Northern District of Georgia
Press releases recorded for this federal judicial district.
Seventeen Charged in Drug Trafficking Ring that Operated from Inside Georgia State Correctional FacilitiesRead the Press Release
ATLANTA – Three current Georgia Department of Corrections (GDOC) inmates and fourteen others have been charged federally for their roles in a wide-ranging drug trafficking conspiracy operating from within prison walls. Using contraband cellular telephones inside of prison, and employing a network of brokers, distributers, and runners outside of prison, GDOC inmates controlled and managed the distribution of illegal narcotics throughout the Atlanta metropolitan area and the southeast region of the United States.
“Once again, inmates have gained access to contraband cellular telephones and used them to organize and manage an extensive criminal enterprise from inside prison,” said U.S. Attorney John Horn. “This indictment alleges that these inmates capitalized on their near unfettered access to cell phones to not only continue their criminal activities, but to direct the criminal activities of others outside of prison. It makes no sense that, where prison is supposed to remove criminals from our community and rehabilitate them, the inmates continue to victimize society from behind prison bars.”
“This case clearly illustrates the growing problems stemming from cell phones within prison walls and in the hands of unrepentant inmates determined to further inflict harm on individual victims or the general public with their continued criminal activity. Prisons should serve as a deterrent for those on both sides of its walls but cell phones, smart phones, or other such available contact with the outside world gives those individuals the unmitigated opportunity to conduct these criminal enterprises in a manner that is difficult at best for law enforcement to detect and neutralize and costly in terms of resources and manpower at worst,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the indictment, and other information presented in court: The indictment alleges that GDOC prison inmates across several prisons conducted a wide-ranging drug trafficking conspiracy by leading, directing, and managing a wide-ranging drug trafficking conspiracy and the activities of brokers, distributers, and runners outside of prison via the use of contraband cellular telephones. The cellular telephones were often equipped with touch screens and internet access that enabled prisoners to coordinate drug transactions. Further, on numerous occasions, multiple cellular telephones were used simultaneously to communicate with the larger network of drug suppliers, distributers, and couriers using voice calls, text messages, and WhatsApp Messenger to coordinate illegal drug transactions.
The following individuals have been indicted, and many of the defendants made their initial appearances before United States Magistrate Judge Linda T. Walker:
The GDOC inmates who were charged are:
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Francisco Palacios Baras, a/k/a “Chapparro,” a/k/a “Shorty,” a/k/a “Kiko,” 36, an inmate at Hancock State Prison in Sparta, Georgia.Palacios Baras has been charged with one count of conspiring to distribute at least 50 grams of methamphetamine and eleven counts of possessing methamphetamine with the intent to distribute.
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Johnathan Corey McLoon, a/k/a “Drop,” 30, an inmate at Valdosta State Prison in Valdosta, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of actual methamphetamine and two counts of possessing methamphetamine with the intent to distribute.
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Christopher Wayne Hildebrand, 33, an inmate at Costal Transition Center in Savannah, Georgia has been charged with one count of conspiring to distribute at least 50 grams of actual methamphetamine and one count of possessing methamphetamine with the intent to distribute.
While they were inmates at Hancock State Prison, Valdosta State Prison and Costal Transition Center, Palacious, McLoon and Hildebrand allegedly obtained contraband cellular telephones and used them to lead and manage an extensive drug trafficking network responsible for the trafficking in crystal methamphetamine in the Atlanta and elsewhere.
A paroled GDOC inmate who was charged, and who allegedly participated in the drug trafficking network outside of prison is:
Ruben Antonio Ruiz, a/k/a “Scrapy,” a/k/a “Flaco,” 36, of Gainesville, Georgia.Ruiz has been charged with one count of conspiring to distribute at least 50 grams of actual methamphetamine, and one count of possessing methamphetamine with the intent to distribute.
The other individuals who were charged and participated in the drug trafficking network outside of prison are:
- Salvador Pineda Melendez, a/k/a “Tomas Pineda Medoza,” 30, of Marietta, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of actual methamphetamine, and two counts of possessing methamphetamine with the intent to distribute.
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Olga Veronica Ramirez Reyes, 27, of Marietta, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of actual methamphetamine, and five counts of possessing methamphetamine with the intent to distribute.
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Gustavo Adolfo Ramirez Reyes, a/k/a “Primo,” 24, of Marietta, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of actual methamphetamine, and three counts of possessing methamphetamine with the intent to distribute.
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Jose Rolando Ramos Remez, 25, of Gainesville, Georgia, has been charged with one count of conspiring to distribute at least 500 grams of a mixture and substance containing a detectable amount of methamphetamine, one count of possessing methamphetamine with the intent to distribute, and one count of possessing a firearm in furtherance of a drug trafficking crime.
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Yony Israel Yanes Padilla, 26, of Gainesville, Georgia, has been charged with one count of conspiring to distribute at least 500 grams of a mixture and substance containing a detectable amount of methamphetamine, one count of possessing methamphetamine with the intent to distribute, and one count of possessing a firearm in furtherance of a drug trafficking crime.
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Troy Oneal Watkins, 46, of Roswell, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of actual methamphetamine, and one count of possessing methamphetamine with the intent to distribute.
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Gregory Landon Smith, 55, of Plainville, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of actual methamphetamine, and one count of possessing methamphetamine with the intent to distribute.
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Robert Lynn White, 55, of Silver Creek, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of actual methamphetamine, and one count of possessing methamphetamine with the intent to distribute.
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Billy Joe Foster, 35, of Tennessee, has been charged with one count of conspiring to distribute methamphetamine, and one count of possessing methamphetamine with the intent to distribute.
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George Travis Roach, 36, of Chattanooga, Tennessee, has been charged with one count of conspiring to distribute at least 50 grams of a mixture and substance containing a detectable amount of methamphetamine, and one count of possessing methamphetamine with the intent to distribute.
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Melissa Leann Waters, 30, of Tennessee, has been charged with one count of conspiring to distribute at least 50 grams of a mixture and substance containing a detectable amount of methamphetamine, and one count of possessing methamphetamine with the intent to distribute.
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Charles Randall Warthen, 52, of Mableton, Georgia, has been charged with one count of conspiring to distribute at least five grams of actual methamphetamine, and one count of possessing methamphetamine with the intent to distribute.
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Walter Alvarado Lopez, a/k/a “Andy,” 28, of Atlanta, Georgia, has been charged with one count of conspiring to distribute at least five grams of actual methamphetamine, and one count of possessing methamphetamine with the intent to distribute.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Tasheika Hinson is prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
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Three Individuals Indicted for Laundering Fraudulent Tax Refunds Using Stolen IdentitiesRead the Press Release
ATLANTA – Anthony Alika, Sonia Alika, and Rapheal Atebefia, all residents of Austell, Georgia, have been indicted for laundering fraudulent tax refunds using stolen identities. The charges include money laundering, conspiracy to money launder, structuring monetary transactions, access device fraud, and aggravated identity theft.
“These defendants allegedly received hundreds of thousands of dollars in fraudulent tax refunds using stolen identities,” said U.S. Attorney John A. Horn. “Stolen-identity tax return fraud unfortunately is a growing problem, and the perpetrators are becoming more sophisticated at concealing the proceeds of their crimes.”
“A vital element in this investigation was following the flow of money being received by the defendants in order to determine the true source of the funds,” stated Veronica F. Hyman-Pillot, Special Agent in Charge. “These defendants conduct cost the U.S. Treasury thousands of dollars, and IRS Criminal Investigation will continue to utilize every tool necessary to unravel financial transactions related to fraudulently obtained tax refunds and the theft of innocent individual’s identities.”
“This investigation was an excellent example of a partnership between federal law enforcement agencies working together to dismantle a fraud conspiracy,” said Thomas Noyes II, U.S. Postal Inspector in Charge of the Charlotte Division. “I fully commend the hard work and countless hours put forth by all agencies involved including the U.S. Attorney’s Office, which resulted in bringing the individuals in this case to justice.”
According to U.S. Attorney Horn, the charges, and other information presented in court: The indictment charges that these defendants conspired together to launder the proceeds from a stolen identity refund fraud scheme, according to allegations in the indictment. It is alleged that the defendants and others obtained means of identification of actual individuals, including their names and social security numbers and used this information to access the Internal Revenue Service’s (IRS) “Get Transcript” database.
Anthony Alika, Atebefia and others are also alleged to have obtained prepaid debit cards from stores located in multiple states, registered the cards in the names of the stolen identities and then filed false income tax returns using the stolen identities and directed the IRS to deposit the tax refunds onto these cards. To conceal their fraud, Anthony Alika, Atebefia and others allegedly used the prepaid debit cards to purchase money orders, which Anthony Alika, Sonia Alika and Atebefia deposited into bank accounts and then structured cash withdrawals of the proceeds in order to prevent the bank from filing Currency Transaction Reports.
Anthony Alika, 42, Sonia Alika, 27, and Rapheal Atebefia, 33, all of Austell, Georgia, were indicted by a federal grand jury on January 5, 2016. Atebefia was arraigned before U.S. Magistrate Judge Linda T. Walker.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Internal Revenue Service – Criminal Investigation and the United States Postal Inspection Service.
DOJ Criminal Tax Division Trial Attorneys Michael Boteler and Charles Edgar, Jr., and Assistant United States Attorney Shanya J. Dingle are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Clayton County Man Sentenced in Violent Multi-County Armed Robbery SpreeRead the Press Release
ATLANTA – Anthony Paul Smith has been sentenced 18 years, six months in federal prison for a series of violent armed robberies of six small businesses that he committed in Clayton County, and Henry County, Georgia.
“The hard working citizens of our community deserve to feel safe and secure at their workplaces,” said U.S. Attorney John A. Horn. “The defendant’s numerous acts of violence against multiple victims, including several who knew him, show a complete disregard for people’s lives. The sentence should reassure citizens of our District that we will find, prosecute, and ultimately remove from the community those who place others in danger through their own violent acts.”
“This investigation and sentence is another example of ATF remaining on the frontline of preventing violent crime through excellent cooperation with our law enforcement partners. Through this cooperative effort we were able to apprehend and successfully prosecute a violent and dangerous individual who posed a significant threat to the public,” said ATF Assistant Special Agent in Charge John Schmidt.
According to U.S. Attorney Horn, the charges and other information presented in court: Between December 10, 2013, and January 14, 2014, Smith committed the listed six armed commercial robberies and theft of a firearm from a federal firearms licensee:
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December 10, 2013 - Smith entered Papa John’s Pizza store located in Jonesboro, Georgia. He approached employee, L.C., and demanded money from her at gunpoint. During the robbery, Smith also grabbed employee B.M. around the neck, placed the barrel of the gun to her neck, and said “I want the money.” Smith threatened to shoot both B.M. and L.C., and fled the restaurant after stealing $1,500.
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January 5, 2014 - K.D., an employee of Boost Mobile located in Jonesboro, Georgia, reported to Clayton County Police officers that a man robbed her at gun point of $2,000 while she stood at the cash register. K.D. identified Smith as the armed robber, who she recognized as a former customer at the store. During the robbery, Smith took K.D.’s personal cell phone, ordered her to remove all the money from the cashier drawer, and demanded that she unplug the landline phone in the office and go to the back of the store.
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January 7, 2014 - Smith committed an armed robbery of a Metro PCS store in Stockbridge, Georgia. Just after the robbery, employee K.K. met with investigators and stated that Smith had entered the store several minutes before the robbery and inquired about an iPhone. K.K. identified Smith as the individual who robbed him at gun point of $6,785.
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January 8, 2014 - Smith entered Forest Park Army and Navy store located in Forest Park, Georgia, a federal firearms licensee, and stole a Ruger pistol. Surveillance video footage from the store captured images of Smith during the burglary.
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January 9, 2014 - Smith entered Big D’s Tobacco and Gifts located in McDonough, Georgia. He approached employee T.F. at the customer counter, pointed a silver handgun at her, and demanded money. Smith left the store after stealing more than $400 from T.F. T.F. recognized him as a recent customer.
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January 11, 2014 - Smith committed an armed robbery of Metro PCS located in Jonesboro, Georgia. He approached employee K.H., cocked and pointed a gun at her, and demanded money from the store’s register and safe. K.H. recognized Smith as a former high school classmate. Smith fled the store after stealing $3,767.
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January 14, 2014 - Smith entered another Metro PCS store in Jonesboro, Georgia. He approached employee A.G., pointed a silver revolver at her, and stole $939, as well as a Samsung Galaxy phone, Samsung Galaxy Tablet, and the store’s cordless phone.
Anthony Paul Smith, 24, of Jonesboro, Georgia, was sentenced on January 6, 2015, to 18 years, six months in federal prison, to be followed by five years of supervised release, and restitution of $16,000.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives as well as the Clayton County Police Department and Henry County Police Department.
Assistant United States Attorneys Richard S. Moultrie, Jr. and Suzette Smikle prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
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Mexican Cartel Leader Edgar Valdez-Villareal, A/K/A "La Barbie," Pleads Guilty to Drug Trafficking and Money LaunderingRead the Press Release
ATLANTA - Edgar Valdez-Villareal, a/k/a La Barbie, who was born in the United States and rose to be a high-level leader of Mexico's Beltran-Leyva Cartel, has pleaded guilty to charges of cocaine importation and distribution, and money laundering.
“Valdez’s conviction is a victory for the people in both the United States and Mexico whose lives were affected by his cocaine trafficking, through drug addiction and community decay or through the violence and corruption associated with the cartel’s daily business,” said U. S. Attorney John Horn. “Valdez stands as a prime example of the Mexican cartels’ influence over the U.S. drug trade, as truckload after truckload of his cocaine traveled across the border to Atlanta for further transport to cities throughout the eastern United States. We are grateful for the cooperation of the Mexican government in securing Valdez’s arrest and extradition to Atlanta to face these charges.”
“Since 2004, Edgar Valdez-Villarreal (La Barbie) was responsible for the distribution of 1000’s of kilograms of Cocaine throughout the Southeast, and more specifically the Northern District of Georgia. This is a great day for DEA, the Government of Mexico and literally hundreds of DEA’s federal, state and local partners throughout the United States. I want to thank the US Attorney in the Northern District of Georgia, and his staff for their outstanding efforts throughout this investigation. This is a victory for this great Nation and our partners in the Republic of Mexico.” Said Atlanta’s DEA Special Agent in Charge Daniel R. Salter.
According to U.S. Attorney Horn, the charges and other information presented in court: As early as the year 2000, Valdez began his drug trafficking career as a marijuana distributor in Laredo, Texas. He soon developed cocaine customers in New Orleans, Louisiana, Memphis, Tennessee, and Mississippi, and his activities escalated into regular shipments of 150-180 kilograms of cocaine to his customers. Valdez eventually entered into a relationship with Arturo Beltran-Leyva, who was then associated with the Sinaloa Cartel in Mexico, and began coordinating shipments of cocaine into Mexico from Colombia and other South American countries using speedboats and airplanes, while also paying bribes to local law enforcement officials. The cocaine was then transported across the border into the United States.
In 2004, Valdez and his partners sought out a more formalized distribution organization for their cocaine customers in Memphis and Atlanta. Valdez obtained cocaine from Colombia, exported the cocaine from Mexico to customers located in the United States in tractor trailer loads of up to 300 kilograms twice per week, then arranged for currency to be smuggled back across the border to the organization’s supervisors in Mexico. In Atlanta alone, the organization distributed a total of 1,500 kilograms of cocaine in just six months in 2005. DEA agents were able to build the case against Valdez using wiretaps, seizures of over 100 kilograms of cocaine and $4 million of drug proceeds, and witness testimony.
Each of the drug trafficking charges in this case carries a maximum sentence of life in prison, a fine of up to $10,000,000, a lifetime term of supervised release, and a $100 special assessment, and requires a mandatory minimum sentence of 10 years imprisonment and five years of supervised release.
The money laundering charge carries a maximum sentence of 20 years in prison, a fine of up to $500,000 or twice the amount of funds that were laundered, a three-year term of supervised release, and a $100 special assessment. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Sentencing for Edgar Valdez-Villareal, a/k/a La Barbie, 42, has not yet been scheduled.
This case is being investigated by the Drug Enforcement Administration.
United States Attorney John Horn and Assistant United States Attorneys Elizabeth M. Hathaway and Garrett L. Bradford are prosecuting the case. The Justice Department’s Office of International Affairs provided assistance with this case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Finance Manager for the Salvation Army Metro Atlanta Area Command Pleads Guilty to Embezzlement of Charitable FundsRead the Press Release
ATLANTA - Gary Hilliard has pleaded guilty to embezzling more than $272,000 from the Salvation Army Metro Atlanta Area Command while serving as its finance manager.
“The Salvation Army provides a wide range of charitable programs and services to needy citizens in our community,” said U. S. Attorney John Horn. “Unfortunately, Mr. Hilliard chose to disregard his former employer’s motto of ‘Doing the Most Good’ by fraudulently diverting charitable funds to his own use without regard for the underprivileged who are in such desperate need of this help.”
“The United States Secret Service will continue to collaborate with its law enforcement partners to target and arrest individuals who violate the trust of our community to further their personal financial gain,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office.
According to U.S. Attorney Horn, the charges and other information presented in court: Hilliard was hired as the finance manager for the Metro Atlanta Area Command in June 2008. As the finance manager, Hilliard supervised the accounts payable department and had the authority to approve vendor invoices and countersign checks to vendors. While carrying out these duties between December 2010 and December 2012, Hilliard embezzled more than $272,000.
Hilliard embezzled a significant portion of that money by creating and submitting bogus invoices and documents that purported to be from legitimate vendors and business partners of the Metro Atlanta Area Command to the accounts payable department. He submitted bogus invoices from advertising agencies who conducted fundraising campaigns on behalf of the Metro Atlanta Area Command, consultants, and other business partners. He chose vendors and businesses who submitted invoices to the Salvation Army on a routine basis because it was unlikely that these invoices or payments would be questioned, and because Hilliard was directly involved in the reconciliation of some of these accounts. He approved or caused these bogus invoices to be approved, which led to checks being generated from the Metro Atlanta Area Command’s operating account. Hilliard countersigned these checks in his role as finance manager, obtained or forged the appropriate authorized signature, then deposited them into bank accounts he controlled.
Initially, Hilliard deposited the checks into his personal checking and savings accounts. Beginning in June 2011, Hilliard opened bank accounts in some of the vendors’ names and deposited the fraudulently obtained checks. To accomplish this, Hilliard submitted three separate false sworn applications to Cobb County, Georgia, to register businesses in the names of the vendors.
On each of these applications, Hilliard falsely stated that he was conducting business in Cobb County in the name of the vendor, provided information on the vendor’s line of business, and stated that he was the sole person composing the business. He then presented each business certificate issued by Cobb County to the bank to open a business bank account in the vendor’s name, and deposited checks made out to the vendor into that account. Hilliard’s scheme unraveled in December 2012, when his bank questioned a discrepancy between the name of the payee on a Metro Atlanta Area Command check and the depository account and decided to contact the Metro Atlanta Area Command.
Sentencing for Gary Hilliard, 47, of Mableton, Georgia, is scheduled for March 31, 2016, at 9:00 a.m. before United States District Judge Leigh Martin May.
This case is being investigated by the United States Secret Service. The Salvation Army Metro Atlanta Area Command fully cooperated with the investigation.
Assistant United States Attorney Sally B. Molloy is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Man Sentenced for Selling Fraudulent ID CardsRead the Press Release
ATLANTA - Horacio Sanchez-Lopez has been sentenced to one year and two months in federal prison for conspiring to manufacture, sell, and distribute counterfeit federal Permanent Resident and Social Security cards.
“Trafficking in counterfeit immigration and Social Security documents threatens the integrity of systems which verify employment,” said U. S. Attorney John Horn. “Forged documents not only circumvent those systems, but can also be used for more nefarious activities.”
“Fraudulent identity documents pose a serious threat to public safety as they enable people to commit a broad range of criminal offenses from identity theft to financial crimes,” said Nick S. Annan, special agent in charge of ICE Homeland Security Investigations Atlanta. “HSI will continue to actively pursue individuals who engage in this type of criminal activity that threatens the safety and security of our communities.”
According to U.S. Attorney Horn, the charges and other information presented in court: In the summer of 2014, Homeland Security Investigations (HSI) agents began investigating a conspiracy that sold counterfeit identification documents in the Chamblee, Georgia, area. Working through cooperating individuals, agents bought several pairs of Permanent Resident and Social Security cards from Horacio Sanchez-Lopez and a co-conspirator, Jorge Manuel Rosado. Sanchez-Lopez or Rosado delivered the documents to customers who ordered them over the phone from another individual, and they sold the documents to confidential informants for between $80 and $120 per set.
On October 16, 2014, agents executed a search warrant at the house in Chamblee where Sanchez-Lopez, Rosado, and others lived. While the conspirators had moved the computer they had been using to make the fraudulent documents, agents found, among other things, a used printer ribbon that lab analysis later found contained 215 images of ID cards. Agents also recovered 93 fraudulent cards that had been cut in half and thrown in a trash can, and a smart phone that contained thousands of passport-style photos for ID cards.
Horacio Sanchez-Lopez, 42, of Chamblee, Georgia, was sentenced by U.S. District Judge Leigh Martin May to one year, two months in prison, followed by three years of supervised release. Sanchez-Lopez is an illegal alien from Mexico, and has been ordered to be transferred for deportation proceedings. Sanchez-Lopez was convicted on these charges on October 8, 2015, after he pleaded guilty.
Jorge Manuel Rosado, 45, of Chamblee, Georgia, pleaded guilty on September 11, 2015, to a conspiracy charge and was sentenced to prison for fifteen months by Judge May.
The conspiracy remains under investigation by the Homeland Security Investigations.
Assistant United States Attorney William G. Traynor is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Lead Defendant Sentenced in $5.8 Million Mortgage Fraud RingRead the Press Release
ATLANTA - Chiedu “George” Chukwuka has been sentenced in connection with his lead role in a mortgage fraud ring that spanned five years and caused millions in losses. Chukwuka, along with his co-defendants and other co-conspirators, engaged in a massive property-flipping scheme resulting in over $5.8 million in actual losses to financial institutions between 2006 and 2011.
“At the height of the recent mortgage-fraud crisis, this property-flipping scheme caused scores of homes to fall into foreclosure, costing financial institutions millions of dollars in losses,” said U. S. Attorney John Horn. “Many communities in our district have been decimated by mortgage fraud during the last 15 years and even now struggle to recover from the effects of these schemes.”
“The sentencing of Mr. Chukwuka brings to a close a lengthy investigation and prosecution of a criminal enterprise that targeted the banking industry through their prolific mortgage fraud schemes. Mr. Chukwuka, considered by law enforcement and prosecution to be head of this enterprise, caused extensive damage with high loss amounts to those victim banks involved. The FBI is pleased with the role it played in bringing about this sentencing to federal prison of Mr. Chukwuka as well as the previous sentencings of his co-defendants in this matter,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Horn, the charges and other information presented in court: Chukwuka, along with his co-defendants and co-conspirators, recruited straw buyers to purchase homes at a discounted price, typically a bank-owned or distressed property. The group then recruited a second straw buyer to purchase the same home at a dramatically inflated price. In turn, Chukwuka, his co-defendants and co-conspirators applied for an acquisition loan for the second straw buyer, supporting the loan application with false income, fake employment, and fraudulent net worth data.
The group profited from their scheme by pocketing the acquisition loan proceeds paid by the victim bank to the straw seller (who was the straw purchaser in the first transaction). The amount of profit was the difference between the price paid by the straw purchaser in the first transaction and the price paid by the straw purchaser in the second transaction, less transaction costs. Since none of the straw purchasers made any significant loan payments, the targeted properties usually went into foreclosure, resulting in over $5.8 million in actual losses to financial institutions between 2006 and 2011.
Chiedu “George” Chukwuka, 47, of Stone Mountain, Georgia, was sentenced by U.S. District Court Judge Timothy C. Batten, Sr. to serve nine years in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,868,243.80. Chukwuka was convicted of conspiracy to commit wire fraud on August 10, 2015, after he pleaded guilty.
The following five defendants also pleaded guilty for their roles in the scheme, and were previously sentenced by U.S. District Court Judge Timothy C. Batten, Sr. as follows:
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Shelly Gee, a/k/a Shelly Baker, 48, of Atlanta, Georgia, was sentenced on November 10, 2015, to one year, six months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $2,243,909.99. Gee was convicted after pleading guilty on June 17, 2015.
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Sandra Petgrave, 43, of Stone Mountain, Georgia, was sentenced on December 4, 2015, to one year, six months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,051,970.77. Petgrave was convicted after pleading guilty on August 18, 2015.
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Kennedy Simmonds, 54, of Snellville, Georgia, was sentenced on December 17, 2015, to three years, ten months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,868,243.80. Simmonds was convicted after pleading guilty on July 6, 2015.
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Marcelle Welch, 37, of Stone Mountain, Georgia, was sentenced on December 17, 2015, to two years, three months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $2,554,189.25. Welch was convicted after pleading guilty on July 29, 2015.
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Leah Freeman, 43, of Atlanta, Georgia, was sentenced on December 17, 2015, to two years in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,828.532.94. Freeman was convicted after pleading guilty on June 19, 2015.
In a related case, Chinedum Oli, 42, of Snellville, Georgia, was sentenced on February 19, 2013, by Senior U.S. District Court Judge Marvin H. Shoob to five years in prison, followed by five years of supervised release, and ordered to pay restitution in the amount of $4,373,281.63. Oli was convicted after pleading guilty on October 9, 2012.
These cases were investigated by the Federal Bureau of Investigation.
Assistant United States Attorneys Jamie L. Mickelson and Steven D. Grimberg prosecuted the cases.
This announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.”
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
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Nurse Practitioner Sentenced for Filing False Claims with Health Insurance Companies and Identity TheftRead the Press Release
ATLANTA - Daphne Maria Patterson has been sentenced to five years and one month in federal prison for health care fraud and aggravated identity theft for filing claims with health insurance companies in which she sought reimbursement for providing medical care to patients that she never provided. Patterson stole personal identifying information from her patients and their family members so she could file more than $2 million in claims from five health insurance companies.
“This defendant was a trusted health care official who stole personal information from her patients’ and their families to enrich herself,” said U.S. Attorney John Horn. “Patterson thought nothing of defrauding health insurance companies or the effects that her scheme could have on her patients’ lives.”
“The defendant in this case displayed a complete disregard for those patients that she victimized as well as the insurance companies that she stole from. The FBI will continue to work with its various law enforcement partners to better protect health care insurance providers and their clients from this type of fraud,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“Fraudulent actions like Ms. Patterson’s not only betrayed the trust that patients placed in her, but they also made everyone’s insurance premiums go up,” Commissioner Hudgens said. “I’m appreciative that U. S. Attorney Horn’s office diligently pursued prosecution in this case.”
According to U.S. Attorney Horn, the charges and other information presented in court: Patterson’s fraud began when she worked as a nurse practitioner for a general medical practice in Lawrenceville, Georgia. Although she was not supposed to bill insurance companies as an employee, she stole identifying information of her patients, and their family members—most of whom Patterson had not treated at all. She filed false claims with the insurer claiming to have provided various allergy tests and treatments to the beneficiaries, when in fact she had not provided these services.
Once her employment with the general medical practice ended, Patterson opened her own clinic, called Healthier U 4 Ever Complete Wellness Center in Stone Mountain, Georgia. While there, Patterson used her patients’ personal information to continue her scheme, and billed various health insurance companies for expensive allergy tests and treatments, when in fact most patients were receiving weight loss advice and assistance. In total, Patterson received more than $1 million from the health insurance companies as a result of her false claims.
Daphne Maria Patterson, 44, of Lithonia, Georgia, has been sentenced to five years, one month in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,153,383.76. Patterson was convicted of these charges on October 7, 2015, after she pleaded guilty.
This case was investigated by the Federal Bureau of Investigation and the State of Georgia Office of Commission of Insurance.
Assistant United States Attorney Jamie L. Mickelson prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Owner and Former Supervisor of “Direct Tax” Preparation Business Sentenced for Tax FraudRead the Press Release
ATLANTA - Jessica Hills and Kiisha Hills have been sentenced for their roles in a tax fraud scheme involving Direct Tax, a tax preparation business with three locations in the Atlanta-College Park area. Jessica Hills owned and operated Direct Tax, and her sister, Kiisha Hills, acted as a supervisor in one office.
“The Hills’ stole the identities of thousands of taxpayers and then used the information to steal millions of dollars from the U.S. Treasury by filing fraudulent tax returns,” said U. S. Attorney John Horn. “Sadly, these “false filing” schemes are now all too common. As we approach tax filing season, this case is a reminder that taxpayers should carefully guard their Social Security numbers and other sensitive personal information and monitor any tax filing made on their behalf.”
“Return Preparer fraud is a priority for IRS Criminal Investigation and we have committed many resources to investigating and prosecuting cases just like this one,” stated Veronica F. Hyman-Pillot, Special Agent in Charge. “It is our hope that today's sentencing will send a strong message to other return preparers that committing refund fraud is a crime and can result in jail time.”
“Using the Social Security number of another to commit fraud, unfortunately, has become a common occurrence”, said Margaret Moore-Jackson, Special Agent-in-Charge, Social Security Administration-Office of the Inspector General. “SSA-OIG special agents are well-trained to detect, investigate, and locate identity thieves,” and that her office, “will utilize collaborations between law enforcement agencies at all levels, and continue to present cases to the U.S. Attorney’s Office to prosecute those who commit identity theft and financial fraud.”
According to U.S. Attorney Horn, the charges and other information presented in court: During tax years 2012, 2013, and 2014, Direct Tax filed over 2,000 federal income tax returns, seeking millions of dollars in refunds. These returns included either fraudulent information designed to increase the refund amount, or were filed using stolen identities. Direct Tax not only continued to file fraudulent tax returns after College Park police executed a search warrant at the College Park location, it also filed fraudulent tax returns after the IRS canceled its electronic filing number and after Jessica L. Hills was detained on federal charges. In total, Direct Tax filed returns claiming over $4 million in tax refunds.
Jessica L. Hills, 30, of Atlanta, Georgia, was sentenced by U.S. District Judge Steve C. Jones to 12 years in federal prison, followed by three years supervised release, and ordered pay restitution in the amount of $954,756.00 to the IRS and $62,528.00 to Georgia Department of Revenue. Jessica L. Hills was convicted on these charges on August 25, 2015, after she pleaded guilty.
Kiisha Hills, 26, of Atlanta, Georgia, was also sentenced by U.S. District Judge Steve C. Jones to four years and three months in federal prison, followed by three years supervised release, and ordered to pay $346,850.00 in restitution to the IRS, and $9,248 to the Georgia Department of Revenue. Kiisha Hills was convicted on these charges on September 14, 2015, after she pleaded guilty.
This case was investigated by the Internal Revenue Service Criminal Investigation, Georgia Department of Revenue, Social Security Administration, and U.S. Secret Service.
Special Assistant United States Attorney Diane C. Schulman and Assistant United States Attorney Samir Kaushal prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Eight Members of Detroit-Based Robbery Crew Sentenced for Roles in $635,000 Jewelry Heist at Lenox Square MallRead the Press Release
ATLANTA – Eight members of a traveling robbery crew—based out of Detroit, Michigan, and linked to jewelry store robberies in several states—have been sentenced to federal prison for their roles in the June 2013 smash-and-grab robbery of the Mayors Jewelry Store in Lenox Square Mall, in Atlanta, Georgia.
“These defendants traveled the country searching for the most expensive jewelry stores to rob,” said U. S. Attorney John Horn. “They used sledgehammers during business hours to terrify store employees, smash open display cases, and steal jewelry to sell on the black market. The arrest and conviction of this crew has prevented an untold number of additional smash-and-grab robberies of jewelry stores on the eastern half of the United States.”
“The FBI is pleased to now have this violent and prolific robbery crew off of our streets. Their violent tactics during these robberies, to include the 2013 robbery at a Lenox Mall based jewelry store in Atlanta, illustrated a complete disregard for the safety of the public. We are appreciative of the hard work and dedication of the many investigators and prosecutors who stayed the course of this extensive and lengthy investigation,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court; the robbery crew consisted of eight individuals, all from Detroit, and each of whom has been convicted and sentenced to federal prison time: Damien Gayles, Kamauri Kennedy, Corey Burrows, Allen Adams, Lorenzo Terry, Anthony Hill, Jason Arnold, and Jasmine Dozier. The crew was led by Kenneth Thomas, now deceased. Several members of the crew are linked to similar jewelry store robberies in Michigan, Virginia, Florida, and elsewhere.
In June 2013, the robbery crew planned to travel from Detroit to Atlanta specifically to commit a “smash-and-grab” style robbery, using sledgehammers, of the Mayors Jewelry Store, in Atlanta, Georgia. Mayors, a high-end retail chain based in Florida, has locations in several states that offer a wide selection of Rolex watches. The robbers’ plan was to steal the watches and return to Detroit, where they could be sold to “fences,” or dishonest jewelry dealers via unreported cash transactions. The fences would then sell the stolen merchandise on the black market, including to buyers overseas.
Thomas, Gayles, Kennedy, and Dozier planned the robbery mission, identified the location to be robbed, conducted surveillance of the store prior to the robbery, and acquired the hammers, vehicles, and other materials needed to commit the crime. Terry, Hill, Burrows, Adams, and Arnold were recruited by the planners to actually commit the smash-and-grab robbery. Burrows and Adams were selected to wield the sledgehammers, due to their larger physical size. Terry, Hill, and Arnold were selected to grab the watches after Burrows and Adams bashed open the display cases.
On June 21, 2013, Burrows, Adams, Terry, Hill, and Arnold entered the Mayors Jewelry Store, in Lenox Square Mall, during business hours in order to rob it. Burrows and Adams concealed sledgehammers in their pants, and then used the sledgehammers to smash open the store’s glass display cases. Hill, Terry, Adams, and Arnold grabbed and stole approximately 19 Rolex watches from the smashed display cases, valued between $25,000 and $65,000 each, and fled the store with the stolen merchandise. The total retail value of the stolen property was approximately $637,600. Kennedy and Dozier served as getaway drivers afterwards. Gayles and Thomas took control of most of the stolen watches and paid their co-conspirators for their efforts. They then sold several of the watches to fences in Detroit.
Using a variety of investigative means, FBI eventually identified the perpetrators of the robbery, who were also suspects in other similar robberies that had occurred throughout the country. In July 2013, Thomas and several other members of the robbery crew were stopped just outside a high-end mall in Aventura, Florida, as they approached that mall in order to commit another smash-and-grab robbery of a jewelry store. Thomas was placed under arrest. FBI’s efforts subsequently led to several indictments and the conviction of these eight defendants.
The following five defendants pleaded guilty to interfering with commerce by robbery, and/or conspiring to interfere with commerce by robbery, and were sentenced by U.S. District Judge Thomas W. Thrash as follows:
- Corey Burrows, 27, was sentenced on September 3, 2015, to four years, three months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $276,465.Burrows was convicted of these charges on May 26, 2015.
- Jasmine Dozier, 26, was sentenced on May 6, 2015, to two years, three months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $276,465.Dozier was convicted of these charges on February 27, 2015.
- Damien Gayles, 25, was sentenced was sentenced on March 2, 2015, to seven years, eight months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $276,465.Gayles was convicted of these charges on October 10, 2014.
- Allen Adams, 28, was sentenced on November 10, 2014, to four years, three months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $276,465.Adams was convicted of these charges on August 22, 2014.
- Kamauri Kennedy, 26, was sentenced on September 9, 2014, to five years, ten months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $276,465. Kennedy was convicted of these charges on June 17, 2014.
The following three defendants pleaded guilty to interfering with commerce by robbery, and/or conspiring to interfere with commerce by robbery, and were sentenced by U.S. District Judges in the Eastern District of Michigan, as follows:
- Lorenzo Terry, 22, was sentenced on December 9, 2015, to four years in prison, by Judge David Lawson, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $276,465.Terry was convicted of these charges on August 5, 2015.
- Anthony Hill, 26, was sentenced on August 25, 2015, to four years, nine months in prison, by Chief Judge Gerald E. Rosen, to be followed by two years of supervised release, and ordered to pay restitution in the amount of $276,465.Hill was convicted of these charges on May 19, 2015.
- Jason Arnold, 21, was sentenced on May 20, 2015, to three years in prison, by Chief Judge Gerald E. Rosen, to be followed by two years of supervised release, and ordered to pay restitution in the amount of $276,465.Arnold was convicted of these charges on November 14, 2014.
This case was investigated by Special Agent Paul Szabo and Task Force Officer William Kimball Murdock of the Federal Bureau of Investigation, with assistance from the Atlanta Police Department.
Assistant United States Attorneys John S. Ghose and Brent Alan Gray prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former U.S. State Department Employee Pleads Guilty to Extensive Computer Hacking, Cyberstalking and "Sextortion" SchemeRead the Press Release
A former U.S. State Department employee pleaded guilty today to perpetrating a widespread, international e-mail phishing, computer hacking and cyberstalking scheme against hundreds of victims in the United States and abroad.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John A. Horn of the Northern District of Georgia, Director Bill A. Miller of the U.S. Department of State’s Diplomatic Security Service and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office made the announcement.
Michael C. Ford, 36, of Atlanta, was indicted by a grand jury in the U.S. District Court for the Northern District of Georgia on Aug. 18, 2015, with nine counts of cyberstalking, seven counts of computer hacking to extort and one count of wire fraud. The names of the victims are being withheld from the public to protect their privacy.
Ford pleaded guilty to all charges and admitted that between January 2013 and May 2015, he used various aliases that included “David Anderson” and “John Parsons” and engaged in a widespread, international computer hacking, cyberstalking and “sextortion” campaign designed to force victims to provide Ford with personal information as well as sexually explicit videos of others. Ford targeted young females, some of whom were students at U.S. colleges and universities, with a particular focus on members of sororities and aspiring models.
Ford posed as a member of the fictitious “account deletion team” for a well-known e-mail service provider and sent phishing e-mails to thousands of potential victims, warning them that their e-mail accounts would be deleted if they did not provide their passwords. Ford then hacked into hundreds of e-mail and social media accounts using the passwords collected from his phishing scheme, where he searched for sexually explicit photographs. Once Ford located such photos, he then searched for personal identifying information (PII) about his victims, including their home and work addresses, school and employment information, and names and contact information of family members, among other things.
Ford then used the stolen photos and PII to engage in an ongoing cyberstalking campaign designed to demand additional sexually explicit material and personal information. Ford e-mailed his victims with their stolen photos attached and threatened to release those photos if they did not cede to his demands. Ford repeatedly demanded that victims take sexually explicit videos of “sexy girls” undressing in changing rooms at pools, gyms and clothing stores, and then send the videos to him.
When the victims refused to comply, threatened to go to the police or begged Ford to leave them alone, Ford responded with additional threats. For example, Ford wrote in one e-mail “don’t worry, it’s not like I know where you live,” then sent another e-mail to the same victim with her home address and threatened to post her photographs to an “escort/hooker website” along with her phone number and home address. Ford later described the victim’s home to her, stating “I like your red fire escape ladder, easy to climb.” Ford followed through with his threats on several occasions, sending his victims’ sexually explicit photographs to family members and friends.
Ultimately, Ford sent thousands of fraudulent “phishing” email messages to potential victims, successfully hacked into at least 450 online accounts belonging to at least 200 victims, and forwarded to himself at least 1,300 stolen email messages containing thousands of sexually explicit photographs. Ford sent threatening and “sextortionate” online communications to at least 75 victims.
During the relevant time period, Ford was employed by the U.S. Embassy in London. The majority of Ford’s phishing, hacking and cyberstalking activities were conducted from his computer at the U.S. Embassy.
“With nothing more than a computer and a few keystrokes, modern predators like Michael Ford can victimize hundreds of people around the world,” said Assistant Attorney General Caldwell. “While this criminal prosecution may never return the victims’ sense of security, I hope that today’s guilty plea brings them some peace of mind.”
“Ford engaged in an international sextortion campaign,” said U.S. Attorney Horn. “He tormented numerous women by threatening to humiliate them unless they provided him with sexually explicit photos and videos, and in some cases, he followed through on his threats. This case demonstrates the need to be careful in safeguarding personal information and passwords, especially in response to suspicious e-mails.”
“When a public servant in a position of trust commits any form of misconduct, to include federal crimes such as cyberstalking and computer hacking, we vigorously investigate such claims,” said Director Miller. “The Diplomatic Security Service is firmly committed to investigating and working with the Department of Justice, U.S. Attorney’s Office and our other law enforcement partners to investigate criminal allegations and bring those who commit these crimes to justice.”
“The allegations contained in this federal indictment portray an individual consumed with sexually themed cyber-stalking and exploitation as well as an individual who felt he was beyond detection and grasp of authorities,” said Special Agent in Charge Johnson. “The FBI is proud of the role it played in working with our law enforcement partners to bring Mr. Ford in for prosecution.”
U.S. District Judge Eleanor L. Ross of the Northern District of Georgia scheduled Ford’s sentencing hearing for Feb. 16, 2016.
The Diplomatic Security Service and the FBI are investigating the case. Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section, Trial Attorney Jamie Perry of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Kamal Ghali of the Northern District of Georgia are prosecuting the case. The Criminal Division’s Office of International Affairs and the U.S. Embassy in London provided assistance in this case.
Former State Department Employee Pleads Guilty to Computer Hacking and Sexual Extortion of WomenRead the Press Release
ATLANTA – Michael C. Ford, a former U.S. State Department employee, has pleaded guilty to perpetrating a widespread, international e-mail phishing, computer hacking, and cyberstalking scheme against hundreds of women in the United States and abroad. Using e-mail passwords obtained by phishing, he hacked into hundreds of victims’ e-mail and social media accounts, stole thousands of sexually explicit photographs, and threatened at least 75 victims that he would release their photos and other personal information unless they agreed to his “sextortionate” demands.
“Ford engaged in an international sextortion campaign,” said U.S. Attorney John Horn. “He tormented numerous women by threatening to humiliate them unless they provided him with sexually explicit photos and videos, and in some cases, he followed through on his threats. This case demonstrates the need to be careful in safeguarding personal information and passwords, especially in response to suspicious e-mails.”
“With nothing more than a computer and a few keystrokes, modern predators like Michael Ford can victimize hundreds of people around the world,” said Assistant Attorney General Caldwell. “While this criminal prosecution may never return the victims’ sense of security, I hope that today’s guilty plea brings them some peace of mind.”
“The allegations contained in this federal indictment portray an individual consumed with sexually themed cyber-stalking and exploitation as well as an individual who felt he was beyond detection and grasp of authorities. The FBI is proud of the role it played in working with our law enforcement partners to bring Mr. Ford in for prosecution,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“When a public servant in a position of trust commits any form of misconduct, to include federal crimes such as cyberstalking and computer hacking, we vigorously investigate such claims,” said Director Miller. “The Diplomatic Security Service is firmly committed to investigating and working with the Department of Justice, U.S. Attorney’s Office and our other law enforcement partners to investigate criminal allegations and bring those who commit these crimes to justice.”
According to U.S. Attorney Horn, the charges and other information presented in court: From January 2013 and May 2015, he used various aliases that included “David Anderson” and “John Parsons” and engaged in a widespread, international computer hacking, cyberstalking and “sextortion” campaign designed to force victims to provide Ford with personal information as well as sexually explicit videos of others. Ford targeted young females, some of whom were students at U.S. colleges and universities, with a particular focus on members of sororities and aspiring models.
Ford posed as a member of the fictitious “account deletion team” for a well-known e-mail service provider and sent phishing e-mails to thousands of potential victims, warning them that their e-mail accounts would be deleted if they did not provide their passwords. Ford then hacked into hundreds of e-mail and social media accounts using the passwords collected from his phishing scheme, where he searched for sexually explicit photographs. Once Ford located the photos, he then searched for personal identifying information (PII) about his victims, including their home and work addresses, school and employment information, and names and contact information of family members, among other things.
Ford then used the stolen photos and PII to engage in an ongoing cyberstalking campaign designed to demand additional sexually explicit material and personal information. Ford e-mailed his victims with their stolen photos attached and threatened to release those photos if they did not cede to his demands. Ford repeatedly demanded that victims take sexually explicit videos of “sexy girls” undressing in changing rooms at pools, gyms and clothing stores, and then send the videos to him.
When the victims refused to comply, threatened to go to the police or begged Ford to leave them alone, Ford responded with additional threats. For example, Ford wrote in one e-mail “don’t worry, it’s not like I know where you live,” then sent another e-mail to the same victim with her home address and threatened to post her photographs to an “escort/hooker website” along with her phone number and home address. Ford later described the victim’s home to her, stating “I like your red fire escape ladder, easy to climb.” Ford followed through with his threats on several occasions, sending his victims’ sexually explicit photographs to family members and friends.
Ultimately, Ford sent thousands of fraudulent “phishing” email messages to potential victims, successfully hacked into at least 450 online accounts belonging to at least 200 victims, and forwarded to himself at least 1,300 stolen email messages containing thousands of sexually explicit photographs. Ford sent threatening and “sextortionate” online communications to at least 75 victims.
During the relevant time period, Ford was employed by the U.S. Embassy in London. The majority of Ford’s phishing, hacking and cyberstalking activities were conducted from his computer at the U.S. Embassy.
Ford was initially charged by criminal complaint and arrested on May 17, 2015 at the Hartsfield-Jackson International Airport in Atlanta, Georgia.
Sentencing for Michael C. Ford, 36, of Atlanta, Georgia, is scheduled for February 16, 2016, before U.S. District Judge Eleanor L. Ross.
The case is being investigated by the U.S. Department of State, Diplomatic Security Service and the Federal Bureau of Investigation.
The case is being prosecuted by Assistant U.S. Attorney Kamal Ghali of the Northern District of Georgia, Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section, and Trial Attorney Jamie Perry of the Criminal Division’s Human Rights and Special Prosecutions Section. Assistance was provided by the Criminal Division’s Office of International Affairs and the U.S. Embassy in London.
Anyone who believes that they are the victim of hacking, cyberstalking, or “sextortion” should contact law enforcement. Resources regarding hacking and other cybercrimes can be found at: https://www.fbi.gov/about-us/investigate/cyber.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
U.S. Attorney’s Office for the Northern District of Georgia Collects over $ 255 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
ATLANTA – U.S. Attorney John A. Horn announced today that the Northern District of Georgia collected $255,099,419 in criminal and civil actions in Fiscal Year 2015. Of this amount, $12,171,472 was collected in criminal actions and $242,927,947 was collected in civil actions.
Additionally, the Northern District of Georgia worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $498,040,851 in cases pursued jointly with these offices. Of this amount, $12,708 was collected in criminal actions and $498,028,143 was collected in civil actions. The U.S. Attorney’s Office for the Northern District of Georgia ranks seventh among districts in the country for collections for which it was directly responsible and sixth in the country for overall collections-both direct and shared.
Attorney General Loretta E. Lynch announced on December 3, 2015, that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“As reflected in this year’s collection figures, financial enforcement is an integral part of our office’s efforts to combat fraud and other crimes from every angle,” said U. S. Attorney John Horn. “With the help of partner agencies, we continue to root out efforts to cheat the public and the government and to hold the perpetrators financially accountable.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. For example, over $212 million dollars was recovered by the U.S. Attorney’s Office in a settlement with First Tennessee Bank, N.A. to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s Federal Housing Administration that did not meet applicable requirements. In addition, civil debts were collected on behalf of other federal agencies, including the Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
One of the largest criminal collections for FY2015 was recovered in United States v. Rupert Morgan for theft of government funds from the Social Security Administration and Veterans Administration. Over $213,000 was recovered in the case through garnishment of the defendant’s investment accounts. The United States also recovered over $127,000 for DeKalb County and the World Congress Center in United States v. Cecil Clark, a case involving conspiracy to commit bribery.
Additionally, the Asset Forfeiture section of the U.S. Attorney’s Office, working with partner agencies and divisions, collected $16,979,004.00 in forfeited funds and restored to victims $1,362,679 in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Leader of Bank Fraud Ring that Stole over $4 Million from Bank of America Corporate Accounts Sentenced to Federal PrisonRead the Press Release
ATLANTA – Alwin Peterson, Jr. and three co-conspirators were sentenced late Tuesday for a bank fraud scheme that targeted over 150 Bank of America accounts and involved over $4 million in fraudulent withdrawals.
“Their criminal actions damaged not only the small businesses they targeted, but also the employees and vendors who depended on timely payments to meet their day-to-day needs,” said U.S. Attorney John Horn. “This case reminds business owners that they need to be vigilant in protecting sensitive personal and bank account information.”
“The U.S. Secret Service and our law enforcement partners work tirelessly to protect consumers and businesses against bank fraud schemes such as this,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office. “These sentences are a testament to that collaborative effort.”
According to U.S. Attorney Horn, the charges and other information presented in court: From approximately November 2012 through his arrest in August 2014, Peterson led a bank fraud scheme that targeted over 150 corporate accounts at Bank of America. Peterson first collected personal information about the individuals listed on the accounts, many of which belonged to small businesses. Using that information, he then called Bank of America’s customer service and impersonated the true account holders. In those calls, Peterson obtained additional account information, monitored account balances, and learned about the latest transactions on existing accounts. Peterson also changed the online banking passwords for some of the accounts so that he could access the accounts by computer.
After fraudulently acquiring the account information, Peterson employed a group of “runners” to enter bank branches and withdraw money from the accounts. Using fake identifications, the runners posed as the true account holders and wired money from the victims’ accounts to other accounts Peterson opened. Peterson also used counterfeit checks to steal money from the accounts. Co-defendants Vivienne Bloch, Kori Henegar, and Allen Parham were all runners in the scheme. The defendants traveled to numerous bank branches in different states throughout the country in an attempt to evade detection. Peterson is responsible for over $4 million in fraudulent withdrawals from the targeted accounts.
All of the defendants were convicted of bank fraud conspiracy after pleading guilty, and were sentenced by United States District Judge Steve C. Jones as follows:
- Alwin Peterson, Jr., 38, of Fayetteville, Ga., was sentenced to 12 years, 1 month in prison to be followed by 5 years of supervised release, and ordered to pay $1,019,381.40 in restitution.
- Parham, 46, of Atlanta, Ga., was sentenced to 6 years, 6 months in prison to be followed by 5 years of supervised release, and ordered to pay $85,414.11 in restitution.
- Bloch, 54, of Decatur, Ga., was sentenced to 5 years in prison to be followed by 5 years of supervised release, and ordered to pay $538,383.50 in restitution.
- Henegar, 35, of Spring, Texas was sentenced to 2 years, 9 months in prison to be followed by 5 years of supervised release, and ordered to pay $395,583.87 in restitution.
This case was investigated by Special Agents with the United States Secret Service. Bank of America fraud investigators provided valuable assistance throughout the investigation.
Assistant United States Attorneys Stephen H. McClain and Samir Kaushal prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Newnan Man Charged with Assaulting Customs Officer at Hartsfield-Jackson AirportRead the Press Release
ATLANTA - Jemel Broussard Harris has been indicted by a federal grand jury on charges of assaulting and injuring a Customs and Border Protection officer while at Hartsfield-Jackson International Airport.
“Tragic events across the world remind us that security at airport inspection areas is critical, and customs officers need to fulfill this mission without attacks and assaults as alleged in this case,” said U.S. Attorney John Horn. “These kinds of disruptions create safety issues for both the officers and other travelers.”
“This assault illustrates the inherent danger that law enforcement officers face every day while helping to keep our communities safe,” said Stephen Kremer, CBP Port Director for the Port of Atlanta. “The safety and security of our officers and of our travelers remains of paramount concern for Customs and Border Protection.”
According to United States Attorney Horn, the charges, and other information presented in court: Harris returned to the United States from the Dominican Republic on November 15, 2015. He allegedly became verbally abusive as he passed through the Customs inspection area of Hartsfield-Jackson International Airport. When Customs and Border Protection officers (CBP) told Harris that he could collect his belongings and go home, he continued his profane tirade, and threw a can of deodorant at a CBP officer. When an officer approached Harris and asked him to collect his belongings and go home, Harris surprised the officer by striking him. In the struggle that ensued, Harris allegedly pulled the officer across an inspection platform before he was subdued and arrested. The officer who Harris struck suffered a cut on his head and suffered other bodily injuries.
The grand jury issued the single-count indictment charging Jemel Broussard Harris, 38, of Newnan, Ga., on Monday, November 23, 2015.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Assistant United States Attorney William Traynor is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Five Sentenced in Violent Carjacking Spree Involving Seven Carjackings in Four CountiesRead the Press Release
ATLANTA – Ladarious Gibbs, Derek C. Turner, Andre Clark, Brandon Washington, and Raphael Banks have been sentenced to federal prison for a series of violent armed carjackings in the Atlanta area.
“The defendants’ crimes were alarmingly violent,” said U.S. Attorney John A. Horn. “These young men preyed upon the citizens of our community. A carjacking is a jarring event alone, but a string of them instills fear and unease throughout the entire community. We hope the long sentences here restore a sense of safety and send a message to anyone who might think of committing this type of crime.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated, “These individuals, through their unified criminal acts, were responsible for a significant violent crime spike in and around the City of Atlanta. It is cases such as this that really do require the combined efforts and resources of law enforcement working together and across jurisdictional boundaries to get these violent offenders off of our streets and into prison.”
“These violent repeat offenders, who are responsible for many crimes throughout the Metro Atlanta, will now be held responsible for their heinous actions,” said Atlanta Police Chief George Turner. “Our partnership efforts with the FBI as well as Cobb, Gwinnett, DeKalb and Cobb Counties and other law enforcement agencies prove that joint efforts lead to successful outcomes.”
According to United States Attorney Horn, the charges and other information presented in court: Between December 29, 2012, and January 18, 2013, the defendants committed at least seven carjackings in Fulton, Gwinnett, Cobb, and DeKalb Counties. During several of the robberies, the defendants pointed guns at the victims and threatened to kill them. The defendants then robbed victims of their cars, personal belongings, cash and cellular telephones. One of the victims was a pregnant woman who suffered pre-term labor as a result of her carjacking and had to be hospitalized. One of the defendants was apprehended following a 100-mile-per-hour chase through downtown Atlanta that endangered dozens of innocent people.
A federal grand jury indicted the defendants on May 20, 2014. Gibbs, Turner, Clark, and Washington pleaded guilty to carjacking and possession of a firearm in furtherance of a crime of violence. Banks pleaded guilty to being an accessory to the crimes. The men received the following sentences:
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Ladarious Gibbs, a/k/a, “Lil D,” 24, of Atlanta, Georgia was sentenced to 30 years in prison, to be followed by five years of supervised release.He was ordered to pay restitution in the amount of $29,080.68.
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Derek C.Turner, a/k/a, “Snoop,” 22, of Atlanta, Georgia, was sentenced to 27 years in prison, to be followed by five years of supervised release.He was ordered to pay restitution in the amount of $29,080.68.
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Andre Clark, a/k/a, “Yammy,” 23, of Atlanta, Georgia, was sentenced to 10 years and one month in prison, to be followed by five years of supervised release.He was ordered to pay restitution in the amount of $1428.
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Brandon Washington, a/k/a, “Lil B,” 21, of Atlanta, Georgia, was sentenced to nine years and nine months in prison, to be followed by five years of supervised release.
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Raphael Banks, 26, of Atlanta, Georgia, was sentenced to four years and nine months in prison, to be followed by three years of supervised release.He was ordered to pay restitution in the amount of $500.
This case was investigated by the Federal Bureau of Investigation, Cobb County Police Department, and Atlanta Police Department.
Assistant United States Attorneys Stephanie Gabay-Smith and Ryan K. Buchanan prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
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Lilburn Man Sentenced to Prison for Hoax Bomb Threat and Threatening a Federal AgentRead the Press Release
ATLANTA - Maksim Mikhaiov Pikulev was sentenced to seven months in prison after pleading guilty to falsely reporting a plot to obtain bombs that would be detonated at a local Wal-Mart and threatening an FBI Special Agent.
“Law enforcement officers who serve and protect the citizens of this district should not be subjected to threats of violence,” said U.S. Attorney John Horn. “Not only did Pikulev report a false bomb threat, which diverted critical law enforcement resources, but after the FBI agent investigating the matter discovered his claim was a hoax, Pikulev threatened to kill the agent.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing in federal court should make it very clear to Mr. Pikulev that the U.S. Government takes bomb threats and threats to its federal agents very seriously. It is hoped that Mr. Pikulev will use his time in prison to reflect on his poor decisions that led to his criminal acts.”
According to United States Attorney Horn, the charges and other information presented in court: On October 17, 2014, Pikulev called Atlanta’s FBI office and falsely reported that two men asked him to build a bomb to blow up a local Wal-Mart. During the investigation, Pikulev stated that he planned to deliver two bombs in his possession to the unknown males and to record the transaction for the FBI. But when an FBI Agent requested to see the bombs, Pikulev refused. The FBI eventually determined that the matter was a hoax.
On December 7, 2014, Pikulev placed a call to the FBI office located in Washington DC. During that recorded call, Pikulev said that he wanted to make a complaint against FBI-Atlanta agents. Pikulev became agitated and angry during the call after he was told to call the Atlanta Division to make his complaint. Pikulev refused to call the FBI Atlanta office and threatened to kill the FBI agent who investigated his bomb hoax.
Pikulev, a/k/a Max, 30, of Lilburn, Ga., has been sentenced to seven months in prison to be followed by three years of supervised release. Pikulev was convicted on these charges on August 14, 2015, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Tracia M. King prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Tax Preparers Charged with Defrauding Clients and IRSRead the Press Release
ATLANTA - Frazier Todd, Jr., Roberta Sheffield, and Cozzie Walker, have been arraigned on federal charges of conspiring to defraud their clients and the IRS by intentionally misrepresenting to the IRS that those clients incurred qualified education-related expenses and were entitled to receive a refundable tax credit.
“One of the ways the federal government encourages people to enroll in and complete their college education is by offering a refundable tax credit for certain expenses students incur, such as for tuition and books,” said U.S. Attorney John Horn. “These defendants allegedly exploited that tax credit by convincing thousands of clients—who were often elderly, disabled, unemployed, and low-income—that the refund was a “stimulus” program they were entitled to receive. The defendants knew that their clients had no qualified education expenses and were not eligible for the refund.”
“IRS Special Agents work year round to investigate and root out dishonest return preparers,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “These defendants clearly took advantage of the people in their community as well as other unsuspecting Americans. The indictment of these individuals helps reassure our communities that return preparers who lack integrity and engage in illegal activities will be held accountable for their actions.”
According to U.S. Attorney Horn, the indictment, and other information presented in court: Walker, Sheffield, and Todd, Jr. were principals of Diverse Resources Business and Tax Firm, a Union City tax preparer business, and People Helping the Community, Inc., a fraudulent non-profit organization. Acting through these entities, the defendants operated a scheme to exploit the American Opportunity Tax Credit (“AOTC”), a refundable tax credit for qualified postsecondary education expenses such as tuition and related costs. Students for whom the AOTC is claimed must be enrolled at least part-time in a degree- or certificate-seeking program at an eligible institution, and they must incur actual education-related expenses. Students can qualify for up to a $1,000 refund, even if they are not otherwise required to file taxes.
The defendants marketed the AOTC as a “stimulus” available to almost anyone, regardless of whether that person incurred education expenses or was even enrolled in school. Some clients did not even know the defendants were filing a tax return on their behalf. To make the scheme appear legitimate, the defendants manufactured a phony curriculum of short videos on topics such as healthy eating, exercise for seniors, and street safety, which they sent to clients after already claiming the AOTC. Even if the clients had paid tuition for these so-called “life enrichment courses,”—which they did not—the defendants knew these courses would not qualify their clients for the AOTC.
The defendants filed tax returns claiming the maximum AOTC refund for every client, representing to the IRS that each client had incurred several thousand dollars in qualified education expenses. Many of the tax returns were fraudulent in other ways too, such as claiming bogus income and business losses. The government estimates that the defendants’ conduct generated over $3.5 million in fraudulent refunds, some of which went to the clients and some of which the defendants retained for themselves. The majority of the defendants’ clients lived in the Atlanta, Georgia and Charlotte, North Carolina areas.
Frazier Todd, Jr., 57, Roberta Sheffield, 42, and Cozzie Walker, 41, all of Atlanta, Ga., are charged with conspiracy to commit wire and mail fraud and fourteen counts of aiding and abetting each other in presenting false and fraudulent claims for payment to the federal government. They were arraigned today before United States Magistrate Judge Russell G. Vineyard, after they were indicted by a federal grand jury on November 9, 2015.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
Anyone who has information concerning the allegations described in the indictment is encouraged to contact IRS-Criminal Investigation at 404-338-7519.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Assistant United States Attorney Lynsey M. Barron is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Three Charged with Hacking into E*Trade and Scottrade in Massive Data Breach and Identity Theft SchemeRead the Press Release
ATLANTA – Three individuals were charged in an indictment unsealed today with an international scheme to hack into E*TRADE Financial Services Corporation and Scottrade Financial Services, Inc. to steal sensitive personal identifying information from millions of customers and build their own securities brokerage using the companies’ proprietary databases.
“The massive scale of these data breaches is staggering. But the methods and goals of this scheme are all too familiar and highlight the critical threat that cyber-crime poses to our nation’s economic security,” said U.S. Attorney John Horn. “The indictment alleges that the defendants launched sophisticated cyber-attacks against financial institutions and stole personal identifying information of millions of customers. The charges announced today send a clear message that international borders will not impede our efforts to prosecute cyber-criminals who seek to breach our computer networks.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated, “This investigation, and the charges announced today, clearly illustrates that the FBI and its partners will not tolerate attacks of any kind on our nation’s financial infrastructure, and will continue to pursue those responsible as part of our collective effort to protect our citizens’ personal information. While corporations that hold our citizens’ data continue to be the targets of the evolving cyber threat, they are also the key to defeating it. This investigation is a prime example of how collaborative efforts between the public and private sector lead to tangible results in the fight against digital crimes.”
According to the indictment unsealed today: Between November 2012 and August 2014, Gery Shalon, a/k/a/ Garri Shalelashvili, Joshua Samuel Aaron, and an unidentified third hacker conspired to hack into the computer networks of financial institutions and media companies to steal customer data. In online chats, Shalon and the hacker discussed their plan to use the stolen customer contact information to build their own brokerage database for marketing stocks to potential investors, boasted about their early success in “cold-calling” investors, and expressed hope that a bank would pay to acquire their database.
The indictment alleges that Shalon directed the hacker to breach companies with large customer databases of investors, including E*TRADE and Scottrade, and the hacker infiltrated their networks using sophisticated hacking techniques. In late November 2013 and early December 2013, the hacker breached Scottrade’s network and E*TRADE’s network using overseas servers provided by Shalon. After gaining a foothold in both networks, the hacker asked Shalon for the login credentials of a customer account at both companies in order to locate their customer databases. In response, Aaron provided Shalon with login credentials that Aaron wrongfully obtained from a United States victim, including the victim’s username and password, and Shalon sent the information to the hacker.
The indictment alleges that, using the victim’s login credentials, the hacker located E*TRADE’s and Scottrade’s customer databases. Shalon and the hacker discussed the personal identifying information information visible in the databases, and at Shalon’s direction, the hacker exported stolen customer data, including names, residential addresses, phone numbers, and email addresses, to an overseas server provided by Shalon.
In total, the defendants compromised customer databases containing the personal information of more than 10 million customers of E*TRADE and Scottrade alone.
A federal grand jury in Atlanta, Ga., returned a 10-count sealed indictment against Shalon, Aaron, and the third hacker on October 27, 2015. The indictment was unsealed today. The indictment charges them with one count of conspiracy to commit wire fraud, three counts of wire fraud, one count of conspiracy to commit computer fraud, two counts of computer fraud, and three counts of aggravated identity theft. Shalon, 31, a resident of Israel, was arrested by Israeli law enforcement in Savyon, Israel on July 21, 2015, and remains in custody in Israel, where extradition proceedings are pending. Aaron, 31, a United States citizen and resident of Israel, is not in custody.
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges, and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation with valuable assistance provided by the New York Field Office of the United States Secret Service. E*TRADE and Scottrade cooperated fully in the investigation. Foreign law enforcement partners also made significant contributions to the investigation, including the exceptional support and cooperation provided by the National Cyber Unit of the Israel Police. Valuable assistance also was provided by the Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the Southern District of New York.
Assistant United States Attorney Nathan P. Kitchens is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Lawrenceville Man Charged with Attempting to Have Sex with 9-Year-Old ChildRead the Press Release
ATLANTA - Leonard Nathaniel Peragine, Jr., has been arraigned on federal charges of using the internet to entice a child for sexual activity, and distributing and possessing child pornography. Peragine was indicted by a federal grand jury on October 27, 2015.
“Peragine is accused of shopping online for sex with children,” said U.S. Attorney John Horn. “Such conduct is as dehumanizing as it is dangerous. Predators may feel safe in the anonymity of the internet, but this case shows that we will find these predators and bring them to justice.”
“The FBI Violent Crimes Against Children program continues to target and present for prosecution individuals such as Mr. Peragine who, as alleged in the federal indictment, would sexually exploit our nation's children. The FBI asks that anyone with information regarding child exploitation matters to contact their nearest FBI field office,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: The defendant, Leonard Nathaniel Peragine, Jr., responded to a classified advertisement that was posted online that purported to offer sexual access to a child. The ad was posted by an undercover agent as part of an FBI investigation. While communicating with the undercover agent to arrange to have sex with the child, said to be a 9-year-old girl, Peragine sent child pornography videos to the undercover agent that depicted adult men committing sex acts on prepubescent children. Peragine sent the videos via messenger application in order to have the agent show the videos to the child to persuade her to have sex with the defendant.
Peragine later spoke with who he thought was the child and asked the child whether she had seen the videos, and whether she wanted to try those activities with him. After the child said she might be interested, Peragine arranged to meet the undercover agent and the child on September 29, 2015, at a location in Suwanee, Georgia. When Peragine showed up for the meeting, he was arrested and searched. Condoms were found in his car, and additional child pornography was located on his cell phone.
Leonard Nathaniel Peragine, Jr., 32, of Lawrenceville, Georgia, was arraigned before United States Magistrate Judge Russell G. Vineyard.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney John S. Ghose is prosecuting the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Home Depot Employees Sentenced to Prison for Identity Theft in Credit Card Fraud SchemeRead the Press Release
ATLANTA – Paulette Shorter and Lakisha Grimes have been sentenced to federal prison for stealing personal identifying information from fellow employees of The Home Depot, Inc. in order to submit fraudulent applications for credit cards.
“The defendants stole the very personal information they were entrusted to protect,” said U.S. Attorney John Horn. “They applied for fraudulent credit cards with personal identifying information taken from The Home Depot’s human resources database. Grimes and Shorter violated the trust of their employer and their fellow employees, and they did so to enrich themselves at the expenses of others.”
“The U.S. Secret Service and our law enforcement partners work tirelessly to protect consumers against identity theft fraud,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office. “These sentences should serve as a reminder that criminals will not get away with maliciously using their entrusted positions for personal gain.”
According to United States Attorney Horn, the charges, and other information presented in court: Paulette Shorter and Lakisha Grimes worked as Human Resources employees in the Atlanta, Georgia headquarters of the Home Depot, Inc., where they had access to employee databases containing employee names, Social Security numbers, and birth dates. The defendants used personal identifying information stolen from the Home Depot employee database and other sources to apply online for Capital One credit cards in the names of different individuals, including Home Depot employees and job applicants. Home Depot Corporate Security discovered the fraudulent scheme based on a tip from a Home Depot employee and reported the identity theft to federal investigators.
In total, thirty-two fraudulent Capital One credit card applications were submitted as part of the scheme using stolen personal identifying information, and two of the approved credit cards were mailed to Shorter’s and Grimes’s residences. Two of Shorter’s relatives used a credit card issued in the fraudulent scheme to purchase merchandise at several outlet stores.
Paulette Shorter, 32, of Orlando, Florida was sentenced on November 4, 2015, by United States District Court Judge Steve C. Jones to two years and one day in prison to be followed by three years of supervised release, and she was ordered to pay $166.90 in restitution to Capital One. Shorter was convicted on this charge on July 30, 2015, after she pleaded guilty.
Lakisha Grimes, 38, of Conyers, Georgia was sentenced on January 16, 2015, by United States District Court Judge Steve C. Jones to two years in prison to be followed by one year of supervised release. Shorter was convicted on this charge on November 3, 2014, after she pleaded guilty.
This case is being investigated by the United States Secret Service.
Assistant United States Attorney Nathan P. Kitchens is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Jonesboro Woman Sentenced for Lying and Buying Firearm used to kill Omaha, Nebraska Police OfficerRead the Press Release
ATLANTA - Jalita Jenera Johnson has been sentenced for lying when she bought a gun and 50-round drum magazine for her convicted felon boyfriend, Marcus Wheeler. Wheeler later used the gun and magazine to kill an Omaha, Nebraska, police officer while the officer was attempting to serve a warrant on Wheeler for his arrest.
“The tragic result in this case is a stark reminder of how firearm purchasing laws are designed to protect the public,” said U.S. Attorney John Horn. “Ms. Johnson’s case shows that if you buy a gun for someone else and lie about it, you never know where that gun will end up or what it will be used for. Illegally bought guns not only pose a risk to our community, but any other community where the gun is ultimately taken.”
“This sentence serves as a reminder to all law enforcement that we need to remain vigilant in curtailing the illegal trafficking of firearms in order to protect the safety of innocent civilians,” said ATF Special Agent in Charge Carl Walker.
According to U.S. Attorney Horn, the charges and other information presented in court: In April 2015, Jalita Jenera Johnson bought a Glock semiautomatic firearm, a 50‑round drum magazine, and ammunition from a pawnshop in Jonesboro, Georgia. When Johnson bought the firearm, she was required to fill out a Bureau of Alcohol, Tobacco, Firearms and Explosives Form 4473. That form requires the purchaser of the firearm to disclose the identity of the true buyer or transferee of the firearm. Johnson stated on the form that she was the true buyer. But in fact, Johnson was buying the firearm for her boyfriend, Marcus Wheeler, who was a convicted felon and so could not buy the gun for himself. Wheeler provided Johnson with the money to buy the gun and magazine. He also directed Johnson on which gun and magazine to buy.
In May 2015, using the gun and magazine that Johnson bought for him, Wheeler got into an armed confrontation with the City of Omaha Police Department in Omaha, Nebraska, during which Wheeler used the Glock firearm to shoot and kill an Omaha Police Officer. Wheeler also was killed during the shootout.
Jalita Jenera Johnson, 26, of Jonesboro, Georgia, has been sentenced to one year of probation, 40 hours of community service, and 180 days’ home confinement. Johnson was convicted on these charges on August 19, 2015, after she pleaded guilty.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant United States Attorney Mary L. Webb prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Virginia Woman Sentenced to 10 Years for Catoosa Teachers Federal Credit Union RobberyRead the Press Release
ROME, Ga. - Pelaralyss Young has been sentenced to 10 years in federal prison for her role in the December 20, 2012, robbery of the Catoosa Teachers Federal Credit Union, in Ringgold, Georgia. Young’s co-conspirator, Laron Burns, was sentenced in the Eastern District of Michigan to 18 years in federal prison.
“Young and Burns targeted a small town credit union at a time when they thought it would be most vulnerable—the Christmas season,” said U.S. Attorney John Horn. “Armed with air pistols, they jumped a teller counter, broke a teller’s leg, and forced employees and customers into the vault, where they were held for the remainder of the robbery. We hope the resolution of this case will help restore the victims and citizens of Ringgold to feeling safe, and will deter anyone else from this senseless violence.”
“This was a very violent robbery and the two defendants in the matter are most deserving of the extensive federal prison sentences handed down. While the customer and bank employees turned victims are left to deal with their emotional or even physical trauma, the FBI and its law enforcement partners working this matter hope that these stiff prison sentences provide some solace toward their continued recovery,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: On December 20, 2012, Pelaralyss Young and Laron Burns, armed with realistic-looking air pistols, and wearing dark clothing, masks, and gloves, entered the Catoosa Teachers Federal Credit Union, in Ringgold, Georgia. Burns jumped over a teller counter and knocked a female bank employee to the ground, breaking her leg in the process. She was then forced to crawl at gun point into a room containing the bank’s safe. Other employees and customers were also forced at gun point into that room, where they were held for the remainder of the robbery.
The robbery occurred immediately after a cash delivery, and the defendants fled with nearly $170,000. They also seized and fled with the cell phones of customers in order to prevent any attempts to alert police.
Pelaralyss Young, 27, of Alexandria, Virginia, was sentenced on October 30, 2015, by U.S. District Judge Harold L. Murphy, Northern District of Georgia, to 10 years in prison, to be followed by five years of supervised release. Young was convicted on these charges on August 13, 2015, after she pleaded guilty without a plea agreement.
Laron Burns, 45, of Flint, Michigan, was sentenced on April 13, 2015, by U.S. District Judge Laurie Michelson, Eastern District of Michigan, to 18 years, 3 months in prison, to be followed by three years of supervised release. Burns was convicted on these charges on December 17, 2014, after he pleaded guilty pursuant to a negotiated plea agreement that also resolved additional criminal conduct committed in Michigan.
Both defendants have also been ordered to pay $166,340 in victim restitution.
This case was investigated by the Federal Bureau of Investigation, the Georgia Bureau of Investigation, the Catoosa County Sheriff's Office, and the Ringgold Police Department.
Assistant United States Attorney John S. Ghose prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Tax Preparers Convicted of Preparing and Filing False Tax ReturnsRead the Press Release
ATLANTA - Frederick Jenkins and Willie Jenkins were convicted by a federal jury Monday, October 26, 2015, on charges that they conspired to prepare and file false federal tax returns that claimed over $1 million in tax refunds.
“The actions of these defendants reflected a willful disregard for our tax system,” said U.S. Attorney John Horn. “Our citizens will not tolerate tax preparers who abuse the system for their own financial gain, and tax cheats will be investigated by the Internal Revenue Service and, where appropriate, criminally prosecuted.”
“This verdict exemplifies IRS Criminal Investigation’s intense focus on the rigorous pursuit of tax refund fraud,” stated Special Agent in Charge, Veronica F. Hyman-Pillot. “These unscrupulous defendants thought they had devised a clever scheme which preyed on unsuspecting victims and benefited them financially. Return preparers cannot fraudulently steal public money and enrich their bank accounts at the expense of the United States Treasury and other taxpayers and not expect to go unpunished.”
“The Jenkins’ did a disservice to legitimate tax preparers who comply with Georgia Tax Law. We will continue to find and track others who seek to defraud the taxpayers of our state.” said Lynne Riley, State Revenue Commissioner, Georgia Department of Revenue.
According to U.S. Attorney Horn, the charges, and other information presented in court: Since 2006, brothers Frederick and Willie Jenkins owned and operated Global Tax Service LLC (GTS), a tax preparation business with multiple locations throughout the metropolitan Atlanta area, and in other states, including Alabama. During the tax years under investigation, 2008 through 2011, the Jenkins brothers prepared and filed false income tax returns for clients. The false items primarily consisted of fraudulent and fictitious business income and losses in order to inflate tax refunds.
For some clients, the Defendants made up a business that did not exist, and then falsified business expenses to make it appear that the business had lost money. For other clients with established businesses, the Defendants fraudulently added false business expenses. The fraudulent business and business expenses were added by the Defendants without the clients’ knowledge.
The end result was the same: The refunds were inflated. Higher refunds led to more money for the Defendants, who often took a percentage of the refund as their fee. Subsequently, when clients sought copies of their tax returns, Jenkins provided them with altered copies, or refused to give copies all together.
After a 5-day jury trial, the jury found Frederick Jenkins guilty on 11 counts and Willie Jenkins guilty on 7 counts. Both were indicted by a federal grand jury on May 20, 2014.
Sentencing for Frederick Jenkins and Willie Jenkins of Fairburn, Georgia, will be scheduled before United States District Judge Orinda D. Evans at a date to be determined.
This case is being investigated by the Internal Revenue Service Criminal Investigation, and the Georgia Department of Revenue.
Assistant United States Attorneys Bernita B. Malloy and Chris Bly are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The home page for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao/gan/.
Georgia Department of Corrections Employees Sentenced to Federal Prison for Stealing State Restitution FundsRead the Press Release
ATLANTA – Tammi Stephens, Daynna Gregory, and Richard Cantrell have been sentenced to federal prison for stealing victims’ restitution money from a fund controlled by the Georgia Department of Corrections (GDOC), where Stephens and Gregory formerly worked in its banking department.
“Stephens and Gregory stole from a fund that compensates crime victims, a fund that the two had been entrusted to help administer,” said U.S. Attorney John Horn. “By printing false checks and delivering them to Cantrell to launder through his business, Stephens and Gregory callously abused that trust, and effectively preyed upon crime victims a second time.”
“This sentencing holds all three defendants fully accountable for their organized criminal scheme to deprive previous crime victims of monies fully due them. The fact that two of the defendants were State employees abusing their positions of trust made the crimes all the more reprehensible,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“We are pleased to see justice served on these individuals for their role in abusing the public’s trust, thanks to the actions by both GDOC’s internal investigations unit and the cooperation of the FBI,” said Homer Bryson, Commissioner of the Georgia Department of Corrections. “The sentencing of Stephens and Gregory sends a strong message that this type of conduct will not be tolerated,” continued Bryson.
According to U.S. Attorney Horn, the charges and other information presented in court: From September 2013 to June 2014, Stephens and Gregory were employees in the Georgia GDOC banking unit where they were responsible for issuing checks drawn on a restitution fund set up to compensate victims of other crimes. The defendants formed and carried out a plan to steal victim restitution money by having Stephens and Gregory use their access to the fund to issue fraudulent checks payable to a flower shop owned by Cantrell, who was not a GDOC employee. The checks were purposely issued to Cantrell's flower shop to hide the defendants’ involvement in the theft. Cantrell agreed to use his business to launder the stolen money.
After printing the fraudulent checks, Stephens and Gregory altered the Department’s financial records to further disguise their theft. Stephens and Gregory issued 29 fraudulent checks to the flower shop, which were then delivered to Cantrell, who cashed them and split the proceeds with Stephens and Gregory. In total, the defendants stole more than $232,426.76 in restitution funds, which they then spent on a variety of retail purchases.
- Tammi Stephens, 37, of Forsyth, Georgia, was sentenced to three years in prison to be followed by three years of supervised release, and ordered to pay restitution of $232,426.76.
- Daynna Gregory, 41, of Lithonia Georgia, was sentenced to two years and nine months in prison to be followed by three years of supervised release, and ordered to pay restitution of $232,426.76.
- Richard Cantrell, 54, of Marietta, Georgia, was sentenced to two years in prison to be followed by three years of supervised release, and ordered to pay restitution of $232,426.76.
This case was investigated by the Federal Bureau of Investigation and the Georgia Department of Corrections.
Assistant U.S. Attorneys Trevor C. Wilmot and Kurt R. Erskine prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The home page for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao/gan/.
Rome Man Charged with Manufacturing Child Pornography by Enticing Minors to Photograph Themselves with Cell PhonesRead the Press Release
ROME, Ga. - Clinton Briggs Miller has been arraigned on federal charges of enticing minors to produce child pornography, by allegedly blackmailing them to send him sexually explicit images of themselves. Miller was indicted by a federal grand jury on October 19, 2015.
“Enticing, tricking, and intimidating children into taking sexually explicit photographs of themselves with their cell phones is as repulsive as it is illegal,” said U.S. Attorney John Horn. “This case illustrates the dangers faced by minors who send racy photos of themselves on phones or over social media.”
“As we have seen in countless other cases, child predators will exploit any technology they can to feed their perverse appetites,” said Special Agent in Charge Nick S. Annan, ICE Homeland Security Investigations in Atlanta. “I strongly encourage parents to educate themselves on how to protect their children from these predators by entering the keyword ‘iGuardian’ in the search box at www.ice.gov.”
According to U.S. Attorney Horn, the charges, and other information presented in court: In July 2015, Miller allegedly exchanged text messages with two minor females, one in California and one in Georgia. He befriended them, persuaded them to send him explicit photographs of themselves, and then threatened to post those photographs on social media websites unless they continued to send him increasingly explicit photographs.
Clinton Briggs Miller, 26, of Rome, Georgia, was arraigned before U.S. Magistrate Judge Walter E. Johnson.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Rome, Georgia, Police Department.
Assistant U.S. Attorney William G. Traynor is prosecuting the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
DeKalb County, Georgia, Sheriff’s Captain Charged with Encouraging Excessive Force at County Jail and Obstruction of JusticeRead the Press Release
Leonard Dreyer, a captain with the DeKalb County, Georgia, Sheriff's Office, has been indicted by a federal grand jury in the Northern District of Georgia on charges of encouraging Dwight Hamilton, a former corrections officer, to use excessive force against an inmate at the DeKalb County Jail and for attempting to obstruct justice by persuading officers who witnessed the incident to write false reports. Dreyer was also charged with obstructing justice by making false statements to an FBI agent investigating the allegations.
Dreyer, 50, of Decatur, Georgia, was arraigned today. He was indicted by a federal grand jury on Oct. 20, 2015.
Hamilton, who was indicted earlier this year for using excessive force and writing false reports, has been charged in the same indictment with additional counts of excessive force and obstruction of justice.
According to the indictment and other information presented in court: Dreyer began working for the DeKalb County Sheriff’s Office in 2004 and worked as a supervisor in the jail from 2010 to 2012. Hamilton worked in the jail from 2005 to 2012. In 2011 and 2012, Hamilton, who was supervised by Dreyer, tased inmates without justification, many of them multiple times, in five separate incidents during his time at the jail. The inmates suffered injuries as a result of the tasing. The superseding indictment charges that in all five instances, Hamilton used excessive force and thereby violated the inmates’ Constitutional rights.
Following four of the five tasing incidents, Hamilton wrote a false report with the intent of impeding, obstructing and improperly influencing the investigation. In the first report, Hamilton falsely reported that the victim “made a step toward” Hamilton immediately before Hamilton tased him.
In another report, Hamilton falsely wrote that the victim failed to comply with Hamilton’s commands before Hamilton tased him. Before one of the five incidents, Dreyer directed Hamilton to tase an inmate who was mouthing off to him. After Hamilton repeatedly tased the inmate without legal justification, Dreyer encouraged three witness officers to write false reports that were favorable to Hamilton and would justify the tasing. During the federal investigation of the incident, Dreyer also made false statements to an FBI agent.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the FBI. This case is being prosecuted by Assistant U.S. Attorney Brent Alan Gray of the Northern District of Georgia and Trial Attorney Christopher Perras of the Civil Rights Division.
Dreyer Superseding Indictment
DeKalb County Sheriff’s Captain Charged with Encouraging Excessive Force at County Jail and Obstruction of JusticeRead the Press Release
ATLANTA – Leonard Dreyer, a Captain with the DeKalb County Sheriff's Office, has been arraigned on charges of encouraging former Corrections Officer Dwight Hamilton to use excessive force against an inmate at the DeKalb County Jail and for attempting to obstruct justice by persuading officers who witnessed the incident to write false reports. Dreyer was also charged with obstructing justice by making false statements to an FBI agent investigating the allegations.
Hamilton, who was indicted earlier this year for using excessive force and writing false reports, has been charged in the same indictment with additional counts of excessive force and obstruction of justice.
“What’s most troubling about this investigation is that a supervisor is alleged to have played a significant role in the commission of these crimes,” said U.S. Attorney John Horn. “We recognize that detention officers – and their supervisors – have a difficult job as they maintain order and protect inmates in our county jails and prisons. But under no circumstances can we allow a detention officer to abuse his power by participating in violent assaults on inmates, nor can we stand by and allow that officer to file false reports to cover up such an incident.”
“Leadership sets the tone at any law enforcement agency. The allegations contained in these charges against Dekalb County Sheriff’s Captain Dreyer are disheartening because it was his role to ensure that rules were followed, that inmates were treated humanely, and that their basic civil rights were not violated. Instead, the allegations indicate that Captain Dreyer used his position to influence or encourage others at the Dekalb County Jail to violate those rules and those rights, to include the tasing of inmates,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the indictment, and other information presented in court: Dreyer began working for the DeKalb County Sheriff’s Office in 2004 and worked as a supervisor in the jail from 2010 to 2012. Hamilton worked in the jail from 2005 to 2012. In 2011 and 2012, Hamilton, who was supervised by Dreyer, used his Taser multiple times on inmates without justification. The inmates suffered injuries as a result of the tasing. The superseding indictment charges that in all five instances, Hamilton used excessive force and thereby violated the inmates’ constitutional rights.
Following four of the five tasing incidents, Hamilton wrote a false report with the intent to impede, obstruct and improperly influence the investigation. In the first report, Hamilton falsely reported that the victim inmate “made a step toward” Hamilton immediately before Hamilton tased him.
In another report, Hamilton falsely wrote that the victim inmate failed to comply with Hamilton’s commands before Hamilton tased him. Before one of the five incidents, Dreyer directed Hamilton to tase an inmate who was mouthing off to him. After Hamilton repeatedly tased the inmate without legal justification, Dreyer encouraged three witness officers to write false reports that were favorable to Hamilton and that would justify the tasing. During the federal investigation of the incident, Dreyer also made false statements to an FBI agent.
Leonard Dreyer, 50, of Decatur, Georgia, was indicted by a federal grand jury on October 20, 2015.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Brent Alan Gray and DOJ Civil Rights Division Trial Attorney Christopher Perras are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Nineteen Atlanta Residents Convicted of Operating a Ring to Cash Stolen U.S. Treasury Checks and Commit Identity TheftRead the Press Release
ATLANTA – Nineteen defendants have been convicted in a large, stolen U.S. Treasury check and identity theft ring, with the final defendants convicted by a jury trial which concluded on Friday October 16, 2015. The defendants ran an elaborate scheme in which they stole checks, manufactured fake state driver’s licenses to use for identity theft and check cashing, and opened credit card accounts in the names of unsuspecting victims.
“Fraud and identity theft crimes are a serious and growing problem in our community,” said U.S. Attorney John Horn. “Thieves who commit these crimes prey upon unsuspecting victims, steal their money, and compromise the victims’ livelihoods, sometimes causing lasting financial charges for them and their families.”
“The convictions in this case were the result of an extensive joint investigation involving many local, state and other federal agencies, who, along with persistent federal prosecutors, clearly saw a mandate to disrupt this organized group’s repeated victimization of the U.S. government. The FBI is pleased with the role that it played in bringing this investigation forward for prosecution and it thanks those many dedicated law enforcement officers and prosecutors for staying the course on such a lengthy and complex case,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn and information presented in court: From approximately June 2012 until September 2014, the defendants worked together to obtain and cash United States Treasury checks stolen from the U.S. Mail. The checks were originally issued to people entitled to the federal funds, including taxpayers receiving refunds, retired federal employees receiving pension benefits, military families, and Social Security beneficiaries receiving Social Security and disability payments.
The defendants played different roles in the scheme: Defendants Erica Willis, Dexter Willis, and Antonio Slatton sold stolen checks to other defendants. Check purchasers, including Hussain Abdullah, Asad Abdullah, Hudhayfah Abdullah and Hafid Abdur-Rabbani, were frequent customers of the check sellers and purchased checks by either paying 25% of the check’s face value or splitting the proceeds from the check in half with the supplier. After purchasing the stolen checks, the defendants would pay identification manufacturers like Ibrahim Abdur-Rabbani and Khalil Majeed to make fake Georgia driver’s licenses matching the names and addresses of the victims, but containing photos of “check runners.” In exchange for a fee, the “ check runners” would use the fake driver’s licenses to cash the stolen checks at retail locations throughout the Atlanta, Georgia, metropolitan area, such as Wal-Mart and Publix.
As part of the investigation, FBI and other law enforcement agents worked with a confidential informant, which put them in a position to recover the stolen checks and false identifications. The government reimbursed the stores that cashed the stolen checks for the losses they incurred.
In a separate credit card fraud scheme, defendants Asad Abdullah, Mikal Majeed, and Billie Cosby, obtained and used counterfeit identification documents to pose as real Sam’s Club members. After presenting the fraudulent documents at various Sam’s Club locations in Georgia, Tennessee, and Alabama, the defendants obtained replacement store credit cards in the names of the victims, which the defendants then used to buy gift cards, gas, groceries, and other items at various Sam’s Club and Wal-Mart locations.
Across the two schemes, the defendants defrauded the federal government, Wal‑Mart, and Sam’s Club of approximately $350,000.
The defendants are as follows:
- Asad Abdullah, 37, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds, theft of government funds, aggravated identity theft and conspiracy to commit credit card fraud.
- Erica Willis, 36, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds, theft of government funds, and aggravated identity theft.
- Hussain Abdullah, 34, of Atlanta, Georgia, was convicted ofconspiracy to commit theft of government funds, theft of government funds, and aggravated identity theft.
- Hudhayfah Abdullah, 32, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds, theft of government funds, and aggravated identity theft.
- Hafid Abdur-Rabbani, 37, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds, theft of government funds, and aggravated identity theft.
- Ibrahim Abdur-Rabbani, 33, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds, theft of government funds, and aggravated identity theft.
- Khalil Majeed, 35, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds, theft of government funds, and aggravated identity theft.
- Ali Al-Amin, 36, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds, theft of government funds, and aggravated identity theft.
- Zakariyah Abdullah, 35, of Atlanta, Georgia, was convicted of aggravated identity theft and using a passport belonging to another.
- Sayeed Valdez, 38, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds.
- Antonio Slaton, 37, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds.
- Cory Howell, 43, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds.
- Damion Davis, 31, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds.
- Dexter Willis, 36, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds.
- JoAnn Drigo, 37, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds.
- Muhajid Ahmad, 33, of Atlanta, Georgia, was convicted of conspiracy to commit theft of government funds.
- Billee Cosby, 34, of Atlanta, Georgia, was convicted of conspiracy to commit credit card fraud.
- Mikal Majeed, 33, of Atlanta, Georgia, was convicted of aggravated identity theft.
- Jasmine Proctor, 20, of Atlanta, Georgia, was convicted of interfering with the U.S. Mail.
Sentencing for the defendants has not yet been scheduled.
This case was investigated by the Federal Bureau of Investigation. Assistance in this case was provided by the following federal agencies: Federal Air Marshal Service; United States Customs and Border Protection; Bureau of Alcohol, Tobacco, Firearms, and Explosives; IRS-Criminal Investigations; United States Secret Service; United States Postal Service; and the Department of Homeland Security. The following state and local agencies also assisted: Georgia Bureau of Investigation; Georgia Office of Consumer Protection; Georgia Department of Corrections; Atlanta Police Department; Woodstock Police Department; Fulton County Sheriff’s Office; Henry County Police Department; Gwinnett County Police Department; Dunwoody Police Department; Brookhaven Police Department; Sandy Springs Police Department; DeKalb County Police Department, and Chamblee Police Department.
Assistant U.S. Attorneys Nekia Hackworth and Kim S. Dammers, along with DOJ Trial Attorney Hans Miller are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Five Defendants Sentenced to Prison for Bank FraudRead the Press Release
ATLANTA - Julius C. Appling, Taj J. Tillison, Tal V. Tillison, Aryonne Johnson, and Andrew Smith, a/k/a Dru, have been sentenced to federal prison for conspiracy to commit bank fraud in connection with their scheme to deposit fraudulent checks at Wells Fargo and SunTrust banks in the metropolitan Atlanta, Georgia area.
“The defendants were able to commit this fraud because they duped unwitting people into allowing them access to their personal bank accounts,” said U.S. Attorney John Horn. “Alarm bells should go off if anyone offers you money in return for depositing their check into your bank account so that they can immediately get the cash from the check. Days later when that person is long gone and you learn that the check bounced, you will be held financially responsible.”
“These five individuals found out the hard way that bank fraud is a serious federal crime involving federal prison time. The FBI treats these types of financial crimes targeting the banking industry very seriously and cautions anyone considering this type of criminal activity to reconsider,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges and other information presented in court: The defendants paid individuals for access to their bank accounts at Wells Fargo and SunTrust banks. In connection with this access, the defendants would gain use of the individuals’ ATM and debit cards, including the PIN to allow their use. They would then deposit fraudulent checks into these third party accounts. The checks were drawn on accounts that had long been closed or the checks were completely fake. The individuals who gave the Defendants access to their accounts were not aware that the Defendants intended to deposit fraudulent checks into the accounts. Once the checks had bounced, those individuals were held responsible for the losses by the banks.
Both Wells Fargo and SunTrust make funds available from deposited checks the same day as the deposit, so after depositing fraudulent checks, the Defendants would either withdraw cash directly from the accounts through ATMs or would make purchases using debit cards and request cash back at the point of sale transaction. Each defendant was captured in multiple photos taken by ATM cameras for many of the deposits and withdrawals. Ultimately, the five defendants gained access to more than 200 bank accounts. The defendants deposited over $880,000 worth of fraudulent checks and withdrew over $360,000.
A federal Grand Jury indicted the defendants on October 28, 2014, and all five defendants pleaded guilty to conspiracy to commit bank fraud. U.S. District Judge Thrash sentenced all five defendants to prison:
- On October 20, 2015, Taj J. Tillison, 24, of Atlanta, Georgia, was sentenced to four years, three months in prison, to be followed by five years of supervised release.She was ordered to pay restitution in the amount of $88,933.67.
- On September 3, 2015, Julius C. Appling, 25, of Atlanta, Georgia, was sentenced to four years, nine months in prison, to be followed by five years of supervised release.He was ordered to pay restitution in the amount of $364,250.43.
- On June 24, 2015, Tal V. Tillison, 25, of Atlanta, Georgia, was sentenced to four years, nine months in prison, to be followed by five years of supervised release.He was ordered to pay restitution in the amount of $300,807.34.
- On June 23, 2015, Andrew Smith, a/k/a Dru, 34, of Atlanta, Georgia, was sentenced to two years, nine months in prison, to be followed by three years of supervised release.He was ordered to pay restitution in the amount of $92,415.08.
- On May 28, 2015, Aryonne Johnson, 25, of Atlanta, Georgia, was sentenced to two years, nine months in prison, to be followed by three years of supervised release.She was ordered to pay restitution in the amount of $162,734.65.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Christopher J. Huber prosecuted the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.”
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Three Individuals Indicted for Role in Bribing DeKalb and Georgia World Congress Center OfficialRead the Press Release
ATLANTA – Anthony Lepore, John Rife, and Brian Domalik, all former employees of a janitorial services company, have been indicted on charges that they conspired to bribe Patrick Jackson, a public official employed by DeKalb County and the Georgia World Congress Center, in exchange for favorable treatment by Jackson on contracts between their company and the two government entities.
“These defendants are charged with circumventing the government contracting process by bribing a corrupt public official who was willing to put his own interests above those of the taxpayers he served,” said U.S. Attorney John Horn. “This indictment reaches to the very top suites of the company, charging complicity in the bribery at the highest levels.”
“These three defendants found out the hard way that those who bribe or otherwise entice public officials to engage in criminal acts of public corruption can themselves become subjects of federal criminal investigations. Because public corruption investigations are the FBI’s number one criminal program priority, the FBI continues to provide significant resources in ensuring that those engaged in this type of activity will be held accountable,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“This indictment illustrates that alleged corruption involving public officials will not be tolerated in the state of Georgia. It is essential that violators of these types of crimes be held accountable. The GBI is fully committed to working with the FBI’s Public Corruption Task Force to investigate public corruption cases,” said Vernon Keenan, Director, Georgia Bureau of Investigation.
According to U.S. Attorney Horn, the charges and other information presented in court: Anthony Lepore was the President and CEO of Rite Way Services, Inc., an Alabama based company that sought to do business with both the DeKalb County Government and the Georgia World Congress Center (GWCC). Rife was the Regional Vice President, and Domalik, who came to work for the company in 2010, was the Division Manager, both working out of the Norcross, Georgia, facility. The indictment alleges that the three defendants, through Rite Way, conspired to bribe Patrick Jackson by facilitating payments to provide Jackson a furnished luxury apartment in Atlanta, Georgia.
Patrick Jackson was simultaneously employed by both DeKalb County and the GWCC as the manager of janitorial services from approximately 2006-2012. Jackson did not disclose to either employer that Rite Way, which obtained contracts with both DeKalb County and GWCC during his employment, was paying for an apartment where he resided. In exchange for the apartment, Jackson used his position as a public official to help the company secure contracts with DeKalb and GWCC and to benefit the interests of the company throughout the course of those contracts with DeKalb County and the GWCC.
Both Patrick Jackson, 55, of Loganville, Georgia, and another former employee of Rite Way, Cecil K. Clark, 55, of Jonesboro, Georgia, who participated in the scheme have previously pleaded guilty and been sentenced:
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Jackson was sentenced on August 12, 2015, by U.S. District Judge William S. Duffey Jr. to four years, three months in federal prison, and ordered to pay restitution to both DeKalb County and GWCC.
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Clark was sentenced on September 30, 2015, by U.S. District Judge William S. Duffey Jr., to one year, five months in federal prison, ordered to pay restitution to DeKalb County and GWCC, and fined $20,000.
Lepore, 63, of Birmingham, Alabama; Rife, 65, of Cumming, Georgia; and Domalik, 47, of Kennesaw, Georgia were named in a ten-count indictment charging them with conspiracy to commit honest services mail fraud. They were arraigned before U.S. Magistrate Judge Linda T. Walker. John Rife will be arraigned at a later date.
This case is being investigated by the Federal Bureau of Investigation and Georgia Bureau of Investigation.
Assistant U.S. Attorneys Jamie L. Mickelson and Kamal Ghali are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
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Floyd Medical Center Agrees to Resolve Alleged Violations of the Americans with Disabilities ActRead the Press Release
ATLANTA - The U.S. Attorney’s Office for the Northern District of Georgia has reached a settlement agreement with Floyd Medical Center (Floyd), a system of health care providers located in Rome, Georgia, to resolve an investigation into allegations that it violated Title III of the Americans with Disabilities Act (ADA) by failing to ensure effective communication with individuals who are deaf and hard of hearing.
“When a deaf patient or caregiver is unable to understand what is happening during a medical visit or procedure, it can be a terrifying experience and adversely affect the quality of care,” said U.S. Attorney John Horn. “Deaf or hard of hearing citizens deserve the same opportunities to participate in medical decisions as every other citizen.”
The U.S. Attorney’s Office initiated an investigation after receiving three complaints alleging that Floyd failed to provide appropriate auxiliary aids and services when necessary to ensure effective communication. The complainants, who are deaf or hard of hearing and rely on American Sign Language as their primary means of communication, were either patients or the primary caregivers of patients at Floyd. One claimant alleged that she endured a complicated labor and delivery by C-section without any effective communication before or during this procedure. Another complainant, who was the primary caregiver for her elderly father, alleged that she was denied effective communication and therefore unable to fully participate in or understand the medical decision-making regarding his terminal illness or discharge to home hospice care.
Under the settlement agreement, Floyd agreed to ensure effective communication to patients who are deaf and hard of hearing. In the future, Floyd agreed to give primary consideration to the expressed preference for a particular auxiliary aid or service by an individual who is deaf or hard of hearing. Among other things, Floyd has agreed to provide mandatory in-service training to all its personnel and provide reports to the U.S. Attorney’s Office regarding its compliance with the settlement agreement. The training will address the needs of deaf and hard-of-hearing patients and companions. Floyd also agreed to pay $75,000 to the complainants.
The ADA prohibits discrimination against individuals with disabilities by health care professionals. Under the ADA, health care providers are required to provide effective communication to individuals who are deaf and hard of hearing. When complex, lengthy communication is involved, the ADA generally requires health care professionals to provide qualified sign language interpreters for the person who is deaf or hard of hearing.
This agreement is part of the Department of Justice’s Barrier-Free Health Care Initiative, which is a partnership of the Civil Rights Division and U.S. Attorneys’ offices across the nation, to target enforcement efforts on a critical area for individuals with disabilities. The initiative, launched on the 22nd anniversary of the ADA in July 2012, includes the participation of more than 40 U.S. Attorneys’ offices, including the U.S. Attorney’s Office for the Northern District of Georgia. Information about the initiative can be found at www.ada.gov/usao-agreements.htm.
Assistant U.S. Attorneys Aileen Bell-Hughes and Emily Shingler are representing the United States in this matter.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Villa Rica Man Indicted for Million Dollar Advance Fee Fraud SchemeRead the Press Release
ATLANTA - James Thomas has been arraigned on federal charges of wire fraud and money laundering arising from an alleged advance fee fraud scheme involving $1.7 million. Thomas was indicted by a federal grand jury on September 15, 2015.
“This defendant is charged with operating a sophisticated advance fee scheme that took advantage of individuals and businesses who had limited options for financing real estate deals after the recession of 2008,” said U.S. Attorney John Horn. “This case shows that consumers and small businesses must be careful about those with whom they enter business relationships, and should research beyond the information on websites.”
“It is our sincere hope that today's federal grand jury indictment will give the many victims involved in this matter assurance that their case will be heard. The FBI will continue to provide significant resources toward investigating and presenting for prosecution those individuals engaged in such wide spread fraud as is alleged in this case,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: Between 2008 and 2011, Thomas portrayed his firm, Trilateral Capital and Development LLC (“Trilateral”), as a reputable and well established private equity company that had successfully loaned millions of dollars for real estate development projects. Trilateral’s website and marketing materials contained fraudulent misrepresentations about the firm’s past real estate deals. Thomas also misrepresented Trilateral’s finances and on least one occasion e-mailed a fraudulent bank statement purporting to show that Trilateral had over $1.6 million in one account.
Through this scheme, more than 20 individuals and companies from across the country and overseas provided Thomas with more than $1.7 million in advance fees for real estate loans that Thomas never provided. The indictment alleges that Thomas used the advance fees to pay himself and employees, take vacations, fund other business ventures and make charitable contributions.
James Thomas, 44, of Villa Rica, Ga., was arraigned before United States Magistrate Judge Linda T. Walker.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Jeffrey Brown is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Husband and Wife Sentenced for Tax FraudRead the Press Release
ATLANTA - Kenneth Horner and Kimberly Horner have each been sentenced to one year, six months in federal prison following a jury’s guilty verdict in February 2015, on tax fraud charges stemming from the defendants skimming money from their towing business.
“Small business owners should take note of this case,” said U.S. Attorney John Horn. “Skimming cash from your business account and intentionally failing to report that money to the IRS, as a federal jury concluded these defendants did, is illegal. Community services and all other benefits of government depend upon citizens paying their fair share of taxes.”
“Businesses are required to honestly report and pay taxes due, and should expect the same of their competitors,” said Acting Assistant Attorney General Ciraolo. “Those business owners who evade these obligations not only steal from the U.S. Treasury, but gain an unfair competitive advantage, and the department is committed to holding them accountable.”
“IRS Criminal Investigation is sworn to protect the tax system and bring to justice those who steal from the Treasury,” stated Veronica F. Hyman-Pillot, Special Agent in Charge. “In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is paying their fair share. Today’s sentence demonstrates that our largest enforcement program is directed at the portion of American taxpayers, who willfully and intentionally violate their known legal duty of filing and paying their fair share of taxes.”
According to U.S. Attorney Horn, the charges and other information presented in court: Kenneth and Kimberly Horner owned Topcat Towing and Recovery, Inc. (“Topcat Towing”), a towing business in Lithonia, Georgia. Between 2005 and 2008, Topcat Towing had an exclusive contract with DeKalb County, Georgia, for all county car tows needed from the south precinct of the county.
Between 2005 and 2008, the defendants skimmed more than $1.5 million in cash receipts from their towing business and deposited those cash receipts into their personal bank account without disclosing the income to their tax return preparer or on corporate and personal tax returns filed with the IRS. The defendants tried to conceal their cash deposits from the government by “structuring” their deposits, which is the act of splitting up cash deposits so that none of them exceed $10,000, for the purpose of evading a Currency Transaction Report from being filed.
Most financial institutions, including banks, are generally required to file Currency Transaction Reports (CTRs) for cash transactions that exceed $10,000. CTRs are submitted to the U.S. Department of Treasury. In 2007 and 2008, the defendants used their unreported cash, in part, to build a custom home in Conyers that was appraised at more than $900,000.
Kenneth Horner, 59, and Kimberly Horner, 54, both of Milledgville, Georgia, have each been sentenced to one year, six months in federal prison, three years of supervised release, and ordered to pay restitution in the amount of $144,455 to the IRS. The Horners were found guilty by a jury on February 20, 2015.
This case was investigated by the Internal Revenue Service Criminal Investigation.
DOJ Criminal Tax Division Trial Attorney Christopher J. Maietta and Assistant U.S. Attorney Steven D. Grimberg prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Guardian Hospice and Related Entities to Pay $3 Million to Resolve False Claims Act AllegationsRead the Press Release
ATLANTA – The United States Attorney’s Office for the Northern District of Georgia announced that Guardian Hospice of Georgia, LLC, Guardian Home Care Holdings, Inc., and AccentCare, Inc., (collectively Guardian) agreed to pay $3 million to resolve allegations that Guardian knowingly submitted false claims to the Medicare program for hospice patients who were not terminally ill. Guardian is a for-profit hospice that provides hospice services in the Atlanta, Georgia, area.
“Medicare payments to hospices are increasing every year,” said U.S. Attorney John Horn. “In order to preserve Medicare funds for services patients truly need, we will continue to pursue hospice providers who abuse the Medicare hospice benefit by billing Medicare for the care of patients who are not terminally ill.”
““The Medicare hospice benefit is intended to provide comfort and care to patients nearing the end of life,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to aggressively pursue companies that abuse the Medicare hospice benefit to improperly inflate their profits.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI is proud of the role that it played in bringing forward today’s settlement in this matter. The FBI will continue to provide significant investigative resources toward combating Medicare fraud in order to not only protect the limited federal funds dedicated to that program but also to protect the end users that rely and depend on the services that it provides.”
“Hospice care is only medically appropriate – and reimbursed by Medicare – for terminally ill patients who are in the last months of their lives,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of Inspector General. “We will continue to vigorously investigate health care companies that put their own profits above their duty to give appropriate medical care to their patients and bill Medicare only for legitimate health care services.”
The Medicare hospice benefit is available for patients who elect palliative treatment (medical care focused on providing patients with relief from pain, symptoms, or stress) for a terminal illness and who have a life expectancy of six months or less if their illness runs its normal course. Before billing Medicare, a hospice provider is obligated to comply with Medicare requirements and ensure that patients who are foregoing curative care are in need of end of life care.
The government alleges that Guardian submitted or caused the submission of false claims for hospice care for patients who Guardian knew were not terminally ill. These claims were submitted for services provided between December 1, 2009 and March 31, 2012. Specifically, the United States contends that Guardian’s business practices contributed to its submission of claims for patients who did not have a terminal prognosis of six months or less, including failing to properly train its staff and medical directors on the hospice eligibility criteria, setting aggressive targets to recruit and enroll patients, and failing to properly oversee the Atlanta hospice.
The settlement resolves allegations filed by Rose Betts and Jennifer Williams, former employees of Guardian, under the qui tam or whistleblower provisions of the False Claims Act, which authorize private parties to sue for false claims on behalf of the United States and share in the recovery. Ms. Betts and Ms. Williams will receive approximately $510,000. The lawsuit was filed in the Northern District of Georgia and is captioned U.S. ex rel. Betts v. Texas Home Health of America, L.P., No. 12-cv-0412.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $25.14 billion through False Claims Act cases, with more than $16.1 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Department of Justice Civil Division’s Commercial Litigation Branch, the Federal Bureau of Investigation, and the U.S. Department of Health & Human Services, Office of Inspector General.
The civil settlement was reached by Assistant United States Attorney Lena Amanti.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Former Savannah ATF Task Force Officer Pleads Guilty to Stealing Government MoneyRead the Press Release
Savannah, Ga. – Former ATF Task Force Officer Daryle McCormick pleaded guilty to fraudulently claiming that he worked approximately 800 hours of overtime resulting in more than $19,500 in additional wages.
“McCormick’s lies about the overtime he worked cost the taxpayers almost $20,000,” said U.S. Attorney John Horn. “In committing this crime, McCormick violated both the law and the public’s trust.”
“Today’s guilty plea demonstrates that federally deputized task force officers will be held to the same standards as other federal law enforcement officers,” said Special Agent in Charge Robert Bourbon of the U.S. Department of Justice Office of the Inspector General’s Miami Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: From approximately November 25, 1996, to May 7, 2015, Daryle McCormick served as a police officer with Savannah-Chatham Metropolitan Police Department headquartered in Savannah, Georgia. From that position, McCormick became a federally‑deputized Task Force Officer with the U.S. Department of Justice’s Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”). McCormick served as an ATF Task Force Officer from approximately September 6, 2005, to June 17, 2014.
As an ATF Task Force Officer, McCormick was eligible to receive overtime pay for working more than eight hours per day. To be paid, McCormick was required to submit an overtime pay request to the ATF, listing the dates worked, the number of hours worked, and the general subject matter of the work. When submitting requests to be paid for overtime hours purportedly worked, McCormick made the following certification: “I certify that the above time was duly earned. I understand that my misstatement concerning the aforementioned time may be cause for dismissal.” Ultimately, when approved, payments for McCormick’s fraudulently claimed overtime came from the U.S. Department of Justice.
From October 2010 to September 2013, McCormick engaged in a scheme to unlawfully commit overtime fraud by repeatedly submitting overtime payment requests to the ATF for hours that he never worked. For example, (1) McCormick claimed to work overtime on days when he had worked a full day with the ATF and had also worked up to an additional four hours at a second job for a local church; (2) McCormick claimed to have worked overtime conducting surveillance or undercover operations, even though no ATF operations occurred on those dates; and (3) McCormick claimed to have worked overtime conducting surveillance or undercover operations; however, McCormick never drafted reports summarizing the alleged ATF operations.
From approximately October 18, 2010, to September 28, 2013, McCormick falsely claimed to have worked almost 800 hours in overtime when in fact, he had not worked those overtime hours. Based on those false overtime requests, the Department of Justice paid McCormick more than $19,500 for overtime hours that McCormick never worked.
On August 31, 2015, Daryle McCormick, 47, of Pooler, Georgia, was charged via criminal information with theft of government money. He pleaded guilty to that charge. McCormick was terminated from the Savannah-Chatham Metropolitan Police Department in May, 2015.
This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Justice Office of the Inspector General.
Special Assistant U.S Attorney Jeffrey W. Davis is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Mexican Cartel Leaders Edgar Valdez-Villarreal, a.k.a. “La Barbie,” and Carlos Montemayor Gonzalez, Extradited to the United States to Face Charges in AtlantaRead the Press Release
ATLANTA – Edgar Valdez-Villarreal, a.k.a. “La Barbie,” and Carlos Montemayor Gonzalez, who are charged in the Northern District of Georgia with importing drugs and money laundering, are among 13 defendants extradited from Mexico this afternoon to face pending charges in the United States. Valdez and Montemayor are alleged to be high-level members of Mexico’s Beltran-Leyva Cartel and were arrested in Mexico on the Atlanta, Georgia, charges in 2010.
“Valdez and Montemayor are charged with leading the efforts for a top Mexican cocaine cartel with sending drugs into the United States while funneling millions of dollars in cash back into Mexico,” said U.S. Attorney John Horn. “Given Atlanta’s status as a distribution hub for the Mexican cartels, this case demonstrates our commitment to work internationally and include the cartels’ leadership in our cases.”
Daniel R. Salter, the Special Agent in Charge of the Drug Enforcement Administration in Atlanta commented, “Today’s extraditions are a great outcome for cooperative law enforcement. DEA, the United States Attorney’s Office (Northern District of Georgia) and our federal, state, local, and foreign partners remain committed to ensuring the safety and security of the United States. Citizens can rest assured that DEA will continue to target these drug trafficking organization’s intent of making a living on the backs of addiction.”
Attorney General Loretta Lynch, Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division, Administrator Chuck Rosenberg of the Drug Enforcement Administration, FBI Director James Comey and Acting Director David Harlow of the U.S. Marshals Service announced the extraditions today in Washington.
The extraditions are a result of ongoing, high-level discussions among law enforcement officials from the start of the tenures of Attorney General Loretta E. Lynch of the United States and Attorney General Arely Gómez González of Mexico. In their first meeting on June 16, 2015, the attorneys general agreed to begin a new push for collaboration between the two nations and committed to working closely to fight international organized crime.
“Today’s extraditions would not have been possible without the close collaboration and productive relationship the Department of Justice enjoys with officials at the highest levels of law enforcement in Mexico,” said Attorney General Lynch. “I am grateful to our Mexican counterparts not only for their assistance with this important matter, but also for their extraordinary efforts and unwavering partnership in our ongoing fight against international organized crime. I look forward to all that we will continue to accomplish in the service of that mission as we build on these achievements together in the days and months ahead.”
Valdez and Montemayor are accused of supplying tractor trailer trucks full of cocaine from Mexico to the Eastern United States on behalf of the Sinaloa and Beltran-Leyva cartels. They were indicted in the Northern District of Georgia on June 11, 2010, with conspiring to import and distribute cocaine, as well as conspiring to launder money by transporting drug money from the United States into Mexico. Valdez Villarreal is also indicted in the Eastern District of Louisiana on narcotics-related charges.
http://www.dea.gov/divisions/atl/2010/atlanta061110p.html
Valdez, Montemayor, and the other 11 defendants were extradited from Mexico this afternoon and were placed in the custody of U.S. Marshals. They will proceed to make initial appearances in federal district court in the coming days.
The remaining 11 defendants include:
• Luis Umberto Hernandez Celis, aka Pack; Alberto Nunez-Payan, aka Fresa, Fresco and 97, and Ricardo Valles de la Rosa, aka Chino, are alleged members of the Barrio Azteca gang and were charged on March 9, 2011, in Western District of Texas with participating in the March 13, 2010, murders in Juarez, Mexico, of U.S. Consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. Consulate employee.
• Jorge Costilla-Sanchez, aka El Cos, is an alleged former leader of the Gulf Cartel and Los Zetas, and was charged on April 10, 2002, in the Southern District of Texas with cocaine and marijuana importation and distribution, money laundering, and threatening federal law enforcement officers with assault, kidnapping or murder. Costilla-Sanchez was among the FBI’s most wanted until his arrest by Mexican authorities on Sept. 12, 2012.
• Jean Baptiste Kingery was charged on Nov. 20, 2013, in the Central District of California with arms trafficking related to the illegal exportation of defense article and munitions from the United States to Mexico. Kingery is expected to make his initial appearance in the District of Arizona on Oct. 1, 2015.
• Aureliano Montoya-Pena, aka La Changa, was among 20 defendants charged on Nov. 2, 2011, in the Northern District of Illinois with conspiracy to possess and distribute more than five kilograms of cocaine and various other offenses related to transporting millions of dollars in drug proceeds between Chicago and Mexico.
• Julio Cesar Valenzuela-Elizalde, aka The Pilot, was among eight defendants charged on Dec. 19, 2002, in the District of Arizona with an international methamphetamine distribution conspiracy, conspiracy to possess with intent to distribute methamphetamine and conspiracy to import a controlled substance.
• Martin Daniel Castillo-Rascon was charged on June 12, 2013, in the Western District of Texas with conspiracy to possess with intent to distribute a controlled substance, conspiracy to import a controlled substance, possession with intent to distribute a controlled substance, importation of a controlled substance and aiding and abetting.
• Antonio Reynoso-Gonzalez was charged in 1995 in the Southern District of California along with Joaquin Guzman-Loera, aka El Chapo, and 22 others with conspiracy to import and to possess cocaine with intent to distribute.
• Antonio Gonzalez Platas was charged in the state of Arkansas with rape.
The charges and allegations in an indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
Today’s extraditions were coordinated by the Criminal Division’s Office of International Affairs, the FBI, the DEA and the U.S. Marshals Service. The federal cases are being handled by prosecutors in the Criminal Division’s Narcotic and Dangerous Drug Section and Organized Crime and Gang Section and in the U.S. Attorney’s Offices in the District of Columbia, Central District of California, Northern District of Georgia, Northern District of Illinois, Eastern District of Louisiana, Southern District of Texas and the Western District of Texas. The state case is being handled by the Office of the Prosecuting Attorney for Arkansas.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Two Sentenced to Federal Prison for $5 Million Real Estate Ponzi SchemeRead the Press Release
ATLANTA – Charles Wooden and Hendrickx H. Toussaint, a now disbarred lawyer, have been sentenced to federal prison for operating a real estate-based Ponzi scheme that took in almost $5 million dollars from out-of-state and foreign investors.
“These defendants tricked investors into handing over millions of dollars by promising quick returns and an income stream,” said U.S. Attorney John Horn. “To make their scheme work, they preyed upon the common belief held by many investors that real estate is a safe investment. Sadly, this case proves that criminals will say anything to persuade a person to part with their money, and that investors should always be skeptical of offers that sound too good to be true.”
“While so much of the financial harm in cases like this is unrecoverable, the FBI hopes that today’s sentencing provides some degree of relief to the many investors turned victims that now suffer from the greed fueled criminal conduct of these two defendants,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“The U.S. Postal Inspection Service has no shortage of Ponzi schemes to investigate and this is just another example of greed overcoming honest business practices,” said Thomas Noyes, Inspector in Charge, Charlotte Division. He added, “Relying on a reputation or relationship is not enough, investors must still verify information, especially if there are claims of outperforming the market.”
According to U.S. Attorney Horn, the charges, and other information presented in court: In or about 2009, Charles Wooden, doing business as Aeon Capital Management, LLC, held himself out to the public as a real estate broker who could locate and oversee the purchase of residential properties and apartment buildings for or on behalf of real estate investors. Wooden purported to find properties that could be flipped in a short period for a profit, and also properties that he would manage for the investors.
Wooden’s property management services allegedly included renting the properties to tenants, collecting rent, and forwarding investors their share of the rental funds. Wooden introduced and described Hendrickx Toussaint, who was an attorney at the time, to real estate investors as the attorney who would escrow investor funds and close real estate purchases for Wooden and the investors. As the escrow agent, Toussaint agreed to hold funds from investors and disburse such funds to purchase real estate for the investors’ benefit.
Between 2009 and 2012, multiple out-of-state and foreign investors invested over $5 million with Wooden and Toussaint for the purchase of Atlanta, Georgia, area real estate. Although Wooden purchased some properties for investors, Wooden and Toussaint did not use the vast majority of investors’ funds as they had promised and represented to the investors. In addition to funding his personal lifestyle and business, Wooden used funds from investors to pay “profits” from short-term real estate “flips,” that in fact never occurred, and to pay rental income to investors from properties that in fact had not been purchased. When one out-of-state investor sued Wooden, he used funds obtained from another victim to settle the out-of-state investor’s lawsuit.
Wooden, Toussaint, and others provided fake documents to the investors to conceal that their monies had not been used to purchase real estate. These false documents included HUD-1 settlement statements, bogus real estate deeds, and in one instance, a fake bank account statement reflecting that the investor’s money was still being held in escrow. Over time, investors asked more and more questions about why public records did not reflect that they owned properties that they had been told had been purchased for them. Wooden blamed Toussaint and county recording systems, and attempted to deceive the victims further by introducing fictitious people and identities who he claimed would fix what he said were simply title recording problems.
Charles Wooden, 48, of Stone Mountain, Georgia, has been sentenced by U.S. District Court Judge Mark H. Cohen to seven years in prison to be followed by three years of supervised release, and to pay restitution of $2.4 million.
Hendrickx H. Toussaint, 44, of Decatur, Georgia, has also been sentenced by U.S. District Court Judge Mark H. Cohen to three years, ten months in prison to be followed by three years of supervised release, and to pay restitution of $1.2 million.
This case was investigated by the Federal Bureau of Investigation and United States Postal Inspection Service.
Assistant U.S. Attorney Douglas W. Gilfillan prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Russian Developer of the Notorious “Citadel” Malware Sentenced to PrisonRead the Press Release
ATLANTA - Dimitry Belorossov, a/k/a Rainerfox, has been sentenced to four years, six months in prison following his guilty plea for conspiring to commit computer fraud. Belorossov distributed and installed Citadel, a sophisticated malware that infected over 11 million computers worldwide, onto victim computers using a variety of infection methods.
“Global cyber-crime requires a global response, and this case is a perfect example,” said U.S. Attorney John Horn. “This defendant committed computer hacking offenses on victims in the United States from the relative safety of his home country of Russia, but he was arrested by our law enforcement partners in Spain. As malware and hacking toolkits continue to victimize computer users around the world, we will step up our efforts to focus internationally on the criminals who develop these programs.”
“The FBI, in working with its international partners, continues to demonstrate that international boundaries no longer provide a safe haven for cybercriminals targeting U.S. individuals or interests domestically. Successful investigation and prosecution of cases such as this are directly attributable to the increased capabilities and determination of our cyber trained investigators and our foreign based legal attachés working collectively to not only disrupt and dismantle these foreign based hacking efforts, but also to bring those individuals responsible to justice,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges and other information presented in court: In late 2011, a malicious software toolkit named “Citadel” began appearing for sale on invite-only Internet website forums frequented by cybercriminals. Citadel was a sophisticated form of malware known as a “banking Trojan” designed to steal online banking credentials, credit card information, personally identifiable information, and, ultimately, funds through unauthorized electronic transfers. Citadel electronically infected the computers of unsuspecting individuals and financial institutions, creating “bots,” which cybercriminals, such as Belorossov, then remotely accessed and controlled.
Cybercriminals, including Belorossov, distributed and installed Citadel onto victim computers through a variety of infection methods, including malicious attachments to spam emails and commercial Internet ads containing malware or links to malware. Since 2011, multiple versions of Citadel have been distributed and operated throughout the world. Citadel became one of the most advanced crimeware tools available in the underground market, as it had the capability, among other things, to block antivirus sites on infected computers. According to industry estimates, Citadel, and other botnets like it, infected approximately 11 million computers worldwide and are responsible for over $500 million in losses.
In 2012, Belorossov downloaded a version of Citadel, which he then used to operate a Citadel botnet primarily from Russia. Belorossov remotely controlled over 7,000 victim bots, including at least one infected computer system with an IP address resolving to the Northern District of Georgia. Belorossov’s Citadel botnet contained personal information from the infected victim computers, including online banking credentials for U.S.-based financial institutions with federally insured deposits, credit card information, and other personally identifying information.
In addition to operating a Citadel botnet, Belorossov also provided online assistance with the goal of developing suggested improvements to Citadel, including posting comments on criminal forums on the Internet and electronically communicating with other cybercriminals via email and instant messaging.
For example, in 2012 Belorossov made numerous postings to Citadelmovement.com, an online forum in which Belorossov discussed his Citadel botnet and recommended improvements to the Citadel malware. In those postings, which were in Russian, Belorossov shared his concurrence with the improvements to Citadel recommended by others and commented on the efficacy of additional criminal functions other customers had recommended as enhancements to the Citadel malware.
Belorossov, 22, of St. Petersburg, Russia, has been sentenced by U.S. District Court Chief Judge Thomas W. Thrash Jr., to four years, six months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $322,409.09. Belorossov was convicted on July 18, 2014, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorneys Steven D. Grimberg and Scott Ferber prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga
German Business Charged with Smuggling Realistic Federal Law Enforcement Badges into the United StatesRead the Press Release
ATLANTA – German company Master-Equipment has been charged with manufacturing, selling, and smuggling realistic American federal law enforcement badges into the United States. The charges arise out of an investigation of a phony DEA badge use by Daniel Harbison, a Georgia resident who was sentenced to federal prison after impersonating a DEA agent in June 2015.
“The production and sale of genuine-looking federal badges by Master-Equipment potentially places a badge in the hands of individuals, like Daniel Harbison, who are not law enforcement but use them for their own purposes,” said U.S. Attorney John Horn. “This type of product only serves to undermine the trust the public places in law enforcement.”
“The dismantling of a foreign based company’s ability to sell counterfeit U.S. law enforcement badges to a U.S. market is critical in the post 9/11 era,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office. “While this case was initiated by an unlawful traffic stop by an individual impersonating a federal law enforcement officer, those circumstances and consequences could have been much different and far more tragic.”
According to U.S. Attorney Horn, the criminal complaint, and other information presented in court: Master-Equipment is a distributor and reseller of law enforcement equipment and accessories located in Kaarst, Germany. Master-Equipment uses the website www.badge-police.com to sell and advertise its products over the Internet. Master-Equipment’s website is entirely in English and it contains no German.
Master-Equipment claims that its products are made in America and its website contains an image of a bald eagle, the American flag, and the phrase “God Bless America.” Most of the equipment and accessories sold by Master-Equipment bear the name of American-based law enforcement agencies. The website also contains photographs of and testimonials from purported customers who claim to be former U.S. federal law enforcement officers.
Via its website, Master-Equipment sells a variety of realistic replicas of badges used by American federal law enforcement agencies. For example, Master-Equipment sells badges bearing the name of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), Customs and Border Protection (“CBP”), Drug Enforcement Administration (“DEA”), Department of Homeland Security (“DHS”), Federal Bureau of Investigation (“FBI”), Internal Revenue Service (“IRS”), and United States Marshals Service (“USMS”). Master-Equipment also sells a variety of badges bearing the name of the Central Intelligence Agency (“CIA”).
According to its website, Master-Equipment only sells its badges to “active [and] retired police officers, collectors, or for theatrical production.” Through its website, Master-Equipment implies that it is lawful for a customer to purchase badges as collectable items, so long as the customer does not use the badges to impersonate a law enforcement officer. In fact, under U.S. federal law it is illegal to knowingly manufacture, sell, or possess badges or colorable imitations thereof, which are used by U.S. federal law enforcement departments or agencies, regardless of whether they are used by collectors, theatrical productions, or any other purpose.
In April 2015, an American citizen used a Master-Equipment badge to impersonate a U.S. federal law enforcement officer. Specifically, on April 3, 2015, in Doraville, Georgia, Daniel Harbison (a three-time convicted felon) conducted a traffic stop of a vehicle by engaging police-style green and white flashing lights. Unbeknownst to Harbison, the vehicle was being driven by an off-duty Corporal with the Doraville Police Department. During the unauthorized traffic stop, Harbison wore a T-shirt printed with the letters “DEA,” carried a .45 caliber handgun in a thigh holster, and possessed an identification card purportedly issued by the DEA. The Doraville officer also saw that Harbison possessed a realistic gold and blue badge engraved with the letters “US.” Harbison told the Doraville officer that he was a federal officer. The Doraville officer then stated that other police officers were in route to check the authenticity of Harbison’s law enforcement credentials. Harbison then returned to his car and fled the scene.
Later that day, police officers identified Harbison’s residence and ultimately, he was arrested. At Harbison’s residence, police officers recovered several items, including: (a) a Springfield .45 caliber handgun, (b) a DEA T-shirt, (c) green and white lights, (d) an identification card purportedly issued by the DEA, and (e) a gold and blue badge engraved with the letters “US” that is alleged to have been manufactured by Master-Equipment.
In connection with its investigation, the FBI conducted two undercover operations. In May 2015, a FBI undercover agent, posing as an ordinary U.S. civilian, ordered a FBI badge from Master-Equipment via its website. In June 2015, Master-Equipment mailed the undercover agent a badge engraved with the words “Federal Bureau of Investigation – Department of Justice” and embossed with the letters “U.S.” The fake FBI badge sent by Master-Equipment was realistic and virtually identical to a genuine FBI badge (although it was slightly larger). In July 2015, a FBI undercover agent, posing as an ordinary U.S. citizen, ordered a FBI badge from Master-Equipment via its website. In July 2015, Master-Equipment mailed the undercover agent a badge engraved with the words “Federal Bureau of Investigation – Department of Justice” and embossed with the letters “US” The second fake FBI badge sent by Master-Equipment is realistic and virtually identical to a genuine FBI badge.
On April 23, 2015, a grand jury charged Daniel Harbison, 40, of Dunwoody, Georgia, with being a felon in possession of a firearm. Harbison pleaded guilty to that charge on June 9, 2015. On August 27, 2015, Harbison was sentenced to serve one year, nine months in prison.
On September 10, 2015, Master-Equipment was charged in a six-count criminal complaint with smuggling goods into the United States, trafficking in counterfeit goods, and manufacturing and selling fake federal law enforcement badges. In connection with the criminal complaint, the FBI seized the website (www.badge-police.com) that Master-Equipment used to sell its fake badges.
Members of the public are reminded that the criminal complaint only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Jeffrey W. Davis, Special Assistant U.S. Attorney Erin Sanders, and Assistant U.S. Attorney G. Jeffrey Viscomi are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Nursing Home Administrator Sentenced to Federal Prison for Stealing Veterans BenefitsRead the Press Release
ATLANTA – Denise M. Bailey, the former administrator of an assisted living facility, has been sentenced to federal prison for misappropriating over $300,000 in veterans benefits that belonged to one of the facility’s residents.
“While working as a nursing home administrator, the defendant stole disability benefits from a Vietnam veteran who lived in the nursing home,” said U.S. Attorney John Horn. “This disabled veteran was entitled to every penny of his disability award after honorably serving our country, and needed the money to live comfortably in assisted living – yet Bailey spent the money for her own personal expenses.”
Special Agent in Charge Monty Stokes, U.S. Department of Veterans Affairs, Office of Inspector General said, “today’s sentencing is the result of a joint effort to investigate and prosecute a VA fiduciary who embezzled funds from a veteran who was not capable of managing his financial affairs. We will continue to vigorously investigate those whose actions corrupt the integrity of VA fiduciary programs intended to care for our nation’s venerable veterans.”
According to U.S. Attorney Horn, the charges and other information presented in court: Bailey was the administrator at Azalea Gardens, an assisted living facility located in Conyers, Georgia. One of the facility’s residents was a Vietnam veteran who needed long-term care after suffering a heart attack in 2006. In December 2010, the Department of Veterans Affairs appointed Bailey to be the fiduciary for the veteran. As his fiduciary, Bailey agreed to use any veterans benefits awarded to the veteran only for his benefit.
On July 7, 2011, the VA awarded the veteran retroactive disability benefits in the amount of $313,452.37, which was deposited in an account held in the name of the veteran with Bailey as administrator. Bailey drained the account within four days. After transferring the money from that account to the Azalea Gardens account, Bailey transferred the majority of it to herself, or accounts controlled by her, and used a portion to pay off family credit cards bills. During the later VA investigation, Bailey submitted fraudulent bills in an attempt to justify the payments, falsely claiming that the veteran owed money to Azalea Gardens for extraordinary services. Bailey had not informed the veteran or his family about the VA payment or the alleged bills for these services.
Bailey, 49, of Danielsville, Georgia, was sentenced by United States District Judge Thomas W. Thrash, Jr., to one year in prison and two years of supervised release. A decision will be made at a later date regarding the restitution amount still owed to Henderson’s family. On July 7, 2015, Bailey pleaded guilty to misappropriating veterans funds while acting as a fiduciary.
This case was investigated by Special Agents of the Department of Veterans Affairs, Office of Inspector General. Valuable assistance was also provided by the Conyers Police Department.
Assistant U.S. Attorney Stephen H. McClain prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao/gan/.
Former Heart Surgeon Convicted of Unlawfully Prescribing and Dispensing OxycodoneRead the Press Release
ROME, Ga. – James Earl Chapman, Jr., a doctor from Macon, Georgia, has been convicted after a two-week jury trial on 49 counts of drug trafficking for prescribing and dispensing controlled narcotics at a Cartersville, Georgia, “pill mill” pain clinic that served as a front for the mass distribution of addictive pain killers.
“A doctor’s first responsibility is to do no harm to others, but evidence at trial established that Dr. Chapman relentlessly and aggressively prescribed controlled pain killing medication to patients who were addicted to them,” said U.S. Attorney John A. Horn. “Many of those patients sold the pills for financial gain, and to finance return trips to the clinic. A jury has guaranteed that Chapman is no longer in a position to do harm.”
Daniel R. Salter, Special Agent in Charge of the DEA Atlanta Field Division said of the case, “Removing and ultimately eliminating healthcare providers who unlawfully dispense pharmaceutical products for non-medical reasons is an important part of DEA’s mission. This medical doctor distributed copious quantities of opiate-based pills to scores of drug-seeking patients. At one point, Dr. Chapman received the largest number of Oxycodone pills of all doctors in the state of Georgia. Dr. Chapman will no longer be able to commit such unlawful acts due to the hard work and dedication put forth by our federal, state and local law enforcement counterparts who made this investigation a success.”
“This conviction demonstrates the great work of law enforcement at all levels to investigate and prosecute the illegal distribution of prescription narcotics affecting Georgia and our surrounding states. The GBI remains committed to working with our local and federal partners in drug enforcement to address these types of crimes,” said Vernon Keenan, Director, Georgia Bureau of Investigation.
“We are committed to ‘following the money trail’ to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice,” stated IRS Criminal Investigation Special Agent in Charge, Veronica F. Hyman-Pillot. “This verdict is a vital element in maintaining public confidence that these individuals and others who commit similar crimes will be held accountable.”
“We were glad to see the results of good police work in this case. We believe that the verdict in this case will send a strong message to those who prey on individuals with addiction will not be tolerated. I am pleased with the hard work that went into this case from the investigation to the successful prosecution. It proves to our communities that when law enforcement agencies work together for a common goal good things happens as demonstrated in this guilty verdict. From a local prospective we were grateful for all the assistance we received in investigating and prosecuting this case,” said Captain Mark Mayton, Commander, Bartow-Cartersville Drug Task Force.
According to U.S. Attorney Horn, the indictment, and evidence presented in court: In May 2010, using information from the FBI/NW Georgia Criminal Enterprise Safe Streets Task Force, federal, state and local law enforcement agents joined together in investigation of Atlanta Medical Group, (“AMG”) after learning that the clinic, located in Cartersville, Georgia, was prescribing pain pills outside the bounds of legitimate medical practice. The investigation revealed that James Earl Chapman, Jr., served as the clinic’s primary doctor. Jason Votrobek and Roland Castellanos, both of whom were found guilty in a previous trial, financed and operated the clinic, along with Jesse Violante. Tara Atkins served as the office manager. Violante and Atkins previously pleaded guilty to charges related to their conduct at the clinic.
Chapman, while serving in his role at AMG, failed to fulfill a doctor’s basic obligations to conduct physical examinations of patients and verify medical histories before prescribing astronomical quantities of controlled substances. Significantly, in the first year the clinic opened, Chapman received the highest number of oxycodone pills of any doctor in the State of Georgia. Chapman continued to prescribe controlled substances in dangerous amounts and combinations even after he received notice that many pharmacies in the area were refusing to fill the prescriptions and that the medical board had subpoenaed his records to determine the propriety of his prescribing practices. Those patient records revealed that Chapman knew that at least some of his patients were drug addicts: the records contained information (from a nurse or the “patients” themselves) that those patients had previously purchased the drugs illegally.
In fact, more than 98% of the patients traveled to AMG from surrounding states in order to receive prescriptions for controlled substances. Furthermore, the evidence showed that Chapman was a drug user himself, and that he asked clinic employees to assist him in illegally obtaining narcotics for his own use. For example, on one day in particular, Chapman had another clinic employee fill out narcotics prescriptions for him to sign, as he was too intoxicated to do so himself. Still, his own drug use did not stop him from seeing “patients.”
James Earl Chapman, Jr., 64, of Macon, Georgia, will be sentenced on November 13, 2015, before the U.S. District Judge Harold L. Murphy.
Jason Cole Votrobek, 31, of Vero Beach Florida, and Roland Rafael Castellanos, 34, of Hollywood, Florida, the financiers and operators of AMG were previously convicted by a jury on March 26, 2014. They were both sentenced to 15 years in federal prison.
A third financier and operator, Jesse Violante, 35, of Vero Beach, Florida, and AMG’s office manager, Tara Atkins, 36, of Cartersville, Georgia, each previously pleaded guilty to charges related to their conduct at the clinic. Violante was sentenced to four years, four months in federal prison. Atkins was sentenced to two years in federal prison.
This case was investigated by the Drug Enforcement Administration, the Georgia Bureau of Investigation, the Bartow County Sheriff's Office, and the Internal Revenue Service-Criminal Investigation. This case was initiated by the FBI/ Northwest Georgia Criminal Enterprise Safe Streets Task Force.
Assistant United States Attorneys G. Scott Hulsey, Cassandra J. Schansman, and Laurel R. Boatright prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Defense Contractor Agrees to Pay $4.63 Million to Settle Overcharging AllegationsRead the Press Release
ATLANTA - The United States Attorney’s Office announced that L-3 Communications Corporation, Vertex Aerospace LLC and L-3 Communications Integrated Systems LP (collectively L-3) have agreed to pay $4.63 million to resolve allegations that they inflated labor hours for time spent by independent contractors at the military’s Continental U.S. Replacement Centers (CRC) in Fort Benning, Georgia, and Fort Bliss, Texas, preparing to deploy to overseas posts to support U.S. military operations abroad. The CRCs prepare individuals for deployment by providing orientation briefings, training, health screenings, payroll processing and addressing other administrative matters.
“Contractors owe a duty to the taxpayers to accurately bill the United States for the actual work performed,” said U.S. Attorney John Horn. “This settlement demonstrates our commitment to hold contractors accountable for false billing and restore wrongfully taken funds to the military.”
“The Justice Department is committed to vigorously pursuing all those who knowingly submit false claims under government contracts,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Contractors that seek taxpayer funds must be scrupulous in their billing, and invoice only for work and amounts permitted by their contracts.”
L-3 performed rotary aviation maintenance and support services for the U.S. Army in Afghanistan, Iraq, Egypt and Kuwait under contracts with the U.S. Air Force. The United States alleges that from 2006 through November 2011, L-3 knowingly overcharged the government for time their independent contractors spent at the CRCs by billing for each individual not based on the actual time that individual spent at the CRC, but based instead on the earliest arrival or latest departure time of any other individual who also processed through the center that same day.
“This collaborative investigative effort reflects the Defense Criminal Investigative Service’s commitment to protecting American taxpayers’ interests by ensuring integrity and accountability throughout the Defense contracting system,” said John F. Khin, Special Agent in Charge, DCIS-Southeast Field Office.
“This settlement is a testament to the hard work of our special agents and also highlights the importance of the whistleblower provision of the False Claims Act,” said Director Frank Robey of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “In this particular case, a concerned citizen wasn’t afraid to speak up, alerted the proper authorities, and helped save the U.S. government millions of dollars.”
The allegations settled arose from a lawsuit filed by a whistleblower, Robert A. Martin, a former L-3 independent contractor, under the qui tam provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. Mr. Martin will receive $798,675 from the recovery announced.
This case was investigated by Special Agents of the Defense Criminal Investigative Service and U.S. Department of the Army Criminal Investigation Command’s Major Procurement Fraud Unit, with assistance from the Defense Contract Audit Agency. The civil settlement was reached by Assistant United States Attorney Christopher J. Huber and Trial Attorneys from the Department of Justice Civil Division’s Commercial Litigation Branch.
The lawsuit is captioned United States ex rel. Martin v. L-3 Communications Corp., et al., 1:10-CV-1622-CAP (N.D. Ga.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Atlanta Doctor Indicted for Tax EvasionRead the Press Release
ATLANTA – Dr. Debra Johnson-Jordan, a physician in East Point, Georgia, has been arraigned on federal charges of tax evasion and failing to file a federal income tax return.
“The indictment alleges that, despite earning significant income, this doctor failed to file tax returns for several years in a row, and then claimed that she was exempt from paying taxes,” said U.S. Attorney John Horn.
“IRS Criminal Investigation is sworn to protect the tax system and bring to justice those who steal from the Treasury,” stated Veronica F. Hyman-Pillot, Special Agent in Charge. “Dr. Jordan stole from the American people by failing to file tax returns and pay the taxes that she owed for numerous years.”
According to U.S. Attorney Horn, the indictment, and other information presented in court: Johnson-Jordan, who practices medicine in East Point, Georgia, is charged with two counts of tax evasion for filing false W-4 forms with her employer claiming that she was exempt from paying federal income taxes for tax years 2011 and 2012. Johnson-Jordan claimed she was exempt from paying federal income taxes despite earning at least $363,376. Johnson-Jordan is also charged with one count of failing to file a federal income tax return for 2010, despite earning at least $175,943. The indictment also alleges that Johnson-Jordan failed to file federal income tax returns for tax years 1997-2007 and 2010-2012.
Debra Johnson-Jordan, 58, of Winder, Georgia, was arraigned before U.S. Magistrate Judge Janet F. King. She was indicted by a federal grand jury on August 26, 2015.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Assistant U.S. Attorney Jeffrey Brown is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Twelve Charged in Scheme that Allowed Georgia Inmates to Sell Drugs and Defraud Consumers from Inside PrisonRead the Press Release
ATLANTA – Two former Georgia Department of Corrections (GDOC) employees, four current Georgia state inmates, three recently paroled inmates, and three others have been charged federally with drug trafficking, extortion, wire fraud conspiracies, wire fraud, and identity theft offenses, as detailed in two indictments unsealed today. Much of the criminal conduct allegedly was committed inside Georgia state prisons.
“Prisons serve to punish and rehabilitate convicted offenders and deter crime—not enable it,” said U.S. Attorney John Horn. “These indictments allege that, after being placed in prison to protect society from their criminal behavior, these inmates capitalized on their ready access to cell phones and other contraband to further victimize citizens outside the prisons. Prisons should be a place where we have confidence that inmates are not operating identity theft schemes and drug distribution rings.”
“The federal indictments and arrests of these individuals represent not only the larger problems posed by contraband such as cell phones in prisons, but also the joint law enforcement effort to address it,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office. “The FBI will continue to work with its state partners, to include the Georgia Department of Corrections, in addressing the many unique challenges facing correctional facilities and those that work within them”.
“Criminals who are able to operate inside correctional facilities and conduct this level of criminal activity are a direct threat to the safety of the public. The GBI is fully committed to working with the Georgia Department of Corrections and the Federal Bureau of Investigation to address this type of crime,” said Vernon Keenan, Director, Georgia Bureau of Investigation.
According to U.S. Attorney Horn, the charges and other information presented in court: As alleged in the indictments, the wide-ranging conspiracy involved GDOC employees at Phillips and Valdosta State Prisons who helped smuggle cell phones and other contraband to inmates in exchange for bribe payments. These cell phones were often equipped with touch screens and internet access that enabled the prisoners to coordinate drug transactions, commit identity theft and credit card fraud, and even post on social media and buy products online.
According to the indictment, the charged GDOC employees allegedly helped smuggle methamphetamine, prescription pain medication, marijuana, liquor, tobacco, and take-out food into the prisons. At times, the inmates even bragged about watching streaming movies while in solitary confinement. In one instance, an inmate allegedly used his contraband cell phone to arrange a “hit” on another inmate whom he suspected of cooperating with law enforcement.
The following individuals were arrested today, and most of the defendants made their initial appearances before United States Magistrate Judge Janet F. King:
Former GDOC employees who were charged are:
- Anekra Artina Williams, 20, of Nashville, Georgia, was a GDOC guard at Valdosta State Prison, in Valdosta, Georgia. Williams has been charged with one count of conspiring to distribute at least 50 grams of methamphetamine; one count of distributing methamphetamine; and one count of conspiring to interfere with commerce by extortion.
- Charonda Edwards, a/k/a “John,” 29, of Decatur, Georgia, was a kitchen worker at Phillips State Prison, in Buford, Georgia. Edwards has been charged with one count of conspiring to distribute methamphetamine and marijuana; and one count of interfering with commerce by extortion.
The current GDOC inmates who were charged are:
- Donald Howard Hinley, 51, was an inmate at Valdosta State Prison prior to his arrest, has been charged with one count of conspiring to distribute at least 50 grams of methamphetamine; one count of distributing at least 50 grams of methamphetamine; and three counts of distributing methamphetamine.
- Mims Morris, 24, who was an inmate at Phillips State Prison prior to his arrest, has been charged with one count of conspiring to distribute methamphetamine and marijuana; two counts of conspiring to commit wire fraud; two counts of committing wire fraud; and two counts of aggravated identity theft.
- Johnathan Silvers, a/k/a “Turtle,” 28, who was an inmate at Phillips State Prison prior to his arrest, has been charged with one count of conspiring to distribute methamphetamine and marijuana.
- Adam Smith, 30, who was an inmate at Phillips State Prison prior to his arrest, has been charged with one count of conspiring to distribute methamphetamine and marijuana.
The paroled GDOC inmates who were charged are:
- Ruben Ruiz, a/k/a “Flaco” and “Scrappy,” 34, of Gainesville, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of methamphetamine. Ruiz was paroled in March 2014 from GDOC custody after serving a 10-year sentence.
- William A. Matthews, a/k/a “Two Young,” 30, of Union City, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of methamphetamine; and one count of distributing methamphetamine. Matthews was paroled in August 2014 from GDOC custody after serving a 10-year sentence.
- Kansas Bertollini, a/k/a “Guido,” 35, of Kathleen, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of methamphetamine; and one count of distributing at least 50 grams methamphetamine. Bertollini was paroled in June 2014 from GDOC custody after serving an 11-year sentence.
The other individuals who were charged are:
- Tiffany Allen, 27, of Cleveland, Georgia, has been charged with two counts of conspiring to commit wire fraud; and two counts of aggravated identity theft.
- Monique Kinney, a/k/a Monique Reed, 26, of Augusta, Georgia. Kinney was charged with one count of conspiring to commit wire fraud; and one count of aggravated identity theft.
- Opal Marie Hayden, 58, of Acworth, Georgia, has been charged with one count of conspiring to distribute at least 50 grams of methamphetamine; and three counts of distributing methamphetamine.
Valdosta State Prison
The GDOC is an agency of the State of Georgia and responsible for overseeing the operations of state prisons. Over 55,000 inmates are incarcerated in Georgia state prisons. According to the indictment, GDOC inmates increasingly obtain and use cellular telephones to further their criminal activities while incarcerated. Among other things, cellular telephones are used to traffic drugs, commit fraud schemes, and organize criminal activity both inside and outside of prison. Inmates regularly buy and sell cellular telephones inside of prison, many of which are the latest models.
The first of two indictments focuses on Valdosta State Prison (VSP), which is located in Valdosta, Georgia, and houses adult male inmates. Donald Hinley was an inmate at VSP.
The Smuggling Scheme
The indictment alleges that inmates typically relied on prison employees to smuggle cellular telephones and other contraband into VSP. In 2014 and 2015, Hinley routinely arranged to have telephones, cigarettes, liquor, prescription pain medication, and illegal drugs smuggled into the prison by prison employees. Anekra Williams was a GDOC corrections officer who allegedly smuggled contraband into VSP in exchange for bribe payments. The indictment alleges that Williams smuggled drugs, tobacco and other items requested by inmates into VSP. On one such occasion, Williams allegedly smuggled methamphetamine and prescription pain medication into the prison for Hinley in exchange for $500. In order to assist with the smuggling scheme, Hinley allegedly arranged to have the contraband packaged in a manner to avoid detection by other prison security officers.
Drug Trafficking from Inside Prison
The indictment alleges that while an inmate at VSP, Hinley coordinated a network of illegal drug suppliers and couriers, from August 2014 through April 2015 that included, among others, Opal Marie Hayden, Ruben Ruiz, William Matthews, Kansas Bertollini, and Williams. With their assistance, Hinley allegedly brokered a number of significant drug transactions in Atlanta and in other areas of Georgia. On multiple occasions, Hinley coordinated the purchase and sale of illegal narcotics by cell phone. In recorded telephone calls, Hinley allegedly bragged “We have good prices and good product.”
The indictment also alleges that in one encounter, Hinley used his contraband cell telephone to call an inmate he knew at Telfair State Prison (TSP) and instructed his associate to kill another TSP prisoner after Hinley confirmed that the inmate was “a snitch” and was likely a prosecution witness against Hinley’s girlfriend. At the time, Hinley’s girlfriend worked as a drug courier in Hinley’s drug organization and was a defendant in a state narcotics case. Hinley allegedly ordered his associate to “shoot every one” of the witness’ family members. Immediately after law enforcement learned of Hinley’s plan, the cooperating inmate was placed in protective custody.
Phillips State Prison
The second indictment focuses on Phillips State Prison (PSP), which is located in Buford, Georgia, and houses adult male inmates. Mims Morris (Morris), Johnathan Silvers (Silvers), and Adam Smith (Smith) were inmates at PSP and were members of the Ghostface Gang. The indictment alleges that while they were inmates at PSP, both Morris and Silvers allegedly obtained cellular telephones and used them to traffic drugs and commit fraud. Morris and Silvers even obtained cellular telephones while they were in segregated custody, charging the devices using the light fixtures in their cells. Silvers allegedly bragged that his cellmate was watching a movie on his cellular telephone while they were in the “hole” together. In a recorded telephone call, Morris talked about posting on Facebook and buying shoes on the Internet. Morris boasted that the guards all knew he had a cellular telephone in segregated confinement.
The indictment also alleges that Tiffany Allen (Allen) and Monique Kinney (Kinney) assisted Morris by using stolen identities to commit fraud. Allen and Kinney communicated with Morris by cellular telephone while he was an inmate at PSP.
The Smuggling Scheme
The indictment alleges that, like VSP, inmates relied on prison employees to bring in cellular telephones and other contraband to PSP. Charonda Edwards (Edwards) was a GDOC contract employee who worked in the kitchen at the prison. Edwards allegedly obtained drugs, tobacco, and other items requested by Silvers in exchange for payment. Edwards then smuggled the items into prison and hid them so the inmates could pick up the contraband. Edwards also allegedly provided valuable information to Silvers in the process such as when the prison would be “locked down.”
Morris, Silvers, and Edwards allegedly relied on prison orderlies and other inmates inside PSP to move drugs, cellular telephones and other items throughout the prison. Morris and Silvers sold the smuggled drugs and contraband to other inmates. In one recorded call, Silvers said that, even though they were in the “hole,” he had food, cigarettes and marijuana, and even expected to get methamphetamine in the near future. Silvers paid Edwards using reloadable prepaid credit cards.
Fraud and Theft from Inside Prison
The indictment alleges that from June 2014 to September 2014, Morris allegedly used his contraband cellular telephone to perpetuate various fraud schemes from inside prison with the assistance of associates on the outside, including Kinney and Allen. The targeted victims were credit card companies and their customers, and job-seekers responding to online advertisements for work.
The Credit Card Scheme
The indictment alleges that on August 26, 2014, Morris called victim “B.T.,” pretending to be a Discover Card representative, working in the “Fraudulent Specialist Department.” He informed B.T. that there were fraudulent charges on her credit card and he needed her credit card number to verify her identity. At his urging, B.T. eventually provided her credit card number to Morris.
While pretending to be B.T., Morris allegedly called a Discover Card representative and was able to access her Discover card account. During the call, Morris used B.T.’s Social Security number and credit card number to authorize a $2,200 transfer to another credit card Morris controlled. Later, Morris allegedly pretended he was B.T. and asked the representative to change the telephone number on the account because he was going to be out of town for several weeks. The Discover representative changed the telephone number to Morris’s prison cell phone. On September 3, 2014, Morris allegedly used B.T.’s information to apply for additional credit cards. With the help of Kinney, Morris was approved for a Capital One Platinum Card using B.T.’s personal information.
The Fake Employment Scheme
On August 31, 2014, Morris texted Allen, telling her he wanted to act as though he was hiring people. Morris allegedly explained that he would obtain personal information from people seeking work and then would order debit cards in their names, using their personal information. Morris commented to Allen that it was “easy as pie” to get someone’s personal information.
The indictment alleges Morris directed Allen to post a fraudulent advertisement on Craigslist.com for job applicants for non-existent construction and roofing jobs. Morris provided a fake company name and an address in Sacramento, California, and even provided his cellular telephone in prison as the telephone number for the fake company so the victims would call him directly and provide their personal information. Allen allegedly attempted to post this information on Craigslist for Morris.
Prison Investigation Also Uncovers Illegal Machinegun Sales
During the federal investigation, FBI agents learned that a woman, later identified as Tiffany Goodson, 34, of Toccoa, Georgia, telephoned an inmate at Jenkins Correctional Center, a privately owned state prison in Millen, Georgia. The inmate received Goodson’s telephone call on a contraband prison cell phone. During that call, Goodson, a convicted felon, allegedly informed the inmate that she knew a man who was willing to build and sell fully automatic machineguns. This inmate later cooperated with federal authorities.
When that information reached the FBI, federal agents identified Goodson and used an undercover agent to purchase two machineguns from her. The agents also identified Goodson’s gun supplier as Robert Burns, 30, of Wahalla, South Carolina. On February 15, 2015, during an undercover operation arranged by the FBI, Mr. Burns drove from South Carolina to Stephens County, Georgia, where he sold Goodson a fully automatic rifle with an obliterated serial number for $2,500.
On July 7, 2015, Goodson and Burns were indicted by a federal grand jury for their roles in a conspiracy to sell illegal machineguns. Earlier today, Mr. Burns pleaded guilty before Senior U.S. District Court Judge Orinda D. Evans. During his plea hearing, Mr. Burns admitted to making and supplying machineguns and to possessing an illegal machinegun with an obliterated serial number. Ms. Goodson’s charges are pending.
Members of the public are reminded that the indictments only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
These cases are being investigated by the Federal Bureau of Investigation the Georgia Bureau of Investigation, and the Georgia Department of Corrections Office of Professional Standards.
First Assistant United States Attorney Kurt R. Erskine, Assistant United States Attorneys Brent Alan Gray and John S. Ghose, and Special Assistant United States Attorneys Erin E. Sanders and Trevor Wilmot are prosecuting these cases.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Vickery Creek Park Backpack Bomber Pleads GuiltyRead the Press Release
ATLANTA - Michael C. Sibley, who placed a backpack containing two pipe bombs at Vickery Creek Park in the Chattahoochee River National Recreation Area, has pleaded guilty to a charge of conveying false and misleading information about a crime.
“In addition to breaking the law, threatening an act of terrorism is a serious matter that diverts scarce law enforcement resources away from legitimate threats and unnecessarily causes alarm,” said U.S. Attorney John Horn. “Sibley’s crime is even more troubling because he attempted to exploit stereotypical fears and prejudices.”
“The guilty plea of Mr. Sibley concludes an investigation that triggered a significant law enforcement response, to include that of numerous bomb technicians, to address the backpack that Mr. Sibley had left at a Roswell, Georgia park on November 4, 2014. This also resulted in a significant investigative effort to identify and locate the person later determined to be Mr. Sibley,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office. “The FBI takes these types of call outs seriously and individuals that engage in this type of criminal conduct will be investigated and presented for federal prosecution. The FBI would like to thank the swift response and continued assistance of the Roswell Police Department and the Cobb County Police Department’s Bomb Squad in addressing this matter.”
According to U.S. Attorney Horn, the charges and other information presented in court: On November 4, 2014, visitors at Vickery Creek Park, which is a part of the Chattahoochee River National Recreation Area in Roswell, Georgia, discovered an abandoned backpack and contacted local law enforcement. An inspection of the bag revealed what appeared to be two completely constructed pipe bombs. Nails and screws were taped to the outside of the tubing consistent with construction designed for maximum fragmentation upon explosion. The pipe bombs also appeared to be ready for remote detonation. The devices, however, did not have a power source, which was required to remotely cause the explosion.
The name written on the abandoned backpack appeared to be a Middle Eastern name. The backpack also contained two books: “The Rape of Kuwait” and “The Holy Qur’an.”
On March 20, 2015, Mr. Sibley voluntarily contacted the FBI and asked to meet with the agents. During this meeting, he confessed to making the devices and to placing them in Vickery Creek Park. Mr. Sibley stated that he placed the bag with these devices, the books and other items in the park to “wake-up” people in the United States. He related that he believes the Mexican border is poorly defended and that many people are entering this country illegally. He also said that he made the explosive devices and placed them in the park to make people realize that if this can happen in Roswell, Georgia, it can happen anywhere.
The sentencing for Michael C. Sibley, 67, of Marietta, Georgia, is scheduled for January 21, 2016.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Tracia M. King is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Georgia National Guard Employee and Two Vendors Sentenced in Corruption SchemeRead the Press Release
ATLANTA - Raytosha Elliott, a former contracting official with the Georgia National Guard, and the owners of two vendor companies have been sentenced to federal prison for a corruption scheme wherein Elliott awarded contracts to the vendors in exchange for illegal kickbacks.
“Elliott took advantage of her position with the Georgia National Guard, and awarded no-bid contracts to her friends in exchange for illegal kickbacks,” said U.S. Attorney John Horn. “She and two of her friends stole over $150,000 in funds that were intended to maintain defense facilities and instead spent the money on themselves.”
“The sentencing of these individuals to federal prison will not only hold them accountable for their greed based criminal conduct, but will also send a clear message to others that might consider a similar scheme. The FBI will continue to work with its various law enforcement partners to ensure that those individuals engaged in these types of activities are identified, investigated and presented for federal prosecution,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“Corruption at any level diminishes the hard work and dedication of the thousands of government employees who are dedicated to providing honest services to the American public,” stated Veronica F. Hyman-Pillot, Acting Special Agent in Charge. “IRS Criminal Investigation stands committed to weed out individuals who misuse their job as a path to financial success by using greed and corruption.”
“This is a prime example of our determination, along with our fellow law enforcement agencies, to investigate allegations of criminal activity and corruption involving the National Guard and other DOD entities,” said Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “Regardless of the 'scope and size' of the allegations, our CID Special Agents are committed to working side-by-side with other agencies to help eradicate this type of activity.”
“The Defense Criminal Investigative Service is committed to protecting the integrity of the DOD contracting process, including the GA National Guard,” said John F. Khin, Special Agent in Charge, Southeast Field Office, Defense Criminal Investigative Service. “This sentencing sends a message to individuals who fail to follow the rules that along with our other law enforcement partners, violators will be brought to justice.”
“Accountability of violators is paramount when dealing with public corruption. GBI’s partnership with the FBI in the Public Corruption Task Force is essential for continued public trust in Georgia. When those who violate the law and violate public trust are held accountable, and go to jail – if this occurs, it sends a clear message that public corruption is not acceptable in this state,” said Vernon Keenan, Director, Georgia Bureau of Investigation.
“We hope these sentences serve as a deterrent to those who desire to pilfer the state and federal governments' coffers. We also believe this case exemplifies how multiple agencies can work together to achieve a common goal: to serve the public who depends on us to defend the integrity of government programs. As in this case, our office will remain dedicated to protecting taxpayers' money by continuously pursuing fraud, waste, abuse and corruption within the executive branch of state government,” said Deb Wallace, State Inspector General, Georgia Office of the Inspector General.
According to U.S. Attorney Horn, the charges and other information presented in court: From May 2007 through April 2012, Elliott worked for the Georgia Department of Defense, the state agency charged with coordinating and supervising all agencies and functions of the Georgia National Guard. Elliott worked as an Engineering Operations Manager at the Clay National Guard Center, located at Dobbins Air Reserve Base, in Marietta, Georgia.
In that position, Elliott worked with engineering firms to develop bid-ready construction projects, prepared bid documents, and oversaw no-bid purchase orders. Under the rules governing the contracting process that Elliott oversaw, projects that cost less than $5,000 did not need to go through a competitive bidding process, allowing Elliott to award the contracts. She certified that the work had been completed for those projects, and facilitated payment to the vendors who allegedly completed such projects.
Elliott awarded numerous contracts under $5,000 to vendor companies created by her friends and associates, including co-defendants Lakeysha Ellis and Angela Thicklin (f/k/a Angela Stanback Kinlaw). In return, Ellis and Thicklin paid Elliott kickbacks, equal to 50% of the value of the contracts, for steering contracts to Ellis’ vendor company, Total Source Solution, LLC, and to Thicklin’s vendor company, 3M Construction LLC.
Elliott awarded Total Source Solution 17 contracts with a total value of approximately $75,000. Elliott awarded 3M Construction 18 contracts with a total value of approximately $78,000. The contracts were for a variety of services supposedly to be performed by the two companies, including electrical work, landscaping, and HVAC work. But the work was never done. Instead, the defendants split the money awarded under the contracts and spent it on personal items, including travel, meals, and merchandise. As part of the scheme, Elliott owned a company named Tech Group Investments, LLC. Ellis and Thicklin took money they received from the Georgia National Guard contracts, and paid kickbacks to Elliott through that company. Elliott falsely certified that the work had been completed to facilitate payment by the Georgia National Guard.
Elliott and Ellis engaged in a similar fraud scheme from January 2009, through May 2011, when Ellis was an accountant at Baumueller-Nuermont Corporation, an industrial equipment company with offices in Atlanta. Her job responsibilities included payroll and paying vendors.
While employed as Baumueller-Nuermont’s accountant, Ellis fraudulently funneled money to the defendants’ two sham companies, Total Source Solution and Tech Group Investments. Ellis wrote corporate checks to Total Source Solution, signed her name on the checks, and forged the signature of the Vice President on the checks, to ensure that the checks could be negotiated. Ellis recorded these payments in the check registry to reflect falsely that the checks had been issued to true vendors (such as American Express) when in fact they went to Ellis’ company.
As part of the scheme, Ellis also falsified employee records in the corporation’s payroll system to disguise payments to the defendants’ two companies. Ellis created phantom employees by altering the names of real employees (by switching their first and last names) and slightly changing their Social Security numbers. She then caused the payroll system to make fraudulent salary payments to Total Source Solution and Tech Group Investments for these new, non-existent employees.
Baumueller-Nuermont lost about $85,000 from this scheme.
Raytosha Elliott, 35, of Atlanta, Georgia, was sentenced yesterday to two years, ten months in prison and three years of supervised release, and ordered to pay $115,902 in restitution to the Georgia National Guard and $26,500 in restitution to Baumueller-Nuermont Corporation by U.S. District Judge Amy Totenberg. Elliott was also ordered to pay $20,000 in restitution to WebBank based on a fraudulent loan application she submitted to the bank in September 2013. In that application, Elliott falsely inflated Tech Group Investments’ sales and gross receipts, and provided a fraudulent federal tax return in support of those figures, to obtain the loan. She was also ordered to perform 60 hours community service.
Lakeysha Ellis, 37, of Decatur, Georgia, was sentenced to nine months in prison and three years of supervised release, and three months of home confinement. She was also ordered to pay $74,902 in restitution to the Georgia National Guard and $81,487.88 in restitution to Baumueller-Nuermont Corporation. Both defendants previously pleaded guilty to two counts of conspiracy.
Today, Angela Thicklin, 45, of Atlanta, Georgia, was sentenced to one year, nine months in prison and three years of supervised release including ordered to pay $78,640 in restitution to the Georgia National Guard by Judge Totenberg. Thicklin previously pleaded guilty to one count of conspiracy.
This case was investigated by the Federal Bureau of Investigation; the Georgia Bureau of Investigation; the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service; Internal Revenue Service Criminal Investigation; the U.S. Army Criminal Investigation Command; and Deputy Inspectors General of the State of Georgia Office of the Inspector General.
Assistant U.S. Attorney Stephen H. McClain prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao/gan/.
Two Former Hall County Sheriff's Office Employees Sentenced for Taking BribesRead the Press Release
GAINESVILLE, Ga. - David M. Treadwell and Austin Herring have been sentenced in separate cases arising from their former employment with the Hall County, Georgia, Sheriff's Office. Treadwell is a former deputy sheriff who accepted a bribe to tip off a person he believed was a drug dealer if the person came under investigation by Hall County law enforcement. Herring, a former jailer at the Hall County Detention Center, smuggled what he believed to be cocaine into the jail and delivered it to an inmate.
“These men committed serious breaches of public trust,” said U.S. Attorney John Horn. “Herring and Treadwell placed self-interest above their sworn duty to serve and protect the citizens of Hall County. For just a few dollars they were willing to trade in their freedom and their careers in law enforcement.”
“Both of these cases illustrate a disheartening departure from integrity and dedication to service that is expected of our law enforcement officers. Today’s sentencing in federal court illustrates the painful but necessary consequences for that departure,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: In late 2014, while Treadwell was employed as a deputy sheriff with the Hall County Sheriff's Office, he accepted $200 or $300 on five occasions from a person he believed was a drug dealer. In exchange for the money, Treadwell agreed to alert the drug dealer if it was learned that the drug dealer was under investigation in Hall County.
In February 2015, while Herring was employed as a jailer with the Hall County Sheriff's Office, he was paid $500 on two occasions to take packages he was told contained cocaine to an inmate inside the jail. On each occasion, Herring took the package to the inmate who was cooperating with the investigation. The inmate then turned the package over to investigators. Herring did not open or tamper with either package, but on each occasion he was specifically told by the person who gave it to him that the package contained cocaine from Mexico. In actuality, neither package contained a controlled substance.
Treadwell and Herring were fired by the Hall County Sheriff's Office immediately upon their respective arrests.
David M. Treadwell, 33, of Gainesville, Georgia, was sentenced to one year, one day in prison to be followed by two years of supervised release, and a $1,000 fine. Treadwell was convicted on these charges on May 12, 2015, after he pleaded guilty.
Austin Herring, 19, of Murrayville, Georgia, was sentenced to six months in prison to be followed by three years of supervised release. As a special condition of supervised release, he must serve the first six months on home confinement with electronic monitoring. Herring was convicted on these charges on May 12, 2015, after he pleaded guilty.
Both cases were investigated by the Federal Bureau of Investigation with assistance from the North Georgia Major Offenders Task Force, which includes deputy sheriffs from the Hall County Sheriff's Office.
Assistant U.S. Attorney William L. McKinnon, Jr. prosecuted both cases.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Savannah ATF Task Force Officer Charged with Theft of Government MoneyRead the Press Release
Savannah, Ga. – Former ATF Task Force Officer Daryle McCormick has been arraigned on a charge that he fraudulently claimed to have worked approximately 800 hours of overtime resulting in more than $19,500 in additional wages.
“As a federal officer, McCormick was expected – at the very least – to obey the laws that he swore to enforce,” said U.S. Attorney John Horn. “The indictment alleges McCormick violated the law and the trust placed in him by bilking the government out of almost $20,000 in overtime for hours he never worked.”
“The integrity of law enforcement is just as much, if not more, at the heart of these allegations as the monetary loss amounts are. The allegations contained in these charges are serious and the government’s response to those allegations reflects it,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“The DOJ OIG appreciates the efforts of the U.S. Attorney’s Office and the FBI to protect taxpayer funds and ensure that federal task force officers are held to the same high standards as any federal employee,” said Special Agent in Charge Robert Bourbon of the DOJ OIG’s Miami Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: From approximately November 25, 1996, to May 7, 2015, Daryle McCormick served as a police officer with Savannah-Chatham Metropolitan Police Department headquartered in Savannah, Georgia. From that position, McCormick became a federally‑deputized Task Force Officer with the U.S. Department of Justice’s Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”). McCormick served as a Task Force Officer with the ATF from approximately September 6, 2005 to June 17, 2014.
As an ATF Task Force Officer, McCormick was eligible to receive overtime pay for working more than eight hours per day. To be paid, McCormick was required to submit an overtime pay request to the ATF, listing the dates worked, the number of hours worked, and the general subject matter of the work. When submitting requests to be paid for overtime hours purportedly worked, McCormick made the following certification: “I certify that the above time was duly earned. I understand that my misstatement concerning the aforementioned time may be cause for dismissal.” Ultimately, when approved, payments for McCormick’s fraudulently claimed overtime came from the U.S. Department of Justice.
From October 2010 to September 2013, McCormick allegedly engaged in a scheme to unlawfully commit overtime fraud by repeatedly submitting overtime payment requests to the ATF for hours that he never worked. For example: the indictment alleges that: (1) McCormick claimed to work overtime on days when he had worked a full day with the ATF and had also worked up to an additional four hours at a second job for a local church; (2) McCormick claimed to have worked overtime conducting surveillance or undercover operations, even though no ATF operations occurred on those dates; and (3) McCormick claimed to have worked overtime conducting surveillance or undercover operations; however, McCormick never drafted reports summarizing the alleged ATF operations.
According to the indictment, from approximately October 18, 2010 to September 28, 2013, McCormick falsely claimed to have worked almost 800 hours in overtime when in fact, he had not worked those overtime hours. Based on those false overtime requests, the Department of Justice paid McCormick more than $19,500 for overtime hours that McCormick never worked.
On August 31, 2015, Daryle McCormick, 47, of Pooler, Georgia, was charged via criminal information with Theft of Government Money.
Members of the public are reminded that the information only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Justice Office of the Inspector General.
Special Assistant U.S Attorney Jeffrey W. Davis is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Millenium Capital Exchange CEO Sentenced to Federal Prison for Running Forex Ponzi SchemeRead the Press Release
ATLANTA - Stafford S. Maxwell, the former owner and Chief Executive Officer of Millennium Capital Exchange, Inc., was sentenced to three years, nine months years in prison for orchestrating a multi-million dollar foreign exchange market Ponzi scheme.
“With false promises of trading success, Maxwell defrauded investors across the country out of more than $2 million,” said U.S. Attorney John Horn. “To those tempted by investment schemes that seem too good to be true – be cautious – because promises of high rates of return are often red flags for fraud.”
“The FBI continues to see such investment based fraud cases that offer their investors high rates of returns with minimum or no risk. While many of the victim investors are still trying to recover financially, it is hoped that they find some solace in today’s sentencing of Mr. Maxwell to federal prison,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: In March 2007, Maxwell incorporated and owned Millennium Capital Exchange, Inc. (“Millennium”), which purported to be a foreign exchange market trading firm. The foreign exchange market (or forex market) is the global market in which participants buy, sell, exchange, and speculate on currencies. The forex trading market consists of banks, commercial companies, central banks, investment management firms, hedge funds, retail forex brokers, and individual investors. Forex trading involves the trading of currencies from different countries against each other. An example of a forex trade is buying Japanese yen while simultaneously selling United States dollars. Trading in foreign exchange markets frequently exceeds $5 trillion per day.
From about 2008 to January 2012, Maxwell solicited investments from individuals across the United States with promises of high fixed rates of return to be generated from successful foreign currency trading. In particular, to obtain money from investors, Maxwell falsely stated that: (a) he possessed excellent forex trading skills; (b) he had a long history of forex trading success; (c) investors would earn an annualized rate of return on their investments from approximately 48% to 72%; (d) he used “stops” and “floors” on currency trades to insure that the gains would be large, but that the losses would be small; (e) investors had realized significant gains based on his trading; and (f) he had reserve funds that enabled him to cover any trading losses.
In fact and in truth, Maxwell: (a) had little success executing forex trades; (b) lost almost all the money that he traded in forex markets; (c) was unable to pay investors the promised investment dividends; and (d) possessed no reserve fund to cover forex trading losses.
According to Millennium’s business model, Maxwell was supposed to use the invested funds to make forex trades through accounts at a financial firm in Geneva, Switzerland. Based on his false representations, investors wired Maxwell over $2 million, expecting that the funds would be traded in the Swiss accounts. After receiving money from investors, however, Maxwell diverted approximately half of the money for other illegal purposes. First, in an effort to perpetuate the scheme and make it appear that he was a successful forex trader, Maxwell used the money received from new investors (that was supposed to be traded on the forex market) to pay “dividends” to older investors. Second, Maxwell used the money received from investors to pay his own personal living expenses. In the end, Maxwell spent or lost almost every dollar invested with him.
On March 17, 2015, Stafford S. Maxwell, 46, of Mableton, Georgia, was indicted on 10 counts of conspiratorial and substantive wire fraud. Maxwell pleaded guilty to all the charges on June 29, 2015. Maxwell was sentenced to three years, nine months in prison and was ordered to pay approximately $1,434,628 in restitution to his victims.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Jeffrey W. Davis prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao/gan/.