District of Columbia
Press releases recorded for this federal judicial district.
Maryland Woman Pleads Guilty to Bank FraudRead the Press Release
WASHINGTON – Aurelia Stanton, 39, of Baltimore, Maryland, and formerly of Washington, D.C., pleaded guilty today to embezzling hundreds of thousands of dollars from her former employer, announced Acting U.S. Attorney Channing D. Phillips and Special Agent in Charge of the FBI Washington Field Office Criminal Division Wayne A. Jacobs.
Stanton pleaded guilty in the U.S. District Court for the District of Columbia, to one count of bank fraud. The Honorable Trevor N. McFadden scheduled her sentencing for Dec. 10, 2021. Under federal sentencing guidelines, she faces a likely range of 27 to 46 months in prison, as well as financial penalties. She also has agreed to pay about $233,000 in restitution. She also has agreed to pay an identical amount in a forfeiture money judgment.
Stanton worked as an office manager from approximately June 2014 through May 2017 for a business, identified in court documents as “Company A.” She was responsible for ensuring timely payment of bills and invoices, accurate bookkeeping, and managing the office. From August 2015 through May 2017, according to court documents, she embezzled more than $233,000 writing checks to herself on the company’s check stock. She used a computer software program to conceal the fraudulent disbursements by editing the company’s bank statements to remove references to the fraudulently drafted, forged, and negotiated checks. In total, she deposited 187 checks with forged signatures.
In announcing the guilty plea, Acting U.S. Attorney Phillips and Special Agent in Charge Jacobs commended the work of those who investigated the case from the FBI’s Washington Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Paralegal Specialists Brittany Phillips and Jessica Mundi. Finally, they commended the work of former Assistant U.S. Attorney Derrick Williams, who investigated and indicted the case, and Assistant U.S. Attorney Kondi Kleinman.
District Man Sentenced to 51 Months in Federal Prison for Series of Bank RobberiesRead the Press Release
WASHINGTON –Micheal Antonio Smith, 33, of Washington, D.C., has been sentenced to 51 months of imprisonment for robbing three Wells Fargo Bank branches within the District of Columbia.
The announcement was made by Acting U.S. Attorney Channing D. Phillips, Special Agent in Charge of the FBI Washington Field Office Criminal Division Wayne A. Jacobs, and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Smith pled guilty in June 2021, in the U.S. District Court for the District of Columbia, to two counts of bank robbery. A third count charging attempted bank robbery was dismissed at sentencing as part of the plea agreement. He was sentenced on Sept. 22, 2021, by the Honorable Judge Christopher R. Cooper. Following his prison term, he will be placed on three years of supervised release.
Smith robbed all three banks within a span of approximately two hours on Sept. 29, 2020. The first robbery took place at approximately 12:18 p.m. at a branch in the 3200 block of Pennsylvania Avenue SE. The others took place at branches in the 600 block of H Street NE and the 1900 block of 14th Street NW. According to the government’s evidence, Smith entered all three branches wearing a grey hooded sweatshirt with a prominent BMW logo and a balaclava style face and head covering. In each bank, Smith presented a note to the demanding large bills and no dye pack. During one of the robberies, Smith reached inside his sweatshirt in a way that suggested his possession of a handgun or other weapon.
Smith took the demand note with him after each robbery and robbed the three banks of $1,510 before fleeing the District of Columbia in a rented Tesla Model S. The FBI was able to locate and track that vehicle to Philadelphia, Pennsylvania, where Smith was located and arrested on Oct. 6, 2020. During a search of the Tesla, FBI agents discovered and seized a grey hooded sweatshirt with a BMW logo and a demand note. Smith has been in custody since his arrest.
This case was investigated by the FBI Washington Field Office’s Violent Crime Task Force, which is composed of FBI Special Agents and Task Force Officers from MPD and other law enforcement agencies. The task force is charged with investigating and bringing cases to prosecution against violent offenders within the District of Columbia.
In announcing the sentence, U.S. Attorney Phillips, Special Agent in Charge Jacobs and Chief Contee commended the work of the MPD officers and FBI agents who investigated the case. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Rommel Pachoca. Finally, they commended the work of Assistant U.S. Attorney James B. Nelson, who investigated and prosecuted the case.
Political Operatives Indicted for Alleged Scheme Involving Illegal Campaign Contribution to 2016 Presidential CampaignRead the Press Release
An indictment was unsealed today in the District of Columbia charging a Kentucky man and a Florida man both with conspiracy to solicit and cause an illegal campaign contribution by a foreign national, effect a conduit contribution and cause false records to be filed with the Federal Election Commission (FEC) and related substantive offenses.
According to court documents, Jesse R. Benton, 43, of Louisville, Kentucky, who previously worked as a campaign manager for two campaigns for U.S. Senate and one campaign for president, and Roy Douglas “Doug” Wead, 75, of Bonita Springs, Florida, who previously served as an advisor to multiple presidential campaigns, conspired together to solicit a political contribution from a Russian foreign national (Foreign National 1). As described in the indictment, Wead conveyed to Foreign National 1 that he could meet Political Candidate 1, a candidate for president during the 2016 election cycle, in exchange for a payment. Shortly after Foreign National 1 committed to transfer the funds, Benton reached out to individuals at Political Committee B, the national party committee for Political Candidate 1’s political party. He then arranged for Foreign National 1 to attend a political fundraising event and get a photograph with Political Candidate 1, in exchange for a political contribution to Political Committee C, a joint fundraising committee comprised of the campaign committee for Political Candidate 1, Political Committee B, and related state committees. Foreign National 1 ultimately wired $100,000 to Company A, a political consulting firm owned by Benton. To disguise the true purpose of the transfer of funds, Wead and Benton created a fake invoice for “consulting services” and invented a cover story.
Wead and Foreign National 1 attended the political fundraising event for Political Candidate 1 on Sept. 22, 2016. Foreign National 2, who worked as a Russian/English translator for Wead, also attended. All three individuals had photographs taken at the event with Political Candidate 1. Following the event, Benton repeatedly represented to a consultant working for Political Committee B and Political Committee C that he had already sent the promised contribution for the event, but in actuality he delayed sending the contribution. Benton ultimately filled out a contributor form, indicated that he was the contributor, and used a personal credit card to make a $25,000 contribution. Benton retained the remaining $75,000 of Foreign National 1’s money. Because Benton falsely claimed to have given the contribution himself, three different political committees unwittingly filed reports with the FEC that inaccurately reported Benton, rather than Foreign National 1, as the source of the funds.
Benton and Wead are both charged with one count of conspiracy to solicit and cause an illegal campaign contribution by a foreign national, effect a conduit contribution, and cause false records to be filed with the FEC, one count of contribution by a foreign national, one count of contribution in the name of another and three counts of making false entries in an official record. The defendants made their initial court appearance today before U.S. Magistrate Judge Zia Faruqui of the U.S. District Court for the District of Columbia. If convicted, Benton and Wead face a range of maximum penalties from five to 20 years in prison, per count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI’s San Diego Field Office is investigating the case.
Trial Attorneys Rebecca G. Ross and Michelle K. Parikh of the Justice Department’s Public Integrity Section and Special Assistant U.S. Attorney Michelle L. Wasserman of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Doctor Licensed in the District of Columbia and Virginia Charged with Unlawful Distribution of Controlled SubstancesRead the Press Release
WASHINGTON – A criminal complaint was unsealed this week in the District of Columbia charging a doctor with unlawful distribution of a controlled substance outside the scope of his professional practice. As detailed in court documents, the case relates to defendant Dr. Robert M. Cao prescribing various narcotic pain medications in the months and days leading up to a man’s May 31, 2021 overdose death.
The announcement was made by Acting U.S. Attorney Channing D. Phillips and Special Agent in Charge of the FBI Washington Field Office Criminal Division Wayne A. Jacobs.
Cao, 38, of Falls Church, Va., was arrested on Sept. 14 and made his initial appearance the following day before Magistrate Judge Zia M. Faruqui in the U.S. District Court for the District of Columbia. His next hearing is scheduled for Oct. 28, 2021. The charge carries a statutory maximum of 20 years in prison and potential financial penalties.
Cao’s arrest is part of a nationwide initiative targeting health care fraud. The Department of Justice announced today that criminal charges have been filed against 138 defendants, including 42 doctors, nurses, and other licensed medical professionals, in 31 federal districts across the United States for their alleged participation in various healthcare fraud schemes that resulted in approximately $1.4 billion in alleged losses.
Nationwide, the charges target approximately $1.1 billion in fraud committed using telemedicine (the use of telecommunications technology to provide health care services remotely), $29 million in COVID-19 health care fraud, $133 million connected to substance abuse treatment facilities, or “sober homes,” and $160 million connected to other health care fraud and illegal opioid distribution schemes across the country.
“This nationwide enforcement action demonstrates that the Criminal Division is at the forefront of the fight against health care fraud and opioid abuse by prosecuting those who have exploited health care benefit programs and their patients for personal gain,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The charges announced today send a clear deterrent message and should leave no doubt about the department’s ongoing commitment to ensuring the safety of patients and the integrity of health care benefit programs, even amid a continued pandemic.”
“Health care fraud and opioid abuse have imposed enormous economic consequences and caused thousands of tragic deaths nationwide,” said Acting U.S. Attorney Phillips. “As today’s announcement shows, we are committed to using the full extent of the law to protect the public from those who illegally sell and prescribe opioids and other dangerous drugs as well as those who carry out schemes to defraud the public health system of taxpayer dollars.”
“Physicians are entrusted to care for our citizens and prescribe necessary medications in legitimate doctor-patient relationships,” said Special Agent in Charge Jacobs of the FBI Washington Field Office's Criminal Division. “The FBI and our partners will continue to investigate and stop those medical professionals who provide illegal prescriptions and distribute controlled substance medications that fuel the opioid epidemic in our country. Not only are these actions criminal, but as we have seen all too often – they have deadly consequences.”
According to court documents, Cao is a physician who is licensed to practice medicine in the District of Columbia and Virginia. Between in or around at least Jan. 9, 2021, and continuing through in or around May 30, 2021, the documents allege, Cao knowingly and intentionally wrote a man identified in court documents as “V.C.” at least five prescriptions for oxycodone and hydrocodone, Schedule II controlled substances with a high potential for abuse.
On May 31, 2021, first responders were dispatched to a Fairfax, Va. residence in response to a 911 call for assistance regarding “V.C.,” after his girlfriend found him cold and non-responsive. He was pronounced deceased under suspicious circumstances.
A subsequent autopsy report documented the cause of death as acute combined oxycodone and ethanol poisoning. On the nightstand next to where “V.C.” was found were prescription bottles, including one containing Percocet (a brand name of the narcotic analgesic oxycodone/acetaminophen) pills filled on May 23, 2021. Cao was the prescribing doctor listed on the bottle.
Court filings also detail text message exchanges between Cao and “V.C.”, including discussions about Cao prescribing narcotic pain medications to “V.C.”; “V.C.” agreeing to give Cao a kickback on some of those pills; and meetings between the two, including a meeting in a parking lot on the night before the man’s death.
The charges in criminal complaints are merely allegations and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory U.S. Sentencing Guidelines and other statutory factors.
The case is being prosecuted by Assistant U.S. Attorney Anne P. McNamara of the U.S. Attorney’s Office for the District of Columbia. The investigation into this matter was conducted by the FBI’s Washington Field Office in partnership with the Fairfax County, Va. Police Department.
Nationally, the cases announced today involving the illegal prescription and/or distribution of opioids involve a total of 19 defendants, including several charges against medical professionals and others who prescribed over 12 million doses of opioids and other prescription narcotics, while submitting over $14 million in false billings.
Prior to the charges announced as part of today’s nationwide enforcement action and since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,600 defendants who have collectively billed the Medicare program for approximately $23 billion. In addition to the criminal actions announced today, CMS, working in conjunction with HHS-OIG, announced 28 administrative actions to decrease the presence of fraudulent providers.
The national announcement can be found at this link:
https://www.justice.gov/opa/pr/national-health-care-fraud-enforcement-action-results-charges-involving-over-14-billion
To view Assistant Attorney General Polite’s remarks:
https://www.justice.gov/opa/video/assistant-attorney-general-kenneth-polite-jr-delivers-remarks-health-care-enforcement.
District Man Pleads Guilty to Sexually Abusing Two Women in Separate Incidents in Northwest WashingtonRead the Press Release
WASHINGTON – Michael Hilliard, 62, formerly of Washington, D.C, pleaded guilty today to sexually abusing two women, both of whom were strangers to him, announced Acting U.S. Attorney Channing D. Phillips.
Hilliard pleaded guilty to two counts of misdemeanor sex abuse. He faces a statutory maximum of 360 days of incarceration – 180 days for each conviction. Additionally, as part of the plea agreement, he agreed to register as a sex offender for the next 10 years. Hilliard will be sentenced on Nov. 17, 2021, by the Honorable Jonathan H. Pittman in the Superior Court of the District of Columbia.
According to the government’s evidence, in the first offense, on May 21, 2021, at about 11:25 a.m., Hilliard approached the victim as she walked toward the PNC Bank at the corner of 14th and P Streets NW. He made verbal sexual advances toward the victim, who ignored him as he proceeded to follow her. The victim later left the bank and entered her vehicle. As she waited at the traffic light on the corner of 14th and P Streets, Hilliard approached the driver’s side of her vehicle, reached into the open window, and grabbed her breast.
In the second offense, on July 10, 2021, at about 2:05 p.m., Hilliard approached another victim during her shift at a convenience store located near Thomas Circle NW and told her that he was hungry. As the victim went to prepare a sandwich for him, he reached behind her and grabbed her buttocks. When the victim turned around, Hilliard reached between her legs and grabbed her vaginal area.
Following these guilty pleas, Hilliard now has 24 misdemeanor sexual abuse convictions since 1999. Hilliard was arrested in these cases on July 12, 2021 and has since been detained.
In announcing the pleas, Acting U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department (MPD). He also expressed appreciation for the work of those who handled the case at the U.S. Attorney’s Office, including Veronica Vaughan and Lezlie Richardson of the Victim/Witness Assistance Unit. Finally, he commended the work of Assistant U.S. Attorney Sandra R. Braschi, who prosecuted both cases.
Former Treasurer and Comptroller of the Universal Ballet Foundation Sentenced to 42 Months in Prison for Bank FraudRead the Press Release
WASHINGTON – Sophia Kim, the former Treasurer and Comptroller for the Universal Ballet Foundation, which operated the Kirov Academy of Ballet, was sentenced today to 42 months in prison for embezzling more than $1.5 million from the organization.
The announcement was made by Acting U.S. Attorney Channing D. Phillips and Special Agent in Charge of the FBI Washington Field Office Criminal Division Wayne A. Jacobs.
Kim, a/k/a “Sophia Kim Sebold” and “Sookyeong Kim Sebold,” pleaded guilty in May 2021 in the U.S. District Court for the District of Columbia to a charge of bank fraud. She was sentenced by the Honorable Rudolph Contreras. In addition to the prison term, Kim 60, of Temple Hills, Md., was ordered to pay more than $1.5 million in restitution and an identical amount in a forfeiture money judgment. Following completion of her prison term, she will be placed on four years of supervised release.
The Kirov Academy of Ballet is a non-profit organization located in the District of Columbia. According to court documents, between approximately January 2018 and September 2018, Kim misappropriated approximately $1.5 million from the organization’s bank accounts through unauthorized check, debit, and credit card transactions.
This consisted of 68 unauthorized checks to “Cash” or to “Sophia Kim,” in whole-dollar amounts ranging from $500 to $12,000, totaling approximately $377,200, 197 unauthorized debits and cash withdrawals, totaling approximately $479,283, and 139 unauthorized credit card transactions, totaling approximately $681,751. More than $1 million of unauthorized debits and withdrawals and credit card charges were at MGM National Harbor Casino in Oxon Hill, MD, totaling approximately $1,068,026.
At the time that Kim began committing these offenses, she had just completed a period of supervised release for an earlier conviction stemming from her work as a bookkeeper and treasurer of another non-profit. In that case, she was convicted in 2012 in the U.S. District Court for the Eastern District of Virginia on charges of filing a false tax return and tax evasion and sentenced to two years in prison, to be followed by three years of supervised release.
In announcing the sentence, Acting U.S. Attorney Phillips and Special Agent in Charge Jacobs commended the work of those who investigated the case from the FBI’s Washington Field Office. They also acknowledged the efforts of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialist Angeline Thekkumthala, as well as Assistant U.S. Attorneys Joshua Rothstein and David Kent, who investigated and prosecuted this matter.
Three Former U.S. Intelligence Community and Military Personnel Agree to Pay More Than $1.68 Million to Resolve Criminal Charges Arising from Their Provision of Hacking-Related Services to a Foreign GovernmentRead the Press Release
WASHINGTON – On Sept. 7, U.S. citizens, Marc Baier, 49, and Ryan Adams, 34, and a former U.S. citizen, Daniel Gericke, 40, all former employees of the U.S. Intelligence Community (USIC) or the U.S. military, entered into a deferred prosecution agreement (DPA) that restricts their future activities and employment and requires the payment of $1,685,000 in penalties to resolve a Department of Justice investigation regarding violations of U.S. export control, computer fraud and access device fraud laws. The Department filed the DPA today, along with a criminal information alleging that the defendants conspired to violate such laws.
According to court documents, the defendants worked as senior managers at a United Arab Emirates (U.A.E.)-based company (U.A.E. CO) that supported and carried out computer network exploitation (CNE) operations (i.e., “hacking”) for the benefit of the U.A.E government between 2016 and 2019. Despite being informed on several occasions that their work for U.A.E. CO, under the International Traffic in Arms Regulations (ITAR), constituted a “defense service” requiring a license from the State Department’s Directorate of Defense Trade Controls (DDTC), the defendants proceeded to provide such services without a license.
These services included the provision of support, direction and supervision in the creation of sophisticated “zero-click” computer hacking and intelligence gathering systems – i.e., one that could compromise a device without any action by the target. U.A.E. CO employees whose activities were supervised by and known to the defendants thereafter leveraged these zero-click exploits to illegally obtain and use access credentials for online accounts issued by U.S. companies, and to obtain unauthorized access to computers, like mobile phones, around the world, including in the United States.
“This agreement is the first-of-its-kind resolution of an investigation into two distinct types of criminal activity: providing unlicensed export-controlled defense services in support of computer network exploitation, and a commercial company creating, supporting and operating systems specifically designed to allow others to access data without authorization from computers worldwide, including in the United States,” said Acting Assistant Attorney General Mark J. Lesko for the Justice Department’s National Security Division. “Hackers-for-hire and those who otherwise support such activities in violation of U.S. law should fully expect to be prosecuted for their criminal conduct.”
“Left unregulated, the proliferation of offensive cyber capabilities undermines privacy and security worldwide. Under our International Traffic in Arms Regulations, the United States will ensure that U.S. persons only provide defense services in support of such capabilities pursuant to proper licenses and oversight,” said Acting U.S. Attorney Channing D. Phillips of the District of Columbia. “A U.S. person’s status as a former U.S. government employee certainly does not provide them with a free pass in that regard.”
“The FBI will fully investigate individuals and companies that profit from illegal criminal cyber activity,” said Assistant Director Bryan Vorndran of the FBI’s Cyber Division. “This is a clear message to anybody, including former U.S. government employees, who had considered using cyberspace to leverage export-controlled information for the benefit of a foreign government or a foreign commercial company – there is risk, and there will be consequences.”
“Today’s announcement shines a light on the unlawful activity of three former members of the U.S. Intelligence Community and military,” said Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office. “These individuals chose to ignore warnings and to leverage their years of experience to support and enhance a foreign government’s offensive cyber operations. These charges and the associated penalties make clear that the FBI will continue to investigate such violations.”
The Defendants’ Applicable Conduct
After leaving U.S. government employment, Baier, Adams and Gericke worked for a U.S. Company (U.S. Company One) that provided cyber services to a U.A.E. government agency in compliance with the ITAR pursuant to a DDTC-issued Technical Assistance Agreement (TAA) signed by U.S. Company One, the U.A.E. government, and its relevant intelligence agency. U.S. Company One’s TAA specifically required the parties to abide by U.S. export control laws; obtain preapproval from a U.S. government agency prior to releasing information regarding “cryptographic analysis and/or computer network exploitation or attack,” and; not “target or exploit U.S. Persons (i.e., U.S. citizens, permanent resident aliens, or U.S. companies or entities, or other persons in the United States) . . .” While employed by U.S. Company One, the defendants received periodic ITAR and TAA training.
In January 2016, after receiving an offer for higher compensation and an expanded budget, the defendants joined U.A.E. CO as senior managers of a team known as Cyber Intelligence-Operations (CIO). Prior to their departure, U.S. Company One repeatedly informed its employees, including the defendants, that the services they were providing constituted “defense services” under the ITAR, and that U.S. persons could not lawfully provide such services to U.A.E. CO without obtaining a separate TAA. After joining U.A.E. CO, the defendants sought continued access to U.S. Company One’s ITAR-controlled information, including from U.S. Company One employees, in violation of the TAA and the ITAR.
Between January 2016 and November 2019, the defendants and other U.A.E. CO CIO employees expanded the breadth and increased the sophistication of the CNE operations that CIO was providing to the U.A.E. government. For example, over an 18-month period, CIO employees, with defendants’ support, direction and supervision, created two similar “zero-click” computer hacking and intelligence gathering systems that leveraged servers in the United States belonging to a U.S. technology company (U.S. Company Two) to obtain remote, unauthorized access to any of the tens of millions of smartphones and mobile devices utilizing a U.S. Company Two-provided operating system. The defendants and other CIO employees colloquially referred to these two systems as “KARMA” and “KARMA 2.”
CIO employees whose activities were supervised by and/or known to the defendants used the KARMA systems to obtain, without authorization, targeted individuals’ login credentials and other authentication tokens (i.e., unique digital codes issued to authorized users) issued by U.S. companies, including email providers, cloud storage providers, and social media companies. CIO employees then used these access devices to, again without authorization, log into the target’s accounts to steal data, including from servers within the United States.
U.S. Company Two updated the operating system for its smartphones and other mobile devices in September 2016, undercutting the usefulness of KARMA. Accordingly, CIO created KARMA 2, which relied on a different exploit. In the summer of 2017, the FBI informed U.S. Company Two that its devices were vulnerable to the exploit used by KARMA 2. In August 2017, U.S. Company Two updated the operating system for its smartphones and other mobile devices, limiting KARMA 2’s functionality. However, both KARMA and KARMA 2 remained effective against U.S. Company Two devices that used older versions of its operating system.
The DPA’s Terms
Under the terms of the DPA, Baier, Adams and Gericke agreed to pay $750,000, $600,000, and $335,000 respectively, over a three-year term, which they may not be reimbursed for without the express approval of the U.S. government. In addition to the financial penalties, as part of the DPA, the defendants agreed to full cooperation with the relevant Department and FBI components; the immediate relinquishment of any foreign or U.S. security clearances; a lifetime ban on future U.S. security clearances; and certain future employment restrictions, including a prohibition on employment that involves CNE activity or exporting defense articles or providing defense services under the ITAR (e.g., CNE techniques), and restrictions on employment for certain U.A.E. organizations.
The investigation was conducted jointly by the U.S. Attorney’s Office for the District of Columbia, the Justice Department’s National Security Division (NSD), and the FBI’s Washington Field Office.
Assistant U.S. Attorneys Demian Ahn and Tejpal Chawla of the U.S. Attorney’s Office for the District of Columbia and Counsel for Cyber Investigations Ali Ahmad and Trial Attorney Scott Claffee of NSD’s Counterintelligence and Export Control Section led the investigation for the government.
Three Former U.S. Intelligence Community and Military Personnel Agree to Pay More Than $1.68 Million to Resolve Criminal Charges Arising from Their Provision of Hacking-Related Services to a Foreign GovernmentRead the Press Release
On Sept. 7, U.S. citizens, Marc Baier, 49, and Ryan Adams, 34, and a former U.S. citizen, Daniel Gericke, 40, all former employees of the U.S. Intelligence Community (USIC) or the U.S. military, entered into a deferred prosecution agreement (DPA) that restricts their future activities and employment and requires the payment of $1,685,000 in penalties to resolve a Department of Justice investigation regarding violations of U.S. export control, computer fraud and access device fraud laws. The Department filed the DPA today, along with a criminal information alleging that the defendants conspired to violate such laws.
According to court documents, the defendants worked as senior managers at a United Arab Emirates (U.A.E.)-based company (U.A.E. CO) that supported and carried out computer network exploitation (CNE) operations (i.e., “hacking”) for the benefit of the U.A.E government between 2016 and 2019. Despite being informed on several occasions that their work for U.A.E. CO, under the International Traffic in Arms Regulations (ITAR), constituted a “defense service” requiring a license from the State Department’s Directorate of Defense Trade Controls (DDTC), the defendants proceeded to provide such services without a license.
These services included the provision of support, direction and supervision in the creation of sophisticated “zero-click” computer hacking and intelligence gathering systems – i.e., one that could compromise a device without any action by the target. U.A.E. CO employees whose activities were supervised by and known to the defendants thereafter leveraged these zero-click exploits to illegally obtain and use access credentials for online accounts issued by U.S. companies, and to obtain unauthorized access to computers, like mobile phones, around the world, including in the United States.
“This agreement is the first-of-its-kind resolution of an investigation into two distinct types of criminal activity: providing unlicensed export-controlled defense services in support of computer network exploitation, and a commercial company creating, supporting and operating systems specifically designed to allow others to access data without authorization from computers worldwide, including in the United States,” said Acting Assistant Attorney General Mark J. Lesko for the Justice Department’s National Security Division. “Hackers-for-hire and those who otherwise support such activities in violation of U.S. law should fully expect to be prosecuted for their criminal conduct.”
“Left unregulated, the proliferation of offensive cyber capabilities undermines privacy and security worldwide. Under our International Traffic in Arms Regulations, the United States will ensure that U.S. persons only provide defense services in support of such capabilities pursuant to proper licenses and oversight,” said Acting U.S. Attorney Channing D. Phillips of the District of Columbia. “A U.S. person’s status as a former U.S. government employee certainly does not provide them with a free pass in that regard.”
“The FBI will fully investigate individuals and companies that profit from illegal criminal cyber activity,” said Assistant Director Bryan Vorndran of the FBI’s Cyber Division. “This is a clear message to anybody, including former U.S. government employees, who had considered using cyberspace to leverage export-controlled information for the benefit of a foreign government or a foreign commercial company – there is risk, and there will be consequences.”
“Today’s announcement shines a light on the unlawful activity of three former members of the U.S. Intelligence Community and military,” said Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office. “These individuals chose to ignore warnings and to leverage their years of experience to support and enhance a foreign government’s offensive cyber operations. These charges and the associated penalties make clear that the FBI will continue to investigate such violations.”
The Defendants’ Applicable Conduct
After leaving U.S. government employment, Baier, Adams and Gericke worked for a U.S. Company (U.S. Company One) that provided cyber services to a U.A.E. government agency in compliance with the ITAR pursuant to a DDTC-issued Technical Assistance Agreement (TAA) signed by U.S. Company One, the U.A.E. government, and its relevant intelligence agency. U.S. Company One’s TAA specifically required the parties to abide by U.S. export control laws; obtain preapproval from a U.S. government agency prior to releasing information regarding “cryptographic analysis and/or computer network exploitation or attack,” and; not “target or exploit U.S. Persons (i.e., U.S. citizens, permanent resident aliens, or U.S. companies or entities, or other persons in the United States) . . .” While employed by U.S. Company One, the defendants received periodic ITAR and TAA training.
In January 2016, after receiving an offer for higher compensation and an expanded budget, the defendants joined U.A.E. CO as senior managers of a team known as Cyber Intelligence-Operations (CIO). Prior to their departure, U.S. Company One repeatedly informed its employees, including the defendants, that the services they were providing constituted “defense services” under the ITAR, and that U.S. persons could not lawfully provide such services to U.A.E. CO without obtaining a separate TAA. After joining U.A.E. CO, the defendants sought continued access to U.S. Company One’s ITAR-controlled information, including from U.S. Company One employees, in violation of the TAA and the ITAR.
Between January 2016 and November 2019, the defendants and other U.A.E. CO CIO employees expanded the breadth and increased the sophistication of the CNE operations that CIO was providing to the U.A.E. government. For example, over an 18-month period, CIO employees, with defendants’ support, direction and supervision, created two similar “zero-click” computer hacking and intelligence gathering systems that leveraged servers in the United States belonging to a U.S. technology company (U.S. Company Two) to obtain remote, unauthorized access to any of the tens of millions of smartphones and mobile devices utilizing a U.S. Company Two-provided operating system. The defendants and other CIO employees colloquially referred to these two systems as “KARMA” and “KARMA 2.”
CIO employees whose activities were supervised by and/or known to the defendants used the KARMA systems to obtain, without authorization, targeted individuals’ login credentials and other authentication tokens (i.e., unique digital codes issued to authorized users) issued by U.S. companies, including email providers, cloud storage providers, and social media companies. CIO employees then used these access devices to, again without authorization, log into the target’s accounts to steal data, including from servers within the United States.
U.S. Company Two updated the operating system for its smartphones and other mobile devices in September 2016, undercutting the usefulness of KARMA. Accordingly, CIO created KARMA 2, which relied on a different exploit. In the summer of 2017, the FBI informed U.S. Company Two that its devices were vulnerable to the exploit used by KARMA 2. In August 2017, U.S. Company Two updated the operating system for its smartphones and other mobile devices, limiting KARMA 2’s functionality. However, both KARMA and KARMA 2 remained effective against U.S. Company Two devices that used older versions of its operating system.
The DPA’s Terms
Under the terms of the DPA, Baier, Adams and Gericke agreed to pay $750,000, $600,000, and $335,000 respectively, over a three-year term, which they may not be reimbursed for without the express approval of the U.S. government. In addition to the financial penalties, as part of the DPA, the defendants agreed to full cooperation with the relevant Department and FBI components; the immediate relinquishment of any foreign or U.S. security clearances; a lifetime ban on future U.S. security clearances; and certain future employment restrictions, including a prohibition on employment that involves CNE activity or exporting defense articles or providing defense services under the ITAR (e.g., CNE techniques), and restrictions on employment for certain U.A.E. organizations.
The investigation was conducted jointly by the U.S. Attorney’s Office for the District of Columbia, the Justice Department’s National Security Division (NSD), and the FBI’s Washington Field Office.
Assistant U.S. Attorneys Demian Ahn and Tejpal Chawla of the U.S. Attorney’s Office for the District of Columbia and Counsel for Cyber Investigations Ali Ahmad and Trial Attorney Scott Claffee of NSD’s Counterintelligence and Export Control Section led the investigation for the government.
District Woman Sentenced to Four Years in Federal Prison for Arson of Large Southeast Washington Apartment BuildingRead the Press Release
WASHINGTON –Laketia Hazelwood, 33, of Washington, D.C., has been sentenced to a four-year prison term for an arson that took place in June 2019 at Pennsylvania House, a 43-unit apartment building in Southeast Washington.
The announcement was made by Acting U.S. Attorney Channing D. Phillips, Charlie J. Patterson, Special Agent in Charge of the Washington Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Robert J. Contee III, Chief of the Metropolitan Police Department (MPD), and John A. Donnelly, Sr., Chief of the D.C. Fire and Emergency Medical Services Department.
Hazelwood pleaded guilty in May 2021 to one count of transporting an explosive with intent to damage property. She was sentenced on Sept. 2, 2021, by the Honorable Richard J. Leon in the U.S. District Court for the District of Columbia. Following her prison term, she will be placed on one year of supervised release.
According to the government’s evidence, on June 17, 2019, at approximately 10 p.m., Hazelwood poured gasoline into a plastic trash can liner and carried it into the lobby of Pennsylvania House, in the 3900 block of Pennsylvania Avenue SE. There, she tossed the gasoline-filled bag onto the lobby floor and threw a series of matches onto it, eventually igniting a large fire. The flames consumed much of the lobby area and caused extensive damage before being extinguished by members of the D.C. Department of Fire and Emergency Medical Services.
Surveillance footage of Hazelwood’s actions was posted publicly at https://www.youtube.com/watch?v=wtlv3AOqo3c&t=5s, resulting in several important tips from the public.
In announcing the sentence, U.S. Attorney Phillips, Special Agent in Charge Patterson, Chief Contee, and Chief Donnelly commended the work of the MPD officers, ATF agents, and Fire Marshals who investigated the case. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Kate Abrey and Teesha Tobias, and Supervisory Litigation Technology Specialist Leif Hickling.
Finally, they commended the work of Assistant U.S. Attorneys James Nelson and Andrew Floyd, who investigated and prosecuted the case.
District Man Sentenced to 118 Months in Prison for Armed Robberies of BusinessesRead the Press Release
WASHINGTON – Ashanti West, 27, of Washington, D.C., was sentenced today to 118 months in prison for carrying out armed robberies of a convenience store and sandwich shop within a two-hour period in the fall of 2019.
The announcement was made by Acting U.S. Attorney Channing D. Phillips, Special Agent in Charge of the FBI Washington Field Office Criminal Division Wayne A. Jacobs, and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
West is one of three defendants, all from Washington, D.C., who pleaded guilty to federal charges in the robberies. One co-defendant, Andre Thomas Jr., 27, was earlier sentenced to 112 months in prison, and another, Jaron Willis, 21, was sentenced to 42 months in prison and an additional six months of home incarceration.
West pleaded guilty in March 2021, in the U.S. District Court for the District of Columbia, to charges of robbery and using, carrying, possessing, and brandishing a firearm during a crime of violence. He was sentenced by the Honorable Timothy J. Kelly. Following his prison term, he will be placed on five years of supervised release.
According to the government’s evidence, on Nov. 5, 2019, at about 11:37 p.m., West and Thomas entered a 7-Eleven in the 4400 block of Benning Road NE, unmasked and scoping out the store. Then, roughly 90 minutes later, at 1:16 a.m. on Nov. 6, 2019, West, Thomas and Willis entered the store, all wearing masks. Once the lone store patron completed her transaction, West retrieved a pistol from his coat pocket and brandished it in the face of a 7-Eleven employee, demanding that the cash register be opened. Willis then hopped over the cashier-counter and began to steal cartons of cigarettes. At that point, a second store employee, who had been stocking shelves, realized what was happening and started to move swiftly toward the exit. Thomas grabbed the employee by the neck and squeezed until the victim lost consciousness. The defendants fled after collectively stealing cash and multiple cartons of cigarettes.
The second robbery took place at approximately 2:50 a.m. All three defendants, again wearing masks, entered a Subway sandwich shop in the 4500 block of Benning Road SE. At the time of this robbery, the door to the left of the register was propped open as the store was actively receiving a delivery. Once again, West pulled out a firearm, pointing it at a store employee before heading to the back of the establishment. When West reached the back of the store, he encountered another employee, who was stocking the freezer with the new deliveries. West forced this victim at gunpoint to lie down on the floor on his stomach, in the entryway to the freezer. Meanwhile, Willis physically pulled and pushed the other employee to the register. Once that employee opened the register, Willis and Thomas told him to hide in the bathroom. The three men took cash, including the entire cash till, and beverages and fled.
The three defendants were arrested soon after the robberies by the Metropolitan Police Department and have been in custody ever since.
This investigation was conducted by Metropolitan Police Department and the FBI Washington Field Office’s Violent Crime Task Force, which is composed of FBI Agents, working in partnership with MPD Detectives, and task force officers from other federal agencies to include the U.S. Department of Homeland Security, Federal Protective Service, U.S. Marshals Service, U.S. Capitol Police, U.S. Department of Energy, and other partners. The task force investigates violent offenders within the D.C. metropolitan area.
In announcing the sentence, Acting U.S. Attorney Phillips, Special Agent in Charge Jacobs, and Chief Contee commended the work of those who investigated the case. They also expressed appreciation for the efforts of those who handled the case for the U.S. Attorney’s Office, including Assistant U.S. Attorney Jeffrey Poulin and Paralegal Specialist Tasha Tobias, as well as Assistant U.S. Attorney Kaitlin A. Vaillancourt, who prosecuted the matter.
District Man Pleads Guilty to Sexually Abusing 14-Year-Old ChildRead the Press Release
WASHINGTON – A 57-year-old man, of Washington, D.C., pleaded guilty today to sexually abusing a 14-year-old girl while he was living with her and her mother in Northwest Washington, Acting U.S. Attorney Channing D. Phillips announced.
The man, who is not identified here to protect the privacy of the victim, pleaded guilty in the Superior Court of the District of Columbia to a charge of second-degree child sexual abuse, with aggravating circumstances. He also pleaded guilty to a related charge of contempt of court. The plea, which is contingent upon the Court’s approval, calls for an agreed-upon prison term in the range of four years to eight and a half years. Following his prison term, the man will be required to register for 10 years as a sex offender and complete a term of supervised release. The Honorable Juliet J. McKenna scheduled sentencing for Jan. 14, 2022.
In connection with his guilty plea, the defendant admitted engaging in sexual abuse against the victim on more than one occasion between October 2015 and December 2016. The victim disclosed what took place to her mother in March 2019. The defendant was arrested on April 5, 2019 and was initially detained pending trial. In May 2019, the Court released him with conditions that included a requirement that he have no contact and stay away from the victim and her mother. However, the Court learned that he continued to have contact with the mother, and as a result, he has been detained since August of 2019.
In announcing the plea, Acting U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department’s Youth and Family Services Division. He also expressed appreciation for the assistance provided by the Children’s Advocacy Center. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Victim/Witness Advocate Juanita Harris, Paralegal Specialist ReShawn Johnson, Investigators Sean Ricardi, Bryan Molnar, Nelson Rhone, and Nick Boffi. Finally, he commended the work of Assistant U.S. Attorneys Stuart Allen, Jason Feldman, and Angela Buckner, who investigated and prosecuted the case.
Businessman Sentenced to 14 Months in Prison for Paying Bribes to Federal and D.C. EmployeesRead the Press Release
WASHINGTON – Charles M. Thomas, 47, was sentenced today to 14 months in prison for paying bribes to two employees of U.S. Department of Housing and Urban Development (HUD) as well as to an employee of the District of Columbia Office of the State Superintendent of Education (OSSE) in return for favorable treatment on contracts for his business.
The announcement was made by Acting U.S. Attorney Channing D. Phillips, Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office, Criminal Division, Christopher Gaffney, Special Agent in Charge, Office of Special Investigations, HUD Office of Inspector General, and Daniel W. Lucas, Inspector General for the District of Columbia.
Thomas, of Lusby, Md., pleaded guilty in May 2018 in the U.S. District Court for the District of Columbia., to one count of conspiracy to commit bribery and two counts of conspiracy to pay gratuities and violate the Procurement Integrity Act. He was sentenced by the Honorable Randolph D. Moss. As part of his plea agreement, he is required to pay restitution to the D.C. Office of the State Superintendent of Education in the amount of $179,999. He also must pay a forfeiture money judgment in the same amount. Additionally, following his prison term, he will be placed on two years of supervised release.
According to court documents, Thomas was the sole owner and president of a Maryland company that provided information technology services to agencies of the federal government and educational services to public school children in the Washington, D.C. metropolitan area. His company had offices in the District of Columbia and Virginia and dozens of employees.
In his guilty plea, Thomas admitted to carrying out three schemes. One involved his dealings with a former management analyst of OSSE, an agency of the District of Columbia government. The others involved his dealings with a former contract oversight specialist and a former supervisory contract specialist with HUD.
In 2013 and 2014, according to the government’s evidence, Thomas made approximately $53,000 in payments to OSSE employee Shauntell Harley. In return, she provided him with information needed to create fraudulent invoices reflecting the provision of early intervention services that Thomas’s company did not provide. All told, Harley used her official position to cause $179,999 in payments to be made to Thomas’s company for work that was not performed.
The activities involving HUD took place from approximately 2010 to 2015. Thomas provided HUD employee Kevin Jones with tickets to sporting events, travel, cash, and other items worth more than $50,000, in exchange for Jones providing Thomas and his company with non-public information about pending HUD contracts. Thomas provided the second employee, former supervisor LaFonda Lewis, with tickets to sporting events, designer handbags, cash, and other items, worth more than $23,000, in exchange for non-public information about contracts.
Harley pleaded guilty to charges involving two bribery schemes in March 2018 and was sentenced to 56 months in prison. Lewis pleaded guilty to violating the Procurement Integrity Act in January 2019 and was sentenced to a year and a day in prison. Jones pleaded guilty to bribery in March 2019 and was sentenced to 24 months in prison.
In announcing the sentence, Acting U.S. Attorney Phillips, Special Agent in Charge Bornstein, Special Agent in Charge Gaffney, and Inspector General Lucas commended the work of those who investigated the case from the FBI’s Washington Field Office, HUD’s Office of the Inspector General, and the District of Columbia Office of the Inspector General.
They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Paralegal Specialists Joshua Fein and Kristy Penny. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Peter C. Lallas, who is investigating and prosecuting the matter.
Maryland Man Pleads Guilty to Defrauding Customers in Scam Involving Fake Sales of PuppiesRead the Press Release
WASHINGTON – A Maryland man who advertised the sale of pit bull puppies on various websites pleaded guilty today to a scheme in which he generated at least $158,000 in money transfers from more than 100 victims who never got the dogs.
The guilty plea was announced by Acting U.S. Attorney Channing D. Phillips and Raymond Villanueva, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Washington, D.C.
Fonjeck Eric Azoh, 42, of Mount Rainier, Md., pleaded guilty to wire fraud. The charge carries a statutory maximum of 20 years in prison and potential financial penalties. As part of the plea agreement, Azoh agreed that a restitution order of at least $158,000 is appropriate in the case. He also agreed to forfeit $67,000 seized by law enforcement during the investigation and pay an additional $92,000 forfeiture money judgment. Azoh will be sentenced in the U.S. District Court for the District of Columbia on Nov. 17, 2021, by the Honorable Carl J. Nichols.
According to the government’s evidence, between January 2019 and October 2020, Azoh offered the pit bull puppies, using various websites. He agreed to sell these puppies to victims living throughout the United States even though he never intended to provide them. Azoh directed victims to send money to him through money transfer businesses, which he then collected at retail stores and elsewhere. Throughout the scheme, Azoh collected at least $158,000 from at least 119 victims who lived in 40 different states.
Azoh was arrested in January 2021 and has been in custody ever since.
In announcing the plea, Acting U.S. Attorney Phillips and Special Agent in Charge Villanueva commended the work of those who investigated the case from HSI. They also expressed appreciation for the work of those who handled the case at the U.S. Attorney’s Office, including Assistant U.S. Attorney John W. Borchert, who prosecuted the case.
Former Priest and “Shelter Home” Operator Indicted for Illicit Sexual Conduct Against MinorsRead the Press Release
WASHINGTON – A federal grand jury in Washington, D.C., returned an indictment yesterday charging a U.S. citizen and resident of Timor Leste with seven counts of engaging in illicit sexual conduct in a foreign place.
According to court documents, Richard Jude Daschbach, 84, is a former priest who is alleged to have engaged in illicit sexual conduct with minor victims in Timor Leste starting in at least 2013. As alleged, Daschbach operated a “shelter home” for children in Timor Leste. Victims disclosed that Daschbach sexually abused them when they were children and resided in the shelter home. Daschbach was defrocked by the Catholic church after some of the victims disclosed the abuse to the church. Daschbach is currently facing related child sexual exploitation charges in Timor Leste. In addition, in 2019, a grand jury in the Northern District of California returned an indictment against Daschbach for wire fraud in connection with his fundraising activity for the shelter home.
““This indictment represents a significant step toward accountability for harms suffered by multiple vulnerable children allegedly victimized by this defendant,” said Assistant Attorney General Kenneth A. Polite Jr. for the Justice Department’s Criminal Division. “I’d like to thank the hardworking investigative and prosecution teams for their work today and every day to ensure that child predators face justice and children are kept safe.
”This case shows that we will use the full extent of the law to prosecute U.S. citizens who allegedly prey on children, no matter how far we must go to bring them to justice,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “Together with our law enforcement partners, we must ensure that people placed in positions of trust do not betray their responsibilities to help the children who depend upon them.”
Daschbach is charged with seven counts of engaging in illicit sexual conduct in a foreign place, Timor Leste. If convicted, he faces a maximum penalty of 30 years in prison per count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI is investigating the case. The Justice Department’s Office of International Affairs provided significant assistance.
Trial Attorneys Jessica Urban and Alicia A. Bove of the Justice Department’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Amy Larson of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case. The Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT) provided assistance.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Priest and ‘Shelter Home’ Operator Indicted for Illicit Sexual Conduct Against MinorsRead the Press Release
A federal grand jury in Washington, D.C., returned an indictment yesterday charging a U.S. citizen and resident of Timor Leste with seven counts of engaging in illicit sexual conduct in a foreign place.
According to court documents, Richard Jude Daschbach, 84, is a former priest who is alleged to have engaged in illicit sexual conduct with minor victims in Timor Leste starting in at least 2013. As alleged, Daschbach operated a “shelter home” for children in Timor Leste. Victims disclosed that Daschbach sexually abused them when they were children and resided in the shelter home. Daschbach was defrocked by the Catholic church after some of the victims disclosed the abuse to the church. Daschbach is currently facing related child sexual exploitation charges in Timor Leste. In addition, in 2019, a grand jury in the Northern District of California returned an indictment against Daschbach for wire fraud in connection with his fundraising activity for the shelter home.
Today’s indictment represents a significant step toward accountability for harms suffered by multiple vulnerable children allegedly victimized by this defendant,” said Assistant Attorney General Kenneth A. Polite Jr. for the Justice Department’s Criminal Division. “I’d like to thank the hardworking investigative and prosecution teams for their work today and every day to ensure that child predators face justice and children are kept safe.”
“This case shows that we will use the full extent of the law to prosecute U.S. citizens who allegedly prey on children, no matter how far we must go to bring them to justice,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “Together with our law enforcement partners, we must ensure that people placed in positions of trust do not betray their responsibilities to help the children who depend upon them.”
Daschbach is charged with seven counts of engaging in illicit sexual conduct in a foreign place, Timor Leste. If convicted, he faces a maximum penalty of 30 years in prison per count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI is investigating the case. The Justice Department’s Office of International Affairs provided significant assistance.
Trial Attorneys Jessica Urban and Alicia A. Bove of the Justice Department’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Amy Larson of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case. The Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT) provided assistance.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Florida Man Sentenced to 155 Days in Jail on Destruction of Property, Firearms ChargesRead the Press Release
WASHINGTON – Henry “Enrique” Tarrio, 37, of Miami, Fla., was sentenced today to a total of 155 days of incarceration on charges stemming from two cases, including one involving the burning of a Black Lives Matter banner stolen from a historically prominent Black church in downtown Washington, announced Acting U.S. Attorney Channing D. Phillips and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Tarrio pleaded guilty on July 19, 2021, in the Superior Court of the District of Columbia, to one count of destruction of property and one count of attempted possession of a large-capacity ammunition feeding device. The Honorable Harold L. Cushenberry, Jr. sentenced Tarrio to 90 days of jail on the destruction of property charge and 150 days in jail on the ammunition offense; the judge suspended all but 155 days of that time on the condition that Tarrio successfully complete three years of probation. Tarrio also must pay $1,000 in fines, as well as $347 in restitution to the church. Tarrio is to begin serving his sentence in two weeks.
According to a proffer of facts submitted at the plea hearing, on the evening of Dec. 12, 2020, a group of individuals affiliated with the “Proud Boys,” including Tarrio, were in the area of 11th and K Streets NW, near the location of Asbury United Methodist Church. Unidentified members of the group stole the banner from the church’s property. The banner had lettering that read “#BLACKLIVESMATTER.” The banner also contained the Church’s logo and website address.
The group then walked southbound on 11th Street NW and took the banner to the intersection of 11th and E Streets NW. At the intersection, the group burned the banner, using lighter fluid and lighters. Numerous unidentified individuals crouched down and applied lighters to the edges of the banner. Tarrio posted a picture to his “Parler” social media account depicting himself holding an unlit lighter, inches from the ignited lighters in two other individuals’ hands.
In the days that followed, Tarrio admitted to burning the banner on social media and in comments to numerous media outlets.
Tarrio returned to the District of Columbia from Florida on Jan. 4, 2021, and he was arrested on a warrant charging him with the Dec. 12, 2020, destruction of property offense. In a search of his book bag, conducted at the time of his arrest, police recovered two high-capacity firearm magazines. Each magazine bars the insignia of the “Proud Boys.” In an interview with police, Tarrio told detectives that he had intended to transfer the magazines to a customer who was also going to be present in the District of Columbia.
In announcing the sentence, Acting U.S. Attorney Philips and Chief Contee commended the work of those who investigated the case from the Metropolitan Police Department, as well as those who are prosecuting the matter from the U.S. Attorney’s Office.
D..C. Man Indicted on Charges in Scheme to Steal More Than $17 Million in COVID-19 Relief FundsRead the Press Release
WASHINGTON – A District of Columbia man has been indicted on federal charges alleging that he perpetrated a scheme to steal more than $17 million in Paycheck Protection Program (PPP) and Economic Injury and Disaster Loan (EIDL) funds.
The announcement was made by Acting U.S. Attorney Channing D. Phillips and Acting Special Agent in Charge Darrell J. Waldon of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office. The indictment was unsealed today in the U.S. District Court for the District of Columbia.
According to the indictment, Elias Eldabbagh, 30, devised a scheme to use tax returns stolen from a Washington, D.C. consulting firm and stolen identities to fraudulently obtain more than $17 million in PPP and EIDL funds in the name of his company, Alias Systems, LLC. The indictment alleges that Eldabbagh attempted to steal a total of $17 million and successfully stole more than $2.3 million from PPP and EIDL programs.
Eldabbagh was arrested today and appeared this afternoon in the U.S. District Court for the District of Columbia. He was released on home confinement pending a hearing set for Aug. 30.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted in or around March 2020 and designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of billions in forgivable loans to small businesses for job retention and certain other expenses, through a program referred to as the Paycheck Protection Program (PPP).
An Economic Injury Disaster Loan (EIDL) is a Small Business Administration administered loan designed to provide assistance to small businesses that suffer substantial economic injury as a result of a declared disaster. An EIDL helps businesses meet necessary financial obligations that could have been met had the disaster not occurred. It provided relief from economic injury that the disaster caused and permitted businesses to maintain a reasonable working capital position during the period that the disaster affected.
As alleged in the indictment, Eldabbagh carried out a scheme from at least July 2020 to July 2021 in which he filed at least 13 fraudulent PPP loan applications and an EIDL application in the name of Alias Systems, LLC, using stolen identities and stolen tax returns that were fraudulently doctored to appear to be tax returns of Alias Systems, LLC. Based on these applications, Eldabbagh fraudulently obtained more than $2.3 million PPP and EIDL funds, which were then transmitted through numerous financial institutions and used to purchase a 2020 Tesla. The indictment further alleged that Eldabbagh attempted to transfer or obtain funds that had been lawfully seized by Special Agents of IRS Criminal Investigation.
Eldabbagh is charged with five counts of wire fraud, 14 counts of engaging in monetary transactions in criminally derived property, 14 counts of aggravated identity theft, and one count of destruction or removal of property to prevent seizure. If convicted, Eldabbagh faces a maximum penalty of 20 years in prison for each wire fraud count, ten years in prison for each count of engaging in monetary transactions in criminally derived property, two years in prison for each aggravated identity theft count, to run consecutive to any sentence for wire fraud, and five years in prison for the count of destruction or removal of property to prevent seizure. The indictment includes a notification of the United States’ intent to seek the forfeiture of 20 bank accounts and a 2020 Tesla purchased with the proceeds of the fraud. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
On May 17, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of fraud related to COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
This case is being investigated by the Washington Field Office of IRS Criminal investigation. Assistance was provided by the Office of the Inspector General for the U.S. Small Business Administration. Assistant U.S. Attorney Leslie A. Goemaat of the Fraud Section of the U.S. Attorney’s Office for the District of Columbia, is prosecuting the case, supported by Paralegal Specialist Mariela Andrade.
District Woman Sentenced to Two Years in Prison for Stealing over $364,000 from EmployerRead the Press Release
WASHINGTON – Jessica J. Lucas, 43, of Washington, D.C., was sentenced today to two years in prison for committing a wire fraud scheme against her employer, a company that owns restaurants in the Washington metropolitan area.
The announcement was made by Acting U.S. Attorney Channing D. Phillips, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division Robert Bornstein, and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Lucas pled guilty in February 2020 to one count of wire fraud in the U.S. District Court for the District of Columbia. Today, she was sentenced by the Honorable Thomas F. Hogan. In addition to her prison term, the Court ordered Lucas to pay restitution in the amount $364,004, as well as a forfeiture money judgment in the amount of $364,004. Following her prison term, she will be placed on three years of supervised release.
According to court papers, beginning on or about Jan. 1, 2015, and continuing through on or about Feb. 28, 2018, Lucas, who was employed as bookkeeper and cash handler for a restaurant in downtown Washington, implemented a scheme to steal from her employer. Lucas was responsible for ensuring that the restaurant had sufficient cash in its safe and bars to conduct the restaurant’s business of serving food and beverages to customers.
As part of her employment, Lucas frequently ordered cash from the company’s financial institution in order for the restaurant to have a “cash fund,” which was supposed to be used to provide change to customers who paid in cash rather than by credit card. As part of her scheme, Lucas regularly ordered more cash than was needed for operation of the restaurant. Lucas then stole a portion of the cash ordered and deposited the cash into her personal bank accounts. In an effort to conceal her theft from her employer, Lucas falsified monthly “change fund reconciliation reports” that she sent to company management in which she reported that there was more cash on hand than was actually in the safe.
In announcing the sentence, Acting U.S. Attorney Phillips, Special Agent in Charge Robert Bornstein and Chief Contee commended the work performed by those who investigated the case from the FBI’s Washington Field Office and the MPD. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys David Gorman and Diane Lucas, who prosecuted the case with assistance from Paralegal Specialist Chad Byron, and former Paralegal Specialist C. Rosalind Pressley.
Owner of DC-Area Tax Preparation Business Pleads Guilty to FraudRead the Press Release
WASHINGTON – Endalkachew Asfaw, 48, of Alexandria, Va., pleaded guilty today to aiding and assisting in the filing of a false tax return and causing at least $250,000 of loss to the Internal Revenue Service, announced Acting U.S. Attorney Channing D. Phillips and Darrell J. Waldon, Acting Special Agent in Charge, IRS-Criminal Investigation, Washington Field Office.
Asfaw pleaded guilty in the U.S. District Court for the District of Columbia. The Honorable John D. Bates scheduled sentencing for Nov. 17, 2021. The charge carries a statutory maximum of three years in prison and potential financial penalties. As part of the plea agreement, Asfaw has agreed to pay restitution to the United States.
“Our country’s financial system depends on honest and accurate compliance with the U.S. tax laws,” said Acting U.S. Attorney Phillips. “Tax fraud costs U.S. taxpayers billions of dollars each year, and this Office will vigorously prosecute those who commit tax fraud.”
“Tax Practitioners entrusted to prepare accurate tax returns should not lead their clients astray by falsifying returns prepared on their behalf. We will continue to investigate those who fraudulently prepare and file income tax returns, effectively stealing money from the government,” said Acting Special Agent in Charge Waldon.
According to court documents, Asfaw, a Certified Public Accountant in Alexandria, has operated Endalk and Yohannes Associated, L.P. with a business partner in the District of Columbia since 2011. From 2016 through 2019, Asfaw and the business partner prepared approximately 10,000 tax returns.
According to court documents, Asfaw knowingly aided and assisted in the preparation of false income tax returns for years 2015 through 2017 on behalf of his clients. Asfaw did this by deliberately overstating unreimbursed employee business expenses on his clients’ Schedule A deductions, including uniforms and unreimbursed mileage expenses. As part of his plea, Asfaw also admitted to creating fraudulent Schedule C expenses and deducting exemptions for individuals that his clients were not entitled to claim. Asfaw admitted to fabricating these items to generate larger tax refunds for his clients. As part of his plea, Asfaw admitted that he filed false tax returns resulting in a total tax loss of more than $250,000 to the U.S. government.
In announcing the plea, Acting U.S. Attorney Phillips and Acting Special Agent in Charge Waldon commended the work of IRS Criminal Investigation, Washington Field Office, which investigated the case. They also acknowledged the work of those who are handling the case at the U.S. Attorney’s Office, including Paralegal Specialist Mariela Andrade and Assistant U.S. Attorney Leslie A. Goemaat, who is prosecuting this matter.
Ohio Resident Pleads Guilty to Operating Darknet-Based Bitcoin ‘Mixer’ That Laundered over $300 MillionRead the Press Release
WASHINGTON – An Ohio man pleaded guilty today to a money laundering conspiracy arising from his operation of Helix, a Darknet-based cryptocurrency laundering service. According to court documents, Larry Dean Harmon, 38, of Akron, admitted that he operated Helix from 2014 to 2017. Helix functioned as a bitcoin “mixer” or “tumbler,” allowing customers, for a fee, to send bitcoin to designated recipients in a manner that was designed to conceal the source or owner of the bitcoin. Helix was linked to and associated with “Grams,” a Darknet search engine also run by Harmon. Harmon advertised Helix to customers on the Darknet to conceal transactions from law enforcement.
“By holding Harmon accountable, the department has disrupted the unlawful money laundering practices of these dangerous criminal enterprises,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The Justice Department, together with our law enforcement and regulatory partners, will continue to take enforcement actions to identify and impede those who use illicit means for financial gain, as well as those who use the Darknet to facilitate and obscure their criminal conduct.”
“Darknet markets and the dealers who sell opioids and other illegal drugs on them are a growing scourge,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “They may try to hide their identities and launder millions in sales behind technologies like Helix. But the department and its law enforcement partners will shine a light on their activities, dismantle the infrastructure such criminal marketplaces depend on, and prosecute and convict those responsible.”
“Criminals may think they can mask financial transactions by using services like Helix to conceal the source of illicit funds,” said Assistant Director Calvin A. Shivers of the FBI’s Criminal Investigative Division. “The FBI and our state, local, federal and international law enforcement partners are working together every day in a complex and ever-changing digital environment to protect the American people from sophisticated money launderers and financiers.”
“The Darknet is driven in part by the criminal marketplaces which peddle their nefarious goods and services,” said Chief James C. Lee of the IRS Criminal Investigation. “But these marketplaces thrive in large measure because of the infrastructure that supports them. Harmon profited by facilitating the back-channel support of these marketplaces and helped criminals launder money they received via illicit activities. He then hid those funds from the government. He admitted his role today in these activities and will now be held accountable.”
“Harmon admitted that he conspired with Darknet vendors to launder bitcoin generated through drug trafficking and other illegal activities,” said Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office. “Today’s guilty plea demonstrates the FBI’s commitment to infiltrate and shut down the cryptocurrency money-laundering networks that support cyber-criminal enterprises.”
Harmon admitted that Helix partnered with several Darknet markets, including AlphaBay, Evolution, Cloud 9 and others, to provide bitcoin money laundering services for market customers. In total, Helix moved over 350,000 bitcoin – valued at over $300 million at the time of the transactions – on behalf of customers, with the largest volume coming from Darknet markets. Harmon further admitted that he conspired with Darknet vendors and marketplace administrators to launder such bitcoins generated through illegal drug trafficking offenses on those Darknet marketplaces.
As part of his plea, Harmon also agreed to the forfeiture of more than 4,400 bitcoin, valued at more than $200 million at today’s prices, and other seized properties that were involved in the money laundering conspiracy. Harmon will be sentenced at a date to be determined and faces a maximum penalty of 20 years in prison, a fine of $500,000 or twice the value of the property involved in the transaction, a term of supervised release of not more than three years, and mandatory restitution. Chief Judge Beryl Howell of the U.S. District Court for the District of Columbia accepted Harmon’s guilty plea and will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The IRS-CI Cyber Crimes Unit and the FBI’s Washington Field Office investigated the case, with valuable assistance provided by the Criminal Division’s Office of International Affairs, the U.S. Attorney’s Office for the Northern District of Ohio, the IRS’s Washington, Cincinnati and Oakland Field Offices, the FBI’s Criminal Investigative Division and Cleveland, Newark and San Francisco Field Offices, and the State Department’s Diplomatic Security Service.
The Belize Ministry of the Attorney General and the Belize National Police Department provided essential support for the investigation, coordinated through U.S. Embassy Belmopan. The investigation was coordinated with the Financial Crimes Enforcement Network, which assessed a $60 million civil monetary penalty against Harmon in a parallel action.
Trial Attorneys S. Riane Harper and C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher B. Brown of the U.S. Attorney’s Office for the District of Columbia prosecuted the case. Additional assistance was provided by Trial Attorneys Emily Siedell and Brian Nicholson of the Criminal Division’s Office of International Affairs, former CCIPS Trial Attorney W. Joss Nichols and Assistant U.S. Attorney Daniel Riedl of the Northern District of Ohio.
Ohio Resident Pleads Guilty to Operating Darknet-Based Bitcoin ‘Mixer’ That Laundered over $300 MillionRead the Press Release
An Ohio man pleaded guilty today to a money laundering conspiracy arising from his operation of Helix, a Darknet-based cryptocurrency laundering service.
According to court documents, Larry Dean Harmon, 38, of Akron, admitted that he operated Helix from 2014 to 2017. Helix functioned as a bitcoin “mixer” or “tumbler,” allowing customers, for a fee, to send bitcoin to designated recipients in a manner that was designed to conceal the source or owner of the bitcoin. Helix was linked to and associated with “Grams,” a Darknet search engine also run by Harmon. Harmon advertised Helix to customers on the Darknet to conceal transactions from law enforcement.
“By holding Harmon accountable, the department has disrupted the unlawful money laundering practices of these dangerous criminal enterprises,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The Justice Department, together with our law enforcement and regulatory partners, will continue to take enforcement actions to identify and impede those who use illicit means for financial gain, as well as those who use the Darknet to facilitate and obscure their criminal conduct.”
“Darknet markets and the dealers who sell opioids and other illegal drugs on them are a growing scourge,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “They may try to hide their identities and launder millions in sales behind technologies like Helix. But the department and its law enforcement partners will shine a light on their activities, dismantle the infrastructure such criminal marketplaces depend on, and prosecute and convict those responsible.”
“Criminals may think they can mask financial transactions by using services like Helix to conceal the source of illicit funds,” said Assistant Director Calvin A. Shivers of the FBI’s Criminal Investigative Division. “The FBI and our state, local, federal and international law enforcement partners are working together every day in a complex and ever-changing digital environment to protect the American people from sophisticated money launderers and financiers.”
“The Darknet is driven in part by the criminal marketplaces which peddle their nefarious goods and services,” said Chief James C. Lee of the IRS Criminal Investigation. “But these marketplaces thrive in large measure because of the infrastructure that supports them. Harmon profited by facilitating the back-channel support of these marketplaces and helped criminals launder money they received via illicit activities. He then hid those funds from the government. He admitted his role today in these activities and will now be held accountable.”
“Harmon admitted that he conspired with Darknet vendors to launder bitcoin generated through drug trafficking and other illegal activities,” said Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office. “Today’s guilty plea demonstrates the FBI’s commitment to infiltrate and shut down the cryptocurrency money-laundering networks that support cyber-criminal enterprises.”
Harmon admitted that Helix partnered with several Darknet markets, including AlphaBay, Evolution, Cloud 9 and others, to provide bitcoin money laundering services for market customers. In total, Helix moved over 350,000 bitcoin – valued at over $300 million at the time of the transactions – on behalf of customers, with the largest volume coming from Darknet markets. Harmon further admitted that he conspired with Darknet vendors and marketplace administrators to launder such bitcoins generated through illegal drug trafficking offenses on those Darknet marketplaces.
As part of his plea, Harmon also agreed to the forfeiture of more than 4,400 bitcoin, valued at more than $200 million at today’s prices, and other seized properties that were involved in the money laundering conspiracy. Harmon will be sentenced at a date to be determined and faces a maximum penalty of 20 years in prison, a fine of $500,000 or twice the value of the property involved in the transaction, a term of supervised release of not more than three years, and mandatory restitution. Chief Judge Beryl Howell of the U.S. District Court for the District of Columbia accepted Harmon’s guilty plea and will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The IRS-CI Cyber Crimes Unit and the FBI’s Washington Field Office investigated the case, with valuable assistance provided by the Criminal Division’s Office of International Affairs, the U.S. Attorney’s Office for the Northern District of Ohio, the IRS’s Washington, Cincinnati and Oakland Field Offices, the FBI’s Criminal Investigative Division and Cleveland, Newark and San Francisco Field Offices, and the State Department’s Diplomatic Security Service.
The Belize Ministry of the Attorney General and the Belize National Police Department provided essential support for the investigation, coordinated through U.S. Embassy Belmopan. The investigation was coordinated with the Financial Crimes Enforcement Network, which assessed a $60 million civil monetary penalty against Harmon in a parallel action.
Trial Attorneys S. Riane Harper and C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher B. Brown of the U.S. Attorney’s Office for the District of Columbia prosecuted the case. Additional assistance was provided by Trial Attorneys Emily Siedell and Brian Nicholson of the Criminal Division’s Office of International Affairs, former CCIPS Trial Attorney W. Joss Nichols and Assistant U.S. Attorney Daniel Riedl of the Northern District of Ohio.
New Jersey Man Sentenced to 41 Months in Prison for Embezzling Money from Law FirmRead the Press Release
WASHINGTON – Andrew Robertson, 54, of Harrison, N.J., formerly of the Washington, D.C., metropolitan area, was sentenced today to 41 months in prison for embezzling hundreds of thousands of dollars from an international law firm with offices in Washington, D.C., and Northern Virginia, among other locations.
The sentencing was announced by Acting U.S. Attorney Channing D. Phillips, Matthew R. Stohler, Special Agent in Charge of the U.S. Secret Service’s Washington Field Office, and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Robertson pleaded guilty in April 2021 to one count of mail fraud. He was sentenced in the U.S. District Court for the District of Columbia by the Honorable Colleen Kollar-Kotelly. Following his prison term, Robertson will be placed on three years of supervised release. The judge also ordered Robertson to pay $425,000 in forfeiture.
According to the government’s evidence, Robertson was employed by the law firm as an office manager of the Washington, D.C., and Northern Virginia offices. Between February 2017 and November 2018, he used his firm-issued corporate credit card to make $425,000 in unauthorized personal purchases from retailers, unauthorized payments of personal expenses, and unauthorized payments to his own personal PayPal account.
Robertson attempted to cover up these unauthorized transactions by creating and submitting fraudulent invoices and accounting classifications to the law firm’s billing department to make it seem as though these expenditures were for legitimate law firm purposes, when, in fact, he knew that these expenditures were solely for his own personal benefit.
In announcing the sentencing, Acting U.S. Attorney Phillips, Special Agent in Charge Stohler, and Chief Contee commended the work of those who investigated the case from the Secret Service’s Washington Field Office and the Metropolitan Police Department. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Amanda Rohde and Assistant U.S. Attorney Kate Rakoczy, who prosecuted the matter.
Maryland Man Sentenced to 7 ½-Year Prison Term for Fraud, Money Laundering, and Identity Theft SchemeRead the Press Release
WASHINGTON – Kelvin Otunyo, 37, of Hyattsville, Md., was sentenced today to 90 months in prison on federal charges stemming from his role in at least six schemes to deposit and launder stolen and unauthorized checks valued at more than $350,000.
The announcement was made by Acting U.S. Attorney Channing D. Phillips, Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office, Criminal Division, and Special Agent in Charge Shimon R. Richmond, of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG).
Otunyo, a Nigerian national, pleaded guilty on April 1, 2021, in the U.S. District Court for the District of Columbia, to two counts of bank fraud, one count of aggravated identity theft, and two counts of conspiracy to commit money laundering. He was sentenced by the Honorable Chief Judge Beryl A. Howell. Following his prison term, he will be placed on four years of supervised release. Otunyo also was ordered to pay a restitution judgment in the amount of $124,157, and a forfeiture money judgment in the amount of $303,207.
According to court papers, between August 2017 and at least August 2018, Otunyo and co-conspirators engaged in a series of schemes in which they obtained stolen or unauthorized checks from victims, established fraudulent shell corporations and bank accounts, and deposited or attempted to deposit the checks before laundering the resulting proceeds. The frauds were committed using false IDs and fraudulent aliases. Otunyo also procured the real name and Social Security number of an identity theft victim for use in one of the schemes.
In total, the six schemes involved nine stolen or unauthorized checks from eight victims totaling $355,745.29.
As part of the larger investigation of Otunyo and others involved in laundering the proceeds of various frauds, business email compromises, and bad check schemes, at least three other defendants have been charged. In June 2019, Chief Judge Howell sentenced Michael Orji, 42, formerly of Washington D.C, to 10 years of incarceration, five years of supervised release, and $905,274 in restitution. One of Otunyo’s co-conspirators, Samson Olawale Afolabi, 36, of Hyattsville, Md., has pleaded guilty and is awaiting sentencing on Oct. 1, 2021. Another defendant, Jamar Skeete, 37, of Washington, D.C., has been indicted in connection with similar, related fraud and money laundering; he has pleaded not guilty to charges.
The case was investigated by the FBI’s Washington Field Office and the Federal Deposit Insurance Corporation-Office of Inspector General. Assistance was provided by the U.S. Postal Inspection Service, and the U.S. Department of Homeland Security-Homeland Security Investigations. The case was prosecuted by Assistant U.S. Attorneys Christopher B. Brown and Charles Willoughby, Jr., with assistance from Paralegal Specialists Chad Byron, Rhonda Richardson, and former Paralegal Specialist C. Rosalind Pressley.
District Woman Pleads Guilty to Two Assaults, Including One Prosecuted as Hate CrimeRead the Press Release
WASHINGTON – Nicole Gogan, 41, of Washington, D.C., pleaded guilty this week to charges stemming from two assaults that took place this spring, including one that was prosecuted as a hate crime, Acting U.S. Attorney Channing D. Phillips announced today.
Gogan pleaded guilty on Aug. 9, 2021, in the Superior Court of the District of Columbia, to one count of bias-related assault and one count of simple assault. She was sentenced by the Honorable Neal E. Kravitz to a total of 180 days in jail, with all but 90 days suspended on the condition that she complete a year of probation.
According to the government’s evidence, the first incident took place on April 6, 2021. At approximately 9:30 that night, Gogan assaulted a U.S. Postal Service worker who was making deliveries in the vicinity of the 400 block of 4th Street NE. Gogan shoved the worker, who is a Black female, while using racial slurs against her. The worker tried to flee, but Gogan pursued her and continued her assault by repeatedly shoving her while using racial slurs.
The second incident took place on May 7, 2021. That evening, at about 7:15, Gogan initiated an encounter with a woman at 12th and H Streets NE, and then assumed a fighting stance while yelling, “Do you want to fight?”
Gogan was arrested on May 7 and has been detained ever since.
In announcing the plea and sentencing, Acting U.S. Attorney Phillips commended the work of those who investigated the cases from the Metropolitan Police Department. He also acknowledged the efforts of those who worked on the cases from the U.S. Attorney’s Office, including Assistant U.S. Attorney Travis Wolf, who investigated and prosecuted both matters.
Georgia Man Pleads Guilty to Charges Related to Ponzi and COVID-19 Fraud SchemesRead the Press Release
WASHINGTON – Christopher A. Parris, 41, formerly of Rochester, New York, and currently of Lawrenceville, Georgia, pleaded guilty today to conspiracy to commit mail fraud related to a Ponzi scheme, as well as to wire fraud involving the fraudulent sale of purported N95 masks during the pandemic.
“The fraud schemes at issue here, including the purported sales of personal protective equipment that the defendant could not actually provide, are particularly egregious,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is committed to prosecuting anyone who would try to profit through this kind of conduct.”
“Preying on companies and the Department of Veterans Affairs as they sought to protect their employees and patients from this pandemic is beyond the pale,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “The department and our law enforcement partners will catch and stop those who take advantage of public health emergencies to perpetrate such frauds.”
“Defendant Parris, together with his co-defendant Perry Santillo, bilked millions of dollars from unsuspecting investors in their Ponzi scheme,” said U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “Their web of deceit spread far and wide as they purchased established investment advisor or broker businesses from across the country in order to gain access to new victims. This office remains committed to working with all of our partners to identify and bring to justice those who seek to enrich themselves by defrauding others.”
“Financial frauds are grounded in greed, so it's no surprise that when multiple people are behind a single scheme the greed runs deeper and the damage hits harder,” said Special Agent-in-Charge Stephen Belongia of the Buffalo Office of the FBI. “The only guarantee in a Ponzi scheme is that it will fall short, and the founders who contrived them will too.”
“The urgent need to protect veterans and VA health care workers during this fast-moving pandemic required the Department of Veterans Affairs to rapidly purchase personal protective equipment” said Inspector General Michael J. Missal of the Department of Veterans Affairs (VA). “Working with our law enforcement partners, the VA Office of Inspector General (OIG) stopped a criminal who was attempting to profit from this horrible crisis and prevented the government and taxpayers from being defrauded of hundreds of millions of dollars. The VA OIG will continue to work zealously to ensure schemes like this are uncovered, investigated and prosecuted to the fullest extent of the law.”
“Since the onset of the pandemic, HSI quickly adapted to investigate the increasing and evolving threat posed by COVID-19-related fraud and criminal activity,” said Acting Special Agent in Charge Jack P. Staton of Homeland Security Investigations (HSI), New Orleans Field Office. “This guilty plea is a testament to the commitment we have, along with our law enforcement partners, to protecting the American public in times of crisis.”
The Ponzi Scheme
Between January 2011 and June 2018, Parris conspired with co-defendant Perry Santillo and others to obtain money through an investment fraud, commonly known as a Ponzi scheme. Specifically, in 2007, Parris and Santillo, as equal partners, formed a business known as Lucian Development in Rochester. Prior to approximately July 2007, Lucian Development raised millions of dollars from investors in Rochester, and elsewhere, by soliciting investments for City Capital Corporation, a business operated by Ephren Taylor. In July 2007, Parris and Santillo were advised by Ephren Taylor that their investors’ money had been lost. In response, in August 2007, Parris and Santillo agreed to acquire the assets and debts of City Capital Corporation. The acquisition proved financially ruinous, with the amount of the acquired debt far exceeding the value of the acquired assets. Taylor was later prosecuted and convicted of operating a Ponzi scheme.
Subsequently, Parris and Santillo chose not to disclose the truth to investors that their money, entrusted to Lucian Development for investment in City Capital Corporation, was gone. Instead, Parris and Santillo continued to solicit ever-increasing amounts of money from new investors in an unsuccessful attempt to recoup the losses. In order to find potential investors to solicit and defraud, Parris and Santillo purchased businesses from established investment advisors or brokers who were looking to exit their businesses. Between approximately 2008 and September 2017, Parris and Santillo, using money obtained from prior investors, purchased the businesses of at least 15 investment advisors or brokers, located in Tennessee, Ohio, Minnesota, Nevada, California (five businesses), Florida, South Carolina (two businesses), Texas, Pennsylvania, Maryland and Indiana.
The investment offerings pitched by Parris and Santillo consisted principally of unsecured promissory notes and preferred stock issued by various entities controlled by Parris and Santillo. Potential investors were offered an apparent array of investment options to create the illusion of a diversified investment portfolio. Those investment options included products issued by purported issuers such as First Nationle Solutions (FNS), Percipience Global Corporation, United RL Capital Services, Boyles America, Middlebury Development Corporation and NexMedical Solutions, among others. None of these issuers had substantial bona fide business operations or used investor money in the manner and for the purposes represented to investors. To the extent that an issuer may have had some minor legitimate business activities, it was not profitable, and insufficient revenues were generated to pay investors any returns (let alone return the principal amounts of their investments).
Over the years, to keep the Ponzi scheme from being detected, a substantial portion of incoming new investor monies were depleted by making promised interest and other payments to earlier investors. Most of the rest of incoming investor money was used by Parris, Santillo and other co-conspirators to finance lavish lifestyles of the conspirators, their families and associates; to expand the scheme by purchasing investment advisor/brokerage businesses to obtain access to fresh investors; and to pay operating expenses – salaries for a sales force and administrative staff, office rents and related expenses, housing for employees, and interest on loans – all of which were used to keep the scheme going and maintain façade of legitimate business operations.
Very little investor money was deployed in productive investments, and when so deployed, the investments yielded meager income and were not profitable, or failed altogether. The Ponzi scheme was headquartered and based out of locations in Rochester, with a number of satellite offices around the country. Administrative and banking functions were largely performed out of Rochester. The conspiracy employed a variety of salespeople, including Parris and Santillo, who traveled around the country to meet with and solicit new investors.
Between January 2012 and June 19, 2018, Parris and Santillo obtained at least $115.5 million from approximately 1,000 investors. By the time the scheme collapsed in late-2017/early 2018, Parris and Santillo, doing business through an array of corporate entities, had returned approximately $44.8 million to investors as part of their scheme, but continued to owe investors approximately $70.7 million in principal.
Among the Rochester area victims of the Ponzi scheme were the following: a resident of Webster, New York, who held a total asset value of $94,341.89 with a fictitious company known as First Nationle Solutions (FNS), which, as of Dec. 31, 2017, was in fact worthless or close to worthless; and a resident of Victor, New York, and his wife, who invested approximately $221,758.67 with FNS and Middlebury Development. The couple received three payments of $2,500 but lost approximately $214,258.67.
Parris and Santillo controlled hundreds of different business bank accounts opened under numerous different business names at various financial institutions, including but not limited to Bank of America, Citizens Bank, Genesee Regional Bank and ESL Federal Credit Union. Santillo and Parris directed and authorized the transactions that occurred in the accounts, including deposits, withdrawals, check writing and funds transfers. The various bank accounts were used to transfer money from one account to another. Incoming investor money was routinely transferred through several accounts before the funds were finally spent on whatever purpose Parris and/or Santillo authorized. By moving investors’ funds through various accounts in various entity names, Parris and Santillo were able to conceal and obscure the fact that new investor money was being used to repay earlier investors, finance the operations of the Ponzi scheme, and fund their lifestyles.
Santillo was previously convicted and is awaiting sentencing.
The COVID-19 Fraud Scheme
Parris also pleaded guilty in a case originally charged in the U.S. District Court for the District of Columbia to defrauding the U.S. Department of Veterans’ Affairs (VA), as well as at least eight other victim companies, in a scheme involving personal protection equipment (PPE). Between February and April 10, 2020, the defendant, as the owner and operator of Encore Health Group, a company based in Atlanta, that purported to broker medical equipment, offered to sell scarce PPE, including 3M-brand N95 respirator masks, to various medical supply companies and governmental entities. In these proposals, Parris knowingly misrepresented his access to, and ability to obtain and deliver on time, vast quantities of 3M N95 masks and other PPE. The defendant falsely represented that he was able to obtain 3M N95 masks directly from authorized sources in the United States, when in fact, he had no ready access to 3M factories or 3M N95 masks or other PPE, no proven source of supply, and no track record of procuring and delivering such items.
For example, in March 2021, Parris offered to sell the VA 125 million 3M N95 masks at a cost of $6.45 per mask. In this process, the defendant attempted to obtain an upfront payment of $3.075 million from the VA, even though he knew at the time that he had no access to the promised masks or present ability to deliver the promised masks.
As part of his guilty plea, Parris admitted that, in addition to attempting to defraud the VA, he actually obtained upfront payments totaling approximately $7.4 million from at least eight clients for 3M N95 masks that he knew he had no access to or present ability to obtain or deliver on time. Parris also admitted that the proceeds of the scheme totaled approximately $6,218,525. In total, Parris sought orders in excess of $65 million for the non-existent PPE equipment.
**
Parris is scheduled to be sentenced on Dec. 8 before U.S. District Judge Frank P. Geraci Jr. He faces a maximum penalty of 20 years in prison for conspiracy regarding the Ponzi scheme, 30 years in prison for wire fraud in connection to a presidentially-declared emergency, and 10 years in prison for committing the offense originally charged in the District of Columbia while on release from the Western District of New York.
The plea is the result of an investigation by the U.S. Postal Inspection Service, under the direction of Acting Inspector-in-Charge Joshua W. McCallister of the Boston Division; the FBI, Buffalo Division, under the direction of Special Agent-in-Charge Stephen Belongia, the IRS, Criminal Investigation Division, under the direction of Thomas Fattorusso, Acting Special Agent-in-Charge; the U.S. Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud, under the direction of Nikitas Splagounias, Acting Special Agent-in-Charge, New York Region, the New York State Department of Financial Services, under the direction of Superintendent Linda A. Lacewell; the Securities and Exchange Commission; the VA OIG, under the direction of Michael J. Missal, Inspector General, and HSI, under the direction of Acting Special Agent in Charge Jack P. Staton of the New Orleans Field Office.
Assistant U.S. Attorney John J. Field is handling the prosecution in the Western District of New York, and Trial Attorney Patrick Runkle of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Peter Lallas are handling the prosecution in the District of Columbia.
On May 17, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of fraud related to COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Georgia Man Pleads Guilty in New York Federal Court on Charges Related to Ponzi and COVID-19 Fraud SchemesRead the Press Release
Christopher A. Parris, 41, formerly of Rochester, New York, and currently of Lawrenceville, Georgia, pleaded guilty today to conspiracy to commit mail fraud related to a Ponzi scheme, as well as to wire fraud involving the fraudulent sale of purported N95 masks during the pandemic.
“The fraud schemes at issue here, including the purported sales of personal protective equipment that the defendant could not actually provide, are particularly egregious,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is committed to prosecuting anyone who would try to profit through this kind of conduct.”
“Defendant Parris, together with his co-defendant Perry Santillo, bilked millions of dollars from unsuspecting investors in their Ponzi scheme,” said U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “Their web of deceit spread far and wide as they purchased established investment advisor or broker businesses from across the country in order to gain access to new victims. This office remains committed to working with all of our partners to identify and bring to justice those who seek to enrich themselves by defrauding others.”
“Preying on companies and the Department of Veterans Affairs as they sought to protect their employees and patients from this pandemic is beyond the pale,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “The department and our law enforcement partners will catch and stop those who take advantage of public health emergencies to perpetrate such frauds.”
“The U.S. Postal Inspection Service aggressively conducts investigations of those who fraudulently use the U.S. Mail to facilitate complex fraud schemes,” said Acting Inspector in Charge Joshua W. McCallister of the U.S. Postal Inspection Service, Boston Division. “Today’s plea demonstrates our ongoing work with law enforcement partners to stop those who are engaged in these types of fraudulent activities.”
“Financial frauds are grounded in greed, so it's no surprise that when multiple people are behind a single scheme the greed runs deeper and the damage hits harder,” said Special Agent-in-Charge Stephen Belongia of the Buffalo Office of the FBI. “The only guarantee in a Ponzi scheme is that it will fall short, and the founders who contrived them will too.”
“The urgent need to protect veterans and VA health care workers during this fast-moving pandemic required the Department of Veterans Affairs to rapidly purchase personal protective equipment” said Inspector General Michael J. Missal of the Department of Veterans Affairs (VA). “Working with our law enforcement partners, the VA Office of Inspector General (OIG) stopped a criminal who was attempting to profit from this horrible crisis and prevented the government and taxpayers from being defrauded of hundreds of millions of dollars. The VA OIG will continue to work zealously to ensure schemes like this are uncovered, investigated and prosecuted to the fullest extent of the law.”
“Since the onset of the pandemic, HSI quickly adapted to investigate the increasing and evolving threat posed by COVID-19-related fraud and criminal activity,” said Acting Special Agent in Charge Jack P. Staton of Homeland Security Investigations (HSI), New Orleans Field Office. “This guilty plea is a testament to the commitment we have, along with our law enforcement partners, to protecting the American public in times of crisis.”
The Ponzi Scheme
Between January 2011 and June 2018, Parris conspired with co-defendant Perry Santillo and others to obtain money through an investment fraud, commonly known as a Ponzi scheme. Specifically, in 2007, Parris and Santillo, as equal partners, formed a business known as Lucian Development in Rochester. Prior to approximately July 2007, Lucian Development raised millions of dollars from investors in Rochester, and elsewhere, by soliciting investments for City Capital Corporation, a business operated by Ephren Taylor. In July 2007, Parris and Santillo were advised by Ephren Taylor that their investors’ money had been lost. In response, in August 2007, Parris and Santillo agreed to acquire the assets and debts of City Capital Corporation. The acquisition proved financially ruinous, with the amount of the acquired debt far exceeding the value of the acquired assets. Taylor was later prosecuted and convicted of operating a Ponzi scheme.
Subsequently, Parris and Santillo chose not to disclose the truth to investors that their money, entrusted to Lucian Development for investment in City Capital Corporation, was gone. Instead, Parris and Santillo continued to solicit ever-increasing amounts of money from new investors in an unsuccessful attempt to recoup the losses. In order to find potential investors to solicit and defraud, Parris and Santillo purchased businesses from established investment advisors or brokers who were looking to exit their businesses. Between approximately 2008 and September 2017, Parris and Santillo, using money obtained from prior investors, purchased the businesses of at least 15 investment advisors or brokers, located in Tennessee, Ohio, Minnesota, Nevada, California (five businesses), Florida, South Carolina (two businesses), Texas, Pennsylvania, Maryland and Indiana.
The investment offerings pitched by Parris and Santillo consisted principally of unsecured promissory notes and preferred stock issued by various entities controlled by Parris and Santillo. Potential investors were offered an apparent array of investment options to create the illusion of a diversified investment portfolio. Those investment options included products issued by purported issuers such as First Nationle Solutions (FNS), Percipience Global Corporation, United RL Capital Services, Boyles America, Middlebury Development Corporation and NexMedical Solutions, among others. None of these issuers had substantial bona fide business operations or used investor money in the manner and for the purposes represented to investors. To the extent that an issuer may have had some minor legitimate business activities, it was not profitable, and insufficient revenues were generated to pay investors any returns (let alone return the principal amounts of their investments).
Over the years, to keep the Ponzi scheme from being detected, a substantial portion of incoming new investor monies were depleted by making promised interest and other payments to earlier investors. Most of the rest of incoming investor money was used by Parris, Santillo and other co-conspirators to finance lavish lifestyles of the conspirators, their families and associates; to expand the scheme by purchasing investment advisor/brokerage businesses to obtain access to fresh investors; and to pay operating expenses – salaries for a sales force and administrative staff, office rents and related expenses, housing for employees, and interest on loans – all of which were used to keep the scheme going and maintain a façade of legitimate business operations.
Very little investor money was deployed in productive investments, and when so deployed, the investments yielded meager income and were not profitable, or failed altogether. The Ponzi scheme was headquartered and based out of locations in Rochester, with a number of satellite offices around the country. Administrative and banking functions were largely performed out of Rochester. The conspiracy employed a variety of salespeople, including Parris and Santillo, who traveled around the country to meet with and solicit new investors.
Between January 2012 and June 19, 2018, Parris and Santillo obtained at least $115.5 million from approximately 1,000 investors. By the time the scheme collapsed in late-2017/early 2018, Parris and Santillo, doing business through an array of corporate entities, had returned approximately $44.8 million to investors as part of their scheme, but continued to owe investors approximately $70.7 million in principal.
Among the Rochester area victims of the Ponzi scheme were the following:
- A resident of Webster, New York, who held a total asset value of $94,341.89 with a fictitious company known as First Nationle Solutions (FNS), which, as of Dec. 31, 2017, was in fact worthless or close to worthless; and
- A resident of Victor, New York, and his wife, who invested approximately $221,758.67 with FNS and Middlebury Development. The couple received three payments of $2,500 but lost approximately $214,258.67.
Parris and Santillo controlled hundreds of different business bank accounts opened under numerous different business names at various financial institutions, including but not limited to Bank of America, Citizens Bank, Genesee Regional Bank and ESL Federal Credit Union. Santillo and Parris directed and authorized the transactions that occurred in the accounts, including deposits, withdrawals, check writing and funds transfers. The various bank accounts were used to transfer money from one account to another. Incoming investor money was routinely transferred through several accounts before the funds were finally spent on whatever purpose Parris and/or Santillo authorized. By moving investors’ funds through various accounts in various entity names, Parris and Santillo were able to conceal and obscure the fact that new investor money was being used to repay earlier investors, finance the operations of the Ponzi scheme, and fund their lifestyles.
Santillo was previously convicted and is awaiting sentencing.
The COVID-19 Fraud Scheme
Parris also pleaded guilty in a case originally charged in the U.S. District Court for the District of Columbia to defrauding the U.S. Department of Veterans’ Affairs (VA), as well as at least eight other victim companies, in a scheme involving personal protection equipment (PPE). Between February and April 10, 2020, the defendant, as the owner and operator of Encore Health Group, a company based in Atlanta, that purported to broker medical equipment, offered to sell scarce PPE, including 3M-brand N95 respirator masks, to various medical supply companies and governmental entities. In these proposals, Parris knowingly misrepresented his access to, and ability to obtain and deliver on time, vast quantities of 3M N95 masks and other PPE. The defendant falsely represented that he was able to obtain 3M N95 masks directly from authorized sources in the United States, when in fact, he had no ready access to 3M factories or 3M N95 masks or other PPE, no proven source of supply, and no track record of procuring and delivering such items.
For example, in March 2021, Parris offered to sell the VA 125 million 3M N95 masks at a cost of $6.45 per mask. In this process, the defendant attempted to obtain an upfront payment of $3.075 million from the VA, even though he knew at the time that he had no access to the promised masks or present ability to deliver the promised masks.
As part of his guilty plea, Parris admitted that, in addition to attempting to defraud the VA, he actually obtained upfront payments totaling approximately $7.4 million from at least eight clients for 3M N95 masks that he knew he had no access to or present ability to obtain or deliver on time. Parris also admitted that the proceeds of the scheme totaled approximately $6,218,525. In total, Parris sought orders in excess of $65 million for the non-existent PPE equipment.
* * *
Parris is scheduled to be sentenced on Dec. 8 before U.S. District Judge Frank P. Geraci Jr. He faces a maximum penalty of 20 years in prison for conspiracy regarding the Ponzi scheme, 30 years in prison for wire fraud in connection to a presidentially-declared emergency, and 10 years in prison for committing the offense originally charged in the District of Columbia while on release from the Western District of New York.
The plea is the result of an investigation by the U.S. Postal Inspection Service, under the direction of Acting Inspector-in-Charge Joshua W. McCallister of the Boston Division; the FBI, Buffalo Division, under the direction of Special Agent-in-Charge Stephen Belongia, the IRS, Criminal Investigation Division, under the direction of Thomas Fattorusso, Acting Special Agent-in-Charge; the U.S. Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud, under the direction of Nikitas Splagounias, Acting Special Agent-in-Charge, New York Region, the New York State Department of Financial Services, under the direction of Superintendent Linda A. Lacewell; the Securities and Exchange Commission; the VA OIG, under the direction of Michael J. Missal, Inspector General, and HSI, under the direction of Acting Special Agent in Charge Jack P. Staton of the New Orleans Field Office.
Assistant U.S. Attorney John J. Field is handling the prosecution in the Western District of New York, and Trial Attorney Patrick Runkle of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Peter Lallas are handling the prosecution in the District of Columbia.
On May 17, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of fraud related to COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Former USDA Official Sentenced in Bribery CaseRead the Press Release
WASHINGTON – Richard Holman, the former Chief of the U.S. Department of Agriculture (USDA) Office of Homeland Security and Emergency Coordination, Physical Security Division, was sentenced today to 180 days of home detention and fined $110,000 for carrying out a multi-year scheme in which he accepted bribes in exchange for ensuring the awarding of USDA contracts.
The sentencing was announced by Acting U.S. Attorney Channing D. Phillips and Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office, Criminal Division.
Holman, 69, of Fairfax, Va. pled guilty in May 2021 to one count of bribery. He was sentenced in the U.S. District Court for the District of Columbia by the Honorable Carl J. Nichols. The judge placed Holman on four years of probation, the first 180 days of which must be served under home detention.
According to court papers, between July 2013 and December 2015, Eric Schneider and Communications Resources, Inc. (CRI) gave Holman and other USDA officials Corvette wheels, concert tickets, PGA tour tickets, meals, alcohol, strip clubs, parking, concierge medical services, prescription drugs, and other cash tips. In exchange, Holman gave Eric Schneider and CRI preferential treatment in the award of USDA contracts worth over $19 million. As part of the scheme, CRI employees drafted procurement documents in such a way as to favor the award of a multi-million dollar contract to CRI, and USDA officials used the documents in the procurement process as if they prepared them.
Schneider, 51, also of Fairfax, Va., pleaded guilty in November 2020 to conspiracy and obstruction for his role in the scheme last year. He is to be sentenced on Oct. 4, 2021.
The FBI’s Washington Field Office and the Beltsville Field Office of the U.S. Department of Agriculture, Office of the Inspector General (OIG) investigated the case, with assistance from the inspector general’s offices of the U.S. Department of Health and Human Services, the U.S. Department of State, and the Small Business Administration OIG. The cae was prosecuted by Assistant U.S. Attorney Elizabeth Aloi of the Public Corruption and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia.
District Man Sentenced to Seven Years in Prison for Firearms OffensesRead the Press Release
WASHINGTON – Clark Calloway, 47, of Washington, D.C., was sentenced today to seven years in prison for possession of a firearm and to acquiring that firearm with the intent to commit assault, announced Acting U.S. Attorney Channing D. Phillips and Nicholas Boshears, Acting Special Agent in Charge of the FBI Washington Field Office's Counterterrorism Division.
Calloway pleaded guilty in October 2018 in the U.S. District Court for the District of Columbia to charges of interstate transportation of a firearm and ammunition, unlawful possession of a firearm and ammunition, and illegal possession of a machine gun. He was sentenced by the Honorable Richard J. Leon. Upon completion of his prison term, he will be placed on three years of supervised release.
During the plea colloquy, Calloway admitted that while a subject of an undercover investigation, he agreed to purchase a fully automatic AK-47 for $250. At the time, Calloway stated that he wanted to use the AK-47 on white people. He acknowledged making numerous statements expressing support against non-Muslims, police officers, and white people. He also acknowledged that he was a former Marine and a felon previously convicted of a felony.
Calloway was arrested by the FBI on May 4, 2017 when he took delivery of the AK-47. He has been in custody ever since.
This case was investigated by the FBI’s Washington Field Office. Assistance was provided by Paralegal Specialists Latina Sanders, Michael Watts, and Donna Galindo, and former Paralegal Specialist Jorge Casillas of the U.S. Attorney’s Office for the District of Columbia. The case was prosecuted by Assistant U.S. Attorneys Tejpal S. Chawla, of the U.S. Attorney’s Office for the District of Columbia, with assistance from former Assistant U.S. Attorney Jeffrey Pearlman, who is now with the Justice Department’s Criminal Division, and Trial Attorneys Justin Sher and Benita Corlett of the Justice Department’s National Security Division.
Maryland Woman Sentenced to 30 Months in Prison for Embezzling Money from Law FirmRead the Press Release
WASHINGTON – Katherine Emma Ross, 30, of Millersville, Md., formerly of Washington, D.C., was sentenced today to 30 months in prison for embezzling hundreds of thousands of dollars from a D.C. law firm.
The sentencing was announced by Acting U.S. Attorney Channing D. Phillips, Matthew R. Stohler, Special Agent in Charge of the U.S. Secret Service’s Washington Field Office, and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Ross was employed by the law firm as an hourly employee in a non-lawyer capacity. Without permission of the firm or its owner, she wrote checks to herself in amounts that she was not owed, forged signatures on those checks, and cashed the checks at bank branches in the District of Columbia, Virginia, and Maryland. From as early as August 2016 and continuing through the summer of 2020, she carried out a scheme in which she stole at least $320,000 from the firm and its owner.
Ross pled guilty in April 2021 to one count of bank fraud in the U.S. District Court for the District of Columbia. She was sentenced by the Honorable Reggie B. Walton. Following her prison term, Ross will be placed on five years of supervised release. The judge also ordered Ross to pay $320,000 in restitution and forfeiture.
In announcing the sentencing, Acting U.S. Attorney Phillips, Special Agent in Charge Stohler, and Chief Contee commended the work of those who investigated the case from the Secret Service’s Washington Field Office and the Metropolitan Police Department. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Michon Tart, Forensic Accountant Bryan Snitselaar, and Assistant U.S. Attorney Kondi Kleinman, who prosecuted the matter.
Attorney General Garland Joins Acting U.S. Attorney Phillips at National Night Out CelebrationsRead the Press Release
WASHINGTON – The U.S. Attorney’s Office for the District of Columbia today joined community and law enforcement partners in celebrating National Night Out, with Attorney General Merrick B. Garland and Acting U.S. Attorney Channing D. Phillips participating in an event at the Washington Nationals Youth Baseball Academy in Southeast Washington.
More than 200 people turned out for the celebration of community collaboration, held at the baseball academy, located in the Sixth Police District. Thousands more gathered across the city and nation, with senior Justice Department officials and U.S. Attorneys taking part in a Department-wide effort to bring attention to events that build stronger community-police relations. The activities in the District of Columbia were led by the Metropolitan Police Department (MPD), which sponsored events in all seven police districts.
“Law enforcement is most effective when it has the trust and support of the communities it serves,” said Attorney General Garland. “That is why events like National Night Out are so important and effective; they help to bridge the gap between neighbors and their police departments in a positive and informal setting.”
“National Night Out is an opportunity for us to show our appreciation to the many people in neighborhoods throughout the District of Columbia for the assistance they provide in promoting public safety,” said Acting U.S. Attorney Phillips. “We depend upon their cooperation and vigilance and have a long history of working together to benefit the community.”
National Night Out is an annual community-building campaign that promotes police-community partnerships and neighborhood camaraderie to make our neighborhoods safer, better places to live. In most areas of the country, the program culminates annually on the first Tuesday of August. National Night Out organizers expect to hold more than 16,000 community events around the country this year.
Established in 1984 from a Department of Justice Bureau of Justice Assistance (BJA) grant, the goal of National Night Out is to build relationships with and between communities and law enforcement. National Night Out enhances the relationship between neighbors and law enforcement while bringing back a true sense of community.
The Washington Nationals Youth Baseball Academy, at 3675 Ely Place SE, is a nine-acre education and recreation campus in the Fort Dupont Park area. It is a centerpiece of Nationals Philanthropies, the official charitable arm of the Washington Nationals. Events there ran from afternoon into early evening and included a moon bounce, kickball, baseball tutorial sessions, food, entertainment, and information from government and community partners.
Wendy Pohlhaus, Director of the Community Engagement Section for the U.S. Attorney’s Office, joined District of Columbia officials, MPD, and federal law enforcement partners at one of the many other National Night Out events, a kickoff event at the Kennedy Recreation Center, 1401 Seventh St. NW, in the Third Police District. She leads a team of prosecutors and community engagement specialists, including Community Engagement Specialist Baretta Francis, who participated along with Attorney General Garland and Acting U.S. Attorney Phillips at the baseball academy event. The Community Engagement Section sponsors events year-round, including a recent youth summit that focused on the prevention of gun violence and the dangers of opioids.
Maryland Woman Pleads Guilty to Defrauding Medicaid Out of Hundreds of Thousands of DollarsRead the Press Release
WASHINGTON – Sikirat Adunni Brown, 59, of Upper Marlboro, Md., pleaded guilty today to defrauding the D.C. Medicaid program out of more than $340,000.
The announcement was made by Acting U.S. Attorney Channing D. Phillips; Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division; Maureen R. Dixon, Special Agent in Charge of the U.S. Department of Health and Human Services’ Office of Inspector General for the region that includes Washington, D.C., and Daniel W. Lucas, Inspector General for the District of Columbia.
The Honorable Dabney L. Friedrich, who accepted Brown’s guilty plea, scheduled sentencing for Nov. 8, 2021. In addition to facing prison time, Brown faces financial penalties.
Brown admitted that, at various times between January 2014 and June 2020, she worked as a personal care aide for at least eight different home health agencies. The home health agencies employed her to assist D.C. Medicaid beneficiaries in performing activities of daily living, such as getting in and out of bed, bathing, dressing, and eating.
Brown was supposed to document the care that she provided to the Medicaid beneficiaries on timesheets and then submit the timesheets to the home health agencies, which would in turn bill Medicaid for the services that she rendered. In her guilty plea, Brown acknowledged that between 2014 and 2020, she caused the D.C. Medicaid Program to issue payments totaling $343,539 for services that she did not provide. As part of her scheme, she submitted false timesheets to different home health agencies claiming that she provided 20 hours or more of personal care aide services. She also claimed to provide services when she was traveling outside the D.C. metropolitan area. She paid kickbacks during the scheme to at least one beneficiary. She also acknowledged that she claimed to provide services to one beneficiary during the COVID-19 pandemic even though that beneficiary said she did not.
The FBI, the U.S. Department of Health and Human Services’ Office of Inspector General, the District of Columbia’s Office of the Inspector General’s Medicaid Fraud Control Unit, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the D.C. Medicaid program.
Brown is the tenth former personal care aide in the last three years to plead guilty to defrauding Medicaid in the United States District Court for the District of Columbia. Five aides were sentenced to 13 months in prison; a sixth was sentenced to serve 15 months.
The government urges the public to provide tips and assistance to stop health care fraud. If you have information about individuals committing health care fraud, please call the Department of Health and Human Services’ Office of Inspector General hotline at (800) HHS‑TIPS [(800) 447-8477] or the D.C. Office of the Inspector General at (800) 724-TIPS [(800) 274-8477].
This case was prosecuted by Assistant U.S. Attorney Kondi Kleinman of the Fraud Section, with assistance from Paralegal Specialist Mariela Andrade.
Maryland Man Pleads Guilty to Sexually Abusing and Blackmailing WomanRead the Press Release
WASHINGTON – A Maryland man pleaded guilty today to sexually abusing and blackmailing a woman he met in August 2019 through a dating website, announced Acting U.S. Attorney Channing D. Phillips.
Steven B. Fabrizio, 57, of Chevy Chase, Md., pled guilty to one count each of blackmail and third-degree sexual abuse. He faces a statutory maximum of five years in prison on the blackmail charge and up to 10 years on the sexual abuse charge. Additionally, he will be required to register as a sex offender for 10 years. He is to be sentenced on Oct. 29, 2021, by the Honorable Marisa Demeo in the Superior Court of the District of Columbia.
According to the government’s evidence, Fabrizio met the woman on Aug. 19, 2019, after corresponding via a dating website and text. They had consensual sex, and Fabrizio gave her $400 in cash, as agreed upon beforehand. The next day, Fabrizio sought to set up another meeting, and the woman declined. At that point, Fabrizio sent the first in a series of texts to her, warning that the woman’s employer, parents, and landlord would be told about their sex-for-cash arrangement unless it continued. Similar texts followed, and the woman agreed to see him. During that second encounter, on Aug. 20, 2019, Fabrizio sexually abused her. Fabrizio later persisted with the texts, and the woman contacted the Metropolitan Police Department. He was arrested on Aug. 21, 2019.
In announcing the plea, Acting U.S. Attorney Phillips commended those who investigated the case from MPD’s Sexual Assault Unit. He also expressed appreciation for the work of those who handled the case for the U.S. Attorney’s Office, including former Victim Witness Specialist Juanita Harris, and Assistant U.S. Attorney Peter V. Taylor, who is prosecuting the matter.
Iranian National Charged with Illegally Exporting Laboratory Equipment to IranRead the Press Release
A federal grand jury in the District of Columbia returned an indictment today charging a Canadian national with the unlawful export of laboratory equipment from the United States to Iran, through Canada and the United Arab Emirates (UAE).
According to court documents, Reza Sarhangpour Kafrani, aka Reza Sarhang, 46, an Iranian national residing in Montreal, was indicted by a grand jury in the U.S. District Court for the District of Columbia on one count of conspiracy, two counts of violations of the International Emergency Economic Powers Act (IEEPA), one count of causing a failure to submit export information and six counts of money laundering. The indictment also includes a forfeiture allegation seeking all proceeds of the alleged crimes. Kafrani will be arraigned on the charges on a date to be determined by the court.
According to the indictment, Kafrani and a co-conspirator co-owned Prolife Global, Ltd., which was based in Canada, but conducted business in the United States and elsewhere. In November 2015, Kafrani began negotiating with a U.S. company to purchase mass spectrometry equipment for import to Canada. During those negotiations, Kafrani initially inquired about costs to ship and install the equipment in Montreal, Canada. Later, however, Kafrani asked a representative of the company if the installation costs were the same for the Middle East, and the representative of the company emailed Kafrani, saying, “You know there are sanctions in place for Iran.” Kafrani was unable to purchase the equipment from this company.
As alleged in the indictment, he then began negotiations with a second U.S. company for the purchase of similar mass spectrometry equipment in March 2016. Ultimately, he and a co-conspirator were able to purchase three mass spectrometers and an autosampler, used to automatically load samples into the mass spectrometer, for a total of approximately $110,739.
Chromatography and spectrometry analytical instruments, such as some of the laboratory equipment purchased by Kafrani, are controlled for nuclear nonproliferation reasons and therefore require a license to be exported from the United States to either Iran or the UAE. Specifically, a license is required from the Department of Commerce’s Bureau of Industry and Security (BIS) to export such items to the UAE, while a license is required from the Department of the Treasury, Office of Foreign Assets Control (OFAC), to export to Iran. The remaining laboratory equipment purchased by Kafrani may not be exported to Iran without a license from OFAC. Kafrani and his co-conspirator applied for an export license from OFAC on Nov. 16, 2015, and again April 23, 2016, but OFAC declined to grant either application. Kafrani’s co-conspirator applied for a license from BIS on March 28, 2016, but that application was returned without action by BIS because OFAC is responsible for administering the U.S. sanctions against Iran.
On Aug. 24, 2016, Kafrani and his co-conspirator directed the second U.S. company to ship one mass spectrometer to Canada, and then coordinated with a Canadian shipping company to reexport it to the UAE on Sept. 7, 2016. From there, they arranged for a UAE-based shipping company to reexport the item to Iran on Sept. 25, 2016.
In September 2016, Kafrani and his co-conspirator arranged for a Canada-based shipping company to pick up two more mass spectrometers and an autosampler directly from the second U.S. company, transport the items to Canada and then reexport them to the UAE Kafrani then hired a UAE-based transport company to reexport the items to Iran on Oct. 11, 2016.
Kafrani never told the second U.S. company that the items were ultimately destined for Iran, causing the firm to fail to file the legally required electronic export information. Kafrani also made, or caused to be made, six separate money transfers from bank accounts in Canada and elsewhere to bank accounts in the United States with the intent to promote the unlawful exports to Iran described above. Charges of conspiracy and failing to submit export information carry a statutory maximum of five years in prison. Violations of the IEEPA and money laundering charges carry a statutory maximum of 20 years in prison. The charges also carry potential financial penalties. If convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Mark J. Lesko of the Justice Department’s National Security Division (NSD); Acting U.S. Attorney Channing D. Phillips for the District of Columbia; Special Agent in Charge Kevin M. Kelly of the Homeland Security Investigations (HSI) Buffalo Field Office; Special Agent in Charge Jonathan Carson of the Department of Commerce’s New York Field Office, Office of Export Enforcement; Acting Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office and Special Agent in Charge Stephen Belongia of the FBI’s Buffalo Field Office made the announcement.
Homeland Security Investigations (HSI), the Department of Commerce’s Office of Export Enforcement. IRS-Criminal Investigations, and the FBI are investigating the case.
Assistant U.S. Attorney Christopher Tortorice for the U.S. Attorney’s Office in the District of Columbia and Trial Attorney Beau Barnes of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with substantial assistance provided by former Assistant U.S. Attorney Jessica Brooks and former Trial Attorney Heather Alpino.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Iranian National Charged with Illegally Exporting Laboratory Equipment from the United States to IranRead the Press Release
WASHINGTON – A federal grand jury in the District of Columbia returned an indictment today charging a Canadian national with the unlawful export of laboratory equipment from the United States to Iran, through Canada and the United Arab Emirates (UAE).
According to court documents, Reza Sarhangpour Kafrani, aka Reza Sarhang, 46, an Iranian national residing in Montreal, was indicted by a grand jury in the U.S. District Court for the District of Columbia on one count of conspiracy, two counts of violations of the International Emergency Economic Powers Act (IEEPA), one count of causing a failure to submit export information and six counts of money laundering. The indictment also includes a forfeiture allegation seeking all proceeds of the alleged crimes. Kafrani will be arraigned on the charges on a date to be determined by the court.
According to the indictment, Kafrani and a co-conspirator co-owned Prolife Global, Ltd., which was based in Canada, but conducted business in the United States and elsewhere. In November 2015, Kafrani began negotiating with a U.S. company to purchase mass spectrometry equipment for import to Canada. During those negotiations, Kafrani initially inquired about costs to ship and install the equipment in Montreal, Canada. Later, however, Kafrani asked a representative of the company if the installation costs were the same for the Middle East, and the representative of the company e-mailed Kafrani, saying, “You know there are sanctions in place for Iran.” Kafrani was unable to purchase the equipment from this company.
As alleged in the indictment, he then began negotiations with a second U.S. company for the purchase of similar mass spectrometry equipment in March 2016. Ultimately, he and a co-conspirator were able to purchase three mass spectrometers and an autosampler, used to automatically load samples into the mass spectrometer, for a total of approximately $110,739.
Chromatography and spectrometry analytical instruments, such as some of the laboratory equipment purchased by Kafrani, are controlled for nuclear nonproliferation reasons and therefore require a license to be exported from the United States to either Iran or the UAE. Specifically, a license is required from the Department of Commerce’s Bureau of Industry and Security (BIS) to export such items to the UAE while a license is required from the Department of the Treasury, Office of Foreign Assets Control (OFAC) to export to Iran. The remaining laboratory equipment purchased by Kafrani may not be exported to Iran without a license from OFAC. Kafrani and his co-conspirator applied for an export license from OFAC on Nov. 16, 2015, and again April 23, 2016, but OFAC declined to grant either application. Kafrani’s co-conspirator applied for a license from BIS on March 28, 2016, but that application was returned without action by BIS because OFAC is responsible for administering the U.S. sanctions against Iran.
On Aug. 24, 2016, Kafrani and his co-conspirator directed the second U.S. company to ship one mass spectrometer to Canada, and then coordinated with a Canadian shipping company to reexport it to the UAE on Sept. 7, 2016. From there, they arranged for a UAE based shipping company to reexport the item to Iran on Sept. 25, 2016.
In September 2016, Kafrani and his co-conspirator arranged for a Canada-based shipping company to pick up two more mass spectrometers and an autosampler directly from the second U.S. company, transport the items to Canada, and then reexport them to the UAE Kafrani then hired a UAE-based transport company to reexport the items to Iran on Oct. 11, 2016.
Kafrani never told the second U.S. company that the items were ultimately destined for Iran, causing the firm to fail to file the legally required electronic export information. Kafrani also made, or caused to be made, six separate money transfers from bank accounts in Canada and elsewhere to bank accounts in the United States with the intent to promote the unlawful exports to Iran described above.
Charges of conspiracy and failing to submit export information carry a statutory maximum of five years in prison. Violations of the IEEPA and money laundering charges carry a statutory maximum of 20 years in prison. The charges also carry potential financial penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Mark J. Lesko of the Justice Department’s National Security Division (NSD); Acting U.S. Attorney Channing D. Phillips for the District of Columbia; Special Agent in Charge Kevin M. Kelly of the Department of Homeland Security’s Homeland Security Investigations (HSI) Buffalo Field Office; Special Agent in Charge Jonathan Carson of Department of Commerce’s New York Field Office, Office of Export Enforcement; Acting Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office and Special Agent in Charge Stephen Belongia of the FBI’s Buffalo Field Office made the announcement.
This case is being investigated by the Buffalo Field Office of the U.S. Department of Homeland Security’s Homeland Security Investigations (HSI), the New York Field Office of the Department of Commerce’s Office of Export Enforcement, the New York Field Office of IRS Criminal Investigation (IRS-CI) and the Buffalo Field Office of the FBI.
Assistant U.S. Attorney Christopher Tortorice for the U.S. Attorney’s Office in the District of Columbia and Trial Attorney Beau Barnes of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with substantial assistance provided by former Assistant U.S. Attorney Jessica Brooks and former Trial Attorney Heather Alpino.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
District Man Sentenced to 33 Months in Prison for Accessing Child PornographyRead the Press Release
WASHINGTON – Brian Kampel, 44, of Washington, D.C., was sentenced today to 33 months in prison for accessing child pornography, announced Acting U.S. Attorney Channing D. Phillips, and Raymond Villanueva, Special Agent in Charge, Homeland Security Investigations (HSI), Washington, D.C.
Kampel pleaded guilty earlier this month in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Judge Dabney L. Friedrich. Following his prison term, he will be placed on supervised release for the rest of his life. In addition, he will be required to register as a sex offender for 15 years following his release from prison. Judge Friedrich also ordered Kampel to pay $39,000 in restitution to his victims.
According to the government’s evidence, Kampel was identified as part of a national investigation, conducted by the U.S. Department of Homeland Security Investigations (HSI), into a password-protected, fee-based website, that advertised child sexual abuse material.
After gaining access to the website, an individual could pay to purchase and download child pornography. This commercial website advertised that it offered users, like Kampel, 600,000 images and 400 hours of video. Kampel paid to purchase and download child pornography in August of 2017.
Following a search of Kampel’s residence, in September of 2019, law enforcement found a laptop computer with over 1,000 images depicting the sexual abuse of children as young as infants and toddlers. The forensic evidence in the case determined that Kampel had been accessing, downloading, and possessing child sexual abuse material for over eight years.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative. Project Safe Childhood is a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the sentence, Acting U.S. Attorney Phillips and Special Agent in Charge Villanueva commended the work of those who investigated the case from the Department of Homeland Security, Homeland Security Investigations. They also commended the work of Assistant U.S. Attorney Amy E. Larson, who prosecuted the case.
Maryland Man Sentenced to Prison and Home Detention on Fraud Conspiracy Charge for Stealing over $1.3 MillionRead the Press Release
WASHINGTON – Mark L. Lezell, 74, of Rockville, Md., has been sentenced to 12 months in prison and 12 months of home detention for his role in a fraud conspiracy targeting companies and individuals from across the United States and around the world.
The announcement was made today by Acting U.S. Attorney Channing D. Phillips, Robert Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division, and Darrell J. Waldon, Acting Special Agent in Charge of the IRS-CI Washington DC Field Office.
Lezell pled guilty in June 2016, in the U.S. District Court for the District of Columbia, to one count of conspiracy to commit wire fraud and one count of failure to file a tax return. He was sentenced on July 28, 2021, by the Honorable Richard J. Leon. In addition to his prison term, the Court ordered Lezell to pay restitution in the amount $1,787,678 as well as a forfeiture money judgment in the amount of $651,955. Following his prison term, he will be placed on 36 months of supervised release, 12 months of which will be on home detention.
According to the government’s evidence, beginning in or about 2009, and continuing through at least 2012, Lezell and his co-conspirator, Issam Abu-Ghosh, conducted a scheme to defraud individuals, companies, and other types of entities, to obtain money. The scheme was conducted in a similar manner for many of the victims. In nearly every instance, Abu-Ghosh represented to the victims that Abu-Ghosh, through his solely-owned company, could obtain a loan for the victims through various connections that he maintained. The loans needed by the victims were often for millions of dollars and to fund large projects. Prior to soliciting potential lenders, Abu-Ghosh required that each victim provide a good faith deposit to be held in escrow to show the victim’s good intentions toward obtaining the loan. The good faith deposits ranged from $15,000 to $250,000.
Lezell, an attorney, acted as the escrow agent for the good faith deposits. Once an agreement was reached between the victim and Abu-Ghosh, the terms and conditions were memorialized in a loan commitment contract. The loan commitment included an escrow agreement, which identified Lezell as the escrow agent and provided conditions under which the escrow agreement would operate, including the transfer of the good faith deposit to a bank account held by Lezell. In most cases, the escrow agreement required that Lezell hold the money with the understanding that the funds would be returned to the victim if Abu-Ghosh failed to identify and provide a lender. Once the victim wired the good faith deposit to the escrow account, most of that money was transferred to Abu-Ghosh within days.
Lezell obtained over $1,653,955 in good faith deposits into his account. No loans were ever obtained by Abu-Ghosh. Instead, the good faith deposits were used by Abu-Ghosh and Lezell for their personal benefit or to further the scheme. Lezell also admitted that he did not file a tax return with the Internal Revenue Service for the tax year 2008, despite receiving a gross income of approximately $350,073.02.
Abu-Ghosh, 63, of Leesburg, Va., plead guilty in September 2018 and was sentenced in January 2020 to 60 months of incarceration, followed by 60 months of supervised release, an order to pay restitution in the amount of $1,358,980, as well as a forfeiture money judgment in the amount of $952,000.
In announcing the sentence, Acting U.S. Attorney Phillips, Acting Special Agent in Charge Bornstein, and Acting Special Agent in Charge Waldron commended the work performed by those who investigated the case from the IRS-Criminal Investigation Division and the FBI’s Washington Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Diane Lucas and Michelle A. Zamarin, and former Assistant U.S. Attorney Michael Marando, who prosecuted the case.
Eleven People Arrested in Federal Drug and Firearms Case Involving Conspiracy to Distribute Cocaine and Other DrugsRead the Press Release
WASHINGTON – Eleven people have been arrested following their indictments on federal charges stemming from an investigation into a drug trafficking network based in Southeast Washington that sold cocaine, crack cocaine, Fentanyl, PCP, and other drugs.
The indictments were made public this week and announced today by Acting U.S. Attorney Channing D. Phillips, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division Robert Bornstein, and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Most of the defendants were arrested by the FBI and MPD on Monday, July 19; all 11 remain in custody. A 12th individual was arrested on related charges. The arrests followed an extensive investigation into a ring that was primarily based in the areas of Martin Luther King Jr., Avenue SE, Mellon Street SE, and Malcolm X Avenue SE, in the Seventh Police District.
A total of 10 firearms have been seized during the investigation, along with PCP, crack, powder cocaine, heroin, pills, and over $2,500 in cash.
“This investigation is part of a broader effort to target violence, drug trafficking, and the possession of illegal firearms in the District of Columbia,” said Acting U.S. Attorney Phillips. “This work is critically important to protecting those who live and work in our community. The arrests reflect the coordination taking place at the federal and local levels every day.”
“The FBI’s Washington Field Office is engaged and working on a daily basis in partnership with MPD and other law enforcement agencies to reduce violent crime in the District of Columbia,” said Acting Special Agent in Charge Bornstein. “This joint partnership with MPD’s Violence Reduction Unit is producing significant results, as demonstrated by the arrests and indictment being announced today. The FBI is committed to continuing to work aggressively to seek justice for those affected by violent crime and prevent additional innocent citizens from becoming victims.”
“Through the focused coordination and intense collaboration of MPD’s Violence Reduction Unit and our law enforcement partners, we are determined to remove the District’s most violent offenders from our streets,” stated MPD Chief Contee. “As alleged in the indictment, these individuals are responsible for many of the drug transactions in our neighborhoods and this is one step closer to making our communities safer for all.”
Those named in the indictment include: Delonta Chappell, 34; Dezmond Cunningham, 27; Anthony Graves, 30; Nico Griffin, 31; Wesley Leake, 31; Leon Linsday, 36; Kevonte Randall, 24; Barry Tyson, 21, and Shawn Wooden, 39, all of Washington, D.C.; Deshawn Loggins, 20, of Temple Hills, Md., and Ricky Lyles, 41, of Accokeek, Md. The 12th individual, Corenzo Mobery, 39, of Washington, D.C., was indicted on related drug and firearms charges.
The prosecutions followed a joint investigation by the FBI Washington Field Office’s Cross Border Safe Streets Task Force in partnership with MPD’s Narcotics and Special Investigations (NSID) Violence Reduction Unit. This partnership targets the most egregious and violent street crews operating in the District of Columbia. Assistance was provided by the U.S. Drug Enforcement Administration, the U.S. Park Police, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). The case is being prosecuted by Assistant U.S. Attorney David Henek of the U.S. Attorney’s Office for the District of Columbia.
The investigation had the sponsorship and support of the federal Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF specializes in the investigation and prosecution of drug trafficking and money laundering organizations and related criminal enterprises.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
District Man Charged with Sending Obscene Material to Minors and Attempting to Produce Child PornographyRead the Press Release
WASHINGTON – Glenn Matthews, 32, of Washington, D.C., has been detained pending trial following the filing of charges of attempted production of child pornography, attempted enticement, enticement of a minor, and sending obscene material to minors.
The charges, contained in a criminal complaint that was unsealed last week, were announced today by Acting U.S. Attorney Channing D. Phillips, Robert Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division, and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Matthews was arrested on July 22, 2021, after he was charged in the complaint filed in the U.S. District Court for the District of Columbia. The complaint alleges that, between July 2020 and November 2020, Matthews utilized the Instagram account SOUTHSIDEAREA to send ten different minors graphic images of himself and/or videos of himself masturbating. The complaint alleges that Matthews also tried to meet at least two of these children for sex, one of whom he suggested meeting at the Anacostia Metro Station. According to the complaint, Matthews also solicited explicit images of at least one purported minor and took a screenshot of an explicit image of another purported minor. The complaint alleges that he threatened to share the screenshot with others if the purported minor did not comply with his demands.
At a hearing on July 26, 2021, the Honorable Magistrate Judge G. Michael Harvey detained Matthews pending trial. A preliminary hearing has been scheduled for Aug. 20.
The charges in criminal complaints are merely allegations and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case is being investigated by the Metropolitan Police Department and the FBI Washington Field Office's Child Exploitation and Human Trafficking Task Force, composed of FBI agents and local, state, and federal partners. It is being prosecuted by Assistant U.S. Attorney April Nicole Russo, with assistance from Paralegal Specialist Alexis Spencer-Anderson.
People with information about these or other child exploitation crimes are encouraged to call the FBI at 1-800-CALL-FBI or submit a tip online at tips.fbi.gov.
Jury Finds Maryland Men Guilty of Murder in 2017 Killing of Man in Southeast WashingtonRead the Press Release
WASHINGTON –Nyekemia Everett, 35, of Greenbelt, Md., and Malik Hewitt, 41, of Capitol Heights, Md., have been found guilty of first-degree felony murder while armed and other charges in the 2017 killing of a man in Southeast Washington.
The announcement was made by Acting U.S. Attorney Channing D. Phillips and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD). The verdict was returned on July 26, 2021, following a trial in the Superior Court of the District of Columbia. In addition to the murder charge, the defendants were found guilty of conspiracy, attempted robbery while armed, and related offenses. The Honorable Neal E. Kravitz scheduled sentencing for Oct. 14, 2021. Both men face a maximum sentence of life in prison.
According to the government’s evidence, beginning on April 26, 2017, Everett, Hewitt, and a third individual plotted to rob the victim, Christopher Heard. Over the phone, they lured him to the 2300 block of Ainger Place SE, on the pretense of a drug deal. At approximately 3:30 a.m. on April 27, 2017, Everett, Hewitt and the third individual drove together to the area and parked. In the meeting that followed, roughly 15 minutes later, Everett pointed a gun at Mr. Heard and announced a robbery. Mr. Heard lunged toward Everett, who shot him twice. Mr. Heard, 37, died at the scene. Everett and Hewitt fled the area and were arrested in May 2017.
In announcing the verdict, Acting U.S. Attorney Phillips and Chief Contee commended the work of those who investigated the case from the Metropolitan Police Department. They also expressed appreciation for the assistance provided by the FBI, Bode Technology, and the crime scene search unit from the District of Columbia Department of Forensic Services. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Alyse Constantinide and Richard Barker; Paralegal Specialists Lornce Applewhite, Debra Forte, Nicole McGhee, and Lashone Samuels; Victim Witness Specialist Jennifer Allen; Robert Cephas, La June Thames, Katina Adams-Washington, M. LaVerne Perry, Lesley Slade, and Maenylie Watson, all of the Victim Witness Assistance Unit; Supervisory Litigation Technology Specialist Leif Hickling, and Homicide Section Intern Jack Holt.
Finally, they commended the work of Assistant U.S. Attorneys Michael Liebman and Shehzad Akhtar, who prosecuted the case.
Virginia Man Pleads Guilty to Federal Sex Trafficking Charge Defendant Coerced and Sexually Exploited Three Women in Northwest WashingtonRead the Press Release
WASHINGTON – Michael Jabaar Wilkins, 38, of Norfolk, Va., has pleaded guilty to a federal sex trafficking charge stemming from his sexual exploitation of three women – sometimes using violence - between 2011 and 2019 for his own financial gain.
The guilty plea was announced by Acting U.S. Attorney Channing D. Phillips, Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division, and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Wilkins pleaded guilty on July 21, 2021, in the U.S. District Court for the District of Columbia, to a charge of sex trafficking by force, fraud, or coercion. The charge carries a mandatory minimum of 15 years in prison. Wilkins remains detained pending his sentencing on Dec. 2, 2021, by the Honorable Rudolph Contreras.
According to the government’s evidence, over the course of a decade, Wilkins separately induced and coerced the women to travel from Virginia to the District of Columbia to engage in commercial sex acts for his own financial benefit. He took sexually explicit photographs of two of the women that he used in online advertisements for commercial sex. The activities took place in the 1300 block of 12th Street NW and other locations in the Logan Circle neighborhood of Northwest Washington. According to the evidence, Wilkins physically assaulted two of the women, knocking one of them unconscious in one confrontation.
Wilkins was arrested on Nov. 5, 2019, following an investigation by the Metropolitan Police Department and the FBI Child Exploitation and Human Trafficking Task Force, which is composed of FBI agents and local, state, and federal partners. He has been detained ever since. He pleaded guilty less than a week before his trial was scheduled to begin.
In announcing the plea, Acting U.S. Attorney Phillips, Acting Special Agent in Charge Bornstein, and Chief Contee commended the work of those who investigated the case from the FBI and MPD. also expressed appreciation for the assistance provided by Trial Attorney Jessica Arco of the Justice Department’s Human Trafficking Prosecution Unit. They acknowledged the efforts of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialists Kenny Nguyen and Alexis Spencer-Anderson, Victim Witness Program Specialist Yvonne Bryant, Victim Witness Service Coordinator Tonya Jones, and Witness Security Specialist Lesley Slade. Finally, they commended the work of Assistant U.S. Attorneys Amy E. Larson and Janani Iyengar, who investigated and prosecuted the case.
Former U.S. Government Employee Pleads Guilty to Sexual Abuse and Obscenity Offenses Committed over 14 YearsRead the Press Release
WASHINGTON – A California man pleaded guilty today to sexual abuse and admitted to the abusive sexual contact of numerous women, as well as photographing and recording dozens of nude and partially nude women without their consent during his career as a U.S. government employee.
According to court documents, Brian Jeffrey Raymond, 45, of La Mesa, was most recently employed by the U.S. government at the U.S. Embassy in Mexico City, Mexico. Raymond departed Mexico after an adult woman was observed nude and screaming for help from his balcony on May 31, 2020. The woman reported she had no memory of events after consuming drinks and food provided by Raymond.
“Brian Raymond betrayed the trust granted to him as a U.S. government employee representing the United States abroad by engaging in years of predatory conduct sexually abusing, exploiting, and recording vulnerable women he targeted in the United States and around the world,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “As demonstrated by Raymond’s prosecution and plea, the Department of Justice and its law enforcement partners will use all of the tools at our disposal to hold accountable those who victimize women.”
During the subsequent investigation, law enforcement agents recovered hundreds of photographs and videos depicting more than 20 unconscious and nude or partially nude women from Raymond’s cell phones, iCloud account, and other electronic devices. Raymond created these materials starting at least as early as 2006 and continuing up until May 30, 2020. Raymond’s hand is visible in photographs and videos manipulating his victims’ eyes, mouths, and limbs and fondling their breasts and buttocks. Raymond is also seen lying in bed with unconscious women on two different occasions. The women experienced memory loss during their time with Raymond and had no knowledge of the photographs, videos or physical contact. Internet history recovered from Raymond’s devices revealed searches for unconscious women, as well as searches for the side effects of prescription drugs combined with alcohol, for example, “ambien and alcohol side effects,” “Ambien dissolve,” “Ambien and alcohol pass out” and “passed out and carried.”
“Thanks to the coordinated efforts of law enforcement here and abroad, Brian Raymond was brought to justice for the sexual and exploitive crimes he repeatedly committed against numerous women,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “We hope that this guilty plea brings some solace to his many victims.”
In the plea agreement, Raymond admitted he engaged in sexual intercourse with two of the victims depicted in the recordings when both were incapable of appraising the nature of the conduct or consenting to it. These offenses occurred on May 30, 2020, and March 26, 2020, in Raymond’s embassy-leased residence in Mexico City. Additionally, Raymond admitted that over the course of 14 years he recorded and/or photographed at least 24 unconscious and nude or partially nude women and touched the breasts, buttocks, groin area and/or genitalia of numerous women while they were incapable of consent. Raymond transported these obscene materials, specifically 479 photographs and videos of 20 unconscious and nude or partially nude women, into the United States. While under investigation, Raymond attempted to delete the photographs and videos from his devices and internet accounts and made materially false statements to law enforcement.
“Today’s guilty plea of Brian Jeffrey Raymond sends a strong message: The Diplomatic Security Service is committed to making sure U.S. government employees who engage in predatory behavior for which they can be charged with a criminal offense face serious consequences,” said Acting Assistant Director for Domestic Operations Julia Sweeney of the U.S. Department of State’s Diplomatic Security Service (DSS). “Our strong relationships with the U.S. Department of Justice and U.S. and foreign law enforcement partners around the world continue to be essential in the pursuit of justice.”
“Brian Jeffrey Raymond’s guilty plea is a step in the right direction in the pursuit of justice for the many victims of his predatory behaviors,” said Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office. “The FBI is grateful to the brave women who came forward to provide information to further this investigation and put a stop to Raymond’s actions.”
Raymond will be sentenced at a date to be determined and faces a maximum penalty of life in prison, a fine of $250,000, a term of supervised release of at least five years and mandatory restitution. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Trial Attorneys Jamie Perry and Danielle Hickman of the Justice Department’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney April Russo of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.
The FBI and the Department of State’s DSS Office of Special Investigations are investigating the case. The Justice Department’s Office of International Affairs and National Security Division provided valuable assistance.
The Department of Justice gratefully acknowledges the Government of Mexico, to include the Fiscalía General de la República and the Fiscalía General de Justicia de la Ciudad de México, for their extraordinary efforts, support and cooperation during the investigation.
If you believe you have been a victim, have information about Raymond or know of someone who may have information about Raymond, the FBI requests that you fill out this secure, online questionnaire, email FBI at [email protected] or call 1-800-CALL-FBI.
Former U.S. Government Employee Pleads Guilty to Sexual Abuse and Obscenity Offenses Committed over 14 YearsRead the Press Release
A California man pleaded guilty today to sexual abuse and admitted to the abusive sexual contact of numerous women, as well as photographing and recording dozens of nude and partially nude women without their consent during his career as a U.S. government employee.
According to court documents, Brian Jeffrey Raymond, 45, of La Mesa, was most recently employed by the U.S. government at the U.S. Embassy in Mexico City, Mexico. Raymond departed Mexico after an adult woman was observed nude and screaming for help from his balcony on May 31, 2020. The woman reported she had no memory of events after consuming drinks and food provided by Raymond.
“Brian Raymond betrayed the trust granted to him as a U.S. government employee representing the United States abroad by engaging in years of predatory conduct sexually abusing, exploiting, and recording vulnerable women he targeted in the United States and around the world,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “As demonstrated by Raymond’s prosecution and plea, the Department of Justice and its law enforcement partners will use all of the tools at our disposal to hold accountable those who victimize women.”
During the subsequent investigation, law enforcement agents recovered hundreds of photographs and videos depicting more than 20 unconscious and nude or partially nude women from Raymond’s cell phones, iCloud account, and other electronic devices. Raymond created these materials starting at least as early as 2006 and continuing up until May 30, 2020. Raymond’s hand is visible in photographs and videos manipulating his victims’ eyes, mouths, and limbs and fondling their breasts and buttocks. Raymond is also seen lying in bed with unconscious women on two different occasions. The women experienced memory loss during their time with Raymond and had no knowledge of the photographs, videos, or physical contact. Internet history recovered from Raymond’s devices revealed searches for unconscious women, as well as searches for the side effects of prescription drugs combined with alcohol, for example, “ambien and alcohol side effects,” “Ambien dissolve,” “Ambien and alcohol pass out,” and “passed out and carried.”
“Thanks to the coordinated efforts of law enforcement here and abroad, Brian Raymond was brought to justice for the sexual and exploitive crimes he repeatedly committed against numerous women,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “We hope that this guilty plea brings some solace to his many victims.”
In the plea agreement, Raymond admitted he engaged in sexual intercourse with two of the victims depicted in the recordings when both were incapable of appraising the nature of the conduct or consenting to it. These offenses occurred on May 30, 2020, and March 26, 2020, in Raymond’s embassy-leased residence in Mexico City. Additionally, Raymond admitted that over the course of 14 years he recorded and/or photographed at least 24 unconscious and nude or partially nude women and touched the breasts, buttocks, groin area and/or genitalia of numerous women while they were incapable of consent. Raymond transported these obscene materials, specifically 479 photographs and videos of 20 unconscious and nude or partially nude women, into the United States. While under investigation, Raymond attempted to delete the photographs and videos from his devices and internet accounts and made materially false statements to law enforcement.
“Today's guilty plea of Brian Jeffrey Raymond sends a strong message: The Diplomatic Security Service is committed to making sure U.S. government employees who engage in predatory behavior for which they can be charged with a criminal offense face serious consequences,” said Acting Assistant Director for Domestic Operations Julia Sweeney of the U.S. Department of State’s Diplomatic Security Service (DSS). “Our strong relationships with the U.S. Department of Justice and U.S. and foreign law enforcement partners around the world continue to be essential in the pursuit of justice.”
“Brian Jeffrey Raymond’s guilty plea is a step in the right direction in the pursuit of justice for the many victims of his predatory behaviors,” said Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office. “The FBI is grateful to the brave women who came forward to provide information to further this investigation and put a stop to Raymond’s actions.”
Raymond will be sentenced at a date to be determined and faces a maximum penalty of life in prison, a fine of $250,000, a term of supervised release of at least five years and mandatory restitution. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Trial Attorneys Jamie Perry and Danielle Hickman of the Justice Department’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney April Russo of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.
The FBI and the Department of State’s DSS Office of Special Investigations are investigating the case. The Justice Department’s Office of International Affairs and National Security Division provided valuable assistance.
The Department of Justice gratefully acknowledges the Government of Mexico, to include the Fiscalía General de la República and the Fiscalía General de Justicia de la Ciudad de México, for their extraordinary efforts, support and cooperation during the investigation.
If you believe you have been a victim, have information about Raymond or know of someone who may have information about Raymond, the FBI requests that you fill out this secure, online questionnaire, email FBI at [email protected] or call 1-800-CALL-FBI.
Former Payroll Administrator Found Guilty of $1.5 Million Fraud Against Longtime EmployerRead the Press Release
WASHINGTON – A longtime payroll administrator was found guilty today of wire fraud and other charges for a scheme in which she embezzled more than $1.5 million from her former employer, announced Acting U.S. Attorney Channing D. Phillips and Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division.
Eleanor Milligan, 61, of Silver Spring, Md., was found guilty of a total of 13 counts, including wire fraud, aggravated identity theft, and first-degree theft. The verdict followed a trial in the U.S. District Court for the District of Columbia. The Honorable Timothy J. Kelly scheduled sentencing for Oct. 22, 2021.
According to the government’s evidence, except for brief periods, Milligan worked from 1998 to 2016 for a company based in Washington, D.C. Beginning in at least or about August 2009, and continuing until in or about March 2016, Milligan used her fellow employees’ names and personal identifying identification without authority to transmit false payment requests to herself through the employer’s payroll processing system. In total, Milligan caused more than $1.5 million in fraudulently obtained payments to be direct-deposited into accounts under her control and otherwise paid for her benefit.
In announcing the verdict, Acting U.S. Attorney Phillips and Acting Special Agent in Charge Bornstein commended the work of those who investigated the case from the FBI’s Washington Field Office. They also expressed appreciation for the assistance provided by the Metropolitan Police Department (MPD). They commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Chad Byron and Michon Tart, Victim-Witness Service Coordinator Tonya Jones, Supervisory Litigation Technology Specialist Leif Hickling, and Litigation Technology Specialist Jeanie Latimore-Brown. Finally, they acknowledged the work of Assistant U.S. Attorneys Diane Lucas and Christine Macey, who prosecuted the matter.
Virginia Man Sentenced to 24 Months in Prison for Fraud Scheme and Possessing Fraudulent Austrian PassportRead the Press Release
WASHINGTON – Tyrone Grandberry, 61, of Woodbridge, Va., has been sentenced to 24 months in prison on charges of wire fraud stemming from a scheme to defraud people who trusted him to invest money on their behalf, and possessing a fraudulent immigration document.
The announcement was made by Acting U.S. Attorney Channing D. Phillips, Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division, and Carlos F. Matus, Acting Director of the U.S. Department of State’s Diplomatic Security Service.
Grandberry pleaded guilty in July 2019 to one count each of wire fraud and possessing a fraudulent immigration document. He was sentenced on July 20, 2021, by the Honorable Paul L. Friedman in the U.S. District Court for the District of Columbia. Upon completion of the prison term, he will be placed on three years of supervised release. He also must pay restitution to victims totaling $3,622,185.
According to the government’s evidence, Grandberry and others solicited investments totaling approximately $4 million and diverted money for their personal use. In some cases, Grandberry “repaid” or “refunded” prior victims with money that he obtained from new investors. He also obtained and possessed a fraudulent Austrian passport in another name.
In announcing the sentence, Acting U.S. Attorney Phillips, Acting Special Agent in Charge Bornstein, and Acting Director Matus commended the work of those who investigated the case from the FBI’s Washington Field Office and the State Department’s Diplomatic Security Service. They also commended the efforts of those who handled the case from the U.S. Attorney’s Office, including Paralegal Specialist Jessica McCormick and Assistant U.S. Attorney Demian Ahn, who prosecuted the matter.
Florida Man Pleads Guilty to Destruction of Property in Burning of Banner Taken from ChurchRead the Press Release
WASHINGTON – Henry “Enrique” Tarrio, 37, of Miami, Fla., pleaded guilty today to charges in two cases, including one involving the burning of a Black Lives Matter banner stolen from a downtown Washington church, announced Acting U.S. Attorney Channing D. Phillips and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Tarrio pleaded guilty in the Superior Court of the District of Columbia to one count of destruction of property and one count of attempted possession of a large-capacity ammunition feeding device. Each offense carries a maximum sentence of 180 days’ imprisonment and/or a $1,000 fine. Sentencing is scheduled for Aug. 23, 2021, before the Honorable Harold L. Cushenberry, Jr. While pending sentencing, Tarrio must continue to abide by a court order to stay away from the District of Columbia.
According to a proffer of facts submitted at today’s hearing, on the evening of Dec. 12, 2020, a group of individuals affiliated with the “Proud Boys,” including Tarrio, were in the area of 11th and K Streets NW, near the location of Asbury United Methodist Church. Unidentified members of the group stole the banner from the church’s property. The banner had lettering that read “#BLACKLIVESMATTER.” The banner also contained the Church’s logo and website address.
The group then walked southbound on 11th Street NW and took the banner to the intersection of 11th and E Streets NW. At the intersection, the group burned the banner, using lighter fluid and lighters. Numerous unidentified individuals crouched down and applied lighters to the edges of the banner. Tarrio posted a picture to his “Parler” social media account depicting himself holding an unlit lighter, inches from the ignited lighters in two other individuals’ hands.
In the days that followed, Tarrio admitted to burning the banner on social media and in comments to numerous media outlets.
Tarrio returned to the District of Columbia from Florida on Jan. 4, 2021, and he was arrested on a warrant charging him with the Dec. 12, 2020, destruction of property offense. In a search of his book bag, conducted at the time of his arrest, police recovered two high-capacity firearm magazines. Each magazine bars the insignia of the “Proud Boys.” In an interview with police, Tarrio told detectives that he had intended to transfer the magazines to a customer who was also going to be present in the District of Columbia.
In announcing the plea, Acting U.S. Attorney Philips and Chief Contee commended the work of those who investigated the case from the Metropolitan Police Department, as well as those who are prosecuting the matter from the U.S. Attorney’s Office.
U.S. Attorney’s Office Promotes 2021 Virtual Safe Surrender ProgramRead the Press Release
WASHINGTON – The Superior Court of the District of Columbia is hosting the final two days of its Virtual Safe Surrender Program this Friday, July 16, and Saturday, July 17. “Safe Surrender” is a program that allows an individual to take care of a misdemeanor bench warrant without having to visit the courthouse or a police station. Anyone wishing to surrender voluntarily can participate on their computer or smartphone.
“The U.S Attorney’s Office for the District of Columbia encourages anyone who has an outstanding bench warrant in a misdemeanor case, or who may have missed a court hearing and is unsure of what to do, to take part in DC Safe Surrender,” said Acting U.S. Attorney Channing D. Phillips. “Prosecutors will credit you for you taking responsibility and coming forward to handle the warrant without the involvement of the police. Participants will be treated respectfully, and defense attorneys will be available to represent persons who wish to have a lawyer. A participant’s warrant may even be taken care of the day that they log in to DC Safe Surrender. The U.S. Attorney’s Office for the District of Columbia urges individuals to take advantage of the final days of this program.”
The Court strongly encourages registration in advance at: http://DCCourts.gov/safesurrender.
D.C. Woman Sentenced to Prison for Stealing from Non-Profit OrganizationsRead the Press Release
WASHINGTON – Maxine Marie Williams, 49, of Washington, D.C., was sentenced today to 12 months and one day in prison for attempting to steal more than $200,000 from two former employers, both non-profit organizations in the District of Columbia.
The sentence was announced by Acting U.S. Attorney Channing D. Phillips, Daniel A. Adame, U.S Postal Inspector in Charge for the Washington Division, and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Williams worked for one non-profit organization from approximately 2015 through March 2018. Her job responsibilities included processing donation checks that were mailed to the office, and preparing and mailing checks to vendors, service providers, and individuals. According to the government’s evidence, from November 2015 through March 2018, she stole 171 checks totaling $161,084.23 from the organization. Most of the checks were charitable contributions that were mailed to the organization’s office in Washington. Other checks consisted of outgoing payments from the organization to vendors, service providers, and individuals. Of the $161,084.23 in stolen checks, more than $140,000 was successfully deposited into accounts associated with Williams, including a $5,000 donor check that Williams deposited at an ATM in Hyattsville, Md.
After Williams was terminated from the first organization in March 2018, she secured employment with the second organization, a non-profit trade association headquartered in Washington. Between December 2018 and June 2019, according to the government’s evidence, Williams stole 33 checks totaling $43,398.93 from the second organization. She successfully deposited more than $38,000 into her bank account.
Williams pled guilty in April 2021 in the U.S. District Court for the District of Columbia to one count of interstate transportation of stolen property. In addition to sentencing Williams to prison, Judge Amit P. Mehta ordered that she pay $179,500.57 in restitution and be liable for a forfeiture money judgment in the same amount.
In announcing the sentence, Acting U.S. Attorney Phillips, Inspector in Charge Adame and Chief Contee commended the work of those who investigated the case from the U.S. Postal Inspection Service and Metropolitan Police Department. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Assistant U.S. Attorney Kondi Kleinman, former Assistant U.S. Attorney Stephanie Miller, Financial Analyst Bryan Snitselaar, Paralegal Specialist Michon Tart, and former Paralegal Specialist Brittany Phillips.
U.S. Attorney’s Office for the District of Columbia and Partners Present Annual Youth SummitRead the Press Release
WASHINGTON - The U.S. Attorney’s Office for the District of Columbia teamed up with several local and federal law enforcement partners and community-based organizations today to present the Annual “Breaking the Silence on Youth Violence” Youth Summit. Due to continued COVID-related social distancing, the Summit was again presented virtually – this year, to more than 250 youth participants.
Acting U.S. Attorney Channing D. Phillips welcomed youth participants, commending them for their “persistence in pursuing [their] aspirations despite the challenges that may arise.” “[D]uring the past year-and-a-half, in the midst of the COVID-19 pandemic, [you] have faced challenges and hardships, but you continue to show your resolve in not only achieving personal success, but in helping to make your community a better place to live,” Phillips remarked. Acting U.S. Attorney Phillips also awarded one of three 2021 United States Attorney Office’s Youth Citizenship Awards to Ronald Woods II. Brandi Ling and Emon Thompson, who appeared remotely to accept the Award, also were recipients of the USAO Youth Citizenship Award.
Each year, the free Summit focuses on gun violence and mental health issues, and features dynamic speakers, entertainment, prizes, and invaluable information and resources. For the past ten years, the U.S. Attorney’s Office has collaborated with its partners to host the Youth Summit. Past Summits have included sessions that highlighted the causes and consequences of youth violence, challenged youth participants to make better decisions, and emphasized the importance of cooperating with law enforcement.
This year’s Youth Summit focused on prevention of gun violence, opioid abuse, and sex trafficking. Emceed by local celebrity DJ Flava, the Summit featured Metropolitan Police Chief Robert J. Contee III; Tia Bell, founder of the T.R.I.G.G.E.R. Project; domestic sex trafficking survivor Tina Frundt, founder of Courtney’s House; and Catie Drew, DEA Scientist and Senior Prevention Program Manager, among other speakers. Assistant U.S. Attorney Kenya Davis shepherded youth participants through a discussion of human trafficking.
Summit partners this year included the D.C. Prevention Center; the East of the River Family Strengthening Collaborative; Hillcrest Children and Family Center; the Court Services and Offender Supervision Agency; the Marion Barry Summer Youth Program; the DC Metropolitan Police Department; the DC Department of Parks and Recreation; the DC Department of Behavioral Health; Advocates for Justice and Education Inc.; the DC Parent Information & Training Center; University Legal Services of the District of Columbia’s Disability Rights Protection and Advocacy Program; Phil More Fit Fitness; and Kids Eat Free.
For more information, contact United States Attorney’s Office for the District of Columbia Director of Community Outreach Wendy Pohlhaus at (202)252-6930 or [email protected].
Former Controller of the George Town Club Pleads Guilty to Defrauding Former EmployerRead the Press Release
WASHINGTON - Isabelle Garcia, 56, former controller for the George Town Club (“GTC”), pleaded guilty today to a federal charge of wire fraud stemming from a scheme in which she defrauded the GTC of over $300,000.
The announcement was made by Channing D. Phillips, Acting U.S. Attorney for the United States Attorney’s Office for the District of Columbia, and Robert Bornstein, Acting Special Agent in Charge, FBI Washington Field Office, Criminal Division.
Garcia was indicted in May 2018 on two counts of wire fraud, one count of bank fraud, and one count of first degree fraud. Garcia pleaded guilty to wire fraud, the first count of the indictment, in the U.S. District Court for the District of Columbia. The remaining charges will be dismissed at sentencing. Wire fraud carries a statutory maximum sentence of 20 years in prison and potential financial penalties. Under federal sentencing guidelines, Garcia faces a likely range of 27 to 33 months in prison and a fine of up to $100,000. The plea agreement also calls for Garcia to pay $300,422.06 in restitution and to agree to entry of a $300,422.06 forfeiture money judgment. The Honorable John D. Bates of the United States District Court for the Distict of Columbia scheduled Garcia’s sentencing for September 29, 2021.
As part of her plea, Garcia admitted that she was the controller for the GTC, a private dining club located in the District of Columbia. From 2006 to 2013, Garcia admitted that she used her control over GTC financial accounts to make payments to herself and to third parties for her personal benefit. Through her scheme, Garcia wrongfully obtained $300,442.06 to which she was not entitled.
In announcing the plea, Acting U.S. Attorney Phillips and Special Agent in Charge Robert Bornstein commended the work of those who investigated the case from the FBI’s Washington Field Office. They also expressed appreciation for the work of Paralegal Specialist Stephanie Frijas. Finally, they commended the work of Assistant U.S. Attorney Peter Lallas and former Assistant U.S. Attorney Anthony Saler, who prosecuted the case.
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Hawaiian Non-Profit Executive Sentenced to 46 Months of Imprisonment for Embezzling over $500,000 from AmeriCorps and for Agreeing to Receive a Bribe for Approving $845,000 in CARES Act GrantsRead the Press Release
WASHINGTON – Hanalei Aipoalani, 42, of Waianae, Hawaii, was sentenced today in federal court to 46 months of imprisonment for embezzling more than $500,000 from AmeriCorps and for agreeing to accept a bribe for the administration of grants under the CARES Act.
The announcement was made by Channing D. Phillips, Acting United States Attorney for the District of Columbia; Deborah Jeffrey, Inspector General of AmeriCorps; and Steven B. Merrill, Special Agent in Charge, FBI Honolulu Field Office.
Hanalei Aipoalani, who pleaded guilty in March 2021 to embezzlement from AmeriCorps and agreeing to take a bribe related to CARES Act funds, was sentenced today by the Honorable Reggie B. Walton of the United States District Court for the District of Columbia to 46 months of imprisonment, three years of supervised release, and ordered to pay $532,730 in restitution to AmeriCorps and a $527,000 money judgment.
“The defendant’s greed greatly cost the people of Hawaii, depriving them of the valuable services that AmeriCorps members provide,” said Acting U.S. Attorney Phillips. “Were it not for the investigators here, Hanalei Aipoalani would also have deprived a qualifying organization of $845,000 in much-needed support under the CARES Act. Today’s sentence should serve as a warning that the United States Department of Justice will prosecute those who abuse their positions of power to enrich themselves at the expense of the American people.”
“Hanalei Aipoalani stole AmeriCorps funds from his neighbors in vulnerable communities to buy luxury goods and take lavish vacations. Holding him accountable for these contemptible actions should deter anyone tempted to do likewise,” said Deborah Jeffrey, Inspector General of AmeriCorps.”
“AmeriCorps trusted Hanalei Aipoalani with their mission in the State of Hawai’i and were ultimately betrayed. Today’s sentencing marks the end of Aipoalani’s betrayal of the Hawai’i community" said Honolulu FBI Special Agent in Charge Steven B. Merrill. “The FBI would like to thank AmeriCorps Office of Inspector General and the United States Attorney for the District of Columbia for their cooperation and dedication to the pursuit of justice.”
AmeriCorps is a federally funded network of national service programs that address critical community needs like increasing academic achievement, mentoring youth, fighting poverty, sustaining national parks, preparing for disasters, and more. AmeriCorps’ national service members commit to service for a set period of time, usually a year, in exchange for a living allowance, funding to be used for college tuition, and other benefits.
From December 2014 through May 2019, Hanalaei Aipoalani embezzled more than $527,000 from a non-profit that hosted an AmeriCorps program, by submitting false claims for payments to AmeriCorps members and directing those payments into his own bank accounts and by creating fraudulent invoices from non-profits for reimbursement by AmeriCorps. As part of his embezzlement, Hanalaei Aipoalani used at least nine inactive or former AmeriCorps’ members’ names, without their knowledge or consent, to fraudulently claim living allowances and other payments, which he then diverted to his own use.
As part of his guilty plea, Hanalaei Aipoalani admitted to conspiring to enroll his wife, Angelita Aipoalani, as an AmeriCorps member, even though she did not perform AmeriCorps service activities, and to cause a second non-profit to pay Angelita Aipoalani more than $69,000 for no compensable work. Hanalaei Aipoalani also admitted to engaging in a scheme to fraudulently obtain AmeriCorps education awards for Angelita Aipoalani, even though she had not performed the required service. Angelita Aipoalani, 42, of Waianae, Hawaii, pleaded guilty in federal court on April 1, 2021, to conspiring with Hanalei Aipoalani to embezzle more than $69,000 from AmeriCorps and to fraudulently obtaining more than $11,000 in AmeriCorps education grants, and is pending sentencing.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which was passed by Congress and signed into law in or about March 2020, provided financial relief to individuals, businesses, states, and localities suffering the economic effects of the COVID-19 pandemic. Among other relief programs, the CARES Act created a $150 billion Coronavirus Relief Fund (“CRF”) to be distributed to states, localities, and tribal governments to support expenditures incurred due to COVID-19. Government entities that received money from the CRF could use the funds, among other things, to make grants to small businesses to reimburse the costs of business interruption caused by required closures and to provide economic relief for those suffering employment interruption.
In August 2020, Hanalaei Aipoalani was hired to serve as Honolulu City and County’s Department of Community Service’s CARES Program Administrator and was responsible for administering CRF programs. In that capacity, Hanalaei Aipoalani agreed to accept a financial benefit from an applicant who filed two fraudulent applications for CARES Act Funds under the agreement that Hanalaei Aipoalani would influence the approval of the grant applications and would receive a financial benefit in return for the approvals.
The FBI, the Inspector General for AmeriCorps, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the AmeriCorps program and programs under the CARES Act. If you are aware of fraud, waste, or abuse affecting AmeriCorps or any of its programs, contact the AmeriCorps Office of Inspector General Hotline at 1-800-452-8210 or [email protected].
In announcing the sentence, Acting U.S. Attorney Phillips, Inspector General Jeffrey, and Special Agent in Charge Merrill commended the work of those who investigated the case from the Office of the Inspector General for AmeriCorps and the FBI’s Honolulu Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Assistant U.S. Attorneys Leslie A. Goemaat and Peter Lallas of the Fraud Section; Amanda Vaughn of the Public Corruption and Civil Rights Section; former Assistant U.S. Attorney Bianca Forde; and Paralegal Specialists Mariela Andrade, Stephanie Frijas, and Joseph McClanahan who worked on the case.
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