District of Colorado
Press releases recorded for this federal judicial district.
Wheat Ridge Doctor Is Sentenced to Federal Prison for the Illegal Distribution of OxycodoneRead the Press Release
DENVER – Dr. Kevin R. Clemmer, age 60, of Evergreen, Colorado, was sentenced today by U.S. District Court Judge Robert E. Blackburn to serve 48 months in federal prison for the illegal distribution of oxycodone and money laundering, federal authorizes announced. Following his prison sentence, Clemmer was ordered to spend 3 years on supervised release. Judge Blackburn also ordered Clemmer to pay restitution. The defendant, who appeared at the sentencing hearing free on bond, was ordered to report to a U.S. Bureau of Prisons facility by noon on the date that it is designated.
Clemmer was indicted by a federal grand jury in Denver on May 16, 2011, and pled guilty on May 23, 2013 to count one (illegal distribution) and count sixty-two (money laundering) of the indictment. According to the stipulated facts contained in the plea agreement, as well as the indictment, the investigation began in April 2009 and continued through September 2010. The investigation established Clemmer knowingly and intentionally distributed and dispensed oxycodone, a schedule II controlled substance, outside the scope of professional practice and not for legitimate medical purposes. Specifically on May 20, 2010, Clemmer met with an undercover officer. The undercover officer described minimal pain management needs and symptoms which did not require, as part of the scope of professional practice, the prescription of oxycodone. However, Clemmer did prescribe 120 doses (pills) of 15 milligram oxycodone to the undercover officer after a very limited medical screen and evaluation. These prescriptions were done outside the scope of professional practice and not for legitimate medical purposes.
Additionally, Clemmer did distribute by prescription, outside the scope of professional practice and not for legitimate medical purposes, oxycodone to Ryan Lujan. Specifically, on September 2, 2010, Clemmer did prescribe oxycodone to Ryan Lujan. On September 3, 2010, Ryan Lujan died. The cause of death is listed as an accidental aspiration of gastric contents associated with oxycodone toxicity. The prescription written by Clemmer (with numerous pills missing) was found at the scene of the death as well as other oxycodone pills which were not prescribed by the defendant. Clemmer’s prescription helped contribute to the death of Ryan Lujan which was not charged as part of this case.
On May 29, 2010, Clemmer purchased a 1999 Lincoln Continental, using cash which was derived from the illegal distribution of a schedule II controlled substance. For purposes of relevant conduct, Clemmer stipulates that the total drug quantity for which he is accountable is 186,340 milligrams of oxycodone.
“Doctors who use their prescription pads as a stack of blank checks to write and cash, instead of as a means to heal and comfort the sick, will be held accountable,” said U.S. Attorney John Walsh. “The powerful prescription drugs that Clemmer trafficked are highly addictive and dangerous, as the tragic and fatal consequences of Clemmer’s conduct demonstrate.”
“The indictment, guilty plea and subsequent sentencing of Dr. Clemmer demonstrates the law enforcement community’s commitment to identifying those medical professionals who divert medications in an unauthorized manner and misuse their position of trust for personal gain,” said DEA Special Agent in Charge Barbra Roach.
“Prescription drug abuse is a serious problem with serious consequences and we will continue to work with our law enforcement partners to insure those individuals who contribute to such abuse are brought to justice,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
This case was investigated by the Drug Enforcement Administration (DEA) Tactical Diversion Squad and the Internal Revenue Service (IRS) – Criminal Investigation.
The case was prosecuted by Assistant U.S. Attorney Zachary Phillips.####
Towaoc Man Sentenced to Federal Prison for Failure to Register as A Sex OffenderRead the Press Release
DENVER – Glen Earl Cotonuts, age 54, of Towaoc, Colorado, was sentenced recently by U.S. District Court Judge Christine M. Arguello to serve 20 months in federal prison for failure to register as a sex offender, U.S. Attorney John Walsh and U.S. Marshal John L. Kammerzell announced. Following his prison sentence, Judge Arguello ordered Cotonuts to spend 5 years on supervised release. The defendant appeared at the sentencing hearing in custody, and was remanded at its conclusion.
Cotonuts was indicted by a federal grand jury on October 1, 2012. On September 30th, 2013 a jury trial in Denver commenced. That trial concluded on October 3, 2013 with a unanimous guilty verdict. The defendant was sentenced on December 16, 2013.
According to court documents, and evidence presented during trial, beginning on June 22, 2012, and continuing until August 15, 2012, Cotonuts was required to register under the Sex Offender Registration and Notification Act, as he was a sex offender by reason of conviction under Federal Law. Despite knowing that he had to register, Cotonuts failed to register and update his registration while living on the Ute Mountain Ute reservation as required by law.
“For the safety of the public, sex offenders are required by law to register with law enforcement,” said U.S. Attorney John Walsh. “When a sex offender changes addresses and fails to register there are serious consequences – including going to prison.”
“This investigation and its successful outcome is yet another example of the resolve of the U.S. Marshals Service towards bringing unregistered sex-offenders to justice,” said U.S. Marshal John Kammerzell. “Once again I am extremely proud of the work of my deputy marshals and that of our close partners at the U.S. Attorney’s Office.”
This case was investigated by the U.S. Marshals Service.
Cotonuts was prosecuted by Durango Branch Office Chief Assistant U.S. Attorney James Candelaria.
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Denver Man Sentenced to Federal Prison for Being A Felon in Possession of A FirearmRead the Press Release
DENVER – Albert Jesse Gallegos, Jr., of Denver, Colorado, was sentenced this week by U.S. District Court Judge Philip A. Brimmer to serve 78 months in federal prison for being a felon in possession of a firearm, United States Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Luke Franey announced. Following his prison sentence, Gallegos was ordered to spend 3 years on supervised release. The defendant, who appeared at the sentencing hearing in custody, was remanded at the hearing’s conclusion.
Gallegos was indicted by a federal grand jury in Denver on October 4, 2012. He pled guilty before Judge Brimmer on September 16, 2013. Gallegos was sentenced on December 16, 2013.
According to court records, including the stipulated facts contained in the defendant’s plea agreement, on September 13, 2012, officers from the Denver Police Department, Lakewood Police Department, and the Rocky Mountain Safe Streets Task Force were conducting surveillance in southwest Denver in an attempt to locate and arrest the defendant, Albert Jesse Gallegos, Jr. Defendant Gallegos was a known fugitive with an active arrest warrant out of Lakewood, Colorado.
Shortly before 4:00 pm, law enforcement officers saw Gallegos leave a Denver home. Gallegos was carrying a black backpack. Gallegos walked to a black Ford Expedition, opened the rear door and placed the backpack inside. Officers moved in to arrest Gallegos. Gallegos attempted to run, but was restrained by the officers. Gallegos resisted arrest and fought with the officers, but was eventually handcuffed and arrested.
Gallegos was searched incident to arrest. Officers found a glass smoking pipe and three clear plastic baggies containing methamphetamine in Gallegos’s pockets. Police impounded the vehicle and conducted an inventory search. Officers found the backpack behind the driver’s seat. Inside the backpack were two loaded semiautomatic handguns - a .40 caliber, Smith and Wesson pistol and a .9mm, FNP pistol - and ammunition. The Smith and Wesson was loaded with a magazine containing 7 rounds of .40 caliber ammunition. The FNP pistol was loaded with a magazine containing 13 rounds of .9mm ammunition. There was also a box of .40 caliber ammunition inside the backpack.
Gallegos was a felon and therefore a prohibited person. Prior to his September 13, 2012 possession of the firearms and ammunition, Gallegos had received six felony convictions, three in Colorado and three in Arizona, for crimes punishable by more than one year imprisonment. Following his arrest, Gallegos was convicted of two additional felonies in Colorado state court.
This case was investigated by the ATF, the Denver Police Department, and the Lakewood Police Department as part of Project Safe Neighborhoods.
Gallegos was prosecuted by Assistant U.S. Attorney Richard Hosley.
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Former Parker Man Sentenced to Serve 51 Months in Federal Prison for $1.7 Million Fraudulent Ponzi SchemeRead the Press Release
DENVER – Shawon McClung, age 27, formerly of Parker, Colorado, was sentenced earlier this week by U.S. District Court Judge R. Brooke Jackson to serve 51 months in federal prison for wire fraud, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Following his prison sentence, Judge Jackson ordered McClung to serve 3 years on supervised release. The defendant was also ordered to pay $1,756,750 in restitution to the 15 victims of his fraud. McClung was ordered to voluntarily surrender to the institution designated by the U.S. Bureau of Prisons within 15 days from the date of designation.
McClung was first charged by Information on June 12, 2013. He pled guilty before Judge Jackson on July 30, 2013. The defendant was sentenced on December 16, 2013.
According to court documents, including the stipulated facts contained in the plea agreement, in 2009, McClung began Flint‑McClung Capital, LLC ("FMC") in Indiana. In November 2010, McClung moved FMC from Indiana to Denver, Colorado. In early 2009, McClung entered into financing discussions with a software programmer for the development of proprietary software to make automated trades on the foreign currency ("FOREX") market. The goal was to develop a software program that would perform numerous automated trades during a short time based on an algorithm designed to predict and exploit differences in foreign exchange rates. On December 15, 2010, an agreement was reached by McClung and the software programmer to provide funding for the software program. However, McClung only provided approximately $213,000 of the promised $614,790, and the software program was never developed and was never available for FMC’s use.
Despite the fact that the software program had not been developed, from approximately March 2009 to approximately April 2011, McClung solicited investor money by falsely representing that FMC owned and used a proprietary "massively parallel automated trading system" to trade currencies on the FOREX market. McClung falsely told investors that this proprietary software was already being used at FMC and had a history of success. Both verbally and in writing, McClung falsely represented to investors, potential investors and others that investors in the investment programs he was offering "historically" received returns of 15% to 100% approximately every 14 to 30 days. In reality, as McClung well knew, the software program did not exist and had no history of success.
Both verbally and in written "Investment Contracts" and "Joint Venture Agreements," McClung falsely represented to investors, potential investors and others that FMC guaranteed from loss the principal of the investment placed with FMC. McClung also falsely represented to investors, potential investors and others that FMC would use their entire investment to trade in currencies using FMC’s proprietary system, which McClung knew did not exist. In fact, McClung did not place any of the investors’ money in trades.
McClung did make some promised payouts to early investors using money he received from other investors. Some of those early investors told other potential investors about their successful "investments" with FMC, which reassured others about investing their money with McClung and FMC.
After McClung and FMC failed to make promised payments to investors via email and other forms of communication, McClung made a number of false excuses to investors and others regarding why the payments had not been made. He also made a number of false promises about future payments. In March 2011, McClung sent to several investors via email a document entitled "Cancellation of Contract and Account Settlement" in which he falsely represented that FMC would return an amount of money specified in the document if the investor signed and released McClung and others of any liability. After receiving signed "Cancellation of Contract and Account Settlement" from many investors, McClung failed to make the promised payouts and failed to return the investors’ principal.
“All too often we see con men like the defendant in this tragic case, who claim to have a super-secret method that enables them to make instant millions by manipulating or outwitting the financial markets,” said U.S. Attorney John Walsh. “That sort of claim always deserves the highest level of skepticism – if a deal promises sky-high returns with no risk, it’s too good to be true, and investors should run away.”
“In order to ensure our financial markets operate fairly, the FBI is committed to aggressively pursuing those who commit investment fraud,” said FBI Denver Division Special Agent in Charge Thomas P. Ravenelle. “We are confident the results of this investigation will deter others who engage in these types of fraudulent schemes.”
This case was investigated by the Federal Bureau of Investigation (FBI).
McClung was prosecuted by Assistant U.S. Attorney Pegeen Rhyne.
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Chinese National Sentenced to Federal Prison for Illegally Exporting to China Radiation-Hardened Computer Circuits Used in Satellite CommunicationsRead the Press Release
DENVER – Philip Chaohui HE, aka Philip Hope, who was residing in Oakland, California, at the time of his arrest, was sentenced yesterday, by Senior U.S. District Court Judge Wiley Y. Daniel to serve 36 months in federal prison for conspiracy to violate the Arms Export Control Act and to Smuggle Goods from the United States, United States Attorney John Walsh and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar C. Kibble announced. Following his prison sentence, HE was ordered to serve 3 years on supervised release. HE was already in custody prior to the sentencing hearing, and was remanded at the hearing’s conclusion.
HE was indicted by a federal grand jury in Denver on December 15, 2011. He pled guilty before Senior Judge Daniel on September 3, 2013. He was sentenced yesterday, December 18, 2013.
According to court documents, including the stipulated facts contained in the plea agreement, HE attempted to illegally export to China radiation‑hardened computer memory circuits used in satellite communications with a value of almost $550,000. HE, the only employee of Oakland, California‑based Sierra Electronic Instruments (SEI), purchased 312 radiation‑hardened circuits from a Colorado manufacturer. The circuits purchased by HE are categorized as defense articles within the International Trafficking in Arms Regulations (ITAR). Lawfully exporting defense articles requires licensing from the U.S. State Department’s Directorate of Defense Trade Controls.
On April 28, 2011, an unindicted co‑conspirator caused two wire transfers totaling about $489,720 to be sent to HE’s bank account in California. On or about May 9, 2011, HE provided payment in full, $549,654, at the time HE placed the order with the Colorado manufacturer. According to the indictment, on or about May 17, 2011, HE provided false certification to the Colorado manufacturer that his company was purchasing the integrated circuits for end‑use in the United States only, and HE further acknowledged that the items were controlled by U.S. Export Laws and could not be transferred, transshipped or otherwise disposed of in any other country, without the prior written approval of the U.S. Department of State.
On December 11, 2011, HE drove to the Port of Long Beach, California, and met with two men in front of a docked ship bearing a Chinese flag. The Chinese‑flagged ship was registered to Zhenhua Port Machinery Company LTD, a subsidiary of the China state‑owned corporation China Communications Construction. The ship had recently arrived from Shanghai, China, and was scheduled to return on December 15, 2011.
HE concealed 200 integrated circuits in several plastic infant formula containers placed inside five boxes which were sealed and labeled as "milk powder" written in Chinese. HE transported the boxes in the trunk compartment of his vehicle. Neither HE, nor his company SEI had a license to export defense articles of any description.
“Exporting sensitive technology to foreign powers in violation of laws and regulations designed to protect our national security is a serious federal crime,” said U.S. Attorney John Walsh. “As in this aggravated case, illegal export of restricted technology can and will result in prison sentences.”
“This sentence represents the results of an extensive two-year HSI Investigation, following the solid lead we received from a responsible Colorado company,” said Kumar C. Kibble, special agent in charge of HSI Denver. “U.S. national security depends on every American’s diligence. If you see something, say something.”
The Defense Security Service (DSS) and the Defense Criminal Investigative Service (DCIS) provided critical assistance to HSI with this investigation. Assistance was also provided by the U.S. Attorneys Offices located in the Northern and Central Districts of California.
HE was prosecuted by Assistant U.S. Attorney Matthew Kirsch and Special Assistant U.S. Attorney John Canedy.
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Denver Man Sentenced for Possession of Child Pornography He Ordered over the Internet Which Was Delivered via United States MailRead the Press Release
Torture table was found in house of defendant when authorities executed search warrant
DENVER -- Clifford Eric Perian, age 53, of Denver, Colorado, was sentenced today by Senior U.S. District Court Judge Lewis T. Babcock to serve 82 months (over 6 years) in federal prison for possession of child pornography, the United States Attorney’s Office and the U.S. Postal Inspection Service announced. After serving his prison sentence, Perian was ordered to serve 10 years on supervised release. He will also be required to register as a sex offender. The defendant, who appeared at the hearing in custody, was remanded immediately after the sentencing was concluded.
Perian was first charged by Criminal Complaint on May 24, 2013. He was then indicted by a federal grand jury in Denver on June 18, 2013. He pled guilty before Senior Judge Babcock on September 17, 2013. He was sentenced on December 10, 2013.
According to court documents, including the affidavit in support of the Criminal Complaint, the indictment, and the stipulated facts contained in the plea agreement, based on a law enforcement tip, the United States Postal Inspection Service (USPIS) began an investigation into Clifford Eric Perian, and determined that he had on multiple occasions purchased several child pornography films. With the help of the National Center for Missing and Exploited Children (NECMEC), the United States Postal Inspection Service (USPIS) investigated numerous CyberTipLine reports relating to emails and online postings by an individual using three different email addresses going back as far as November 11, 2007. The NCMEC and the USPIS were able to establish that evidence existed indicating that all three accounts were used by Clifford Perian. In the postings, Perian was soliciting parents of minor boys or looking for minor volunteers to be subjected to various acts of sexual torture and/or abuse.
On May 23, 2013, Postal Inspectors executed a search warrant at the residence of Perian in Denver. Inspectors found the bondage and sexual paraphernalia Perian boasted about online. They found DVD’s containing child pornography or child erotica, as well as a home-made “torture table” with which to tie down and immobilize others. Computers were also seized. Following the execution of the search warrant, Postal Inspectors contacted Perian. Investigators then determined that Perian ordered videos online, and then received them in the U.S. Mail. It was also determined that Perian received images of young males under the age of 18 engaged in sexual activity with male adults through internet chat rooms and via email. There were also allegations that Perian sexually touched and was sexually touched by at least three boys ages 16 to 17 in approximately 2004 through 2006. Law enforcement also determined that Perian had been to local water parks taking non-explicit pictures of young boys he did not know under the age of 18.
“This defendant was focused on the physical torture of young children,” said U.S. Attorney John Walsh. “Not only did he possess images of child torture, he admitted to molesting boys, and Postal Inspectors found a ‘torture table’ in the basement of his home. His prison sentence clearly will protect our children from this predator.”
“We continued to aggressively investigate, apprehend and assist in the prosecution of individuals who seek to exploit children via the U.S. Mail,” said Adam P. Behnen, Inspector in Charge, U.S. Postal Inspection Service, Denver Division. “It is imperative that we identify and prosecute these predators to stop the further exploitation of children.”
This case was investigated by the U.S. Postal Inspection Service.
Perian was prosecuted by Assistant U.S. Attorney Valeria Spencer.
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."
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Parker Hunting Guide Pleads Guilty to Failing to File Income Tax Returns and Agrees to Pay $278,000 to the IRSRead the Press Release
DENVER – Richard K. Sears, age 65, of Parker, Colorado pled guilty before U.S. District Court Chief Judge Marcia S. Krieger today to three counts of failing to file tax returns with the Internal Revenue Service United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Sears, who is free on a bond, is scheduled to be sentenced by Chief Judge Krieger on March 4, 2014. Sears was charged by an Information in Denver on April 10, 2013. IRS Special Agents and Investigators with the Colorado Parks and Wildlife executed a search warrant on Sears’ residence in July of 2010.
According to the facts contained in the Information as well as the stipulated facts contained in the plea agreement, from 2004 through 2009 Sears owned and operated several businesses including Apache Park Land & Cattle, Inc. ("APLC"), Trophy Outfitters, Inc. ("TO"), Private Land Bucks and Bulls, Inc. ("PLBB") and Apache Park Livestock, Inc. ("APL"). Sears hunting business operated in Colorado and New Mexico and he solicited customers to travel to these two states to hunt big game such as elk, deer, and bear. The cost of hunting packages ranged from approximately $2,000 to $10,000. His other business was a livestock business in Colorado.
During calendar years 2004 through 2009, Sear’s received significant gross income from his businesses for which he failed to file income tax return for as required by law. He earned at least the following amounts of gross income when in fact he knew he was required to file income tax returns for these years:
Tax Year
Gross Income
2004
$ 281,763
2005
$ 382,946
2006
$ 93,701
2007
$ 155,586
2008
$ 75,755
2009
$ 274,953
Furthermore, in July of 1997, Sears purchased property in Parker, Colorado for the purpose of building a home for him and his family. The property was purchased in the wife’s name in an attempt to hinder IRS collection efforts as he was aware of back taxes he owed. Particularly, the IRS assessed taxes against Sears several times during 1991 through 1993 and was unsuccessfully in collecting over $37,000 in taxes plus interest and penalties. The IRS had filed tax liens against Sears for money he owed. Once the tax liens expired in 2007, Sears executed a quit claim deed transferring ownership of the property into his name.
The total tax loss of $ 278,274 is attributable to Sears’ endeavors to frustrate IRS collection of back taxes due and owed for calendar years 1991-1993, and the tax loss from his failures to file income tax returns for years 2004-2009.
“As citizens, we all have an obligation to file our tax returns and pay any tax properly owing,” said U.S. Attorney John Walsh. “Ignoring and circumventing tax obligations only results in a kind of ‘double trouble:’ Not only will the tax bill eventually come due with interest and penalties, but there is also the possibility of jail time and a criminal conviction.”
“Income tax fraud is based on greed, individuals who commit tax fraud are merely stealing money and creating an unfair tax burden on honest tax paying citizens. These individuals believe they will not be caught but they will be caught and brought to justice,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
Willful failure to file a tax return with the IRS carries a penalty of not more than 1 year imprisonment, and up to a $100,000 fine, per count.This case was investigated by the Internal Revenue Service – Criminal Investigation with assistance from Colorado Parks and Wildlife, and US Fish and Wildlife Service.
This case is being prosecuted by Assistant U.S. Attorney Timothy Neff and Department of Justice Tax Division Trial Attorney Kevin Sweeney.
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Grand Junction Man Is Sentenced to 38 Months in Federal Prison for Income Tax EvasionRead the Press Release
DENVER – James G. Kreutzer, age 52, of Grand Junction, Colorado, was sentenced yesterday by U.S. District Court Judge William J. Martinez to serve 38 months in federal prison for income tax evasion, United States Attorney John Walsh, IRS Criminal Investigation Special Agent in Charge Stephen Boyd and FBI Special Agent in Charge Thomas P. Ravenelle announced. Following his prison sentence, Kreutzer was ordered to spend 3 years on supervised release. Judge Martinez also ordered him to pay $186,473 in restitution, as well as a $10,000 fine.
Kreutzer waived his right to be indicted by a federal grand jury on May 7, 2013, and was charged by Information. According to the stipulated facts contained in the plea agreement, as well as the Information, Kreutzer through Village Nursery, Inc (his solely owned company) and various related entities he owned and/or controlled, engaged in real estate development and construction activities in Southwest Colorado. During the period of 2001 through 2008, Kreutzer devised a scheme to defraud, lenders, which included financial institutions, companies, and other persons. Personally and through his companies Kreutzer repeatedly sought and obtained new loans to service his prior loans, to pay his personal obligations and expenses, and to pay for his real estate purchases and construction activities. To obtain these loans, he routinely made materially false and fraudulent pretenses, representations and promises to financial institutions.
By mid-2008, Kreutzer was no longer able to obtain money through new loans or otherwise to pay previous lenders and others. In 2007 and 2008, Kreutzer’s personal expenses were reflected by the accountant he hired in the company's general ledger as accounts receivable which showed he took $1,132,917.46 from his company in 2007, none of which was reported as income on his 2007 tax return. In 2008 he took an additional $248,627.35, none of which was reported as income on his 2008 tax return. The personal expenses paid by the company in 2007 and 2008 included Kreutzer’s home mortgage payments for his two homes, his utility payments, his Mercedes Benz payments, his gambling expenses in Las Vegas, Nevada, and his jewelry purchases.
The accountant, over a number of years, told Kreutzer the money he took out of the company was income and he should report it on his personal income tax returns. Kreutzer stated to the accountant, in essence, don't put it on the return, I can't pay it. Kreutzer paid no income tax to the IRS in 2007 and 2008 while the actual calculated amount due to the IRS was $186,473.
This case was investigated by IRS-Criminal Investigation and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Todd Norvell and Tim Neff.
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Former DEA Pilot Sentenced for Lying About Number of Missions FlownRead the Press Release
DENVER – Jeremy S. Peres, age 44, of Denver, Colorado, and a former DEA pilot, was sentenced by U.S. District Court Judge Robert E. Blackburn to serve 1 years’ probation, and was ordered to pay restitution totaling $4,368 to the federal government for making and using a false document knowing it contains false statements, the Department of Justice announced. Specifically, Peres lied about the number of missions he flew while working for the DEA. Certain missions earn law enforcement pilot hazard pay, which in this case Peres received. Peres no longer works for the DEA.
Peres was indicted by a federal grand jury in Denver on February 26, 2013. He pled guilty to making and using false documents on August 15, 2013. He was sentenced today, November 27, 2013.
According to court documents, including the stipulated facts in the plea agreement, the defendant was a Drug Enforcement Administration (DEA) pilot. The DEA maintained aircraft at a Metro Denver airport, and the defendant was a DEA pilot based in Colorado. The DEA paid the defendant a salary, and the defendant was also entitled to receive hazard pay when he flew missions under specified hazardous conditions. In order to receive the supplemental hazard pay, the defendant was required to submit a Flight Hazard Pay Certificate (FHPC) to the DEA for each qualifying flight.
Between November 2011 and July 2012, Peres submitted 44 false and fraudulent FHPCs for missions he did not actually pilot or co-pilot. When he was contacted by his supervisor, he stated that there were discrepancies in the DEA paperwork because he was actually flying a Federal Bureau of Investigation (FBI) plane for those instances. The defendant, in fact as he knew, had not flown a FBI plane in those instances, and in fact had not flown any plane. The defendant’s submission of the false FHPCs caused the DEA to pay the defendant hazard pay equal to approximately 25 percent of his daily salary, totaling $4,368.
This case was investigated by the Department of Justice Office of the Inspector General. Peres was prosecuted by Assistant U.S. Attorney Anna Edgar.
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Denver Man Sentenced to 100 Years in Federal Prison for Advertising Child Pornography and Other Child Pornography Related CrimesRead the Press Release
DENVER – Richard Franklin, a.k.a “westfaliaimplant”, age 45 of Denver, Colorado, was sentenced today by Senior U.S. District Court Judge Wiley Y. Daniel to serve 1200 months (100 years) in federal prison for advertising child pornography, receipt of child pornography, two counts of distribution of child pornography, and possession of child pornography. Today’s sentence, one of the longest child pornography sentences in Colorado history, essentially means the defendant will spend the rest of his life in prison. Judge Daniel also ordered Franklin to serve a lifetime of supervised release. The defendant, who appeared at the hearing in custody, was remanded.
Franklin was indicted by a federal grand jury in Denver on June 8, 2011. He was found guilty on August 27, 2013, following a seven-day jury trial. He was sentenced today, November 26, 2013.
According to court documents, as well as facts presented at trial, from May 11, 2009 and January 5, 2011, Franklin knowingly made, printed or published any notice or advertisement offering to receive, exchange or distribute child pornography to anyone who was a member of his online trading circle. Further, the defendant knowingly received and distributed child pornography using the Internet. Lastly, Franklin knowingly possessed images of child pornography.
In total, the defendant possessed multiple hard drives containing over 200,000 images of child pornography. Franklin used a file trading software to allow others to preview and browse his collection and to chat with fellow child pornography traders. Part of the trading of images was to encourage purveyors to produce new child pornography videos. As a result of this investigation, two young children, both under 12 years old, were rescued from their abusers.
When imposing sentence, the Court stated that the crimes of the defendant were “pernicious and evil” and “must be dealt with in the most severe way.”
“The Department of Justice’s Project Safe Childhood continues to work aggressively to protect children from those who would exploit them,” said U.S. Attorney John Walsh. “In cases such as this, we work diligently to punish those who provide these horrible images, with the goal of reducing both the availability and demand.”
“The FBI will continue to aggressively pursue those who prey on children, especially those who advertise, trade and/or produce child pornography,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “Crimes of this nature threatened to destroy our most precious resource, offend every sensibility, and cannot be tolerated. The FBI and our partners will spare no expense or resource to bring them to justice.”
This case was investigate by the Denver and Phoenix Field Offices of the Federal Bureau of Investigation (FBI).
Franklin was prosecuted by Assistant U.S. Attorneys Judith Smith and Alecia Riewerts Wolak.
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."
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Alien Found at Search Location Charged with Illegally Possessing Firearms and AmmunitionRead the Press Release
DENVER – Hector Diaz, age 49, of Colombia, was charged Friday in what was a sealed Criminal Complaint with one count of being an alien illegally in possession of a firearm, federal, state and local law enforcement authorities announced. Diaz is scheduled to make his initial appearance in U.S. District Court in Denver this afternoon at 2:00 p.m. before U.S. Magistrate Judge Craig B. Shaffer, where he will be advised of his rights and the charges pending against him.
According to an affidavit in support of the Criminal Complaint, on November 21, 2013, Drug Enforcement Administration agents, in partnership with several state and local law enforcement agencies, executed 16 federal search warrants pursuant to a single ongoing criminal investigation. Diaz, an alien who is lawfully in the United States, was present at one of the search locations, a residence in Cherry Hills Village. While concluding the security sweep of the residence, agents and officers found 5 assault rifles, one shotgun and 5 handguns, as well as a large cache of ammunition.
If convicted of being an alien in possession of a firearm the defendant faces not more than 10 years in federal prison, and up to a $250,000 fine.
This case is being investigated by the Drug Enforcement Administration (DEA), the Internal Revenue Service Criminal Investigations (IRS CI), the Denver Police Department (DPD), and other state and local law enforcement agencies. The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) is assisting with this portion of the investigation.
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 in the Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
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Statement Regarding Marijuana Enforcement ActionRead the Press Release
In response to multiple media questions regarding today’s drug enforcement action, the U.S. Attorney’s Office issued the following updated statement:
“While the investigation is ongoing, there are strong indications that more than one of the eight federal prosecution priorities identified in the Department of Justice’s August guidance memo are potentially implicated.”
Jeff Dorschner, Spokesman, U.S. Attorney’s Office
The initial statement issued regarding today’s enforcement action follows:
“The Drug Enforcement Administration, Internal Revenue Service Criminal Investigations, the Denver Police Department and state and local law enforcement are today executing lawfully obtained search warrants and seizure warrants. One important note: Although we cannot at this time discuss the substance of this pending investigation, the operation under way today comports with the Department’s recent guidance regarding marijuana enforcement matters. As this is an on-going investigation, no additional information will be made available.”
Jeff Dorschner, Spokesman, U.S. Attorney’s Office
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Longmont Man Arrested for Investment SchemeRead the Press Release
DENVER – Gary Snisky, age 47, of Longmont, Colorado, was arrested without incident yesterday on charges of mail fraud and money laundering, federal authorities announced. Snisky was indicted by federal grand jury in Denver on November 19, 2013, which remained under seal until his arrest and first court appearance. Snisky was arrested at Denver International Airport. He made his initial appearance this afternoon before U.S. Magistrate Judge Michael Hegarty, where he was advised of his rights and the charges pending against him. Snisky’s co-conspirator, Richard Greeott, plead guilty on October 7, 2013 to mail fraud and money laundering charges. As part of Greeott’s plea agreement, he agreed that his sentence will include an order of restitution in an amount up to $4,501,887.
According to the indictment and Greeott’s plea agreement, beginning in 2010 continuing through January 2013, Sniksy devised a scheme to defraud investors by false and fraudulent promises. Snisky operated a Colorado company called Colony Capital, LLC (“Colony Capital”), which purported to be a private equity firm offering investment opportunities in bonds, futures trading, and other offerings. Sometime in 2011, Snisky shut down Colony Capital and formed a company in Longmont, Colorado called Arete, LLC (“Arete”), which also purported to be a private equity firm offering similar investment opportunities.
Starting in July 2011, Snisky offered a 10-year investment model based on the purchase of Ginnie Mae bonds, which promised the investor a 10% upfront bonus and an annual return of 7%. Prior to April of 2012, Snisky began offering a 5-year investment model for the Ginnie Mae bond program, which promised a 6% annual return on the invested money. Between approximately July 2011 and January 2013, Snisky received more than $4,000,000 in investor money that was supposed to be invested in the Ginnie Mae bond program. Snisky did not purchase any Ginnie Mae bonds.
Additionally, in mid-2010, Snisky asked Richard Greeott, who was doing information technology work for Colony Capital, to develop an algorithm for a fully-automated trading system for trading in the futures market. By the end of 2012, Snisky knew that Greeott was still developing the Algorithm and was merely testing it by trading in a simulated environment and by making small trades in the futures market. At no time did Snisky, Greeott, or anyone else at Colony Capital or Arete make any real profit using the Algorithm. However, Snisky falsely led investors, potential investors, and financial advisors to believe that the Algorithm was being used by Colony Capital, and Arete, to profitably trade in the futures market. Based on these false statements, Snisky received more than $300,000 from investors to be invested in the futures trading program. Snisky did not invest this money as promised. Snisky also falsely boasted about Colony Capital’s and Arete’s success in the futures market in order to falsely bolster the companies’ overall appearance of success.
In connection with seizure warrants that were executed in this case, the government is seeking to forfeit over $1.9 million in currency seized from Gary Snisky and related LLC accounts and a commercial real property valued at approximately $400,000.00.
“The U.S. Attorney’s Office and federal law enforcement continue to fight investment fraud wherever we find it,” said U.S. Attorney John Walsh. “As this case shows, unscrupulous investment fraud schemes are all too common, and require law enforcement’s diligent, determined investigation and prosecution.”“Investment fraud schemes often involve individuals who appear extremely credible and trust worthy. When investigated by our special agents who specialize in following the money, these individuals are exposed as greedy and uncompassionate and have devastated the financial well-being of investors whose trust they betrayed,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
“The FBI will continue to work with our law enforcement partners to protect innocent investors and our economy from those who engage in these types of fraudulent schemes,” said FBI Denver Special Agent in Charge Thomas P. Ravenelle.
“The U.S. Postal Inspection Service will continue to vigorously pursue those who utilize the U.S. Mail to perpetrate fraud schemes and take consumers' hard earned money,” said Adam P. Behnen, Inspector in Charge of the U.S. Postal Inspection Service Denver Division. “We are appreciative of our quality law enforcement relationships with IRS Criminal Investigation and the Federal Bureau of Investigation for their hard work in this case.”
Snisky was charged with; 13 counts of wire fraud, which carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000 per count; five counts of money laundering, which carries a penalty of not more than 10 years in federal prison, and a fine of up to $500,000, per count. The indictment also includes an asset forfeiture allegation.
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, and Assistant U.S. Attorney Tonya Andrews is handling the forfeiture proceedings.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
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Mexican National Living Illegally in Denver Caught with over 50 Kilograms of MarijuanaRead the Press Release
DENVER – Joel Rodriguez Padilla, a/k/a Isaias Rodriguez Padilla, age 37, a Mexican national living in Denver, was indicted by a federal grand jury this week on immigration and drug charges, United States Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar Kibble announced. Padilla has been in custody since his arrest on a Criminal Complaint on October 8, 2013. The indictment was returned by a federal grand jury in Denver on November 5, 2013. Padilla appeared in U.S. District Court in Denver this morning before a Magistrate Judge, where he was arraigned on the indictment. A tentative trial date of January 13, 2014 has been set before U.S. District Court Judge William J. Martinez.
According to court documents, including the indictment and the affidavit in support of the original Criminal Complaint, on October 9, 2013, Padilla, a Mexican national, did unlawfully, knowingly and intentionally possess with intent to distribute 50 or more kilograms of marijuana. Further, on that same date, Padilla, an alien, was found in the United States after having been denied admission, deported and removed from the United States. Padilla faces an enhanced penalty because his deportation was subsequent to a conviction for an aggravated felony offense.
The indictment includes an asset forfeiture allegation. Upon conviction, Padilla could be ordered to forfeit the proceeds from his criminal conduct, including $60,365 in currency seized from his Denver home. Padilla also faces the forfeiture of his home, where the money as well as scores of kilograms of marijuana were found.
The investigation revealed that Padilla had been previously involved in and prosecuted for the trafficking 1.5 pounds of methamphetamine in October 2000. Agents also found that Padilla had been deported on a number of different occasions.
“Trafficking in marijuana for illicit sale – here, by a previously deported foreign national – is a serious federal crime,” said U.S. Attorney John Walsh. “This case falls squarely within guidance provided by the Department of Justice for federal prosecution of marijuana offenses.”
“Illegal re-entry after deportation and possession with the intent to distribute narcotics are serious federal violations,” said Kumar C. Kibble, special agent in charge of HSI Denver. “Our HSI special agents routinely partner with law enforcement nationally to help identify, locate, and ultimately pursue prosecution against these individuals. In many cases, these re-entry convictions lead to significantly enhanced prison sentences that help to deter further criminal activity.”
If convicted, Padilla faces not more than 20 years in federal prison, and up to a $250,000 fine for possession with intent to distribute more than 50 kilograms of marijuana. If convicted of illegal reentry of a deported alien subsequent to an aggravated felony conviction, Padilla faces not more than 20 years in federal prison, and up to a $250,000 fine.
This case was investigated by HSI, the U.S. Forest Service, the Adams County Sheriff’s Office, the North Metro Task Force, and the Westminster Police Department.
The defendant is being prosecuted by Special Assistant U.S. Attorneys Kirsten Sinclair and Geoffrey Rieman.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty.
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Pueblo Man Found Guilty of Tax Evasion, Bank Fraud and Interfering with IRS LawsRead the Press Release
DENVER – Michael Destry Williams, age 49, of Pueblo, Colorado, was found guilty by a jury late yesterday for tax evasion, structuring, bank fraud, and interfering with IRS laws, the U.S. Attorney’s Office, Internal Revenue Service – Criminal Investigation Division (IRS CI) and Treasury Inspector General for Tax Administration (TIGTA) announced. The guilty verdict was the result of a 6 day trial before U.S. District Court Judge Christine M. Arguello. Williams remained in the custody of the United States Marshals and is scheduled to be sentenced on January 27, 2014 at 3:30 p.m.
Williams was indicted by federal grand jury in Denver on March 22, 2012, followed by a superseding indictment on July 26, 2012.According to the indictment, superseding indictment and evidence presented at trial, Williams was self-employed as a general contractor focusing primarily on residential construction projects, including roofing, remodeling and the repair and restoration of residential structures sustaining fire and water related damage. He was also self-employed as a real estate investor involved in the purchase, renovation and resale (commonly known, as “fixing and flipping”) of residential properties. Williams operated under the name of Greenview Construction, Inc., a Colorado corporation.
From April 2005 and continuing through January 2008, Williams willfully attempted to evade a substantial amount of income tax and self-employment tax due and owing by him to the United States for calendar years 2005, 2006 and 2007. He failed to file income tax returns and failed to pay to the IRS income tax and self-employment tax. To conceal his income, Williams established and used trusts as part of his tax evasion scheme and structured over $90,000 in deposited funds from July 2008 through September 2008.
In November of 2009, Williams attempted to defraud a Colorado financial institution by depositing worthless fabricated United States Treasury checks for his own benefit. There were two false treasury checks totaling $55,000 payable to Greenview Construction. In February of 2010, there was a third fabricated United States Treasury check in the amount of $250,000 that Williams tendered to the El Paso County Court to settle a criminal misdemeanor case for which he had been sentenced to a jail term.
From October 2008 through December 2010, Williams mailed numerous frivolous correspondences to the Secretary of the Treasury as well as various IRS offices in an attempt to obstruct and impede the administration of the internal revenue laws. The obstructive efforts included attempts by Williams to target State of Colorado judicial officers who had presided over three separate state cases in which Williams was named as a defendant. In particular, Williams sent IRS criminal referrals accusing one of these judicial officers and the Clerk of the El Paso County District Court with committing criminal tax and related offenses.
“This defendant attempted to hide his income from the IRS, a ploy that doesn’t work,” said U.S. Attorney John Walsh. “The agents who investigated this case and the trial team who prosecuted the defendant deserve recognition for their hard work and successful outcome.”
“It’s only a matter of time -- when you willfully conceal income and interfere with IRS laws to this degree -- you will be investigated and brought to justice,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
“Without the outstanding teamwork demonstrated by the IRS Criminal Investigation, the U.S. Attorney’s Office in the District of Colorado and the Treasury Inspector General for Tax Administration, this conviction would not have been possible,” said P. Cordale Lamb, Special Agent in Charge in TIGTA’s Denver Office. “The conviction sends a strong message: those individuals who attempt to interfere with or impede the administration of Internal Revenue laws will be investigated and will be held accountable in a court of law.”
Williams was charged and found guilty of three counts of tax evasion, one count of structuring, two counts of bank fraud, three counts of fictitious obligations and one count of interfering with the administration of internal revenue laws. Tax evasion and structuring carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000 per count. Bank fraud carries a penalty of not more than 30 years in federal prison, and a fine of up to $1,000,000 per count. Fictitious obligations carries a penalty of not more than 25 years in federal prison, and a fine of up to $1,000,000 per count. Interfering with the administration of internal revenue laws carries a penalty of not more than 3 years in federal prison, and a fine of up to $250,000 per count.
This case was investigated by agents with IRS Criminal Investigation (IRS CI) and U.S. Treasury Inspector General for Tax Administration (TIGTA). The case is being prosecuted by Assistant U.S. Attorney Kenneth Harmon Department of Justice Tax Division Trial Attorney Kevin Sweeney.
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Utah Man Pleads Guilty for Threatening CEORead the Press Release
DENVER – Robert Hutchins, age 60, of Sandy, Utah, pled guilty yesterday before Chief U.S. District Court Judge Marcia S. Krieger to interstate communications involving a threat, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Hutchins appeared at the change of plea hearing free on bond. Hutchins is scheduled to be sentenced on February 10, 2014. He was originally indicted by a federal grand jury in Denver on July 10, 2013.
According to the stipulated facts contained in the plea agreement, in 2012, the United States Anti-Doping Agency (USADA) had been investigating allegations that cyclist Lance Armstrong had achieved his prodigious record by cheating; by “doping” and using drugs and other improper means to win. As the investigation heated up in the summer of 2012, Chief Executive Officer of USADA, Travis Tygart, received a barrage of negative public comment, mostly via emails, about USADA’s investigation. In August 2012, it was anticipated that USADA would announce its findings, including that Lance Armstrong would banned from cycling for life. On August 23, 2012, Lance Armstrong released a press statement that he would not challenge USADA’s findings. The negative emails intensified. On August 24, 2012, USADA, as predicted, made the announcement that Lance Armstrong would be banned from cycling for life and disqualified of all his competitive results from August 1, 1998, through August 24, 2012. This disqualification included being stripped of his seven Tour de France titles.
Among the members of the public who were angry over USADA’s methods and conclusions was the defendant, Mr. Hutchins. Beginning in July 2012, Mr. Hutchins sent two emails USADA voicing his displeasure. Those emails, while scathing in tone and full of invective, were not threatening.
On the evening of August 23, 2012, Mr. Hutchins crossed the line and made threats to Travis Tygart. The email was sent to one of USADA’s email addresses with the subject line “Travis Tygert [sic] Hope you have body guards and bullet proof vest.” The email read as follows:
Travis Tygert [sic], Hope you have body guards and bullet proof vest, your [sic] a dead man mother f@%&*#. You just don’t know what you’ve done!!!
You’re a** is f@%&*#.The email was traced to Mr. Hutchins in Sandy, Utah. As a result of the threatening email sent on August 23, 2012, Mr. Travis Tygart hired private security for himself and his family, and moved his family to a secure location while the FBI investigated the source of the threat.
Hutchins faces not more than 5 years in federal prison, and up to a $250,000 fine.
In an unrelated case, Gerrit Kuechle Keats, a Florida doctor, pled guilty on October 7, 2013 to sending threatening communications over the internet to Mr. Tygart for similar reasons. Keats is scheduled to be sentenced by U.S. District Court Judge R. Brooke Jackson on January 23, 2014.
This case was investigated by the FBI.
The defendant is being prosecuted by Assistant U.S. Attorney Valeria Spencer.
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Montrose County Man Is Sentenced to 10 Years in Federal Prison for Possession of Child PornographyRead the Press Release
DENVER – David Anthony Roesener, age 32, of Montrose, Colorado, was sentenced yesterday by Senior U.S. District Court Judge John L. Kane to serve 120 months (10 years) in federal prison for possession of child pornography, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Following his prison sentence, Judge Kane ordered Roesener to serve 20 years on supervised release. The defendant appeared at the sentencing hearing in custody, and was remanded at the conclusion of the hearing.
Roesener was first charged by Criminal Complaint on December 11, 2012. He was indicted by a federal grand jury in Denver on December 18, 2012. He pled guilty before Judge Kane on April 4, 2013. He was sentenced yesterday, November 4, 2013.
According to court documents, including the stipulated facts contained in the plea agreement, on November 11, 2011, and FBI Task Force Officer, operating in an undercover capacity in New Haven, Connecticut, accessed the internet using a peer-to-peer program. The task force officer observed a screen name connected to the network that was sharing files which depicted images and videos of child pornography. Further investigation revealed that the screen name resolved to an Internet Protocol (IP) address in Montrose, Colorado.
A search warrant was served on that address. FBI agents and task force officers found images and videos on Roesener’s computer. The images included prepubescent children engaging in sexually explicit conduct, some of which depicted sadistic and masochistic conduct. Among the material seized were various images and videos of unclothed male children bound and gagged, taped to walls, and performing sex acts on adult males and other children.
“The defendant in this case collected images that exploited vulnerable children sexually,” said U.S. Attorney John Walsh. “The 10 year prison sentence is more than appropriate given the types of images this defendant collected.”
“The FBI remains committed to ensuring those responsible for exploiting innocent children are actively investigated and brought to justice,” said Thomas P. Ravenelle, Special Agent in Charge of the FBI’s Denver Division Field Office.
This case was investigated by the FBI.
The defendant was prosecuted by Assistant U.S. Attorney Michelle Heldmyer.
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Hotchkiss Man Sentenced for Theft of Detective's Assault Rifle and Tactical GearRead the Press Release
Detective was in Denver receiving cancer treatment at time of crime
DENVER -- Keaton Bell, age 25, of Hotchkiss, Colorado, was sentenced today in U.S. District Court in Grand Junction by Senior U.S. District Court Judge John L. Kane to serve 5 years’ probation, with the first 12 months in community corrections for possession of stolen firearms and ammunition, and possession of machine gun, the United States Attorney’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Eagle County Sheriff’s Office announced. Bell was also ordered to serve 100 hours of community service. Bell, who appeared at the sentencing hearing in custody, will be released today and will surrender to the community corrections facility when there is an opening.
Bell was indicted by a federal grand jury in Denver on February 4, 2013. He pled guilty before Senior Judge Kane on May 30, 2013. He was sentenced today, November 4, 2013.
According to court documents, including the stipulated facts contained in the plea agreement, in October 2012, an Eagle County Sheriff’s Office detective and SWAT team member was in Denver undergoing cancer treatment. He lived in Gypsum, Colorado, with his girlfriend, who visited him periodically in Denver during his cancer treatment. The detective’s girlfriend gave her girlfriend permission to stay at the detective’s Gypsum home while the two were in Denver for the cancer treatment. The person staying at the home invited her boyfriend, Keaton Bell, to stay with her in Gypsum.
While Bell and his girlfriend were at the home between October 5 through October 7, 2012, they got into a fight. Bell eventually left, taking the detective’s SWAT equipment, including a machine gun, a hand gun, ammunition and tactical gear, which had been stored in the basement of the home. Some of the equipment and weapons were owned by Eagle County.
At the time the crime was reported, Bell was reportedly in Alberta, Canada, working for a mining company. Officers went to Bell’s home in Hotchkiss, Colorado on November 2, 2012, and were unable to reach anyone. Investigators continued to locate Bell when he responded via text about his location. He then called the officers when he became available. Officers asked for permission to search Bell’s pickup. He granted them permission as along as a family member was present. During the search officers found, among other things, a leg holster for a taser that the Special Operations Unit of the Sheriff’s Office, to which Hall was assigned, uses. Hall confirmed the leg holster was his. Officers then issued a state warrant for Bell’s arrest.
On November 20, 2012, Bell was reported as a suspicious person at a Wal-Mart in Glenwood Springs, Colorado, and police were called. The Glenwood Springs Police Department arrested Bell on the Eagle County arrest warrant. Investigators confirmed that Bell stole from Hall a Colt rifle, a Glock, a .380 pistol, magazines, and a suppressor for the rifle. They also found out that once Bell returned from Canada he then put the stolen items into his truck.
The Eagle County Sheriff’s Office obtained a state search warrant for the truck, and found a camouflage-colored rifle case under the driver’s side rear wheel well which contained the following items stolen from Hall’s home: a Colt M4 Commando .223 Fully Automatic Rifle, an EOTech Sight System, a Surefire Light System, a GemTech Halo Suppressor, a Glock 9mm model 26 semi-automatic pistol, and two .223 magazines. They also found the Bersa .380 with holster under the hood and in the engine compartment of the vehicle.
The Colt rifle is imprinted with information that the weapon is fully automatic. Further, the firearm was clean when it was stolen and dirty when recovered, evidencing that it had been fired.
The Eagle County detective who was the victim of this crime has since passed away from complications related to his cancer.
“The defendant stole special equipment designed solely for the use of law enforcement,” said U.S. Attorney John Walsh. “In the wrong hands, that equipment can be used for serious wrong-doing. Thanks to the hard work of the Eagle County Sheriff and the ATF, they were able to identify and arrest the person responsible for the theft. I would also like to give my condolences to the detective’s family and the Eagle County Sheriff’s Office, as I understand he recently passed away – Eagle County has lost a tremendous law enforcement officer.”
“Detectives from the Eagle County Sheriff’s Office worked long and hard putting together the case against Keaton Bell. This included searches of vehicles and structures in other counties of Colorado,” said Eagle County Sheriff Joseph Hoy. “We appreciate the assistance of local, state, and federal law enforcement agencies during this investigation. All Sheriff’s Office and Detective Kyle Hall’s personal weapons were recovered from Bell. Unfortunately, Detective Hall passed away on October 25th from complications of his cancer. He did not get a chance to see Mr. Bell be sentenced for his crimes.”
This case was investigated by the Eagle County Sheriff’s Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Federal Bureau of Investigation (FBI).
The defendant was prosecuted by Assistant U.S. Attorney Michelle Heldmyer.
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Pastor Pleads Guilty to Wire Fraud as Part of A $5 Million Ponzi SchemeRead the Press Release
DENVER – Pastor Charles Lawrence Kennedy, Jr., age 71, of Tampa, Florida pled guilty before U.S. District Court Judge Christine M. Arguello yesterday to one count of wire fraud federal law enforcement authorities announced. Kennedy, who is free on a bond, is scheduled to be sentenced by Judge Arguello on January 22, 2014. Kennedy was indicted by a federal grand jury in Denver on March 22, 2012, along with co-defendants Stanley Wayne Anderson of Arvada, Colorado and Edwin Alexander Smith of Denver, Colorado. Smith pled guilty to one count of wire fraud on August 27, 2013. Anderson’s trial is scheduled for January 13, 2014.
According to the facts contained in the indictment as well as the stipulated facts contained in the plea agreement, beginning in October of 2005 and continuing through December 2008, Anderson, Smith and Kennedy together with each other, and aiding and abetting other persons known and unknown to the Grand Jury, devised a scheme to defraud investors.
Anderson and Smith resided in Colorado and conducted business through “CFO-5, LLC” and “Trinity International Enterprises, Inc”, two companies they controlled. Trinity had no business operations apart from soliciting investment funds related to an investment program. Anderson was the chairman and chief executive officer of CFO-5 and Trinity. Smith was the secretary of CFO-5 and president of Trinity. Kennedy resided in Florida where he worked as a pastor and conducted business through a company identified as “Keys to Life Corporation". Kennedy through a formal partnership with Trinity assisted Anderson and Smith in soliciting investment funds.
They solicited investors' funds for use in an investment program where significant profits would supposedly be generated through the trading of European medium term notes ("MTN program"). When in fact, the MTN program did not exist. Furthermore, they represented that their MTN program would pay nearly immediate returns in amounts ranging from 200 to 1000 percent.
They raised approximately $5 million dollars from approximately 100 investors nationwide over the course of the scheme. The investors' funds were not used to trade in financial instruments, but were instead misappropriated by Anderson, Smith and Kennedy for unauthorized uses. Investors, with the exception of those who received Ponzi scheme-like payments, that is, money taken from one investor to compensate another, lost their total investments. Anderson and Smith generally commingled and deposited investors' funds into bank accounts controlled by Anderson and Smith.
Kennedy began soliciting investments in December of 2005 from fellow pastors and members of their congregations through his company Keys to Life Corporation and falsely promised that for every $1,000 invested, the minimum return would be $1,000,000 which would be paid within 90 days. From December 2005 through April 2006, Kennedy collected $460,000 from nine investors and forwarded only $145,000 to Trinity for use in the investment pool, and as a result has agreed to pay $315,000 in restitution. Kennedy in fact took a portion of investor funds for his own personal benefit.
“The defendant used his position as a Pastor to solicit funds from investors with promises of substantial returns,” said U.S. Attorney John Walsh. “Instead of investing the funds, he and others used the money for unauthorized purposes. The defendant’s abuse of his position of trust led to 100 people losing their hard earned money, for which the defendant will now face the consequences.”
“Investors should always be wary and cautioned of investment proposals that promise high returns on their investment. ‘If it seems too good to be true’, it is probably an investment scheme,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
“The FBI has made protecting innocent investors a priority,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “Therefore, we will vigorously investigate those who engage in schemes to defraud members of our communities.”
“Fraud schemes victimize honest hard working individuals,” said Adam P. Behnen, Inspector in Charge, U.S. Postal Inspection Service, Denver Division. “Our inspectors will take every action possible to ensure that people who use the mails for criminal gain are caught and brought to justice.”
Wire fraud carries a penalty of not more than 20 years imprisonment, and up to a $250,000 fine, per count.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 Timothy Neff.
The charges in the indictment are only allegations, and the defendants are presumed innocent unless and until proven guilty.
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Colorado Springs Man and Member of "North American May-Boy Love Association" Indicted by Federal Grand JuryRead the Press Release
DENVER – A federal grand jury in Denver recently returned an indictment charging Clifton Brett Bennett, age 55, of Colorado Springs, Colorado, with one count of receipt of child pornography and one count of possession of child pornography, the U.S. Attorney’s Office, and the U.S. Postal Inspection Service, the Colorado Springs Police Department -- Internet Crimes Against Children Task Force (ICAC) announced. Bennett appeared in U.S. District Court in Denver on October 29, 2013. He did not contest the government’s request that he be detained. He was also arraigned. A tentative trial date of January 6, 2014 before U.S. District Court Judge Christine M. Arguello has been set.
According to the indictment, between November 1, 2008 and April 15, 2011 Bennett knowingly received material that contained child pornography. Further, on January 23, 2013, Bennett knowingly possessed child pornography. According to a state affidavit of probable cause, a United States Postal Inspector contacted an ICAC detective regarding a child pornography investigation. Postal Inspectors had identified an individual who lived in Colorado Springs who made over $4,000 in purchases for over 100 child pornography videos over a number of years. Follow up investigation determined the individual was Clifton Bennett.
A search warrant was executed at Bennett’s residence. During the execution of the warrant a detective conducted a forensic preview of the computer, and found images of prepubescent boys who were nude and posed in sexually explicit positions with their genitals exposed. They also found DVDs containing child pornography – many of which were delivered via U.S. Mail from New York. He also allegedly bought and downloaded child pornography as well. Investigators also determined that Bennett was a member of the “North American Man-Boy Love Association.” Following the execution of the search warrant Bennett was arrested and held in state custody. With the return of a federal indictment the state dismissed their case in its entirety.
If convicted of receipt of child pornography the defendant faces not less than 5 years and not more than 20 years in federal prison, and up to a $250,000 fine. If the defendant has a prior qualifying child exploitation conviction, he faces not less than 15 years and not more than 40 years imprisonment, as well as a fine of up to a $250,000. 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. If the defendant has a prior qualifying child exploitation conviction, he faces not less than 10 years and not more than 20 years imprisonment, as well as a fine of up to $250,000. Bennett has a prior state conviction for Sexual Exploitation of Children, for which he served time in jail.
“The defendant in this case obtained some of his child pornography through the U.S. Mail,” said U.S. Attorney John Walsh. “Regardless of how defendants obtain their explicit material showing children being sexually abused, we will use every tool available to prosecute them.”
“Protecting children from these egregious crimes remains a top priority for the U.S. Postal Inspection Service,” said Adam P. Behnen, Inspector in Charge, U.S. Postal Inspection Service, Denver Division. “We continue to aggressively investigate, apprehend and assist in the prosecution of individuals who seek to sexually exploit children via the U.S. Mail.”
“Children are not a commodity. They remain our most precious resource and need to be protected,” said Colorado Springs Police Chief Peter T. Carey. “I applaud the diligence of our ICAC Unit in safeguarding our children from those who prey on them.”
This case was investigated by the United States Postal Inspection Service and the Colorado Springs Police Department -- Internet Crimes Against Children Task Force (ICAC).
Bennett is being prosecuted by Assistant U.S. Attorney Valeria Spencer.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
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."
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Colorado Man Pleads Guilty to Defrauding Elderly VictimRead the Press Release
DENVER – Akihiko Siegfried, age 54, formerly of Denver, CO, pled guilty before U.S. District Court Judge Philip A. Brimmer late Monday to one count of mail fraud and one count of money laundering, federal law enforcement authorities announced. Siegfried, who is currently in custody, is scheduled to be sentenced by Judge Brimmer on March 10, 2014. Siegfried was indicted by a federal grand jury in Denver on June 17, 2013.
According to the facts contained in the indictment as well as the stipulated facts contained in the plea agreement, in January of 2008, Siegfried knocked on the door of the elderly victim’s residence and when the door opened Siegfried pretended to be distraught and was crying. Siegfried falsely told the victim that Siegfried’s parents had just died in a car crash and that he had no money and no family to turn to for help. Siegfried asked to borrow money. The victim was then an 89-year-old widower of Japanese descent with little family, asked Siegfried if he was Japanese which he replied that he was. He felt sorry for Siegfried and, in part because of their shared Japanese heritage, decided to help Siegfried.
Siegfried borrowed from the victim several times and in the middle of 2008 falsely told the victim he would inherit substantial money as a result of his parents’ death, but that it would be tied up in probate for some time and he needed money for paying the associated fees and taxes. In fact, Siegfried’s father died in the 1990s, his mother died in 2002, and there was never any inheritance held up in probate; however, from mid-2008 through March of 2013 Siegfried repeatedly falsely told the victim the inheritance was held up in probate.
From March of 2009 through March of 2013, Siegfried frequently spent time as an inmate in the Colorado Department of Corrections. When he was in jail during that time frame, he repeatedly called and sent letters through the mail asking for money, directing the victim to deposit and wire transfer money to Siegfried’s inmate account with the Colorado Department of Corrections. Siegfried told the victim he needed the money because he was required to pay for his diabetes medicine while he was in jail and because he needed to pay more probate fees and taxes for his purported inheritance. In fact, Siegfried has never been diagnosed with diabetes, has never taken medication for diabetes, and inmates of the Colorado Department of Corrections are not required to pay for medicine prescribed to them while they are in custody.
During the entire scheme, Siegfried told the victim he would repay all of the money Siegfried received his inheritance. Siegfried agrees that, from January 2008 through March 2013, as a result of the scheme, the victim provided at least $400,001 to him and that his sentence will include an order of restitution of at least $400,001 and up to $560,861.
In October of 2012, when Siegfried was released from prison, he received a check payable to himself in the amount of $49,655.30 from the State of Colorado, Department of Corrections. At least $10,000 of this money was proceeds of the fraud scheme involving the elderly victim.
“All too often, con men prey on our senior citizens and steal their life savings,” said U.S. Attorney John Walsh. “Protecting the public – and particularly seniors – from fraud is one of the top priorities of this office. The defendant in this case will face the full weight of the law at sentencing.”
“Individuals who commit crimes against the vulnerable and elderly with this degree of trickery, fraud and deceit will to be punished to the fullest extent of the law,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
“The FBI will continue to aggressively pursue con-artists who prey upon the elderly and defraud innocent victims of their life’s savings,” said FBI Denver Special Agent in Charge Thomas Ravenelle.
Mail fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000 per count. Money Laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000 per count.
This case was investigated by agents with IRS Criminal Investigation, Federal Bureau of Investigation (FBI), and the Colorado Department of Correction. The case is being prosecuted by Assistant U.S. Attorney Pegeen Rhyne. AUSA James Russell is handling the asset forfeiture.
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Littleton Police Officer Pleads Guilty to Firearm and Drug Trafficking CrimesRead the Press Release
DENVER – Jeffery Allan Johnston, age 46, of Parker, Colorado, today pled guilty before U.S. District Court Judge Philip A. Brimmer to one count of being a prohibited person in possession of firearms and one count of possession with intent to distribute MDMA (commonly known as Ecstasy), and admitted the forfeiture allegation in the Information, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. At the conclusion of the hearing Judge Brimmer ordered that he be immediately remanded into custody. Johnston is scheduled to be sentenced by Judge Brimmer on February 3, 2014.
Johnston was first charged by Criminal Complaint on July 19, 2013. He was arrested at his Parker home on July 22, 2013. He was charged by Information on August 15, 2013, where he waived his right to be indicted by a federal grand jury. He pled guilty today, October 28, 2013.
According to the stipulated facts in the plea agreement, as well as other court documents, in April 2012, a source told law enforcement that he (the source) attended a party at Johnston’s home. While at the party, the source claims he observed behavior consistent with the use of illegal drugs. On July 16, 2013, a source received a message from Johnston. In cooperation with the FBI, the source returned Johnston’s call and had a coded conversation about providing Johnston with MDMA. On July 19, 2013, the source, working with the FBI, traveled to Johnston’s residence. Through monitored and recorded calls before the meeting, the source had agreed to deliver 75 MDMA pills to Johnston. The source and Johnston then met at Johnston’s residence. The exchange of money and MDMA took place in the kitchen of the residence. Johnston received approximately 9.9 grams of MDMA, in the form of 37 pills and 6.3 grams of powder MDMA. Johnston paid the source $1,300 for the drugs. Following the transaction, Johnston was taken into custody and a federal search warrant was executed at the residence.
During the search agents found the MDMA used during the controlled exchange in a kitchen drawer. They also found a stainless steel Colt Officers Model .45 caliber pistol located in a small black bag, loaded with seven rounds in the magazine and one in the chamber located above the kitchen drawer that contained the drugs. Investigators eventually located a small amount of cocaine, steroids, hundreds of prescription pills, additional firearms, and hundreds of rounds of ammunition in the residence. They also found 8 other firearms, including an AR-15 and two 12 gauge shotguns. At all pertinent times, the defendant was employed as a sworn police officer.
Johnston faces not more than 10 years in federal prison, and a fine of up to $250,000 for being a prohibited person in possession of firearms (specifically an unlawful user of Schedule I controlled substances, MDMA, MDA and GHB while knowingly possessing multiple firearms). He also faces not more than 20 years in federal prison, and a fine of up to $1,000,000 for possession with intent to distribute MDMA (Ecstasy).
This case was investigated by the Federal Bureau of Investigation (FBI).
Johnston is being prosecuted by Assistant U.S. Attorneys David Conner and Guy Till.
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Trespasser Fined $255,000 for Unauthorized Removal and Sale of Sand and Gravel from Public LandRead the Press Release
DENVER – Today, the United States Attorney for the District of Colorado, John F. Walsh, announces the recovery of $255,000 as part of a settlement of allegations that Merial I. Currier and Currier Gravel Pit, Inc. operated a gravel mining pit on public land, without obtaining authorization from the Bureau of Land Management (BLM).
The United States alleges that Currier trespassed on BLM-administered land, as follows. Between 1991 and 2010, Currier operated a 9-acre gravel mining pit on BLM-administered public land near Collbran, Colorado, located in the NE1/4 of the SE1/4 of Section 12, Township 9 South, Range 93 West of the Sixth Principal Meridian, Colorado. Currier operated this pit without ever obtaining the necessary authorization from the BLM to remove and sell sand and gravel from the pit. Currier removed an estimated 153,439 short tons of sand and gravel -- over 300 million pounds -- and sold it. The United States alleges Currier or her predecessor in interest, Carleton Currier, also constructed a 4-acre reservoir on BLM land near Colbran, again without any permission or authorization from the BLM.
“Taking minerals from public land without a permit harms the people of the United States,” said U.S. Attorney John Walsh. “If you do it, there will be swift and certain consequences.”
“The BLM manages the public’s land for the benefit of the public. This settlement reaffirms the importance of people understanding where public land boundaries are and having the proper permits to operate on public land,” said Colorado Acting Assoc. State Director John Mehlhoff.
A settlement was reached whereby Currier will pay $255,000 for the estimated 153,439 short tons of sand and gravel that Currier removed and sold. In addition to the monetary settlement, Currier also agreed to ensure that reclamation is performed for the damaged land and to dismiss an appeal contesting the United States’ ownership of the trespassed land that she had previously filed with the Interior Board of Land Appeals.
Currier has denied the allegations of trespass. The settlement agreement shall not be construed as an admission of liability, wrongdoing, or guilt on the part of Currier.
This case was handled by Assistant U.S. Attorney Amanda Rocque.
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Colorado Springs Man Indicted and Held Without Bond for the Sexual Exploitation of ChildrenRead the Press Release
DENVER – Justin Craig Smith, age 32, of Colorado Springs, Colorado, was indicted by a federal grand jury in Denver for the sexual exploitation of children, the distribution of child pornography, and the possession of child pornography, United States Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar Kibble announced. The federal grand jury indictment was handed down in August. Smith, who was on bond for state charges since December 2012, made his initial appearance in federal court on October 11, 2013. He was ordered held without bond after a hotly contested hearing on October 17, 2013. On that date he was also arraigned.
According to the indictment as well as a proffer given by the government in open court during the detention hearing, from July, 2010 through April, 2011, Smith attempted and did use two minors to engage in sexually explicit conduct for the purpose of producing child pornography. On May 7, 2012, Smith allegedly knowingly distributed and attempted to distribute child pornography. Lastly, on December 5, 2012, he was found in possession of child pornography.
In December of 2012, local law enforcement executed a search warrant at Smith’s Colorado Springs residence after an investigation revealed that he was using a peer-to-peer system to share child pornography. During the subsequent investigation it was determined that Smith had photographed his sexual assault of a minor child, aged 8 years old and taken lascivious photographs of another child who is now 12 years old for a period of years. The defendant also made his young victims watch videotapes of child pornography. Further forensic evaluation of Smith’s computer not only uncovered the images of his sexual molestation, it also contained one of the largest collection of toddler videos that the forensic analyst has ever seen.
After the December 2012 search warrant was executed, Smith was arrested by the Colorado Springs Police on state charges of molestation. That case is pending.
“Mr. Smith engaged in the sexual assault and exploitation of two young children to produce child pornography,” said U.S. Attorney John Walsh. “This case should send a strong message to those who sexually prey on our children that they will get caught and they will be punished.”
“Only those predators who produce child pornography really know what perverted logic they use to rationalize the horrific trauma they permanently inflict on innocent children,” said Kumar C. Kibble, special agent in charge of HSI Denver. “However, our special agents with Homeland Security Investigations derive great satisfaction from rescuing these children from their living nightmare, and pursuing prosecution against their victimizers.”
If convicted of the sexual exploitation of children, Smith faces not less than 15 years, and not more than 30 years in federal prison, as well as a fine of not more than $250,000, per count for each of the two counts. If convicted of distribution of child pornography, the defendant faces not less than 5 years, and not more than 20 years in federal prison, as well as a fine of up to $250,000. If convicted of possession of child pornography the defendant faces not more than 10 years imprisonment, and up to a $250,000 fine.
This case was investigated by Homeland Security Investigations (HSI),with cooperation from the Colorado Springs Police Department and the Internet Crimes Against Children Task Force (ICAC).
Smith is being prosecuted by Assistant U.S. Attorney Valeria Spencer.The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
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."
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Stevie Marie Vigil Pleads Guilty to Purchasing Firearm for Evan EbelRead the Press Release
DENVER -- Stevie Marie Anne Vigil, age 22, of Commerce City, Colorado, pled guilty this afternoon before U.S. District Court Judge Christine M. Arguello to the one and only count of the indictment, knowingly transferring a firearm to a convicted felon, United States Attorney John Walsh, 18th Judicial District Attorney George Brauchler and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Acting Special Agent in Charge Luke Franey announced. Vigil was indicted on August 8, 2013. Today’s guilty plea did not involve a plea agreement. The defendant pled guilty to the indictment as charged. Vigil is scheduled to be sentenced by Judge Arguello on January 16, 2014 at 1:30 p.m.
According to the indictment, on March 8, 2013, Vigil knowingly disposed of and transferred a firearm to Evan Ebel, knowing and having reasonable cause to believe that Evan Ebel had been convicted of a crime punishable by imprisonment for a term exceeding one year.
“As this horrifying case starkly highlights, purchasing a firearm for a felon can and likely will result in tragedy,” said U.S. Attorney John Walsh. “For that reason, acting as a ‘straw purchaser’ of guns is also a grave federal felony, one that this office will prosecute to the full extent of the law. The defendant here has admitted her guilt to committing this crime, a crime that led directly to the murder of an innocent pizza delivery driver, Nate Leon, and the Colorado Department of Corrections Executive Director Tom Clements.”
“Stevie Vigil gave a known and dangerous felon a firearm that he later used to murder Mr. Leon and Mr. Clements,” said George H. Brauchler, District Attorney for the 18th Judicial District. “Today, she is being held accountable for her role in helping to murder two good men. Mr. Leon was a dedicated family man who had the bad luck to be working hard one night. Mr. Clements tirelessly devoted his career to improving the lives of prisoners. Providing a firearm to a felon like Evan Ebel is a deplorable and dangerous act which can be a death sentence for a complete stranger.”
“We know through our investigation that straw purchasing is a major source of crime guns,” said Denver Acting Special Agent in Charge Luke Franey. “ATF will continue to work with our law enforcement partners to stop the illegal purchase and transfer to violent criminals.”
Vigil faces not more than 10 years in federal prison, and a fine of up to $250,000.
The indictment is a result of a joint federal and state investigation involving multiple agencies, including: Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Colorado Bureau of Investigation (CBI), El Paso County Sheriff?s Office, the Denver Police Department, the Federal Bureau of Investigation (FBI), the Texas Rangers, the Wise County, Texas Sheriff’s Department, the Texas Department of Public Safety, and the Colorado Department of Corrections.
Vigil is being prosecuted by Assistant U.S. Attorney Richard Hosley, Chief of the U.S. Attorney’s Major Crimes Section, and Special Assistant U.S. Attorney Mark Hurlbert, Assistant District Attorney for the 18th Judicial District.
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Eric and Ryan Jensen Plead Guilty to All Counts of Introducing Tainted Cantaloupe into Interstate CommerceRead the Press Release
Click here for a copy of the Jensen plea agreement
DENVER -- Eric Jensen, age 37, and Ryan Jensen, age 33, brothers who owned and operated Jensen Farms, located in Granada, Colorado, pled guilty this morning before U.S. Magistrate Judge Michael E. Hegarty to all six counts of the government’s Information which charged them with introduction of adulterated cantaloupe into interstate commerce, United States Attorney John Walsh and Food and Drug Administration – Office of Criminal Investigation Special Agent in Charge Patrick Holland announced. The defendants are scheduled to be sentenced by Magistrate Judge Hegarty on January 28, 2014 at 9:00 a.m. Eric and Ryan Jensen were first charged by Information on September 24, 2013. They made their initial appearance in U.S. District Court in Denver on September 26, 2013.
According to the stipulated facts in the plea agreement, as well as other court documents, Eric and Ryan Jensen were responsible for a farm in Granada, Colorado, where they grew, picked, packaged, sold and shipped cantaloupe. In six separate shipments, the cantaloupe produced by the Jensens bore a poisonous bacteria, Listeria monocytogenes, which rendered it injurious to health.
The court documents further state that the defendants set up and maintained a processing center where cantaloupes were taken from the field and transferred to a conveyor system for cleaning, cooling and packaging. The equipment should have worked in such a way that the cantaloupe would be washed with sufficient anti-bacterial solutions so that the fruit was cleaned of bacteria in the process.
In May of 2011 the Jensen brothers allegedly changed their cantaloupe cleaning system. The new system, built to clean potatoes, was installed, and was to include a catch pan to which a chlorine spray could be included to clean the fruit of bacteria. The chlorine spray, however, was never used. The defendants were aware that their cantaloupes could be contaminated with harmful bacteria if not sufficiently washed. The chlorine spray, if used, would have reduced the risk of microbial contamination of the fruit.
Investigation by the FDA and the Center for Disease Control (CDC) determined that the defendants failed to adequately clean their cantaloupe. They then maintained the fruit in unsanitary conditions . Their actions allegedly resulted in at least six shipments of cantaloupe contaminated with Listeria monocytogenes being sent to 28 different states. The CDC tracked the outbreak-associated illness and determined that people living in 28 states consumed contaminated cantaloupe, resulting in at least 33 deaths and 147 hospitalizations. Further, one woman pregnant at the time of her outbreak-related illness had a miscarriage. Ten additional deaths not specifically attributed to Listeriosis occurred among persons who had been infected by eating outbreak-related cantaloupe.
“The defendants have now admitted that they failed to protect the public from deadly bacteria on their cantaloupe, in violation of the law and critical FDA requirements,” said U.S. Attorney John Walsh. “Their actions resulted in tragedy nationwide, and profound economic consequences for an entire industry, and has exposed them to these serious criminal consequences.”
“According to CDC estimates, roughly 48 million Americans get sick, 128,000 are hospitalized, and 3,000 die of foodborne diseases each year. I applaud the U.S. Attorney’s Office for the District of Colorado for standing up for the 147 known victims in this case,” said Patrick J. Holland, Special Agent in Charge of the FDA—Office of Criminal Investigations. Prosecutions like this heightened awareness among food growers, processors and distributors and demonstrate the critical role they play in the health and safety of every American.”
Both defendants have pled guilty to six counts of adulteration of a food and aiding and abetting. If convicted, each defendant faces not more than one year in federal prison, and a fine of up to $250,000 per count.
This case was investigated by the FDA -- Office of Criminal Investigations, the Center for Disease Control and the State of Colorado Department of Public Health and Environment.
The defendants are being prosecuted by Assistant U.S. Attorney Jaime Pena.
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Remarks Investiture of Kenneth Gonzales to the United States District Court District of New MexicoRead the Press Release
John Walsh
United States Attorney
District of ColoradoIt's a great honor for me to speak here on behalf of the U.S. Attorney's community and the Department of Justice at the investiture of a great friend, Ken Gonzales. We have a several U.S. Attorneys here, at their own expense: Sandy Coates from Oklahoma City, Ken Magidson from Houston, and Steve Yarbro, Acting U.S. Attorney in New Mexico.
Now, standing before all these judges makes me mindful of my duty of candor as an officer of the court. For that reason, I am duty bound to tell you that for Ken’s fellow U.S. Attorneys, this is one of those bittersweet moments we all face in life.
First and foremost, we U.S. Attorneys feel great happiness, satisfaction and pride in Ken taking on this new position for which he is so remarkably well suited. We also are happy for the District of New Mexico. You are formally inducting today a judge whom I am confident will over time become a towering figure – though a quiet and unassuming one – in the history of this district. This is a judge destined for great things, and for great service to the people of New Mexico and the nation.
But at the same time, speaking as an officer of the court and as representative of the 93 U.S. Attorneys around the United States, it's hard not feel a certain wistfulness. None of you will be surprised to hear that Ken has always stood out among U.S. Attorneys nationally, and has enjoyed the particular respect and appreciation his colleagues.
That's not because he was the loudest. He was not. It's not because he was the best connected back East and aiming for the reins of power in DC. He was not. It is not because he pushed his way to the limelight in front of every issue. He did not. In fact, the affection and profound respect that Ken Gonzales has earned nationally flowed precisely from the fact that he was and did none of those things. Instead, Ken quietly and effectively answered the call when needed, no matter how difficult the assignment, and without expectation of personal reward. He brought a firm professionalism, steady judgment and a bottomless well of integrity to the job that together commanded our attention and compelled our admiration. He was, when all is said and done, a U.S. Attorney's U.S. Attorney -- an example for all of us of how to do the job.
Of course, all of us as U.S. Attorneys know that our time in these positions is comparatively short – unlike, say, the service of U.S. District Judges. In Ken’s case, we all knew he was bound for bigger things. I know I speak for all us in celebrating the fact that Ken will now have an opportunity to serve the public in a place of enormous responsibility and authority, where he can bring to bear all the greatness of his mind and spirit to serve the public, without regard to the shifting winds of politics and elections.
On a personal note, Ken has been a constant friend and source of counsel for me over these years as well, and I expect will continue to be. From the day that Ken showed up at my swearing in as U.S. Attorney three years ago in Denver until a few weeks ago at the 10th Circuit Bench and Bar conference, Ken has been for me one of those crucial friends that we are all lucky to have -- the friend who keeps your feet on the ground, who provides a sense of perspective and context, who makes hard times easier, and who keeps the good times from going to your head. I know that Ken played that role not just for me, but for many others.
And what better temperament and frame of mind could there be than that for a United States District Judge? So, on behalf of the U.S. Attorney's community, let me say to Chief Judge Armijo: The District of New Mexico is getting a tremendous gift in Ken Gonzales. I know you will use it well.
By the way, I thought it was only appropriate that Ken will be starting his time as a U.S. District Judge in Las Cruces, where he started his career as an Assistant U.S. Attorney, and also where border issues are so important. Ken talked to me constantly about the intense border challenges this district faces. But I thought it was odd you moved him to the Southern border, as in our conversations he was always talking to me about New Mexico's troublesome northern border!
Eric Holder, the Attorney General of the United States, was unable to make it here today because of all the hubbub y algarabía right now in Washington. He sends both his deep regrets and a letter that he asked me to read:
[Read letter]
On that note of national recognition and appreciation, let me conclude.
Ken, felicitaciones. Vamos a echarte de menos, amigo. Suerte, y nos vemos pronto.
U.S. Attorney John Walsh Issues Statement About Conviction of War Criminal "John Doe" Following Week Long Jury TrialRead the Press Release
“After a comprehensive investigation and an emotional jury trial, John Doe, a/k/a Kefelegn Alemu Worku, has been convicted of identity theft and lying to the United States government to gain entry and ultimately become a naturalized citizen. As the United States proved at trial, the defendant was in fact a war criminal, responsible for the persecution, torture and murder of defenseless people in the late 1970s in Ethiopia during the “Red Terror.” At trial, the United States presented as witnesses several of the victims the defendant had personally tortured. Their testimony was chilling, as was the fact that the defendant at trial sat with his back turned to them as they testified, until ordered by the Court to turn around so that his victims could identify him.
“Although no order of a U.S. Court can undo the crimes perpetrated by the defendant in Ethiopia, this trial offered Alemu Worku’s victims the opportunity to speak the truth bravely for all to hear and to see that a measure of justice would be done, at long last. As a result of defendant’s conviction, U.S. District Court Judge John L. Kane today immediately stripped Alemu Worku of his unlawfully obtained citizenship.
“I would like to recognize the outstanding work of Homeland Security Investigations Special Agent Jeff Lembke, Special Assistant U.S. Attorney Lily Alves, and lead prosecutor Assistant U.S. Attorney Brenda Taylor, who worked diligently and with great purpose and skill. In the end, their efforts and the courage of the victims who testified have ensured that Alemu Worku is no longer was able to hide ‘in plain sight’.”
John Walsh
United States Attorney, District of Colorado####
Grand Junction Man Found Guilty of Sending Interstate Threatening CommunicationsRead the Press Release
Defendant threatened to kill children, police officers and their families
DENVER – Kenneth Royal Wheeler, age 32, of Grand Junction, Colorado, was found guilty yesterday following a four-day jury trial before U.S. District Court Judge William J. Martinez of two counts of sending interstate threatening communications, U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar Kibble announced. The jury deliberated for 75 minutes before reaching a verdict. Wheeler is scheduled to be sentenced by Judge Martinez on January 15, 2014.
Wheeler was first charged by Criminal Complaint on March 20, 2012. He was indicted by a federal grand jury in Denver on March 22, 2012. A superseding indictment was obtained on May 21, 2013. The jury trial began on September 23, 2013. The verdict was handed down on September 26, 2013.
According to court documents, as well as facts presented to the jury during trial, a person called the Grand Junction Police Department to report threatening Facebook posts. The Grand Junction Police Department, working with Homeland Security Investigations, conducted an investigation and determined that the threatening posts were made by Wheeler. It was also determined the Wheeler was in Rome, Italy when he made the posts. In fact, one of the posts stated that Wheeler believed he could post anything he wanted and not be prosecuted because he was not physically in the United States.
Among Wheeler’s posts were instructions for people to kill children at a local Daycare. He also told his “followers” to kill specific police officers, as well as their families and children. In one post Wheeler said: “the americans cant punish me for what i say here in rome italy on facebook. so. kill cops. drown them in the blood of their children, hunt them down and kill their entire blood lines.”
Assistant U.S. Attorney Colleen Covell said during her closing arguments to the jury: “Ladies and gentlemen, the First Amendment allows you to burn a flag in protest of the government, but it doesn’t allow you to threaten to burn the faces of the children of the Grand Junction Police Department.”
Wheeler was arrested at the Grand Junction Airport once he returned to the United States from Rome.
The defendant faces not more than 5 years in federal prison, and up to a $250,000 fine, per count, for each of the two counts of sending interstate threatening communications.
This case was investigated by Homeland Security Investigations and the Grand Junction Police Department.
The jury trial was handled by Assistant U.S. Attorneys Colleen Covell and David Tonini. Assistant U.S. Attorney Michelle Heldmyer in the U.S. Attorney’s Grand Junction branch office provided substantial assistance during the investigation and pendency of the case.
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Eric and Ryan Jensen Charged with Introducing Tainted Cantaloupe into Interstate CommerceRead the Press Release
DENVER – Eric Jensen, age 37, and Ryan Jensen, age 33, brothers who owned and operated Jensen Farms, located in Granada, Colorado, presented themselves to U.S. Marshals in Denver today, where taken into custody on federal charges brought by the U.S. Attorney’s Office with the Food and Drug Administration – Office of Criminal Investigation, United States Attorney John Walsh and Food and Drug Administration (FDA) Office of Criminal Investigations Special Agent in Charge Patrick Holland announced. The Information charges the brothers with introducing adulterated food into interstate commerce. The defendants are scheduled to make their initial appearance this afternoon at 2:00 p.m. before U.S. Magistrate Judge Michael E. Hegarty. At that hearing they will be advised of their rights as well as the charges pending against them.
According to the six-count Information filed under restriction on September 24, 2013, as well as other court records, Eric and Ryan Jensen allegedly introduced adulterated cantaloupe into interstate commerce. Specifically, the cantaloupe bore a poisonous bacteria, Listeria monocytogenes. The Information further states that the cantaloupe was prepared, packed and held under conditions which rendered it injurious to health.
Court documents state that the defendants set up and maintained a processing center where cantaloupes were taken from the field and transferred to a conveyor system for cleaning, cooling and packaging. The equipment should have worked in such a way that the cantaloupe would be washed with sufficient anti-bacterial solutions so that the fruit was cleaned of bacteria in the process.
In May of 2011 the Jensen brothers allegedly changed their cantaloupe cleaning system. The new system, built to clean potatoes, was installed, and was to include a catch pan to which a chlorine spray could be included to clean the fruit of bacteria. The chlorine spray, however, was never used. The defendants were aware that their cantaloupes could be contaminated with harmful bacteria if not sufficiently washed. The chlorine spray, if used, would have reduced the risk of microbial contamination of the fruit.
Investigation by the FDA and the Center for Disease Control (CDC) determined that the defendants failed to adequately clean their cantaloupe. Their actions allegedly resulted in at least six shipments of cantaloupe contaminated with Listeria monocytogenes being sent to 28 different states. The CDC tracked the outbreak-associated illness and determined that people living in 28 states consumed contaminated cantaloupe, resulting in 33 deaths and 147 hospitalizations. Further, one woman pregnant at the time of her outbreak-related illness had a miscarriage. Ten additional deaths not attributed to Listeriosis occurred among persons who had been infected by eating outbreak-related cantaloupe.
“As this case so tragically reminds us, food processors play a critical role in ensuring that our food is safe,” said U.S. Attorney John Walsh. “They bear a special responsibility to ensure that the food they produce and sell is not dangerous to the public. Where they fail to live up to that responsibility, and as these charges demonstrate, this office and the Food and Drug Administration have a responsibility to act forcefully to enforce the law.”
“U.S. consumers should demand the highest standards of food safety and integrity,” said Special Agent in Charge Patrick J. Holland of the FDA-Office of Criminal Investigations, Kansas City Field Office. “The filing of criminal charges in this deadly outbreak sends the message that absolute care must be taken to ensure that deadly pathogens do not enter our food supply chain.”
Both defendants have been charged with six counts of adulteration of a food and aiding and abetting. If convicted, each faces not more than one year in federal prison, and a fine of up to $250,000 per charge.
This case was investigated by the FDA Office of Criminal Investigations, the Center for Disease Control and the State of Colorado Department of Public Health and Environment.
The defendants are being prosecuted by Assistant U.S. Attorney Jaime Pena.
These charges are only allegations and the defendants are presumed innocent unless and until proven guilty.
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Colorado Man Charged with Attempting to Interfere with the Administration of IRS LawsRead the Press Release
DENVER – Byron Thomas Warnes, age 60, of Silverthorne, Colorado, was charged by an Information in Denver yesterday, Thursday, September 25, 2013, for attempting to interfere with the administration of IRS laws, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Warnes waived his right to be indicted by a federal grand jury.
According to the Information, Warnes was self-employed as a real estate agent and broker doing business under the name “Gold Mountain Realty” (“GMR”). He was also the co-founder, 50% beneficial owner and one of two principals of Aspen Ridge, LLC (“Aspen Ridge”), a Colorado limited liability company involved in real estate investment and development. One of Aspen Ridge’s real estate projects concerned the purchase in October 2005 and contemplated development of approximately 291 acres of undeveloped land commonly known as the “Pine Air Addition,” situated in and about Hot Sulphur Springs, Grand County, Colorado. Warnes and Aspen Ridge’s other principal ultimately did not develop this land but rather granted conservation easements to Grand County with respect to most of the acreage, leading to the acquisition and sale of State of Colorado tax credits associated with the granting of these easements.Beginning in or about 1994, the IRS conducted an audit examination to determine Warnes’s income and federal income tax liability for the year 1992. In February 1997, as a result of that audit, the IRS determined that Warnes owed a total of approximately $232,242 in federal taxes, interest and penalties for the 1992 year and made a tax assessment of this amount and the IRS recorded a federal tax lien for this and other federal tax assessments against Warnes.
From about January 2005, and continuing through August 2008, the exact dates being unknown, Warnes directly and through others known and unknown did corruptly endeavor to obstruct and impede the due administration of the internal revenue laws by:
- Cashing or converting to cashier’s checks, real estate commission checks rather than depositing them into personal or business bank accounts.
- Depositing the resulting cash and/or cashier’s check into a personal bank account for use to pay for personal expenses.
- Converting the resulting cashier’s checks into smaller blocks of cash or using them to purchase similar bank instruments in smaller denominations.
- The negotiation and conversion of these real estate commission checks, in the manner described above, such that he ultimately received cash from these real estate commission checks in sub-$10,000 amounts, thereby avoiding and circumventing bank currency reporting requirements for transactions involving more than $10,000 in cash.
- Circumventing the bank cash reporting requirements, by enlisting family members to negotiate, on his behalf, for cash checks made payable to him in amounts greater than $10,000 and providing to him in return the resulting cash, or, alternatively, using their names and social security account numbers to negotiate these checks and obtain the resulting cash.
- Deeding some of the sub-divided acres of the Pine Air Addition into the names of two of his family members.
- Filing an individual federal income tax return with the IRS for the year 2005 under-reporting by approximately $98,000 the real estate commissions that he had made for that year.
- Failing to file federal income tax returns for years subsequent to 2005, thereby failing to disclose to the IRS the income that he was receiving during those years.
“Those who interfere with the administration of the IRS and IRS laws may face criminal consequences,” said U.S. Attorney John Walsh.
“Interfering with the tax law or those administering tax laws is unacceptable; rest assured we will hold those accountable and bring them to justice,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field office.
Warnes was charged with one count of attempting to interfere with the administration of IRS laws. If convicted of that count he faces not more than 3 years in federal prison, and a fine of up to $250,000.
This case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Kenneth Harmon.
The charges contained in the information are allegations, and the defendant is presumed innocent unless and until proven guilty.####
- Cashing or converting to cashier’s checks, real estate commission checks rather than depositing them into personal or business bank accounts.
Child Pornography Producer Sentenced to Nearly 20 Years in Federal Prison Followed by A Lifetime of Supervised ReleaseRead the Press Release
DENVER – Robert Arthur Brewster, age 42, of Clifton, Colorado, was sentenced yesterday by U.S. District Court Judge R. Brooke Jackson to serve 235 months (just under 20 years) in federal prison for production of child pornography, United States Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar Kibble announced. Following the nearly 20 year sentence, Judge Jackson ordered Brewster to spend the rest of his life on court supervision as well as register as a sex offender. Brewster was also ordered to pay $3,000 to one of the victims of his crime that submitted a request for restitution. The defendant appeared at the hearing in custody, and was remanded at its conclusion.
Brewster was indicted by a federal grand jury in Denver on February 26, 2013. He pled guilty before Judge Jackson on July 10, 2013. He was sentenced on September 24, 2013.
According to court documents, including the stipulated facts contained in the plea agreement, on January 7, 2010, and Internet Crimes Against Children (ICAC) task force officer with the Kenton County Police Department in Kenton, Kentucky, working in an undercover capacity as a 13-year old girl, received an instant message from the online profile of the defendant. The chat was short, with both parties simply saying “hi”.
On January 9, 2010, the defendant identified himself as a 38-year old male living in Clifton, Colorado. The undercover officer (UCO) responded by identifying himself as a 13-year old girl living in Kentucky. The defendant and the UCO had several message sessions where the conversation became more focused on pornography. The defendant asked the UCO if she shared porn on the internet and subsequently began forwarding the UCO pictures and video clips of prepubescent minors engaged in sexually explicit conduct.
During the chats the defendant admitted that he took sexually explicit pictures of a minor child under the age of 12 with whom he had access. He provided those pictures to the UCO. The pictures, investigators determined, where of a minor child, under 12-years of age, to whom the defendant had access. The pictures showed sexually explicit conduct, including one where the defendant was touching the child’s vaginal area.
The defendant and the UCO discussed via chat that the UCO wanted to get a webcam. The defendant asked if the UCO would share pictures with the defendant. The defendant continued to share pictures with the UCO. Brewster also pointed the UCO to various internet locations where the UCO could view additional child pornography. The defendant also admitted that he had thousands of pictures and videos that he could share with the UCO.
On January 16, 2010, the defendant told the UCO that he had purchased the webcam for her. He then showed the UCO his bedroom via his own webcam. During this session, the UCO saw the defendant’s tattoos, which were later used to help identify him as the person who produced child pornography of the minor victim. The UCO ultimately received the webcam sent by the defendant.
A search warrant was then executed at Brewster’s residence in Clifton, Colorado. Law enforcement seized computer media from the defendant’s residence, which yielded 870 images and 22 videos of child pornography. The media also contained 23 images of the minor the defendant had access to and used to produce child pornography.
“This case shows why federal law provides for severe punishment of child pornography defendants: the defendant in this case produced child pornography by photographing his sexual abuse of a child, and then distributed the images over the internet,” said U.S. Attorney John Walsh. “This defendant will spend the rest of his life either in prison or being supervised by the court as the government does its best to stop him from hurting children ever again.”
“Some of the longer federal prison sentences are reserved for those who sexually exploit children to produce child pornography, as in Mr. Brewer’s case,” said Kumar C. Kibble, special agent in charge of HSI Denver. “Our HSI special agents are extremely vigilant about rescuing these innocent children, and pursuing prosecution against their victimizers.”
This case was investigated by Homeland Security Investigations (HSI). The Mesa County Sheriff’s Office assisted with the search warrant. The Colorado Springs ICAC officers and forensics also participated in the investigation.
The defendant was prosecuted by Special Assistant U.S. Attorney Shana Martin and Assistant U.S. Attorney Alecia Riewerts Wolak.
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."
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El Paso County Man Ordered Detained for Production of Child PornographyRead the Press Release
DENVER – Kenneth Wayne Hugo, age 37, of El Paso County, Colorado, was ordered held without bond yesterday by a U.S. Magistrate Judge Michael E. Hegarty after being charged with the sexual exploitation of children, distribution of child pornography, and possession of child pornography, United States Attorney John Walsh and Federal Bureau of Investigation Denver Division Special Agent in Charge Thomas Ravenelle announced. Hugo was transferred from state to federal custody last week. He was remanded into custody of the U.S. Marshals at the conclusion of the detention hearing.
On January 23, 2013, the FBI and the El Paso County Sheriff's Office executed a search warrant at Hugo’s residence. During the execution of the search warrant agents and deputies found over 8,000 images of child pornography on Hugo’s computer and media. During the course of the investigation agents and officers also found images of child pornography that Hugo himself created, including taking pictures of himself while fondling girls under the age of 12 years old. On that date Hugo was arrested and charged in state court for the molestation. He was held in state custody ever since until after his August 6, 2013 indictment by a federal grand jury. The indictment alleged that Hugo documented the molestation.
Count one of the indictment charges Hugo with the sexual exploitation of children. If convicted of that count he faces not less than 15 years and not more than 30 years in federal prison, as well as a fine of not more than $250,000. Counts two and three of the indictment charge Hugo with distribution of child pornography. If convicted on those counts the defendant faces not less than 5 years and not more than 20 years in federal prison, as well as a fine of not more than $250,000 per count. Count four of the indictment charges Hugo with possession of child pornography. If convicted of that count the defendant faces not more than 10 years in federal prison, as well as a fine of not more than $250,000.
“Those who produce child pornography, victimizing children for others’ enjoyment, belong in federal prison,” said U.S. Attorney John Walsh. “By producing child pornography images, the children the defendant allegedly victimized will be harmed for the rest of their life.”
“Combating the exploitation and victimization of children is one of the FBI’s top priorities,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “With the arrest of Kenneth Hugo, the FBI, working in conjunction with state and local authorities, has removed another child predator from our community and curtailed the abusive actions of an individual actively preying on children.”
This case was investigated by the FBI and the El Paso County Sheriff's Office.
The defendant is being prosecuted by Assistant U.S. Attorney Valeria Spencer.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
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."
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United States Attorney John Walsh Alerts Public to Beware of Disaster Fraud in Aftermath of Recent FloodsRead the Press Release
DENVER – United States Attorney John Walsh today urged Colorado residents and businesses to be aware of the potential for fraud in the aftermath of the recent devastating floods. The United States Attorney’s Office, along with the Department of Justice, the FBI, and the National Center for Disaster Fraud (NCDF), wants to remind the public that anyone can report fraud involving disaster relief operations through the National Disaster Fraud Hotline toll free at (866) 720-5721 or the Disaster Fraud e-mail at [email protected] The telephone line is staffed by a live operator 24 hours a day, seven days a week.
“Victims and donors alike should use care in deciding who to do business with,” said U.S. Attorney John Walsh. “Unfortunately there are some who prey on the vulnerable or desperate. Before giving money to an organization, do your research to ensure it is a legitimate relief agency. Also, before you hire a contractor, do your research to ensure that they are a legitimate, reputable business.”
U.S. Attorney Walsh also noted that scams come in all forms - email, phone calls and mail solicitations. He urges Coloradans to be vigilant and cautious before giving anyone your personal information.Before making a donation of any kind, consumers should adhere to certain guidelines, including the following:
* Do not respond to any unsolicited (spam) incoming emails, and do not click on links contained within those messages, as they may contain computer viruses.
* Be skeptical of individuals representing themselves as surviving victims or officials asking for donations via email or social networking sites.
* Beware of organizations with copycat names similar to but not exactly the same as those of reputable charities.
* Rather than following a purported link to a website, verify the existence and legitimacy of non-profit organizations by utilizing various internet-based resources.
* Be cautious of emails that claim to show pictures of the disaster areas in attached files because the files may contain viruses. Only open attachments from known senders.
* To ensure that contributions are received and used for intended purposes, make donations directly to known organizations rather than relying on others to make the donation on your behalf.
* Do not be pressured into making contributions; reputable charities do not use coercive tactics. * Be aware of who you are dealing with when providing your personal and financial information. Do not give your personal or financial information to anyone who solicits contributions. Providing such information may compromise your identity and make you vulnerable to identity theft.
* Avoid cash donations if possible. Pay by debit or credit card, or write a check directly to the charity. Do not make checks payable to individuals.
* Legitimate charities do not normally solicit donations via money transfer services.
* Most legitimate charities maintain websites ending in .org rather than .com.Before hiring a company to repair or restore your property, check with the numerous entities that track the legitimacy of those companies, including the Better Business Bureau. Rely on companies with a track record, not those that established themselves overnight.
If you believe you have been a victim of fraud by a person or organization soliciting relief funds on behalf of flood victims, if you discover fraudulent disaster relief claims submitted by a person or organization, or if you know about or suspect fraud involving disaster relief operations, you can report it through the National Disaster Fraud Hotline, toll free, at (866) 720-5721 or the Disaster Fraud e-mail at [email protected]. The telephone line is staffed by a live operator 24 hours a day, seven days a week.
You can also report suspicious e-mail solicitations or fraudulent websites to the FBI’s Internet Crime Complaint Center at www.ic3.gov.
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Denver Man Sentenced to Lengthy Prison Term for Possessing Sawed-off Shotgun and MethamphetamineRead the Press Release
DENVER – Anthony Russell, age 44, of Denver, was sentenced this week by U.S. District Court Judge Philip A. Brimmer to serve 168 months (14 years) in federal prison for possessing a sawed-off shotgun and for possession of methamphetamine with intent to distribute, United States Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Andrew Traver announced. Following his prison sentence, Judge Brimmer ordered Russell to serve 5 years on supervised release. The defendant appeared at the sentencing hearing in custody, and was remanded at its conclusion.
Russell was indicted by a federal grand jury in Denver on April 25, 2013. He pled guilty before Judge Brimmer on June 26, 2013. He was sentenced on September 16, 2013.
According to court documents, including the stipulated facts contained in the defendant’s plea agreement, on February 4, 2013, Denver Police officers executed a search warrant at Russell’s residence. During the lawful search officers found two 12 gauge shotguns, both with shortened barrels. Both also had four rounds of ammunition. Law enforcement also located a glass jar containing methamphetamine and a chrome plated revolver. In the garage officers located a glass jar that contained a two layered liquid, which included a batch of methamphetamine oil. There was also a bottle containing a white powdery substance. According to facts that came out during sentencing, Russell was manufacturing methamphetamine at his residence while his minor step-daughter lived there. The total amount of a mixture or substance containing a detectable amount of methamphetamine located at the defendant’s residence was 570 grams. The defendant also had prior felony convictions.
“The ATF, working with local law enforcement like the Denver Police Department, are targeting the worst of the worst when it comes to illegal gun possession and drug trafficking,” said U.S. Attorney John Walsh. “The 14 year prison sentence handed down in this case demonstrates that possessing an illegal firearm and illegal drugs results in a lengthy loss of personal liberty.”
“A convicted felon who continues to possess illegal crime guns and manufacturers methamphetamine is clearly a danger to this community,” said Denver Special Agent in Charge Andrew Traver. “ATF will continue to work with the Denver Police Department in an attempt to apprehend and remove anyone who blatantly disregards the safety of our citizens.”
This case was investigated by the Denver Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Russell was prosecuted by Assistant U.S. Attorney Jeremy Sibert.
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Registered Sex Offender Sentenced to Federal Prison for Receipt of Child PornographyRead the Press Release
DENVER – Kris Katzenmeyer, age 51, of Broomfield, Colorado, was sentenced today by U.S. District Court Judge Robert E. Blackburn to serve 87 months (over 7 years) in federal prison for receipt of child pornography, U.S. Attorney John Walsh and Denver Division U.S. Postal Inspector in Charge Adam P. Behnen announced. Following his prison sentence, Judge Blackburn sentenced Katzenmeyer to spend 20 years on supervised release. He also will be required to register as a sex offender. The defendant appeared at the sentencing hearing in custody, and was remanded at the hearing’s conclusion.
Katzenmeyer was indicted by a federal grand jury in Denver on December 6, 2012. He pled guilty to receipt of child pornography before Judge Blackburn on June 20, 2013. He was sentenced on September 18, 2013.
According to court documents, including the indictment and the stipulated facts contained in the plea agreement, in October 2010, the United States Postal Inspection Service (USPIS) and a Foreign Law Enforcement Agency began an investigation into a movie production company that operated a website offering DVDs and streaming videos (films) of child pornography for sale. On numerous occasions in 2011, USPIS Inspectors conducted undercover purchases of DVDs via the international company’s online ordering system. Law enforcement determined that the international company had a shipping facility located in the state of New York and that the undercover online orders were transferred from the international company to this New York based shipping facility for fulfillment.
A review of the international company’s business records, recovered pursuant to a lawfully obtained search warrant during the investigation, identified customer Kris Katzenmeyer, the defendant, who was living in Northglenn, Colorado. The defendant used the internet to purchase 49 films from the international company’s website between November 24, 2006 and April 29, 2011. The defendant received all of the films as they were delivered to him through the U.S. Mail.
During the investigation it was determined that the defendant volunteered at a local church, working on the church’s website and teaching computer classes. During a subsequent interview, the defendant stated that he had physical contact with a minor child on three occasions between 2009 and 2012.
“This investigation originated from information received from overseas law enforcement partners, which demonstrates that the Department of Justice, and the U.S. Attorney’s Office, working closely together with our law enforcement partners, will now allow international boundaries to prevent us from conducting criminal investigations, especially when they pertain to the exploitation of our children,” said U.S. Attorney John Walsh.
“Protecting children from these crimes is a top priority for the U.S. Postal Inspection Service,” said Denver Division U.S. Postal Inspector in Charge Adam P. Behnen. “This prison sentence should put all types of child predators on notice that serious consequences await those who seek to exploit children via the U.S. Mail.”
This case was investigated by the U.S. Postal Inspection Service (USPIS).
The defendant was prosecuted by Assistant U.S. Attorney Alecia Riewerts Wolak.
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."
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The Macalan Group, Inc. Agrees to Resolve Overcharging AllegationsRead the Press Release
DENVER – The Macalan Group, Inc., formerly known as NEK Advanced Securities Inc. (NEK), a security contractor headquartered in Colorado Springs, Colorado, has agreed to resolve allegations that it submitted false claims in connection with a contract with the Joint Improvised Explosive Device Defeat Organization (JIEDDO), U.S. Attorney John Walsh announced on behalf of the Justice Department and its investigative partners.
NEK’s contract with JIEDDO required it to develop and deploy teams of specialized personnel to Iraq and Afghanistan to combat improvised explosive devices. The government alleged that NEK submitted false invoices for payment in connection with this contract that claimed excessive or unallowable costs. To resolve these allegations, NEK has paid the United States $2.08 million, and will also relinquish an outstanding invoice for $744,969, and turn over numerous weapons and accessories acquired under the contract.
“No government contract is more important than one that supports the security efforts of our nation overseas,” said U.S. Attorney John Walsh. “When a contractor fails to bill by the contract rules set up to protect American taxpayers, our office will diligently and aggressively seek to recover any losses, as this case demonstrates.”
“This settlement demonstrates our commitment to pursue contractors who fail to accurately bill the government,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “The Justice Department will continue to ensure that those who do business with the government do so honestly and fairly and uphold the integrity of our public contracting process.”
“We are very pleased with today’s settlement with over two million dollars back to the U.S. Government,” said Frank Robey, Director of the United States Army Criminal Investigation Command’s Major Procurement Fraud Unit. “Our special agents have worked tirelessly on this case, along with our partners in Federal law enforcement and the Department of Justice, and will continue to do so as we continue to scrutinize and monitor contracts affecting the U.S. Army.”
“The settlement in this investigation is the result of a highly successful joint effort by the Defense Criminal Investigative Service (DCIS) and our law enforcement partners from the U.S. Army Criminal Investigations Command and the Department of Justice, to include support provided by the Defense Contract Audit Agency,” said Janice M. Flores, Special Agent in Charge of the DCIS Southwest Field Office. “This settlement highlights the Federal Government's continuing resolve to recover losses to the American taxpayer when a contractor has claimed money to which it was not entitled. The United States must be able to count upon Government contractors to seek payment only for services performed or material provided, in conformance with their contractual obligations.”
The United States Attorney’s Office is grateful for the hard work of the investigative partners that produced today’s result, including the Civil Division, Commercial Litigation Branch; the Army Criminal Investigation Command Major Procurement Fraud Unit; the Defense Criminal Investigative Service; the Defense Contract Audit Agency; and, the Contract Integrity Center, Office of General Counsel, Defense Contract Management Agency.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Assistant U.S. Attorney J. Chris Larson and Department of Justice Trial Attorney Benjamin Wei handled this matter on behalf of the United States.
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Englewood Woman Sentenced to 28 Months in Federal Prison for Failure to Pay over $4.7 Million in Employment TaxesRead the Press Release
DENVER – Beth Ann Pettyjohn, age 61, of Englewood, Colorado, was sentenced yesterday by U.S. District Court Judge William J. Martinez to serve 28 months in federal prison for failure to pay over employment tax, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Following her prison sentence, Pettyjohn was ordered to spend 3 years on supervised release. Judge Martinez also ordered her to pay $4,669,532.05 in restitution to the IRS, as well as a $25,000 fine.
Pettyjohn waived her right to be indicted by a federal grand jury on January 17, 2013, and was charged by Information. According to the stipulated facts contained in the plea agreement, as well as the Information, Pettyjohn is the co-owner and vice president of Overhead Door Company of Denver (OHD). From September 2003 to June of 2009, Beth Ann Pettyjohn stopped paying over the payroll taxes (income taxes withheld & FICA) OHD withheld from employee wages as well as the matching portion of FICA totaling almost 4.7 million dollars owed to the IRS. Pettyjohn admitted that she knew she had a duty to pay over the amounts withheld from employee wages, but she told an IRS agent she failed to do so because the IRS was not beating down her door. Pettyjohn managed the accounting department at OHD and determined which bills were paid, and then issued and signed the related checks. Pettyjohn has a bachelor's degree in business with a major in accounting, and she has an inactive CPA license issued by the State of Colorado. During the relevant years, the defendant employed both hourly and salaried employees.
During the period in question and for many prior years, Pettyjohn and her husband lived in a home valued at over $1 million dollars. Between 2005 through 2007, Pettyjohn received wages from OHD averaging approximately $133,000 per year. Also, after Mrs. Pettyjohn stopped paying over the payroll taxes at OHD, she purchased pieces of real estate. In August of 2007, Mr. and Mrs. Pettyjohn purchased a condominium in Gypsum, Colorado for $349,900 with a $100,000 down payment. In 2009, Pettyjohn paid $285,000 in cash to purchase her son's condominium in suburban Denver. The condo was resold to an unrelated party a few months later.
“Tax fraud is not a victimless crime,” said U.S. Attorney John Walsh. “The taxpayers and the employees of the defendant are victims, and when someone commits this crime not only do they have to pay the taxes to the IRS, they also face prison time.”
“Employers who fail to remit employment taxes are victimizing legitimate businesses by creating an unfair competitive advantage over those businesses that lawfully pay their share of employment taxes,” said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “As this sentence demonstrates, there are real consequences for committing employment tax fraud.”
This case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Matt Kirsch.
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Chief Executive Officer of Superior Discount Coins Pleads Guilty to Defrauding Gold Coin Investors Out of over $2.4 MillionRead the Press Release
DENVER – James P. Burg, age 62, formerly of Fairplay, Colorado, pled guilty before U.S. District Court Judge John L. Kane today to one count of mail fraud and one count of failing to file an income tax return, federal law enforcement authorities announced. Burg, who is free on bond, is scheduled to be sentenced by Judge Kane on December 17, 2013 at 10:00 a.m. Burg was indicted by a federal grand jury in Denver on November 5, 2012. The indictment remained sealed until his arrest in California on November 29, 2012.
According to the indictment as well as the plea agreement, beginning on or about October 1, 2007, and continuing through and including on or about January 12, 2012, in Colorado and elsewhere, James P. Burg devised and intended to devise a scheme to defraud customers that ordered coins from a business known as Superior Discount Coins and Gold Run Investments and for obtaining money from those customers by means of materially false and fraudulent pretenses, representations and promises. Burg took and received $2,464,099 from customers that ordered coins and he failed to deliver the coins as promised.
As part of the scheme, Burg represented that he was the Chief Executive Officer of a company known as Superior Discount Coins (“SDC”) and that SDC was in the business of selling coins. Burg also conducted business using a company known as Gold Run Investments (“GRI”) and represented that GRI was in the business of selling coins. At times, Burg operated GRI using the alias “Tim Burke”. Burg advertised and solicited customers through radio advertisements and over the internet using websites he controlled, including; www.superiordiscountcoins.com, www.yourcoinbroker.com, and www.goldruninvestments.net
Burg misrepresented and promised customers that if they ordered coins from SDC or GRI and paid him for those coins, he would deliver the coins to them or to accounts designated by them. He sent, and caused to be sent to customers that ordered coins from SDC or GRI invoices stating amounts of money owed for the coins and, in some cases, providing information about a bank account to which the customers should transfer their money to purchase the coins.
A substantial portion of the money Burg received from customers was not used to purchase coins for such customers but instead he converted the money to his own use and benefit. Burg refused to refund money to customers in several instances where the customers requested a return of their money after he failed to deliver coins as originally promised. To prevent the scheme’s detection, Burg sometimes filled customers’ orders for coins only after such customers threatened to take legal action or report him to law enforcement authorities. Burg used one customer’s payment for coins to refund funds to another customer.
For calendar years 2003 through 2009, Burg failed to file income tax returns with the Internal Revenue Service as required by law. These returns were required to be filed with the IRS on April 15 following the subsequent above mentioned years. The investigation determined during the above years Burg generated gross income over 1.3 million dollars for which he failed to pay income taxes on the income.
Mail fraud carries a penalty of not more than 20 years in federal prison and a fine of up to $250,000 per count. Failing to file a tax return carries a penalty of not more than 1 year in federal prison and a fine of up to $25,000 per count.
This case was investigated by special agents with IRS-Criminal Investigation, the Federal Bureau of Investigation (FBI), and the U.S. Postal Inspection Service.
The case is being prosecuted by Assistant U.S. Attorney Tim Neff.
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Mexican Drug Cartel Working with Members of Mexican Mennonite Community Indicted for Large Scale Marijuana TraffickingRead the Press Release
DENVER – A federal grand jury in Denver returned a nine-count indictment charging seven individuals with conspiracy to distribute and possess with intent to distribute 1,000 kilograms or more of marijuana, a Schedule I Controlled Substance, and use of a communications device (phone) to facilitate drug trafficking, U.S. Attorney John Walsh and Drug Enforcement Administration (DEA) Special Agent in Charge Barbra Roach announced. The grand jury returned the indictment on August 6, 2013. One of the seven defendants, Abraham Friesen-Remple, was arrested on August 20, 2013 in the Santa Teresa Point of Entry in New Mexico. He appeared in federal court yesterday, September 10, 2013, for a detention hearing. A U.S. Magistrate Judge ordered Friesen-Remple to be held without bond pending a resolution of the case.
According to court records and testimony presented during Friesen-Remple’s detention hearing, the defendants worked with a Mexican Drug Cartel, trafficking thousands of kilograms of marijuana first by putting the drugs in the gas tanks of cars, and later putting the drugs inside large farm equipment. At the beginning of the conspiracy the vehicles crossed the Mexican border and drove to Colorado Springs, where the marijuana was off-loaded at an auto-body repair shop. Drivers then took the marijuana to various places across the country.
After the individual who ran the Colorado Springs auto body shop was arrested, the organization decided to move the marijuana trafficking from Colorado Springs to North Carolina. Trucks carrying farm equipment continued to transport the marijuana throughout the United States. Many of those charged are members of the Mexican Mennonite community.
Those indicted by the grand jury are:
Eduardo Tellez-Ponce
Ulises Castillo-Meraz
Abraham Friesen-Remple
Enrique Harms-Groening
David Loewen
Juan Reimer
Pedro Dyke-FriesenLaw enforcement are searching for the other six defendants in this case, all of whom are considered fugitives and many of which are believed to be outside the United States.
“This case involves smuggling literally tons of marijuana into the United States from Mexico, with Mexican Cartel involvement,” said U.S. Attorney John Walsh. “International trafficking of drugs, particularly with organized crime involvement, is a top priority of federal law enforcement and the U.S. Attorney’s Office. The fact that this case involves marijuana in no way reduces its status as a high priority matter, consistent with recent guidance from the Department of Justice on marijuana enforcement issues.”
“The Drug Enforcement Administration continues to fulfill its mission by investigating and dismantling high level drug trafficking organizations,” said DEA Special Agent in Charge Barbra Roach. “Marijuana traffickers continue to pose a significant threat to our young people and our communities.”
If convicted of conspiracy to distribute and possess with intent to distribute 1,000 kilograms or more of marijuana, the defendants face not less than 10 years, and not more than life in prison, as well as a $10,000,000 fine. If convicted of use of a communications facility (telephone) for drug trafficking, those charged with that offense face not more than 4 years in prison, and up to a $250,000 fine.
This case was investigated by the Drug Enforcement Administration (DEA), including the Denver, Grand Junction and Glenwood Springs offices.
The defendants are being prosecuted by Assistant U.S. Attorneys Stephanie Podolak and Michele Korver.
The allegations contained in the indictment are charges, and the defendant are presumed innocent unless and until proven guilty.
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Former Preschool Teacher David Moe Sentenced to Federal Prison for Distribution of Child PornographyRead the Press Release
DENVER – Former Paddington Station preschool teacher David Moe, age 46, of Denver, was sentenced today by U.S. District Court Judge William J. Martinez to serve 96 months in federal prison for distribution of child pornography, United States Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar Kibble announced. Following his prison sentence, Judge Martinez ordered Moe to spend 10 years on supervised release. Moe was also ordered to pay restitution of $5,000 each to three victims who filed requests with the court. He will also be required to register as a sex offender. Moe, who appeared at the sentencing hearing in custody, was remanded at the hearing’s conclusion.
According to court documents, including the stipulated facts contained in the plea agreement, on May 4, 2012, a detective with the Loveland Police Department, who is a member of the Internet Crimes Against Children (ICAC) Task Force, while working in an undercover capacity, logged on to the Internet and accessed a peer-to-peer file sharing program. The undercover detective attempted to download a digital file believed to contain child pornography from a remote host computer. The detective was able to connect directly to the remote host computer and the requested file was placed in queue. He remained in queue to receive the file until May 6, 2012, when the connection was terminated. The detective was unable to complete the download.
Using investigative techniques, the detective was able to determine that the defendant was offering a child pornography file for distribution. It was later determined that the Internet Protocol (IP) address offering the child pornography file for distribution resolved to Moe’s residence in Denver, Colorado. A federal search warrant was obtained by HSI and was executed on July 24, 2012. During the execution of the search warrant, items containing child pornography were seized, including two desktop computers, numerous external hard drives, and 383 CDs and DVDs. All of the items seized by HSI belonged to the defendant.
During the execution of the warrant, agents learned from the defendant that he had been a teacher at Paddington Station preschool for the last 18 years. At the time of the search warrant, Moe taught Cultural Rhythms/Enrichments (3 to 5 year olds) and had been the Director of Enrichments and Before and After School Care programs since 2005.
A forensic examination was conducted of the defendant’s computers, external hard drives, CDs and DVDs. Evidence of distribution and receipt of child pornography was found on the defendant’s two computers and an external hard drive. Evidence of child pornography possession was found on the defendant’s computers, external hard drives, and 383 CDs and DVDs. At least 800,000 child pornography/erotica images and over 13,000 child pornography/erotica videos were located on the defendant’s computers and computer media, including the video that had been made available to the undercover detective in May 2012.
A forensic examination reflected that the child pornography possessed by the defendant was well organized and archived. The examination revealed that the defendant possessed child pornography for at least 10 years. Further, the examination revealed that the defendant distributed and received child pornography since at least 2007. The defendant’s child pornography collection included pornographic depictions of children as young as toddlers.
As described in the plea agreement, a forensic examination was conducted on the defendant’s computers and computer media. All images and videos of child pornography recovered during forensic examination were provided to the National Center for Missing and Exploited Children (NCMEC). A thorough review of all of the images and videos possessed by the defendant reflected no evidence that the defendant himself created or produced child pornography. Today he pled guilty to distributing existing child pornography.
“The conduct the defendant was sentenced for today is reprehensible,” said U.S. Attorney John Walsh. “Moe spent 10 years collecting nearly 2,000,000 images of children engaged in explicit sexual conduct, all the while working as a preschool teacher. The U.S. Attorney's Office will continue to work with determination to protect children, and to combat the market for child pornography that Defendant Moe so extravagantly helped to fuel.”
“The predator’s market for sharing child pornography is built by people like David Moe who possessed more than a million explicit images of children being sexually abused,” said Kumar C. Kibble, special agent in charge of HSI Denver. “Our HSI special agents routinely work with our law enforcement partners to remove these predators from civil society.”
This case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI).
Moe was prosecuted by Assistant U.S. Attorney Alecia Riewerts Wolak.
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."
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California Man with Colorado Ties Pleads Guilty to Multi-Million Dollar Real Estate SchemeRead the Press Release
DENVER – Dale Johnson, age 46, of Los Angeles, California, pled guilty before U.S. District Court Judge Wiley Y. Daniel last week to one count of wire fraud and one count of money laundering, federal law enforcement authorities announced. Johnson, who is free on bond, is scheduled to be sentenced by Judge Daniel on January 21, 2014 at 11:00 a.m. Johnson along with six other co-defendants, as mentioned below, were indicted by a federal grand jury in Denver on September 1, 2011.
According to the facts contained in the indictment as well as the stipulated facts contained in the plea agreement, the scheme began in March of 2006. Johnson was a member of a business group based out of Culver City, California called “Synergy”. In early 2006, Synergy was made up of Dale Johnson (President & Chief Executive Officer), Donald Beverly (Vice President of New Business Development), Ronald Benjamin (Regional Manager and Senior Vice President of Sales & Marketing), Jimmy Hutchinson (Chief Financial Officer), and Vincent Jackson (Vice President of Marketing).
In 2006, Johnson began to present Synergy members with a number of properties available for purchase in Colorado. He began to develop business relationships with various real estate professionals in Colorado, to include, Jerry Minney (real estate broker) and Scott Goldberg (mortgage broker). Minney and Golderg assisted Synergy members in the purchase of various homes in Colorado. Johnson and other Synergy members began traveling to Colorado where they started purchasing multiple residential properties. The homes were typically purchased in the individual member’s own name, using the member’s personal credit history to qualify for the purchases. Johnson and others typically identified the property and helped arrange for the purchase by a Synergy member.
As part of the scheme, Synergy members with the assistance of Goldberg, and other persons, submitted “uniform residential loan applications” to lenders in connection with qualifying for home loans. In a number of loan applications, Synergy members and other buyers provided, or assisted in providing, materially false statements, representations, and omissions to real estate lenders, or the lenders’ agents. False information included income, assets, debts, employment history and/or intent to occupy the home as a primary residence.Furthermore, Synergy Members, with the assistance of Goldberg, Minney, and others, arranged for a portion of lender funds from home purchases to be paid to Synergy Members as “kickbacks”. Such kickbacks were often concealed from lenders through a series of false statements and material omissions made in connection with closings for properties or in connection with the loan documents submitted to the lenders. To further conceal the kickbacks from lenders, they routed payments through third parties posing as property management companies, such as “5280 Denver Real Estate” and “Willow Property Management”, and through realtor commissions paid to Broker One Real Estate.
Donald Beverly pled guilty on July 30, 2012 and is scheduled to be sentenced on November 20, 2013. Scott Goldberg pled guilty on June 12, 2012 and is schedule to be sentenced on October 15, 2013. Vincent Jackson pled guilty on May 23, 2012 and was sentenced to 60 months of probation on October 17, 2012.
Wire fraud carries a penalty of not more than 20 years in federal prison and a fine of up to $250,000 per count. Money Laundering carries a penalty of not more than 10 years in federal prison and a fine of up to $250,000 per count.
This case was investigated by agents with Internal Revenue Service Criminal Investigation (IRS-CI), the Federal Bureau of Investigation (FBI), United States Postal Service and the U.S. Secret Service.
The case is being prosecuted by Assistant United States Attorney Tim Neff.
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Federal Law Enforcement Officers Association 22nd Annual National Awards Banquet and Ceremony Remarks by U.S. Attorney John WalshRead the Press Release
It is a profound honor to speak to you all tonight, both as a member of the federal law enforcement community, and also as a citizen of this great Republic. As others have noted long before me, speaking in praise of men and women for their specific acts of courage and heroism, as you have asked me to do, is not only an honor, but also a profound challenge. My fear is that my lack of eloquence might somehow diminish or undervalue the worth of the remarkable deeds you will soon be hearing about tonight. The facts themselves are the best form of praise, and they speak eloquently in true homage to the brave agents and officers who are being honored here.
Nevertheless, let me offer a few observations as a deeply appreciative lawyer and prosecutor. Sometimes I am sure that it appears to all of you in law enforcement that we prosecutors have lost sight of who is actually doing the hard work of law enforcement, as we sit comfortably in our office chairs, dispensing what we are confident is great wisdom, or at worst, while we stand before the occasional irate judge or skeptical jury as we prosecute a case. I’m sure it sometime looks like we’ve forgotten that we ourselves didn’t collect the evidence we present in court; or that we think that we ourselves arrested the defendants we cross-examine. And I know for a fact that it can appear at times that we have forgotten that while our role as prosecutors is important in our system of justice, it is merely the final formal act of bringing wrongdoers to justice, not the entire endeavor.
So, as a prosecutor, let me first be clear that we prosecutors do remember who actually does the difficult and all-too-often dangerous work of protecting the public in the hard-edged real world, not just the courtroom. And that is all of you -- and particularly, it is the men and women receiving awards tonight. Tonight you will hear the facts about acts of valor that are indeed the best praise of those we are honoring: Men and women who ran into burning buildings to save the aged and infirm; who engaged in intense firefights with the Taliban in Afghanistan; who sprinted to leap into speeding cars to bring them under control and then save the lives of the very wrongdoers they were seeking to apprehend; who dove into the raging ocean surf to rescue drowning swimmers at the cost of their own lives, and more. My words tonight are small in the balance compared to the simple facts of what these men and women have done. There is so much to honor here.
Any thoughtful person hearing these tales of heroism will ask him or herself two questions. The first is the age-old question: Had I been there that day, would I have acted so nobly? That question, I suppose, has no certain answer until the actual moment arrives. The second question is more complex: Why? Why did these men and women react and act in a way that was so true, so good and so selfless?
Let me address the second question first, in the hope that it might help us all consider the first as well. Why were these men and women so brave and selfless? Obviously, I can’t speak to their thoughts and motivations individually, but let me venture a few broad observations based on my experience in and with law enforcement.
First, there is no doubt that character played a commanding role. Each of the award winners here tonight reached down deep into their souls in a moment of crisis and danger and found something strong and true that they could work with, that impelled them to act, and that freed them to act.
Moreover, the intense and superior training that all of you have received as law enforcement, whether federal, state or local, unquestionably played a crucial role. These men and women, like you, had been trained and conditioned to act under dangerous and unclear circumstances, to weigh the various options almost instantaneously, and to act as their trained judgment guided them.
But as I read through the awards before coming here, something else also struck me: As you listen to the awards this evening, you will note that many of the officers being honored acted in the specific furtherance of their duty as law enforcement officers, and that many others did not – that is, they intervened to rescue others while off-duty or merely passing by, and with no direct relationship to their law enforcement work. Now, whether as part of their immediate duty or not, these acts are equally noble and equally deserving of our praise.
But the fact that our law enforcement officers acted without hesitation in both circumstances – on duty, or off -- is telling, because it says something fundamental about what motivated them: A sense of responsibility; a sense of ownership of our nation and community; and an abiding sense of our common humanity.
And that says something crucial not only about these officers, but about this nation. Why did these men and women feel so deeply that sense of common purpose and responsibility? Police officers in Egypt or Syria today are also highly trained, but guess what -- they don’t act this way. Quite to the contrary, by all accounts they are behaving in a diametrically opposite way. And the highly trained police in Nazi Germany and the Soviet Union did not rise to the aid of others in this way – far from it. They put their training to different, and darker, uses.
No, in the end, what struck me about the acts of valor that we will be hearing about tonight is they are the acts of a free people, living in a democracy that calls on all of us to participate and all of us, in effect, to rule ourselves, putting us to that highest test. They are the acts of people living in a democracy that operates under the protection of a law – our Constitution – that holds us all equal in our rights and equal in our obligations to others, a law that in this country guides us in our day-to-day lives, not just in our courts.
These men and women acted as they did because of their incredible character and intense training, yes. But they also acted in this noble way because they are Americans, who feel and understand reflexively that they themselves are responsible for their communities, and who know in the very marrow of their bones that upon each of them and each of us depends the success or failure of this great experiment in democracy and freedom that we call the United States of America.
We live in a time of great conflict and discord in the nation’s politics, and it is easy to get a little disheartened about the future of our public life. But reading these awards leaves no doubt that the future of our great national experiment is in very good hands. These men and women show us we have nothing to fear. And they give us something priceless: When the day does arrive for each of us when that first question is called: “Will I act so bravely?” we have their real, living example urging us on.
So, in closing, let me say this: Thank you – both to the award winners here tonight, whose contributions have been frankly astonishing, but also to all their family members here, who are the rock on which these men and women depend. My particular thanks and deepest best wishes go to the family of Special Agent Knapp, who is honored tonight and who lost his life in order to save others. And finally, let me also thank all the members of law enforcement in attendance. Thank you not only for the work you do, and the bravery you show, but for the light you hold up showing all of us as Americans what free men and free women can do.
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Chinese National Pleads Guilty to Illegally Exporting Radiation-hardened Computer Circuits Used in Satellite Communications to ChinaRead the Press Release
DENVER – Philip Chaohui HE, aka Philip Hope, who was residing in Oakland, California, pled guilty September 3, 2013, before Senior U.S. District Court Judge Wiley Y. Daniel to conspiracy to violate the Arms Export Control Act and to Smuggle Goods from the United States, United States Attorney John Walsh and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar C. Kibble announced. HE is scheduled to be sentenced by Judge Daniel on December 18, 2013 at 10:00 a.m. He is in federal custody.
According to court documents, including the stipulated facts contained in the plea agreement, HE attempted to illegally export to China radiation-hardened computer memory circuits used in satellite communications with a value of almost $550,000. HE, the only employee of Oakland, California-based Sierra Electronic Instruments (SEI), purchased 312 radiation-hardened circuits from a Colorado manufacturer. The circuits purchased by HE are categorized as defense articles within the International Trafficking in Arms Regulations (ITAR). Lawfully exporting defense articles requires licensing from the U.S. State Department’s Directorate of Defense Trade Controls.
On April 28, 2011, an unindicted co-conspirator caused two wire transfers totaling about $489,720 to be sent to HE’s bank account in California. On or about May 9, 2011, HE provided payment in full, $549,654, at the time HE placed the order with the Colorado manufacturer. According to the indictment, on or about May 17, 2011, HE provided false certification to the Colorado manufacturer that his company was purchasing the integrated circuits for end-use in the United States only, and HE further acknowledged that the items were controlled by U.S. Export Laws and could not be transferred, transshipped or otherwise disposed of in any other country, without the prior written approval of the U.S. Department of State.
On December 11, 2011, HE drove to the Port of Long Beach, California, and met with two men in front of a docked ship bearing a Chinese flag. The Chinese-flagged ship was registered to Zhenhua Port Machinery Company LTD, a subsidiary of the China state-owned corporation China Communications Construction. The ship had recently arrived from Shanghai, China, and was scheduled to return on December 15, 2011.
HE concealed 200 integrated circuits in several plastic infant formula containers placed inside five boxes which were sealed and labeled as “milk powder” written in Chinese. HE transported the boxes in the trunk compartment of his vehicle. Neither HE, nor his company SEI had a license to export defense articles of any description.
“We have specific laws designed to protect sensitive American technology from getting into the wrong hands overseas,” said U.S. Attorney John Walsh. “Defendant HE attempted to smuggle export-controlled radiation-hardened computer chips to China, and faces serious punishment for his criminal activity.”
“The Arms Export Control Act is designed to prevent having our technology illegally exported and ultimately used against us,” said Kumar C. Kibble, special agent in charge of HSI Denver. “Our HSI special agents in Colorado Springs, San Francisco and Los Angeles worked together with our law enforcement partners to investigate Philip HE and eliminate the threat he posed to this country.”
For conspiring to violate the Arms Export Control Act (AECA) and to Smuggle Goods from the U.S., HE faces not more than 5 years in federal prison, and a fine of up to $250,000.
The Defense Security Service (DSS) and the Defense Criminal Investigative Service (DCIS) provided critical assistance to HSI with this investigation. Assistance was also provided by the U.S. Attorneys Offices located in the Northern and Central Districts of California.
HE is being prosecuted by Assistant U.S. Attorney Matthew Kirsch.
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Two Men in Unrelated Cases Sentenced to Federal Prison for Child Exploitation CrimesRead the Press Release
DENVER – Two men were sentenced this week to serve federal prison sentences for child exploitation crimes, U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar Kibble announced. The cases of the two men were unrelated.
Michael Burch, age 31, of Seattle, Washington, was sentenced by Senior U.S. District Court Judge Wiley Y. Daniel to serve 121 months in federal prison, followed by 10 years on supervised release, for the crime of travel with intent to engage in illicit sexual conduct, namely engaging in a sex act with a person under 18 years of age. Burch appeared at the sentencing hearing in custody, and was remanded at the hearing’s conclusion.
According to the stipulated facts in Burch’s plea agreement, after numerous internet chats and several phone calls, on August 22, 2012 Burch left Seattle, Washington by commercial bus, arriving in Grand Junction at 3:20 a.m. on August 24, 2012. He thought he was meeting a single mother with two girls, one age 4 and the other age 14. In fact, the single mother he was communicating with was actually an undercover agent. Once Burch arrived in Grand Junction he was placed under arrest.
Paulo dos Santos Silva, Jr., age 38, and a citizen and national of Brazil, was also sentenced by Senior U.S. District Court Judge Wiley Y. Daniel to serve 148 months in federal prison, followed by 5 years on supervised release, for the crime of attempted coercion and enticement. Silva appeared at his sentencing hearing in custody, and was remanded at the hearing’s conclusion.
According to the stipulated facts in Silva’s plea agreement, after multiple sexually explicit internet chats and a phone call, on February 15, 2012, Silva flew from Brazil to Grand Junction to meet a single mother with two girls, ages 4 and 14. In fact, the single mother was actually an undercover agent. At approximately 11:00 a.m., after arriving at the Grand Junction Airport, Silva was arrested.
“Anyone who travels great distances to have sex with children is an especially dangerous predator,” said Kumar C. Kibble, special agent in charge of HSI Denver. “To protect the most innocent and vulnerable members of our communities, our special agents in Homeland Security Investigations take an extremely active role to identify and ultimately remove these predators from society.”
These cases were investigated by ICE Homeland Security Investigations (HSI).
Burch was prosecuted by Assistant U.S. Attorney Valeria Spencer. Silva was prosecuted by Assistant U.S. Attorney Alecia Riewerts Wolak.
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."
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California Man Arrested After Disrupting JetBlue FlightRead the Press Release
DENVER – Gregory Meyer, age 47, of Studio City, California, was arrested early this morning by the FBI after committing a disturbance on a JetBlue flight, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Meyer is scheduled to appear in U.S. District Court in Denver today at 2:00 p.m. before U.S. Magistrate Judge Craig B. Shaffer, where he will be advised of his rights as well as the charges pending against him. He is expected to be released on bond.
Meyer is charged with two counts of simple assault by offensive touching of two passengers on Jet Blue flight 358, which was en route from Bob Hope Airport in Burbank, California to John F. Kennedy International Airport in New York, New York. Because of Meyer’s assaultive behavior, and his failure to obey flight attendants, the Captain of JetBlue flight 358 diverted the plane to Denver International Airport. The plane was then met by Denver Police Officers. The defendant was placed into federal custody and transported to the Denver City Jail.
Court records indicate that Meyer smelled of alcohol and was loud when he boarded the flight. He stroked one female passenger’s arm and grabbed her waist and tried to grab her hand. She was seated next to him but across the aisle. Meyer also grabbed the head of another female passenger who was seated in front of him. Flight attendants did not serve Meyer alcohol because he was visibly drunk from vodka he brought on board. Law enforcement found out later Meyer also took an Ambien sleeping pill.
Meyer faces not more than 6 months imprisonment, and up to a $5,000 fine per count.
This case was investigated by the FBI with assistance from the Denver Police Department.
Meyer is being prosecuted by Assistant U.S. Attorney Richard Hosley.
A Criminal Complaint is a probable cause charging document. The defendant is presumed innocent unless and until proven guilty.
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Statement by U.S. Attorney John Walsh Regarding Marijuana Enforcement in ColoradoRead the Press Release
“The U.S. Attorney’s Office for the District of Colorado will continue to focus its marijuana enforcement efforts on the investigation and prosecution of cases that implicate the key federal public safety interests highlighted in the today’s Department of Justice guidance. The key federal interests set forth in that guidance are also key interests of the people of Colorado. Of particular concern to the U.S. Attorney’s Office are cases involving marijuana trafficking directly or indirectly to children and young people; trafficking that involves violence or other federal criminal activity; trafficking conducted or financed by street gangs and drug cartels; cultivation of marijuana on Colorado’s extensive state and federal public lands; and trafficking across state and international lines. In addition, because the Department of Justice’s guidance emphasizes the central importance of strong and effective state marijuana regulatory systems, the U.S. Attorney’s Office will continue to focus on whether Colorado’s system, when it is implemented, has the resources and tools necessary to protect those key federal public safety interests. To accomplish these goals, we look forward to closely working with our federal, state and local partners.”
John Walsh, United States Attorney, District of Colorado
Click here for the Memorandum by Deputy Attorney General James Cole regarding marijuana enforcement guidance: http://go.usa.gov/DCVV
Denver Man Convicted of Advertising Child Pornography and Other Child Pornography Related ChargesRead the Press Release
Advertising conviction is one of the first of its kind in the country
DENVER – Following a seven-day jury trial, Richard Franklin, a.k.a “westfaliaimplant”, age 45 of Denver, Colorado, was found guilty of advertising child pornography, receipt of child pornography, two counts of distribution of child pornography, and possession of child pornography, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. The jury deliberated for two hours before reaching their verdict. Franklin, who appeared at the trial in custody, was remanded following the conclusion of the trial. The trial was held before Senior U.S. District Court Judge Wiley Y. Daniel. Franklin is scheduled to be sentenced by Judge Daniel on November 14, 2013 at 9:30 a.m.
According to the Second Superseding Indictment, as well as facts presented at trial, from May 11, 2009 and January 5, 2011, Franklin knowingly made, printed or published any notice or advertisement offering to receive, exchange or distribute child pornography to anyone who was a member of his online trading circle. Further, the defendant knowingly received and distributed child pornography using the Internet. Lastly, Franklin knowingly possessed images of child pornography.
In total, the defendant possessed multiple hard drives containing over 200,000 images of child pornography. Franklin used a file trading software to allow others to preview and browse his collection and to chat with fellow child pornography traders. Part of the trading of images was to encourage purveyors to produce new child pornography videos. As a result of this investigation, two young children, both under 12 years old, were rescued from their abusers.
During her closing remarks, Assistant U.S. Attorney Judith Smith said: “The defendant’s currency was trading in the suffering of children’s sexual abuse and humiliation.”
U.S. Attorney John Walsh praised the prosecution team, including the Assistant U.S. Attorneys and the FBI Special Agents who conducted the investigation into Franklin. “Thanks to the in-depth work of the FBI agents, and the excellent litigation of the prosecutors handling this case, the defendant faces a mandatory minimum of 15 years in federal prison for his heinous crime of trafficking in images of the sexual exploitation of children as young as babies.”
“Protecting children from providers of child pornography is a priority of the FBI,” said FBI Denver Division Special Agent in Charge Thomas Ravenelle. “Today’s verdict demonstrates that those who advertise, distribute, possess, and trade child pornography will be prosecuted to the fullest extent of the law.”
The penalty for notice or advertising child pornography is not less than 15 years, and up to 30 years in federal prison, and a fine of up to $250,000. The penalty for receipt or distribution of child pornography is not less than 5 years, and not more than 20 years in federal prison, and a fine of up to $250,000, per count. The penalty for possession of child pornography is not more than 10 years imprisonment and up to a $250,000 fine. If the defendant has a prior conviction relating to aggravated sexual abuse, sexual abuse, or abusive sexual conduct involving a minor or ward, or the production, possession, receipt mailing, sale, distribution, shipment or transportation of child pornography, or sex trafficking in children, the defendant faces not less than 25 years and not more than 50 years imprisonment for advertising child pornography, and not less than 15 years and not more than 40 years imprisonment for receipt, distribution and possession of child pornography.
This case was investigate by the Denver and Phoenix Field Offices of the Federal Bureau of Investigation.
Franklin was prosecuted by Assistant U.S. Attorneys Judith Smith and Alecia Riewerts Wolak.
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."
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Craig Doctor Arrested for Prescribing Drugs Resulting in Patient Deaths and Heath Care Fraud SchemeRead the Press Release
Click here for a copy of the indictment charging Dr. Joel Miller
DENVER – Joel E. Miller, age 55, of Craig, Colorado, was arrested without incident today on charges of health care fraud, money laundering and distributing/dispensing controlled substances, federal and state authorities announced. Miller was indicted by federal grand jury in Denver on August 21, 2013, which remained under seal until his arrest and first court appearance. Miller was arrested without incident in Steamboat Springs, Colorado. He made his initial appearance this afternoon before a U.S. Magistrate Judge in Grand Junction, where he was advised of his rights and the charges pending against him.
According to the indictment, Miller was a licensed physician in the state of Colorado and obtained Doctor of Osteopathic Medicine (D.O.) degree in 1990. He was licensed to practice medicine in Colorado in 1994. In 2003 he practiced medicine in Moffat County, Colorado and in 2008, Miller opened a solo private medical practice located in Craig, Colorado. The legal name of his business was DODXRX, doing business as High Country Medical.
In September 2009, the State of Colorado Board of Medical Examiners (“Board”) entered a Stipulation and Final Agency Order in which the Board issued a Letter of Admonition against Miller based upon findings he mis-prescribed neuropsychiatric medications to certain patients. The Board ordered Miller, among other things, to attend a continuing medical education course “in the area of prescribing” and provide proof of completion of such a course. In March of 2011, Miller sent a letter to the Board acknowledging completion of the ordered course.
Approximately between May 2008 and September 2012, Miller executed and attempted to execute a scheme to defraud health care benefit programs, namely Medicaid, Medicare, and commercial health care plans. Particularly, Miller prescribed controlled substances to patients without determining a sufficient medical necessity for the prescription of controlled substances; prescribed controlled substances to patients in a manner which was inconsistent with the usual course of professional practice and for other than legitimate medical purpose; and prescribed pharmaceuticals to patients for whom the prescription was not intended, and directed the persons to whom he prescribed the pharmaceuticals to give the prescription to third parties.
Furthermore, Miller prescribed controlled substances in quantities and dosages that would cause patients to abuse, misuse, and become addicted to the controlled substances. He also pre-signed prescriptions and allowed office employees to distribute controlled substance prescriptions to patients in his absence and without a doctor’s examination of the patient. According to the indictment, in August of 2010, Miller dispensed and distributed to a patient hydrocodone (Schedule III controlled substance), alprazolam and clonazepam, (both Schedule IV controlled substances) which resulted in the death of the patient. The indictment also alleges that in May 2012, Miller dispensed and distributed to a patient hydrocodone (Schedule III controlled substance), and diazepam (a Schedule IV controlled substance) which also resulted in death.
“Defrauding our health care system, causing the cost of care to increase is one thing,” said U.S. Attorney John Walsh. “It is quite another when a doctor over prescribes prescription medication that, as alleged in this case, causes patients to be addicted, and in two cases here, die.”
"Dr. Joel E. Miller's over prescribing and distribution of licit drugs is no different than the drug traffickers that DEA targets," said Drug Enforcement Administration Denver Special Agent in Charge Barbra Roach. "Dr. Miller destroyed the life of at least two patients, has hurt many other patients and disguised his drug dealing by conducting those activities in his professional office and while wearing a doctor's coat. DEA will continue to target "drug dealers" no matter their social or professional status."
"Crimes like this are motivated purely by greed and the patients are the real victims in this case," said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. "Prescription drug abuse is a serious problem and we are committed to investigate along with our law enforcement partners those individuals who are responsible for the illegal distribution of prescription medicine."
“Many people in Moffat County were directly negatively affected by the actions of Dr. Miller,” said Moffat County Sheriff Tim Jantz. “Some in our community were caused great harm and pain, which will never go away for those families. Hopefully this arrest and indictment will bring some closure to those affected by his actions.”
Miller was charged with thirty four counts as follows; one count of health care fraud with death resulting, which carries a penalty of life in prison, and up to a $250,000 fine; eight counts of health care fraud, which carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000 per count; ten counts of money laundering, which carries a penalty of not more than 20 years in federal prison, and a fine of up to $500,000 or twice the value of the property involved, per count; two counts of dispensing of controlled substances resulting in death, which carries a penalty of not less than 20 years, and up to life in federal prison, and up to a $1,000,000 fine; seven counts of dispensing of controlled substances, which carries a penalty of not more than 20 years in federal prison, and up to a $1,000,000 fine; dispensing of controlled substances, which carries a penalty of not more than 10 years in federal prison, and up to a $250,000 fine; one count of dispensing a controlled substance, which carries a penalty of not more than 10 years in federal prison, and up to a $500,000 fine; and one count of furnishing false and fraudulent material information, which carries a penalty of not more than 4 years in federal prison, and up to a $250,000 fine. The indictment also includes an asset forfeiture allegation.
This case was investigated by agents with the Drug Enforcement Administration (DEA) and IRS Criminal Investigation with the assistance of the Moffat County Sheriff’s Office and the Colorado Attorney General's Office. The case 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.
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Last Defendant in Operation Spitter Is Sentenced to 8 Years in Federal Prison for Distribution of Heroin and CocaineRead the Press Release
DENVER – Elder Geovany Sabillon-Umana, age 43, of Denver, Colorado was sentenced by U.S. District Court Judge Wiley Y. Daniel to serve 96 months (8 years) in federal prison for conspiracy to distribute heroin and cocaine, and money laundering, federal and state authorities announced. Following his prison sentencing, Umana was ordered to spend 5 years on supervised release. Umana pled guilty to the above charges on October 23, 2012. Other key co-conspirators of “Operation Spitter” were sentenced by Judge Daniel and received the following sentences:
- Jose Lopez-Luna pled guilty to drug charges & money laundering and was sentenced to 192 months, followed by 5 years supervised release.
- Yoni Dimar Mas-Cruz pled guilty to drug charges and was sentenced to 72 months, followed by 5 years supervised release.
- Nandi Evelio Arrazola pled guilty to drug charges and was sentenced to 70 months, followed by 5 years supervised release.
- Elvin Eduardo Cruz-Cruz pled guilty to drug charges and was sentenced to 48 months, followed by 5 years supervised release.
- Corina Terrones was indicted on drug charges and money laundering and is currently a fugitive.
According to the statement of facts contained in Umana’s plea agreement, investigators from the Front Range Task Force (FRTF) which included DEA and IRS CI agents conducted an investigation into the Jose Lopez- Luna, aka Gordo, drug distribution organization (DTO) since approximately June 2011. The Gordo DTO is responsible for the distribution of multi-pound quantities of heroin and cocaine in the Denver metropolitan area. The investigation led investigators to Umana, an active narcotics customer and narcotics sub-distributor for the Gordo DTO.
From July 2011 through April 2012, the investigation disclosed Umana distributed narcotics and assisted the Gordo DTO by arranging or providing the means of transportation of drugs, advising Jose Lopez-Luna in the narcotics business, preparing documents for DTO automobile registration and insurance, assisting with acquisition of mobile phones, smart phones and services, assisting with Jose Lopez-Luna's housing, offering to obtain a firearm for Jose Lopez-Luna, and sometimes sourcing the Gordo DTO with cocaine drug supplies obtained from another DTO.
In late spring of 2011 the FRTF investigators began their investigation by making controlled purchases of heroin from lower level traffickers including Yoni Dimar Mas-Cruz. Investigators conducting surveillance determined that the person eventually identified as Jose Lopez-Luna was the source of the drug supply. The street level distributors are sometimes called “Spitters” because they keep balloons of heroin in their cheeks and spit them out into their hands when, for example, a customer comes to buy a $20 rock of heroin, giving the OCDETF case name “Operation Spitter.”
Searches conducted in April of 2012 resulted in the recovery of vehicles, more than 20 ounces of heroin, a quantity of cocaine, and approximately one pound of methamphetamine, cell phones, drug proceeds in the form of cash, and one firearm. Over the course of the investigation 2,101 grams of heroin, 2,383 grams of cocaine and 445 grams of methamphetamine were seized by law enforcement officers.
This case was investigated by the Drug Enforcement Administration (DEA), IRS – Criminal Investigation Division, and the Front Range Task Force which includes members of the DPD and the Arapahoe County Sheriff’s Department.
The case was prosecuted by Assistant U.S. Attorney Guy Till of the U.S. Attorney’s Office.
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