District of Delaware
Press releases recorded for this federal judicial district.
Superseding Indictment Issued for Dover Developer ZimmermanRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that the federal grand jury returned a Superseding Indictment charging Michael A. Zimmerman, age 56, of Dover with additional fraud and money-laundering offenses.
The Superseding Indictment alleges that Zimmerman made a false statement in April 2008 in connection with a $685,206.00 construction draw request to The Bancorp Bank (“Bancorp”) for the Long Neck project in Sussex County, Delaware. The Superseding Indictment alleges that two line items within that draw request, totaling $440,206.00, were false and were not for work that was not connected to the Long Neck project. According to the Superseding Indictment, Zimmerman submitted several forged and/or fraudulent documents to Bancorp in connection with the construction draw request. Zimmerman’s conduct in submitting the false draw request comprises Count 10 of the Superseding Indictment, which is punishable by a maximum term of 30 years imprisonment, a fine of $250,000.00, and mandatory restitution.
The Superseding Indictment further alleges that Zimmerman utilized at least a portion of the construction draw request for personal purposes unrelated to the Long Neck project. In particular, Zimmerman caused the transfer of Bancorp loan proceeds from his company account to his personal bank account in the amount of $106,672.00. Zimmerman ultimately used those funds to reimburse himself for a check he had written on or about May 7, 2008, toward his partnership investment in Club Wild Quail, LLC – an entity which owned the Wild Quail Country Club in Camden-Wyoming, Delaware. The diversion of Long Neck project funds to Zimmerman’s personal account constitutes the money laundering count in Count 11 of the Superseding Indictment. This charge carries a maximum term of 10 years imprisonment and a fine of up to $250,000.00.
The case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Office of Inspector General, Board of Governors of the Federal Reserve System and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz and Lesley F. Wolf.
Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.
See also: http://www.justice.gov/usao/de/news/2013/01-29.html
Zimmermin First Superseding IndictmentShipping Corporations to Pay $10.4 Million for Environmental Crimes on Four ShipsRead the Press Release
$2.6 Million Will Go To Projects to Aid Coastal
Environment Hit by Hurricane SandyWASHINGTON – Two shipping firms based in Germany and Cyprus today pleaded guilty to felony obstruction of justice charges and violating the Act to Prevent Pollution from Ships related to the deliberate concealment of vessel pollution from four ships that visited ports in Delaware, New Jersey, and Northern California, the U.S. Attorney’s Offices in Delaware, New Jersey and, the Department of Justice Environment and Natural Resources Division and the U.S. Coast Guard announced.
U.S. Attorney for the District of New Jersey Paul J. Fishman and U.S. Coast Guard Deputy Commander of the Delaware Bay Sector Capt. Todd Wiemers announced the plea agreement – which includes a $10.4 million penalty, $2.6 million of which will be used to address environmental damage caused by Hurricane Sandy – at a press conference in Newark.
According to a multi-district plea agreement arising out of charges brought in the District of Delaware and District of New Jersey, Columbia Shipmanagement (Deutschland) GmbH (CSM-D), a German corporation, and Columbia Shipmanagement Ltd. (CSM-CY), a Cypriot company, have agreed to pay a $10.4 million penalty and be placed on probation for four years. During probation, the companies will be subject to the terms of an environmental compliance program that requires outside audits by an independent company and oversight by a court appointed monitor. The shipping firms admitted that four of their ships (three oil tankers and one container ship) had intentionally bypassed required pollution prevention equipment and falsified the oil record book, a required log regularly inspected by the U.S. Coast Guard. The case is the largest vessel pollution settlement in either Delaware and New Jersey. The guilty pleas were entered before U.S. District Judge Susan D. Wigenton in Newark federal court.
“This prosecution is a fine example of multi-district cooperation in enforcing federal environmental law and achieving a just sentence,” U.S. Attorney for the District of Delaware Charles M. Oberly III said.
“Deliberate pollution and intentional falsification of ship records to hide environmental crimes are serious offenses. These reprehensible actions not only damage the marine environment, but also put law breakers at a competitive advantage over those who respect the law and play by the by rules,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We intend to send a message with these prosecutions that those engaged in deliberate despoiling of our precious natural resources will be vigorously prosecuted.”
“We in New Jersey are as sensitive as anyone to the need to preserve the shoreline,” U.S. Attorney Fishman said. “Shipping companies who foul the water by deliberately discharging oil and lying about it to the Coast Guard can expect to be prosecuted.”
“This was a case of willful pollution and deliberate falsification of records designed to deceive the Coast Guard,” said Captain David Fish, Chief of Investigations for the Coast Guard. “It takes both resources and a culture of compliance to abide by the law. We are hopeful that the remedial measures required as part of this criminal conviction will have a positive impact on these companies and serve as a message to other maritime companies as to what is expected.”
According to documents filed in this case and statements made in court:
The $10.4 million penalty includes $2.6 million in organizational community service payments to assist the coastal maritime environment in New Jersey and Delaware damaged by Hurricane Sandy. The plea agreement directs the funds to environmental projects that will be selected by the National Fish & Wildlife Foundation to help conserve, preserve and restore the coastal environment of New Jersey and Delaware hit by Hurricane Sandy.
The investigation into the M/T King Emerald was launched on May 7, 2012, after several crew members provided cell phone photos and other evidence to Coast Guard officers conducting a routine inspection. The King Emerald was engaged in various types of illegal discharges of bilge waste dating back to at least 2010. The defendants admitted that illegal discharges of both sludge and oily bilge waste were discharged at night off the coast of Central America, including a discharge within the Exclusive Economic Zone of Costa Rica where a national park is located. The ship’s second engineer pleaded guilty previously and will be sentenced in Newark on April 3, 2013.
The Delaware investigation began in October 2012, after several crew members of the M/T Nordic Passat provided the Coast Guard with a thumb drive containing photographs and video showing how illegal discharges had been sent overboard through the ship’s sewage system. They also alleged that sludge had been put into the ship’s cargo tanks and that logs showing sludge had been incinerated onboard had been falsified. The charges involving the M/V Cape Maas stem from a whistleblower report to the Coast Guard when the ship visited the port in San Francisco. He provided a video showing the operation of the oily water separator pumping overboard without the use of the oil content monitor to detect and prevent oil from being illegally discharged.
Just two weeks prior to today’s plea, the defendants and their attorneys disclosed violations on a fourth ship, the M/T Cape Taft that was then anchored in New York waters and destined for New Jersey. After the ship disclosed problems to the company, an internal investigation revealed that the ship’s oily water separator had been used improperly for some time. Instead of sensing a sample of overboard discharges, it was instead flushed with fresh water by the crew. The ship’s oil record book was revised by CSM-D to reveal 16 instances where it was false. The defendants cooperated with the investigation and provided the government with video replays of the oil content monitor showing when the crew had “tricked” the sensor with fresh water.
In pleading guilty, the defendants have admitted the following in a detailed joint factual statement filed in Court:
• The King Emerald oil tanker used three different methods to illegally dispose of oily bilge waste. In April 2012, approximately five tons of oily waste was discharged in the exclusive economic zone of Costa Rica approximately 45 miles from a national park.
• At least three chief engineers and the second engineer were involved in illegal discharges and intentional falsification of the oil record book for the King Emerald. In one instance, the oily water separator was operated solely for the purpose of generating data on the ship’s electronic recording device to account for an illegal discharge that had already taken place.
• During the Coast Guard boarding in Carteret, N.J., the second engineer lied to inspectors and then hid a valve used to make illegal discharges in an overhead space on the ship.
• Oil contaminated bilge waste was illegally pumped overboard from the M/T Nordic Passat on the orders of the chief engineer and second engineer with a portable pump and “magic hose” that was draped down three levels of the engine room to dump overboard through the sewage system.
• Illegal discharges have been made from the M/T Nordic Passat since 2006 by “tricking” the sensor designed to detect oil with fresh water during overboard discharges on a regular and routine practice by or at the direction of the chief engineer and second engineer. As a result, virtually every discharge totaling approximately 2,000 tons of unmonitored and oil contaminated bilge waste were discharged into ocean waters illegally and in violation of MARPOL over at least a six-year period, and all of the corresponding entries in the oil record book were false.
• During the Coast Guard boarding of the Nordic Passat, senior ship engineers lied to the Coast Guard and told lower level crew members to lie.
• On the M/V Cape Maas, a container ship, the manufacturer’s seal on the oil content monitor had been broken and fresh water had been used to trick the sensor.
The plea agreement sets forth the counts charged as to each defendant in each district including six counts involving three vessels in New Jersey and four counts involving one ship in Delaware. The guilty pleas include violations of the Act to Prevent Pollution from Ships for failing to maintain an accurate oil record book, obstruction of justice and making false statements. The maximum penalty for each of these felony offenses is $500,000 or up to twice the gross gain or loss from the offense for a corporation.
This prosecution was made possible through the combined efforts of the U.S. Coast Guard Districts 1, 5 and 11; Coast Guard Sectors New York, Delaware Bay, and San Francisco; Coast Guard Investigative Service, Coast Guard Office of Maritime and International Law; and Coast Guard Office of Investigations and Analysis.
The government is represented by Edmond Falgowski, Assistant U.S. Attorney in Delaware; Kathleen P. O’Leary, Assistant U.S. Attorney in the Criminal Division in New Jersey; Richard A. Udell, Senior Trial Attorney, and Stephen Da Ponte, Trial Attorney, of the Environmental Crimes Section of the U.S. Department of Justice Environment and Natural Resources Division. Assistance was also provided by the U.S. Attorney’s Office for the Northern District of California.
Chief Scientist of Government Contractor Sentenced to One Year in Prison for Conspiring to Obtain Pirated Software from Chinese and Russian CybercriminalsRead the Press Release
WILMINGTON, Del. – Dr. Wronald Best, age 55, of Owensboro, Kentucky, was sentenced to one year in prison today for conspiracy to commit criminal copyright infringement, in which Best obtained over $2.3 million in stolen software from Chinese and Russian cybercriminals. Best also was sentenced to three years of supervised release, which will commence following his prison term.
Investigation of China-based Cybercriminal Leads to Identification of Dr. Wronald Best
According to statements made at today’s hearing and documents filed in court, the U.S. Department of Homeland Security, Homeland Security Investigations, identified a China-based website located at www.crack99.com that was advertising thousands of pirated software titles at a fraction of their retail value. The investigation revealed that this website was operated by Xiang Li, age 36, of Chengdu, China, who used the website to distribute pirated or cracked software to customers all over the world, including the United States. Software is “cracked” when its digital license files and access control features have been disabled or circumvented.
The HSI investigation revealed that between April 2008 to June 2011, Xiang Li engaged in over 500 transactions, in which he distributed approximately 550 different copyrighted software titles to at least 325 purchasers located in at least 28 states and over 60 foreign countries. These software products were owned by approximately 200 different manufacturers and were worth over $100 million. The software is used in a wide range of applications including defense, engineering, manufacturing, space exploration, aerospace simulation and design, mathematics, and explosive simulation. More than one-third of the unlawful purchases were made by individuals within the United States, including small business owners, government contractors, students, inventors, and engineers.
Between January 2010 and June 2011, undercover agents made a series of purchases of pirated software worth hundreds of thousands of dollars from Xiang Li’s CRACK99 website. The investigation culminated in a face-to-face meeting between Xiang Li and undercover agents on the Island of Saipan, in June 2011. Xiang Li had agreed to travel from China to Saipan to deliver pirated software, design packaging, and 20 gigabytes of proprietary data obtained from an internal computer server of a U.S. software company to undercover agents posing as U.S. businessmen. In addition, Xiang Li and the undercover agents were meeting to discuss a plan to distribute pirated software to small businesses in the United States. The undercover agents arrested Xiang Li on June 7, 2011, after he delivered the stolen intellectual property to them at a Saipan hotel. Xiang Li was transported to the District of Delaware, where he has remained in custody since June 2011.
On January 7, 2013, Xiang Li pled guilty to conspiracy to commit criminal copyright infringement and wire fraud in the United States District Court for the District of Delaware. Li is scheduled to be sentenced by United States District Judge Leonard P. Stark on May 3, 2013.
Dr. Wronald Best Conspires with International Cybercriminals to Commit IP Theft
During the investigation, agents learned that Dr. Wronald Best was one of CRACK99’s top customers in 2008 and 2009. As the investigation shifted focus to Best’s activities, agents learned that between September 2008 and May 2011, Best conspired with Xiang Li and other computer software crackers located in China and Russia to obtain and utilize unauthorized copies of industrial-grade software in the performance of government contracts for the military and law enforcement sectors. At the time, Best held the position of “Chief Scientist” at MPD, Inc., a Kentucky-based government contractor that services the U.S. and foreign militaries and law enforcement agencies.
The HSI investigation revealed that Best communicated electronically with approximately 35 different computer code crackers and obtained over 60 pirated software applications from Chinese and Russian sources. He paid over $6,000 to obtain pirated software worth over $2.3 million. Best told special agents that he used that cracked software to conduct computer simulations on components MPD, Inc. was designing for use in military helicopters, including the Black Hawk helicopter and the presidential helicopter fleet, commonly referred to as “Marine One.” Other projects on which Best used cracked software included designing Patriot missile components, police radars and breath analysis equipment widely used by American police departments.
The investigation also confirmed that Best was more than a customer of Chinese and Russian cybercriminals. Best also used his position as Chief Scientist” for a government contractor to obtain trial licenses to use various software applications, which he then provided to cybercriminals for cracking and future dissemination. He also provided these international software pirates with instructions on how to disable the security devices in certain software.
Following the sentencing hearing, United States Attorney Charles M. Oberly, III, stated: “Each year, American companies lose intellectual property valued in the billions of dollars to international cybercriminals engaged in rampant digital theft. Mr. Best’s offenses are aggravated by the fact that he used pirated software obtained from these thieves to design parts for our military and law enforcement personnel. The successful prosecution of this conspiracy ring proves that neither the international cybercriminal behind a computer in China nor his customers behind computers in America are beyond the reach of U.S. law enforcement.”
“Dr. Best betrayed our country and those who are sworn to protect it, by conspiring with international cyber thieves who believed they could remain anonymous in cyberspace. They were wrong,” said John P. Kelleghan, special agent in charge of Homeland Security Investigations in Philadelphia. “HSI and our law enforcement partners will continue to ensure that those who commit these crimes, no matter where they reside, are held accountable for their actions.”
This case is being investigated by the United States Department of Homeland Security, Homeland Security Investigations, and the Defense Criminal Investigative Service. This case is being prosecuted by Assistant United States Attorneys David L. Hall and Edward J. McAndrew.
Former Youth Group Leader Sentenced to 5 Years in Prison for Transportation of Child PornographyRead the Press Release
WILMINGTON, Del. – David Osborn, age 41, of New Castle, Delaware, was sentenced today to 5 years in prison for transportation of child pornography via AOL chat rooms and email. Osborn also was sentenced to 5 years of supervised release following his prison sentence. He also will be required to register as a sex offender in any jurisdiction in which he lives, works, or attends school. United States Attorney Charles M. Oberly, III made the announcement following Osborn’s sentencing hearing before United States District Judge Richard G. Andrews.
According to statements made at today’s hearing and documents filed in court, Osborn was identified by the Federal Bureau of Investigation through reports of child pornography trafficking that had been provided by AOL LLC to the National Center for Missing and Exploited Children (“NCMEC”). Under federal law, internet service providers, such as AOL, are required to report suspected child pornography being transmitted over their servers to NCMEC, which then directs these “cybertips” to the appropriate law enforcement agency. AOL reported that an AOL user, later identified as Osborn, used AOL email to trade images of child pornography with another AOL customer in South Florida.
On May 26, 2011, federal agents executed a search warrant at Osborn’s New Castle residence and arrested Osborn after finding over 700 images of child pornography on his computer equipment. Law enforcement agents also searched Osborn’s email account, which was found to contain additional images of child pornography. Osborn’s child pornography collection focused mainly on girls between the ages of four and sixteen. Forensic data found on the equipment indicated that Osborn had been receiving and distributing images of child pornography for over eight years. Also found were over 500 internet chat logs between Osborn and others regarding child sexual exploitation. Investigators also learned that Osborn was the moderator of an online chat room devoted to discussions of hitting and beating children to coerce them into engaging in sexual acts.
Over the 13 years prior to his May 26, 2011 arrest, Osborn worked as a substitute teacher in the Appoquinimink School District and as a school bus driver for elementary and high school students at various New Castle County Schools. Osborn also was a member of Masons Lodge Number 26, in Newport, Delaware, where he held various positions supervising youth groups for pre-teen and teenage boys and girls.
This case is being investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Edward J. McAndrew, of the District of Delaware, and Trial Attorney Michael Grant, of the United States Department of Justice’s Child Exploitation and Obscenity Section.
For more information about reporting online child exploitation to the national CyberTipline, visit the National Center for Missing and Exploited Children’s website at: www.missingkids.com. For more information about the United States Department of Justice’s Project Safe Childhood program, visit http://www.justice.gov/psc/.
Delaware Woman Charged in $940,000+ Tax Fraud and Identity Theft SchemeRead the Press Release
39 Count Indictment Alleges The Defendant Defrauded The Irs, The State Of New York, And Her Own Clients
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that an Indictment has been handed down by a federal grand jury charging Dawn Chamberlain, age 36, of Claymont, Delaware, with seven counts of mail fraud (18 U.S.C. § 1341), one count of wire fraud (18 U.S.C. § 1343), eight counts of aggravated identity theft (18 U.S.C. § 1028A), and twenty counts of submitting false claims to the United States (18 U.S.C. § 287). The defendant faces up to 20 years in prison on each count of wire fraud and mail fraud, up to 5 years in prison on each count of false claims, and consecutive 2-year terms of imprisonment on each of the aggravated identity theft charges, in addition to possible fines and restitution.
According to the Indictment, from 2009 through 2012, the defendant acted as a tax preparer in Delaware. She filed false and fraudulent U.S. Individual Federal Income Tax Returns for other people. In the returns, the defendant claimed more than $730,000 in credits to which her clients were not entitled, including the American Opportunity Tax Credit and the Earned Income Tax Credit.
The Indictment further alleges that the defendant caused the refunds generated by the fraudulent federal income tax returns to be deposited into her own bank accounts, and bank accounts of her family members. She returned less than the full amount of the refunds to her clients, converting the remaining proceeds to her personal use.
The Indictment charges that the defendant used her client’s names, dates of birth, and social security numbers to file false and fraudulent New York State Resident income tax returns, without their knowledge. The defendant took advantage of New York’s tax laws, requesting refunds of more than $210,000. The Indictment alleges that the defendant knew or should have known that these clients did not live in the State of New York.
U.S. Attorney Oberly gave the following comment, “This case should send a clear signal during this tax filing season that individuals who file false claims against the United States Treasury will face significant penalties. I find fraud upon the government to be particularly troubling, and I am committed to working with the Internal Revenue Service to prosecute these cases and seek incarceration wherever possible.”
“Individuals who commit refund fraud and identity theft of this magnitude deserve to be punished to the fullest extent of the law,” stated Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. “We, along with our law enforcement partners and the United States Attorney's Office, continue to do our part in protecting the integrity of the tax system and those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury."This case is the result of an investigation conducted by the Internal Revenue Service, the United States Postal Inspection Service, and the Social Security Administration, Office of the Inspector General, with cooperation from the State of New York. The prosecution is being handled by Assistant United States Attorney Lauren Paxton, District of Delaware.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Man Pleads Guilty in Panamanian Drug Trafficking ConspiracyRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Kelvin Cook, age 34 of Wilmington, Delaware, pleaded guilty to conspiracy to possess with the intent to distribute five kilograms or more of cocaine and one kilogram or more of heroin, in violation of Title 21, United States Code, Sections 841 and 846. The charge carries a maximum term of life imprisonment, with a mandatory minimum term of ten years imprisonment. The Court scheduled a sentencing hearing for Thursday, June 20, 2013, at 3:00 p.m.
According to facts introduced at the change of plea hearing, Cook was responsible for recruiting a number of drug couriers to take smuggling trips to Panama to illegally import cocaine and heroin into the United States. Agents identified a total of 19 couriers who took smuggling trips on behalf of the organization, and who smuggled, or attempted to smuggle, more than 13 kilograms of cocaine and five kilograms of heroin from Panama to Delaware. Cook also was responsible for a significant crack cocaine distribution network on the 500 block of West Sixth Street in Wilmington.
Cook is the fourteenth individual charged in connection with the Wilmington-based Panama drug conspiracy to enter a guilty plea in federal court. Ten defendants have entered guilty pleas in the United States District Court for the District of Delaware, while four other defendants have entered guilty pleas in the United States District Court for the Southern District of Texas. In addition, three defendants are in Panamanian custody, while two other defendants remain at large.
The investigation was led by the Drug Enforcement Administration, the Department of Homeland Security – Homeland Security Investigations, the Internal Revenue Service – Criminal Investigation Division, and the Wilmington Police Department.
This case is being prosecuted by Assistant United States Attorney Robert F. Kravetz. For further information, contact Press Information Officer Kimberlynn Reeves at (302) 573-6277, ext. 16287.
For additional information regarding the case, see also: http://www.justice.gov/archive/usao/de/news/2011/Panama%20Press%20Release.html; http://www.justice.gov/archive/usao/de/news/2012/07-27.html; http://www.justice.gov/archive/usao/de/news/2012/07-25.html; http://www.justice.gov/archive/usao/de/news/2012/Banerjee%20Plea%20Release.html
New Castle Man Indicted for Using Facebook to Threaten Government Witness in Federal Narcotics Trafficking and Murder-For-Hire TrialRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that a federal grand jury sitting in Delaware returned an indictment charging John Boney, age 35, of New Castle, Delaware with witness tampering and interstate transportation of threats, in violation of Title 18, United States Code, Sections 875 and 1512.
If convicted of the charges contained in the indictment returned today, John Boney faces a maximum sentence of 20 years in prison, a $250,000 fine, and 3 years of supervised release following any prison sentence.
According to the indictment and court documents filed in the case, John Boney was arrested on January 24, 2013 in the U.S. Courthouse in Wilmington after he used Facebook to threaten a government witness scheduled to testify that day in a federal criminal trial. In that federal criminal trial, John Boney’s brother, William Boney, age 39, of Pike Creek, was charged with narcotics trafficking, attempted murder by retaliating against an informant, and soliciting another person to retaliate against an informant by committing murder.
The trial of William Boney stemmed from his November 2010 attempt to broker a seven-kilogram cocaine deal worth approximately $217,000 at his residence in Delaware. Drug Enforcement Administration (“DEA”) agents intervened before the deal could be completed, and William Boney, along with four other individuals, was arrested. While attempting to cooperate with DEA agents against other narcotics traffickers, William Boney plotted the murder of a confidential informant who had notified DEA agents about the November 2010 cocaine deal. During meetings with a person he solicited to carry out the murder, William Boney discussed killing the confidential informant or the informant’s young child.
John Boney was present in the U.S. Courthouse during William Boney’s criminal trial, which began in the Wilmington federal building on January 22, 2013. On the morning of January 24, 2013, a government witness arrived at the courthouse to testify, but refused to enter the courtroom. The government witness informed law enforcement agents that John Boney sent a message to the witness’s brother on Facebook threatening to kill the witness if he testified against William Boney. In the message, John Boney wrote: “Snitches get laid in ditches right isn’t that the street rule and your bro is a state witness against my bro after he owes him 30 grand.” John Boney ended the message by writing, “if he testifies against someone who helped him out I’m sorry for what happens to him.”
After learning of the threat, federal agents removed John Boney from the courtroom in which William Boney’s trial was being held, interviewed him, and seized an Android smartphone that John Boney admitted using to post the threat on Facebook. John Boney was arrested and remains in federal custody.
On January 29, 2013, the jury returned guilty verdicts against William Boney on charges of conspiracy to possess with intent to distribute cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(A), and 846; attempted murder by retaliating against an informant, in violation of Title 18, United States Code, Section 1513(a)(1)(B); and soliciting another person to retaliate against an informant by committing murder, in violation of Title 18, United States Code, Sections 1513(a)(1)(B) and 373.
This case is being investigated by U.S. Drug Enforcement Administration and is being prosecuted by Assistant United States Attorneys Jamie M. McCall and Edward J. McAndrew.
Criminal indictments are only charges and are not evidence of guilt. A defendant is presumed to be innocent unless and until proven guilty.
Defendant Convicted of Drug and Attempted Witness Retaliation ChargesRead the Press Release
WILMINGTON, Del – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that a federal jury after less than four hours of deliberation over lunch found defendant William Boney guilty on charges of conspiracy to possess with intent to distribute cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(A), and 846; attempted murder by retaliating against an informant, in violation of Title 18, United States Code, Section 1513(a)(1)(B); and soliciting another person to retaliate against an informant by committing murder, in violation of Title 18, United States Code, Sections 1513(a)(1)(B) and 373. The jury returned its verdict yesterday after a one-week trial.
According to the evidence presented at trial, on November 7, 2010, Boney attempted to broker a seven-kilogram cocaine deal worth approximately $217,000 at his residence in Delaware. Before the cocaine deal could be completed, however, Drug Enforcement Administration (“DEA”) agents intervened after using a confidential informant to infiltrate the cocaine deal. Boney, along with four other individuals, was arrested, and the DEA seized nearly five kilograms of cocaine. Following his arrest, Boney was released to cooperate with the DEA in ongoing drug investigations.
While released, Boney discovered the identity of the confidential informant who assisted the DEA with the investigation of the November 7, 2010 drug deal. Boney then began to plot this person’s murder. DEA agents, however, uncovered Boney’s plot and inserted a second confidential informant into the Defendant’s scheme to portray the role of a “hit man.” Boney met with the purported “hit man” three times between May 22, 2011 and July 3, 2011. During these meetings, Boney discussed killing the confidential informant. If the informant was not present when the “hit man” entered the informant’s home, Boney requested the “hit man” kill the informant’s young child. Boney also provided critical information to the purported “hit man” to carry out this act. Boney further showed the “hit man” where various individuals lived who he believed possessed large amounts of cash or drugs so that the “hit man” could conduct home invasion robberies of these residences to collect the cash or drugs as payment for the murder of the confidential informant.
A sentencing hearing will be scheduled by the District Court. At sentencing, Boney faces a mandatory minimum sentence of 10 years of imprisonment, and up to life in prison for the drug conspiracy offense. He also faces a maximum penalty of 30 years in prison for attempted murder by retaliating against an informant; and a maximum penalty of 15 years in prison for soliciting another person to retaliate against an informant by committing murder.
United States Attorney Oberly congratulated the DEA investigators and the prosecution team on a well-earned conviction of a defendant whose ruthlessness included soliciting a hit man to kill the informant and/or his baby. He stated: ?The protection of witnesses and other innocents is of paramount concern and threats, intimidation or other actions against witnesses and others will always be fully investigated and prosecuted fully.”
Drug Enforcement Administration Special Agent in Charge David G. Dongilli said, “DEA will not tolerate threats against any person that has provided assistance or cooperated with DEA. I wish to extend my thanks to all of the law enforcement agencies that participated in this investigation, including the Delaware State Police, Delaware Department of Probation and Parole, Wilmington Police Department, Newark Police Department, and the New Castle County Police Department. I also want to extend my appreciation to the U.S. Attorney’s Office for the District of Delaware for their dedication, cooperation, professionalism, and support in the investigation and prosecution of this case.”
The case was prosecuted by Assistant United States Attorneys Jamie M. McCall and Ilana Eisenstein, District of Delaware. For further information, please contact AUSA McCall at 302-573-6079 or AUSA Eisenstein at 302-573-6082.
Dover Developer Indicted for Bank Fraud and Money LaunderingRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Michael A. Zimmerman, age 55, of Dover was indicted by a federal grand jury on January 23, 2013 for numerous bank fraud-related offenses. More specifically, Mr. Zimmerman was charged with one count of conspiracy to commit bank fraud and seven counts of making a false statement to a financial institution, each punishable by a maximum term of 30 years imprisonment and a fine of $1,000,000.00. The indictment also charges Mr. Zimmerman with one count of money laundering in violation of Title 18, United States Code, § 1957. This charge carries a maximum term of 10 years imprisonment and a fine of $250,000.00.
Zimmerman, a developer operating primarily in Kent and Sussex Counties, obtained financing in excess of $37 million from the Wilmington Trust Company (“Wilmington Trust”) in connection with three development projects— Salt Pond Plaza, Compass Pointe, and the Shoppes at Fieldstone. In March 2011, prior to its acquisition by M&T Bank, Wilmington Trust sold the debt associated with these, as well as other projects in which Zimmerman was a buyer, to a third party. Wilmington Trust incurred a loss on these three projects alone in excess of $26 million.
The Indictment alleges that in 2007 and 2008, in connection with the Salt Pond Plaza, Compass Pointe, and Shoppes at Fieldstone projects, Zimmerman and uncharged co-conspirators submitted false draw requests for payment from the bank and requested and received advanced funds in violation of the terms of the loan agreements with Wilmington Trust. Wilmington Trust funded the draw requests, which were not utilized for the purposes that Zimmerman and his co-conspirators had represented. In one instance, Zimmerman requested and received $150,000.00 in funds from Wilmington Trust that he represented to be for architectural and engineering costs, but instead used the money to finance acquisition of a personal interest in a development in the Bahamas.
United States Attorney Oberly said, “The Indictment reflects this Office’s commitment to hold accountable those who criminally contributed to the failure of the Wilmington Trust Company. The shareholders and employees of the bank, as well as the community, have been harmed by this failure, and the government remains firmly committed to prosecuting those whose fraudulent acts compromised the soundness and viability of a Delaware institution. The investigation continues.”
“The FBI is committed to ensuring banks and similar financial institutions are seen as sound and stable institutions, said Stephen Vogt, Special Agent in Charge of the FBI’s Wilmington Office. “Those who perpetrate sophisticated fraud schemes threaten the stability of financial institutions and, with the assistance of our law enforcement partners, will be prosecuted to the fullest extent of the law.”
“The IRS, along with our law enforcement partners, will vigorously pursue unscrupulous individuals who abuse our financial systems and violate the public trust,” said Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. “This indictment demonstrates the federal law enforcement agencies’ collective determination to restore and ensure that trust.”
“Zimmerman’s alleged large scale fraud against a TARP bank included diverting construction loans for unauthorized purposes, such as for a project in the Bahamas,” said Christy Romero, Special Inspector General for Troubled Asset Relief Program (SIGTARP). “Defrauding a TARP bank is the same as defrauding American taxpayers who funded the bailout, and SIGTARP and our law enforcement partners will bring to justice those responsible for crimes related to TARP.”
“We are committed to working with our law enforcement partners in holding accountable wrongdoers whose fraudulent actions materially impact the safety and soundness of financial institutions regulated by the Federal Reserve Board,” said Mark Bialek, Inspector General of the Board of Governors of the Federal Reserve System.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Office of Inspector General, Board of Governors of the Federal Reserve System. The case is being prosecuted by Assistant United States Attorneys Robert F. Kravetz and Lesley F. Wolf.Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.
Indictment
Operator of Delaware-Based Software Piracy Websites Sentencted to 58 Months for Copyright Infringement and Identity TheftRead the Press Release
WILMINGTON, Del. - Jamie Lynn Snyder, age 35, of Newark, Delaware, was sentenced to 58 months in prison today for criminal copyright infringement and identity theft in which she obtained over $1 million in illicit proceeds. Snyder also was sentenced to 3 years of supervised release, which will commence following her prison term, and was ordered to pay a total of $1,013,407.69 in restitution to her victims.
According to statements made at today’s hearing and documents filed in court, between January 1, 2008 and April 27, 2010, Snyder operated websites through which she sold, without authorization, at least 24,044 individual copies of pirated software products copyrighted by at least 81 different software manufacturers to thousands of customers. The total estimated retail value of the pirated software sold by Snyder surpassed $5.9 million.
The FBI made undercover purchases of over 20 software titles from the websites, which were located online at www.cheapestsoftwareanywhere.com and www.cheapestlegalsoftware.com. Included among the purchased software were some of the most popular titles manufactured by Adobe, Apple, Autodesk and Microsoft. The FBI also received numerous complaints from consumers across the country who believed they were lawfully purchasing software from Snyder’s websites, only to learn that Snyder was not authorized to sell the software, which could not be updated properly or registered with the manufacturers. In fact, the professional-looking websites also contained various statements attesting to their legitimacy and lawful sale of the software to consumers.
The FBI’s investigation further revealed that Snyder personally profited in the amount of $971,935.10 from the unlawful software transactions between February 26, 2008 and March 3, 2010.
In April 2010, the FBI executed a search warrant at Snyder’s Newark residence and interviewed Snyder. During that interview, Snyder confessed to operating the websites while knowing that it was unlawful for her to sell the software titles without authorization. She estimated that she was advertising approximately 400 software titles on the website, and had been earning approximately $25,000 to $35,000 per month from sales over past two years.
On November 16, 2011, Snyder pled guilty to criminal copyright infringement and was released on her own recognizance pending sentencing. Upon learning of Snyder’s guilty plea from news reports, the owners of TriMark Enterprises LLC, which employed Snyder as a bookkeeper, reported to the Delaware State Police and the FBI that Snyder had embezzled approximately $40,000 from the Wilmington-based company between February 2011 and January 2012. According to the business owners, Snyder forged numerous checks payable to herself and her creditors and also made unauthorized purchases of personal items on a company credit card. When confronted by a Delaware State Police detective about the allegations, Snyder admitted to the fraud.
Following the sentencing hearing, United States Attorney Charles M. Oberly, III, stated, “Fueled by the Internet, American companies lose billions of dollars each year to the unlawful distribution of products that they invent and manufacture. What Snyder did from computers in her living room was digital theft of over $5.9 million in merchandise. While in the process of pleading guilty to that offense, she went on to steal $40,000 from her local employer. Today’s sentence demonstrates that serial fraudsters should expect to receive stiff sentences.”
This case is being investigated by the Federal Bureau of Investigation and the Delaware State Police, and is being prosecuted by Assistant United States Attorney Edward J. McAndrew.
Chinese Citizen Pleads Guilty to $100 Million Internet Software Piracy ConspiracyRead the Press Release
WILMINGTON, Del. – Xiang Li, age 36, of Chengdu, China, pled guilty late yesterday to one count each of conspiracy to commit criminal copyright infringement and conspiracy to commit wire fraud, for his role in operating a website used to distribute over $100 million worth of pirated software around the world. Li, who will be sentenced on May 3, 2013 by United States District Judge Leonard P. Stark, faces a maximum sentence of twenty five years in prison, a fine of $250,000, and 3 years of supervised release following his prison sentence. The entry of the guilty plea was announced at a press conference held this morning by Charles M. Oberly, III, United States Attorney for the District of Delaware and John Morton, Director, United States Immigration and Customs Enforcement.
According to statements made at the plea hearing and documents filed in court, the U.S. Department of Homeland Security, Homeland Security Investigations, identified Xiang Li as the operator of a website located at www.crack99.com that was advertising thousands of pirated software titles at a fraction of their retail value. The investigation revealed that Xiang Li used the CRACK99 website to distribute pirated or cracked software to customers all over the world, including the United States. Software is “cracked” when its digital license files and access control features have been disabled or circumvented.Through emails sent to customers of his website, Xiang Li described himself as being part of “an international organization created to crack” software. In a November 2008 email exchange with a customer, for example, Xiang Li stated that he would charge $1,000 to obtain a cracked version of a particular software program. When the customer wrote, “Yes ok tell me who do this,” Defendant replied: “Experts crack, Chinese people Sorry can not reveal more.”
During the course of the charged conspiracy (from April 2008 to June 2011), Xiang Li engaged in over 500 transactions, in which he distributed approximately 550 different copyrighted software titles to at least 325 purchasers located in at least 28 states and over 60 foreign countries. These software products were owned by approximately 200 different manufacturers and were worth over $100 million. The software is used in a wide range of applications including defense, engineering, manufacturing, space exploration, aerospace simulation and design, mathematics, and explosive simulation.
More than one-third of the unlawful purchases were made by individuals within the United States, including small business owners, government contractors, students, inventors, and engineers. Some of Xiang Li’s biggest American customers held significant engineering positions with government agencies and government contractors. For instance, Xiang Li sold twelve cracked software programs worth over $1.2 million to Cosburn Wedderburn, who was then a NASA electronics engineer working at NASA’s Goddard Space Flight Center, in Greenbelt, Maryland. Xiang Li also sold ten cracked software programs worth over $600,000 to Dr. Wronald Best, who held the position of “Chief Scientist” at a Kentucky-based government contractor that services the U.S. and foreign militaries and law enforcement with a variety of applications such as radio transmissions, radar usage, microwave technology, and vacuum tubes used in military helicopters. Both Wedderburn and Best have pled guilty to conspiracy to commit criminal copyright infringement and are awaiting sentencing in the District of Delaware.Between January 2010 and June 2011, undercover agents made a series of purchases of pirated software worth hundreds of thousands of dollars from Xiang Li’s CRACK99 website. The investigation culminated in a face-to-face meeting between Xiang Li and undercover agents on the Island of Saipan, in June 2011. Xiang Li agreed to travel from China to Saipan to deliver pirated software, design packaging, and 20 gigabytes of proprietary data from a U.S. software company to undercover agents posing as U.S. businessmen. In addition, Xiang Li and the undercover agents were meeting to discuss a plan to distribute pirated software to small businesses in the United States. The undercover agents arrested Xiang Li on June 7, 2011, after he delivered the stolen intellectual property to them at a Saipan hotel. Xiang Li was transported to the District of Delaware, where he has remained in custody since June 2011.
One of the companies victimized by software piracy scheme stated, “Circumventing our commercial aerospace and defense software license mechanisms not only harms the competitiveness of our company, but also U.S. national security interests. In addition to the revenue lost, we spend significant legal resources obtaining patents and trademarks to protect our intellectual property. We also invest a lot of energy administering software license agreements and product-based, end-user licenses, which are key components of our U.S. export control compliance and customer support programs.”
This case is being investigated by the United States Department of Homeland Security, Homeland Security Investigations, and the Defense Criminal Investigative Service. This case is being prosecuted by Assistant United States Attorneys David L. Hall and Edward J. McAndrew.
Delaware Man Sentenced to 97 Months on Fraud and Money Laundering ChargesRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Kyong Ho Kim, age 45, of Newark, Delaware, was sentenced today by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, to 97 months imprisonment and full restitution, after being convicted of wire fraud (18 U.S.C. § 1343), and engaging in monetary transactions in property derived from specified unlawful activity (Money Laundering, 18 U.S.C. § 1957).
The defendant solicited and obtained over US $2.2 million from more than eight victims in Delaware and elsewhere, through a fraudulent foreign currency trading scheme. The defendant represented that he was a successful foreign currency trader and that he would invest his victims’ money in foreign currency markets. Meanwhile, the defendant diverted most of the funds into his personal bank accounts. The defendant continued the fraud over a decade by falsifying bank records and sending victims false financial statements, indicating that their investments had grown through foreign currency trading. The defendant spent the diverted funds on personal items such as a high-end Mercedes, a yacht, and a lease on a waterfront home.
U.S. Attorney Oberly said of the sentence, “Fraud schemes targeting individual investors have a devastating impact on the victims’ financial and emotional well-being. This case should send a clear signal that those who commit fraud by representing themselves as so-called investment advisors will face significant penalties.”
This case was prosecuted by Assistant United States Attorney Lauren M. McEvoy, and was investigated by the Federal Bureau of Investigation.