District of Colorado
Press releases recorded for this federal judicial district.
Arvada Man Sentenced to 30 Months in Federal Prison for Hacking into Computer System of His Former EmployerRead the Press Release
DENVER – Blake Douglas Snowden, age 44, of Arvada, Colorado, was sentenced yesterday by U.S. District Court Judge Christine M. Arguello to serve 30 months in federal prison, followed by 3 years of supervised release for unauthorized access to a protected computer and unauthorized interception of an electronic communication, the U.S. Attorney’s Office and the Federal Bureau of Investigation (FBI) announced. Snowden was also ordered to pay restitution of $25,354 to Onyx Healthcare, Inc., his former employer and the company whose computer and email he hacked. Judge Arguello found that the total loss Snowden caused to Onyx Healthcare was $1,697,471.76. The defendant, who appeared at the sentencing hearing free on bond, was ordered to report to a Bureau of Prisons facility within 30 days of designation.
Snowden, no relation to the infamous Edward Snowden, was indicted by a federal grand jury in Denver on November 20, 2013. He pled guilty before Judge Arguello on May 28, 2014. He was sentenced on March 12, 2015. The issue regarding loss took substantial time to resolve, explaining the nearly one year between guilty plea and sentencing.
According to the stipulated facts contained in the plea agreement, Snowden worked as a sales employee for Onyx MD, which is a Colorado company headquartered in Denver, Colorado. Onyx provides physician staffing services nationwide with their primary focus being temporary placement of physicians. The company uses a password-protected third-party web-based software application for customer relationship management. The web-based software is also used for numerous business functions, including employees accessing their email, reviewing calendar events and tasks, and accessing client and prospective client records.
In September 2011, Onyx noticed that its Development Director’s account was setup to forward copies of his email messages to another email address outside of the company. He had not configured that setting. It was later determined that three other Onyx executives also had copies of their emails rerouted without their permission. An investigation was initiated by the FBI after the executives determined that an intruder had not only rerouted copies of executives’ emails, but also accessed a proprietary company database that contained physician and client information. Of the information illegally accessed, ninety percent (90%) of the candidate physician profiles were surgeons.
Agents determined that the intruder masqueraded the true IP address. However, follow up determined that the intruder used a Qwest IP address affiliated with Snowden’s residence in Arvada, Colorado. Snowden had also used an IP address located in Kremmling, Colorado, where he owned or was associated with another residential property. The investigation then began to target Blake Snowden who was a sales employee at Onyx who primarily focused on recruitment and placement of surgeons until his employment was terminated on August 30, 2010.
In 2011 Snowden started to work for an affiliate of All Star Recruiting, Inc., a Florida-based physician recruiting company that competed with Onyx in the temporary placement of physicians market. On December 15, 2011, a search warrant was executed at Snowden’s Arvada residence. During the execution of the warrant, digital evidence, namely two laptops and removable storage media, were found. Numerous Microsoft Word documents, emails and recorded conversations were found on the electronic media seized from his residence. These files found on the laptops revealed that the defendant had obtained passwords that enabled him to fully access the Onyx web-based software beginning in March 2011 through September 2011. Further investigation into various email accounts controlled by Snowden revealed that he had intercepted approximately 19,502 unique email messages that had been sent to Onyx’s executives during that timeframe.
“Hacking into a secure computer system is a federal crime that can lead to significant federal prison time,” said U.S. Attorney John Walsh. “The prison sentence handed down by Judge Arguello reflects the particularly malicious nature of the criminal conduct in this case, in which the defendant hacked with intent to harm a company and its employees.”
“A personal vendetta against a former employer turned into a criminal act,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “In this instance, the defendant was able to inflict great damage to the victim company by accessing and taking information from the database system that is pivotal to the victim’s business operations. This was done to gain an unfair competitive advantage. This behavior was aggravated by the defendant’s complete disregard for the privacy of several employees at the victim company by intercepting and accessing their email communications. Regardless of motivation, the FBI is committed to tracking down cybercriminals who launch such malicious, targeted attacks.”
This case was investigated by the FBI’s Cyber Squad.
The defendant was prosecuted by Assistant U.S. Attorney David Tonini.
Brighton Man Arrested for Production, Transportation and Possession of Child PornographyRead the Press Release
Defendant accused of taking a picture of the sexual abuse of an infant
DENVER – Jamie Sailas, age 29, of Brighton, Colorado, was arrested this morning without incident by federal agents with U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the U.S Attorney’s Office and HSI announced. The defendant was arrested based on a Criminal Complaint charging one count of production of child pornography, one count of transportation of child pornography, and one count of possession of child pornography. Sailas appeared before a U.S. Magistrate Judge where he was advised of his rights, and the charges pending against him. He is being held in custody pending a detention and preliminary hearing, scheduled for March 17, 2015 at 10:00 a.m.
According to an HSI special agent’s affidavit, in October of 2013 an HSI agent in Washington, DC was conducting proactive undercover investigative activity on the internet. During his investigative work, he encountered a link to a video of a minor child with black marker on her torso with obscene words and an arrow pointing down to her genitalia. It was determined that this image was located in a Dropbox account. The agent learned that Dropbox had independently contacted the National Center for Missing and Exploited Children (NCMEC). Further investigation by HSI revealed that the subscriber to the Dropbox account was Jaime Sailas, who was determined to reside at an address in Brighton, Colorado.
As the investigation progressed it was determined that in addition to Dropbox, Sailas also allegedly used two Google email addresses to transport child pornography. He transported thousands of child pornographic images and videos. He used an email account to send a nude picture of his genitalia to someone he met online. Sailas also worked at a Brighton business named Game Trader. It was determined that child pornography activity was connected to both his home and the business. No business computers were compromised.
In connection to the investigation, agents and officers executed a search warrant at Sailas’ residence. It was discovered that in addition to Sailas, there were five additional adults and one minor child residing in the home. Sailas did have his own bedroom, which was locked. In that room multiple devices containing child pornography were discovered. Also, an image of what appeared to be an adult male’s genitalia inserted into the mouth of an infant was located on one of his devices. The genitalia in this image of child pornography appears to be consistent with the physical characteristics of the images Sailas sent via one of his email accounts. This photo was allegedly produced by Sailas.
“Those who sexually abuse our children, especially those who use infants to produce child pornography, deserve the full weight of federal law enforcement to stop them,” said U.S. Attorney John Walsh. “Thanks to the work of HSI and prosecutors from the U.S. Attorney’s Office, an individual responsible for such child pornography has been arrested and charged with a crime.”
“Since the crimes associated with sexually victimizing children are so heinous, Homeland Security Investigations aggressively investigates these crimes with our law enforcement partners at the local, state, federal and international levels to identify and pursue prosecution against these child predators worldwide,” said David A. Thompson, special agent in charge of HSI Denver. “Our investigations help bring justice to these innocent victimized children.”
If convicted of production of child pornography, the defendant faces not less than 15 years, and not more than 30 years in federal prison, and up to a $250,000 fine. If convicted of transportation of child pornography, the defendant faces not less than 5 years, and not more than 20 years imprisonment, and up to a $250,000 fine. If convicted of possession of child pornography, the defendant faces not more than 10 years in federal prison, and up to a $250,000 fine.
This case was investigated by HSI with support from the Brighton Police Department.
This case is being prosecuted by Assistant U.S. Attorney Alecia L. Riewerts.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a felony violation of federal law has a Constitutional right to be indicted by a federal grand jury.
The charges contained in the Criminal Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
Denver Felon Sentenced to 16 Years in Federal Prison for Gun and Drug DistributionRead the Press Release
DENVER – A Denver man was sentenced to serve 16 years in federal prison last Friday for gun and drug charges, the U.S. Attorney’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announced. Maurice Alyn Mickling, age 28, of Denver, was ordered to serve 192 months in prison, followed by 4 years on supervised release by U.S. District Court Judge Raymond P. Moore. Mickling appeared at the sentencing hearing in custody, and was remanded at its conclusion.
Mickling was indicted by a federal grand jury in Denver on January 7, 2014. He was found guilty of gun and drug distribution charges following a the three-day jury trial in front of Judge Moore on August 27, 2014. The jury deliberated for approximately three hours before delivering their verdicts. He was sentenced on Friday, March 3, 2015.
According to court documents as well as facts presented during the trial, in December of 2013 Mickling, who was wanted for parole violations, was located at the Ramada Inn on Colfax and Marion. The Denver SWAT Team was called because of Mickling’s prior violent felony convictions and because he was believed to be armed. As SWAT arrived, Mickling saw the team, and immediately fled on foot. Mickling got to the corner of the parking lot, threw a loaded handgun high into the air over the fence, dropped a toiletry style bag, and then jumped the fence. Mickling threw the firearm so far that it flew across the street and struck an innocent bystander in the leg.Once Mickling was over the fence, he slipped on some ice, and was immediately apprehended by officers. Inside the dropped bag was 3.6 grams of crack and a digital scale, which is traditionally indicative of drug distribution. He also had $756 in cash on his person.
“Defendant Mickling, who had a long criminal history, including a conviction for a crime of violence, was armed with a firearm, posing a serious danger to the community,” U.S. Attorney John Walsh said. “The 16 year prison sentence means this defendant will not endanger his community for a long time to come.”
“Mr. Mickling is an example of the worst of the worst kind of criminal and today’s sentencing reflects that,” said Luke Franey, Special Agent in Charge, ATF Denver Field Division. “With multiple violent felonies on his record, he continued to possess firearms and endanger the public.”
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Denver Police Department, and the Colorado Department of Corrections, Division of Adult Parole.
This case was prosecuted by Assistant U.S. Attorneys Jeremy Sibert and David Tonini.
Five People Charged and Arrested for Smash and Grab Jewelry Robbery in Cherry CreekRead the Press Release
DENVER – Five individuals were arrested early Wednesday morning in Northern California after law enforcement determined that they were allegedly responsible for the smash and grab robbery of the Williams Jewelers store in Cherry Creek, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. A Criminal Complaint was filed in the District of Colorado charging the five individuals with Robbery affecting commerce and Conspiracy to commit robbery affecting commerce. They are scheduled to appear this morning before a U.S. Magistrate Judge in the Northern District of California, Oakland Division.
Charges have been filed against Anthony Domino, age 21, Summer Sawyer, age 30, Sharde Suwannabart, age 24, Sean McCullough, age 23, and Anthony Tyree, age 23, all of San Francisco, California. According to the affidavit in support of the Criminal Complaint, on February 24, 2015 at 10:30 a.m., the Denver Police Department responded to a robbery at Williams Jewelers in the Cherry Creek area. The owner of the store met with officers, telling them that a black female first entered the store looking at watches. She later left the store stating she was going to get her credit cards. At that time, three black males wearing black hoodies and black masks and armed with handguns entered the store and robbed the victims at gunpoint. Williams, the owner, reported that one of the robbers moved him from the back of the store to the desk area of the store at gunpoint. Employees at the jewelry store described certain characteristics of the female who was in the store prior to the robbery, including the way her fingernails were painted.
Several witnesses observed a maroon Chevy Blazer fleeing the area of the robbery at a high rate of speed. One witness observed people yelling with urgent voices as they jumped into a running and moving red SUV. Denver Police officers tracked that Chevy Blazer SUV to an alley next to 370 Clayton Street in Denver. A records checked determined that the owner of the Blazer was an Aurora resident. When that resident was contacted by police he said he had sold the vehicle the night before to two unknown black males and two unknown black females after he placed an advertisement on Craigslist. The buyers contacted him from an out of state phone number. The owner sold the individuals the vehicle for $1,550 in cash. The sale took place in the parking lot of University of Colorado Hospital parking lot. The buyers came to the purchase in a newer Cadillac “Crossover” SUV with California plates. Law enforcement was able to determine the California license plate number.
Additional investigation determined that based on the license plate the Cadillac SUV was rented at San Francisco Airport from Enterprise Rent-A-Car. On February 25, 2015, agents obtained a federal court order to contact OnStar. An employee from OnStar utilized the GPS feature for the vehicle in question, determining that at approximately 3:15 a.m. Mountain Standard Time, or roughly nearly 17 hours after the robbery of Williams Jewelers, the vehicle was located driving in a southbound direction on Interstate 80 near Roseville, CA. The FBI Rocky Mountain Safe Streets Task Force agents made contact with the California Highway Patrol (CHP). CHP units attempted to make contact with the Cadillac SUV. At that time the SUV led law enforcement on a vehicle pursuit. After the Cadillac was involved in a single vehicle crash off of Interstate 80, in the San Francisco Bay Area, officers reported that four to five occupants fled the vehicle on foot. Ultimately five occupants were taken into custody by the CHP.
In the vehicle was a Glock semi-automatic handgun. One defendant had at least five Rolex watches, including one that had serial numbers matching a watch taken at Williams’ Jewelry. Follow up investigation with witnesses and victims of the crime, as well as additional analysis of evidence obtained resulted in all five people in the car being charged with federal Robbery crimes, as related to the Hobbs Act. Sawyer, who matches the surveillance video of the woman in the store who said she was interested in watches and was observed to have specifically painted fingernails and who is seen on video opening the store doors for the robbers, was in the crashed car. Suwannabart was also in the crashed car. She matches surveillance video taken from the Englewood Williams Jewelers store, where on February 23, 2015 she was carefully watching the store. The three males from the car matched witness descriptions and/or had stolen evidence in their possession at time of arrest.
“The raw violence used in the take-over robbery of a Denver jewelry store left no doubt of the urgent need to identify, locate and arrest the perpetrators,” said U.S. Attorney John Walsh. “Thanks to the extraordinary work of the FBI, the Rocky Mountain Safe Streets Task Force, and the many law enforcement partners who worked together with prosecutors from this office late into the night, a crew of violent interstate robbers was apprehended in California less than 24 hours after their crime.”
“The arrests in this case highlight the success that can be attained when federal, state, and local agencies combine resources to aggressively pursue those that commit serious acts of violence,” said FBI Special Agent in Charge Thomas Ravenelle. “We extend our gratitude to our law enforcement partners for working together and using innovative strategies to quickly apprehend violent criminals threatening the safety of our community.”
If convicted of Robbery affecting commerce, each defendant faces not more than 20 years in federal prison, and up to a $250,000 fine. If convicted of Conspiracy to commit robbery affecting commerce, each defendant faces not more than 5 years in federal prison, and up to a $250,000 fine.
This matter was investigated by the FBI, the Rocky Mountain Safe Streets Task Force, with substantial thanks to local citizens, the Denver Police Department, the Aurora Police Department, the California Highway Patrol, the Denver District Attorney’s Office, the State Auto Theft Intelligence Coordination Center, the California State Threat Assessment Center, the Chico (California) Police Department, the Martinez (California) Police Department, the Contra Costa County Sheriff’s Office, and the Folsom (California) Police Department. All of these agencies focused resources on this incident and contributed to the identification, location and apprehension of the suspects.
The defendants are being prosecuted by Assistant U.S. Attorneys Celeste Rangel and Matthew Kirsch.
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 in the Criminal Complaint are allegations. The defendants are presumed innocent unless and until proven guilty.
U.S. Magistrate Judge Orders Colorado Springs Bombing Suspect to Be Held Without BondRead the Press Release
DENVER – U.S. Magistrate Judge Michael J. Watanabe today ordered Thaddeus Cheyenne Murphy, age 44, of Colorado Springs, Colorado, to be held in custody without bond pending a resolution of his case. The U.S. Magistrate Judge ordered Murphy to be held because he was deemed both a danger to the community and a risk of flight. The U.S. District Court will next schedule a serious of hearing dates, that should be available later in the week.
Metlife Home Loans Llc, Successor to Metlife Bank N.a., to Pay $123.5 Million to Resolve Alleged Federal Housing Administration Mortgage Lending ViolationsRead the Press Release
WASHINGTON – MetLife Home Loans LLC has agreed to pay the United States $123.5 million to resolve allegations that MetLife Bank N.A. (MetLife Bank) violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today.
MetLife Bank was a banking services company headquartered in Bridgewater, New Jersey. In June 2013, MetLife Bank merged into MetLife Home Loans LLC, a mortgage finance company headquartered in Irving, Texas. MetLife Bank was, and MetLife Home Loans LLC is, a wholly owned subsidiary of MetLife Inc., a holding company headquartered in New York City.
“MetLife Bank took advantage of the FHA insurance program by knowingly turning a blind eye to mortgage loans that did not meet basic underwriting requirements, and stuck the FHA and taxpayers with the bill when those mortgages defaulted,” said U.S. Attorney John Walsh of the District of Colorado. “This settlement is part of our systematic, national effort to hold lenders accountable for irresponsible lending practices that not only harmed FHA, but also contributed to a catastrophic wave of home foreclosures across the country.”
“MetLife Bank’s improper FHA lending practices not only wasted taxpayer funds, but also inflicted harm on homeowners and the housing market that lasts to this day,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “As this settlement shows, we will continue to hold accountable financial institutions that elected to ignore the rules and to pursue their own financial interests at the expense of hardworking Americans.”
During the time period covered by the settlement, MetLife Bank participated as a Direct Endorsement Lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and certify mortgages for FHA insurance. If a loan certified for FHA insurance later defaults, the holder of the loan may submit an insurance claim to the FHA for the losses resulting from the defaulted loan. Because the FHA does not review the underwriting of a loan before it is endorsed for FHA insurance, the FHA depends on a DEL to follow program rules to ensure that only eligible loans are submitted for FHA insurance.
As part of the settlement, MetLife Home Loans LLC admitted to the following facts: From September 2008 through March 2012, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements. MetLife Bank was aware that a substantial percentage of these loans were not eligible for FHA mortgage insurance due to its own internal quality control findings. According to these findings, between January 2009 and August 2010, the portion of MetLife Bank loans containing the most serious category of deficiencies, which MetLife Bank called “material/significant,” ranged from 25 percent to more than 60 percent. These quality control findings were routinely shared with MetLife Bank’s senior managers, including the chief executive officer and board of directors. While the overall “significant” error rate identified by MetLife Bank decreased in 2010 and 2011, during the same time period, MetLife Bank more frequently downgraded FHA loans from “significant” to “moderate.” In one instance, a quality control employee wrote in an email discussing MetLife Bank’s practice of downgrading its quality control findings: “Why say Significant when it feels so Good to say MODERATE.” Overall, between January 2009 and December 2011, MetLife Bank identified 1,097 FHA mortgage loans underwritten by MetLife Bank with a “significant” finding, but despite an obligation to self-report findings of material violations of FHA requirements, MetLife Bank only self-reported 321 mortgages to HUD. MetLife Bank’s conduct caused FHA to insure hundreds of loans that were not eligible for insurance and, as a result, FHA suffered substantial losses when it later paid insurance claims on those loans.
“The settlement announced today is the culmination of two years of work by HUD OIG and our continued efforts to identify and properly respond to instances of fraud against HUD’s mortgage insurance program,” said Inspector General David Montoya of HUD.
“We appreciate that MetLife Bank has accepted responsibility for its actions and is settling with the government,” said General Counsel Helen Kanovsky of HUD. “We want to thank the Department of Justice and HUD’s Office of Inspector General for all of their efforts in helping us make this settlement a reality. This settlement with MetLife Bank underscores our consistent message that HUD takes compliance with its requirements seriously.”
The settlement was the result of a joint investigation conducted by HUD, HUD OIG, the Civil Division and the U.S. Attorney’s Office for the District of Colorado.
Federal Grand Jury Formalizes Charges Against Thaddeus Murphy, Man Responsible for Placing Explosive Type Device at Colorado Springs BuildingRead the Press Release
Click here for a copy Thaddeus Murphy's indictment
DENVER – Thaddeus Cheyenne Murphy, age 44, of Colorado Springs, Colorado, was indicted by a federal grand jury in Denver yesterday, the U.S. Attorney’s Office, the FBI, ATF and Colorado Springs Police Department announced. Murphy is believed responsible for placing a device at 603 South El Paso Street in Colorado Springs. Murphy is scheduled to appear before U.S. Magistrate Judge Michael J. Watanabe at 10:00 a.m. tomorrow morning (Wednesday, February 25, 2015) in the Arraj Federal Courthouse, 901 19th Street, for a detention hearing and arraignment. During the detention portion of the hearing the government will argue that the defendant is a danger to the community and should be held without bond. That decision will be made by Magistrate Judge Watanabe.
Because of the indictment, the preliminary hearing originally scheduled for February 27, 2015 has been vacated.
Count one of the indictment alleges that on January 6, 2015, Murphy did maliciously damage and destroy, or attempt to damage or destroy, by means of fire and an explosive, a building located at 603 South El Paso Street in Colorado Springs, Colorado, and such real property is used in interstate or foreign commerce. If convicted of that count, Murphy faces not less than 5 years, and up to 20 years in federal prison, and up to a $250,000 fine.
County two of the indictment alleges that on February 19, 2015, Murphy having been previously convicted of a felony offense knowingly possessed firearms. If convicted of that count, Murphy faces not more than 10 years in federal prison, and up to a $250,000 fine.
This case is being jointly investigated by the FBI, ATF and the Colorado Springs Police Department with support from the El Paso County Sheriff’s Office. The investigation into Murphy’s motive is ongoing.
The defendant is being prosecuted by Assistant U.S. Attorneys Gregory Holloway and Beth Gibson.
The charges in the Indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Colombian Man Pleads Guilty to Visa Fraud Related to Drug Trafficking and Conspiracy to Possess with Intent to Distribute MarijuanaRead the Press Release
Click here for a copy Hector Diaz plea agreement
DENVER – Hector Diaz, age 50, of Colombia, pled guilty this morning before U.S. District Court Judge Robert E. Blackburn to one count of visa fraud committed in facilitation of a drug trafficking crime and one count of conspiracy to possess with intent to distribute less than 50 kilograms of marijuana, federal authorities announced. Diaz, who is free on bond, is scheduled to be sentenced on May 29, 2015 at 9:00 a.m. by the Honorable Judge Blackburn.
If convicted of visa fraud committed in facilitation of a drug crime, the defendant faces not more than 20 years in federal prison, and up to a $250,000 fine. If convicted of conspiracy to possess with intent to distribute less than 50 kilograms of marijuana, Diaz faces not more than 5 years imprisonment, and up to a $250,000 fine.
This case is being investigated by the Drug Enforcement Administration (DEA), the IRS – Criminal Investigations (IRS CI), and the U.S. Department of State, Diplomatic Security Services (DSS).
Diaz is being prosecuted by Assistant U.S. Attorneys M.J. Menendez and Bradley Giles, with assistance regarding asset forfeiture from Assistant U.S. Attorney Tonya Andrews.
Man Responsible for Placing Explosive Type Device at Colorado Springs Building ArrestedRead the Press Release
Click here for a copy of the Criminal Complaint and Affidavit charging Thaddeus Murphy
DENVER – Thaddeus Cheyenne Murphy, age 44, of Colorado Springs, Colorado, was arrested late yesterday on charges of arson and being a felon in possession of firearms, the U.S. Attorney’s Office, the FBI, ATF and Colorado Springs Police Department announced. Murphy is believed responsible for placing a device at 603 South El Paso Street in Colorado Springs. Murphy is scheduled to appear before U.S. Magistrate Judge Michael E. Hegarty at 2:00 p.m. this afternoon in the Arraj Federal Courthouse, 901 19th Street, where he will be advised of his rights and the charges pending against him. A detention hearing and preliminary hearing will be scheduled for a date to be set next week.
According to an affidavit in support of a Criminal Complaint, on January 6, 2015 at 10:48 am the Colorado Springs Police department received reports of an explosion at a building located at 603 South El Paso Street in Colorado Springs. Police officers responded, as did their bomb squad. Further, soon thereafter federal agents from the FBI and the ATF jointly responded to the scene to work with the police department in conducting the investigation. The device was a road flare and pipe bomb near a container of gasoline. The device was lit, causing an explosion. The gasoline did not ignite. The building and sidewalk were charred as a result of this device.
Multiple interviews were done by law enforcement of witnesses who noticed a specific type of truck and an individual fleeing the scene. Extensive investigation done by law enforcement eventually lead to the identification of a truck that closely matched the description of the truck fleeing the scene. Also, the person driving the truck generally resembled the sketch drawn by the Colorado Springs Police Department. After determining the individual’s identity, and developing probable cause that the owner of the truck, Thaddeus Murphy, was the likely person responsible for the device, federal agents working with the U.S. Attorney’s Office obtained a search warrant of the target’s home. While executing the warrant, agents and officers found seven firearms, and devices similar to the one used at the building. Murphy has prior felony convictions, which made it illegal for him to possess the firearms. Also during the search, Murphy was interviewed by federal law enforcement where he stated that the target of his criminal actions was not the NAACP, but that he had a different motive. The investigation continues regarding the motive for the attack. The residents of Colorado Springs, and the occupants of the building in question, can rest assured that the person who allegedly placed the device is now in custody.
Murphy is charged with one count of arson of a building. If convicted on that count, he faces not less than 5 years, and up to a $250,000 fine. He also faces one count of being a felon in possession of firearms. If convicted on that count, he faces not more than 10 years in federal prison, and up to a $250,000 fine.
This case is being jointly investigated by the FBI, ATF and the Colorado Springs Police Department with support from the El Paso County Sheriff’s Office.
The defendant is being prosecuted by Assistant U.S. Attorneys Gregory Holloway and Beth Gibson.
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 in the Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney John Walsh Attends White House Summit on Countering Violent ExtremismRead the Press Release
DENVER -- Today, U.S. Attorney John Walsh, along with six other U.S. Attorneys, are participating in the White House’s Summit on Countering Violent Extremism.
The purpose of the Summit is to highlight domestic and international efforts to prevent violent extremists and their supporters from radicalizing, recruiting, or inspiring individuals or groups in the United States and abroad to commit acts of violence, efforts made even more imperative in light of recent, tragic attacks in Ottawa, Sydney, and Paris. This summit will build on the strategy the White House released in August of 2011, Empowering Local Partners to Prevent Violent Extremism in the United States, the first national strategy to prevent violent extremism domestically.
Our partners around the world are actively implementing programs to prevent violent extremism and foreign terrorist fighter recruitment. The summit will also include representatives from a number of partner nations, focusing on the themes of community engagement, religious leader engagement, and the role of the private sector and tech community.
Through presentations, panel discussions, and small group interactions, participants will build on local, state, and federal government; community; and international efforts to better understand, identify, and prevent the cycle of radicalization to violence at home in the United States and abroad.
Proprieter of "sowet" Website Indicted for Promoting Massage Parlors That Offered Sexual ServicesRead the Press Release
DEFENDANT USED INTERNET AND CREDIT CARDS VIA INTERSTATE COMMERCE TO PROMOTE PROSTITUTION BUSINESSES FOR HIS PERSONAL FINANCIAL GAIN
DENVER – David A. Warmack, of Adams County, Colorado, was arrested on February 13, 2015, based on a sealed indictment returned by a federal grand jury in Denver on February 11, 2015, on charges of Use of a Facility in Interstate Commerce to Promote a Business Enterprise Involving Prostitution, the U.S. Attorney’s Office, the FBI, and the Colorado State Patrol announced. Warmack is scheduled to appear before a U.S. Magistrate Judge in Denver this afternoon, where he will be advised of his rights and the charges pending against him.According to the indictment, beginning in August 2011 and continuing through July 2014, Warmack owned and operated a website business named “Sowet.com”. The website promoted and facilitated prostitution that was taking place at various massage parlors across Metro Denver. The massage parlors offered not only massages but also unlawful sexual services.
The defendant charged the owners of the massage parlors for advertisements on his “Sowet” website. He visited some of the businesses, getting unlawful sexual services in exchange for writing a review of the parlor and the specific prostitute that he posted on his site. Further, Warmack posted sexually suggestive photographs of the women in an effort to attract business to the massage parlors.
In his attempt to drive business to the massage parlors, the defendant:
- Personally visited a site, obtained a massage and sexual services so he could give personal testimonials
- Giving internet reviews of the individual sites, including details of the women at each location
- Providing reviews of the physical location of the massage parlor, including the inside cleanliness and other conditions
- Posting advertisements with information about location, hours of operation, names of workers, and cost of services for each location
- Operational procedures of the individual massage parlors, including “door fees”
Warmack also ran a forum on his “Sowet” website where website users could discuss topics on bulletin boards related to the massage parlors. The defendant served as the administrator for these bulletin boards. He also counseled those using the massage parlors on how to handle any law enforcement questioning which they might encounter should law enforcement inspect a massage parlor while they are present.
The defendant received a monthly fee from each of the massage parlors, collecting anywhere from $150 to $400 per location. For some massage parlors, Warmack went further, promoting the businesses by paying for and arranging for additional advertising on other websites, such as “backpage.com” and “craigslist.com”. He collected fees for his additional promotional services.
The main massage parlors Warmack promoted included:
- Happy Feet, in Golden, from 2011 to 2012
- Sunday Spa, in Aurora, from 2012 to 2013
- Jewell Spa, in Lakewood, from 2012 to 2013
- Abalone Spa, in Wheat Ridge, in 2013
- Maize Spa, in Aurora, from 2013 to 2014
- Hill Relaxation Spa, in Parker, in 2014
The indictment includes 20 counts of Use of a Facility in Interstate Commerce to Promote a Business Enterprise Involving Prostitution, including credit card transactions, use of the internet for advertising purposes, and flying in workers to Colorado from other states to work at the various Metro Denver locations.
If convicted, Warmack faces not more than 5 years in federal prison per count. He also faces up to $250,000 fine per count.
“Thanks to the hard work of the Colorado Trafficking and Organized Crime Coalition, we were able to help put five illicit massage parlors out of business, and prosecute an individual who was helping those illegally run businesses make money,” said U.S. Attorney John Walsh.
“The arrest of David Warmack illustrates the FBI’s commitment to work with its partners to address individuals and businesses that promote and facilitate illegal prostitution and venues for human trafficking,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “Thanks to the hard work of our law enforcement partners, the defendant’s illegal activity was identified, he was arrested, and is now being prosecuted.”
This case was investigated by the FBI and the Colorado State Patrol. Additional investigative assistance was provided by members of the Colorado Trafficking and Organized Crime Collation (CTOCC) to include the Arvada Police Department, Arapahoe County Sheriff’s Office, Aurora Police Department, Commerce City Police Department, Douglas County Sheriff’s Office, Jefferson County Sheriff’s Office, Lakewood Police Department, and the Wheat Ridge Police Department.
The defendant is being prosecuted by Assistant U.S. Attorney Tim Neff.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
- NOTE: CTOCC: In March 2012, a non-funded Task Force/Coalition named the Colorado Trafficking and Organized Crime Coalition (CTOCC) was created. Its mission is to tackle the emergent problem of involuntary servitude of adults and international victims (to include labor exploitation and commercial sex) within the State of Colorado. CTOCC investigates predicated venues that support human trafficking including the internet, restaurants, hotels, bars, labor camps, and businesses associated with prostitution. CTOCC’s goal is to investigate, dismantle, and prosecute groups and individuals that hide and launder illicit proceeds from criminal activity such as human trafficking. Currently the FBI partners with over twenty-five local, state, and federal partners that compose CTOCC.
Three Colorado Springs Residents Sentenced to Federal Prison for Conspiracy to Defraud the Irs and Related Tax Charges Following Jury TrialRead the Press Release
DENVER – George Brokaw, age 68, John Pawelski, age 66, and Mimi Vigil, age 63, all from Colorado Springs, Colorado, were sentenced today by U.S. District Court Judge Christine M. Arguello for conspiracy to defraud the IRS and related tax charges, federal law enforcement authorities announced. The three defendants failed to appear at their original sentencing hearing. Judge Arguello then issued a bench warrant for all three defendants, which resulted in Deputy U.S. Marshals locating and arresting the defendants. Today, Brokaw was sentenced to serve 78 months in federal prison, followed by 3 years on supervised release. Pawelski was sentenced to serve 78 months in federal prison, followed by 3 years on supervised release. Both defendants were also ordered to pay a $15,000 fine. Vigil was sentenced to serve 72 months in federal prison, followed by 3 years on supervised release. She was also ordered to serve 200 hours of community service. At the conclusion of the hearing, Judge Arguello ordered all three defendants to remain in federal custody.
All three defendants were indicted by a federal grand jury in Denver on May 22, 2013, which was followed by a superseding indictment on October 21, 2013. They were convicted, following a 5-day jury trial on November 7, 2014. The jury deliberated for an hour and a half before reaching their verdicts. They were sentenced on February 10, 2015.According to the superseding indictment, and evidence presented at trial, beginning in October 2008, and continuing through May 2009, Brokaw, Pawelski, Vigil, and others conspired with each other to defraud the United States by submitting false claims for income tax refunds to the Internal Revenue Service.
The three filed or caused to be filed false, fictitious and fraudulent Form 1040 tax returns containing false claims for refunds in their names. A total of twelve fraudulent returns were filed attempting to receive over twenty-four million dollars in fraudulent refunds. In connection with these false tax returns they submitted or caused to be submitted false Forms 1099-OID. The 1099-OID forms falsely reported that financial institutions, lenders, or other entities had withheld and paid over to the IRS interest income from accounts which did not generate such interest income and from which no such withholdings were made. The Form 1040 tax returns claimed false refunds based on these false claims of withholdings.
Furthermore, from March 2008 and continuing through April 2012, the defendants willfully conspired with each other to obstruct and impede the due administration of the Internal Revenue laws by attempting to thwart the legitimate collection of taxes owed to the IRS by them and others. They caused to be filed or submitted to the IRS a variety of false, fraudulent, or illegitimate documents which purported to constitute payments of taxes owed to the IRS as well as purported electronic funds transfer (EFT) drawn on closed bank accounts. In addition, the defendants filed a variety of false and fraudulent liens or other documents which falsely claimed that IRS employees, who were engaged in legitimate tax collection efforts against one or more of the defendants, owed one or more of the defendants amounts of money ranging from tens of millions of dollars to billions of dollars.
All three defendants face statutory maximum sentences ranging from not more than 3 years to not more than 10 years, plus up to a $250,000 fine, per count of conviction.
“It is everyone’s responsibility, their obligation, to cooperate with the IRS and their collection of taxes,” said U.S. Attorney John Walsh. “In this case, the defendants not only refused to pay their taxes, they also impeded the IRS and ignored a court order by failing to appear at the originally scheduled sentencing. Today’s prison sentence demonstrates the serious penalties one faces when interfering with the lawful collection of taxes.”
“IRS – Criminal Investigations is working vigorously to stop abusive tax schemes that unfairly shift the tax burden to honest American taxpayers,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office. “As our tax season gears up, this sentencing reinforces our commitment to every taxpayer that we will identify and prosecute those who try to defraud the tax system and evade paying their fair share of taxes.”
“The prison sentences handed down today reflect the serious nature of interfering with the lawful collection of taxes,” said Preston C. Lamb, Special Agent in Charge of the Treasury Inspector General for Tax Administration (TIGTA). “Hopefully this prosecution will deter those who think they can avoid or work around our tax system.”
This case was investigated by Internal Revenue Service – Criminal Investigation (IRS CI), and Treasury Inspector General for Tax Administration (TIGTA). The case was prosecuted by Assistant U.S. Attorneys Mathew Kirsch and Martha Paluch.Longmont Man Pleads Guilty to Investment Fraud SchemeRead the Press Release
DENVER – Gary Snisky, age 48, of Longmont, Colorado, pled guilty yesterday before U.S. District Court Judge Raymond P. Moore to mail fraud and money laundering, federal authorities announced. Judge Moore is scheduled to sentence Snisky on June 18, 2015. Snisky 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. Greeott is scheduled to be sentenced by Judge Phillip A. Brimmer on April 24, 2015.
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.
Beginning in late 2009, as a paid independent contractor, co-conspirator Richard Greeott began doing website development work for Colony Capital. In 2010, Snisky asked Greeott to develop a fully-automated trading system for trading in the futures market, particularly an algorithm. 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. Eventually, Greeott began testing the algorithm by trading small amounts of money in small, but real, futures contracts. 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 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 in order to falsely bolster their appearance of success and overall financial stability. Between July 2011 and January 2013, Snisky falsely led investors, potential investors, and financial advisors to believe that they were trading “live” in the futures markets and that they had a history of trading profitably in the futures market. Also, 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.
The net loss Snisky caused to investors in the bond and futures trading program was $5,226,965.93. To date, as a result of asset forfeiture proceedings, victims are in the process of being paid restitution in the amount of $2,695,913.32. The remaining amount of restitution is $2,531,052.61, most of which is jointly liable between Snisky and Greeott.
Snisky plead to one count of mail fraud, which carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000; one count of money laundering, which carries a penalty of not more than 10 years in federal prison, and a fine of up to $500,000.
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 is being prosecuted by Assistant U.S. Attorney Pegeen D. Rhyne, with Assistant U.S. Attorney Tonya Andrews is handling the forfeiture proceedings.
Husband and Wife Who Fled Prior to Trial in Colorado Arrested in the BahamasRead the Press Release
BOTH DEFENDANTS MAKE COURT APPEARANCE IN MIAMI AFTER BEING DEPORTED BY BAHAMIAN GOVERNMENT
DENVER – Donald and Karlien Winberg, of Earth, Texas, appeared in federal court in Miami today after being arrested at Miami International Airport yesterday on charges of bond violations in Colorado, U.S. Attorney John Walsh and FBI Special Agent in Charge Thomas Ravenelle announced. Donald Winberg, age 44, and Karlien Winberg, age 33, were originally detained in the Bahamas after fleeing the United States to avoid trial on conspiracy and wire fraud charges in Colorado. Authorities in the Bahamas had detained the defendants, who were accompanied by their seven children, for failing to have proper identification and travel documents. Bahamian authorities also knew of the federal arrest warrants based on the bond condition violations, which resulted in the Winbergs being deported. The two defendants and their seven children were put on a flight to the United States, landing in Miami, where they were taken into custody by FBI agents.The Winbergs were indicted by a federal grand jury in Denver on April 22, 2014. As their case progressed in U.S. District Court in Denver, Colorado, and as the defendants neared trial, they committed alleged bond violations and later fled, resulting in the issuance of arrest warrants in October 2014.
The Winbergs, beginning in 2010, advertised on the internet that they had hay and corn for sale. Once a potential buyer contacted the defendants, a sale would be negotiated. Defendants claimed to buyers that they owned extensive farmland in Idaho and Texas; that they produced hay, straw, potatoes, and other agricultural crops in substantial quantities; that they shipped large quantities of agricultural products throughout the United States; that they had between 15,000 and 65,000 tons of hay for sale; and that they had trucks to deliver the large quantities of purchased hay or corn to the buyer. The defendants would then take the victims’ money and not deliver the material that was advertised, purchased and promised.
As the case was moving toward trial, the Winbergs fled, at one point staying in the Galveston, Texas area. The defendants purchased a sail boat that they then ran aground not far from the shore. At that time it was believed that they had a large amount of cash. Around that same time, the defendants were the subject of local publicity in the Galveston area. The Winbergs were able to obtain another boat and successfully travelled to the Bahamas. They were arrested without incident on a boat near the Staniel Cay Yacht Club in the Bahamas. The arrest was made by Bahamian authorities after a Louisiana family vacationing in the Bahamas recognized the family from a press story out of Galveston. The defendants failed to provide identification documents, and the Bahamian authorities, knowing about the federal arrest warrants, arrested the two defendants. They were then deported back to the United States, where they were arrested. After the court orders that they be sent to Colorado, the U.S. Marshals Service will be responsible for their transportation. No time table has been set for that transport. Social Services is working to determine what happens to the seven children.
The defendants face one count of conspiracy to commit wire fraud. If convicted of that count, they face not more than 20 years in federal prison, and up to a $250,000 fine. They each face 14 counts of wire fraud and/or aiding and abetting. If convicted of wire fraud, or aiding and abetting, the defendants face not more than 20 years in federal prison, and up to a $250,000 fine per count.
This case was originally investigated by the FBI. The FBI wants to recognize the following agencies that assisted in the search and arrest of the Winbergs: Drug Enforcement Administration, Customs and Border Protection, American Citizen Services at the U.S. Embassy in Nassau, Bahamas, and the Royal Bahamas Police Force.
The defendants are being prosecuted by Assistant U.S. Attorney Patricia Davies. The Justice Department’s Office of International Affairs also provided assistance in this case.
The indictment is an allegation, and the defendants are presumed innocent unless and until proven guilty.
Denver Man Indicted for the Receipt and Possession of Child Pornography Ordered Held in Custody Without BondRead the Press Release
DEFENDANT WAS A REGISTERED SEX OFFENDER DUE TO A PREVIOUS CHILD PORNOGRAPHY CONVICTION
DENVER – Shawn Cheever, age 44, of Denver, Colorado, was ordered detained without bond today by U.S. Magistrate Judge Kathleen M. Tafoya, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. The detention order came today following a hearing where at its conclusion Magistrate Judge Tafoya found that the defendant was a danger to the community and a risk of flight.
Cheever was indicted by a federal grand jury in Denver on January 27, 2015. He was arrested by special agents with the FBI soon thereafter. He then made his initial appearance on January 29, 2015, where he was advised of his rights and the charges pending against him. In addition to today’s detention hearing, Cheever was arraigned, where he entered a pro-forma not guilty plea.
According to the indictment, count one alleges that on October 28, 2014, the defendant knowingly received child pornography via his computer. Count two alleges that on January 6, 2015, the defendant knowingly possessed any computer disk or other material that contained child pornography.
During today’s detention hearing, Assistant U.S. Attorney (AUSA) Colleen Covell argued that Cheever should be held without bond because he was a danger to the community and a risk of flight. To bolster her argument, AUSA Covell told the court that Cheever was a danger to the community because, in part, he was a registered sex offender due to a prior conviction in a child pornography case. Further, the defendant had 23 prior convictions (11 of which were felonies). Arguing the defendant is a risk of flight, Covell told the court that Cheever failed to appear in court 14 times. Finally, the defendant is a documented methamphetamine user.
If convicted of receipt of child pornography, the defendant faces not more than 20 years imprisonment, but if there is a similar conviction, the defendant faces not less than 15 years, and up to 40 years in federal prison, as well as up to a $250,000 fine. If convicted of possession of child pornography, the defendant faces not more than 10 years in federal prison, but if there is a similar conviction, the defendant faces not less than 10 years and up to 20 years in federal prison, as well as up to a $250,000 fine.
This case was investigate by the Federal Bureau of Investigation (FBI).
The defendant is being prosecuted by Assistant U.S. Attorney Colleen Covell.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Walsenburg Police Officer Sentence to Federal Prison for Aiding and Abetting the Possession with Intent to Distribute HeroinRead the Press Release
DENVER – Gloria Evangeline Suazo, age 32, of Pueblo, was sentenced last week by U.S. District Court Judge Raymond P. Moore to serve 60 months (5 years) in federal prison for aiding and abetting the possession with intent to distribute a controlled substance, namely heroin, U.S. Attorney John Walsh and ATF Denver Division Special Agent in Charge Luke Franey announced. Following her prison term, Suazo, a Walsenburg Police Officer at the time of her crime, was ordered to serve 3 years on supervised release. As a convicted felon, she will never be legally allowed to possess a firearm or ammunition. Suazo’s ex-husband, Jeromy Ray Suazo, age 33, also of Pueblo, was a codefendant in the case. He pled guilty to being a felon in possession of a firearm and for conspiracy to distribute and possession of a controlled substance with intent to distribute, and was sentenced by Judge Moore to 120 months (10 years) in federal prison followed by 3 years of supervised release.
Gloria and Jeromy Suazo were indicted by a federal grand jury on June 3, 2014. Jeromy Suazo pled guilty on September 23, 2014 and was sentenced on December 16, 2014. Gloria Suazo pled guilty on October 29, 2014 and was sentenced on January 23, 2015.
According to court documents, Jeromy Suazo was contacted while leaving a Pueblo area bar. During that contact law enforcement noticed a Glock firearm. As the defendant was a felon he was taken into custody for being a felon in possession of a firearm. After his arrest, he called Gloria Suazo, his ex-wife, who happened to be a Walsenburg Police Officer, from the Pueblo County Jail, asking her to retrieve a large amount of cash and heroin which he had hidden in his apartment. Suazo went to the apartment, and while there Jeromy called again and described the exact location and appearance of the heroin so she could recover it along with the cash. Law enforcement officers, who were monitoring the jail house call, arrived at Jeromy’s apartment too late to catch Gloria Suazo in the act. They later obtained consent to search Gloria Suazo’s home, and located and seized the cash and heroin. She was arrested soon after.
While out on bond on the federal indictment, and the day after she pled guilty in the federal case, Gloria was arrested in Pueblo for distributing cocaine. Her children were with her at the time she was selling the cocaine and when she was arrested. That case is pending in state court.
“When a government official abuses his or her position to provide cover for illegal conduct, we will hold that official responsible,” said U.S. Attorney John Walsh. “In this case a sworn law enforcement officer chose to help her ex-husband instead of following her legal law enforcement obligations, and for that she will now be incarcerated.”
“ATF and our partners from the Pueblo Police Department will continue to target those who possess firearms while distributing narcotics as well as anyone who assists them in the criminal activity,” said Denver ATF Special Agent in Charge Luke Franey. “This includes those who hold a position of trust with the public.”
This case was investigate by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Pueblo Police Department.
The matter was prosecuted by Assistant U.S. Attorney Kurt Bohn.
Fountain, Colorado Man Sentenced for Defrauding the Department of Veterans Affairs and the Social Security AdministrationRead the Press Release
DEFENDANT RECEIVED 100 PERCENT DISABILITY BENEFITS FROM BOTH AGENCIES WHILE WORKING
DENVER – Albert Kenneth Lender, age 62, of Fountain, Colorado, was sentenced yesterday by U.S. District Court Judge Philip A. Brimmer to serve three months in federal prison, followed by three years on supervised release for two counts of making false statements to the government, the U.S. Attorney’s Office, the Veterans Affairs Office of the Inspector General and the Social Security Administration Office of the Inspector General announced. Lender was also order to pay restitution to the government of over $130,000, the amount of loss, plus interest. He was ordered to report to a Bureau of Prisons facility within 15 days of designation.
Lender was indicted by a federal grand jury in Denver on June 17, 2014. He pled guilty on August 22, 2014. He was sentenced on January 27, 2015.
According to the stipulated facts contained in the plea agreement, Lender received benefits at a 100 percent disability rating from the Department of Veterans Affairs (VA) in 1991. That same year, he also began receiving benefits at a 100 percent disability rating from the Social Security Administration (SSA). Both agencies advised Lender that should his status change, he was to notify the agencies immediately. He also received follow up letters reinforcing that advisement.
Prior to January 2005, Lender caused Zac Towne Paint & Quarter Horses (Zac Towne) to be formed, listing his wife as the sole proprietor. Thereafter, he negotiated contracts on behalf of Zac Towne, including one with the City of Fountain for landscaping, ground maintenance, snow removal, and related services. He also worked to secure other contracts. Once the contracts were awarded, Lender performed the duties to fulfill the contracts, including the landscaping, ground maintenance and snow removal. He also hired others to assist him.
Based on Lender’s false representations and material omissions to both the VA and the SSA, Lender received more than $130,000 in disability benefits for which he was ineligible.
This case was investigated by the Department of Veterans Affairs Office of the Inspector General, and the Social Security Administration Office of the Inspector General.
The case was prosecuted by Assistant U.S. Attorney Patricia Davies.
Inmate Housed at Florence Correctional Complex Found Guilty of Threatening to Assault and Murder Correctional Officers and Their FamiliesRead the Press Release
DENVER – Following a three-day trial, a jury late last week found Theron Maxton, age 59, an incarcerated inmate, guilty of four counts of influencing a federal officer by threats to the officer and/or the officer’s family member, the U.S. Attorney’s Office and the FBI announced. The jury deliberated for approximately three two hours before handing down their guilty verdicts. The trial was held before U.S. District Court Judge Philip A. Brimmer, starting on January 20, 2015, and concluding on January 22, 2015. At the conclusion of each trial day, as well as at the conclusion of the trial, Maxton was remanded into custody.
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. He is scheduled to be sentenced by Judge Brimmer on May 1, 2015.
According to the Second Superseding Indictment, obtained on May 8, 2014, in November of 2012 the defendant allegedly 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, Mr. 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.
For each count of influencing a federal official by threats to the officer and/or family member, the defendant faces not more than 10 years, and up to a $250,000 fine, per count, for each of the four counts.
This case was investigate by the Federal Bureau of Investigation.
The trial was handled by Assistant U.S. Attorneys David Tonini and Valeria Spencer.
Northern Colorado Heroin Network Dismantled by the FBI and the Longmont Police DepartmentRead the Press Release
FEDERAL CHARGES INCLUDE DISTRIBUTION OF HEROIN RESULTING IN DEATH
DENVER – Longmont Police Officers and FBI special agents today dismantled a heroin distribution network centered in Northern Colorado, the U.S. Attorney’s Office, FBI and Longmont Police Department announced today. Ten defendants were arrested based on an either a federal indictment returned by a federal grand jury in Denver or a state arrest warrant. One of the four federal defendants, Brice Alday, of Longmont, appeared in U.S. District Court in Denver this afternoon, where he was advised of his rights and the charges pending against him. Four defendants remain at large, and arrests are ongoing.
In September 2014, the Longmont Police Department’s Special Enforcement Unit (SEU), and the Federal Bureau of Investigations (FBI) initiated a joint investigation into a heroin use and distribution ring working primarily in Longmont, but with connections to other communities in Northern Colorado. As a result of this investigation, four persons were indicted on federal charges related to heroin distribution – including an allegation that the distribution resulted in death. In addition to the federal defendants, 10 others were named in state charges for possession and/or distribution of a schedule I controlled substance.
The federal indictment includes four federal defendants. Alday and his three co-defendant face four counts, including Conspiracy to distribute and possess with the intent to distribute heroin – the use of which resulted in death. All four defendants also face distribution of heroin resulting in death. Alday and two others also face use of communication facility, a telephone, in furtherance of the drug trafficking crime.
The Longmont Police Department is still looking for many of the suspects and are requesting the assistance from the public. Anyone with information on this crime, or any other crime, is asked to call the Longmont Police Department at 303-651-8501 or Northern Colorado Crime Stoppers at 1-800-222-TIPS (8477). Crime Stoppers provides a way for members of the community to assist local law enforcement agencies in the fight against crime. Crime Stoppers knows "someone other than the criminal has information that can help solve a crime". Crime Stoppers offers ANONYMITY to people who provide information about crimes AND pays rewards when the information supplied leads to an arrest. People providing information to Northern Colorado Crime Stoppers that lead to the arrest and filing of charges for this crime may receive up to a $2,000.00 reward and remain anonymous. Tips can also be provided to the Northern Colorado Crime Stoppers via the internet at www.nococrimestoppers.com or by Text to: 244637 (crimes) Keyword: NOCO (followed by your tip).
“Tragically, heroin use has climbed dramatically in Colorado, which has led to an epidemic of heroin overdose deaths,” said U.S. Attorney John Walsh. “Thanks to the FBI and the Longmont Police Department, a Northern Colorado heroin distribution network that was responsible for the death of an individual has been dismantled. But our work in this area is far from done.”
“These arrests highlight a commitment by federal and local agencies to address criminal enterprises responsible for a surge in the trafficking of heroin and resulting overdoses that take lives and destroy families,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “We extend our gratitude to the Longmont Police Department and United States Attorney’s Office for working together and using innovative strategies to dismantle groups that threaten the well-being of our communities.”
The federal defendants face a variety of drug distribution related charges. All four also face the charge of Conspiracy to distribute and possess with intent to distribute heroin – the use of which resulted in death. The four also face distribution of heroin resulting in death. Each count carries a penalty of not less than 20 years, and up to life in federal prison, and up to a $1,000,000 fine. If convicted of use of a communication facility, each of the three defendants who were indicted on that charge face not more than 4 years in prison, and up to a $250,000 fine.
This case was investigated by the Federal Bureau of Investigation, Fort Collins Resident Agency and the Longmont Police Department. In addition, the Boulder District Attorney’s Office is working closely with law enforcement on the prosecution of the state defendants.
The federal defendants are being prosecuted by Assistant U.S. Attorney Bradley Giles.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
Arvada Woman Sentenced for Conspiracy to Provide Material Support to A Designated Foreign Terrorist OrganizationRead the Press Release
DENVER – U.S. Attorney John Walsh of the District of Colorado and Special Agent in Charge Thomas Ravenelle of the FBI’s Denver Division, and Assistant Attorney General for National Security John P. Carlin, announced that Shannon Conley, 19, of Arvada, Colorado, was sentenced today by U.S. District Court Judge Raymond P. Moore to serve 48 months in federal prison, followed by 3 years on supervised release, for conspiracy to provide material support to a designated foreign terrorist organization. During her supervised release, Judge Moore ordered her to serve 100 hours of community service. Conley, who appeared at the hearing in custody, was remanded at its conclusion.
Conley was first charged by criminal complaint on April 9, 2014. She was indicted by a federal grand jury in Denver on Sept. 10, 2014.
According to court documents, including the stipulated facts in the plea agreement, from about February 2014 and continuing through April 8, 2014, Conley and a co-conspirator unlawfully worked together and with other individuals to provide and attempt to provide material support and resources to a designated foreign terrorist organization, specifically Al-Qaeda (AQ) and Al-Qaeda in Iraq (AQI), aka the Islamic State of Iraq (ISI), aka the Islamic State of Iraq and Al Sham (ISIS), aka the Islamic State of Iraq and the Levant (ISIL).
The conspiracy was accomplished, in part, when Conley met the co-conspirator on the Internet. During their communications, they shared their view of Islam as requiring participation in violent jihad. The co-conspirator communicated to Conley that he was an active member of a group fighting in Syria known as ISIS. The two then decided to become engaged and worked together to have Conley travel to Syria to join her new fiancé. Before traveling to Syria, Conley refined and obtained additional training and skills in order to provide support and assistance to any AQ and/or ISIS fighter. Conley also intended to fight if it became necessary to do so.
In furtherance of the conspiracy, Conley joined the U.S. Army Explorers (USAE) to be trained in U.S. military tactics and in firearms. She traveled to Texas and attended the USAE training. She also obtained first aid/nursing certification and National Rifle Association certification. Conley knew that ISIS was a designated foreign terrorist organization. In fact, on numerous occasions, Special Agents with the FBI met with her in attempts to persuade her not to carry out her plans to travel overseas to provide support to a foreign terrorist organization and to engage in violent jihad. On March 29, 2014, the co-conspirator, together with others, arranged for an airline ticket to be purchased for Conley to travel to Turkey, departing from Denver on April 8, 2014. On April 8, 2014, Conley traveled to Denver International Airport and attempted to board the flight to Turkey. She was then arrested by FBI agents.
A subsequent search of Conley’s home revealed DVDs of Anwar Al-Awlaki lectures and a number of books and articles about AQ, other terrorist groups and jihad. Agents also recovered shooting targets labeled with the number of rounds fired and distances.
“Conspiring to providing material support to a foreign terrorist organization is a serious federal crime,” said U.S. Attorney John Walsh. “The defendant in this case got lucky. The FBI arrested her after determining that she had been radicalized and planned to travel to Syria to support the brutal foreign terrorist organizations operating there. Had she succeeded in her plan to get to Syria, she would likely have been brutalized, killed or sent back to the United States to commit other crimes. Today’s sentence underscores the seriousness of defendant’s conduct, but pales in comparison to the penalty she would have paid had she not been stopped.”
“This sentencing highlights the rapidly changing, shrinking nature of the world and the implications for law enforcement and public safety,” said Special Agent in Charge Thomas Ravenelle. “Terrorist groups now have the ability to directly attract and even recruit U.S. residents to commit violence or provide other support on their behalf. Anyone in our community who takes deliberate steps to commit federal crimes in support of a declared terrorist organization will have those steps disrupted and will be arrested and prosecuted whenever appropriate and necessary in order to preserve the safety of our community.”
This case was investigated by the FBI and the Arvada Police Department.The defendant was prosecuted by Assistant U.S. Attorney Greg Holloway of the District of Colorado, with the assistance of Jennifer Levy of the National Security Division’s Counterterrorism Section.
United States Attorneys John F. Walsh and Richard S. Hartunian to Lead Attorney General's Advisory CommitteeRead the Press Release
WASHINGTON - Attorney General Eric Holder announced today the appointment of United States Attorney John F. Walsh for the District of Colorado as chair of the Attorney General’s Advisory Committee of United States Attorneys (AGAC). Attorney General Holder also appointed United States Attorney Richard S. Hartunian for the Northern District of New York to serve as vice chair. Both appointments are effective immediately.
“Throughout their respective tenures in Colorado and the Northern District of New York, John Walsh and Richard Hartunian have been thoughtful leaders of the United States Attorney community, fierce advocates for the citizens they serve, and champions of the cause of justice,” said Attorney General Holder. “Each of them has been instrumental in addressing sensitive legal issues, handling difficult cases, and shaping and implementing critical Smart on Crime reforms. I thank John and Richard for agreeing to lead the Attorney General’s Advisory Committee – and for lending their perspectives and deep experience to the pressing policy questions about which I, and Attorney General-designate Loretta Lynch, will surely look to them for guidance and counsel.”
U.S. Attorney Walsh previously served on the AGAC from February 2011 to January 2013 as the chair of the Medical Marijuana Working Group and co-chair of the White Collar/Fraud Subcommittee. He replaces U.S. Attorney for the Eastern District of New York and Attorney General nominee Loretta E. Lynch.
U.S. Attorney Hartunian was appointed to the AGAC in April 2013 and has served as the chair of the Border and Immigration Subcommittee in addition to serving on several committees. He replaces Acting Deputy Attorney General and former U.S. Attorney for the Northern District of Georgia Sally Quillian Yates.
Attorney General Holder also thanked U.S. Attorney Lynch and Acting Deputy Attorney General Yates for serving as chair and vice chair of the AGAC for the past two years.
“I want to express my heartfelt personal thanks to both Loretta Lynch and Sally Yates for their outstanding leadership of the Attorney General’s Advisory Committee,” said Attorney General Holder. “It has been a pleasure and a privilege to work closely with them on a range of critical issues over the years. I am both proud and deeply gratified that the American people will continue to benefit from their service in the new roles to which President Obama has nominated them. And I am confident that the Department of Justice will only grow stronger under their leadership as Attorney General and Deputy Attorney General, respectively.”
“I’m deeply honored that the Attorney General has asked me to serve as chair of this crucial advisory committee,” said Colorado U.S. Attorney John Walsh. “And it is a great honor to represent the men and women of U.S. Attorney’s Offices nationally, who work tirelessly every day to protect the American people and pursue justice in the courts.”
The AGAC was created in 1973 to serve as the voice of the United States Attorneys and to advise the Attorney General on policy, management and operational issues impacting the offices of the United States Attorneys.
Aurora Drug Dealer Sentenced to 147 Months in Federal Prison for Intent to Distribute Cocaine While Possessing A FirearmRead the Press Release
DENVER – Korian Kenny Bascombe, age 31, of Aurora, Colorado, was sentenced late last week by U.S. District Court Judge Christine M. Arguello to serve 147 months (over 12 years) in federal prison for possession with intent to distribute cocaine and possessing a firearm in furtherance of a drug trafficking crime, federal and state law enforcement authorities announced. Following his prison sentence, Bascombe was ordered to serve 4 years of supervised release. Bascombe was also ordered to forfeit $7,746.00, a firearm and a 2000 Cadillac DeVille.
Bascombe was originally charged by indictment on February 26, 2013, followed by a superseding indictment on June 18, 2013. He then pled guilty before Judge Arguello on September 9, 2014. Other defendants charged in the superseding indictment include Robert Bellender (aka Ghost), Victor Rivas-Pinzon, Andrew T. Sorensen, and Bruce Thomas. Bellender, Rivas-Pinzon and Thomas pled guilty and were sentenced to 54, 42, and 38 months in prison, respectively.
According to information contained in court documents, including the stipulated facts contained in Bascombe’s plea agreement, Bascombe was arrested after a traffic stop on February 24, 2013. During a search of Bascombe’s car subsequent to his arrest, 28 grams of crack cocaine and a .22 caliber semi-automatic pistol with ammunition was found in the vehicle.
Based on the investigation by the Front Range Task Force, Bellender began purchasing distribution quantities of powder cocaine and crack cocaine from Bascombe for $1,200 per ounce when Bellender’s initial supplier stopped distributing to him. Bascombe and Bellender were converting or “cooking” powder cocaine to convert it into the crack form.
Between October of 2011 and his arrest, Bascombe sold a crack cocaine to Bellender and his co-conspirators. Twenty kilograms is the equivalent of approximately 705 ounces.
This case was investigated by agents of the Front Range Task Force which include the Drug Enforcement Administration, IRS Criminal Investigation (IRS CI), Denver Police Department, Aurora Police Department, Arapahoe County Sheriff’s Office, Douglas County Sheriff’s Office, Colorado Bureau of Investigation, Colorado National Guard, and the Mountain Police Department.
This case is being prosecuted by Assistant U.S. Attorney James R. Boma.
Canada Extradites Drug Trafficking Defendant to Colorado for ProsecutionRead the Press Release
DENVER – Hector Armondo Chavez, age 28, 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. Chavez 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 is scheduled to make his initial appearance this afternoon at 2:30 p.m. before U.S. Magistrate Judge Craig B. Shaffer, located on the 4th Floor of the Arraj Federal Courthouse, 901 19th Street.
According to the indictment, Chavez, 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 two counts of using a telephone to facilitate the commission of a drug trafficking felony. If convicted of conspiracy, Chavez 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, Chavez faces not more than 4 years imprisonment, and up to a $250,000 fine, per count, for each of the two 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 Chavez, two others named in the indictment remain fugitives. Defendant Javier Batista Cervantes is a Mexican National living in Canada and is pending extradition. 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.
“When you face federal drug trafficking charges, you can run to another country, but you can’t hide there forever,” said U.S. Attorney John Walsh. “U.S. law enforcement, working with our international partners, can locate a defendant, as was the case with Defendant Chavez, and file extradition papers, which ultimately results in the person returning to the U.S. to resolve the indictment.”
“The extradition of Hector Armondo Chavez to the United States is an example of a commitment to international cooperation,” said DEA Denver Special Agent in Charge Barbra Roach. “The Drug Enforcement Administration thanks the Alberta Law Enforcement Response Teams (ALERT), Lethbridge Regional Police Service and the Royal Canadian Mounted Police for their assistance in this extradition.”
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 Chavez 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.
Denver Man Sentenced to Lengthy Prison Term for Being A Felon in Possession of A Firearm and Possessing A Firearm During A Drug Trafficking CrimeRead the Press Release
DENVER – Archie Poole, age 38, of Denver, Colorado, was sentenced yesterday by U.S. District Court Judge William J. Martinez to serve 130 months in federal prison for being a felon in possession of a firearm, and possessing a firearm in furtherance of a drug trafficking crime, U.S. Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Division Special Agent in Charge Luke Franey announced. Following his prison sentence, Judge Martinez ordered Poole to serve 3 years on supervised release. Poole, who appeared at the sentencing hearing in custody, was remanding at the hearing’s conclusion. Poole also faces drug charges in a separate multi-defendant federal drug trafficking prosecution.
Poole was first charged by Criminal Complaint on May 6, 2014. He was indicted by a federal grand jury in Denver on May 19, 2014. He pled guilty before Judge Martinez on October 8, 2014. Poole was sentenced on January 7, 2015.
According to the stipulated facts contained in the plea agreement, on April 11, 2014, at a hotel on Colfax in Denver, Poole sold a confidential informant crack cocaine. On April 17, 2014, Poole again sold crack cocaine while knowingly possessing a .40 caliber handgun. The next day the Denver Police Department executed a search warrant of Poole’s hotel room. They found crack, a digital scale, a box containing plastic baggies, a baking soda box, and receipts for the hotel and a cell phone.
On May 4, 2014, Poole was arrested on a warrant by law enforcement following a traffic stop. Officers located a loaded ..40 caliber pistol in the vehicle. Poole possessed the firearm despite the fact that he had multiple felony convictions, included: Possession/Sale of a Controlled Substance in Denver District Court -- 1995; Possession/Sale of a Controlled Substance in Denver District Court – 1997; Controlled Substance Possession More than 1 gram – Adams County Court – 2003; Possession of Contraband – Bent County Combined Court – 2006. When a person as felony convictions, it is illegal to possess a firearm.
During the sentencing hearing, it was established that Defendant Poole was a member of a local gang and had substantial alcohol and other substance abuse issues.
“The lengthy prison sentence handed down is appropriate given the fact that the defendant not only trafficked in dangerous drugs but he also carried a weapon dangerous weapon during his drug trafficking,” said U.S. Attorney John Walsh. “Thanks to the ATF and the Denver Police Department, another gang member involved in drugs and guns has been taken off of our streets.”
“ATF and our partners will continue to make it a priority to arrest and seek convictions of armed drug traffickers,” said ATF Denver Division Special Agent in Charge Luke Franey.
This case was investigated by the ATF and the Denver Police Department.
This case was prosecuted by Assistant U.S. Attorney Jeremy Sibert.
Jefferson County Inmate Sentenced to 40 Months in Federal Prison for Threatening the President of the United StatesRead the Press Release
DENVER – Patrick James Murray, age 50, formerly an inmate of the Jefferson County Jail, but now in federal custody, was sentenced yesterday by U.S. District Court Judge Wiley Y. Daniel to serve 40 months in federal prison for threatening to kill the President of the United States. The sentence is to run consecutively with a 7 year state prison sentence the defendant is already serving regarding the illegal possession of a weapon and eluding police. Once released from prison, Murray was ordered to serve 3 years on supervised release.
Murray was indicted by a federal grand jury in Denver on March 22, 2012. He pled guilty to Threats against the President of the United States before Judge Daniel on September 3, 2014. He was sentenced yesterday, January 6, 2015.
According to the stipulated facts contained in the plea agreement, on or about February 3, 2012, a letter addressed to a United States District Judge was delivered via U.S. Mail to the Alfred Arraj Courthouse in downtown Denver. The envelope had as a return address: Patrick J. Murray, with his registration number at the Jefferson County Detention Facility. In the enclosed letter, Murray stated that he was no longer intending to kill the particular U.S. District Judge to whom he had sent the letter, but instead, that he now planned to kill the President.
On February 5, 2012, a special agent with the United States Secret Service met with the defendant at his place of incarceration. After acknowledging that he understood his rights and agreeing to speak with the agent, the defendant admitted that he wrote and mailed the letter threatening the President. He also stated his intention to kill the President when he got out of jail. After the interview with the Secret Service agent, the defendant mailed two additional letters to the same U.S. District Judge. The first was a letter addressed to the President, expressing his intent to assassinate him. The second letter was addressed to Judge Krieger asking that she forward the first letter to the President.
“As today’s prison sentence demonstrates, threats against any public official, and especially a threat against the President of the United States, are serious crimes,” said U.S. Attorney John Walsh. “In this day and age, threats to public officials – whether to law enforcement, to state or local officials, or to federal officials – will draw a quick, determined and effective response.”
This case was investigated by the United States Secret Service.
The case was prosecuted by Assistant U.S. Attorney James Allison, Chief of the Criminal Division of the United States Attorney’s Office, District of Colorado.
Denver Man Sentenced for Conspiracy to Defraud the U.S. for Running an Illegal Gambling BusinessRead the Press Release
DENVER – Kerwin Dale Sande, age 60, of Denver, Colorado, was sentenced earlier this week by U.S. District Court Judge Raymond P. Moore to serve 15 months in federal prison for Conspiring to Own and Operate an Illegal Gambling Business and money laundering, the U.S. Attorney’s Office, Federal Bureau of Investigation, Colorado Bureau of Investigation and the IRS-Criminal Investigation announced. Following his prison sentence, Sande was ordered to serve 3 years on supervised release. As part of resolving his case, Sande agreed to the forfeiture of $2.0 million in cash and assets. Judge Moore ordered the defendant to report to a Bureau of Prisons facility once one is designated.
According to the Information and plea agreement, starting in the summer of 2006 and continuing through October of 2013, Sande operated a gambling business. He operated his business out of his home; he maintained his primary residence in the Denver Metropolitan area while also living at times in a secondary residence in Scottsdale, Arizona. He recruited, entertained and interacted with bettors at exclusive golf and country clubs; he maintained over a half-dozen memberships in such private clubs in various states including Colorado, Arizona, Oklahoma and California. His business focused primarily on sports bookmaking which included wagers on a variety of sporting events to include major league baseball games and golf, as well as professional and collegiate football, basketball and hockey.
Sande would assign a given bettor a credit limit within which the bettor was authorized to place bets and accepted bets through various means including on the telephone, through at least 5 or more "bet-takers", and over the internet using an off-shore internet betting website which he controlled (www.playfastsports.com). The website was housed and maintained through computer servers registered in Costa Rica.
Sande collected gambler's debts in a variety of ways including taking cash payments directly from bettors at golf clubs, private parties or other public locations. He also accepted checks from bettors which would commonly be made out to his company, KDS Enterprises., Inc., as well as collecting wire transfers. On occasions he received payment in the form of valuable coins, and, on one occasion, he accepted a motorcycle, in place of monetary payment. He paid bettors their winnings in cash but occasionally he would write checks and he would sometimes send cash payments directly to bettors using federal express in which he would conceal the cash in the sealed pages of a magazine. Sande drove and owned several high-end sports and luxury cars, a number of which contained built-in, hidden lock boxes which he utilized to transport and transfer large sums of bulk currency for his unlawful gambling operation.
“Defendant’s elaborate and extensive gambling enterprise was completely outside the law,” said U.S. Attorney John Walsh. “The sentence in this case is a warning and a reminder that unlicensed gambling – including sports bookmaking -- is a serious crime.”
“Yesterday’s sentencing is indicative of the success that can be attained when agencies combine resources to investigate illegal gambling operations,” said FBI Special Agent in Charge Thomas Ravenelle. “It takes joint investigations such as this one, which combined our state and federal resources, to investigate criminal organizations of this nature. The FBI is committed to continue working with our law enforcement partners and prosecutors to investigate and prosecute alleged organized criminal activity.”
“The scope of this illegal gambling and money laundering operation wasn’t isolated to Colorado; rather, this activity reached an international level and impacted numerous lives over a seven-year period,” said CBI Director Ron Sloan. “However, the dedication and investigative tenacity demonstrated by CBI agents and our local and federal partners ensured Mr. Sande will be held accountable for his actions.”
“IRS Criminal Investigation is experienced in unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money," stated Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “This sentence should serve as a deterrent to those who might contemplate similar fraudulent actions.”
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation with assistance from the Colorado Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Tim R. Neff.
Denver Man Arrested for Production and Transportation of Child PornographyRead the Press Release
UPDATE: December 31, 2014
Today U.S. District Court Judge R. Brooke Jackson granted a stay of release on bond in U.S. v. Michael Yellowhorse after the U.S. Attorney’s Office appealed a decision made by a U.S. Magistrate Judge to release the defendant on a $25,000 unsecured bond with numerous conditions, including that he be held in home detention with electronic monitoring. Yellowhorse was arrested last week based on a Criminal Complaint for the production and transportation of child pornography.
DENVER – Michael Yellowhorse, born in 1987 and of Denver, Colorado, was arrested last week based on a Criminal Complaint for the production and transportation of child pornography, the U.S. Attorney’s Office and the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) announced. Yellowhorse appeared this afternoon before U.S. Magistrate Judge Boyd N. Boland for a preliminary hearing and detention hearing. Magistrate Judge Boland found during the preliminary hearing that probable cause existed that Yellowhorse committed the crimes alleged in the Criminal Complaint. The Magistrate Judge then ordered the defendant released on bond. The government is considering filing a request for emergency stay of the release order to obtain a review of the conditions of the defendant’s release.
Yellowhorse made his initial appearance before a Magistrate Judge on the day he was arrested, December 23, 2014. At that hearing he was advised of his rights and the charges pending against him. The preliminary hearing and detention hearing occurred today, Monday, December 29, 2014.
According to the Criminal Complaint, Yellowhorse is charged with two counts of production of child pornography and one count of transportation of child pornography. During the hearings, evidence was presented that the defendant was investigated for posting images to a photo-sharing website popular amongst individuals interested in trading child pornography. Additionally, evidence was presented showing the defendant sent child pornography to an undercover investigator in Australia. Further investigation, to include preliminary analysis of the defendant’s cell phone and computer, revealed that the defendant created the child pornography he sent to the investigator in Australia.
If convicted, Yellowhorse faces not less than 15 years, not more than 30 years in federal prison, and a fine of not more than $250,000 for each of the two counts of producing child pornography. He faces not less than 5 years and not more than 20 years in prison, and up to a $250,000 fine for the one count of transportation of child pornography.
This case is being investigated by ICE HSI. The defendant is being prosecuted by Assistant U.S. Attorney Alecia Riewerts.
The charges are allegations, and the defendant is presumed innocent unless and until proven guilty.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a federal felony crime has a Constitutional right to be indicted by a federal grand jury.
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 Attorney’s? 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.?
Aurora Drug Dealer Is Sentenced to 54 Months in Federal Prison for Distribution of Cocaine and Money LaunderingRead the Press Release
DENVER – Robert Bellender, age 39, of Aurora, Colorado, was sentenced this week by U.S. District Court Judge Christine M. Arguello to serve 54 months in federal prison for possession with intent to distribute cocaine and money laundering, federal authorities announced. Following his prison sentence, Bellender was ordered to serve 5 years on supervised release. Bellender was taken into custody at the conclusion of the sentencing hearing.
Bellender was originally charged by a criminal complaint on May 10, 2013, followed by a superseding indictment on June 18, 2013. He then plead guilty on July 29, 2014. Other defendants charged in the superseding indictment include Korian Bascombe (aka k-Mac), Victor Rivas-Pinzon, Andrew T. Sorensen and Bruce Thomas. Sorensen pled guilty and was sentenced to time served. Rivas-Pinzon and Thomas plead guilty and were sentenced to 42 and 38 months in prison, respectively. Bascombe pled guilty on September 9, 2014 and scheduled to be sentenced on January 16, 2014 by Judge Arguello.
According to information contained in court documents, including the stipulated facts contained in Bellender’s plea agreement, the investigation started in October of 2011 and continued through the date of Bellender’s arrest on May 28, 2013. Numerous cocaine purchases from Bellender were made by a DEA undercover agent. Through investigative techniques, agents noted that codefendants Thomas, Sorensen and numerous other individuals, both known and unknown, were ordering quantities of powder and crack cocaine from Bellender on numerous occasions.
Bellender’s initial supplier of cocaine stopped distributing to him. At that point, Bellender began to purchase distribution quantities of powder cocaine and crack cocaine from Bascombe who was in turn being supplied with powder cocaine by Rivas-Pinzon. Bellender was selling both forms of cocaine during this entire period. Bellender and Bascombe were converting or “cooking” powder cocaine to convert it into the crack form.
Based on the investigation of the Front Range Task Force, which includes DEA, IRS CI and Aurora Police Department, from October of 2011 through May of 2013, Bellender and his coconspirators purchased and distributed or sold a conservatively estimated 20 kilograms or more of cocaine and 5 kilograms or more of crack cocaine. Bellender was purchasing cocaine from Bascombe for $1,200 per ounce. Twenty kilograms is the equivalent of approximately 705 ounces.
This case was investigated by agents with the Front Range Task Force which includes the Drug Enforcement Administration, IRS Criminal Investigation (IRS CI) and the Aurora Police Department.
The case is being prosecuted by Assistant U.S. Attorney James R. Boma.
Westminster Man Sentenced to 35 Years in Federal Prison for Transportation and Possession of Child PornographyRead the Press Release
DENVER -- Gregory Lynn Hopson, age 44, of Westminster, Colorado, was sentenced today by U.S. District Court Judge Lewis T. Babcock to serve 420 months (35 years) in federal prison for the transportation and possession of child pornography, to run concurrently with a Colorado state prison sentence for a prior felony conviction of sex assault on a child by a person in a position of trust, 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 sentence, Hopson was ordered to serve lifetime supervised release, and register as a sex offender. He was also ordered to pay restitution to the victim of his crime. Hopson, who appeared at the hearing in custody, was remanded at its conclusion.
Hopson was indicted by a federal grand jury on October 24, 2012. On September 25, 2013, Hopson was named in a superseding indictment. On September 29, 2014, Hopson pled guilty before Judge Babcock to the transportation and possession of child pornography. He was sentenced today, December 23, 2014. Hopson is currently serving a state prison sentence of 16 years to life for his second violation of probation for a sex assault on a child conviction out of Boulder County, Colorado.
According to the stipulated facts contained in the plea agreement, on March 5, 2011, special agents from ICE executed a search warrant at an address in Westminster. A resident at the address in question was a registered sex offender, on probation for sex assault on a child by a person in a position of trust in 2000. The defendant had admitted in that case to sexually abusing two children under the age of 12.
During the search HSI agents seized a computer and CD-ROMs. After un-encrypting the data, agents found a well-organized collection of thousands of images and videos of child pornography. The material depicted children as young as infants being sexually abused. One of the CD-ROMs contained images and videos of a minor child under the age of 12 with whom the defendant was in a position of trust. The images depicted the defendant engaged in sexually explicit conduct with the child or depicted the child’s genitalia in a lewd and lascivious way. It was further determined that Hopson exchanged child pornography with others. HSI agents uncovered approximately 300 emails that the defendant had sent or received – and attached to those emails were approximately 1,700 images and videos of child pornography.
“Defendant Hopson, by his repeated acts of victimization and criminal conduct, has made clear that he poses a real and present danger to children and to society,” said U.S. Attorney John Walsh. “The sentence imposed today will neutralize this dangerous perpetrator for 35 years and is a true victory for the community and for Colorado’s children.”
“Insidious crimes like this steal the innocence and youth of our nation’s children,” said Assistant Attorney General Caldwell. “The Department of Justice is committed to investigating, prosecuting and incapacitating those who prey upon the most vulnerable members of our society.”
“Anyone who collects and shares child pornography victimizes the most innocent and most vulnerable members of our society,” said Special Agent in Charge David Thompson, Homeland Security Investigations (HSI) in Denver. “This lengthy prison sentence recognizes the trauma that predators inflict on helpless children.”
This case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI).
Hopson was prosecuted by Assistant U.S. Attorney and Chief of the Special Prosecutions Section, Judith A. Smith, Assistant U.S. Attorney Beth N. Gibson, and Department of Justice Child Exploitation and Obscenity Section Trial Attorney Keith Becker.
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 Attorney’s? 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.?
Colorado Springs Man Arrested After Posting Internet Threat to Kill Police Officers in ColoradoRead the Press Release
UPDATE: December 29, 2014
DENVER – Jeremiah M. Perez, age 33, of Colorado Springs, Colorado, appeared this afternoon before U.S. Magistrate Judge Boyd N. Boland for a preliminary hearing and a detention hearing. Perez through his attorney waived his right to a preliminary hearing (a probable cause finding hearing). During the detention hearing, the government asked that Perez be held without bond based on an argument that he was a danger to the community. After hearing prosecution and defense arguments, Magistrate Judge Boland ordered Perez released on a $25,000 unsecured bond to a halfway house, when bed space becomes available. Magistrate Judge Boland also ordered Perez not to have any contact with computers. Perez was also ordered to follow the standard conditions of release, which include no access to firearms and no possession or use of marijuana.
Click here to access the Complaint and Affidavit in the Perez case
DENVER – Jeremiah M. Perez, age 33, of Colorado Springs, Colorado, was arrested yesterday without incident for posting online threats advocating the killing of police officers and retired police officers in Colorado, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Perez made his initial appearance before U.S. Magistrate Judge Kristen L. Mix this afternoon, where he was advised of his rights, as well as the charges pending against him. Perez will be held in custody pending a detention hearing and preliminary hearing scheduled for Monday, December 29, 2014 at 1:30 p.m.
On December 17, 2014, Google urgently contacted the FBI San Francisco Office to report what they perceived as a threat, which consisted of a comment posted in association with a YouTube video. The FBI San Francisco Office immediately initiated an investigation into the threat, posted by user name “Vets Hunting Cops,” which was focused on killing police officers, and ultimately learned that the posting came from an IP address in Colorado. The FBI in Colorado was notified and continued the investigation, which revealed that the IP address was assigned to Century Link and resolved at a specific address in Colorado Springs. The FBI and Colorado Springs Police Department then began surveillance of those who lived at that address.
The following day the FBI and Colorado Springs Police Department served a federal search warrant on Perez’s address. The threat Perez allegedly posted stated, in part: “SINCE DARREN WILSON our group has killed 6 retired sheriffs and cops......because of this event we will hunt two more in colorado this week.....for every innocent citizen that cops kill WE, VETERANS WILL KILL RETIRED HELPLESS COPS.” The threat further said, “COPS ARE THE REAL ENEMIES OF FREEDOM LOVING AMERICANS and TIME TO STRIKE BACK IN ALL OUT WAR IS NOW.”
On December 22, 2014, the FBI contacted Perez. At that time they determined that he knew that law enforcement officers would see the post and his intent was for them to be fearful after reading it. He was then arrested. A forensic examination of Perez’s computer confirmed that the posting in question, along with other postings, came from his device.
“If you threaten to kill – or incite others to kill – police officers, you will get some very serious attention from this office, the FBI, and other appropriate authorities,” said U.S. Attorney John Walsh.
“Those who threaten the lives of law enforcement officers through interstate communications will be fully investigated by the FBI and our partners,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “The perceived anonymity of the Internet will not serve as a shield for espousing violence in violation of federal law. In conducting this investigation, we would like to thank the Colorado Springs Police Department and the U.S. Attorney’s Office for their invaluable assistance.”
If convicted, Perez faces up to 5 years in federal prison, and not more than a $250,000 fine, for transmitting a threat in interstate and foreign commerce.
This case was investigated by the Federal Bureau of Investigation (FBI) in Colorado Springs, Denver, and San Francisco, with support from the Colorado Springs Police Department.
The defendant is being prosecuted by Assistant U.S. Attorney Judith Smith.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a federal felony offense has a Constitutional right to be indicted by a federal grand jury.
The charges contained in the Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
Owner and Operator of Wolf Creek Ski Area Sentenced for Conducting Work Activity in the Forest Without A PermitRead the Press Release
DENVER – Randall D. Pitcher, age 52, of Pagosa Springs, Colorado, who owns and operates the Wolf Creek Ski Area within the confines of the Rio Grande National Forest, was sentenced today in Durango by U.S. Magistrate Judge David L. West to serve five years on supervised probation, including 500 hours of community service, to be performed 100 hours per year for each of the five years of probation, U.S. Attorney John Walsh and U.S. Forest Service Special Agent in Charge Laura Mark announced. The community service is to be served with the Sheriff’s Departments of Archuleta, Hinsdale and Mineral Counties together with the U.S. Forest Service. Pitcher was also ordered to pay a $5,000 fine.
Pitcher was previously charged and pled guilty to conducting work in the Forest without a permit,. Pitcher entered his guilty plea before U.S. Magistrate Judge David L. West in Durango on November 24, 2014.
According to the stipulated facts contained in the plea agreement, on February 11th, March 3rd, and March 4th, defendant Pitcher hired a commercial helicopter service to transport himself and his Wolf Creek Ski Area employees on to the Rio Grande National Forest for the purpose of engaging in avalanche training and search and rescue training. On all three occasions, Pitcher did not have a permit to conduct such work activities nor did he have the necessary authorization of the Forest Service to conduct such work activities.
“The permitting process for those working in the Forest serves many important functions, including protecting those doing the work as well as those who may be in the area,” said U.S. Attorney John Walsh. “In this instance, the defendant was engaged in avalanche mitigation and response training. That activity is inherently dangerous, thus amplifying the need for a permit. Thanks to the investigative work of the U.S. Forest Service, Mr. Pitcher was held accountable for failing to obtain the necessary authorization before conducting the activities. Such failure in this instance led to serious consequences.”
“The Forest Service takes permitting for services seriously on National Forest System lands because it is an integral part of managing for public safety and resource protection,” said Laura Mark, Special Agent in Charge, U.S. Forest Service, Rocky Mountain Region. “We feel that the sentence in this case adequately reflects the serious nature of this matter.”
This case was investigated by the U.S. Forest Service, and prosecuted by Durango Branch Office Chief James Candelaria.
Littleton Man Sentenced for Implementing Mortgage Fraud SchemeRead the Press Release
DENVER – Peter V. Capra, age 57, of Littleton, Colorado, was sentenced yesterday by U.S. District Court Judge R. Brooke Jackson to serve 144 months in federal prison for wire fraud and money laundering, federal authorities announced. Following his prison sentence, Capra was ordered to serve 3 years on supervised release. Capra was also ordered by Judge Jackson to pay over $9 million in restitution. Capra was remanded into custody at the conclusion of the hearing.
Capra was found guilty on March 21, 2014, following a 8-day trial before Judge Jackson. The jury deliberated for two days before reaching their verdict. Capra was indicted by a federal grand jury in Denver on April 15, 2012, followed by a superseding indictment on May 23, 2012. As part of the mortgage fraud scheme, Demetrious G. Gianopoulos, and Brian Waring were charged in two separate indictments and Justin Knight was charged by an information. Gianopoulos pled guilty to one count of money laundering and was sentenced to five years’ probation. Knight pled guilty to destruction of records in a federal investigation and was sentenced to 12 months of home confinement. Waring pled guilty to conspiracy to commit mail fraud, wire fraud, and money laundering and was sentenced to 18 months in federal prison on September 25, 2014.
According to the indictment, superseding indictment and evidence presented at trial, Capra was the President of Golden Design Group, Inc. (GDG), a company which built and sold houses in the Denver metropolitan area. Capra was also the registered agent for Distinctive Mortgages, LLC, which used space within GDG’s office building and provided mortgages to some of the customers buying houses from GDG.
From January 2005 through July 2008, Capra, along with others, executed a scheme to defraud several mortgage lenders. The scheme was executed in connection with applications for residential mortgage loans and related documents associated with real estate purchases including but not limited to 33 properties in Parker, Colorado. Capra structured transactions involving GDG homes to allow buyers to receive substantial amounts of the lenders’ money at the time of closing without the knowledge of the lenders. He also sold a large volume of homes to otherwise unwilling or unqualified buyers. The evidence at trial showed that Capra netted over $11,000,000 as a result of his scheme.
Loan applications for the buyers were submitted through several different mortgage brokers that assisted with providing, or at least failing to question the accuracy of, false information submitted in connection with the applications, including materially false and fraudulent representations about the buyers’ income, liabilities, source of down payment, and intent to occupy the properties as their primary residences. At closing, funds ranging from $85,000 to over $200,000 were distributed to the buyers in ways that prevented the lenders from discovering that these funds were actually going to the buyers; these funds were not disclosed in the HUD-1 closing statements or were disguised in those statements.
Capra was charged with and found guilty of fourteen counts of wire fraud, two counts of mail fraud, and ten counts of money laundering. He was found not guilty of one count of obstruction of justice. Each count of wire and mail fraud carries a penalty of not more than 20 years in federal prison, and a fine of the greater of up to $250,000 or twice the gain or loss from the offense. Each count of money laundering carries a penalty of not more than 10 years in federal prison, and a fine of the greater of up to $250,000 or the value of the property involved in the transaction. At sentencing, the Judge will also consider entering an order of asset forfeiture, including all property constituting or derived from proceeds traceable to the commission of the offense, or a money judgment equal to the total proceeds taken.
This case was investigated by IRS Criminal Investigation, the Federal Bureau of Investigation, and the United States Postal Inspection Service. The case was prosecuted by First Assistant U.S. Attorney Robert Troyer and Chief of the Economic Crimes Section of the Criminal Division, Assistant U.S. Attorney Matthew Kirsch.
Cortez Woman Pleads Guilty to Filing False Tax Returns Relating to Theft of FundsRead the Press Release
DENVER – Lisa Kay Balderrama, age 50, of Cortez, Colorado, pled guilty last week in Durango before U.S. Magistrate Judge David L. West to making false statements on a tax return, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Balderrama is scheduled to be sentenced by a U.S. District Court in Durango on April 8, 2015.
Balderrama waived her right to be indicted and thus was charged by Information on October 20, 2014. She pled guilty before Magistrate Judge West in Durango on December 2, 2014.
According to information contained in 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, she 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.
Balderrama pled guilty to one count of a false statement on a tax return, which carries a penalty of not more than 3 years in federal prison, and a fine of up to $250,000.
This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from 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 Return Preparer Sentenced for Filing False Tax ReturnsRead the Press Release
DENVER – Keith G. Smith, age 54, of Aurora, Colorado, was sentenced earlier this week to serve 9 months in federal prison by U.S. District Court Judge Raymond P. Moore for filing and assisting in preparing false tax returns, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. In addition, Judge Moore ordered Smith to pay $128,893.87 in restitution to the IRS. Smith was ordered by Judge Moore to report to authorities by 3:00 p.m. on the day of sentencing.
Smith was indicted by a federal grand jury in Denver on March 11, 2014. He pled guilty before Judge Moore on September 16, 2014. He was sentenced on Tuesday, December 9, 2014.
According to information contained in the indictment and plea agreement, beginning in 1987, Smith operated a tax return preparation business. He told some of his clients that he formerly worked for the IRS and conducted audits, seized assets, and carried a weapon. When in fact, for about four years Smith worked in an administrative positon at the IRS; he was not a criminal investigator, he did not conduct audits, and he did not seize assets. In 2000, the IRS assessed Smith a civil penalty because of underreported tax liabilities on returns that he had prepared for clients. Smith thereafter continued to prepare clients' returns but no longer signed them as preparer, instead indicating on the returns that they were prepared by the taxpayers.
Among the returns that Smith prepared for the years 2006 through 2010 were 40 false tax returns requesting refunds, in amounts ranging from $715 to $7,124, all of which the IRS paid. Many of the returns falsely claimed deductions for medical and dental expenses, home mortgage interest payments, education expenses, and charitable contributions. The false statements on the 40 returns resulted in a total tax loss of $138,148. In addition, Smith falsified his personal income tax returns for years 2008 and 2009.
This case was investigated by Internal Revenue Service – Criminal Investigation. Smith was prosecuted by the Economic Crime Section of the Criminal Division of the Colorado U.S. Attorney’s Office.
Dave Conner, Assistant U.S. Attorney and Career Prosecutor, Dies Peacefully at Home After 15-Year Fight with CancerRead the Press Release
Please click here for a photo of Assistant U.S. Attorney Dave Conner
DENVER -- It is with profound sadness that U.S. Attorney John Walsh announces that Assistant U.S. Attorney Dave Conner passed away yesterday following a prolonged illness. Dave passed away peacefully at his home yesterday afternoon, after battling cancer for over fifteen years. Dave worked up until the day of his death.
"Dave Conner was no ordinary prosecutor. Over thirty-two years of service in the state and federal courts, he dedicated his heart and soul to the pursuit of justice,” said U.S. Attorney John Walsh. “Dave’s skill, integrity and fierce commitment to fairness made him a legend among prosecutors, law enforcement and defense attorneys alike. He was a living, breathing model that prosecutors should aspire to, and a teacher of generations of young prosecutors, in both word and deed. We will miss Dave terribly, but the chords sounded by his memory will forever link our hearts to him and to what he stood for.”
Dave started his career as a prosecutor working as a Deputy District Attorney in Denver in March of 1982. While in the Denver DA’s Office, Dave was promoted to Chief Deputy District Attorney. He then left the Denver District Attorney’s Office to become an Assistant U.S. Attorney in 1988. He left the U.S. Attorney’s Office in 1996 to work as a Federal Public Defender, and four years later returned to the U.S. Attorney's Office, where he served in the Major Crimes Section in charge of violent crimes, including bank robberies. Dave worked closely with a variety of federal, state and local law enforcement agencies, including the FBI led Rocky Mountain Safe Streets Task Force. There he worked with both Special Agents from the FBI and state and local police officers assigned to the task force.
Dave obtained his Bachelor’s Degree with honors from Dartmouth College. Following his undergraduate study, Dave attended the University of Denver College of Law, where he earned his law degree, again with honors. Dave started his career as a newspaper reporter in Kirksville, Missouri. He clerked at the Missouri Attorney General’s Office and was an associate at Davis, Graham & Stubbs prior to his government service.
Dave was active in the Smoky Hill United Methodist Church. He was an avid student of history, especially American history, Abraham Lincoln and the West. Dave had a near photographic memory. He could quote from many closing arguments that he had seen even when the prosecutor who tried the case could barely recall the case. His memory of court cases, biblical passages and the lines of old Western movies served him well in the courtroom and were always entertaining to his colleagues. Dave was an icon in the prosecution community. He was always a fierce advocate for justice and for all of his friends and family.
As a Deputy and Chief Deputy District Attorney in Denver, Dave prosecuted a number of high profile cases, including the Masonic Temple arson as well as the Michael Alexis homicide. As an Assistant U.S. Attorney, Dave prosecuted Forest Service employee Terry Barton, who was responsible for starting the Hayman Fire, one of the largest wildland fires in Colorado history. He also prosecuted individuals who kidnapped an executive of a bank in La Junta in an attempt to take all of the bank's money in the vault. The lead defendant in that case received a prison sentence of over 1,000 years.
Dave leaves behind his wife, Teri Dahn, a son, Gavin Conner, who serves as a Denver firefighter, and a daughter, Ashton Conner, who works at Kaplan University in Southern California.
Service information is pending.
Colorado U.S. Attorney's Office Efforts Result in the Collection of over $5 Billion in Civil and Criminal Recoveries in Fiscal Year 2014Read the Press Release
DENVER – U.S. Attorney John Walsh announced that the efforts of the U.S. Attorney’s Office for the District of Colorado resulted in the collection of over $5 billion in recoveries in Fiscal Year 2014 (October 1, 2013 to September 30, 2014). Specifically, the U.S. Attorney’s Office in Colorado, working on its own and with other U.S. Attorney’s Offices and components of the Department of Justice, collected $5,308,286,656.99 ($5.3 billion).
The $5.3 billion in Fiscal Year 2014 collections is the result of the following efforts by the Colorado U.S. Attorney’s Office:
- $21,794,608.09 ($21.8 million) in criminal and civil action recoveries in Fiscal Year 2014. ($16,644,526.42in criminal actions and $5,150,081.67 civil actions
- $17,764,953.00 ($17.8 million) in asset forfeiture actions.(Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.)
- $4.45 billion in penalties ($4.0 billion to the United States, $208 million to the FDIC, and approximately $246 million to five states) as a result of the overall $7 billion settlement with Citigroup regarding its misconduct in the Residential Mortgage-Backed Securities (RMBS) market. This settlement came as a result of the joint investigation and close partnership between the Colorado U.S. Attorney’s Office and the U.S. Attorney’s Office for the Eastern District of New York. At the time of the settlement, the Citigroup penalty was the largest bank fraud civil penalty ever paid, and was only exceeded by the penalty in a subsequent settlement of a similar federal investigation against Bank of America. The resolution also requires Citigroup to provide billions in relief to underwater homeowners, payments to distressed borrowers and affected communities through a variety of means including financing affordable rental housing developments for low-income families in high-cost areas.
- Approximately $850 million in additional funds collected in 2014 from Bank of America pursuant to the 2012 National Mortgage Servicer Settlement in which the Colorado U.S. Attorney’s Office took a leading role.
Overall, as Attorney General Eric Holder announced on November 20, 2014, the United States Department of Justice collected $24.7 billionin civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in Fiscal Year 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
The total annual budget of the Colorado U.S. Attorney’s Office is approximately $18 million. Thus, even putting aside the collections in the large national RMBS and mortgage servicing cases in which the Colorado U.S. Attorney’s Office played a leading role, the Office’s efforts in civil, criminal and forfeiture matters resulted in collection of nearly $40 million, more than twice its budget (approximately 220%). Taking into account the recoveries obtained by the Colorado U.S. Attorney’s Office while working with the U.S. Attorney’s Office for the Eastern District of New York in the Citigroup case and with that office and other agencies in the National Mortgage Servicer case, the Office’s efforts have resulted in the collection of 294 times its annual budget (2944%) in Fiscal Year 2014. (Note that the Colorado U.S. Attorney’s Office’s recent recovery of nearly $400 million in penalties and forfeitures from DaVita, Inc. in a False Claims Act matter is not included in these figures, as those funds were collected after Oct. 1, 2014, i.e., in Fiscal Year 2015.)
“The United States Attorney’s Office works tirelessly to investigate both civil and criminal misconduct and to collect money due to the taxpayers and to victims of that misconduct,” said U.S. Attorney John Walsh. “The extraordinary efforts of our dedicated prosecutors and staff have resulted in the truly extraordinary recovery of over $5 billion in 2014.”
“Every day, the Justice Department’s prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Eric Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And as a result, I can report today that – during Fiscal Year 2014 – the Justice Department collected a total of $24.7 billion in civil and criminal actions.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
Most civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Over $10 million in the forfeiture collections arise from investment fraud schemes. In 2014, the United States Attorney’s Office for the District of Colorado recovered over $8.2 million in fraud proceeds derived from a penny stock “pump and dump” scheme, which is being prosecuted in the Central District of California and the District of Delaware. In addition, the District of Colorado recovered over $1.9 million in assets related to an alleged investment fraud scheme. These funds have already been repaid to the investors. At present, the defendant is awaiting trial.Owner and Operator of Wolf Creek Ski Area Charged and Pleads Guilty to Conducting Work Activity in the Forest Without A PermitRead the Press Release
DENVER – Randall D. Pitcher, age 52, of Pagosa Springs, Colorado, who owns and operates the Wolf Creek Ski Area within the confines of the Rio Grande National Forest, was charged and pled guilty today to conducting work in the forest without a permit, U.S. Attorney John Walsh and U.S. Forest Service Special Agent in Charge Laura Mark announced. Pitcher entered his guilty plea before U.S. Magistrate Judge David L. West in Durango this morning. Pitcher is scheduled to be sentenced by Magistrate Judge West on December 16, 2014 at 9:00 a.m. in Durango.
According to the stipulated facts contained in the plea agreement, on February 11th, March 3rd, and March 4th, defendant Pitcher hired a commercial helicopter service to transport himself and his Wolf Creek Ski Area employees on to the Rio Grande National Forest for the purpose of engaging in avalanche training and search and rescue training. On all three occasions, Pitcher did not have a permit to conduct such work activities nor did he have the necessary authorization of the Forest Service to conduct such work activities.
Pitcher faces up to 6 months in federal prison, a fine of up to $5,000 or both.
This case was investigated by the U.S. Forest Service, and prosecuted by Durango Branch Office Chief James Candelaria.
Arkansas Man Arrested and Detained for Traveling to Colorado with the Intent to Engage in Illicit Sexual Conduct with ChildrenRead the Press Release
DENVER – Donnie Waldo, Jr., age 47, of Dover, Arkansas, appeared in U.S. Magistrate Court this morning for a detention hearing, following his recent arrest for aggravated sexual abuse with children, travel with intent to engage in illicit sexual conduct, and attempted coercion and enticement of minors, U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Acting Special Agent in Charge John Eisert announced. Waldo was charged by Criminal Complaint on November 10, 2014. He was indicted by a federal grand jury in Denver on November 17, 2014. Today Waldo was ordered held without bond by U.S. Magistrate Judge Michael J. Watanabe, after making a determination that the defendant was a danger to the community and a risk of flight.
According to the affidavit in support of the Criminal Complaint, as well as the indictment, 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 6, 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.
“Preventing sexual predators from using the internet to prey on children is a crucial priority for law enforcement and for the United States Attorney’s Office,” said U.S. Attorney John Walsh. “This defendant was ordered held without bond because of the gravity of the pending charges.”
“Anyone who travels a thousands of miles across state lines to have sex with a minor is every parent’s worst nightmare,” said John Eisert, special agent in charge of Homeland Security Investigations in Denver. “Our HSI agents work aggressively to find these predators and pursue prosecution with the U.S. Attorney’s Office.”
If convicted of aggravated sexual abuse with children, the defendant faces not less than 30 years, and not more than life imprisonment. If convicted of travel with intent to engage in illicit sexual conduct, the defendant faces not more than 30 years in federal prison. If convicted of attempted coercion and enticement, the defendant faces not less than 10 years, and up to life in federal prison for each of the two counts. Each count also carries a penalty of up to a $250,000 fine.
This case was investigated by ICE HSI. The defendant is being prosecuted by Assistant U.S. Attorney Alecia L. Riewerts.
The charges contained in the indictment are allegations, and the defendant is considered innocent until proven guilty.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
Federal, State and Tribal Officials Hold Summit and Tribal Consultation to Discuss Offender Re-Entry and Develop Strategies to Reduce Recidivism and Promote Public SafetyRead the Press Release
Click here for picture number 1 from Summit
Click here for picture number 2 from Summit
DENVER – On Tuesday, U.S. Attorney John Walsh, joined by five members of the Ute Mountain Ute Tribal Council, as well as representatives from the Bureau of Indian Affairs, local social workers, health services, victim advocates, Federal Probation, the Federal Public Defender’s Office and a U.S. Magistrate Judge held an Offender Reentry Summit and Tribal Consultation in Towoac on the Ute Mountain Ute Reservation. The purpose of the Summit and Consultation was to seek Tribal input and guidance regarding potential re-entry and re-integration programs for offenders returning to the Tribal Community from prison. Specifically, the group worked to develop strategies to reduce recidivism and the crime associated with recidivism. Approximately 30 people attended the day-long event.
The U.S. Attorney’s Office organized the multi-agency Summit hosted by the Ute Mountain Ute Tribe to discuss improving collective efforts on offender re-entry. Offender re-entry is when a member of the community is released from prison back to their community after serving a sentence for criminal conduct. Statistics have shown that two-thirds of all individuals released from prison are arrested within three years of release. One-third of all probationers incur a subsequent criminal conviction. This occurs, in part, because of the lack of infrastructure to support the person re-entering society. The goals of the Summit included supporting community needs, protecting public safety, reducing re-offending conduct by supporting returning offenders.
The group outlined potential solutions, including local substance abuse counseling (both in-patient and out-patient), employment, and housing to support the offender as the person comes back to the community. The notification of victims and community members when an offender is released from prison was also identified as a top priority. There were discussions regarding existing resources and future needs to support an offender re-entry program for the Ute Mountain Ute Tribe. Establishing a collaborative path forward on federal offender re-entry
The Summit included a presentation on “Creating a Successful Offender Reentry Program” by Kimberly Cobb, Project Director of American Probation & Parole Association. That presentation defined re-entry as a seamless process that begins when a person first enters prison, and continues all the way through to reintegration back into the community. An important part of developing a successful strategy is identifying funding, and looking at best practices from other tribal re-entry programs.
“The Summit was a critical step in working towards our collective goal of promoting public safety on the Ute Mountain Ute Reservation,” U.S. Attorney John Walsh said. “Working closely with the Ute Mountain Ute Tribe we hope to strive to reduce recidivism and continue to make the reservation a safer place.”
This event was successful because of the many leaders who attended the Summit. Key participants included Ute Mountain Ute Chairman Manuel Heart, former Chairman Gary Hayes, Ute Mountain Ute Council Members Priscilla Blackhawk-Rentz (Tribal Council Secretary/Custodian), Juanita Plentyholes (Vice Chair), and DeAnne House, U.S. Magistrate Judge David West, head Federal Public Defender Virginia Grady, U.S. Probation Chief LaVetra Castles, Ute Mountain Ute General Counsel Peter Ortego, as well as representatives from the Bureau of Indian Affairs, the U.S. Attorney’s Office, and the U.S. Bureau of Prisons.
The coalition will continue to meet to refine the identified goals and work to implement them. The U.S. Attorney’s Office will continue to work in collaboration with the many partners participating in this process.
Englewood Man Sentenced to 60 Years in Federal Prison for Production of Child PornographyRead the Press Release
DENVER – Mervin Edy Wolf, age 62, of Englewood, Colorado, was sentenced today by U.S. District Court Judge Raymond P. Moore to serve 720 months (60 years) in federal prison for production of child pornography, U.S. Attorney John Walsh and FBI Denver Special Agent in Charge Thomas Ravenelle announced. Based on his age, the defendant will likely die in prison. At the beginning of the pronouncement of sentence, Judge Moore said; “Mr. Wolf, you were born a free man, but I’m going to make sure you don’t die as one.”
The defendant, who appeared at the sentencing hearing in custody, was remanded following the hearing.
Wolf was arrested based on a Criminal Complaint filed on March 6, 2014. He was subsequently indicted by a federal grand jury in Denver on March 26, 2014. He pled guilty before Judge Moore on July 24, 2014. He was sentenced today, November 20, 2014.
Beginning on or about September of 2007, Wolf began producing pornographic photographs of a minor child who was a member of his extended family. Over the next seven years Wolf coerced the same minor child to perform and participate in an escalating pattern of sexual acts with him that Wolf would photograph and or video tape. During several of the molestations, Wolf’s other family members were in the room next door, but unaware of what was happening.
In January 2013, the minor child contacted Wolf via telephone and told him that she was afraid she may be pregnant due to his sexual activity with her. Wolf told the minor child he would pay for an abortion if she was in fact pregnant by Wolf. Wolf mailed two home pregnancy tests to the minor child; after she took the tests and learned she was not pregnant.
When the minor child learned that Wolf was planning to visit her in June 2014, she made the decision to disclose all of the sexual abuse by Wolf. The minor child explained she was afraid Wolf would start molesting her younger sibling. Once the minor child’s family learned of the abuse by Wolf, other family members came forward to also report abuse by Wolf. During the course of the California investigation, it was also learned that Wolf and his wife were foster parents in 2003. Two foster children who were both girls and under the age of seven, both disclosed sexual abuse by Wolf. The allegations were investigated by the Arapahoe County Department of Human Services and the Englewood Police Department. No charges were filed against Wolf. However, due to the allegations, the Wolfs’ foster care license was revoked.
On March 5, 2014, a federal search warrant was executed at the residence of Mervin Wolf in Englewood, Colorado. During the subsequent search of Wolf’s home, FBI agents seized a 8mm video camera, a digital camera, a camera tripod, and a laptop among other items. Forensic examination of the computers revealed that the Wolf had produced hundreds of images of child pornography of Minor #1 from the time that she was seven until she was fourteen. He also hid a camera in Minor #1’s bathroom and filmed her while she was nude.
“The defendant manipulated and preyed on children over the course of many years,” said U.S. Attorney John Walsh. “He poses a permanent risk to other children and the community that fully warrants Judge Moore’s severe sentence, which guarantees he will spend the rest of his life in prison.”
“The FBI will continue to aggressively seek out and investigate those who prey on children, especially those who produce and distribute child pornography,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “Crimes of this nature threaten our most precious resource, offend every sensibility, and cannot be tolerated.”
This case was investigated by the FBI with support from Minor #1’s local county Sheriff’s Office.
Wolf was prosecuted by Assistant U.S. Attorney Judith Smith, Chief, Special Prosecutions Section, Criminal Division of the Colorado U.S. Attorney’s Office.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."
U.S. Attorney, Consulate General of Mexico, and Colorado Attorney General Sign First of Its Kind Memorandum of UnderstandingRead the Press Release
Click here for MOU in English
Click here for MOU in Spanish
Click here for photograph of U.S. Attorney John Walsh, Mexican Counsul General Carlos J. Bello, and Colorado Attorney General John Suthers
DENVER – This morning United States Attorney John Walsh, Mexican Consul General Carlos J. Bello, and Colorado Attorney General John Suthers signed a trilateral memorandum of understanding (MOU) which formalized a cooperative relationship to protect and promote the lawful rights of Mexican nationals in Colorado who are victims of crime, and to promote trust between the Mexican community in Colorado and all levels of law enforcement in the state. The MOU, the first of its kind between a U.S. Attorney’s Office, state Attorney General’s Office and a Mexican Consulate, is the result of close cooperation between the three governments as they work with the Mexican community to address issues related to crime and the protection of crime victims. This important intergovernmental agreement does not change existing law – which already protects crime victims, regardless of national origin – but represents the formalization of an active partnership between the three governments to ensure that those rights are fully implemented and honored.
The Memorandum of Understanding culminates 18 months of close cooperation between the U.S. Attorney’s Office, the Colorado Attorney General’s Office and the Mexican Consulate General in Denver that included community meetings, workshops, and “mobile consulate” office meetings around Colorado to focus attention on labor rights, human trafficking, prevention of “notario” fraud and commercial scams, the problem of domestic violence and which even extended to emergency preparedness for the community in natural disasters.
“Today’s signing of this ground-breaking MOU reflects the dedication of the U.S. Attorney’s Office, the Colorado Attorney General’s Office, and the Mexican Consulate to cooperate, communicate and work together to ensure that legal protections for crime victims found in both federal and state law extend fully to the Mexican community here in Colorado,” said U.S. Attorney John Walsh. “Critically, our collective efforts to promote trust between the Mexican community here in Colorado and law enforcement at all levels will ensure not only the proper protection of all residents and visitors in our state regardless of national origin, but will help ensure criminals cannot evade prosecution by targeting immigrants. Crime victims must have confidence that they can safely report crimes and identify criminals, and today’s Memorandum of Understanding is a major step forward to build that trust.”
General Consul, Carlos J. Bello, said that: “This MOU institutionalizes the framework of cooperation through which we have worked together to promote a culture of prevention and reporting, fostering trust within the Mexican Community and a strategy of outreach that includes the active participation of the U.S. Attorney’s Office and the Colorado Attorney General’s Office.”
“Whenever we have an opportunity to unite - as we are here today - we can help reach our goal of protecting and promoting the lawful rights of Mexican nationals by advancing the trust between the Mexican community in Colorado and law enforcement,” said Colorado Attorney General John Suthers. “I am optimistic that by signing this Memorandum of Understanding we will move toward achieving that goal.”
ESRI Agrees to Pay $550,000 to Settle Allegations of Government Contract FraudRead the Press Release
DENVER -- Esri, Inc., a geographic information systems (GIS) software development company based in Redlands, California, has paid $550,000 to settle allegations that it violated the False Claims Act by overbilling the Bureau of Land Management’s (BLM) National Operations Center (NOC) during the course of multi-year GIS software development projects called the National Integration Land System and GeoCommunicator.
The NOC provides internal operational and technical program support to BLM offices across the country. It contracted with Esri for the development of mapping system software to aid in achieving BLM’s land management goals.
Government contractors are bound by the rules set forth in the Federal Acquisition Regulations (FAR) and are expected to know and comply with those provisions. During the course of the GIS projects, Esri and BLM entered into Time and Materials (T&M) type contracts. The FAR regulations for T&M contracts prohibit contractors from adding certain types of profit and fees to billed items such as travel and the cost of project subcontractors. The United States alleges that Esri added prohibited profit and fees to invoices for payment in T&M contracts, without BLM’s knowledge or approval. Because Esri did not disclose these billing practices to BLM, the federal agency paid Esri hundreds of thousands of dollars to which it was not entitled. Esri also improperly billed BLM for Esri employees to attend conferences unrelated to the GIS projects, and improperly billed BLM for computer services such as servers and virtual private network accounts for which BLM did not contract.
“Protecting taxpayer dollars is a critical mission of the United States Attorney’s Office,” said U.S. Attorney John Walsh. “When a government contractor inflates its bills to the United States, we will take action both to recover the overbilled amount, and also to hold the contractor responsible for the misconduct.”
“This settlement is another example of the successful results of collaboration between BLM, Office of Inspector General and the U.S. Attorney’s Office to fight fraud, waste and mismanagement,” said Mary Kendall, Deputy Inspector General, Department of the Interior.
The claims settled by this agreement are allegations only. There has been no determination of liability.
This matter was investigated by the Department of the Interior’s Office of Inspector General. It was handled by Assistant U.S. Attorneys Amanda Rocque and Zeyen Wu.
Grand Junction Business Owner Charged with Income Tax EvasionRead the Press Release
DENVER – Michael E. Ho, age 68, of Grand Junction, Colorado, was indicted by a federal grand on October 28, 2014 on charges of income tax evasion, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Ho was arrested yesterday without incident and appeared before a U.S. Magistrate Judge in Grand Junction federal court for his initial appearance, where he was advised of his rights, the charges pending against him, and the penalties associated with those charges. The indictment remained sealed until his initial appearance.
According to the indictment, Ho a resident of Grand Junction and owner of Five-O Enterprises, Inc. (hereinafter “Five-O”), had and received taxable income which was owed to the United States of America an income tax. He willfully attempt to evade and defeat the income tax due and owing by him for the following years:
Year
Taxable Income
Tax Owed
2006
$292,455
$41,682
2007
$214,927
$31,746
2008
$320,647
$69,473
2009
$213,887
$40,578
2010
$124,244
$11,919
2011
$208,537
$40,052
Ho evaded income tax due and owing by committing affirmative acts of evasion. Specifically, between 2006 and 2010, he attempted to conceal his ownership in, and income from a dental practice known as Skyline Dental in Grand Junction, Colorado. Ho operated as a d/b/a (“doing business as”) of Five-O. Ho owned the building in which Skyline Dental was located, and a “consulting” contract with the on-site dentist gave Ho control over almost every aspect of the practice.
In 2009 Ho instructed an accounting firm not to issue a Form 1099 to him for $156,005 in interest payments he received in 2008. In March 2010, Ho converted Skyline Dental to a non-profit corporation called Colorado Community Dental Services, and continued to operate, control and receive income from the dental practice. Between 2006 and 2011, HO willfully and intentionally failed to disclose true and accurate information to his accountant/tax preparer regarding.
Furthermore, Ho did not timely file personal or business income tax returns with or make timely tax payments to the IRS for the tax years 2006 through 2011. In February 2013, after learning of an IRS investigation, Ho caused the preparation and filing of U.S. Income Tax Forms 1040, as well as Forms 1120S prepared for Five-O, for the tax years 2006 through 2011. The income information reported on the forms was false. The Forms 1120S failed to properly report all income earned by Five-O d/b/a Preventative Dental, which unreported income would have flowed through to Ho’s Forms 1040.
Ho was charged with six counts 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 Michelle M. Heldmyer.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
RTD Supervisor Appears in Court for Accepting Bribes in Connection with His Official DutiesRead the Press Release
DENVER – Kenneth P. Hardin, age 60, of Aurora, Colorado, was indicted by a federal grand jury last week on charges of accepting bribes, United States Attorney John Walsh, FBI Special Agent in Charge Thomas P. Ravenelle, and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Hardin appeared in court yesterday for his initial appearance before U.S. Magistrate Tafoya, where he was advised of his rights and the charges pending against him.
According to the indictment, Hardin was an employee of the Regional Transportation District in Colorado (“RTD”), holding the position of Senior Manager of RTD’s Civil Rights Division. In that position, Hardin’s duties at RTD included directing and managing the operations of RTD’s Civil Rights Division, which was responsible for furthering civil rights goals through regulatory compliance, complaint investigation, community outreach, and programmatic strategy development. The Disadvantaged Business Enterprise program is one of the programs that fell under the umbrella of RTD’s Civil Rights Division. As the Senior Manager of the Civil Rights Division, Hardin also served as RTD’s Diversity Officer, and his duties included taking a leadership role in developing diversity initiatives. RTD receives money from federal grants.
On or about the dates listed below, Hardin corruptly solicited and accepted money from a person intending to be influenced and rewarded in connection with RTD business involving more than $5,000.
Date
Amount of Bribe
April 30, 2014
$1,100
May 15, 2014
$1,000
June 26, 2014
$1,000
September 15, 2014
$2,000
Hardin was charged with four counts of bribery concerning programs receiving Federal funds each of which carries a penalty of not more than 10 years in federal prison and a fine of up to $250,000.
“Colorado is rightly proud of its long, successful tradition of government free of bribes and corruption,” said U.S. Attorney John Walsh. “When we identify public corruption and bribery, the United States Attorney’s Office and federal law enforcement will pursue it tirelessly and prosecute it forcefully under the law.”
“The charges against Hardin illustrate the FBI’s commitment to investigate officials who use their positions of trust for personal gain,” said FBI Special Agent in Charge Thomas P. Ravenelle. “This type of criminal activity undermines the public’s confidence in government activities that should be fair and transparent. To ensure these matters are fully addressed, we strongly encourage anyone who has information about corrupt activities at any level of government to call the FBI at 888-232-3270.”
“A senior official in government holds a position of trust in the eyes of the public and that trust was violated by accepting bribes,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office. “This successful investigation was due to the cooperative efforts of our law enforcement partners – US Attorney’s Office and the FBI.”
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Pegeen D. Rhyne.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Three Colorado Springs Residents Convicted of Conspiracy to Defraud the IRS and Related Tax Charges Following Jury TrialRead the Press Release
DENVER – George Brokaw, age 68, John Pawelski, age 66, and Mimi Vigil, age 63, all from Colorado Springs, Colorado, were found guilty today of conspiracy to defraud the IRS and related tax charges, following a 4-day jury trial before U.S. District Court Judge Christine M. Arguello. The jury deliberated for an hour and a half before reaching their verdicts. Brokaw, Pawelski and Vigil are scheduled to be sentenced by Judge Arguello on January 25, 2015. Following the guilty verdicts the three defendants, who were free on bond, were taken to U.S. Magistrate Judge Kathleen M. Tafoya’s courtroom for a detention hearing. Magistrate Judge Tafoya changed the conditions of their bond to include GPS monitoring confined to Colorado Springs as well as a curfew from 9:00 p.m. to 6:00 a.m.
All three defendants were indicted by a federal grand jury in Denver on May 22, 2013, which was followed by a superseding indictment on October 21, 2013. According to the superseding indictment, and evidence presented at trial, beginning in October 2008, and continuing through May 2009, Brokaw, Pawelski, Vigil, and others conspired with each other to defraud the United States by submitting false claims for income tax refunds to the Internal Revenue Service.The three filed or caused to be filed false, fictitious and fraudulent Form 1040 tax returns containing false claims for refunds in their names. A total of twelve fraudulent returns were filed attempting to receive over twenty-four million dollars in fraudulent refunds. In connection with these false tax returns they submitted or caused to be submitted false Forms 1099-OID. The 1099-OID forms falsely reported that financial institutions, lenders, or other entities had withheld and paid over to the IRS interest income from accounts which did not generate such interest income and from which no such withholdings were made. The Form 1040 tax returns claimed false refunds based on these false claims of withholdings.
Furthermore, from March 2008 and continuing through April 2012, the defendants willfully conspired with each other to obstruct and impede the due administration of the Internal Revenue laws by attempting to thwart the legitimate collection of taxes owed to the IRS by them and others. They caused to be filed or submitted to the IRS a variety of false, fraudulent, or illegitimate documents which purported to constitute payments of taxes owed to the IRS as well as purported electronic funds transfer (EFT) drawn on closed bank accounts. In addition, the defendants filed a variety of false and fraudulent liens or other documents which falsely claimed that IRS employees, who were engaged in legitimate tax collection efforts against one or more of the defendants, owed one or more of the defendants amounts of money ranging from tens of millions of dollars to billions of dollars.
All three defendants face statutory maximum sentences ranging from not more than 3 years to not more than 10 years, plus up to a $250,000 fine, per count of conviction.
“Defendants sought to hide their disregard for the Constitution and our system of laws behind an inky cloud of fraudulent and sometimes farcical ‘legal’ claims,” said U.S. Attorney John Walsh. “The jury, after hearing all the evidence and argument, saw through Defendants’ continuing scheme and convicted them of fraudulently attempting to obtain millions of dollars from the United States.”
“This verdict of guilty on all counts sends a clear message when you participate in a fraudulent tax scheme attempting to receive millions of dollars in fraudulent refunds, you will be found guilty,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office. “On the front end, IRS did an outstanding job safeguarding U.S. tax dollars by preventing any fraudulent refunds from being issued to these individuals.”
“We are happy that the jury held the defendants accountable for their repeated efforts to interfere with and harass legitimate tax collection efforts by hard working IRS employees,” said Preston Lamb, Special Agent in Charge of the Treasury Inspector General for Tax Administration (TIGTA).
This case was investigated by Internal Revenue Service – Criminal Investigation (IRS CI), and Treasury Inspector General for Tax Administration (TIGTA). The case is being prosecuted by Assistant U.S. Attorneys Mathew Kirsch and Martha Paluch.
Thornton Woman Sentenced to Federal Prison for Fraud Against the GovernmentRead the Press Release
DENVER – Paula King (aka Paula Pfeiffer), age 69 of Thornton, Colorado, was sentenced on November 4th, 2014 by U.S. District Court Judge Philip A. Brimmer to serve 9 months in federal prison, followed by 3 years on supervised release for defrauding the United States of over one hundred thirty thousand dollars, the U.S. Attorney’s Office, the Social Security Administration Office of Inspector General and the Railroad Retirement Board Office of Inspector General announced. King was ordered to pay a total of $131,443 in restitution ($89,205 to the Social Security Administration and $42,238 to the Railroad Retirement Board), and to report to a Bureau of Prisons facility within 15 days of designation.
According to the stipulated facts contained in the plea agreement, beginning in 1994, King obtained Social Security Supplemental Income benefits to which she was not entitled, and continued to receive them for 17 years. She also obtained widow’s benefits from the U.S. Railroad Retirement Board to which she was not entitled. In order to obtain these benefits, King failed to disclose to the agencies that she had remarried and certified that she had not been remarried, knowing that her remarriage would make her ineligible for the benefits. She used two sets of names, dates of birth, and social security numbers to conceal her fraud.
During the sentencing hearing, the defendant argued that due to her age and poor health, she should receive a sentence to probation or in-home detention. The court found that the fact that King is now in poor health does not mitigate her criminal culpability, and that a sentence to prison was necessary in this case, adding that such a sentence would send a message to others who may believe that being in ill health precludes a sentence of incarceration despite the one’s criminal conduct.
The investigation was conducted by the Social Security Administration Office of the Inspector General and the Railroad Retirement Board Office of the Inspector General.
This case was prosecuted by Assistant U.S. Attorney Linda Kaufman.
Harold Henthorn Arrested for First Degree Murder Related to Death of Wife at Rocky Mountain National ParkRead the Press Release
DENVER – Harold Henthorn, age 58, of Highlands Ranch, Colorado, was arrested without incident this morning by Special Agents with the National Park Service (NPS) and the Federal Bureau of Investigation (FBI), with substantial support from the Douglas County Sheriff’s Office, following his indictment on First Degree Murder, the agencies announced. The indictment was returned by a federal grand jury in Denver yesterday, November 5, 2014. Henthorn is scheduled to make his initial appearance before U.S. Magistrate Judge Kathleen M. Tafoya at 2:00 p.m. today, where he will be advised of his rights and the charges pending against him.
According to the indictment, on or about September 29, 2012, in the State and District of Colorado, and within the jurisdiction of the United States, namely the Rocky Mountain National Park, Henthorn willfully, deliberately, maliciously, and with premeditation and malice aforethought did unlawfully kill his wife, Toni Henthorn.
If convicted, Henthorn faces a mandatory term of life in federal prison without the possibility of parole, as well as a fine of up to a $250,000.
“The indictment charges Henthorn with the first degree murder of his wife in Rocky Mountain National Park,” said U.S. Attorney John Walsh. “The United States Attorney’s Office will work tirelessly with the National Park Service and the FBI to ensure that justice is done for the victim and her family.”
“The National Park Service is always concerned for the protection of our visitors,” said Mark Magnuson, Rocky Mountain National Park Chief Ranger. “When a violent crime such as this occurs in a national park, one of our nation’s most treasured places, we work hard to ensure that those responsible are held accountable and the victim and the victim’s family are afforded justice. In this case, we will continue to work closely with the FBI and the U.S. Attorney’s Office toward a just resolution.”
“Working with our partners from Douglas County and the National Park Service, FBI agents took Henthorn into custody this morning,” said FBI Denver Division Special Agent in Charge Thomas Ravenelle. “As with all defendants, Henthorn will now be afforded his day in court after an extensive investigation.”
This case was investigated by the National Park Service and the Federal Bureau of Investigation. The Douglas County Sheriff’s Office provided assistance during the investigation and arrest.
The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney's Office for the District of Colorado to Have Election Officer in Place to Field Voter ComplaintsRead the Press Release
DENVER – United States Attorney John Walsh announced that Assistant U.S. Attorney Thomas O’Rourke will lead the efforts of the office as District Election Officer in connection with the Justice Department’s nationwide Election Day Program for tomorrow’s pending election. Assistant U.S. Attorney O’Rourke will be responsible for overseeing the District of Colorado’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington. Mr. O’Rourke has held this position for well over 15 years.
United States Attorney Walsh said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department of Justice for the public to report possible election fraud and voting rights violations while ballots are being accepted on election day.
In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Walsh stated that Assistant U.S. Attorney O’Rourke will be on duty in Colorado while the polls are open. He can be reached by members of the public by calling 303-454-0209.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The Denver FBI field office can be reached by calling 303-629-7171.
Complaints about possible violations of federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by calling 800-253-3931 or 202-307-2767, by fax at 202-307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
Former Denver Woman Is Sentenced to Federal Prison on Charges Related to Identity TheftRead the Press Release
DENVER – Libia Hernandez-Garcia, age 60, of Miami, Florida, formerly of Denver, Colorado, was sentenced late last week by U.S. District Court Judge Christine M. Arguello to serve 12 months in federal prison for tax fraud, visa fraud and social security fraud, federal authorities announced. Following her prison sentence, she was ordered to serve 3 years on supervised release and ordered by Judge Arguello to pay over $70,000 in restitution. She was ordered to report to a Bureau of Prisons facility within 15 days of designation. She was indicted by a federal grand jury on May 21, 2013, followed by a superseding indictment on February 25, 2014. She pled guilty before Chief Judge Arguello on May 22, 2014.
According to the charging documents as well as the stipulated facts contained in the plea agreement, from 2009 through 2011, Hernandez-Garcia made false claims against the Internal Revenue Service which she knew to be false by preparing and filing federal income tax returns for several individuals where the claims for income tax refunds were fraudulent. Particularly, Hernandez-Garcia provided false information to a tax preparer, so refunds not belonging to her would be deposited into her own bank account.
From 2009 through 2012, Hernandez-Garcia misused the Social Security Number (SSN) of several individuals by causing the filing of individual income tax returns which falsely included the name and SSN, as a dependent, for the person identified as the filer of the tax return.
From 2008 through 2011, Hernandez-Garcia assisted in the preparation and filing with the IRS the U.S. Individual Income Tax Return of her husband for tax years 2007 through 2010 which were materially false and fraudulent. Particularly, dependents were claimed on her husband’s tax returns when in fact the dependents were not a person who could lawfully be claimed as a dependent of his. On her own personal tax returns for tax years 2006 through 2011, Hernandez-Garcia followed a similar pattern claiming dependents that could not be claimed as her dependents all in an effort to receive higher refunds.
Furthermore, on two separate occasions, one in 2008 and the second in 2011, Hernandez-Garcia made false statements under penalty of perjury in Petitions for a Nonimmigrant Worker packages. Such statements included: the beneficiary of the H-1B visa petition, Diana Aleph Aguilar Hernandez, would be employed by a local hotel operating under a national brand name as Operations Manager; Libia Hernandez was an authorized official to make such a petition on behalf of that hotel; that Libia Hernandez was authorized by that hotel to act on behalf of the company in labor certification matters.
This case was investigated by the Internal Revenue Service – Criminal Investigation, Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Bureau of Diplomatic Security Service (DSS), and Office of the Inspector General – Social Security Administration (SSA OIG).
This case is being prosecuted by Assistant U.S. Attorney Robert Brown.
Denver Attorney Is Sentenced to Federal Prison for Conspiracy to Defraud the IRSRead the Press Release
DENVER – Eva Melissa Sugar, age 61, of Aurora, Colorado, was sentenced earlier this week by U.S. District Court Judge John L. Kane to serve 18 months in federal prison for conspiracy to defraud the United States in connection with the collection of taxes, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Following her prison sentence, Sugar was ordered to serve 3 years on supervised release and ordered by Judge Kane to pay a fine of $5,000. She was ordered to report to a Bureau of Prisons facility within 15 days of designation. Sugar and two co-defendants, Jerry L. Roberts and Gregory N. Laurence, were indicted by a federal grand jury in Denver on May 8, 2013. Roberts pled guilty to failure to file tax returns on July 15, 2014 and is scheduled to be sentenced by Judge Kane on November 18, 2014. Laurence pled guilty to attempting to obstruct the administration of internal revenue laws on February 6, 2014 and was sentenced by Judge Kane on September 4, 2014 to probation for 5 years and ordered to pay $180,850 in restitution.
According to information contained in the indictment and plea agreements, Sugar was a practicing attorney in Denver, Colorado and obtained an L.L.M. in Taxation from the University of Denver. Around 1999, Sugar began receiving referrals from a group called Financial Fortress Associates (FFA). FFA promoted the use of so-called Constitutional Pure Trust Organizations (PTOs) as a part of various schemes to avoid tax reporting requirements, including transferring ownership of most or all assets belonging to a taxpayer or a taxpayer’s business to trusts and treating payments to the same trusts as business deductions. FFA further advised clients not to file tax returns or any other documents with the IRS on behalf of the trusts. FFA recruited clients through the internet and in seminars or “meetings” conducted in hotel conferences rooms around the country, including locations in Colorado, Georgia, Texas, and elsewhere. At some of these meetings, Sugar explained how the FFA’s banking program worked, and others associated with FFA explained other aspects of FFA’s program.Sugar charged her clients fees for her services, including an initial fee to set up bank accounts and associated unincorporated business organizations (UBOs), as well as annual maintenance fees. For additional fees, Ms. Sugar allowed her clients to control funds in the UBO bank accounts through the use of blank checks that she would sign, for a fee, as the account signer or trustee. The clients would then fill in the checks, spending the money from the accounts in whatever manner they desired. Sugar provided these services for more than 150 clients, and in so doing, performed various overt acts in furtherance of the conspiracy. The tax loss resulting from Sugar’s activities as part of the conspiracy is between $2.5 million and $7 million.
Roberts and Laurence were clients of Sugar. Roberts was a resident of Polk County, Florida and worked for Roberts Enterprises, a family business which assisted charitable organizations, primarily religious ones, with fundraising. Beginning in 2001 through at least May of 2007, Roberts used the services of Sugar, to take steps to prevent the IRS from learning his true income and assessing taxes on that income. Roberts then failed to file tax returns reporting his income.
Laurence was a resident of Germantown, Tennessee and practiced medicine through two entities in which he was the sole physician, Germantown Family Care and Obstetrics, LP and Germantown Aesthetics, LP. Beginning in 2002 through the end of 2007, Dr. Laurence used the services of Melissa Sugar to disguise his true income from the IRS and to support the false business and personal tax returns he filed during the relevant period.
Another client of Sugar’s, Jerold Sorensen, was charged in a separate indictment with attempted obstruction of the administration of the internal revenue laws and was found guilty by a jury in Denver in June of 2014. On September 8, 2014 Sorensen was sentenced by U.S. District Court Judge Raymond P. Moore to 18 months in federal prison and to pay a fine of $100,000.00. .
This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service and prosecuted by Assistant U.S. Attorneys Matthew T. Kirsch, Anna Edgar, Pegeen Rhyne, and J. Chris Larson.