April 8, 2014.
According to information contained in the plea agreement and indictment, from 2001 through 2006, Annis willfully failed to file his personal federal income tax returns for tax years 2001 through 2006 and willfully evaded the payment of taxes, penalties and interest assessed to him by the IRS for those tax years. In late 2004, Annis paid Creative Consulting Group and Joe Hill $2,100 to create an "International Business Trust" called Glacier Mountain Holdings, where Hill was appointed as the "Managing Fiduciary Party" so that Annis's personal residence could be placed in the trust. On December 3, 2004 Annis moved his personal residence into this trust for various reasons, including general asset protection and hiding the house from the IRS.
On December 30, 2005, in order to refinance the house, the house was transferred back to Annis and his spouse where it remained for nearly two years. On November 29, 2007, Annis sent an email to Hill in which stated: "For now, we need to get the house back into the trust. .... I don't know when the IRS is going to do an asset search (maybe they already have)." On December 4, 2007, Annis and his spouse transferred the house back into the trust.
Between December 2007, and March 2010, Annis annually paid Creative Consulting Group and Hill to maintain Glacier Mountain Holdings. Joe Hill was convicted on related charges in the District of Wyoming following a jury trial.
This case was investigated by Internal Revenue Service – Criminal Investigation and prosecuted by Assistant U.S. Attorney Pegeen D. Rhyne.
Man found guilty of first degree murder at ADX sentenced to serve life in prisonRead the Press Release
DENVER – Silvestre Rivera, age 57, an inmate at ADX in Florence, Colorado, was sentenced today by U.S. District Court Judge Robert E. Blackburn to serve life in prison for the murder of Manuel Torrez. The life sentence was mandatory based on his First Degree Murder conviction. Rivera, and co-defendant Richard Santiago, murdered fellow inmate Torrez on April 21, 2005 while the three were exercising in the recreation area that is part of the ADX’s general population unit.
Rivera was convicted of First Degree Murder following a two week jury trial. The jury delivered the guilty verdict on April 21, 2015. During testimony at Rivera’s trial, it was determined that Rivera, Santiago and Torrez were all part of the Mexican Mafia. Torrez and Santiago arrived at ADX in 2000. Shortly after Rivera’s arrival, Torrez was killed.
Defendant Richard Santiago, age 55, also an inmate at ADX, is pending trial before Judge Blackburn, although no trial date has yet been set. Santiago is presumed innocent unless and until proven guilty.
The Rivera case was investigated by the FBI. Rivera and Santiago are being prosecuted by Assistant U.S. Attorney’s Valeria Spencer and M.J. Menendez.
Inmate housed at Florence Correctional Complex sentenced for threatening to assault and murder correctional officers and their familiesRead the Press Release
DENVER – Theron Maxton, age 60, an incarcerated inmate, was sentenced today by U.S. District Court Judge Philip A. Brimmer to serve 100 months in federal prison followed by 3 years of supervised release for retaliating against a federal officer by threats to the officer and/or the officer’s family member, U.S. Attorney Office John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. The prison sentence is to be served consecutive to his current prison sentence for threatening federal officers out of South Carolina.
On January 22, 2015, Maxton was found guilty following a three day jury trial of four counts of retaliating against a federal officer by threats to the officer and/or the officer’s family member. Maxton was an inmate at the Florence Correctional Complex, in both the United States Penitentiary and the Federal Correctional Institution at the time he made the threats.
According to the Second Superseding Indictment, obtained on May 8, 2014, and facts presented at trial, in November of 2012, the defendant threatened to assault or murder prison correctional officers, and in some cases, their families, in retaliation of the officers performing their official duties. The threats were made in letters, either to the correctional officer directly, or in one instance to a former now released cellmate. In that letter, Maxton attempted to persuade the former inmate to kill the Prison staff members and their families. In December of 2012, Maxton also said directly to an FBI special agent that if given the opportunity he would try to kill prison staff members.
This case was investigate by the Federal Bureau of Investigation.
The defendant was prosecuted by Assistant U.S. Attorneys Valeria Spencer and David Tonini.
Renewable energy company pays $387,000 to settle allegations of fraud in American Recovery and Reinvestment Act programRead the Press Release
DENVER -- WECSREP Inc., a renewable energy company based in Palm Springs, California, has paid $387,000 to settle allegations that it violated the False Claims Act when it submitted applications to the U.S. Department of Treasury under a program created by the American Recovery and Reinvestment Act of 2009 (ARRA).
The National Renewable Energy Laboratory (NREL) in Golden, Colorado reviewed applications for a program that offered companies up to a 30 percent cash reimbursement for initiating and placing into service “renewable energy properties” such as solar and wind projects. The funds for the reimbursement came from Treasury funds set aside under section 1603 of the ARRA.
To qualify for this program, companies submitted the costs they incurred building renewable energy projects to NREL, which reviewed and approved projects for reimbursement with Treasury funds. In its 35 applications to this program, WECSREP claimed inflated installation costs of up to 414 percent of the original installation costs, while concealing the original installation costs from NREL and Treasury. In many cases, instead of receiving a 30 percent reimbursement for its projects, WECSREP was able to recoup the entire installation cost of the project from Treasury funds based on the inflated costs submitted in its applications. The money paid to WECSREP went far beyond what was authorized by the program, and the United States alleged that WECSREP’s abuse of this government program violated the False Claims Act.
“WECSCREP abused a renewable energy program set up under the American Recovery and Reinvestment Act to help stimulate the economy in the tough days after the 2008 Financial Crisis,” said U.S. Attorney John Walsh. “By paying this penalty under the False Claims Act, WECSREP is finally handing back the taxpayer money it received by inflating costs estimates, inflated estimates that may have deprived others of the opportunity to participate in these programs at a time of economic crisis.”
“This settlement reinforces the commitment of the Treasury Office of the Inspector General to pursue cases against those who attempt to defraud the U.S. Treasury Department and misuse public funds,” said Assistant Inspector General for Investigations John L. Phillips.
The claims settled by this agreement are allegations only. There has been no determination of liability.
This matter was investigated by the U.S. Department of Treasury’s Office of Inspector General. It was handled by Assistant U.S. Attorneys Amanda Rocque and Zeyen Wu.
Longmont man is sentenced to 84 months in prison for investment fraud schemeRead the Press Release
DENVER – Gary Snisky, age 49, of Longmont, Colorado was sentenced today by U.S. District Court Judge Raymond P. Moore to serve 84 months in federal prison, for mail fraud and money laundering, federal authorities announced. Following his prison sentence, Snisky was ordered to serve 3 years each on supervised release. He was also ordered by Judge Moore to pay $2,531,032.22 in restitution to the victims.
Snisky plead guilty on January 5, 2015 and was indicted by a federal grand jury in Denver on November 19, 2013. Snisky’s co-conspirator, Richard Greeott, plead guilty on October 7, 2013 to mail fraud and money laundering charges and was sentenced by Judge Phillip A. Brimmer on April 27, 2015 to six months in federal prison for his significantly smaller role in the scheme.
According to information contained in court documents for both cases, including the plea agreements and indictment, from 2009 through 2011, Snisky operated Colony Capital in Colorado, which purported to be a private equity firm offering investment opportunities in bonds, futures trading, and other offerings. In 2011, Snisky shut down Colony Capital and formed Arete in Longmont, Colorado, which operated in a similar manner. As part of his scheme, Snisky repeatedly falsely told financial advisors and investors that he was an “institutional trader” who was “on Bloomberg,” which Snisky claimed made him part of an elite group of people who could “make markets” and who had access to lucrative opportunities to which ordinary investors did not have access.
From July of 2011 through January 2013, Snisky offered investors a “proprietary value model” which was based on using the investors’ money to purchase Ginnie Mae bonds. Throughout 2012, Snisky continued to make false assurances about the safety of investing in the Bond Program despite the fact that Snisky knew that he had not purchased any Ginnie Mae bonds as promised. Throughout the scheme, Snisky sent fabricated account statements to investors that falsely reflected that their money had been invested in the bonds as promised.
Additionally, in 2010, Snisky asked Greeott to develop an algorithm to support a fully-automated trading system for trading in the futures market. In 2011, Greeott believed that he had developed an algorithm for trading in the futures market that he tested in a simulated environment for several months. However, at all times, the algorithm was still in a developmental phase. At no time did anyone at Colony Capital or Arete trade a significant amount of money or make any real profit in the futures market. However, starting in 2010, Snisky falsely led investors, potential investors, and financial advisors to believe the algorithm was being used by Colony Capital, and later Arete, to profitably trade in the futures market. Based on these false representations, several victims invested money in Snisky’s futures trading program.
The net loss Snisky caused to investors in the bond and futures trading programs was $5,226,965.54. To date, as a result of asset forfeiture proceedings, victims are in the process of being paid restitution in the amount of $2,695,913.31. The remaining amount of restitution is $2,531,032.22, most of which is jointly liable between Snisky and Greeott.
“The defendant took advantage of investors through a completely fraudulent scheme,” said U.S. Attorney John Walsh. “The prison sentence handed down serves not only as a deterrent to would-be fraudsters, but also as reassurance to victims of this financial crime.”
"The FBI will continue to protect the financial markets by working closely with its law enforcement and regulatory partners,” said FBI Denver Division Special Agent in Charge Thomas Ravenelle. ‘We trust that the outcome of this investigation will deter others who are seeking to engage in similar criminal activity, and attempting to defraud innocent investors.”
“All too often we hear of hard working Americans who lose their life savings to investment schemes; their trust was violated when they were lied to about the success and profitability of the investments,” said Gilbert R. Garza, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
“Investment Schemes, like many financial crimes, erodes the integrity of our financial industries, and can threaten the economic and emotional health of our investors,” said Adam P. Behnen, Inspector in Charge, U.S. Postal Inspection Service, Denver Division. “It is critical we make every effort to protect the public from investment fraud schemes and its effect on our consumers by ensuring the integrity of the U.S. Mail.”
This case was investigated by the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, and the United States Postal Inspection Service.
This case was prosecuted by Assistant U.S. Attorney Pegeen D. Rhyne, with Assistant U.S. Attorney Tonya Andrews handling the forfeiture proceedings.
Aspen Postal employee arrested after being caught with firearm, knives and handcuffs on Postal propertyRead the Press Release
DENVER – Mauro Emilio Pennini, age 56, of Aspen, a postal employee who worked at an Aspen post office was arrested based on a Criminal Complaint charging him with being the subject of a protection order in possession of a firearm and for possessing a firearm at a federal facility, the U.S. Attorney’s Office and the U.S. Postal Service Office of the Inspector General announced. Pennini made his initial appearance before a U.S. Magistrate Judge in Grand Junction today, where he was advised of his rights and the charges pending against him. He is due back in court on June 23, 2015 at 1:30 p.m. in Grand Junction for a preliminary hearing and a detention hearing.
According to the affidavit in support of the Criminal Complaint, the U.S. Postal Service Office of the Inspector General received information from the U.S. Postal Inspection Service that a mail processing clerk was arrested in the Aspen Post Office on June 8, 2015 by Aspen Police officers. The clerk, Pennini, was arrested for violating a Civil Protection Order. The order was obtained on May 22, 2015, in Pitkin County District Court in Aspen by a female and two minors. The order, which later became permanent, was issued because the court found that Pennini constitutes a credible threat, that an imminent danger exists to the life and health of the Protected Persons named in the action, and sufficient cause exists for the issuance of a Civil Protection Order. It ordered that Pennini not contact, harass, stalk, injure the protected persons. On June 8, 2015, Pennini sent one of the protected persons a text message, which was the basis for the arrest.
After arrest the defendant asked the police officers to get medication he needed out of his bag, which was kept on Postal property in an unlocked locker. When the police officer went to get the medication at the defendant’s request, he found a Sig Sauer 9mm handgun loaded with 14 rounds of ammunition. He also found a switch-blade knife, 3 folding knives, a multi-purpose tool and knife, two sets of handcuffs and two magazines with 14 rounds of ammunition in each.
“The U.S. Attorney’s Office is committed to keep postal employees and their customers safe,” said U.S. Attorney John Walsh. “Possessing a firearm while under a protective order and while on federal property are violations of federal law and will be prosecuted.”
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 alleged 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 and U.S. Attorney’s Office remain committed to holding accountable anyone responsible for such alleged violations. The public we serve can rest assured that the USPS OIG will continue to ensure the accountability and integrity of U.S. Postal Service employees.”
If convicted, Pennini faces not more than 10 years in federal prison, and up to a $250,000 fine for being the subject of a protection order in possession of a firearm. He also faces not more than 1 year in federal prison, and up to a $100,000 fine for possessing a firearm at a federal facility.
This case was investigated by the U.S. Postal Service Office of the Inspector General.
The defendant is being prosecuted by Assistant U.S. Attorney Bob Brown.
A Criminal Complaint is a probable cause charging document. Anyone accused of violating a felony federal law has a Constitutional right to be indicted by a grand jury.
The charges in the Criminal Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney's Office indicts two cases where women were working with a male to sexually exploit childrenRead the Press Release
DENVER – The U.S. Attorney’s Office has obtained federal grand jury indictments in two separate unrelated cases where a woman, working with a male, sexually exploited a child, captured the abuse on camera or transmitted it live via the internet, thus producing child pornography. One case was investigated by the FBI, and the other case was investigated by the Colorado Springs Police Department’s Internet Crimes Against Children (ICAC) Task Force and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI).
On June 15, 2015, Mr. Matthew Scott Holt, age 34 and Ms. Jordain Larsen, age 26, of Westminster, were advised in court on charges contained in an Indictment that a federal grand jury returned on June 9, 2015. Four of the counts charged Holt and Larsen together with production, and aiding and abetting one another’s production, of child pornography. Seventeen of the remaining counts charged either Holt and Larsen with production of child pornography. The last count charges Holt with distribution of child pornography. Prior to the indictment, both defendants had been arrested for child pornography production offenses based on charges filed in Criminal Complaints. Both defendants were also ordered to be held without bond pending a resolution of their cases.
According to court documents, the Larimer County Sheriff’s Office initiated the investigation after downloading child pornography from a residence in Westminster, Colorado. After the Larimer County Sheriff’s Office referred the case to the Westminster Police Department, WPD continued the investigation, including obtaining and executing a state search warrant. Shortly after the execution of that warrant, WPD found pornographic images of Holt with a child under the age of three and it also found child pornographic images of a second child under the age of 12. WPD then requested the assistance of the FBI. On May 14, 2015, Holt was located in Fort Collins in a shopping center parking lot where he was living out of his car, and he was arrested on a federal Criminal Complaint. As detailed in that Complaint, FBI’s review of Holt’s computers revealed multiple child pornographic images of Ms. Larsen engaged in sexual conduct with the same child under the age of three who was depicted in child pornographic images with Holt. Ms. Larsen was arrested on a federal Criminal Complaint shortly thereafter. Holt and Larsen have appeared before a U.S. Magistrate Judge, where they have been advised of their rights and the charges pending against them.
In a second case, on May 6, 2015, a federal grand jury returned an Indictment charging both Mr. Brandon Tyler Hill, age 29, of Colorado Springs, and Ms. Rhiannon Carnahan, age 29, of Woodland Park, Colorado, charging both with counts of production, and aiding and abetting one another’s production, of child pornography and transportation, and aiding and abetting one another’s transportation, of child pornography. Prior to the indictment, Mr. Hill and Ms. Carnahan were charged via Criminal Complaints. Both defendants are detained without bond pending a resolution of their cases. Hill and Carnahan have appeared before a U.S. Magistrate Judge, where they have been advised of their rights and the charges pending against them.
If convicted on the child pornography production counts, Ms. Larsen, Mr. Holt, Mr. Hill and Ms. Carnahan each face not less than 15 years, and not more than 30 years in federal prison, and up to a $250,000 fine, for each count. Holt, Hill and Carnahan each also faces not less than 5 years, and not more than 20 years in federal prison, and up to a $250,000 fine if convicted of distribution or transportation of child pornography.
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 Hill and Carnahan case was investigated by the Colorado Springs Police Department and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), with support provided by the Woodland Park Police Department.
Holt and Larsen are being prosecuted by Assistant U.S. Attorney Judith Smith, Chief of the Special Prosecutions Section of the U.S. Attorney’s Office Criminal Division, and Hill and Carnahan are being prosecuted by Assistant U.S. Attorney Alecia Riewerts, Project Safe Childhood Coordinator.
The charges contained in the indictments are allegations, and the defendants are presumed innocent unless and until proven guilty.
St. Louis man is sentenced to prison after traveling to Denver to have sex wtih mother and two minor daughtersRead the Press Release
DENVER – Darwin Gilbert Gowen, age 62, of St. Louis, Missouri, was sentenced yesterday by U.S. District Court Judge R. Brooke Jackson to serve 135 months (just over 11 years) in federal prison, followed by 10 years on supervised release for travel with intent to engage in illicit sexual conduct, the U.S. Attorney’s Office and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) announced. Gowen, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Gowen was first charged by Criminal Complaint on June 20, 2014. He was indicted by a federal grand jury in Denver on July 2, 2014. He pled guilty before Judge Jackson on March 31, 2015. He was sentenced on June 16, 2015.
According to court documents, Gowen was arrested by HSI agents at Denver International Airport (DIA) after he traveled with intent to have sex with two minor children. Specifically, the investigation began when an HSI special agent based in Greeley, Colorado, who was working in an undercover capacity as a 37-year-old single mother of two minor daughters, ages 15 and 11, came into contact with Gowen. The special agent, acting in the undercover persona, communicated with the defendant who expressed an interest in having sex with the mother and both daughters.
During the conversations, which took place primarily via email and text, the defendant stated that he was “a 60 year old male, widowed . . . wanting to experience the wild side of life.” He also said he “adored chubby girls” . . . and was “looking for naughty daughters . . . who love to hook up with a kinky mom for mom daughter fun.” Further investigation revealed that the individual was the defendant, Gowen, of St. Louis, Missouri.
Gowen told the undercover agent that he was going to fly to Denver to see her and have sex with her and her daughters. HSI agents confirmed that the defendant had arranged to fly to Denver on June 19th. On that date, he flew from St. Louis to DIA. Gowen met a female HSI agent, who purported to be the mother of the two minor children, at the DIA baggage claim. After the two discussed that he flew to Denver for the express purpose of having sex with the two minor children, he was arrested.
This case was investigate by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI). The Denver Police Department and the Colorado State Patrol assisted with the arrest at DIA.
Gowen was prosecuted by Assistant U.S. Attorney Alecia Riewerts, the Project Safe Childhood Coordinator for the District of Colorado.
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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (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.projectsafechildhood.gov.
Colorado Springs man in car viewing child pornography on Fort Carson Army Base sentenced to 7 years in federal prisonRead the Press Release
DENVER – Francis Hector Calar, age 54, of Colorado Springs, Colorado, was sentenced yesterday by U.S. District Court Judge Christine M. Arguello to serve 84 months in federal prison, followed by 10 years on supervised release, for possession of child pornography, U.S. Attorney John Walsh and FBI Denver Special Agent in Charge Thomas Ravenelle announced. In addition, Calar was ordered to pay $3,000 in restitution to each of the six victims that requested restitution. Calar was arrested in March of 2014 after a military police officer caught him masturbating in his car outside a building with unsecured WiFi on Fort Carson Army Base.
Calar was charged by Criminal Complaint on March 11, 2014. He was indicted by a federal grand jury in Denver on April 7, 2014. He pled guilty before Judge Arguello on March 24, 2015. He was sentenced yesterday, Tuesday, June 16, 2015.
According to court documents, at approximately 10:30 a.m., a Military Police Officer was dispatched to investigate a complaint of a suspicious vehicle parked in a public parking lot located at a building on Fort Carson Army Base. Upon arrival, the officer observed an individual sitting in the driver’s seat of a Ford sedan. The officer attempted to contact the individual, later identified as Francis Hector Calar, however, Calar was intently focused on an image of the screen of his laptop computer. The officer saw that Calar was masturbating to a graphic image of child pornography. After finally noticing the officer’s presence, Calar quickly closed his laptop and threw it on the passenger seat. He then put his penis back inside his pants. He was then ordered to exit the car and was taken into custody.
Subsequent investigation revealed that Calar, a civilian military contract employee, often parked in the place where he was initially contacted because he was able to obtain unsecured WiFi access to child pornography. He used this access to view child pornography. Calar first became interested in child pornography approximately five or six years ago after his brother was arrested for the sexual assault of a child. Calar visited specific chat rooms and searched for child pornography during breaks from work.
Calar was active with children, coaching youth volleyball for young girls and youth baseball for young boys. He was also active in his church, and has previously taught Sunday school for children at his church.
The defendant’s collection was highly organized; he acknowledged categorizing files by the ages of the children depicted in the images, such as “0-5” and “6-8”. Further, he had more than 15,000 child pornography images and 764 child pornography videos on an external hard drive and other computer digital media. His child pornography collection included 83 identified child pornography series.
Calar obtained and distributed child pornography through chat rooms on the Internet. He previously used a peer-to-peer file sharing network to distribute child pornography when he was in the early stages of collecting child pornography. He uploaded child pornography to a specific child pornography website. The forensic examination revealed that he eventually evolved to using Skype and email to distribute child pornography to other collectors.
“Today’s prison sentence is appropriate, especially given the fact that the defendant had an extensive, well organized collection of child pornography and that he was involved in many different youth organizations,” said U.S. Attorney John Walsh. “Thanks to the work of the Fort Carson Military Police and the FBI, this child pornographer is being held accountable for possessing these heinous images.”
“Calar’s sentence is an illustration of the FBI’s commitment to protect our most vulnerable citizens, our children,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “The FBI will continue to work diligently with our law enforcement partners and the United States Attorney’s Office to investigate and prosecute cases involving the sexual exploitation of children.”
This investigation was conducted by the U.S. Army Criminal Investigative Division (CID) and the Federal Bureau of Investigation (FBI).
Calar was prosecuted by Project Safe Childhood Coordinator Assistant U.S. Attorney Alecia Riewerts.
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."
Northglenn Man Sentenced to 16 Months in Federal Prison for Possession of a Controlled SubstanceRead the Press Release
DENVER – Richard Jackson, age 30, of Northglenn, Colorado, was sentenced yesterday by Chief U.S. District Court Judge Marcia S. Krieger to serve 16 months in federal prison, followed by 1 year on supervised release, the U.S. Attorney’s Office and the FBI announced. Jackson, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Jackson was first charged by Criminal Complaint on September 27, 2014. He was indicted by a federal grand jury in Denver on November 3, 2014. He pled guilty to possession of a controlled substance before Chief Judge Krieger on March 18, 2015. He was sentenced yesterday, Monday, June 15, 2015.
According to court documents, Jackson was the subject of a drug investigation, where investigators found evidence of methamphetamine. On September 26, 2014, FBI agents with the Joint Terrorism Task Force (JTTF) executed a search warrant at Jackson's Northglenn residence. During the execution of the warrant agents and officers found ammunition, magazines, but no firearms. They also found residue of heroin and methamphetamine on a scale, in glass pipes, and in a sink drain. A baggie of Oxycodone pills, along with multiple cells phones and a Department of Corrections identification card were found in a safe inside the residence. Jackson maintained Nazi insignia in his residence and posted rules on a wall of his basement. Two of the rules were, “Violence is a must to secure our race” and “We do not cooperate with law enforcement.” The defendant had a number of prior convictions, including one for felony menacing with a real or simulated weapon. That conviction resulted in a four year prison term in the State Department of Corrections, although he was paroled before serving the entire prison sentence.
“Defendant Jackson has shown a substantial disregard for the safety of others and a lack of respect for the law,” said U.S. Attorney John Walsh. “Thanks to the work of the FBI, and the members of the Joint Terrorism Task Force, this felon will spend time in federal prison for his crime.”"The sentence handed down represents the FBI’s dedication to pursuing those intent on harming the citizens of our communities, whether through direct action or general criminal activity that threatens the safety of our neighborhoods” said FBI Denver Special Agent in Charge Thomas Ravenelle. "The FBI will continue to work through our strong law enforcement partnerships to protect our communities from those engaged in these types of activities."
This case was investigated by the FBI’s JTTF, the ATF, the Northglenn Police Department and the North Metro Drug Task Force. The search warrant was executed by the Northglenn, Thornton and Broomfield SWAT teams.
Man Arrested After Pointing Firearm at and Then Assaulting Federal Contract Security GuardRead the Press Release
DENVER – Christian Edward McCabe, age 25, of Denver, was arrested based on a Criminal Complaint after pointing a firearm at a federal government contract guard, and then resisting arrest, the U.S. Attorney’s Office announced in cooperation with the Federal Protective Service (FPS), a part of the Department of Homeland Security. The incident took place near the Byron White Federal Courthouse, which houses the 10th Circuit Court of Appeals. McCabe made his initial appearance before a U.S. Magistrate Judge yesterday. He is in custody pending a detention hearing and preliminary hearing, scheduled for June 16, 2015 at 10:30 a.m. before U.S. Magistrate Judge Kristen L. Mix.
The case involves a Protective Security Officer (PSO), who is a federally contracted security guard working for Door Electric Company, Inc. (DECO). PSOs are responsible for protecting federal buildings in the downtown Denver area. On June 9, 2015 at 1:50 a.m., a PSO was dispatched the Byron White Federal Courthouse, located at 1823 Stout Street, to remove a homeless man sleeping on the northwest corner steps. As the PSO was escorting the homeless man, an unknown male (later identified as McCabe), approached the two, pointed a handgun, and stated “hey guys.” The handgun was a Glock .40 caliber. The PSO pushed the homeless man out of the line of fire, and then pulled his firearm, pointed it at McCabe, and demanded twice that McCabe drop his weapon. McCabe complied on the second request.
As the PSO attempted to take McCabe into custody, McCabe resisted, resulting in a struggle. The defendant ultimately was able to break free and run from the PSO. He was later caught by two other PSO’s after the original PSO called for help after the struggle. At 2:47 a.m. McCabe was taken to Denver Health Medical Center (DHMC) for a physical evaluation and then transferred to a detention facility. Preliminary toxicology results showed McCabe had cocaine in his blood.
McCabe faces one count of assaulting, resisting, or impeding officers or employees. If convicted he faces not more than 20 years in federal prison, and up to a $250,000 fine.
“The Security Officer in this case showed tremendous restraint, professionalism and courage in dealing with the defendant,” said U.S. Attorney John Walsh. “He protected the man he was escorting from federal property at considerable risk to himself, and was able to restrain the defendant which ultimately helped with his capture before others were harmed.”
This case was investigated by the Federal Protective Service (FPS).
The defendant is being prosecuted by Assistant U.S. Attorney Jeremy Sibert.
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 Criminal Compliant are allegations, and the defendant is presumed innocent unless and until proven guilty.
Denver Tre Seven Crip Gang Member Charged with Being a Felon in Possession of a FirearmRead the Press Release
DENVER – Sean Jovan Swanson, age 29, of Denver, was arrested and charged with being a felon in possession of a firearm, U.S. Attorney John Walsh and ATF Denver Division Special Agent in Charge Luke Franey announced. Swanson, a Tre Seven Crip, was first arrested by the Denver Police Department’s Fugitive Unit. The case was then adopted by the ATF. Swanson is in state custody facing assault charges in Denver District Court stemming from an incident where Swanson pistol-whipped a victim, leaving significant facial injuries. The charges were ordered unsealed on June 11, 2015.
According to the affidavit in support of the Criminal Complaint, on May 1, 2015, the Denver Police Department (DPD) Fugitive Unit was asked to assist in the apprehension of a potentially violent and dangerous individual identified as Sean Jovan Swanson. Swanson had an active felony warrant for Aggravated Robbery, stemming from a “home invasion” incident which occurred on May 1, 2015. On May 5, 2015, the DPD Fugitive Unit responded to the area of the Timbers Hotel. They had obtained information that Swanson was likely staying there.
After conducting surveillance, the DPD Fugitive Unit saw Swanson at the motel lobby, and heard him ask for the key to a particular room. After additional officers arrived at the scene, the Fugitive Unit detectives along with uniformed officers approached the motel room door and knocked. A female answered the door. At that time, officers saw Swanson attempt to flee through a back patio door. He changed his mind, and ran back into the motel room. From there he was taken into custody. In close proximity to Swanson was a backpack. In the backpack was a loaded handgun stolen out of Denver.
Swanson had a number of felony convictions prohibiting him from possessing a firearm or ammunition, including: a) Arapahoe County District Court for Robbery in 2003; b) Denver District Court for Attempted Escape from Felony Pending in 2008; and c) U.S. District Court for being a felon in possession of a firearm in 2011. Swanson was on federal supervised release on this case at the time of his arrest.
Swanson faces one count of being a felon in possession of a firearm. If convicted on that count he faces not more than 10 years in federal prison, and up to a $250,000 fine.
“As illustrated by this case against defendant Swanson, the U.S. Attorney’s Office, ATF and the Denver Police Department use a targeted approach to charging gun cases,” said U.S. Attorney John Walsh. “We carefully consider the impact of such charges on our relationship with the communities affected by gun violence, and we carefully select for prosecution the people whose criminal activities are having the most impact on those communities. We will continue to maintain and build upon the trust of the community in our focused approach toward making those communities safer.”
“Mr. Swanson continued to carry a firearm and engage in violent activity even while being on supervised release for a federal firearms conviction,” said ATF Denver Division Special Agent in Charge Luke Franey. “ATF and our task force partners will continue to have zero tolerance for violent individuals who possess and use firearms.”
“We have an obligation to the community to keep them safe and removing armed criminals from the street is one way we can assure our citizens’ safety,” said Denver Police Chief Robert White. “I cannot stress how important it is that we collaborate with the members of the community to combat violent crimes.”
These cases arise out of the Project Safe Neighborhood initiative, a partnership which includes the Aurora, Denver and Lakewood Police Departments (among others), working in concert with the ATF and the U.S. Attorney’s Office.
The defendant is being prosecuted by Assistant U.S. Attorney Celeste Rangel.
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 Criminal Compliant are allegations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney's Office Obtains Two Guilty Pleas from Gang Members with GunsRead the Press Release
DENVER – The U.S. Attorney’s Office, working closely with its law enforcement partners, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), announced that two unrelated gang members who committed firearm crimes have recently pled guilty to those crimes. Both defendants now await sentencing.
Colton Field, age 32, of Metro Denver, a Crenshaw Mafia Gangster Blood, who was indicted by a federal grand jury in Denver on February 11, 2015 and then pled guilty on June 5, 2015 before U.S. District Court Judge Christine M. Arguello to being a felon in possession of a firearm, is scheduled to be sentenced on October 7, 2015 by Judge Arguello. According to the stipulated facts contained in Field’s plea agreement, on December 11, 2014 an Aurora Police officer heard the stereo of a blue PT Cruiser from 50 feet away. The officer stopped the car based on a noise violation. Field was driving the vehicle.
After pulling the vehicle over, the officer noticed a tattoo and clothing that stated “104,” consistent with the Crenshaw Mafia Gangster Bloods. When asked to provide his identification, Field, gave a false name. After the officer asked him to step out of the car, Field drove off recklessly. Responding officers found an empty PT Cruiser. An inventory search of the vehicle revealed ammunition and a 9 mm firearm. The defendant was then located hiding under a car near where the PT Cruiser was found. Further investigation revealed that the defendant had been handling the firearm, including loading it. The defendant’s girlfriend purchased the firearm at a pawn shop. Field faces not more than 10 years in federal prison, and up to a $250,000 fine. This case was investigated by the Aurora Police Department and the ATF. The defendant is being prosecuted by Assistant U.S. Attorney Beth Gibson.
Jonathan Thomas Fricks, age 34, of Denver, an Oldies 13 gang member, who was indicted by a federal grand jury in Denver on December 16, 2014 and then pled guilty yesterday before U.S. District Court Judge Christine M. Arguello to possession with intent to distribute at least 5 grams of methamphetamine and possession of a firearm in furtherance of a drug trafficking crime, is scheduled to be sentenced on September 22, 2015 by Judge Arguello. According to the stipulated facts contained in the plea agreement, between August 14 and 15, 2014, a Colorado Department of Corrections Community Parole Officer (CPO) was investigating the whereabouts of Fricks, who was wanted on a parole violation. The CPO was able to locate the defendant at a Motel 6 in Denver. At the motel the CPO observed the defendant loading items into a car in the parking lot. The defendant and a woman then departed the Motel 6. The CPO called for backup from the Denver Police Fugitive Team and followed the defendant and the woman to Edgewater, Colorado. The defendant was arrested inside a local grocery store. Upon his arrest, officers found $3,755 in cash in the defendant’s pants pocket.
The CPO searched the car in which defendant was riding. Within the car, the CPO unzipped a black and white bag and observed a magazine with ammunition loaded in it and the butt of a gun. Upon discovering the firearm, the CPO called for agents from the ATF to assist with the search. A full search of the car by ATF agents revealed a 9 mm pistol loaded with seventeen rounds; a second magazine containing five rounds of ammunition; three baggies containing 47 grams of methamphetamine; and other drug trafficking related items. The methamphetamine Fricks possessed was at least 95 percent pure. Fricks faces a minimum sentence of 10 years, and up to life in federal prison, and up to a $5,000,000 fine. This case was investigated by the Colorado Department of Corrections, the Denver Police Department, and the ATF. The defendant is being prosecuted by Assistant U.S. Attorney Peter McNeilly.
These cases arise out of the Project Safe Neighborhood initiative, a partnership which includes the Aurora, Denver and Lakewood Police Departments (among others), working in concert with the ATF and the U.S. Attorney’s Office.
Littleton Woman Arrested for Oil Investment SchemeRead the Press Release
DENVER – Jill M. Evans, age 49, of Littleton, Colorado was arrested last week on charges of wire fraud and money laundering, the United States Attorney’s Office, IRS – Criminal Investigation (IRS CI) and the Federal Bureau of Investigation (FBI) announced. Evans was indicted by a federal grand jury on May 21, 2015. The indictment remained under seal until her arrest on May 27, 2015. Evans appeared on that date in federal court where she was advised of her rights as well as the charges pending against her. She was then ordered released on May 29, 2015, by a U.S. Magistrate Judge on a 50 percent secured bond, where she needs to pay 10 percent of the bond (or $5,000).
According to the indictment, in September 2011 and continuing through May 2015, Evans devised a scheme to defraud at least eight individuals whom she solicited to invest in alleged oil transactions. Evans informed or caused others to inform potential investors that she or one of her companies, Paramount Mortgage or Evcom, had rights or agreements related to the purchase and resale of petroleum products, including diesel oil or jet fuel. She claimed that the oil deals could not be completed until certain fees or other expenses related to the deals could be paid.
Evans falsely told investors they would receive a return on their investment ranging from fifty percent to fifty times their original investment within a matter of days or weeks. She told investors that their funds would be held in an escrow account and would be fully refundable if the oil deal did not close. Evans instructed investors to transfer funds to bank accounts. Some investors’ funds were not used as represented and were also sent to personal bank accounts that Evans controlled. Of those funds transferred to personal accounts she controlled, she used those funds for her own personal expenses.She would tell investors that oil deals were nearing successful completion and that disbursements of profits were imminent. She sent e-mails attaching fabricated court documents regarding the status of civil litigation purporting to award Evans or related parties substantial sums of money. When the oil deals failed to close, she told investors that she would be able to pay investors from these proceeds.
Furthermore, Evans concealed from investors her December 2011 criminal indictment by a State of Colorado grand jury and her subsequent March 2013 criminal conviction for theft and forgery. Evans’s bond conditions prohibited her from entering into any financial transactions in excess of $1,000, and the terms of her subsequent state sentence prohibited her from investing money, entering into any financial contracts or arrangements, and having access to or control of any funds of any individual.
Evans was charged with eight counts of wire fraud and six counts of money laundering. Wire fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000. Money laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000. Included in the indictment is a notice of forfeiture for any property traceable to the money laundering charges alleged in the indictment.This case was investigated by IRS – Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Anna K. Edgar.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Denver Gang Member Indicted for Being a Felon in Possession of a Firearm and AmmunitionRead the Press Release
DENVER – Ronald Odean Bryant, age 22, of Denver, Colorado, has been indicted on May 20, 2015 by a federal grand jury in Denver on charges of being a felon in possession of a firearm and being a felon in possession of ammunition, U.S. Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Division Special Agent in Charge Luke Franey announced. Prior to the indictment, Bryant was charged by Criminal Complaint on May 15, 2015. On May 29, 2015 the court ordered that both the original Complaint and the formal charging document, the indictment, be unsealed. The defendant is currently in state custody on unrelated charges. No date has yet been set for when Bryant will be brought to federal court for his initial appearance.
According to court documents, including the original affidavit in support of the Criminal Complaint, on May 11, 2015, at approximately 11:30 p.m. uniformed officers in a marked Denver Police Department patrol vehicle noticed a gold in color Range Rover, with severe damage, including a heavily damaged windshield, damage to the headlight/bumper area, with the turn signals not appearing to work. The break light on the driver’s side was not functioning either. The car was pulled over by the Denver Police patrol vehicle near the intersection of East Bruce Randolph and North York Street.
When the officers approached the car they observed a female driver, a male sitting in the front passenger seat, and two females in the back seat. Each individual provided their identification information. When the officers checked the information, they determined that one of the females, and the male, now identified as Bryant, provided false information. As officers approached the vehicle to discuss the false information the car started to move forward as if it was about to flee. The driver stopped the car after being ordered by an officer to stop. Bryant was then observed to have his hands in his lap, concealed by a leather jacket. He was asked to step out of the car. When he complied, he dropped a plastic baggie of what appeared to be narcotics. It was later determined that the baggie contained methamphetamine.
As Bryant was about to be frisked he fled on foot. Officers gave chase, but did not immediately capture him. The Denver Police Department established a perimeter, and summoned a Police K-9 to the scene. Once the K-9 arrived and the area within the perimeter was searched, Bryant was apprehended without incident. When searched subsequent to arrest a round of ammunition was found in Bryant’s pocket. An inventory search of the vehicle Bryant was in revealed a Ruger .22 caliber pistol loaded with 7 rounds of ammunition. This firearm was located under the rear seat. A small revolver was also located, loaded with one round, in a beer box in the vehicle. Additional investigation determined that one of the females in the vehicle had purchased the Ruger pistol for Bryant several days earlier.
On May 14, 2015, agents and officers reviewed Bryant’s criminal history. Anyone with a felony criminal conviction is prohibited by both federal and state law of possessing a firearm or ammunition. Bryant has been identified as a CMG Blood. He has a prior conviction in Denver District Court for possession of a Schedule II Controlled Substance. Bryant is currently on probation in that case.
Bryant has been charged with one count of being a felon in possession of firearm or ammunition, and one count of being a felon in possession of ammunition. If convicted, the defendant faces not more than 10 years in federal prison, and up to a $250,000 fine on each of the two total counts.
“This case is an example of the close partnership between the Department of Justice, the ATF and the Denver Police Department to combat gun violence on our streets,” said U.S. Attorney John Walsh. “Working together with all levels of law enforcement and the community itself, we are making significant progress in those efforts, and will continue to move forward effectively.”
“ATF and our partners will continue to pursue felons who possess firearms and endanger members of the community,” said ATF Denver Division Special Agent in Charge Luke Franey.
Denver Police Chief Robert White said: “The significant arrest of an individual like Ronald Bryant goes a long way toward making our community safer and addressing violent crime. With zero tolerance for violent crime and a collaborative effort between law enforcement and the community, we can make communities safer and Denver a better place to live.”
This case was investigated by Denver Police Department and the ATF, as part of Project Safe Neighborhood, an initiative which includes the Denver, Aurora and Lakewood Police Departments working in concert with the ATF and the U.S. Attorney’s Office.
The defendant is being prosecuted by Assistant U.S. Attorney Peter McNeilly.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Two Men Arrested in Connection with Stock Trading SchemeRead the Press Release
DENVER – Michael Todd Osborn, age 44, who has been living in Connecticut and New York, and Corey Earl Engelen, age 45, of Parker, Colorado were arrested last week, Osborn on charges of wire fraud and money laundering, and Engelen on charges of money laundering, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Gilbert R. Garza announced. Osborn and Engelen were indicted by a federal grand jury on February 11, 2015 which remained sealed until Osborn’s arrest. Engelen has been released on a $70,000 unsecured bond after being read his rights and the charges pending against him. He was later arraigned and pled not guilty. Osborn was arrested in New York City and is pending release on bond.
According to the indictment, beginning in October 2009 and continuing until July 2010, Osborn devised a scheme to defraud investors. He told them that he would use their funds to trade stocks on their behalf. In fact, he did no trading, and he and his Colorado associate used the investors’ money for their own personal benefit and purposes other than trading. Osborn held himself out to investors as an experienced trader of stocks and other securities and a veteran in the equity/swing trading business. In some instances, he falsely represented he was a licensed broker. He sold investors units in the CU Equity Swing Fund I, LLC and the 10x Leveraged Oscillator Fund, through which he represented he would conduct short-term trading. Investors typically learned of the investment opportunity through a friend or trusted associate.
Osborn falsely represented that he had a prime trading account through which he would be able to leverage the funds invested and thereby reap greater profits than from unleveraged trading and falsely represented that the investors’ funds were protected from fraud, larceny, and embezzlement by a fidelity bond with Lloyds of London.
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 held by Osborn’s associate in Colorado. Once the investors had wired funds, Osborn provided them “blotters,” which contained detailed records of trades he had purportedly made. The information provided was false, as Osborn had never made the trades, and certainly no profits had been realized.
In June of 2010, Corey Engelen knowingly engaged in monetary transactions derived from specified unlawful activity, namely wire fraud. The transactions consisted of wire transfers from Infinite One, LLC of $50,000, $44,915, and $15,000 to the bank accounts of Dream Motor Cars and law offices.
Osborn was charged with eight counts of wire fraud and three counts of money laundering. Engelen was charged with three counts of money laundering. Wire fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000. Money laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000. Included in the indictment is a notice of forfeiture for any property traceable to the structuring charges alleged in the indictment.
This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorney Linda Kaufman.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Statement by U.S. Attorney John Walsh Regarding Heroin RoundupRead the Press Release
DENVER – Today U.S. Attorney John Walsh issued the following statement and list of those indicted and arrested as part of the announcement of federal and state indictments and arrests of the Ruelas-Torres Drug Trafficking Organization:
“This operation represents the gold standard for federal state cooperation and investigation of drug trafficking organizations. The Colorado Attorney General’s Office and the United States Attorney’s Office worked hand–in hand with the federally funded Denver OCDETF Strike Force, most importantly teaming up with the DEA, IRS, FBI, HSI, Colorado State Patrol and other key agencies.
“The federal indictment has a specific goal: Through these federal money laundering and financial charges, we aim to strangle this heroin-trafficking organization both in Colorado and in Mexico by depriving it of the oxygen it needs – money.
“Let’s not understate the pain, suffering and death that heroin traffickers are causing here in Colorado. Colorado is in the midst of a heroin epidemic – the number of heroin overdose deaths skyrocketed from 2003 to 2012 by 600%. In 2013 alone, at least 118 Coloradans died of overdoses in which heroin played a role. In 2014, the situation was even worse: 147 Coloradans died of heroin-related overdoses, a 25% increase in one year. Since 2010, the Colorado Department of Health believes that nearly 500 [481] Coloradans have died from heroin overdoses. This is a disaster hiding in plain sight.
“The U.S. Attorney’s Office has obtained federal grand jury indictments charging 17 defendants. The federal charges focus on the large scale criminal enterprise and the illegal money laundering activities. Of those named in the federal indictment, 6 are in custody, and 11 remain at large, of which we believe 6 are in Mexico.
“I’d like to thank the Colorado Attorney General’s Office – including the Attorney General and her prosecutors, along with our team at the U.S. Attorney’s Office. And critically, Colorado owes special thanks and appreciation to the Organized Crime & Drug Enforcement Task force-funded Denver Strike Force team, including the DEA, IRS Criminal Investigation, FBI, Homeland Security Investigations, Colorado State Patrol, Northern Colorado Drug Task Force, West Metro Drug Task Force, the Denver Police Department and the Aurora Police Department. Together, we have disrupted a well-organized highly sophisticated drug trafficking organization.”
Those named in the federal indictment:
JOEL EFREN RUELAS-AVILA, a/k/a “Efren,” (fugitive in Mexico)
JOSE LUIS RUELAS-TORRES, (fugitive in Mexico)
MARIA DE JESUS ESPINOZA-RODRIGUEZ, a/k/a “Maria,” (fugitive in Mexico)
BETITO LAST NAME UNKNOWN, (fugitive in Mexico)
JOSE CARLOS BARRAZA-ACEVES, a/k/a “Luis 2525,” (fugitive in Mexico)
HECTOR LIBRADO RIVERA-SANDOVAL, (fugitive in Mexico)
LEO DELFIN, (fugitive)
PEDRO ARMANDO GUTIERREZ-NUNEZ, a/k/a “Carlos 4109,” (arrested)
RAUL ESTRADA-CASTILLO, a/k/a “Javier Rios,” a/k/a “Irvin,” a/k/a “Ramon,” (arrested)
IVAN HARO-PEREZ, a/k/a “Ivan,” (fugitive)
JOSE VIDAL LEON-PENUELAS, a/k/a “Vidal,” (fugitive)
CARLOS ALBERTO PEREZ-GARCIA, (arrested)
PABEL ERBEY BERNAL-LOPEZ, (fugitive)
YAJAHIRA MELISSA LOPEZ-CALIDONIO, a/k/a “Melissa,” (arrested)
LIGIA LOPEZ-PEREZ, (fugitive)
NELI YANIRA CALIDONIO-MEZA, a/k/a “Neli.” (arrested)
MARTIN RODRIGUEZ-SANCHEZ (fugitive)Civilian Living on Fort Carson Sentenced to 45 Years in Federal Prison for Heinous Domestic Violence AssaultsRead the Press Release
Defendant choked victim until she blacked out, then poured boiling hot water on her groin to bring her back to consciousness
DENVER – Mitchell Lee Gibson, age 30, who resided on-base on Fort Carson near Colorado Springs, Colorado, was sentenced today by U.S. District Court Judge Robert E. Blackburn to serve 540 months (45 years) in federal prison for assault resulting in serious bodily injury, assault with a dangerous weapon and assault of a spouse by strangling and suffocation, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Following his prison sentence, Judge Blackburn ordered Gibson to serve 3 years on supervised release. Gibson, who attended the sentencing hearing in custody, was remanded at the hearing’s conclusion.
Gibson was first arrested based on a Criminal Complaint filed on March 26, 2014. He pled guilty before Judge Blackburn on February 5, 2015, and was sentenced today, May 20, 2015.
According to the stipulated facts contained in the plea agreement, on March 25, 2014 at about 9:45 p.m., Fort Carson Police officers responded to a 911 call from a victim who explained that Gibson had assaulted her. Responding officers immediately saw significant injuries and called for medical assistance. She told officers that Gibson was under the influence of alcohol and prescription medication, and that he threatened to hurt her and a child.
While at the hospital, doctors determined that the female victim had two black eyes, scratches and extensive bruising on her face, arms, chest, shoulders, torso, hips and legs. She had red marks on her arms and throat, and injuries from whipping on her back, torso and legs. She had a bite mark on the back of her neck and blood from a laceration on her ear. She had second degree burns covering her stomach, groin, right arm and right leg. She also had two open blisters from the burns. All of this while she was 9 weeks pregnant.
The investigation determined that Gibson had whipped the victim with a coaxial cable, which he regularly made her retrieve for him prior to the beatings. He would choke her with the cable until she blacked out, and then pour boiling hot water on her stomach, groin and leg to revive her. He had threatened to kill her, a child and then himself.
“Defendant Gibson assaulted his victim in a series of senseless, sadistic attacks that earned him every minute of the stern sentence imposed,” said U.S. Attorney John Walsh. “We hope that his victim – and the larger community -- can now rest easy, knowing that her tormentor will spend decades isolated from society.”
“The level of Mitchell Gibson’s violence and his cruelty toward family members during these assaults are shocking,” said Special Agent in Charge Thomas P. Ravenelle. “We view today’s sentence as a just punishment and deterrent that will help to protect others from his abhorrent conduct.”
This case was investigated by the Fort Carson Police Department and the FBI.
Gibson was prosecuted by Assistant U.S. Attorney Gregory Holloway.
Colorado Liquor Store Owner Pleads Guilty to Failing to Report $3.2 Million in Income to the IrsRead the Press Release
DENVER – Alan Timothy Hershey, age 50, of Gilcrest, Colorado, pled guilty last week before U.S. District Court Judge Christine M. Arguello to conspiracy to defraud the United States and tax evasion, United States Attorney John Walsh, IRS Criminal Investigation Acting Special Agent in Charge Gilbert R. Garza announced. Judge Arguello is scheduled to sentence Hershey on August 25, 2015. Hershey was indicted by a federal grand jury in Denver on July 3, 2014 along with co-conspirator Renee Molinar. Molinar plead guilty to conspiracy to defraud the United States on May 7, 2014 and is scheduled to be sentenced on August 27, 2015.
According to information contained in the indictment and the plea agreements, Johnstown Liquor is a retail liquor store located in Johnstown, Colorado. In March of 2001, Hershey transferred the store to co-conspirator Molinar. They concealed from the IRS that Hershey retained true ownership and control of the store.
They used a "Keystroke" point of sale record-keeping system at the store which was connected to the store's cash registers and accurately recorded the business's cash, check, and credit card receipts. At Hershey's direction, Molinar would remove a certain amount of the cash receipts before preparing the deposit slips and give that cash to Hershey. To conceal the existence of the cash receipts that had been removed, they used a second set of books. Hershey directed an unindicted co-conspirator to make entries into a separate record-keeping system (QuickBooks system) for this purpose. They also used the check-cashing business operated by Johnstown Liquor, which required the store to have a large amount of cash on hand, to conceal the true amount of the business's cash receipts.
Hershey willfully filed no federal income tax returns for the entire period of the conspiracy, (for tax years 2001 through 2011), and made no payments of income taxes to the IRS. To conceal the gross receipts they were skimming from the store, Hershey used nominees to act as purchasers, and bought two other liquor stores (Liquor Plus in Greeley, and Gilcrest Liquor in Gilcrest) and a number of houses with the cash skimmed from Johnstown Liquor’s gross receipts. Hershey controlled the operations of the stores, and he and Molinar collected the rents from the houses. Hershey also ran Corona’s and More, a liquor store in Bennett, Colorado. He failed to pay federal taxes on any of the four stores’ $3,223.027 taxable income.
As part of the fraud, many employees were paid “off the books” in cash wages. Any employees paid entirely in cash were issued no Forms W-2. Those who were paid partly in cash and partly by check received Forms W-2 reflecting only the payments made by check. To ensure that the IRS would not discover this deceit, Hershey instructed the employees who were paid in cash not to file tax returns.
Johnstown Liquor was required to collect state sales taxes on its sales of beverages, file monthly sales tax returns, and to pay those taxes monthly to the Colorado Department of Revenue. Hershey directed the unindicted co-conspirator to create the business's monthly state sales tax returns using the understated sales figures from the QuickBooks records. Johnstown Liquor collected sales tax on each sale, but failed to pay $440,000 of what was collected to the Colorado Department of Revenue.
The total restitution owed by Hershey in this case is $1,777,183, consisting of $1,337,183 owed to the IRS for all federal taxes owed by Hershey for tax years 2001- 2011 and $440,000 owed to the Colorado Department of Revenue for state sales taxes collected by Johnstown Liquor from 2001 through 2010. Molinar’s restitution is based on the unpaid federal taxes related to Johnstown Liquor and the sales tax collected by Johnstown Liquor and not remitted to the state, or $1,464,952.
Hershey and Molinar each pled guilty to one count of conspiracy to defraud the United States, which carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000 or the greater of twice the gross loss or twice the gross gain from the offense. Hershey also pled guilty to two counts of income tax evasion, each of which carries a penalty of not more than 5 years in federal prison, and a fine of up to $100,000
This case was investigated by the Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service. This case was prosecuted by Assistant United States Attorney Assistant U.S. Attorney Linda Kaufman.
Judge Orders Injunction to Stop Sale of Dangerous MagnetsRead the Press Release
DENVER – A federal judge today ordered a Colorado company to stop selling hazardous high-powered magnets that had been the subject of a product recall by their manufacturer as part of an agreement with the Consumer Product Safety Commission (CPSC), the Justice Department announced. U.S. District Court Judge Christine M. Arguello of the District of Colorado found that Zen Magnets LLC and its owner, Shihan Qu, were likely violating the Consumer Product Safety Act by selling magnets that were purchased from a New Jersey company shortly before the magnets were recalled.
Last week, the department filed a complaint seeking injunctive relief and civil penalties against Zen Magnets and Qu.
The complaint alleged that Zen Magnets purchased 917,000 tiny, high-powered magnets from a New Jersey firm one week before that firm signed an agreement with the CPSC to recall the magnets. Once the magnets were recalled, their sale by any party was prohibited. Nonetheless, despite repeated warnings by the CPSC, Qu’s Denver-based company continued to sell the magnets.
The magnets are sold in sets and generally marketed as desk toys. When swallowed by children or teens, the magnets clamp together and can cause serious internal injuries.
“Zen Magnets insisted on selling a dangerous product to the public, even after repeatedly being warned to stop by the Consumer Product Safety Commission,” said U.S. Attorney John Walsh of the District of Colorado. “The magnets in this case can cause serious harm to people – particularly to children – if swallowed, by causing rips in the digestive system leading to grave infection. Given the company’s refusal to stop selling the product, this office, working with the Consumer Product Safety Commission, did not hesitate to seek a court order to protect the public. Today’s order is a victory for public safety, and for the safety of young children.”
In issuing the preliminary injunction, Judge Arguello found a substantial likelihood that the defendants had violated the Consumer Product Safety Act and a cognizable danger of recurring violations in the future. The ruling said that Zen Magnets “has essentially turned its pledge to continue to defy the CPSC into a marketing campaign” and has “openly vowed” not to stop selling the recalled magnets absent an injunction. Thursday’s ruling followed a three-hour evidentiary hearing on Monday in Denver.
“The Department of Justice will continue to work with the Consumer Product Safety Commission to enforce our consumer protection laws and protect consumers from dangerous products,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Efforts to evade the law and sell products that have already been recalled will not be tolerated.”
Zen Magnets is separately challenging a rule issued by the CPSC that went into effect April 1, but was temporarily stayed until April 20. The rule requires magnets or magnet sets to be large enough so that they cannot be swallowed or weak enough so they are unlikely to clamp together if ingested.
In issuing that rule, the CPSC noted the risk of injury that the rule addresses. When a person ingests more than one magnet from a magnet set, there is potential for damage to intestinal tissue. The magnets are attracted to each other in the digestive system, damaging the tissue that becomes trapped between the magnets. In several incidents, surgery was required to remove magnets that children had swallowed.
The rule, which Zen Magnets is challenging before the 10th Circuit Court of Appeals, applies only prospectively. The preliminary injunction issued by Judge Arguello applies to the 917,000 tiny magnets that Zen Magnets acquired in July 2014, shortly before the manufacturer agreed to recall the magnets, and all other magnets that were commingled with the recalled magnets.
The case is being handled by Assistant U.S. Attorney Jamie Mendelson of the District of Colorado and Trial Attorney Patrick Jasperse of the Civil Division’s Consumer Protection Branch.
Canada Extradites Second Drug Trafficking Defendant to Colorado for ProsecutionRead the Press Release
DENVER – Javier Batista-Cervantes, age 35, who was until today in Canada, was extradited from Canada to Denver, Colorado so he can face drug trafficking charges, U.S. Attorney John Walsh and Drug Enforcement Administration (DEA) Denver Division Special Agent in Charge Barbra Roach announced. Batista-Cervantes was indicted, along with six others, in 2010 for the importation of cocaine from Mexico. The cocaine was brought to Colorado, where it was then later sent to Canada. The defendant made his initial appearance today before a U.S. Magistrate Judge Michael E. Hegarty. The defendant will next be in court on May 19, 2015 at 2:00 p.m. for arraignment and detention.
According to the indictment, Batista-Cervantes, along with others, conspired to import into the United States from Mexico, and then export from the United States into Canada, cocaine, a Schedule II Controlled Substance. The defendant also faces three counts of using a telephone to facilitate the commission of a drug trafficking felony. If convicted of conspiracy, he faces not less than 10 years, and up to life in federal prison, as well as up to a $4,000,000 fine. If convicted of using a telephone for drug trafficking, the defendant faces not more than 4 years imprisonment, and up to a $250,000 fine, per count, for each of the three counts.
The investigation dates back to when a co-defendant, Calvin Wayne Skidmore, was arrested in 2010 at the Del Bonita Port of Entry by U.S. Customs and Border Protection officers. A search of his vehicle yielded 46 packages of cocaine, equating to 16.5 kilograms, concealed in hidden compartments.
In addition to Batista-Cervantes, two other people named in the indictment remain fugitives. Co-defendant Hector Armondo Chavez was extradited to Colorado from Canada on January 16, 2015. Defendant Hernandez-Renteria is deceased. Dionisio Salgado, a U.S. citizen, pled guilty in a related case in federal court in Colorado and was sentenced to serve 10 years in prison. Canadian citizen Calvin Wayne Skidmore pled guilty in a related case in the District of Montana and was also sentenced to 10 years in prison.
This case was investigated by the DEA. The Lethbridge Regional Police Service, a part of the Alberta Law Enforcement Response Teams in Canada as well as the Royal Canadian Mounted Police, assisted U.S. government authorities. The U.S. Marshals Service assisted in the transportation of Batista-Cervantes from Canada to Colorado. The Department of Justice’s Office of International Affairs provided assistance in this matter. The case is being prosecuted by Assistant U.S. Attorney Michele Korver of the U.S. Attorney’s Office, District of Colorado.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Bureau of Prisons Employee Who Was Also A Union Official Sentenced for Making False Statements on DocumentsRead the Press Release
DENVER – Aide Spade, age 49, of Evergreen, was recently sentenced by Chief U.S. District Court Judge Marcia S. Krieger to 3 years’ probation and ordered to pay restitution of $14,234.18 plus an additional $5,000 fine for making and using a false document knowing it contained fraudulent statements and entries, the U.S. Attorney’s Office, the Department of Justice Office of the Inspector General (DOJ OIG), and the U.S. Department of Labor’s Office of Labor-Management Standards (OLMS) announced.
Spade was indicted by a federal grand jury in Denver on June 4, 2014. She pled guilty before Chief Judge Krieger on October 14, 2014. She was sentenced on May 11, 2015.
According to the stipulated facts contained in the plea agreement, Spade was the Treasurer of the American Federation of Government Employees (AFGE) Local 709 and an employee of the Bureau of Prisons, assigned to the Federal Correctional Institution in Englewood. As Treasurer, Spade was responsible for maintaining all financial records of the union, preparing the union’s annual financial reports, and keeping records of all financial transactions. Spade used her position as treasurer to embezzle over $59,000 that the Union had received in dues payments from its members. Overall, the defendant issued 33 unauthorized cashier’s checks to herself totaling $46.489.18 and made unauthorized cash withdrawals for her own personal use totaling $12,680. She also submitted forms to the U.S. Department of Labor on which she knowingly and willfully underreported the amount of allowances and disbursements the Union paid to her.
Her embezzlement was discovered when, in April 2012, the AFGE Local 709 membership requested financial records from Spade so they could conduct an audit. Spade delayed, which resulted in AFGE’s National office making an identical request in November of 2012. She then turned over all the records to the Union President and resigned her post with the union and her position with the Bureau of Prisons. The records included a folder with copies of checks and withdrawal slips payable to Spade totaling $40,676.86.
On November 18, 2013, agents of the Department of Labor’s Office of Labor-Management Standards, and the Department of Justice Office of the Inspector General interviewed Spade. During the interview, it was determined that Spade had embezzled union funds for her own personal use, including car payments, gas, and other expenses. After resigning, Spade has paid $44,935.00 to the union as restitution for her embezzlement, leaving a total of $14,234.18 as restitution still due and owing.
“Officials who victimize their unions and union members by stealing funds will face felony prosecution,” said U.S. Attorney John Walsh. “The consequence in this case is that the defendant is now a felon who had to resign from her union position as well as her career service job.”
“The Office of the Inspector General will continue its efforts to ensure that Department of Justice employees who break the law and fail to act with integrity are held accountable and brought to justice,” said Special Agent in Charge Norman Lau of the DOJ OIG.
“This sentence sends a clear message that there are consequences for union officers who break the trust placed in them to be good stewards of union funds,” said Emily Prosise, Denver-St. Louis District Director of the Office of Labor-Management Standards. “The Department of Labor will continue to protect workers by seeking appropriate punishment of, and restitution from, anyone attempting to use their position for personal financial gain at the expense of union members.”
This case was investigated by the Department of Justice Office of the Inspector General and the Department of Labor’s Office of Labor-Management Standards.
The defendant was prosecuted by Special Assistant U.S. Attorney Daniel Burrows and Assistant U.S. Attorney Anna Edgar.
Denver Gang Member Arrested for Being A Felon in Possession of A FirearmRead the Press Release
DENVER – David Nunez-Hernandez, age 21, of Denver, Colorado, has been ordered held without bond following his arrest on the charge of being a felon in possession of a firearm, U.S. Attorney John Walsh and ATF Denver Division Special Agent in Charge Luke Franey announced. Nunez-Hernandez was first arrested on April 29, 2015. He was then charged federally based on a Criminal Complaint on May 1, 2015. He was indicted by a federal grand jury in Denver on May 5, 2015. On May 8, 2015, following a contested detention hearing, U.S. Magistrate Judge Nina Y. Wang ordered he be held without bond pending a resolution of his case.
According to court documents and information proffered to the court during the defendant’s detention hearing, on April 29, 2015 at 5:00 p.m. a Denver Police officer, while on patrol, observed a vehicle without a state-mandated front license plate. The officer then conducted a traffic stop. During the traffic stop the officer learned the driver, David Nunez-Hernandez was driving without a license, which had been revoked based on a car insurance violation. The officer learned that Nunez-Hernandez was going to his friend’s house because his “homie” just got shot. It was later determined that Nunez-Hernandez’s cousin was the one who was shot.
Denver Police obtained permission from Nunez-Hernandez to search his vehicle. While searching the trunk of the car, the officer observed the handle of a firearm. The firearm turned out to be a loaded Smith and Wesson, model 686, .357 magnum caliber revolver. Further investigation revealed that Nunez-Hernandez had been previously convicted of a felony offense, and was therefore prohibited from possessing firearms. Nunez-Hernandez had two convictions out of Denver District Court, one in 2011 for attempted escape from community corrections, and one in 2009 for possession of a Schedule 2 controlled substance. He also had a conviction in Adams County District Court in 2009 for felony menacing real/simulated weapon. Nunez-Hernandez was arrested and charged with being a felon in possession of a firearm.
Nunez-Hernandez then made several appearances in U.S. District Court, including his advisement. During his detention hearing, additional information came out about his background, including the fact that he is an “Eastside Playboy Crip” and that he uses marijuana three times a day.
“Combatting violent street crime requires the close cooperation of federal, state and local law enforcement,” said U.S. Attorney John Walsh. “This arrest is part of federal law enforcement’s ongoing effort to work with our Metro Denver partners to address gang-related gun violence.”
“ATF and our partners at the Denver Police Department will continue to have zero tolerance for convicted felons who possess firearms in our community,” said ATF Special Agent in Charge Luke Franey.
Nunez-Hernandez faces one count of being a felon in possession of a firearm. If convicted on that count he faces not more than 10 years in federal prison, and up to a $250,000 fine.
This case was investigated by the Project Safe Neighborhood Task Force, which includes the ATF, the Denver Police Department, and the Lakewood Police Department.
The defendant is being prosecuted by Assistant U.S. Attorney Robert Brown.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney and Fbi Statement Regarding Identity of Longhorn BanditRead the Press Release
DENVER – U.S. Attorney John Walsh and FBI Denver Special Agent in Charge Thomas Ravenelle today confirmed the individual found dead at the Essex House Motel in Littleton, Colorado, on the evening of Friday, May 8, 2015, was believed by law enforcement to be the person responsible for a string of Metro Denver bank robberies, who had been dubbed by the FBI as the “Longhorn Bandit.” Yesterday, Arapahoe County Coroner Kelly C. Lear-Kaul, M.D. released the identity of the individual as 19 year old Jesus Emmanuel Avila. Earlier last week, the FBI and U.S. Attorney’s Office obtained a sealed Criminal Complaint – now unsealed – charging Avila with one count of bank robbery, and alleging in the complaint he committed two other bank robberies.
Thanks to the investigative work of the FBI and Rocky Mountain Safe Streets Task Force (RMSSTF), Special Agents and Task Force Officers were first able to identify the Longhorn Bandit as Avila. They later determined the location where Avila was believed to be staying. The FBI SWAT Team and RMSSTF members went to the location, the Essex House Motel, in Littleton, Colorado, to execute the arrest warrant. In the process of affecting the arrest of Avila, the defendant shot an FBI SWAT Team member in the leg. The injured FBI Special Agent was immediately transported to a local hospital, where it was determined his injuries were not life threatening. After Avila shot the FBI Agent, he turned the gun on himself. He died from a single gunshot wound to the head (manner of death classified as suicide), according to the Arapahoe County Coroner.
“The hard work of the FBI and the Safe Streets Task Force led to the identification and location of a serial bank robber,” said U.S. Attorney John Walsh. “As the subject’s actions firing on law enforcement agents and wounding an FBI agent show, the robber was armed, dangerous and posed a grave risk to the public. Our thoughts are with the injured FBI Special Agent, with best wishes for a speedy recovery.”
“On behalf of the FBI, I want to express my sincere gratitude to those Agents, Officers, Paramedics and agencies, especially the Littleton Police Department, who provided invaluable assistance in response to the shooting on Friday,” said Special Agent in Charge Thomas Ravenelle. “We are very thankful the wounds sustained by our Agent are not more serious. He has received outstanding treatment from the professionals at the Swedish Medical Center, and we look forward to his return to duty upon recovering from his injuries.”
The Criminal Complaint charging Avila has been unsealed and dismissed as a result of the defendant’s suicide.
Castle Rock Man Pleads Guilty to Sending Marijuana Thorugh the U.S. MailRead the Press Release
Defendant also received over $100,000 in cash through the U.S. Mail in return
DENVER – Brian Daniel Evins, age 42, of Castle Rock, Colorado, pled guilty before U.S. District Court Judge Robert E. Blackburn to three counts of possession of a controlled substance with the intent to distribute, U.S. Attorney John Walsh and Denver U.S. Postal Inspector in Charge Adam P. Behnen announced. Evins, appeared at the change of plea on April 30, 2015 before Judge Blackburn. He was at that hearing free on bond. Evins was originally indicted by a federal grand jury in Denver on February 9, 2015.
According to the stipulated facts contained in the plea agreement, on April 2, 2014, a U.S. Postal Inspector came across a suspicious mailing that may have contained narcotics or narcotic proceeds. The first package in question came from Missouri, and contained U.S. currency. The package was sent to a Commercial Mail Receiving Agency (CMRA) mailbox and was addressed to an individual from Lone Tree, Colorado. Further investigation revealed that the person who rented the CMRA mailbox used fake identification.
Inspectors conducted surveillance of the CMRA mailbox. They saw an individual driving a grey Honda Pilot come into the CMRA, pick up several packages from the CMRA mailbox, and return to his car. Inspectors traced the car to an individual named Brian Daniel Evins, of Castle Rock, Colorado. A review of Evins’ driver’s license revealed that he was the same individual who entered the CMRA and claimed parcels from the CMRA mailbox. At one point he also claimed one parcel of what appeared to be U.S. Currency that was too large to fit in his mailbox.
As the investigation continued, the Inspectors found Evins mailing parcels of marijuana from a handful of post offices in South Metro Denver during the Summer and Fall of 2014. Further, he continued to pick up parcels that appeared to be U.S. currency from his CMRA mailbox. As a result, Inspectors decided to contact him while he was collecting his mail at the mailbox.
During that contact it was determined that Evins sent via U.S. Mail over 100 outbound packages containing marijuana to various locations across the country. Further, he received over 100 inbound money parcels containing several hundreds of thousands of dollars in U.S. currency. Inspectors then conducted a search of Evins’ apartment. That search resulted in recovering 580 grams of bagged marijuana, 800 grams of marijuana extract/hash oil, 5,480 grams of marijuana edibles, for a total weight of 6,860 grams of marijuana. A search of his vehicle resulted in finding an additional 78 grams of liquid marijuana. He had previously mailed two additional packages that were seized by law enforcement. Those packages contained 3,654 grams of marijuana. In total, Inspectors learned that Evins sent 11,026 grams of marijuana. Law enforcement also had seized during the investigation over $53,000 of U.S. currency which was the proceeds from his illegal narcotics transactions. That money was forfeited to the government as part of the defendant’s plea agreement.
“As the Department of Justice has made clear, stopping the interstate transportation of marijuana is a federal priority,” said U.S. Attorney John Walsh. “When drug traffickers use the U.S. mail to violate federal drug laws, the U.S. Attorney’s Office will team up with our local, state and federal partners to hold violators accountable.”
“The defendant’s use of the U.S. Mail to send marijuana is illegal and is evidenced by his recent guilty plea to federal charges for intent to distribute” said Adam P. Behnen, Inspector in Charge, U.S. Postal Inspection Service, Denver Division. “Although some states have recently passed laws allowing their residents to possess small amounts of marijuana, it is a violation of federal statute to use the U.S. Mail to ship any and all illegal drugs.”
The defendant pled guilty to three counts of possession of a controlled substance with the intent to distribute. He faces not more than 20 years in federal prison, and up to a $1,000,000 fine per count.
This case was investigated by the U.S. Postal Inspection Service.
Evins is being prosecuted by Assistant U.S. Attorneys Kurt Bohn.
Two Men Who Breached Photobucket.com Indicted and Arrested on Conspiracy and Fraud Related ChargesRead the Press Release
Two men have been arrested after breaching the computer services of Colorado based Photobucket, a company that operates an image and video hosting website, announced U.S. Attorney John Walsh for the District of Colorado and Special Agent in Charge Thomas Ravenelle for the Denver Division of the Federal Bureau of Investigations (FBI). Brandon Bourret, 39, of Colorado Springs, Colorado and Athanasios Andrianakis, 26, of Sunnyvale, California, were arrested today without incident at their homes. Both made initial appearances today, where they were advised of their rights and the charges pending against them.
According to the indictment, beginning on July 12, 2012 and continuing through July 1, 2014, Bourret and Andrianakis knowingly conspired to commit acts and offenses against the United States, namely computer fraud and abuse, access device fraud, identification document fraud and wire fraud. The indictment further alleges that there was interdependence among the members of the conspiracy.
The purpose of the conspiracy was for the conspirators to enrich themselves by selling passwords and unauthorized access to private and password protected information, images and videos on the Internet and by selling private and password protected information, images and videos that the conspirators obtained from the Internet.
The conspirators developed, marketed and sold a software application called Photofucket, which allowed viewers to circumvent the privacy settings of the image and video hosting website at Photobucket.com and to access and copy users private and password protected information, images and videos without authorization. The conspirators used Photofucket to obtain guest passwords to access users’ password protected albums. They also transferred, or caused to be transferred, guest passwords to others who paid to use the Photofucket application.
“It is not safe to hide behind your computer, breach corporate servers and line your own pockets by victimizing those who have a right to protected privacy on the internet,” said U.S. Attorney Walsh. “The U.S. Attorney’s Office is keenly focused on prosecuting those people for their theft -- and for the wanton harm they do to innocent internet users.”
“Unauthorized access into a secure computer system is a serious federal crime,” said Special Agent in Charge Ravenelle. “The arrest of Brandon Bourret and his co-conspirator reflects the FBI’s commitment to investigate those who undertake activities such as this with the intent to harm a company and its customers.”
The investigation regarding the breach and who’s albums were accessed is ongoing. For those who want to follow the status of this case, visit http://www.justice.gov/largecases – and then select “Photobucket.” In addition, the U.S. Attorney’s Office and the FBI commend Photobucket for their cooperation from the inception of the investigation – and thanked them for their continued assistance as both the investigation and prosecution moves forward.
Bourret and Andrianakis both face one count of conspiracy, which carries a penalty of not more than five years in federal prison and up to a $250,000 fine. They each face one count of computer fraud, aid and abet, which also carries a penalty of not more than five years in federal prison and up to a $250,000 fine. Finally, they each face two counts of access device fraud, which carries a penalty of not more than ten years in federal prison, and up to a $250,000 fine, per count.
This case is being prosecuted by Assistant U.S. Attorney David Tonini.
The charges contained in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.
Two Men Who Breached Photobucket.com Indicted and Arrested on Conspiracy and Fraud Related ChargesRead the Press Release
CLICK HERE FOR A COPY OF THE INDICTMENT
Defendants sold access to people’s private photographs and videos by creating an applications known as “Photofucket”
DENVER – Two men have been arrested after breaching the computer services of Colorado based Photobucket, a company that operates an image and video hosting website (http://www.photobucket.com), U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Brandon Bourret, age 39, of Colorado Springs, and Athanasios Andrianakis, age 26, of Sunnyvale, California, were arrested today without incident at their homes. Both made initial appearances today, where they were advised of their rights and the charges pending against them.
According to the indictment, beginning on July 12, 2012 and continuing through July 1, 2014, Bourret and Andrianakis knowingly conspired to commit acts and offenses against the United States, namely computer fraud and abuse, access device fraud, identification document fraud and wire fraud. The indictment further alleges that there was interdependence among the members of the conspiracy.
The purpose of the conspiracy was for the conspirators to enrich themselves by selling passwords and unauthorized access to private and password protected information, images, and videos on the Internet and by selling private and password protected information, images and videos that the conspirators obtained from the Internet.
The conspirators developed, marketed and sold a software application called Photofucket, which allowed viewers to circumvent the privacy settings of the image and video hosting website at Photobucket.com and to access and copy users private and password protected information, images and videos without authorization. The conspirators used Photofucket to obtain guest passwords to access users’ password protected albums. They also transferred, or caused to be transferred, guest passwords to others who paid to use the Photofucket application.
“It is not safe to hide behind your computer, breach corporate servers, and line your own pockets by victimizing those who have a right to protected privacy on the internet,” said U.S. Attorney John Walsh. “The U.S. Attorney’s Office is keenly focused on prosecuting those people for their theft -- and for the wanton harm they do to innocent internet users.”
“Unauthorized access into a secure computer system is a serious federal crime,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “The arrest of Brandon Bourret and his co-conspirator reflects the FBI’s commitment to investigate those who undertake activities such as this with the intent to harm a company and its customers.”
The investigation regarding the breach and who’s albums were accessed is ongoing. For those who want to follow the status of this case visit http://www.justice.gov/largecases -- and then select “Photobucket”. In addition, the U.S. Attorney’s Office and the FBI commend Photobucket for their cooperation from the inception of the investigation – and thanks them for their continued assistance as both the investigation and prosecution moves forward.
Bourret and Andrianakis both face one count of conspiracy, which carries a penalty of not more than 5 years in federal prison, and up to a $250,000 fine. They each face one count of computer fraud, aid and abet, which also carries a penalty of not more than 5 years in federal prison, and up to a $250,000 fine. Finally, the each face two counts of access device fraud, which carries a penalty of not more than 10 years in federal prison, and up to a $250,000 fine, per count.
This case is being prosecuted by Assistant U.S. Attorney David Tonini.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
Telluride Man Pleads Guilty to Filing $161,000 in False Claims with the IrsRead the Press Release
DENVER – Ugur Ulupinar, age 37, of Telluride, Colorado, pled guilty this week in Durango before U.S. Magistrate Judge David L. West to filing false claims with the IRS, United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Gilbert R. Garza announced. Ulupinar is scheduled to be sentenced on October 13, 2015 at 9:00 am.
Ulupinar waived his right to be indicted and thus was charged by Information on April 27, 2015. The defendant pled guilty on May 5, 2015.
According to information contained in the plea agreement as well as the charging documents, from February to May of 2012, Ulupinar knowingly filed 162 false Forms 1040, U.S. Individual Income Tax Return, with the Internal Revenue Service (IRS). Ulupinar used his business, Westax, to establish a business relationship with the Turkey based visa services company “Campus” where Ulupinar would file Forms 1040 for Campus’ clients. Clients were citizens of Turkey, and neighboring nations, and university students in their nation of origin participating in the 2010 and 2011 U.S. Summer Work Travel Program otherwise known as a J1 Visa. Campus assisted their clients in obtaining employment in the United States through the Summer Work Travel Program, and also offered tax preparation services for these clients.
Ulupinar used the information he received from Campus to prepare and file 162 Forms 1040 with the IRS for tax year 2011. These returns legally declared each client’s wages and taxes withheld; however, Ulupinar falsely claimed the American Opportunity Tax Credit (AOTC) for each client on each of the 162 Forms 1040. The AOTC is a refundable tax credit available to those U.S. Resident Aliens or Citizens who incur college tuition expenses while attending an eligible educational institution. None of the clients were Resident Aliens or Citizens of the U.S. during the applicable tax years. As a result of fraudulently claiming the AOTC, each Form 1040 claimed the refund of an additional $1,000.00 per Form 1040 which was in addition to the amount legally due each client. A total of $161,000.00 was fraudulently claimed using the AOTC.
Ulupinar knew the clients were not entitled to the AOTC because they were not U.S. Resident Aliens or Citizens who incurred tuition expenses from a qualified educational institution. Furthermore, no client provided him with any information regarding tuition payments. U.S. Treasury tax refund checks were issued in the clients names and mailed to Ulupinar’s Post Office Box in Telluride, Colorado. He would endorse the tax refund check by signing the clients name and then he counter endorsed the check with his own name before he deposited the checks into a bank account he controlled. The clients were not aware of the additional $1,000 refund attributable to the AOTC tax credit which Ulupinar would keep for himself.
As part of Ulupinar’s plea agreement, he agrees to pay $161,000 in restitution to the Internal Revenue Service.
Ulupinar pled guilty to one count of filing a false claim with the IRS, which carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000.
This case was investigated by Internal Revenue Service – Criminal Investigation and the U.S. Postal Inspection Service.
The defendant is being prosecuted by Assistant U.S. Attorney Todd Norvell in the Colorado U.S. Attorney’s Durango Branch Office.
Grand Junction Real Estate Developers Are Sentenced to Federal Prison for Money LaunderingRead the Press Release
DENVER – Franklin Thad Harris, age 59, and Merlin D. Unruh, age 53, both of Grand Junction, Colorado, were sentenced today by U.S. District Court Judge Christine M. Arguello to serve 36 months and 28 months in federal prison, respectively, for money laundering, the United States Attorney’s Office, the Federal Bureau of Investigation and IRS Criminal Investigation announced. Following their prison sentences, Harris and Unruh were ordered to serve 3 years each on supervised release. They were also ordered by Judge Arguello to pay $1,844,846.49 in restitution joint and several to the victim bank.
Harris and Unruh were indicted by a federal grand jury in Denver on January 8, 2013, for charges of bank fraud and money laundering. The indictment remained under seal until their arrest on January 11, 2013. A superseding information was filed on April 14, 2014. Harris and Unruh plead guilty to one count of money laundering on July 17, 2014. They were sentenced on May 6, 2015.
According to information contained in court documents, including the stipulated facts contained in their plea agreements, Harris was in the business of constructing housing developments throughout the Grand Junction, Colorado, area. In the mid to late 2000s, Harris was involved in the purchase of several acres of land for various planned housing developments in Grand Junction. Financing for the projects came in the form of secured loans from First National Bank of the Rockies (FNBR). Harris’s partner, Unruh, was in the construction business and was the general contractor on building projects with Harris. TDSM was a Colorado real estate development company incorporated in February 2003 and Harris and Unruh were sole members of the board of directors of TDSM. HARRIS was the President and Registered Agent of TDSM. Unruh was Secretary/Treasurer of TDSM. Unruh incorporated and was the registered agent for McGleeson, Inc., a construction company.
In 2010, several construction loans to Harris had become problem loans as they were in default with FNBR. The Special Assets Department of FNBR began to review the loans and identified potential fraud and requested an outside forensic audit which eventually lead to federal law enforcement agencies being notified. Between October 2007 and December 2008, Harris and Unruh obtained loan disbursements totaling $3,718,351.83. They submitting false and fraudulent expense documentation, primarily false invoices, which represented various types of construction work completed at both sites. In fact, much of the work reflected in the invoices had not been performed at the Chatfield site, and no work was done on the Thunder Valley development.
An IRS Special Agent conducted an analysis of the flow of funds and found Harris and Unruh, on numerous occasions, conducted a series of financial transactions after the draw money was deposited into their construction business account. They diverted funds meant to pay subcontractor invoices to private bank accounts and retirement accounts owned/controlled by them and their spouses.
This case was investigated by agents with Federal Bureau of Investigation (FBI) and IRS Criminal Investigation (IRS CI). The case was prosecuted by Assistant U.S. Attorney Michelle Heldmyer.
Six Individuals from Colorado Are Charged with Prison Refund Fraud SchemeRead the Press Release
DENVER – Raul Caraveo, age 43, Pamila Lucero, age 40, Sabrina Caraveo, age 31, Eugene Chavez, age 43, Carolina Aragon, age 58, and Christina Portillos, age 35, all from Colorado, were charged for conspiracy to file false IRS refunds, United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Gilbert R. Garza announced. All six defendants were indicted by a federal grand in Denver on April 7, 2015, which remained sealed until those charged had their initial appearances before a U.S. Magistrate Judge last week.
According to the indictment, beginning in February 2008, and continuing until May 2014, the defendants and unindicted coconspirators conspired with each other to defraud the Internal Revenue Service by submitting or causing to be submitted false claims for income tax refunds.
Raul Caraveo, while incarcerated within the Colorado Department of Corrections (DOC), obtained the identifying information of fellow inmates and inmates’ relatives to include names, dates of birth, and social security numbers. Caraveo and fellow DOC inmate Eugene Chavez used this information to generate false Form 1040A tax returns, listing the names of inmates and their relatives as either the primary tax payer or as a dependent of that alleged tax payer, and entering false wage and income information on the Forms 1040A. They submitted to the IRS tax returns for the years 2005 through 2013 with similar characteristics to include but not limited to Form 1040A, Earned Income Tax Credits, and all requested refunds that ranged between $2,491 and $3,052.
In most instances, Raul Caraveo and Eugene Chavez would fill out Form 1040A returns and mail them from prison to Pamila Lucero, Sabrina Caraveo, or Carolina Aragon. At other times, Raul Caraveo, Eugene Chavez, and other inmates would provide missing information for the returns to Pamila Lucero, Sabrina Caraveo, or Carolina Aragon, and direct them to add that information to the returns.
Almost all of the false returns used one of approximately a dozen addresses provided by Pamila Lucero, Sabrina Caraveo, Carolina Aragon, Christine Portillos, and unindicted co-conspirators. Once the packages of returns were completed, Pamila Lucero, Sabrina Caraveo, or Carolina Aragon would mail them to the IRS Service Center for processing.
During the course of this conspiracy, over 250 false claims for income tax refunds were submitted to the Internal Revenue Service in an attempt to receive fraudulent refunds.
All six defendants were charged with count one, count of conspiracy to file false claims for a refund. The remaining counts two through thirty-seven, are false claims for a refund, are charged as follows: Raul Caraveo 33 counts, Pamila Lucero 32 counts, Sabrina Caraveo 29 counts, Eugene Chavez 30 counts, Carolina Aragon 3 counts and Christina Portillos 7 counts.
Conspiracy to file false claims for a refund, if convicted, carries a penalty of not more than 10 years imprisonment, and up to a $250,000 fine, per count. False claims for a refund, carries a penalty of not more than 5 years imprisonment, and up to a $250,000 fine, per count.
This case is being investigated by Internal Revenue Service – Criminal Investigation (IRS CI). The defendants are being prosecuted by Assistant U.S. Attorney Martha A. Paluch.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
Manager/owner of Pain Clinic Is Sentenced to 15 Years in Federal Prison for Conspiracy, Distribution of A Controlled Substance and Money LaunderingRead the Press Release
DENVER -- Keith A. Schwartz, age 47, of Silverthorne, Colorado, was sentenced last week by Senior U.S. District Court Judge John L. Kane to serve 180 months (15 years) in federal prison for conspiracy, distribution of a controlled substance and money laundering, United States Attorney John Walsh announced. Following his prison sentence, Schwartz was ordered to serve 6 years on supervised release. Schwartz was convicted by a jury on October 24, 2014, following a 14-day trial. The jury deliberated for a day and a half before returning a verdict of guilty. Schwartz, who has been in custody since his indictment, remains in custody. Schwartz was indicted by a federal grand jury in Denver on May 22, 2013.
According to the indictment and evidence presented at trial, Schwartz, in conjunction with co-conspirators, all of but one of whom have previously pled guilty, knowingly conspired and agreed to dispense and distribute, or facilitate the dispensing and distribution of controlled substances, to patients at times and in circumstances outside the usual course of professional medical practice. He then laundered the proceeds from the patients through bank accounts in his wife’s name. The patients didn’t have a sufficient medical necessity for the prescription of the controlled substances. The primary prescription drug involved in the case was Oxycodone, with over one half million dosage units prescribed in an 18 month period.
Specifically, Schwartz, using an alias, approached a pain doctor named Kevin Clemmer in May of 2011, who at the time was housed in the Federal Detention Center in Englewood, Colorado after his indictment for the unlawful prescription of controlled substances. Schwartz offered to purchase the list of Clemmer’s patient lists, most of whom received substantially more narcotic or other controlled substance medication than was medically necessary.
That same month, after obtaining the patient list, Schwartz, and his co-conspirators, first saw Dr. Clemmer’s patients in a Holiday Inn in Wheat Ridge, Colorado, where they enlisted and worked with co-conspirator Dr. Joseph Ferrara, who was registered with the DEA to write prescriptions for controlled substances. The pain clinic eventually moved into office space, and Schwartz, who was the owner, manager, organizer and operator, had direct communications with patients regarding Dr. Ferrara’s treatment regimen. The defendant induced Dr. Ferrara to unlawfully write opioid and benzodiazepine prescriptions in large numbers to addicted patients – the amounts of which far exceeded the amount medically necessary and safe to use. In fact, the government presented expert testimony that proved that many of the controlled substance prescriptions written were up to four times the safe medical limit. As a result of the unlawful distribution of controlled substances, medication prescribed by Schwartz’s pain clinic contributed to the death of at least three patients.
The relationship among the co-conspirators began in the summer of 2009, when Schwartz recruited Dr. Ferrara to write medical marijuana recommendations to support Schwartz’s marijuana growing in his house. During 2009 and 2010, the medical marijuana business expanded to include travel throughout the state of Colorado, where Dr. Ferrara wrote medical marijuana recommendations. In May of 2011, the conspiracy shifted its primary focus to distribution of prescription controlled substances while also maintaining the medical marijuana recommendation business.
Schwartz laundered the money obtained by the pain clinic by placing it in bank accounts in corporations in the name of his wife. Schwartz used some of the illegally obtained money to purchase his $1.6 million house out of foreclosure.
“For a fistful of dollars, Defendant Schwartz stoked the epidemic of prescription drug abuse that is killing hundreds of Coloradans every year,” said U.S. Attorney John Walsh. “The painful sentence Schwartz received in this case mirrors the pain and suffering that flowed directly from his criminal conduct.”
“Prescription drug abuse is a serious problem in Colorado and those individuals that are responsible for the illegal and excessive distribution of prescription medicines need to be held accountable and brought to justice," said Barbra Roach, Special Agent in Charge of the Drug Enforcement Administration, Denver Field Division. “This is a great example of Federal and local law enforcement agencies working together to make our community a better place.”
“Because of our financial expertise, IRS CI has been involved in prescription drug abuse investigations and prosecutions around the country. In the Schwartz case IRS CI focused its financial investigative resources on the money laundering activities,” said Gilbert R. Garza, Acting Special Agent in Charge of IRS Criminal Investigation, Denver Field Office. “Thanks to IRS CI Special Agents, over $1,000,000 in assets was seized as part of the investigation, representing some of the defendant’s ill-gotten gains.”
Following the trial, he was found guilty of one count of conspiracy to distribute and dispense controlled substances, prescription drugs outside the course of usual professional medical practice, two counts of distribution and dispensing a controlled substance and aiding and abetting the same, four counts of use of a telephone to facilitate a drug crime, one count of conspiracy to commit money laundering, and 36 counts of money laundering. The defendant was found not guilty of two counts of use of a telephone to facilitate a drug crime and two counts of money laundering.
This case was investigated by the Tactical Diversion Squad (TDS) of the DEA, which includes members of the IRS Criminal Investigation, the Greenwood Village Police Department and the Arvada Police Department.
The defendant was prosecuted by Assistant U.S. Attorney M.J. Menendez.
Fort Collins Businessman Charged with Failing to File Income Tax Returns with the IrsRead the Press Release
DENVER – Donald D. Smith, age 66, of Fort Collins, Colorado, was charged by an Information with three counts of failing to file income tax returns, announced United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Gilbert R. Garza. The Information was filed on April 8, 2015, but remained sealed until his initial appearance which was on April 21, 2015. The case is now pending.
According to the Information, during calendar year 2008, Smith, the owner and operator of a business named Mountain West Children’s Academy LLC, had and received gross income of approximately $183,343. Smith was required by law, following the close of that calendar year, and on or before April 15, 2009, to file an income tax return to the Internal Revenue Service (IRS), stating specifically the items of his gross income and any deductions and credits to which he was entitled. In short, Smith willfully failed to file an income tax return.
During the calendar year 2009 and 2010, Smith followed a similar pattern. During 2009, Smith received gross income of approximately $122,068. During 2010, Smith received gross income of approximately $154,900. For both years Smith was required by law to file income tax returns with the Internal Revenue Service. Smith willfully failed to file income tax returns due with the Internal Revenue Service on April 15, 2010 and April 18, 2011, respectively.
Smith was charged with three counts of failing to file income tax return with the Internal Revenue Service, each of which carries a penalty of not more than 1 year in federal prison, and a fine of up to $100,000.
This case was investigated by the Internal Revenue Service – Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Patricia Davies.
An Information is a formal charging document, where the defendant waives the Constitutional right to be indicted by a federal grand jury.
The charges contained in the Information are allegations, and the defendant is presumed innocent unless and until proven guilty.
Four Men Arrested in Scheme to Sell Stolen Material from Fort CarsonRead the Press Release
DENVER – Four individuals, including two active duty members of the U.S. Army, have been arrested based on Criminal Complaints, charging each with one count of conspiracy to commit theft of government property. If convicted of this crime, each defendant faces not more than 5 years in federal prison, and up to a $250,000 fine. All four defendants (listed below), are scheduled to appear before U.S. Magistrate Judge Michael J. Watanabe today, Tuesday, April 21, 2015 at 10:00 a.m. for detention hearings.
Those arrested:
Daniel Francis, age 50, of Colorado Springs
Staff Sergeant Benjamin Thomas Cardwell, age 41, of Fort Carson
Sergeant Johnny Dominic Herrera, age 29, of Fort Carson
Todd Crow, age 34, of Colorado Springs“Dedicated investigative work by a team of federal law enforcement agents led to the identification of a ring of thieves who are alleged to have stolen government property, selling it through a co-conspirator,” said U.S. Attorney John Walsh. “The stolen goods covered the gamut, from batteries, to MREs, to sensitive technology, and was mostly sold on eBay. This investigation is ongoing as we seek to track what was taken, where it went, and what was sold, and then follow the money.”
“The FBI and our partners will thoroughly investigate the misappropriation of U.S. government resources,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “Such conduct undermines the intended use of taxpayer dollars, and we encourage anyone who suspects this type of activity to immediately report their information to law enforcement.”
"This is a prime example of our special agents working shoulder to shoulder with unit commanders and our fellow law enforcement agencies to root out crime affecting the U.S. Army and helping to bring those responsible to justice," said Chris Grey, spokesman for the U.S. Army Criminal Investigation Command.
“Fort Carson is unable to comment on the specifics of the ongoing investigation. Fort Carson is collaborate fully with all involved agencies,” said Lt. Colonel Armando Hernandez,” Fort Carson Spokesperson.
This case was investigated by the FBI, the Army Criminal Investigative Division (CID) and Naval Criminal Investigative Service (NCIS), with support from U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the U.S. Postal Inspection Service (USPIS), and the Colorado Springs Police Department.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a felony violation of federal law has a Constitutional right to be indicted by a grand jury.
The charges contained in the four individual Criminal Complaints are allegations, and the defendants are presumed innocent unless and until proven guilty.
This case is being prosecuted by Assistant U.S. Attorney Beth Gibson.
Final Defendant Is Sentenced to Prison in Multi-million Dollar Real Estate SchemeRead the Press Release
DENVER – Ronald Benjamin, age 49, of Los Angeles, California, was sentenced by U.S. District Court Judge Wiley Y. Daniel to serve 14 months in federal prison for wire fraud and aiding and abetting, federal law enforcement authorities announced. Following his prison sentence, Benjamin was ordered to spend 3 years on supervised release. Judge Daniel also ordered him to pay over $870,000 in restitution to the victims of his crime.
Benjamin along with six other co-defendants, were indicted by a federal grand jury in Denver on September 1, 2011. Benjamin pled guilty on January 22, 2015 before Judge Daniel. According to the indictment as well as his plea agreement and the plea agreements of his co-conspirators, the scheme began 2006. Benjamin was related by marriage to a member of a business group based out of Culver City, California called Synergy. Synergy was made up of Dale Johnson (President & Chief Executive Officer), Donald Beverly (Vice President of New Business Development), Ronald Benjamin (Regional Manager and Senior Vice President of Sales & Marketing), Jimmy Hutchinson (Chief Financial Officer), and Vincent Jackson (Vice President of Marketing).
In early 2006, Dale Johnson began to present fellow Synergy members with a number of properties available for purchase in Colorado. By early 2006, Johnson had begun to develop business relationships with various real estate professionals in Colorado, to include, Jerry Minney (real estate broker) and Scott Goldberg (mortgage broker). Both Minney and Golderg assisted Synergy members in the purchase of various homes in Colorado.
Starting in 2006, Benjamin and Synergy members began traveling to Colorado where they started purchasing multiple residential properties. The homes were typically purchased in the individual member's own name, using the member's personal credit history to qualify for the purchases. Johnson and others typically identified the property and helped arrange for the purchase by a Synergy member.
As part of the scheme, Synergy members with the assistance of Goldberg, and other persons, submitted "uniform residential loan applications" to lenders in connection with qualifying for home loans. In a number of such loan applications, Synergy members and other buyers provided, or assisted in providing, materially false statements, representations, and omissions to real estate lenders, or the lenders' agents. The materially false information provided to the lenders occurred in the loan application process and concerned such things as the borrowers': income, assets, debts, employment history and/or intent to occupy the home as a primary residence. They also arranged for a portion of lender funds from home purchases to be paid to Synergy Members as "kickbacks" which were concealed from lenders. Kickbacks were concealed from lenders by routing payments through third parties posing as property management companies, such as "5280 Denver Real Estate" and "Willow Property Management", and through realtor commissions paid to Broker One Real Estate.
From approximately May 1, 2006, through September 22, 2006, Benjamin purchased at least 12 homes as part of the scheme. Various falsehoods were found in the loan applications and supporting documents connected with such purchases.
Dale Johnson was sentenced to 34 months in federal prison on March 19, 2014. Donald Beverly was sentenced to 14 months in federal prison on June 17, 2014. Jimmy Hutchinson was sentenced to 14 months in federal prison on March 4, 2014. Vincent Jackson was sentenced to 60 months of probation on October 17, 2012. Jerrold Minney was sentenced to 5 years of probation on August 5, 2014. Scott Goldberg was sentenced to 5 years of probation on June 17, 2014.
This case was investigated by agents with Internal Revenue Service Criminal Investigation (IRS-CI), the Federal Bureau of Investigation (FBI), United States Postal Inspection Service (USPIS) and the U.S. Secret Service.
The case was prosecuted by Assistant United States Attorney Tim Neff.
United States Attorney's Office for the District of Colorado Recovers $66,000 Resolving Allegations That Slawson Exploration Company Violated the False Claims ActRead the Press Release
DENVER -- John Walsh, United States Attorney for the District of Colorado, today announced the recovery of more than $66,000 to settle allegations that Slawson Exploration Company violated the Federal False Claims Act by failing to properly value gas produced from Indian leases and pay royalties to the Department of the Interior’s Office of Natural Resources Revenue (“ONRR”).
Slawson isa privately held oil and gas exploration company headquartered in Wichita, Kansas. In 2011, Slawson was the lessee for seven leases located on the Fort Berthold Indian Reservation in North Dakota and one lease located on the Fort Peck Indian Reservation in Montana (“the Leases”). As a lessee of these Indian leases, Slawson is required to comply with regulations mandating proper valuation and pricing when calculating and paying royalties to ONRR on any gas removed from these leases. This matter was handled by the Colorado U.S. Attorney’s Office because all energy companies that have a federal or Indian lease from which they obtain oil and gas resources are required to submit reports of their production and corresponding royalty payments to ONRR in Lakewood, Colorado.
ONRR acts as a trustee for royalty payments owed to Indian tribal and individual leaseholders. After receiving the royalty payments from lessees like Slawson, ONRR verifies that the payments are correct and then passes these monies on for distribution to the Indian leaseholders.
According to the Settlement, the United States contends that Slawson knowingly failed to properly adjust the value of gas production on the Leases in 2011, and thus, underreported royalties to ONRR. The United States alleges that Slawson has a history of underpaying royalties on the Leases, and had been penalized by ONRR in the past for failing to properly report and pay royalties. Slawson denies the allegations.
“When gas companies tell the federal government what they owe for the natural resources taken from Indian lands, they need to understand that ‘close enough’ is not ‘good enough’,” said U.S. Attorney, John Walsh. “We stand ready with our law enforcement partners to hold these companies accountable when they don’t tell the whole truth about what they are required to pay the government.”
“The Office of the Inspector General for the Department of the Interior continues to support ONRR and the Department of Justice in recovering oil and gas royalties owed to Indian mineral owners,” said Matthew Elliott, Deputy Inspector General for Investigations at the Office of the Inspector General. “This settlement should stand as a reminder that our Energy Investigations Unit is poised to respond when Indian mineral interests are compromised or ignored.”
“A company's timely and accurate submission of royalty reports and payments is essential,” said Greg Gould, Director of the Office of Natural Resources Revenue. “To ensure that we collect every dollar due, ONRR will continue to insist that companies report and pay the proper royalties for these American Indian assets.”
The United States Attorney’s Office acknowledges the cooperation and teamwork demonstrated by governmental entities involved in today’s recovery. Special thanks are extended to both the Office of Natural Resources Revenue and the Energy Investigations Unit of the Department of the Interior’s Office of Inspector General. The United States Attorney’s Office in Denver, Colorado works closely with both of these offices in the pursuit of unpaid or underpaid oil and natural gas revenue, claims for which are processed at the Office of Natural Resources Revenue at the Federal Center in Lakewood.Assistant U.S. Attorney Amanda Rocque handled the matter on behalf of the United States.
Cortez Woman Sentenced to Prison for Filing False Tax Returns Relating to Theft of FundsRead the Press Release
DENVER – Lisa Kay Balderrama, age 50, of Cortez, Colorado, was sentenced earlier this week by Chief U.S. District Court Judge Marcia S. Krieger to serve 12 months in federal prison for filing a false tax return, United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Steven A. Osborne announced. Following her prison sentence, Balderrama was ordered to serve 1 year on supervised release. Balderrama was also ordered by Chief Judge Krieger to pay $64,477 in restitution to the IRS. The defendant was ordered to report to a Bureau of Prisons facility within 48 hours of designation. Balderrama waived her right to indictment, and thus was charged by Information on October 20, 2014. She pled guilty before Chief Judge Krieger on December 4, 2014.
According to information contained in the stipulated facts of the plea agreement as well as the Information, Lisa Balderrama began working for Empire Electric Association in Cortez, Colorado in December 2005 as a Customer Services Representative. At the end of October 2012, accounting employees for Empire noted that the manual check register was not reconciling with internal bookkeeping and that the two were off by over $200,000. These employees brought this to Balderrama's attention, questioning whether certain deposits had been made. Balderrama convinced the other employees that deposits had gone into the bank, that everything was okay, and that she would find the discrepancy.
In mid-December 2012, the defendant was again questioned about the discrepancy and about a $277,000 electronic transaction she had posted on October 22, 2012. The following Monday, Balderrama reported to work and confessed to her superiors that she had stolen approximately $280,000 from Empire Electric. The investigation revealed that from approximately 2009 through 2012, Balderrama stole money from customers who paid cash for their electric bills. Empire’s accountant conducted an investigation into their books and found that $277,035 in adjustments had been made to 184 accounts in order to cover the shortages due to Balderrama’s thefts.
Balderrama failed to report a combined total income of $277,035 on her tax returns in 2010, 2011, 2012 and 2013. The tax loss to the IRS which resulted from Balderrama's false statements totaled $64,477.
“As the defendant Balderrama learned in this case, regardless of the source of income, if you don’t pay taxes on it, you will be held criminally accountable,” said U.S. Attorney John Walsh. “With tax day approaching, this case serves as a reminder that we all report our taxable income, and pay any taxes due.”
“As we approach the end of tax filing season, this is a reminder that all taxpayers should file complete and accurate tax returns or they will be held accountable; all income regardless of the source is taxable,” said Steven A. Osborne, Acting Special Agent In Charge for IRS Criminal Investigation, Denver Field Office.
This case was investigated by Internal Revenue Service – Criminal Investigation and the Cortez City Police Department. Balderrama is being prosecuted by Assistant U.S. Attorney Dondi Osborne in the Colorado U.S. Attorney’s Durango Branch Office.
Aurora Man Found Guilty of Gun and Drug Charges Following Jury TrialRead the Press Release
DENVER – Michael Eugene Simpson, age 35, of Aurora, Colorado, was found guilty yesterday of gun and drug charges, following a three day jury trial before U.S. District Court Judge Philip A. Brimmer, United States Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Luke Franey announced. The jury deliberated for approximately five hours before reaching their verdicts.
Simpson was charged by Criminal Complaint on June 20, 2014. He was indicted by a federal grand jury on June 30, 2014. The U.S. Attorney’s Office obtained a Superseding Indictment on January 7, 2015. The jury trial began on April 6, 2015, with a verdict being rendered on April 9, 2015. The jury found the defendant guilty of one count possession with intent to distribute cocaine (with a penalty of not more than 20 years in prison, and up to a $1,000,000 fine per count); three counts of possession of a firearm and ammunition by a prohibited person (with a penalty of not more than 10 years in prison, and up to a $250,000 fine per count), one count of possession of an unregistered firearm (with a penalty of not more than 10 years in prison, and up to a $250,000 fine), and eight counts of possession of ammunition by a prohibited person (with a penalty of not more than 10 years in prison, and up to a $250,000 fine per count).
According to facts that came out trial, on June 19, 2014, at approximately 3:00 a.m., law enforcement special agents and officers executed a search warrant in Aurora, Colorado. The address was the residence of Michael Simpson. Aurora Police Department and ATF had previously received information that Simpson, a convicted felon, was in possession of numerous firearms and was participating in drug activity. That morning, upon approaching the residence, law enforcement officials found Simpson in a vehicle in the driveway. He did not comply with commands and instead turned the vehicle on and tried to flee. He attempted to back out the driveway but could not because a law enforcement vehicle was parked directly behind him. He proceeded to back up into the vehicle several times until law enforcement officers broke the driver side window and tased him.Agents and officers then conducted a lawful search of the residence, law enforcement officers found: (1) a loaded .40 Smith and Wesson firearm in a vehicle outside the house; (2) a loaded, Cobray 12 gauge Streetsweeper shotgun in the garage; (3) a loaded, .380 Bersa handgun in a safe from a downstairs closet; and, (4) 19.9 grams of cocaine in a plastic bag on the kitchen counter. In the same safe where the .380 Bersa handgun was found, law enforcement officers found over 100 rounds of ammunition, a digital scale, a beaker, and plastic bags used to distribute cocaine. Law enforcement officers found ammunition in two kitchen cabinets, on top of the refrigerator, and on a desk downstairs. A razor blade, digital scale, and plastic bags were also found in a kitchen cabinet.
Simpson, a member of the 83 Gangster Crips, has previous drug-related felony convictions. His felony convictions prohibit him from legally possessing firearms or ammunition.
This case was investigated by the ATF and the Aurora Police Department.
The defendant is being prosecuted by Assistant U.S. Attorneys Jason St. Julien and Robert Brown.
Colorado U.S. Attorney's Office Cracks Down on Men Traveling from Out-of-state to Colorado to Have Sex with ChildrenRead the Press Release
DENVER – The U.S. Attorney’s Office, in conjunction with U.S. Immigrations and Customs Enforcement (ICE) Homeland Security Investigations (HSI), have cracked down on individuals who travel to Colorado from other states with the intention of having sex with minor children. Two arrests were made last week, and a third individual pled guilty to the crime. All three are held in custody.
Brian Franklin Howard, age 37, of Las Vegas, Nevada, was arrested on April 2, 2015, at Denver International Airport by HSI and the Denver Police Department after he flew here to have sex with children. Howard initially came into contact with an undercover HSI agent on line. The agent was using the persona of a single mother of children, ages 10 and 14. At one point Howard took photos of his penis and sent them to the single mother persona, indicating that he would like for her to show them to her daughters. He then arranged to meet her and her children in Denver. He flew from Las Vegas to Denver, where he was met with an agent acting in an undercover capacity at DIA. Once he confirmed his intent to have sex with the children he was arrested. Howard faces one count of aggravated sexual abuse with children (with a penalty of not less than 30 years and up to life in federal prison, and up to a $250,000 fine), two counts of travel with intent to engage in illicit sexual conduct (with a penalty of not more than 30 years in prison, and up to a $250,000 fine), and two counts of attempted coercion and enticement (with a penalty of not less than 10 years and up to life in prison, and up to a $250,000 fine). Howard is scheduled to have a detention hearing on April 8, 2015.
Also last week Matthew Hornung, age 33, of Harrisburg, Pennsylvania, was arrested by HSI and the Colorado State Patrol on March 28, 2015, after driving to Colorado to have sex with children. Hornung also met an undercover agent on line. The agent was using the single mother persona, saying she had children ages 10 and 14. The defendant, intent on meeting the single mother and her two children, drove from Pennsylvania to Colorado. Hornung made it to Colorado, although his vehicle started to fail before he reached Greeley. He was arrested by HSI and the Colorado Highway Patrol after he approached the marked CSP car for assistance. The defendant faces one count of travel with intent to engage in illicit sexual conduct (with a penalty of not more than 30 years in federal prison, and up to a $250,000 fine). He has been ordered held without bond pending a resolution of his case.Finally, Darwin Gowen, age 62, of St. Louis, Missouri, pled guilty on March 31, 2015, before U.S. District Court Judge R. Brooke Jackson, to one count of travel with intent to engage in illicit sexual conduct (the penalty of which is not more than 30 years in federal prison and up to a $250,000 fine). Gowen also met an HSI agent online, using the persona of a single mother with young children. He traveled from Missouri to Denver by plane, where he was arrested by HSI at DIA after confirming his intent to have sex with children, ages 11 and 15. Gowen is in federal custody pending sentencing.
“Preventing the sexual abuse of children is a top priority of this office,” said U.S. Attorney John Walsh. “These cases should demonstrate to those who plan to travel from other states to Colorado in hopes of sexually exploiting children that there will be immediate and severe criminal consequences.”
“The sexual exploitation of children by predators has reached epidemic proportions nationally and internationally,” said David A. Thompson, special agent in charge of HSI Denver. “Targeting these predators through the tireless efforts by our HSI special agents has been a high priority for more than a decade. These cases demonstrate how every parent must remain vigilant to Internet predators who may pose in various disguises to meet and ultimately sexually exploit children.”
These cases were investigated by HSI with support from the Colorado State Patrol.
Howard and Gowen are being prosecuted by Assistant U.S. Attorney Alecia Riewerts. Hornung is being prosecuted by Assistant U.S. Attorney Beth Gibson. Howard and Hornung have been charged by Criminal Complaint. Anyone accused of committing a felony violation of federal law has a Constitutional right to be indicted by a grand jury. Both of those defendants are presumed innocent unless and until proven guilty. Gowen has pled guilty.
Aurora Felon Sentenced to 108 Months in Federal Prison for Being A Felon in Possession of A Firearm and Possession of A Firearm in Furtherance of A Drug Trafficking CrimeRead the Press Release
DENVER – Dominic Miller, age 26, of Aurora, Colorado, was sentenced this week by Senior U.S. District Court Judge John L. Kane to serve 106 months (nearly 9 years) in federal prison for being a felon in possession of a firearm and for possession of a firearm in furtherance of a drug trafficking crime, U.S. Attorney John Walsh and ATF Special Agent in Charge Luke Franey Announced. Following his prison term, Miller was ordered to serve 5 years on supervised release. The defendant, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Miller was indicted by a federal grand jury on April 22, 2014. He pled guilty before Judge Kane on January 9, 2015. He was sentenced yesterday, April 2, 2015.
According to court documents, including the stipulated facts contained in the defendant’s plea agreement, on March 6, 2014, Aurora Police Department Gang Intervention officers identified defendant Miller walking near the 2200 block of North Ironton Street in Aurora displaying Eight Tre Gangster tattoos. The officers attempted to make contact with Miller and another male. As the officers stopped their vehicle, getting out to approach the two, the defendant and other male fled. Officers eventually caught Miller and placed him under arrest.
As the officers placed Miller into custody, they observed the handle of a firearm sticking out of the defendant’s right front pants pocket. Officers recovered a HiPoint, .380 caliber pistol. The firearm was loaded with eight rounds of ammunition. It was then determined that the weapon was previously reported stolen by the Grand Island, Nebraska police department. Officers also located two baggies of crack cocaine with a gross weight of 3.3 and 3.7 grams respectively. Miller had a previous conviction in March 2009 of Aggravated Robbery, which was an armed carjacking. Miller was on parole for that conviction at the time of arrest. It was also confirmed that Miller was a gang member, possessing the firearm for protection against other gang members.
“The lengthy prison sentence handed down by Judge Kane demonstrates that cooperation between federal and local law enforcement is an effective means of removing dangerous drug dealers from our streets,” said U.S. Attorney John Walsh. “We will continue to focus on prosecuting the most dangerous felons who possess firearms as part of our effort to make our streets safer.”
“Violent felons who possess firearms pose a danger to the general public and law enforcement officers,” said ATF Denver Special Agent in Charge Luke Franey. “ATF and our partners at the Aurora Police Department will continue to pursue these individuals to keep the public safe.”
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Aurora Police Department.
Miller was prosecuted by Assistant U.S. Attorney Jeremy Sibert.
Colorado Springs Business Owner Charged with Filing False Returns and Structuring DepositsRead the Press Release
DENVER – Lisabeth Melahn, age 53, of Colorado Springs, Colorado, was indicted by a federal grand jury on March 26, 2015 on charges of filing false income tax returns and structuring cash deposits to evade reporting requirements, announced United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Steven A. Osborne. Melahn is scheduled to appear before a U.S. Magistrate Judge on April 10, 2015 to respond to the charges.
According to the indictment, Melahn, the owner of a Colorado Springs business, Tan Your Hide, subscribed personal income tax returns for the 2008 through 2010 tax years, knowing that the income from her S-corporation, Tan Your Hide II, listed on those tax returns was substantially understated.
In addition, the indictment charges that on 8 separate occasions between March 31, 2010 and July 8, 2010, Melahn caused cash deposits totaling over $10,000 to be made to her personal account at American National Bank which were split in order to circumvent the requirement that currency transactions of over $10,000 be reported. The split deposits were made either at different times on the same day or on two consecutive days. The total of the structured deposits alleged in the indictment totaled over $100,000.
“Filing true and timely income tax returns is not only a civic duty, it is also a legal obligation,” said U.S. Attorney John Walsh. “Those who evade paying income taxes, either by not filing, or in this case, by not providing accurate income information, can end up being prosecuted to the fullest extent of federal law.”
“As April 15 is approaching, this should serve as a reminder to all taxpayers that they should file complete, timely, and accurate tax returns or they could face significant penalties; and those individuals who goes as far to commit tax fraud may find themselves facing jail time,” said Acting Special Agent In Charge Steven A. Osborne of IRS-Criminal Investigation, Denver Field Office.
Melahn was charged with three counts of subscribing to a false income tax return, each of which carries a penalty of not more than 3 years in federal prison, and a fine of up to $250,000. She is also charged with eight counts of structuring deposits to evade the CTR reporting requirements. Because the alleged structuring involved more than $100,000 in a 12-month period, the charges carry a penalty of not more than 10 years in federal prison and a fine of up to $500,000 per count. Included in the indictment is a notice of forfeiture for any property traceable to the structuring charges alleged in the indictment.
This case was investigated by the Internal Revenue Service – Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Linda Kaufman.The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Metro Denver Bank Executive Vice President Indicted for EmbezzlementRead the Press Release
DENVER – Candice L. White, age 42, of Centennial, Colorado, is scheduled to appear before a U.S. Magistrate Judge this afternoon after a federal grand jury in Denver indicted her on charges of embezzlement and willful misapplication of funds by a bank officer or employee, reported the U.S. Attorney’s Office, the Federal Bureau of Investigation (FBI) and the Special Inspector General of Troubled Asset Relief Program (SIGTARP).
According to the indictment, White was a Senior Vice President of Front Range Bank. From July 2009 through March 2011 she allegedly embezzled more than $92,000 from the bank for her own personal use and for the use of others. In addition, White is charged with willfully misapplying additional funds from other client accounts to an escrow account from which White embezzled the majority of the $92,000 in order to conceal and facilitate her ongoing criminal activity.
Because Front Range Bank received TARP funds, the Special Inspector General (SIGTARP) assisted the FBI in the investigation.
White faces 37 felony counts of embezzlement and willful misapplication of funds from a federally insured bank. If convicted on those counts, she faces not more than 30 years in federal prison, and up to a $250,000 per count. She also faces two misdemeanor counts of embezzlement and willful misapplication of funds from a federally insured bank. If convicted on those counts, she faces not more than 1 year in federal prison, and up to a $100,000 fine.
The defendant is being prosecuted by Assistant U.S. Attorney Pegeen Rhyne.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.Three Metro Denver Individuals Charged for Large Wells Fargo Bank RobberyRead the Press Release
DENVER – Two individuals from the Metro Denver area were arrested this morning by special agents and task force officers from the FBI led Rocky Mountain Safe Streets Task Force (RMSSTF) on charges of armed bank robbery, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. The defendants were arrested without incident. A third defendant also charged with bank robbery was already in custody on an unrelated matter. One of the two arrested today made his initial appearance this afternoon, where he was advised of his rights and the charges pending against him. The other defendant arrested will make his initial appearance tomorrow.
Gabriel Archuleta, age 19, of Denver, Thomas Lucero, age 21, of Denver, and Thomas McQuonwn, age 48, of Lakewood, have each been charged with one count of armed bank robbery. If convicted of armed bank robbery, each defendant faces not more than 25 years in federal prison, and up to a $250,000 fine. The charges stem from the June 17, 2014 armed robbery of the Wells Fargo Bank at 6000 West 44th Avenue in Wheat Ridge, Colorado. McQuonwn was the defendant who appeared in court today. Archuleta is expected to appear in court tomorrow. Lucero is currently in state custody on unrelated charges.
“The message from these arrests could not be more clear: Federal and state law enforcement does not rest until violent takeover bank robberies of this kind are solved, and the perpetrators behind bars,” said U.S. Attorney John Walsh. “Through relentless, implacable investigation, the FBI Rocky Mountain Safe Streets Task Force and federal prosecutors put together the many pieces of the puzzle in the case, ultimately turning it into the picture framed by today’s Criminal Complaint.”
“Today’s arrests illustrate the FBI’s commitment to work with its partners to address all violent crime including bank robberies,” said FBI Special Agent in Charge Thomas Ravenelle. “This investigation, which spanned many months, was truly a collaborative effort between local and federal law enforcement. The suspects have demonstrated they were willing to meticulously plan every detail of the robbery. The community is safer with these suspects behind bars as they would certainly have committed other violent robberies. We are confident that today’s arrests send a message to those contemplating bank robbery that they will be aggressively investigated and prosecuted to the full extent of the law.”
This case was investigated by the FBI, the Rocky Mountain Safe Streets Task Force, the Wheat Ridge Police Department, the Denver Police Department, and the Lakewood Police Department.
The defendants are being prosecuted by Assistant U.S. Attorney Robert Brown.
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.
Those charged are presumed innocent unless and until proven guilty.
Lone Tree Businessman Pleads Guilty to Defrauding the U.S. GovernmentRead the Press Release
DENVER – Hemal Ramesh Jhaveri, age 52, of Lone Tree, Colorado, pled guilty this week before Chief U.S. District Court Chief Marcia S. Krieger to conspiracy to defraud the United States, federal authorities announced. Chief Judge Krieger is scheduled to sentence Jhaveri on June 15, 2015. Jhaveri was indicted by a federal grand jury in Denver on August 6, 2014. An information was subsequently filed on March 16, 2015, the same day he pled guilty. Jhaveri is free on bond.
According to information contained in the charging documents and the plea agreement, Jhaveri was the founder, sole owner, and chief executive officer of SofTec Solutions, Inc. of Englewood, Colorado.
Between 2001 and 2010, SofTec Solutions participated in the Small Business Administration’s 8(a) Business Development Program, which was available to small businesses that were owned and controlled by socially and economically disadvantaged individuals. As a result of its participation in the program, the company received United States government contracts under which it provided clerical and administrative support and other services. During the life of the conspiracy, the government paid SofTec Solutions more than $17,000,000 pursuant to those contracts.
As requirements for SofTec Solutions’ continued participation in the program, Jhaveri’s net worth was to remain under $750,000 and his withdrawals from the company were not to exceed $300,000 in any fiscal year. In order to circumvent those limits, Jhaveri, with the assistance of others, diverted money from SofTec Solutions to bank accounts that he controlled and to other places for his personal use and benefit. The government’s position is that the diversions occurred in the years 2006 through 2009 and the total amount of money diverted was $4,494,305.79.
Much of the diverted money moved to bank accounts in California, India, Singapore, and Hong Kong and from those accounts to accounts that Jhaveri controlled. In addition, Jhaveri diverted over $500,000 from SofTec Solutions and used it as part of the purchase price of his $3,000,000 residence in Lone Tree, Colorado. He also arranged for the company to pay the IRS $177,240 to satisfy his personal tax bill. In 2008 and 2009, Jhaveri caused SofTec Solutions to transfer a total of $984,194 to pay expenses related to a restaurant in which he had an interest. In addition, Jhaveri funneled $45,000 from SofTec Solutions to an account of a dormant company and used that money to make his alimony payments.
Jhaveri never informed the SBA that this money had been diverted from SofTec Solutions to his use and benefit. If Jhaveri had provided that information, the SBA would have seen that his withdrawals from the company exceeded $300,000 in each of the years 2006 through 2009 and that his net worth each year was more than he reported to the agency.
Jhaveri willfully failed to report much of the diverted money on his federal income tax returns. The government has taken the position that Jhaveri failed to report $3,349,111 of the diverted money as income on his 2006-09 returns and, as a result, he caused a tax loss of $1,171,179. The government is requesting that Jhaveri be ordered to pay that amount as restitution to the IRS.
Jhaveri pled guilty to one count of conspiracy to defraud the United States, which carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000.
This case was investigated by IRS – Criminal Investigation, Department of Defense – Office of Inspector General – Defense Criminal Investigative Service, General Services Administration - Office of the Inspector General, Army Criminal Investigation Command – Colorado Fraud Resident Agency – Major Procurement Fraud Unit, Small Business Administration – Office of the Inspector General. The Special Enforcement Program of the Internal Revenue Service assisted in the case. The defendant was prosecuted by the Economic Crime Section of the U.S. Attorney’s Office’s Criminal Division.
U.S. Attorney's Office Receives Suspicious PackageRead the Press Release
Denver Fire Department determents the contents were not hazardous
DENVER – The U.S. Attorney’s Office for the District of Colorado released the following statement regarding receiving a piece of mail containing white powder:
“The Colorado U.S. Attorney’s Office received a piece of mail that contained a letter and white powder. The piece of mail was opened in the mail room. Once the person who opened the piece of mail determined it contained white powder, he and the office followed its standard protective protocol. The Federal Protective Service, Denver Fire Department, Denver Police Department and the FBI responded. The Denver Fire Department determined on site that the substance contained in the envelope was not hazardous. The piece of mail is now in the custody of the Federal Bureau of Investigation, which is conducting a criminal investigation into the letter. Operations in the U.S. Attorney’s Office were minimally impacted and have since returned back to normal.”
Jeff Dorschner, Spokesman, U.S. Attorney’s Office, District of Colorado