Northern District of Georgia
Press releases recorded for this federal judicial district.
Former Newton County Deputy Sheriff Pleads Guilty to Firearms ChargeRead the Press Release
ATLANTA - Darrell Mathis has pleaded guilty to a charge of possessing a firearm in furtherance of a drug trafficking crime.
“The defendant dealt drugs while armed with a gun while he was a deputy sheriff,” said United States Attorney Sally Quillian Yates. “He was sworn to uphold the law and to protect the public from the crimes that he committed himself. Today’s guilty plea provides important reassurance to the community that corrupt law enforcement officers have no place in our community and will be held accountable for their actions.”
Ricky Maxwell, Acting Special Agent in Charge, FBI Atlanta Field Office, stated: “A career in law enforcement comes with not only immense responsibilities but also temptations to stray from those responsibilities. Former Deputy Mathis unfortunately gave in to those temptations, the results of which ended his career and damaged the public’s trust in those others serving honorably. The FBI will continue its efforts to identify, investigate, and present for prosecution, those individuals who engage in similar such corrupt and criminal conduct.”
According to United States Attorney Yates, the charges and other information presented in court: In April 2013, it came to the attention of the Federal Bureau of Investigation that Mathis, a deputy sheriff with the Newton County Sheriff’s Office, was engaged in distributing marijuana. From May through September 2013, Mathis sold various quantities of marijuana to a confidential source who was working with the FBI, as well as to an undercover FBI agent. On at least two occasions, Mathis sold marijuana from his marked patrol vehicle while wearing his Newton County Sheriff’s Office uniform.
On August 8, 2013, Mathis sold one pound of marijuana to an undercover FBI agent. Following that sale, Mathis and the undercover FBI agent went to meet with another undercover FBI agent to discuss the sale of additional quantities of marijuana. Mathis brought his NCSO badge and his firearm to the meeting. Mathis told the undercover agent that he was bringing his firearm to the meeting “just in case.” During the meeting, Mathis told the second undercover FBI agent, who Mathis believed to be a marijuana and cocaine trafficker, that he was a police officer, pulled out his badge, and stated, “Don't worry, I'm on your side.” Mathis was arrested on September 19, 2013, when he met with the undercover FBI agent while in possession of one pound of marijuana.
The charge in this case carries a maximum sentence of life imprisonment and a mandatory minimum sentence of five years' incarceration, as well as a maximum fine of $250,000. 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.
Darrell Mathis, 41, of Lithonia, Ga., is scheduled to be sentenced on March 5th, at 2:00 p.m. before United States District Judge Orinda D. Evans.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Jamie L. Mickelson 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
California Couple Convicted of Federal Credit Card Fraud and Identity Theft ChargesRead the Press Release
ATLANTA - Elton Lee Flenaugh and Deje D. Silas have been convicted of federal credit card fraud and identity theft charges.
“This case highlights the need for aggressive federal investigation and prosecution of credit card fraud and identity theft crimes,” said United States Attorney Sally Quillian Yates. “We commend the U.S. Secret Service for synchronizing local law enforcement activities in multiple cities to bring this brazen, multi-state scheme to a halt, and these defendants to justice.”
“The defendants’ criminal actions reflect how advancements in digital technology can alternatively have a negative effect on our communities. The Secret Service will continue to collaborate with its law enforcement partners and the public and private sectors to actively investigate and arrest those that commit crimes that prey on unsuspecting victims,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office.
According to United States Attorney Yates, the charges, and other information presented in court: Flenaugh and Silas had a romantic relationship dating back several years. On February 9, 2013, Flenaugh and Silas were scheduled to fly from Atlanta to Los Angeles. During the pre-flight security screening process, alert TSA security officers noticed a suspicious package in Flenaugh’s carry-on bag and, upon further inspection, found nearly 100 fraudulent credit cards secreted inside of a double-sealed manila envelope, which had been hidden inside of an empty, foil-lined Lay’s potato chip bag. 33 of the cards were embossed in Silas’ name, 28 were embossed in three different aliases used by Flenaugh, and 21 were blank and had not yet been embossed. Subsequent searches by the Atlanta Police Department revealed fraudulent driver’s licenses inside of the protective case attached to Silas’ cell phone, and underneath the removable insole of one of Flenaugh’s shoes in the carry-on bag.
Additional investigation revealed fraudulent credit cards, licenses, and stolen credit card account and identity information of hundreds of people. These were found in personal items seized from and during searches of Google e-mail accounts controlled by Flenaugh and Silas, an Apple iPad seized from them at the airport, and a 2007 BMW M6 automobile registered to one of Flenaugh’s aliases.
The investigation showed that the scheme began at least by early 2012 and continued until Flenaugh and Silas’ arrests in February 2013. The scheme involved obtaining credit and debit card account information of hundreds of people, which were then used to manufacture fraudulent credit cards. The cards were made to appear as if they had been issued by major financial institutions such as Chase Bank, U.S. Bank, and Capital One. The defendants also obtained personal identifying information -- including Social Security numbers, dates of birth, and credit information -- of dozens of people, which were used to create fraudulent driver’s licenses to use with the fraudulent credit cards. The fraudulent credit cards were then embossed with the names used on the fraudulent driver’s licenses. The issuing banks and the names embossed on the fraudulent credit cards were merely a front to make them appear legitimate. The magnetic stripes on those cards were encoded with the actual debit and credit card account information of account holders at dozens of financial institutions throughout the country, but primarily at credit unions located in California, Florida, Georgia, Oregon, and Washington.
In at least three instances identified to date, Flenaugh and Silas opened fraudulent credit card accounts in one of the stolen identities and made thousands of dollars in unauthorized charges. As part of his plea agreement with the United States, Flenaugh agreed that he is responsible for losses between $200,000 and $400,000.
Elton Lee Flenaugh, a/k/a Josh Ford a/k/a Ali Waheed, 34, of Richmond, Ca., and Deje D. Silas, 21, of San Francisco, Ca., were originally arrested and charged by the Atlanta Police Department at the airport on February 9th, and taken into custody by the Clayton County Sherriff’s Office.
On March 4, 2013, the U.S. Secret Service took Flenaugh into federal custody at the Clayton County Jail after Clayton County authorities indicated that Flenaugh had posted bond and would be released from custody in Clayton County. A federal complaint was filed against him later that day. On March 7, 2013, the court ordered Flenaugh detained as a flight risk and as a danger to the community, and he has remained in custody since then. A federal grand jury indicted Flenaugh on the instant charges on April 2, 2013.
Flenaugh pleaded guilty today to one count of possession of 15 or more counterfeit or unauthorized access devices, and one count of aggravated identity theft. The charge against him for possession of counterfeit or unauthorized access devices carries a maximum sentence of 10 years in federal prison, and the aggravated identity theft charge carries a mandatory minimum sentence of two years in federal prison, which is required to be imposed consecutive to any sentence imposed on the possession charge. Each of the charges also authorizes a fine of up to $250,000. 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.
Silas remained in Clayton County custody until May 8, 2013, when she agreed to waive indictment and appeared in federal court on a Criminal Information pursuant to a negotiated plea agreement. On May 21, 2013, she pleaded guilty to one count of conspiracy to possess 15 or more counterfeit or unauthorized credit cards. On August 28, 2013, the court sentenced Silas to three years, five months in federal prison in connection with the scheme. Silas is currently serving her sentence.
Sentencing for Flenaugh is scheduled for Feb. 27, 2014, at 2:00 p.m. before Senior United States District Judge Orinda D. Evans.
This case is being investigated by Special Agents of the United States Secret Service. Valuable assistance has been provided by the Hartsfield-Jackson Atlanta International Airport division of the Atlanta Police Department, the Office of the Chief Counsel of the Transportation Security Administration, the City of Atlanta Department of Aviation, the Miami-Dade State’s Attorney’s Office, the San Francisco Field Office of the Federal Bureau of Investigation, the Investigations Division of the California Department of Motor Vehicles, and the Oakland Police Department.
Assistant United States Attorney David M. Chaiken is prosecuting the case.
Anyone who believes they may be the victim of identity theft is strongly encouraged to request and review their credit reports from the three nationwide consumer credit reporting companies; Equifax, Experion, and Trans Union, to be sure everything on the reports are authorized, and that they request a fraud alert from the companies. It is also suggested that they immediately close any accounts that have been compromised or opened fraudulently. Those who do online banking or manage other accounts online, check these accounts regularly and be sure passwords are strong. To report identity theft, contact the Federal Trade Commission at: http://www.consumer.ftc.gov/articles/0277-create-identity-theft-report or the FTC Identity Theft Hotline at 1-877-438-4338 or TTY 1-866-653-4261.
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/.
Rapper Gucci Mane Arraigned on Federal Gun ChargesRead the Press Release
ATLANTA – Radric Davis, an Atlanta-based rap artist who performs under the name Gucci Mane, has been charged in federal court with two separate counts of possessing a firearm while being a felon.
“The indictment charges that on two separate occasions, this defendant, a convicted felon, threatened individuals, including the police and his attorney with a gun” said United States Attorney Sally Quillian Yates. “This is how people get hurt, and we are committed to ensuring that convicted felons not have guns.”
“When offenders such as this use firearms to threaten individuals, including law enforcement officers sworn to protect our community, ATF takes this very seriously,” said ATF Special Agent in Charge Christopher Shaefer. “ATF remains on the frontline of preventing violent crime along with our law enforcement partners and will continue to pursue those who violate the law, regardless of their celebrity status.”
“The Atlanta Police Department has made it a priority to take violent repeat offenders off our city streets and see that they are held responsible for their actions. We are thankful for the cooperation with our partner agencies, especially the U.S. Attorney’s Office, in bringing Mr. Davis to justice. We cannot tolerate convicted felons ignoring the law by carrying firearms and endangering our citizens,” said Atlanta Police Chief George N. Turner.
According to United States Attorney Yates, the charges, and other information presented in court: On September 12, 2013, Davis, who was a felon at the time, was found in possession of a firearm. Then, just two days later, on September 14th, he again possessed a firearm different from the earlier gun. On both occasions, Davis displayed the loaded firearm, acted erratically, and made threats to individuals, including police and his attorney.Davis, 33, of Atlanta, Ga., was indicted by a federal grand jury on November 19, 2013. He made his initial appearance before Magistrate Judge Linda T. Walker and was detained in custody pending his trial.
Each charge of being a felon in possession of a firearm carries a maximum sentence of 10-years in prison and a fine of up to $250,000. In determining the actual sentence, the sentencing Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Members of the public are reminded that an indictment contains only allegations. 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 law enforcement partner members of the Violent Repeat Offenders Initiative, including the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Atlanta Police Department.
Assistant United States Attorney Kim S. Dammers 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/.
Owner of Atlanta Income Tax Preparation Firm Pleads Guilty to Multi-Million Dollar Refund FraudRead the Press Release
ATLANTA - Anita R. Ford, a/k/a Anita R. Dixon has pleaded guilty today for aiding or assisting in the presentation and filing of false personal income tax returns with the U.S. Internal Revenue Service.
“By filing thousands of false tax returns this defendant caused the U.S. Treasury to issue millions of dollars in fraudulent refunds to her clients,” said United States Attorney Sally Quillian Yates. “Her scheme was stopped when she prepared a false tax return for an undercover IRS agent. This conviction should make abusive return preparers think twice before attempting to rob the U.S. Treasury.”
“At the IRS, protecting taxpayer money is a matter we take extremely seriously. An integral part of the agency’s mission involves detecting and catching fraudulent refund claims,” stated IRS Criminal Investigation Special Agent in Charge, Veronica F. Hyman-Pillot. “The message this case sends is that participation in refund fraud schemes does not pay and those who do will be prosecuted. Additionally, taxpayers who receive fraudulent refunds, whether knowingly or not are responsible for repaying the money.”
According to United States Attorney Yates, the charges and other information presented in court: Between 2004 and 2012, Ford owned and operated Georgia Peach Financial & Fast Tax Service (“Georgia Peach”), an Atlanta personal income tax preparation business. During that time Ford prepared and electronically filed (“e-filed”) thousands of Form 1040 individual income tax returns with the IRS that intentionally misstated her clients’ income in order to generate fraudulent refunds. In particular, Ford made up fake side businesses with fake income and fake expenses, and then attached false Schedules C’s (“Profit or Loss from Business”) to the clients’ tax returns showing such made up income and expenses. This had the effect of off-setting her clients’ income tax liability from their real salaries, as reflected in Forms W2 (“Wage & Tax Statement”) issued by their real employers, generating false credits and refunds.
In March 2011, a Special Agent of IRS-CI visited Georgia Peach in an undercover capacity, posing as a taxpayer seeking to have a return prepared. Ford began preparing a tax return in the agent’s cover identity, based on a Form W2 in the cover identity, and informed the agent that they would owe approximately $200. In truth, the agent would have been due a refund of almost $400. Ford then created a fictitious Form Schedule C for a fake beauty salon business, with $30,000 in fake business expenses, generating a fraudulent refund of over $4,000, and e-filed the completed tax return with the IRS. To prepare and e-file the return, Ford charged a fee of $510. Ford did not provide a copy of the tax return to the undercover agent or review it with the undercover agent before e-filing it.
The returns identified in the scheme sought fraudulent refunds ranging from several thousand dollars to tens of thousands of dollars, including at least one fraudulent refund of more than $30,000. As part of her plea agreement with the United States, Ford agreed that she is responsible for between $2.5 and $7 million in losses to the IRS.
Ford, 49, of Jonesboro, Ga., pleaded guilty to both counts of a two-count Criminal Information filed against her on October 4, 2013. The charges each carry a maximum sentence of three years, for a total of six years in federal prison, and a fine of up to $250,000 on each count. Also, as part of the plea agreement, Ford has agreed to pay $5,732,021.50 in restitution to the United States Treasury. The sentencing has not yet been scheduled. 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.
This case is being investigated by Special Agents of IRS-CI.
Assistant United States Attorney David M. Chaiken is prosecuting the case.
The IRS would like to remind people that while most preparers provide excellent service to their clients, the IRS urges taxpayers to be very careful when choosing a tax preparer. Taxpayers should be as careful as they would be in choosing a doctor or a lawyer. It is important to know that even if someone else prepares a tax return, the taxpayer is ultimately responsible for all the information on the tax return.
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/.
Ex-Social Security Employee Sentenced to Prison for ExtortionRead the Press Release
ATLANTA - Cordell Fleming, a former Claims Representative with the Social Security Administration, has been sentenced to one year and one day in prison for extortion.
“Mr. Fleming abused his position of public trust with the Social Security Administration when he extorted money from the disabled, aged, and indigent, in return for expediting their claims” said United States Attorney Sally Quillian Yates. “The defendant earned every day of this prison sentence.”
“While employee fraud is rare in SSA’s dedicated work force, the Office of the Inspector General has no higher priority than the investigation and prosecution of the rare individual who violates the public trust. I’m pleased to see this case brought to a successful conclusion and grateful that the U.S. Attorney’s Office shares our determination to ensure the integrity of SSA’s programs,” said Thomas Caul, Special Agent in Charge, Office of the Inspector General for the Social Security Administration.
According to United States Attorney Yates, the charges and other information presented in court: Fleming worked as a Claims Representative for the Social Security Administration in Morrow, Ga. As part of his duties, Fleming processed requests for Supplemental Security Income (SSI) payments for eligible individuals. SSI is a Federal income supplement program designed to help aged, blind, and disabled people, who have little or no income, by providing cash to meet basic needs for food, clothing, and shelter. As part of his scheme, Fleming offered to “expedite” the processing time of SSI payments to recipients in exchange for a fee. In an attempt to make the expedited SSI payments appear legitimate, Fleming frequently created false documents that purportedly justified the expedited disbursement of the payments. From October 2012 to April 2013, Fleming extorted and attempted to extort money (in amounts ranging from approximately $500 to $1,800) from at least nine SSI recipients or their representatives.
On August 27, 2013, Fleming, 47, of Conyers, Ga., pleaded guilty to Extortion under the Color of Official Right. Today, United States District Judge Timothy C. Batten, Sr. sentenced Fleming to one year and one day in prison to be followed by three years of supervised release, and full restitution. He was also ordered to perform 120 hours of community service.
This case was investigated by Special Agents of the Social Security Administration - Office of the Inspector General.
Special Assistant United States Attorney Diane C. Schulman and Assistant United States 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Man Sentenced for Bribing Federal OfficialRead the Press Release
ATLANTA – Hakeem Omar has been sentenced on charges arising out of a scheme to bribe an immigration official.
“Many dream of obtaining their United States citizenship and pursue that dream lawfully,” said United States Attorney Sally Quillian Yates. “This defendant attempted to subvert the immigration process by offering bribes to a federal agent. Now, after paying thousands of dollars in bribes, he is headed to prison and has been stripped of his fraudulently obtained citizenship.”
“Quite simply, America's immigration system is not for sale," said David P. D’Amato, special agent in charge of ICE’s Office of Professional Responsibility (OPR) for the Southeast Region. "OPR works closely with partners like the U.S. Attorney’s Office to ensure that those who seek to compromise the integrity of our nation's legal immigration system pay a price for their crimes."
According to United States Attorney Yates, the charges and other information presented in court: Beginning in September 2010, and continuing until at least July 2012, Omar and co-defendant Ibrahim Barrie paid a series of bribes to a special agent with the Department of Homeland Security who was working undercover. Over a two-year period, Omar paid thousands of dollars to the undercover special agent for what he believed was assistance with his immigration status in the United States, including obtaining United States citizenship through naturalization.
Hakeem Omar, 31, of Atlanta, Ga., was sentenced by United States District Judge Steve C. Jones to two years in federal prison and was stripped of his fraudulently obtained United States citizenship. He will serve three years of supervised release following his prison term and will be turned over to a duly-authorized immigration official for appropriate removal proceedings.
Omar is the second conspirator to be sentenced in this case. On October 21, 2013, co-conspirator Ibrahim Barrie, 32, of Atlanta, Ga., was sentenced to 24 months in prison. Upon completion of his sentence, Barrie will be turned over to a duly-authorized immigration official for appropriate removal proceedings.
This case was investigated by Special Agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.Assistant United States Attorney Skye 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
MS-13 Members Convicted of Murders and Attempted MurdersRead the Press Release
ATLANTA – Remberto Argueta and William Espinoza have been convicted by a federal jury for committing murders, attempted murders, and armed robberies in Gwinnett and DeKalb counties.
“These two defendants set the standard for violence and disregard for human life as members of the international gang MS-13,” said United States Attorney Sally Quillian Yates. “They spread fear throughout the community by killing innocent pedestrians, shooting suspected rival gang members and robbing innocent people at gunpoint. By finding them guilty, this jury has held them accountable for their crimes.”
“As active members of one of the most violent gangs in the world, these men posed a significant threat to the public safety of our communities,” said Brock D. Nicholson, special agent in charge of ICE HSI Atlanta, which is responsible for agency investigations in Georgia and the Carolinas. “HSI and our partners at the FBI and local law enforcement agencies have taken a strong stand against transnational gangs in Atlanta. These are just the latest convictions that show how successful our efforts have been.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: "Today's conviction in federal court of two violent members of the international gang known as MS-13 adds to the list of successes for those law enforcement officers, investigators and prosecutors who are working hard to neutralize this dangerous criminal enterprise. While these successes are important for the FBI and its various law enforcement partners, it is more important to those particular communities impacted by MS-13's violent crimes."
According to United States Attorney Yates, the charges and other information presented in court: MS-13 is an international gang that has operated in the Atlanta area since at least 2005. The gang members staked out Gwinnett and DeKalb Counties as their home territory. The evidence presented at trial showed that the defendants committed the following crimes:
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Remberto Argueta, along with other gang members, planned to rob Arpolonio Rios-Jarquin, a suspected drug dealer, at a hotel in April 2007. When Rios-Jarquin turned out to have his own gun, Argueta and his fellow MS-13 members engaged in a shootout with Rios-Jarquin that spilled outside the hotel room. Surveillance video showed one of the MS-13 members stopping to pick up Rios-Jarquin’s weapon, which he later showed off as a trophy.
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In October 2007, Argueta and several other MS-13 members were at an apartment complex in Gwinnett County when Argueta spotted suspected rival gang members. He approached them and asked them who they “claimed”—that is, what gang they belonged to. When Christian Escobar responded that he and his friend, Jose Garcia-Barajas, were members of the rival gang 18th Street, Argueta said, “You’re going to die.” Argueta pulled out a handgun and started chasing and shooting at Escobar and Garcia-Barajas. He shot Escobar in the back and Garcia-Barajas in the hip and arm. While shooting at them, Argueta also fired shots into the apartments of nearby residents. An elderly woman testified that one of Argueta’s bullets hit an armchair that she had been sitting in just a few minutes earlier.
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In early July 2008, William Espinoza loaned his .380 caliber handgun to fellow gang members so that they could retaliate against a member of La Raza, a rival gang. An MS-13 member shot a 15-year-old boy who was taking a shortcut through an apartment complex. The boy was not a member of a gang and had traveled from Ohio with his family to visit other family members for the Fourth of July holiday.
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A few weeks later in July 2008, Espinoza and other members of MS-13 were at El Pueblito, a nightclub in DeKalb County, when a fight broke out with suspected members of the rival gang 18th Street. Surveillance video showed Espinoza going out to the parking lot and retrieving a .380 handgun from a car. He approached the club entrance and shot Jayro Arango-Sanchez in the stomach. Arango-Sanchez testified that he was not a gang member and that he was at the club with his girlfriend and brother to celebrate his birthday.
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Just two days later, Espinoza and four other MS-13 members drove to an apartment complex in Gwinnett County to look for pedestrians to rob. After spotting a victim, Espinoza and another gang member got out of their SUV and approached Aurelio Vasquez. Espinoza put his .380 handgun to Vasquez’s head while the other MS-13 member started to search Vasquez’s pockets for money. Vasquez, who was returning home after buying groceries, resisted being robbed, so Espinoza shot him through the head. Espinoza and his fellow gang members wanted to rob Vasquez for beer money.
The sentencing for Remberto Argueta, also known as Pitufo, 27, of Lilburn, Ga., and William Espinoza, also known as Cheberria and Crazy, 31, of Norcross, Ga., will be scheduled at a later date before United States District Judge Richard W. Story. Each of the defendants was convicted of RICO conspiracy involving murder. Argueta was also convicted of Violent Crime in Aid of Racketeering and a firearms offense related to the murder of Arpolonio Rios-Jarquin. Espinoza was also convicted of Violent Crime in Aid of Racketeering and a firearms offense related to the attempted murder of Jayro Arango-Sanchez. Violent Crime in Aid of Racketeering for murder carries a mandatory sentence of life in prison, while RICO conspiracy involving murder carries a sentence up to life. Parole has been abolished in the federal system.
This case is being investigated by Special Agents from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Federal Bureau of Investigation, with assistance from Gwinnett County Police Department, DeKalb County Police Department, and Gwinnett County Sheriff’s Office.
Assistant United States Attorney Paul R. Jones and U.S. Department of Justice, Organized Crime and Gang Section, Trial Attorney Joseph K. Wheatley 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/gan/.
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Georgia Emissions Inspectors Sentenced to Federal PrisonRead the Press Release
ATLANTA – Jerome Clarence Barnes, Jr. and Jared F. Walker have been sentenced in federal court for their roles in a scheme to fraudulently issue emissions certificates for cars that would have failed the emissions inspection required by law.
“Barnes sold his position as a licensed emissions inspector when he took payoffs to issue fake emissions certificates for cars that should have failed the test,” said United States Attorney Sally Quillian Yates. “Thanks to the diligent efforts of the federal EPA and state EPD criminal investigators, this case has put an end to Barnes’ fraudulent scheme and, as a result, removed a persistent threat to Atlanta’s air quality and public health.”
“Violators who submit false reports or incorrect data undermine EPA’s commitment to protect clean air for all Americans,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in Georgia. “Unfortunately, this case was not an isolated incident; defendant Barnes has a history of this type of criminal behavior. Today’s sentencing demonstrates that those who try to save money by cutting corners will be held responsible for their crimes. EPA will continue working with its law enforcement partners to protect the public and the environment.”
“The vehicle emissions program is important to Georgia’s air quality. EPD works hard to make sure stations and inspectors are performing the tests correctly and complying with the law,” said Jud Turner, Director of Georgia’s Environmental Protection Division. “We appreciate DOJ, EPA and other law enforcement agencies working with us to investigate and prosecute Mr. Barnes and others like him who circumvent the program.”
According to United States Attorney Yates, the charges and other information presented in court: Barnes, 35, of Lithia Springs, Ga., was responsible for issuing over 4,000 fraudulent emissions certificates to car owners in Georgia from September 2011 to September 2012, falsely stating that the owners’ cars passed the required emissions test. Barnes worked with other individuals to open emissions inspection stations in their names that he would then use to issue fraudulent emissions certificates. Opening stations in others’ names helped conceal Barnes’ involvement in the fraudulent activity. He wanted to avoid detection because he previously owned two inspection stations that state authorities had shut down for fraud. When authorities would discover emissions fraud occurring at one of the inspection stations, Barnes continued the fraud at another station that was opened under the name of a different owner. During the scheme, Barnes used On Time Emissions in Fulton County, All Clean Emissions in Cobb County, BDH Emissions in Dekalb County, Elite Emissions in Fulton County, and Cleaner Atlanta Emissions in Cobb County, to conduct fraudulent emissions testing.
Walker, 35, of Austell, Ga., owned All Clean Emissions. He and co-defendants Ieka N. Jones, 33, of Winston, Ga., and Seretha Franklin, 36, of Villa Rica, Ga., were licensed emissions inspectors who worked with Barnes to issue passing emissions certificates to car owners whose cars would have otherwise failed the emissions test. Instead of connecting the owners’ real cars to the emissions equipment, the defendants connected different cars they knew would pass the test. During the tests, the computer system automatically transmitted emissions testing data to a statewide database accessible by the Georgia Environmental Protection Division. The defendants manually entered other information into the system, such as the make, model, and vehicle identification number, to make it appear that they were testing the owners’ real cars, many of which had already failed an emissions test or showed equipment malfunctions. The defendants charged $100 to $125 for a fraudulent emissions test, far more than the usual amount charged for a legitimate inspection. Georgia law prohibits inspection stations from charging more than $25 for an emissions test.
Barnes was sentenced by United States District Judge Timothy C. Batten, Sr. to four years and six months in federal prison and three years of supervised release. Walker was sentenced to six months in federal prison and one year of supervised release. On September 6, 2013, Barnes pleaded guilty to one count of conspiring to commit wire fraud by depriving the State of Georgia and its citizens of their right to his honest services as a licensed emissions inspector. That same day, Walker pleaded guilty to one count of violating the Clean Air Act. On September 30, 2013, Jones and Franklin each pleaded guilty to one count of violating the Clean Air Act. Sentencing for Jones and Franklin is scheduled for December 20, 2013, before Judge Batten.
The Clean Air Act is a federal law that authorizes the United States Environmental Protection Agency to establish air quality standards to protect public health and welfare and to regulate emissions of hazardous air pollutants. As required by the Act, the State of Georgia has established a vehicle emissions testing program that requires cars in several counties be inspected to ensure that their emissions do not exceed limits for hydrocarbons, nitrogen oxide, and other compounds. With certain exceptions, car owners must submit an emissions certificate to obtain their annual vehicle registration. The Clean Air Act prohibits making false statements in records, including emissions certificates and database records, that are required to be maintained by the Act.
This case was investigated by Special Agents of the United States Environmental Protection Agency, Criminal Investigation Division, and the Georgia Department of Natural Resources, Environmental Protection Division.
Assistant United States 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 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 Hedge Fund Manager Indicted for Defrauding Investors and Obstructing the SECRead the Press Release
GAINESVILLE , Ga.– Stanley J. Kowalewski has been arrested in South Carolina after being indicted by a federal grand jury in Atlanta for defrauding investors of hedge funds of up to $8 million, and for obstructing the U.S. Securities and Exchange Commission’s subsequent investigation of his activities.
“Kowalewski is charged with stealing from the investors who trusted him and then repeatedly lying to them and the SEC about his self-dealing,” said United States Attorney Sally Quillian Yates. “The victims of his greed include pension funds, schools, hospitals, and other non-profits who lost over $8 million in hard-earned money, which Kowalewski diverted to his own personal use.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Investment fraud cases such as this remain a focus of the FBI’s criminal investigators in that these cases generate many victims and large loss amounts. The FBI will continue to work with its many law enforcement partners in an effort to hold accountable those individuals who would victimize unsuspecting investors by diverting their funds for personal gain.”
“Theft of employee benefit assets jeopardizes the benefits of workers. This case reaffirms the Labor Department’s commitment to protect workers’ benefits by identifying criminal activity wherever and whenever it occurs,” said Isabel Colon, Regional Director of EBSA’s Atlanta Regional Office.
According to United States Attorney Yates, the charges and other information presented in court: Kowalewski was the sole owner and Chief Executive Officer of SJK Investment Management, LLC, in Greensboro, N.C. Beginning in 2009, Kowalewski solicited investment money from pension funds, school endowments, hospitals, non-profit foundations, and other investors which he placed in two SJK “hedge fund of funds,” an onshore fund and an offshore fund called the Absolute Return Funds. Almost immediately after receiving the first investor money, Kowalewski began diverting the proceeds to pay for personal and business overhead expenses.
In December 2009, Kowalewski formed a new SJK fund called the Special Opportunities Fund, which he did not disclose to investors. He diverted millions from the Absolute Return Funds to the Special Opportunities Fund without disclosing the transfers to investors. After he secretly transferred the funds, Kowalewski diverted millions from the Special Opportunities Fund to himself through various self-dealing transactions, including having the Special Opportunities Fund buy three homes that Kowalewski owned and in which his family, his parents, and his brother-in-law’s family lived. Kowalewski also bought a multi-million-dollar beach house and directed that the Special Opportunities Fund pay him $4 million as a fee to which he was not entitled. Kowalewski created and altered documents in an effort to make these transactions appear legitimate.
Also as part of the scheme, Kowalewski overvalued the assets held by the Special Opportunities Fund and used those fraudulent valuations to calculate the returns for investors in the Absolute Return Funds. As a result, the monthly statements distributed to SJK investors showed fraudulently inflated returns. Investors lost over $8 million as a result of Kowalewski’s fraudulent scheme.
On March 30, 2010, the SEC initiated a proceeding to determine whether there had been violations of the federal securities laws in connection with SJK. As part of its investigation, the SEC subpoenaed Kowalewski to testify under oath. During his sworn testimony, Kowalewski testified that, after the Special Opportunities Fund had purchased his three homes, the Fund had leased the properties to him and his relatives, each for a yearly rental payment. He testified further that Michael J. Fulcher, the Chief Financial Officer of SJK, had drafted, and Kowalewski had signed, the leases at or near the time of the homes’ sales. According to the indictment, however, Kowalewski and his relatives had never leased the homes back from the Special Opportunities Fund. Prior to Kowalewski’s sworn testimony, Kowalewski and Fulcher conspired to obstruct the SEC proceeding by creating the leases and backdating them, in an effort to document the claimed lease relationships and to conceal the self-dealing transactions by Kowalewski. The leases were not created and signed at the time of the homes’ sales but in November 2010, a few weeks before Kowalewski testified. Kowalewski provided the fraudulent leases to the SEC as part of the investigation and then testified falsely about them to conceal his actions and obstruct the SEC’s investigation. The indictment also alleges Kowalewski lied in his sworn testimony when he testified that he had disclosed the Special Opportunities Fund to investors and that attorneys and other professionals had approved of his self-dealing transactions.
The indictment charges Kowalewski, 41, of Pawleys Island, S.C., with 22 counts of wire fraud, one count of conspiracy, and one count of obstructing the SEC proceeding. Each wire fraud count carries a maximum sentence of 20 years in prison. The conspiracy and obstruction charges each carry a maximum sentence of 5 years in prison. On April 19, 2013, Fulcher pleaded guilty to one count of conspiring with Kowalewski to obstruct the SEC proceeding, which charge carries a maximum sentence of five years in prison. Each of these charges carries a fine of up to $250,000. Fulcher’s sentencing date has not yet been scheduled. 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.
Members of the public are reminded that the indictment contains only allegations. 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 Special Agents of the Federal Bureau of Investigation, Investigators with the Atlanta Regional Office of the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), and Special Agents of the Atlanta Regional Office of the U.S. Department of Labor’s Office of the Inspector General. The Atlanta Division Office of the U.S. Securities and Exchange Commission previously brought a civil action against Kowalewski. In that case, Kowalewski was ordered to pay over $16 million in disgorgement and civil penalties.
Assistant United States Attorneys Stephen H. McClain and Russell Phillips 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/gan/.
Former Atlanta Investment Advisor Sentenced to Federal Prison for Embezzling More Than $2.5 Million from ClientsRead the Press Release
ATLANTA – Benjamin Daniel DeHaan has been sentenced on charges arising out of a scheme to defraud more than 50 clients.
“This defendant may have started out as a legitimate investment advisor, but he got greedy and began stealing from those who trusted him with their investments,” said United States Attorney Sally Quillian Yates. “He diverted money from his clients’ accounts and used it to fund a lavish lifestyle. Now he is headed to prison and will never work in the securities industry again.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The level of greed and disregard for his clients earns this defendant a place in prison. While the FBI will continue to go after such individuals for investor related fraud, the damage to those investing is already done and all that is often left is the solace provided by a stiff prison sentence.”
According to United States Attorney Yates, the charges and other information presented in court: DeHaan owned and operated Lighthouse Financial Partners, LLC, an investment advisory service in Atlanta, Ga. He recruited investors by posting a series of videos on Lighthouse’s website and on YouTube. DeHaan told investors that he had developed a proprietary software program that allowed him to determine when to buy and when to sell a particular stock. Approximately 114 people entrusted him with money to invest on their behalf. At its peak, Lighthouse had approximately $6.7 million in assets under management.
From January 2010 through May 2012, DeHaan misappropriated and converted to his own use more than $2.5 million of his clients’ money. He used the fraud proceeds to purchase a new house for himself in Memphis, Tenn., and to purchase partial ownership of a restaurant and bar in Memphis. DeHaan also used his clients’ money to fund an investment account in his own name and to pay Lighthouse’s overhead and operating expenses. He attempted to cover-up his theft by emailing fraudulent account statements to investors. This provided victims a false sense of security and delayed their complaints to law enforcement.
Benjamin Daniel DeHaan, 37, of Decatur, Ga., was sentenced by United States District Judge Steve C. Jones to seven years and three months in federal prison, and was remanded immediately to the custody of the U.S. Marshal. He will serve three years of supervised release following his prison term, and was ordered to pay $6,931,619.13 in restitution to the victims. On February 1, 2013, DeHaan pleaded guilty to a Criminal Information charging him with wire fraud.
This case was investigated by Special Agents of the Federal Bureau of Investigation.
Assistant United States Attorney Russell Phillips 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Newnan Dentist Sentenced to Prison for Unlawfully Distributing Controlled SubstancesRead the Press Release
ATLANTA - Hugh Maddux, the former owner of a dental practice in Newnan, Ga., has been sentenced for drug distribution.
"Opiate abuse has risen to epidemic levels both in Georgia and nationally with deadly consequences," said United States Attorney Sally Quillian Yates. “In a small dental practice where the defendant had known many of his patients for years, things quickly spiraled out of control as the number of prescriptions and addicted patients grew. This dentist, whether he was motivated by greed or was simply blind to the consequences, completely abandoned his responsibility as a health care provider, dispensing controlled substances to his patients without any regard for medical necessity.”
Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division commented on the sentencing, “It is disturbing when healthcare providers break the law by unlawfully distributing pain medications. This individual distributed highly addicting opiates with total ill-will and disregard for the safety of those receiving them. The success of this investigation is a direct result of the hard work put forth by dedicated DEA Atlanta Field Division Diversion investigators and the United States Attorney’s Office.”
According to United States Attorney Yates, the charges and other information presented in court: Maddux owned a dental practice in Newnan, Ga., until he sold it. Shortly after his practice was sold, it came to light that Maddux had written hundreds of prescriptions for controlled substances to his patients, many of whom were addicted to the drugs he prescribed. In October 2011, DEA Diversion Investigators received a complaint from a source who wished to remain anonymous that Maddux was writing illegal prescriptions from his dental office. In response to the complaint, DEA Investigators examined prescriptions from three pharmacies for controlled substances issued by Maddux to several patients named in the original complaint. Investigators discovered an unusually large number of narcotic prescriptions had been issued to these patients.
Shortly thereafter, Investigators interviewed one of Maddux’s patients who had been named in the original complaint as an abuser of opiate pain pills. This patient was a long-time dental patient at Maddux’s dental clinic. The patient explained that she received numerous controlled substance prescriptions from Maddux’s dental office, even though she had not been examined by him for at least eight months. She admitted to being addicted to opiate pain pills.
In January 2012, Investigators interviewed the owner of a nearby pharmacy. The owner told investigators that in early 2011 he became suspicious of the numerous prescriptions called in by Maddux’s clinic. The pharmacy owner told Maddux that his pharmacy would no longer accept prescriptions from his dental office unless Maddux spoke with pharmacy staff and approved it. Investigators soon discovered that Maddux had issued hundreds of prescriptions for Schedule II narcotics between October 2009 and October 2011.
From March 2012 to October 2012, Investigators interviewed several former patients, most of whom admitted to seeking Schedule II pain pills from Maddux for the purpose of supporting their drug addictions. Most of these patients routinely received prescriptions from Maddux without being examined, and many stated that prescriptions were left for them outside of the clinic for them to pick up after regular business hours. One patient even admitted to obtaining the prescriptions for the purpose of selling pills on the street.
On March 21, 2013, Investigators interviewed Maddux. He confirmed his signature on numerous prescriptions that could not be accounted for in the patient's chart. Maddux also confirmed that he left prescriptions for controlled substances taped to the back door of his practice for his patients to pick up after business hours – a practice he conceded was ripe for abuse. He acknowledged that many of the narcotic prescriptions he wrote were not medically necessary or supported by sound medical judgment.
Maddux, 62, of Newnan, Ga., has been sentenced by United States District Judge William S. Duffey to one year, one month in prison to be followed by three years of supervised release, an $8,000 fine, and 250 hours of community service. Maddux was convicted on these charges on August 14, 2013, after he pleaded guilty.
This case is being investigated by the Drug Enforcement Administration.
Assistant United States Attorney 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 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/.
Defendant Convicted of Arranging Fraudulent Marriages to Deceive Immigration OfficialsRead the Press Release
ATLANTA - Rex Anyanwu has been found guilty of deceiving Immigration officials by helping aliens enter into fraudulent marriages to U.S. citizens and guilty of obtaining his own citizenship in violation of the law and of conspiracy to commit visa fraud and alien harboring.
"For at least eleven years, the defendant ran a fraudulent marriage factory," said United States Attorney Sally Quillian Yates. “He paid U.S. citizens to marry aliens and then lied to Immigration officials to assist the aliens in their illegal efforts to stay in the United States. Anyanwu's illegal business has been shut down and he will now lose his own citizenship.”
“By undermining the integrity of our immigration system, the defendant caused numerous people to receive immigration benefits to which they were not entitled, including the ability to fraudulently naturalize as U.S. citizens in some cases,” said Special Agent in Charge Brock D. Nicholson, head of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Georgia and the Carolinas. “By enlisting vulnerable homeless and destitute citizens in his scheme, the defendant exposed them to a criminal conspiracy in which they otherwise would likely never have been involved in.”
According to United States Attorney Yates, the charges and other information presented in court: Beginning in February 2001 and continuing until April 2012, Rex Anyanwu conspired with aliens and U.S. citizens to defraud immigration officials to obtain lawful status for the aliens in the United States. At trial, the United States called numerous U.S. citizen witnesses from Huntsville, Ala. who testified how they were recruited and paid $700 by Anyanwu to marry aliens, predominantly from Kenya and Nigeria. Alien witnesses were also called to testify that they had agreed to pay Anyanwu as much as $10,000 to find them a U.S. citizen willing to marry them, but not live with them.
The U.S. citizens and aliens testified that they typically did not meet each other until the very day of the wedding when they were introduced, sometimes on the court house steps, by Anyanwu. The defendant told the “couple” to bring multiple changes of clothes and in one case provided the U.S. citizen with the shirt off of his own back. He would then take pictures of the supposedly happily married couple in different clothing for use in proving to Immigration officials that the couple shared a life.
A true marriage, one where the couple intends to remain together, is one path through which an alien can become a U.S. citizen. Engaging in a marriage solely for immigration purposes is a crime. Evidence at trial showed that Anyanwu continued his scheme by filing fraudulent applications for visas with Citizenship and Immigration Services. Many witnesses testified the defendant would forge the U.S. citizens' names on the paperwork submitted to Immigration. For an additional fee, Anyanwu would create fraudulent documents to show the couple lived together, including false Form 1040 tax returns, false W-2s, fraudulent verification of employment letters, fraudulent leases and bills all intended to demonstrate that the couple was in fact sharing their life and living together.
When Immigration scheduled an interview with the couple, Anyanwu would then send the U.S. citizen spouse in to a Department of Motor Vehicles’ office to obtain a fraudulent Driver's License or Identification card. The U.S. citizens testified they were again paid by the defendant to do this and were told by him what address to put on the identification document. These documents were intended to deceive Immigration into believing the couple actually lived together when, in fact, they never did.
Lastly, Anyanwu would again contact the U.S. citizen spouse when it was time for the “couple” to go in for their Immigration interview. The defendant would meet with the couple and go through the questions, and the answers to questions, typically asked by Immigration to determine if a marriage is valid; simple questions that any legitimately married couple that lived with each other would know. However, since these couples did not live together and share their lives, they needed Anyanwu's coaching to pass the interview. The U.S. citizens testified that they were paid more money by the defendant for attending the interviews. The aliens testified that they paid Anyanwu additional money before the interview.
One Huntsville, Ala., witness testified that she was made to pose as another person and go to Immigration pretending to be the spouse of an alien. When she was arrested for using fraudulent identification, Anyanwu abandoned her in Atlanta, Ga., and later threatened her not to tell anyone about him. Another witness testified that she referred 50 U.S. citizens to Anyanwu to get paid to marry people born in Africa.The charges in this case - visa fraud in violation of 18 U.S.C. 1546(a), conspiracy to engage in visa fraud in violation of 18 U.S.C. 371, alien harboring in violation of 8 U.S.C. 1324(a)(1)(A)(iv) and (v)(II) and (B)(i), conspiracy to do the same in violation of 8 U.S.C. 1324(a)(1)(A)(v)(I), and procuring naturalization for himself in violation of 18 U.S.C. 1425(a) - carry a maximum sentence of up to 5 years in prison for the 371 conspiracy charge and 10 years in prison for the remaining charges, and a fine of up to $250,000 on each count. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but which provide appropriate sentencing ranges for most offenders.
Sentencing for Rex Anyanwu, 51, of Lithia Springs, Ga., is scheduled for sentencing on January 27, 2014, at 2:00 p.m. before United States District Judge Thomas W. Thrash.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. U.S. Citizenship and Immigration’s Fraud Detection National Security Unit and U.S. Department of State, Diplomatic Security Service also assisted in the case.
Assistant United States Attorney Susan Coppedge, Special Assistant United States Attorney Njeri Maldonado, and Intern Annalise Lisson 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/gan/.
Former Portfolio Manager for New York Hedge Fund Pleads Guilty to Multi-Million Dollar Insider Trading ConspiracyRead the Press Release
ATLANTA – Mark Megalli pleaded guilty on Thursday to participating in a multi-million dollar insider trading conspiracy involving Carter’s, Inc. stock.
“This conviction marks a tragic fall for a defendant who worked at top investment, law, and consulting firms and rose to a prominent position at a multi-billion dollar New York hedge fund,” said United States Attorney Sally Quillian Yates. “But, there is one set of rules, and they apply to everyone. Rigging the system by trading on inside information undermines the public’s confidence in our financial system – and it’s a violation of the law.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Laws are in place to regulate investment firms and individual investors and to ensure that a level playing field is maintained for those engaging our financial markets. This case illustrates clearly why those laws are in place and the hard consequences for those that choose to disregard them. Today’s guilty plea of Mr. Megalli will begin the process of holding him accountable from his criminal actions involving Carter’s, Inc. stock trades.”
According to United States Attorney Yates, the charges and other information presented in court: Megalli was employed as the portfolio manager for the consumer sector at Level Global Investors, LP (“Level Global”), a multi-billion dollar hedge fund headquartered in New York, NY, between August 2009 and its dissolution in February 2011. Megalli was responsible for managing and making trading decisions on behalf of a multi-million dollar portfolio of consumer industry stocks. Megalli had previously obtained undergraduate and JD/MBA degrees from one of the country’s top universities, passed the New York bar and the Chartered Financial Analyst (“CFA”) examinations, and worked at top investment, consulting, and law firms.
In September 2009, Megalli caused Level Global to hire Eric M. Martin as a paid consultant to Level Global to advise Megalli on consumer sector stocks for $25,000 per quarter. Until March 2009, Martin had been employed as the Vice President of Investor Relations for Atlanta-based Carter’s, Inc., the major children’s clothing company. Carter’s is a public company registered with the U.S. Securities & Exchange Commission (“SEC”) and its common stock is listed on the New York Stock Exchange.
Beginning in mid-September 2009 and continuing through the end of July 2010, Martin provided Megalli with inside information about Carter’s quarterly and annual financial results and other events in advance of the public announcement of the information. Megalli in turn caused Level Global to execute transactions in Carter’s securities between September 2009 and July 2010, based in whole or in part on the inside information received from Martin, earning illegal profits and illegally avoiding losses for Level Global. As part of his guilty plea, Megalli agreed that he is responsible for illegal insider trading gains and losses avoided for Level Global between $2.5 million and $7 million.Martin obtained the inside information from a Carter’s executive, Richard T. Posey, who was employed as the company’s Vice President of Operations at that time. Martin also provided inside information to several other individuals and investment firms for which he had been hired as an outside consultant, directly and through an expert networking firm.
By way of example, Posey tipped Martin, and Martin tipped Megalli and others, in advance of Carter’s October 27, 2009 announcement that it was conducting an internal investigation into accounting irregularities and would be delaying its earnings release for the third quarter of 2009. After business hours on October 22, 2009, Posey and Martin had an in-person meeting during which Posey disclosed inside information about the investigation and earnings delay to Martin. As soon as the meeting ended, Martin placed a telephone call to a former Wall Street equity research analyst previously identified as “Cooperator Number 1,” during which Martin passed on the information that he had received from Posey. Martin asked Cooperator Number 1 to wait to trade on the information until Martin could warn his clients. The next morning, at 9:42 a.m. on Friday, October 23, 2009, Martin sold his entire position in Carter’s stock, over 35,000 shares valued at approximately $1 million. Later that morning, at 11:23 a.m., Martin placed a 7-minute call to Megalli, during which Martin disclosed inside information about the investigation to Megalli. Less than two minutes into the call, Megalli sent an instant message to Level Global’s head of trading in which Megalli ordered the liquidation of Level Global’s entire position in Carter’s stock, 300,000 shares valued at nearly $9 million.
The next trading day, Monday, October 26th, Cooperator Number 1 placed a 12-minute call to Martin. Immediately after the call ended, Cooperator Number 1 sold his entire position in Carter’s stock -- 15,000 shares valued at over $400,000 -- and bought November 30th put options, thereby betting on Carter’s stock price to decline significantly. The next morning, Tuesday, October 27th, Carter’s shocked the market with the news of its internal investigation and earnings delay, and its stock price fell over 20% in one day. The internal investigation ultimately resulted in a multi-year financial restatement by Carter’s, criminal indictments of two of its former top executives for securities fraud and related offenses, and three SEC enforcement actions.
Megalli, 41, of New York, NY, pleaded guilty to one count of conspiracy to commit securities fraud. The charge to which he pleaded guilty carries a maximum sentence of five years in prison and a fine of up to $250,000. 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.
Megalli is the third individual to be convicted in a criminal investigation into insider trading in Carter’s stock, and the fifth person overall to be criminally charged in connection with the accounting fraud and insider trading investigations arising out of Carter’s October 27, 2009 earnings delay and multi-year financial restatement.
Martin, 43, of Roswell, Georgia, was indicted on November 7, 2012, for conspiracy, securities fraud, and wire fraud in connection with his participation in an insider trading conspiracy and for his own insider trading in Carter’s stock between 2005 and 2009, while Martin was still employed as Carter’s head of investor relations. The conspiracy charge alleged that Martin repeatedly provided inside information about Carter’s to Cooperator Number 1 ahead of the company’s earnings releases and other events between 2005 and 2009. This included tipping Cooperator Number 1 about Carter’s May 2005 acquisition of competitor Oshkosh B’Gosh before the news became public. Martin pleaded guilty to the conspiracy charge on December 8, 2012.
Posey, 48, of Duluth, Ga., was charged by Criminal Information and pleaded guilty to conspiracy to commit securities fraud on June 19, 2012. The conspiracy charge against Posey related to his disclosure of insider information to Martin ahead of quarterly and annual earnings releases and other events between early 2009 and July 2010, after Martin’s separation from Carter’s.Sentencing for Megalli, Martin, and Posey has not yet been scheduled.
The case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorneys David M. Chaiken and Stephen H. McClain are prosecuting the case.
The Atlanta Regional Office of the SEC has conducted a separate investigation into potential civil violations of the U.S. securities laws relating to insider trading in Carter’s stock. In connection with its investigation, the SEC has filed civil enforcement actions against multiple individuals.
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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Three Sentenced for Conspiracy, Insider Trading and Tax EvasionRead the Press Release
ATLANTA – Douglas Ballard, Guy Mitchell and Joseph Todd Foster have been sentenced for their roles in a conspiracy to commit bribery and bank fraud, insider trading and tax evasion that occurred at the now-failed Integrity Bank.
“Our nation’s financial crisis was fueled in part by bank insiders and major borrowers whose greed led them to break the law,” said United States Attorney Sally Quillian Yates. “The conduct of these defendants, two of whom once held prominent positions in banking, helped pave a path to the shocking number of bank failures Georgia has experienced in the last ten years.”Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The magnitude and impact of this financial institution based fraud case clearly illustrates why these types of criminal investigations are a priority matter at the FBI. We will continue to work with our various investigative partners to identify, investigate, and present for prosecution those individuals who betray their positions of trust within these institutions for the sake of personal greed.”
“The sentence today does not replace the losses that were incurred due to this scheme,” stated Veronica F. Hyman-Pillot, Special Agent in Charge with IRS Criminal Investigation. “However, today’s sentence is a message to others that regardless of who you are, there are consequences for committing these types of crimes.”
“The FDIC OIG is pleased to join the U.S. Attorney’s Office and our law enforcement colleagues in announcing the sentencing of individuals whose criminal actions caused serious harm to Integrity Bank,” said Fred W. Gibson, Jr., Acting Inspector General, Federal Deposit Insurance Corporation. “It is particularly troubling to the FDIC OIG when a bank insider like Mr. Ballard, who is entrusted with operating the bank in a safe and sound manner, violates that trust and engages in activities that contribute to losses to the Deposit Insurance Fund. Mr. Mitchell’s sentencing should deter others who face similar opportunities to conspire with bank insiders in such criminal behavior. Today’s sentencing confirms that those who undermine the integrity of the financial system will be brought to justice and held accountable for their crimes.”
According to United States Attorney Yates, the charges and other information presented in court: Ballard, a former Executive Vice-President at the now-failed Integrity Bank, formerly headquartered in Alpharetta, Ga., received more than $200,000 in cash bribes from Mitchell, the bank’s largest borrower. At the same time in 2006, when Ballard was being bribed, he allowed Mitchell to draw more than $7 million from a loan that was supposed to be used for renovation and construction at the Casa Madrona Hotel in Sausalito, Calif., despite the fact that no renovation or construction work was done. Instead, Mitchell used the money to buy an island in the Bahamas, travel by private jet, purchase Miami Heat basketball tickets, buy fancy jewelry and expensive cars, and a mansion in Coconut Grove, Fla.
Mitchell received $20 million in additional business loans from Integrity Bank after the Casa Madrona loan proceeds were exhausted, and he continued to use some of that money for impermissible, personal expenses. Mitchell defaulted on the loans and Integrity Bank eventually failed.
Foster was Integrity Bank’s Vice President in charge of Risk Management. He sold nearly all of his Integrity stock in August of 2006 based on materially adverse information about the company that was not available to the public. Specifically, Foster knew that the bank was in an increasingly precarious position because of Mitchell’s financial difficulties and pending default.
Ballard, Mitchell, and Foster were sentenced by United States District Judge Julie Carnes.
Douglas Ballard, 44, was sentenced to serve two years and six months in federal prison, to be followed by three years of supervised release. He was ordered to pay restitution in the amount of $1,000,000, and a special assessment of $200. Ballard pled guilty to conspiracy to commit bank fraud and bribery, and income tax evasion, on July 6, 2010.
Guy Mitchell, 54, of Miami, Fla., was sentenced to five years in prison, to be followed by three years of supervised release. He was ordered to pay restitution in the amount of $5,661,650, a fine of $250,000, and a special assessment of $100. Mitchell pled guilty to conspiring to commit bank fraud and bribery on July 1, 2013.
Joseph Todd Foster, 46, of Blakely, Ga., was sentenced to three years of probation, and 120 hours of community service. He was also ordered to pay a $100 special assessment. Foster pled guilty to securities fraud on July 6, 2010.
This case was investigated by Special Agents of the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation Office of Inspector General, and the Internal Revenue Service.
Assistant United States Attorneys Douglas W. Gilfillan and Christopher C. Bly 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Ex-Captain from Murray County Sheriff's DepartmentSentenced to Federal PrisonRead the Press Release
ROME, Ga. - Michael Henderson, a former Captain with Murray County Sheriff’s Office, has been sentenced to 12 months and one day in prison for obstructing a public corruption investigation.
“By lying to his fellow law enforcement officers, Mr. Henderson obstructed a public corruption investigation,” said United States Attorney Sally Quillian Yates. “But, in addition to violating the law, Mr. Henderson also violated the trust given to him by Murray County’s citizen.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing of former Captain Henderson marks the end of an otherwise successful and promising career in law enforcement with the Murray County Sheriff’s Office. Actions that betray an officer’s sworn oath and the overall public trust bestowed upon them cannot be tolerated. With today’s sentencing, former Captain Henderson is being held accountable for those actions.”
According to United States Attorney Yates, the charges and other information presented in court: In April 2012, a female citizen of Murray County, Ga., met with then-Chief Magistrate Judge Bryant Cochran regarding a legal matter. The citizen claimed that during that meeting, Mr. Cochran made inappropriate sexual overtures towards her. Following the complaint, Mr. Cochran called several local police officers to pass along a “tip” that the citizen carried drugs in her white Dodge vehicle.
Sometime in mid-July 2012, Mr. Cochran provided then-Captain Henderson with the tip that the citizen carried drugs in her white Dodge vehicle. After receiving the tip, Henderson provided the tip to, and discussed the tip with, other members of the Murray County Sheriff’s Office.
On August 14, 2012, Henderson and separately-convicted former Deputy Sheriff Joshua L. Greeson participated in a traffic stop of the white Dodge car. During the stop, Greeson found methamphetamine in a metal tin hidden under the wheel well of the car. After finding the drugs, Henderson and Greeson arrested the female citizen and another occupant of the vehicle.
Shortly thereafter, the Georgia Bureau of Investigation (GBI) received information that the drugs had been planted on the vehicle by another individual, in an attempt to falsely implicate the female citizen. As a result, the state drug charges against the citizen were dismissed.
On August 22, 2012, agents from the GBI interviewed Henderson in connection with a public corruption investigation. During the interview, Henderson falsely stated to the GBI agents that he had never told any other members of the Murray County Sheriff’s Office that he had received a tip that the white Dodge was allegedly carrying drugs.
On August 31, 2012, Henderson was fired from the Murray County Sheriff’s Office.
On March 27, 2013, Henderson, 41, of Murray County, Ga., pleaded guilty to tampering with a witness by lying to the GBI agents. United States District Judge Harold L. Murphy sentenced Henderson to 12 months and one day in prison to be followed by one year of supervised release.
This case was investigated by the Federal Bureau of Investigation and the Georgia Bureau of Investigation.
Assistant United States Attorneys Jeffrey W. Davis and Michael Herskowitz 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 is www.justice.gov/usao/gan.
Tax Return Preparer Pleads Guilty to Tax FraudRead the Press Release
ATLANTA - Amberula Levitt pleaded guilty today to two counts of filing false personal tax returns for the 2004 and 2005 tax years.
“Remarkably, this defendant was preparing tax returns for others while cheating on her own,” said United States Attorney Sally Quillian Yates. “She used her knowledge and expertise of the tax system to try and defraud it.”
“Individuals who evade their tax obligations cheat their country and their fellow citizens,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The Justice Department will investigate and prosecute tax professionals who use their skills to defraud the Internal Revenue Service.”
"Each of us is responsible for filing correct and accurate tax returns, “stated IRS CI Special Agent in Charge, Veronica F. Hyman-Pillot. "IRS CI will continue to investigate those individuals who intentionally evade their tax obligations."
According to United States Attorney Yates, the charges and other information presented in court: From 2004 through 2010, Levitt owned and operated Tax Time Tax Service (“Tax Time”), a tax preparation business with multiple locations throughout metro Atlanta. Levitt fraudulently under-reported the earnings from Tax Time on her personal tax returns. For the years 2004 through 2009, Levitt owes approximately $620,000 in back taxes to the IRS.
The charges for filing a false tax return in this case carry a maximum sentence of three years in prison and a fine of up to $250,000 on each count. 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 Levitt, 44, of East Point, Ga., is scheduled for January 23, 2014, at 10:30 am before United States District Judge Amy Totenberg.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Trial Attorney Christopher J. Maietta of the Justice Department’s Tax Division and Assistant United States Attorney Steven D. Grimberg 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/gan/.
Medical Business Owner Pleads Guilty to Medicaid FraudRead the Press Release
ATLANTA – Jennifer C. Alsdorf has pleaded guilty to health care fraud for filing fraudulent claims with the Georgia Medicaid program.
“This defendant cheated the Medicaid program by sending in thousands of fraudulent claims for medical services that were never performed,” said United States Attorney Sally Quillian Yates. “We will continue to partner with the Georgia Attorney General’s Office in fighting the costly effects of health care fraud in this State.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Individuals who engage in extensive schemes to defraud healthcare fraud and compromise our publicly funded programs such as Medicare and Medicaid need to be identified and held accountable. With today's plea, Ms. Alsdorf will be held accountable for her criminal actions.”
“Fighting Medicaid fraud is a top priority for my office,” said Attorney General Sam Olens. “This case sends a strong message that we take every complaint received seriously, and we will aggressively investigate and prosecute those who overbill Medicaid.”
According to United States Attorney Yates, the charges and other information presented in court: Jennifer C. Alsdorf was the owner, President, and CEO of Hand in Hand Speech & Language Services, Inc. The medical business was located in Tampa, Fla. (and prior to 2005 in Vidalia, Ga.) and offered speech-language therapy services for children covered by Medicaid. Acting on behalf of Hand in Hand, Alsdorf contracted with speech-language pathologists to perform the services under independent contractor agreements. Alsdorf would bill Medicaid for the services provided by the pathologists, and then send a portion of the amount she received from Medicaid to them.
In the contracts, Alsdorf agreed to pay a set fee to the pathologists for each initial evaluation and each subsequent therapy visit rendered by the pathologists to Medicaid recipients. The fees that Alsdorf paid to the pathologists for those two services were based on the amounts that Medicaid reimbursed for the services.
After rendering services to patients, the pathologists would send Alsdorf treatment notes showing which patients they had seen, how long they had provided therapy, and which services they had provided. Alsdorf was supposed to use these notes to prepare the claims to submit to Medicaid. Unbeknownst to the speech-language pathologists, however, in addition to billing Medicaid for initial evaluations and therapy visits, Alsdorf also billed Medicaid for “sensory integration” therapy, a service the pathologists had not provided. Many of the pathologists did not even know what sensory integration therapy was and had never heard of such a service. Alsdorf did not send any of the money she received from Medicaid for this service to the pathologists. She instead kept all of the money she received for sensory integration therapy.
Alsdorf also submitted claims to Medicaid for patient visits that never occurred. She submitted claims under pathologists’ names for services during times when they were not working with Hand in Hand. She also submitted claims representing that the pathologists had treated certain patients when, in fact, the pathologists had never seen or treated the patients at any time. Alsdorf submitted thousands of fraudulent claims to Medicaid.
Alsdorf pleaded guilty to one count of health care fraud. The charge carries a maximum sentence of 10 years in prison and a fine of up to $250,000. 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.
As part of the plea agreement, Alsdorf has agreed to a restitution judgment of $200,000 to the Georgia Medicaid program, which includes forfeiture of a 2013 Mercedes Benz, thousands of dollars that were previously seized from two retirement accounts and a bank account, and two pieces of real estate located in Montgomery County, Ga.
Sentencing for Alsdorf, 44, of Tampa, Fla., is scheduled for January 8th, 2014, at 10:30 a.m. before United States District Judge Amy Totenberg.
This case is being investigated by Special Agents of the Federal Bureau of Investigation and Investigators from the Georgia Medicaid Fraud Control Unit and the Georgia Department of Community Health.
Assistant United States Attorneys Stephen H. McClain and G. Jeffrey Viscomi, and Georgia Assistant Attorney General Henry A. Hibbert, 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 is www.justice.gov/usao/gan.
Major Drug Trafficker Receives 14 Year SentenceRead the Press Release
ATLANTA - Otis Henry has been sentenced to 14 years in prison for trafficking over 700,000 pills of BZP, a drug similar to ecstasy.
“Based on the staggering amount of drugs in the case, the defendant earned every day of his prison sentence,” said United States Attorney Sally Quillian Yates. “To those tempted by the allures of the drug trade like cars, cash, and jewelry – think twice. It’s more likely that you’ll be wearing an orange jumpsuit than a gold watch.”
Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division commented, “The use of a number of synthetic designer drugs continues to be a major concern in this country. Benzylpiperine, like any other synthetic stimulant, is dangerous and can lead to adverse effects such as severe convulsions or even death. Because of the hard work and dedication of all of the law enforcement agencies involved, Henry will not be able to see the outside of prison for a long time.”
According to United States Attorney Yates, the charges and other information presented in court: From at least February 2010 to October 2010, Henry was a major distributor of BZP and marijuana in the metropolitan Atlanta area. In one instance, on October 1, 2010, law enforcement officers obtained a warrant to search Henry’s residence in DeKalb County. Inside the home, officers seized approximately 700,000 tablets of BZP which was one of the largest domestic seizures of the drug in U.S. history. In particular, officers found the pills hidden in the walls of the house, behind insulation, under seat cushions, and in crawl spaces. Officers also recovered a handgun, 2 pounds of marijuana, $39,000 in cash, and over 150 grams of methamphetamine from the residence. The street value of the drugs is estimated at $2.8 million.
After agents executed the search warrant, Henry fled and evaded authorities for over a year. Ultimately, in January 2012, Henry was arrested in Tampa, Fla. Thereafter, agents searched Henry’s hotel room and recovered 4 pounds of marijuana and $3,300 in cash.
Henry, 43, of DeKalb County, Ga., was sentenced to 14 years in prison to be followed by three years of supervised release. Henry pleaded guilty on July 24, 2013.
This case was investigated by the Drug Enforcement Administration and the DeKalb County Police Department.
Assistant United States Attorneys Jeffrey W. Davis, Dahil Goss, Jeffrey Viscomi, and Skye Davis prosecuted 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 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 Coca-Cola Employee Charged with FraudRead the Press Release
ATLANTA - Jeffrey David Shamp has been arraigned on federal charges of fraud and money laundering. He was indicted by a federal grand jury on Oct. 15, 2013.
“This defendant is charged with using corporate American Express gift checks to pay personal expenses,” said United States Attorney Sally Quillian Yates. “We will continue to ferret out those who abuse positions of trust for personal gain.”
“The United States Secret Service and our law enforcement partners work tirelessly to thoroughly investigate cases like this. We will continue to take an aggressive approach towards those who violate the faith and trust of businesses to further their financial crime activity,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office.
“Mr. Shamp used deceit and fraud, in the misuse of a marketing tool intended to promote the good name of Coca-Cola, for his own personal benefit,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS-Criminal Investigation. “IRS-CI is committed to unraveling financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money.”
According to United States Attorney Yates, the charges, and other information presented in court: Jeffrey Shamp worked for The Coca-Cola Company from approximately July 2002, to November 2011, most recently as a Senior National Account Executive based in Massachusetts. In his position, Shamp was authorized to order American Express (“Amex”) gift checks to be used as part of a sales incentive program for Coca-Cola’s customers. From approximately November 2005, through September 2011, Shamp fraudulently obtained Amex gift checks under the false pretense that the checks would be used as part of Coca-Cola’s sales incentive program, when in fact Shamp used them to pay for over $400,000 in personal expenses.
Shamp, 40, of Cincinnati, Ohio, was arraigned today before United States Magistrate Judge E. Clayton Scofield III.
The wire fraud charges in this case each carry a maximum sentence of 20 years in prison and a fine of up to $250,000. The money laundering charges each carry a maximum sentence of 10 years in prison and a fine of up to $250,000. 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.
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 United States Secret Service and Internal Revenue Service Criminal Investigation.
Assistant United States Attorney Steven D. Grimberg and Intern Ryan Freeman 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Teacher Sentenced for Receiving Child PornographyRead the Press Release
ATLANTA - William Villemez has been sentenced to five years in prison for receiving and possessing child pornography.
“Child pornography is a horrendous crime that involves the sexual abuse and exploitation of the most innocent members of society,” said United States Attorney Sally Quillian Yates. “It is particularly distressing when a teacher purchases and downloads child pornography. Thanks to the vigilance of our law enforcement partners, this teacher will no longer be around students but will be going to federal prison.”
“Postal Inspectors are charged with protecting the U.S. mail from illegal use. As long as criminals use the U.S. mail to exploit children, the Postal Inspection Service will continue to make these types of investigations a top priority,” said Keith Morris, Postal Inspector in Charge of the Atlanta Division.
“Crime against children continues to be a top priority for the Georgia Bureau of Investigation. We are committed to work with our federal law enforcement counterparts and bring to justice those who exploit children,” said Vernon M. Keenan, Georgia Bureau of Investigation Director.
According to United States Attorney Yates, the charges and other information presented in court: Between July 2008 and March 2011, Villemez ordered 32 DVD’s containing images of child pornography and child erotica from a website based outside the United States. He spent more than $750 for those DVD’s. Law enforcement traced those orders to Villemez’s home in Smyrna, Ga. During the execution of a search warrant in October 2012, agents found that Villemez had not only purchased the DVD’s but had also downloaded child pornography onto his computer. During the period that he was receiving DVD’s in the mail and downloading computer images of child pornography, Villemez taught drama and dance to middle-school students at Pace Academy in Atlanta.
Villemez, 30, of Acworth, Ga., has been sentenced to five years in prison to be followed by 10 years of supervised release. He was convicted on these charges on April 19, 2013, after he pleaded guilty.
This case is being investigated by the United States Postal Inspection Service with assistance from the Georgia Bureau of Investigation and Cobb County Police Department.
Assistant United States Attorneys Paul R. Jones and Brent A. Gray prosecuted 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Former Union City Firefighter Sentenced for Receiving Child PornographyRead the Press Release
NEWNAN, Ga. - Justin D. Corley was sentenced today to serve five years in federal prison for receiving child pornography.
“This defendant collected a large number of horrible images and videos portraying the sexual abuse of young children. The fact that he apparently traded some of these images with other collectors while he was on duty as a municipal firefighter is particularly troubling,” said United States Attorney Sally Quillian Yates. “Mr. Corley has justly earned a significant sentence for his role in victimizing these children and by violating his public position.”
According to United States Attorney Yates, the charges and other information presented in court: In November 2011, the United States Department of Homeland Security/Homeland Security Investigations (DHS/HSI) initiated a peer-to-peer file sharing operation in an effort to identify people in the Atlanta area who were involved in receiving or distributing child pornography via the internet. HSI investigators determined that Justin Corley made child pornography files available to other collectors using a wireless internet protocol address assigned to the Union City (Ga.) Fire Department. On January 19, 2012, a federal agent downloaded files containing child pornography from Corley who was then using an internet protocol address associated with a family member.
On February 7, 2012, federal agents executed a search warrant at Corley’s home in Newnan, Ga., and seized his laptop computer. A forensic examination of Corley’s computer revealed more than 9,000 images of child pornography in the form of photographs and videos.
Corley, 31, of Newnan, Ga., has been sentenced by United States District Judge Timothy C. Batten, Sr., to five years in prison to be followed by 15 years of supervised release, and ordered to pay restitution in the amount of $1,000. Corley was convicted on these charges on July 9, 2013, after he pleaded guilty.
This case is being investigated by Special Agents from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations
Assistant United States Attorney Brent Alan Gray prosecuted 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Former Deputy Sheriff Sentenced for Obstructing A Public Corruption InvestigationRead the Press Release
ROME, Ga. - Joshua Lamar Greeson has been sentenced to 10 months in prison for obstructing a public corruption investigation.
“This defendant took an oath to uphold the law and protect the citizens of Murray County,” said United States Attorney Sally Quillian Yates. “Instead, he lied to GBI agents investigating an ongoing public corruption case, betraying the community he swore to protect.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The criminal conduct of former Murray County Deputy Sheriff Greeson is unconscionable and unthinkable for those serving faithfully within the criminal justice community. Today’s sentencing of Greeson will provide many opportunities for him to reflect on those actions and to serve as notice to others that this conduct will not be tolerated.”
According to United States Attorney Yates, the charges and other information presented in court: In April 2012, a citizen of Murray County, Ga., had a meeting with then-Chief Magistrate Judge Bryant Cochran related to a legal matter. The citizen claimed that during that meeting, Mr. Cochran made inappropriate sexual overtures towards her. In the days and weeks following the complaint, then-Judge Cochran called several local police officers to pass along a Atip@ B that the citizen carried drugs in her white Dodge vehicle.
On August 9, 2012, Cochran called Greeson, who at the time was a Deputy with the Murray County Sheriff=s Department. Five days after the call, on August 14, 2012, Greeson conducted a traffic stop of the white Dodge vehicle. During the traffic stop, Greeson found methamphetamine in a metal can hidden under the tire well of the car. After locating the drugs, Greeson arrested the driver as well as the citizen who was the owner of the vehicle sitting in the front passenger seat.
On August 15, 2012, Greeson met with a Superior Court Judge to obtain a search warrant for a urine sample from the citizen. During the meeting, Greeson falsely stated to the judge, in sum and substance, that he had not received any prior information about the white Dodge vehicle prior to stopping it.
Shortly thereafter, the GBI received information that the drugs had been planted on the vehicle by another individual in an attempt to falsely inculpate the citizen. As a result of that information, the local district attorney’s office dismissed the charges against the citizen.
GBI agents interviewed Greeson on August 23, 2012, in connection with an investigation of public corruption and civil rights violations. During the interview, Greeson falsely stated to the GBI agents that he had not received any information about the white Dodge car before he pulled it over.
He met with the GBI for a second interview on August 27, 2012. During this meeting, Greeson admitted to the GBI that he had lied – in that prior to stopping the white Dodge he had, in fact, been provided with information that the vehicle was supposed to be carrying drugs.
Greeson, 26, of Chatsworth, Ga., was convicted on these charges after pleading guilty on April 12, 2013. On August 29, 2012, he was terminated from the Murray County Sheriff’s Department. United States District Judge Harold L. Murphy sentenced him to 10 months in prison to be followed by one year of supervised release.
This case was investigated by Special Agents of the Federal Bureau of Investigation and Georgia Bureau of Investigation.
Assistant United States Attorneys Michael Herskowitz and 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia Rome Division is http://www.justice.gov/usao/gan/.
Newton County Deputy Sheriff Arrested on Drug Trafficking and Firearms ChargesRead the Press Release
ATLANTA - Darrell Mathis has been charged with distributing marijuana and using and carrying a firearm in furtherance of a drug trafficking offense.
“This defendant used his position as a police officer to openly violate the very laws that he was sworn to uphold,” said United States Attorney Sally Quillian Yates. “Selling marijuana out of his police car while wearing a badge and uniform is outrageous. This case is a reminder that no one is above the law.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Allegations of law enforcement officers actually engaged in the distribution of drugs is a rare occurrence. When those allegations came to the FBI concerning Newton County Deputy Sheriff Mathis, the FBI swiftly took action. The FBI considers such allegations of criminal conduct by law enforcement officers to be a priority investigative matter and we continue to ask the public to contact their nearest FBI field office with information concerning such activities.”Ezell Brown, Newton County Sheriff, stated: “My office is completely cooperating with the FBI in this investigation. This is an embarrassment to the Newton County Sheriff’s Office, as well as law enforcement in general. Mr. Mathis has been placed on administrative leave pending the outcome of the investigation”.
According to United States Attorney Yates, the charges, and other information presented in court: In April 2013, it came to the attention of the Federal Bureau of Investigation that Darrell Mathis, a deputy sheriff with the Newton County Sheriff’s Office, was engaged in distributing marijuana. From May through September 2013, Mathis sold various quantities of marijuana to a confidential source who was working with the FBI, as well as to an undercover FBI agent. On at least two occasions, Mathis sold marijuana from his marked patrol vehicle while wearing his Newton County Sheriff’s Office uniform.
On August 8, 2013, Mathis sold one pound of marijuana to an undercover FBI agent. Following that sale, Mathis and the undercover FBI agent went to meet with another undercover FBI agent to discuss the sale of additional quantities of marijuana. Mathis brought his NCSO badge and his firearm to the meeting. During the meeting, Mathis told the undercover agent, who he believed was a drug dealer, that he was a police officer, pulled out his badge, and stated, "Don't worry, I'm on your side."
Mathis, 40, of Lithonia, Ga., made his initial appearance before Magistrate Judge Russell G. Vineyard and was released on bond. He was arrested on September 19, 2013, when he met with the undercover agent in possession of one pound of marijuana. Mathis has been a sworn deputy sheriff with Newton County since December 2008.
The charge of possession with intent to distribute and distribution of marijuana carries a maximum sentence of five years in prison and a fine of up to $250,000. The charge of using and carrying a firearm during and in relation to a drug trafficking offense carries a maximum term of life in prison and a fine of up to $250,000.
Members of the public are reminded that a criminal complaint contains only allegations. 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 Jamie L. Mickelson 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Members of Atlanta-Based Gang Arrested on Federal Extortion ChargesRead the Press Release
ATLANTA – Five members of an Atlanta-based gang have been charged by a federal grand jury with extortion, drug trafficking, and firearms offenses.
“These defendants, whose calling cards were violence and intimidation, allegedly terrorized local businesses by shaking them down for cash in return for ‘protection,’” said United States Attorney Sally Quillian Yates. “The community does not need this kind of protective service, or any of the other illegal services the defendants allegedly offered.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “This investigation provides a very good look inside the activities of an organized and violent criminal enterprise that focused that violence on the Asian-American community here in the metro Atlanta area. The FBI’s investigation into this gang was extensive and the resulting arrests and indictments are a testament to the hard work of those dedicated individuals who are committed toward making our communities safer.”
According to United States Attorney Yates, the charges, and other information presented in court: Eugene Thomas Chung, a/k/a Yoo Jin Chung (“Chung”), Athith A. Vorasith, a/k/a Andy Vorasith (“Vorasith”), Jong Sung Kim, a/k/a John Kim (“Kim”), Ye El Choi, a/k/a David Choi (“Choi”), and Thomas Jungwon Lee, a/k/a Tommy Lee (“Lee”) are alleged to have conspired together and with others to extort money and property from legitimate business people, using threats, force, violence, and firearms in furtherance of their criminal enterprise.
In about July 2009, Chung and his crew allegedly visited the Gah Bin Korean bar and restaurant in Gwinnett County, Ga., and demanded a monthly share of the restaurant’s profits in exchange for “protection.” Chung promised that, unless a victim made the demanded payments, Chung and his crew would assault this victim, harass his/her customers and employees, and otherwise damage the restaurant. To reinforce their threats, Chung told the victim his crew routinely carried firearms and terrorized other Korean businesses in the community. Over the next four months, Chung and his criminal associates allegedly strong-armed the victim into making monthly protection payments, ranging from $400 to $800.
Shortly after the victim was assaulted, the FBI opened an investigation, and the victim resumed making protection payments under FBI surveillance.
As part of the ongoing undercover investigation, on about March 10, 2010, the victim introduced an undercover agent to Chung, Vorasith, and Lee. During the recorded meeting, Chung explained to the undercover officer that he ran a marijuana distribution business and offered a menu of other illegal services as well, including gambling, extortion, and debt collection. Chung offered to help the undercover officer if he ever needed money collected and stated, “If you need us to beat up anybody, we’re professionals at that.” Chung added that he and his associates were “best at making people crippled,” and said they could also make people “permanently limp, blind, or deaf.” Upon hearing that the undercover officer supposedly was owed $200,000 by a businessman in Houston, Texas, who was behind in payments (and who was actually an undercover officer as well), Chung offered to collect the debt.
On September 17, 2013, a federal grand jury in Atlanta returned a 13-count indictment charging the following individuals with extortion, drug trafficking, and firearms offenses:
•Eugene Thomas Chung, a/k/a Yoo Jin Chung, 39, of Duluth, Ga.;
•Athith A. Vorasith, a/k/a Andy Vorasith, 24, of Auburn, Ga.;
•Jong Sung Kim, a/k/a John Kim, 48, of Suwanee, Ga.;
•Ye El Choi, a/k/a David Choi, 30, of Norcross, Ga.; and
•Thomas Jungwon Lee, a/k/a Tommy Lee, 32, of Duluth, Ga.On September 19, 2013, initial searches and arrests were conducted in connection with an unsealed indictment. The defendants made their initial appearances in the United States District Court for the Northern District of Georgia before Magistrate Judge Russell G. Vineyard.
If convicted, Chung and Vorasith face a maximum sentence of up to life imprisonment; Kim, Choi, and Lee face up to 20 years of imprisonment. They also are potentially subject to fines of over $1,000,000 dollars.
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 a defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by Special Agents of the Federal Bureau of Investigation.
Assistant United States Attorneys John S. Ghose, Kurt R. Erskine, and Ryan Scott Ferber 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 is www.justice.gov/usao/gan.
Jury Convicts Identity ThiefRead the Press Release
Cora Ford Used Stolen Identities of the Homeless and Disabled to File Fraudulent Tax Returns for Refunds
ATLANTA - Cora Cadia Ford has been found guilty by a jury following a three-day trial on 30 counts of mail fraud, aggravated identity theft, and filing false claims with the Government.
“This defendant took advantage of some of the most disadvantaged members of our community,” said United States Attorney Sally Quillian Yates. “Her greed drove her to use the identities of people who were homeless, mentally challenged, and physically disabled. She not only stole taxpayer money, she callously left her victims without their much-needed disability payments.”
IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot said, “Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law. IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney’s Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes.”
According to United States Attorney Yates, the charges and other information presented in court: from approximately January 2007 to May 2011, Ford prepared and filed false tax returns with the IRS, using the names and social security numbers of the poor, homeless and disabled. Ford intentionally prepared each tax return with false information so that it would generate a tax refund. Ford obtained the tax refund checks and deposited them into her own bank account or cashed the checks at check-cashing stores, and used the money for her own benefit. As a result of Ford’s crimes, many of the victims whose names and social security numbers were stolen had their social security disability benefits reduced or eliminated for a period of time.
Ford obtained the victims’ names and social security numbers in a variety of ways. In some instances, Ford convinced the victims to provide her with their identifying information so that she could apply on their behalf for a homeless grant with the Government. In fact, no such Government grant existed. In other instances, Ford, who also ran a small church with her now-deceased husband, told her victims that she would file a tax return on their behalf and it would be “a gift from God.” In fact, Ford used the victims’ identifying information to prepare and file false tax returns, and kept the entire tax refund for herself. One victim, who testified that her social security disability benefits were reduced to approximately $27 per month as a result of Ford’s crimes, causing her to be unable to afford her own medications, stated that the defendant’s crimes had ruined her life.
The mail fraud charges each carry a maximum sentence of 20 years in prison, and each false claim charge carries a maximum sentence of 5 years in prison. The aggravated identity theft charges carry at least one mandatory two-year consecutive sentence to any other sentence imposed. Each count also carries a fine of up to $250,000. 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 Ford, 55, of Stone Mountain, Ga., is scheduled for December 16, 2013, at 10:30 am before United States District Judge Thomas W. Thrash.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Assistant United States Attorneys Thomas J. Krepp and Steven D. Grimberg 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Multi-State Takedown Targeted National Cocaine Trafficking OrganizationRead the Press Release
ATLANTA – Twelve members of a national cocaine trafficking organization have been charged in a large-scale investigation conducted by the Federal Bureau of Investigation code-named “Operation Holy Trap.”
“Today’s takedown is another chapter in this Office’s ongoing commitment to hold significant narco-traffickers to account and to dismantle their operations and infrastructure,” said United States Attorney Sally Quillian Yates. “Our streets are safer with these serious offenders off them. The arrests also serve as a valuable reminder to those who might use their seemingly legitimate businesses to support narco-traffickers. You are not above the law. You will be prosecuted.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “While the import and distribution of dangerous drugs such as methamphetamines, cocaine, and heroin continue to be carried out by highly organized criminal enterprises covering large territories within the U.S., law enforcement continues to go after these groups in an equally organized manner as demonstrated by the David G. Wilhelm Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force, based in Atlanta. The FBI, as part of this federally led group of local, state, and other federal investigators and analytical staff, brings forward its expertise in helping dismantle these criminal enterprises and seizing their assets. The indictments and arrests resulting from Operation Holy Trap are a result of many months of hard work by this dedicated Strike Force and required much coordination with other law enforcement entities in other states. The cocaine distribution in this case was extensive and the money generated by this group is an indicator as to how active and established this group was in the U.S. The fight to keep our communities safe from this corrosive criminal influence continues and the FBI remains a committed and steadfast partner in this effort.”
According to United States Attorney Yates, the charges, and other information presented in court: For over 18 months, the FBI has been investigating a drug trafficking organization with ties to Georgia, Florida, Massachusetts, Texas, and Louisiana.
The organization is alleged to have been overseen by Edwin Rivera, a/k/a Neno, a/k/a Nano (“Rivera”), a Boston-based drug dealer, who used vehicles outfitted with hydraulic concealed compartment (or traps) to smuggle multiple kilograms of cocaine and hundreds of thousands of dollars throughout the United States. Rivera employed Hector Ramon DeJesus, who operated a seemingly legitimate auto shop in Atlanta, to install the traps in the load vehicles. Juan Manuel Santana Baez, a/k/a “Robin,” worked with and for DeJesus in the trap business, including on vehicles used by Rivera.
Rivera is alleged to have used a syndicate of couriers to transport the organization’s drugs and drug proceeds, including Pedro Angel Morales, a/k/a “Tito;” Glenny Difo; Militza Negron; Jose Ramon Medina Bravo, a/k/a “Lynx;” Jose M. Vellon Rios, a/k/a Javier Luis R Mercado; Jennifer Medina; and Alex Jonathan Tejada Avelino, a/k/a “Jonathan.” Maximo Stiven Bernabel Pena, a/k/a “Pablo,” and Freddy Pena also were members of Rivera’s cocaine trafficking organization.
To date, investigators have seized over 70 kilograms of cocaine and approximately $1,000,000 in drug proceeds.
On July 9, 2013, a federal grand jury in Atlanta returned a five-count indictment charging the following individuals with various drug offenses, including conspiring to traffick over five kilograms of cocaine and substantive drug trafficking charges:Edwin Rivera, a/k/a “Neno,” a/k/a “Nano,” 43, of Hyde Park, Mass.;
- Maximo Stiven Bernabel Pena, a/k/a “Pablo,” 23, of Roxbury, Mass.;
- Juan Manuel Santana Baez, a/k/a “Robin,” 38, of Duluth, Ga.;
- Glenny Difo, 37, of Orlando, Fla.;
- Militza Negron, 41, of Orlando, Fla.;
- Jose Ramon Medina Bravo, a/k/a “Lynx,” 28, of Tamarac, Fla.;
- Jose M. Vellon Rios, a/k/a Javier Luis R Mercado, 32, of Hazelton, Pa.;
- Jennifer Medina, 31, of Gretna, La.;
- Alex Jonathan Tejada Avelino, a/k/a “Jonathan,” 30, of Jamaica Plain, Mass.;
- Freddy Pena, 24, of Jamaica Plain, Mass.; and
- Pedro Angel Morales, a/k/a “Tito,” 49, of Springfield, Mass.
In addition, a criminal complaint was issued against Hector Ramon DeJesus, 67, of Lawrenceville, Ga., charging him with conspiring to traffic over five kilograms of cocaine.
On September 12, 2013, initial searches and arrests were conducted in connection with an unsealed indictment and criminal complaint. Federal, state, and local law enforcement officers fanned out across Atlanta, Ga., Boston, Mass., Scranton, Pa., Orlando and Tamarac, Fla., to seek to arrest the charged defendants. The takedown, which is ongoing, so far has ensnared nine defendants. Over the next two days, initial appearances are scheduled to occur in this District, as well as in the Middle District of Florida and District of Massachusetts.
The investigation of the case was led by FBI agents from the David G. Wilhelm OCDETF-Atlanta Strike Force, which consists of federal, state, and local drug officers and focuses on dismantling international drug organizations operating in the United States. The investigation also included participation from the Strike Force members: the Drug Enforcement Administration (DEA), the United States Marshals Service, the Department of Homeland Security, the Internal Revenue Service-Criminal Investigation (IRS), the Georgia Bureau of Investigation (GBI), Lawrenceville Police, Gwinnett County Sheriff’s Office, Clayton County Police, and Barrow County Sheriff’s Office.
If convicted, the charged defendants face a maximum sentence of up to life imprisonment, as well as fines of over $10 million dollars.
Members of the public are reminded that the indictment and criminal compliant contain only allegations. A defendant is presumed innocent of the charges, and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
Assistant United States Attorneys Ryan Scott Ferber and C. Brock Brockington 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Former Griffin Grocery Store Owner Sentenced for Wic FraudRead the Press Release
NEWNAN, Ga. - Herbert Dix has been sentenced in federal district court for defrauding the U.S. Department of Agriculture (USDA) and possessing forged “WIC” vouchers.
“Families most in need rely on government funds for basic subsistence,” United States Attorney Sally Quillian Yates. “This defendant stole from the USDA and tax payers, depriving some of the neediest families of funds meant to help them survive.”“It is unfortunate that people continue to defraud nutritional programs that have been created to provide assistance in times of need. USDA-OIG remains committed to working with DOJ and its law enforcement partners in ensuring that those who steal from nutritional programs, such as the WIC program, and the taxpayers are prosecuted to the fullest extent of the law. People who defraud these programs foolishly think they will never be caught, but USDA is assiduous in investigating program fraud and bringing the perpetrators of such fraud to justice”, stated Karen Citizen-Wilcox, Special Agent-in-Charge.
"The enduring cooperation between the Georgia Department of Public Health (DPH), local law enforcement and the U.S. Attorney’s Office should send a clear signal to those contemplating WIC fraud,” said Brenda Fitzgerald, M.D., DPH’s commissioner, who commended a conviction three years in the making. “We are committed to working together to detect and eliminate fraud, and to preserve precious funds for those who need it most.”
According to United States Attorney Yates, the charges and other information presented in court: Dix owned and operated Spanks Quick Stop, a store front grocery store in Griffin, Ga. Spank’s Quick Stop was authorized by the State of Georgia to redeem Woman, Infant, and Children (WIC) vouchers for specified food items, such as infant formula, milk, and cheese, etc. The Georgia Department of Public Health (DPH) issues WIC vouchers to low income, at risk families, who can use the vouchers to purchase specified food items from authorized grocers. Contrary to federal law and state regulations, Dix and his employees paid cash for the WIC vouchers instead of accepting them as payment for the food items listed on the vouchers.
On 18 separate occasions, an undercover law enforcement officer entered Spank’s Quick Stop, where Dix and his employees illegally redeemed blank WIC vouchers for cash. Dix then filled in an amount on the vouchers significantly greater than what he paid for the vouchers and deposited the vouchers into his bank account. In December 2010, federal, state and local law enforcement officers executed a search warrant at Spank’s and seized over 100 forged blank WIC vouchers. An analysis of Dix’s bank records revealed that between 2010 and 2011 he had defrauded the USDA out of more than $150,000.
Dix, 49, of Riverdale, Ga., has been sentenced to one year and ten months in prison, followed by three years of supervised release, 100 hours of community service, $14,100 restitution, and a special assessment of $10,100. Dix was indicted in July 2012 on 18 counts of WIC fraud and 83 counts of possession of forged securities. In May, he pleaded guilty to the entire indictment.
This case was investigated by Special Agents of the United States Department of Agriculture, Office of Inspector General, Georgia Department of Public Health, Office of Inspector General, and the Griffin Police Department.
Assistant United States Attorney David Leta 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Former Candidate for DeKalb County Superior Court Pleads Guilty to Defrauding InvestorsRead the Press Release
ATLANTA - Michael Rothenberg, a former candidate for a seat on the DeKalb County Superior Court, pleaded guilty today to a charge of defrauding the owners of WinterHawk Energy and Development Corporation.
“This defendant stole from investors who trusted his judgment,” said United States Attorney Sally Quillian Yates. “His fraud is particularly egregious because he was involved in defrauding investors at the very time he was seeking to be elected as a DeKalb County Superior Court Judge, and because he used a portion of the illegal proceeds to fund his political campaign. Ultimately, his fraud scheme was uncovered, and his quest to be elected ended in failure.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Investment fraud schemes often have at their core individuals who appear very credible. These schemes often end with those individuals being revealed as greedy and uncompassionate for those devastated investors whose trust they betrayed. Today’s guilty plea will ensure that Mr. Rothenberg will be held accountable for his criminal actions.”
According to United States Attorney Yates, the charges and other information presented in court: Michael Rothenberg, 35, of DeKalb County, Ga., deceitfully persuaded the owners of WinterHawk Energy and Development Corporation (“WinterHawk”) into investing a total of $1.35 million. Rothenberg represented that the invested money would be placed in a trust account, controlled by Rothenberg, which would be used to fund the trading of notes by large financial institutions. These notes, according to Rothenberg, would be split into “tranches,” and a ten percent profit would be earned each time a note or “tranch” was traded. Rothenberg told the investors that the investment involved no risk.
In fact, no investment existed and Rothenberg used the money paid by WinterHawk to fund his political campaign for a seat on the DeKalb County Superior Court as well as to pay personal expenses. Rothenberg ultimately was unsuccessful in his bid for a judgeship. During the scheme, Rothenberg placated the investors’ concerns and lulled them into believing that the investment opportunity was real by emailing them fabricated bank statements, which made it appear as if the money they had invested remained in his trust account and that Rothenberg himself was wealthy. From time to time Rothenberg returned some of the money to the investors in response to their demands, and claimed falsely that he was making up for the shortfall by personally investing his own money. But Rothenberg did not invest his own money, and in fact spent the remaining proceeds – approximately $800,000 – without the investors’ knowledge or consent.
The charge of wire fraud in this case carries a maximum sentence of 20 years in prison and a fine of up to $250,000. 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 is scheduled for November 18, 2013 at 10:00 a.m. before United States District Judge Steve C. Jones.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Steven D. Grimberg is prosecuting the case. The DeKalb County District Attorney’s Office has provided valuable assistance.
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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Former Cox Employees Charged with EmbezzlementRead the Press Release
Two Employees Allegedly Diverted Funds to Their Personal Bank Accounts
ATLANTA - Joysha Flucker has been arraigned on charges in an indictment that a federal grand jury returned on May 21, 2013, for allegedly stealing over $900,000 from Cox Communications.
“Those who shamelessly steal from their employer should expect to be held accountable,” said United States Attorney Sally Quillian Yates. “Companies must be able to trust their employees, especially when those employees are entrusted with handling money. The charges against these defendants reflect that they violated the law as well as their employer’s confidence.”Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The federal indictments of these two former Cox employees represent the FBI’s commitment to partner with and provide assistance to the corporate sector. Those individuals who engage in such wide spread and high dollar thefts run the very real risk of becoming targets in a federal investigation.”
According to United States Attorney Yates, the charges and other information presented in court: Joysha Flucker, 36, of Decatur, Ga., and Sakia Allen, 38, of Jonesboro, Ga., previously worked for Cox Communications, where they had access to the company’s electronic invoicing system that tracked the company’s payments to various third parties. Flucker and Allen manipulated the electronic invoicing system so that Cox Communications would issue duplicate payments to the third parties. However, the duplicate payments were directed into bank accounts under the control of the defendants. As a result of the defendants’ actions, Cox Communications suffered losses of at least $943,865.46.
Flucker was arraigned before United States Magistrate Judge Russell G. Vineyard today on the charges and was detained. Allen previously entered a plea of guilty to one count of wire fraud on July 25, 2013, before United States District Judge William S. Duffey, Jr.
The indictment charges the defendants with multiple counts of wire fraud and one count of conspiracy. Each wire fraud count carries a maximum sentence of 20 years in prison and the conspiracy count carries a maximum sentence of 5 years in prison. Each count also carries a fine of up to $250,000. 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.
The United States is also seeking the forfeiture of all funds derived from this scheme. The United States previously forfeited a house and luxury automobiles as proceeds of the alleged offense.
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 with the assistance of the Sandy Springs Police Department.Assistant United States Attorneys Mary F. Kruger and Thomas J. Krepp 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Georgia Emissions Inspectors Plead Guilty in Federal CourtRead the Press Release
ATLANTA – Jerome Clarence Barnes, Jr. and Jared F. Walker have pleaded guilty for their roles in a scheme to fraudulently issue emissions certificates for cars that would have failed the emissions inspection required by law.
“Barnes orchestrated a scheme to take hundreds of thousands of dollars in illegal payments in return for falsely certifying that cars had passed emissions tests,” said United States Attorney Sally Quillian Yates. “By issuing false certificates, not only did Barnes and his codefendants corrupt the emissions certification system, they also allowed a threat to air quality in Atlanta, and as a consequence, public health.”
“Congress enacted the Clean Air Act to ensure that all Americans have the right to breathe clean, safe air and violators who produce fraudulent emissions data undermine that right.” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in Georgia. “All of the violations in this case took place in the Greater Atlanta area, a region that exceeds minimum federal standards for hazardous air pollutants. This case is an excellent example of how EPA, working with investigators from the Georgia Environmental Protection Division and other agencies, works to protect both the public and the environment.”
“The result of this investigation sends an important message to anyone who would try to defraud Georgia’s vehicle emissions program,” said Judson H. Turner, Director of the Georgia Environmental Protection Division (EPD). “The program has a major role in the state’s plan to improve air quality in metropolitan Atlanta, so we are very pleased with this outcome.”According to United States Attorney Yates, the charges and other information presented in court: Barnes, 34, of Lithia Springs, Ga., was responsible for issuing over 4,000 fraudulent emissions certificates to car owners in Georgia from September 2011 to September 2012, falsely stating that the owners’ cars passed the required emissions test. Barnes worked with other individuals to open emissions inspection stations in their names that he would then use to issue fraudulent emissions certificates. Opening stations in others’ names helped conceal Barnes’ involvement in the fraudulent activity. He wanted to avoid detection because he previously owned two inspection stations that state authorities had shut down for fraud. When authorities would discover emissions fraud occurring at one of the inspection stations, Barnes continued the fraud at another station that was opened under the name of a different owner. During the scheme, Barnes used On Time Emissions in Fulton County, All Clean Emissions in Cobb County, BDH Emissions in Dekalb County, Elite Emissions in Fulton County, and Cleaner Atlanta Emissions in Cobb County, to conduct fraudulent emissions testing. Walker, 35, of Austell, Ga., owned All Clean Emissions.
Jared F. Walker, and co-defendants Ieka N. Jones, 33, of Winston, Ga., and Seretha Franklin, 36, of Acworth, Ga., were licensed emissions inspectors who worked with Barnes to issue passing emissions certificates to car owners whose cars would have otherwise failed the emissions test. Instead of connecting the owners’ real cars to the emissions equipment, the defendants connected different cars they knew would pass the test. During the tests, the computer system automatically transmitted emissions testing data to a statewide database accessible by the Georgia Environmental Protection Division. The defendants manually entered other information into the system, such as the make, model, and vehicle identification number, to make it appear that they were testing the owners’ real cars, many of which had already failed an emissions test or showed equipment malfunctions. The defendants charged $100 to $125 for a fraudulent emissions test, far more than the usual amount charged for a legitimate inspection. Georgia law prohibits inspection stations from charging more than $25 for an emissions test.
Barnes pleaded guilty to one count of conspiring to commit wire fraud by depriving the State of Georgia and its citizens of their right to his honest services as a licensed emissions inspector. Walker pleaded guilty to one count of violating the Clean Air Act. The conspiracy charge against Barnes carries a maximum sentence of 5 years in prison. The Clean Air Act charge against Walker carries a maximum sentence of 2 years in prison. Each charge carries a fine of up to $250,000. 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.
The Clean Air Act is a federal law that authorizes the United States Environmental Protection Agency to establish air quality standards to protect public health and welfare and to regulate emissions of hazardous air pollutants. As required by the Act, the State of Georgia has established a vehicle emissions testing program that requires cars in several counties be inspected to ensure that their emissions do not exceed limits for hydrocarbons, nitrogen oxide, and other compounds. With certain exceptions, car owners must submit an emissions certificate to obtain their annual vehicle registration. The Clean Air Act prohibits making false statements in records, including emissions certificates and database records, that are required to be maintained by the Act.
Sentencing is scheduled for November 22, 2013, at 10:00 a.m. before United States District Judge Timothy C. Batten, Sr. The indictment charging Jones and Franklin with conspiracy and Clean Air Act violations remains pending.
This case is being investigated by Special Agents of the United States Environmental Protection Agency, Criminal Investigation Division, and the Georgia Department of Natural Resources, Environmental Protection Division.
Assistant United States Attorney Stephen H. McClain 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Chattanooga Man Sentenced to Prison for Child EnticementRead the Press Release
ROME, Ga. - Jason Antti, who traveled to Georgia to have a sexual encounter with a fictitious 11-year-old and 14-year-old girl has been sentenced on charges of child enticement.“This office will continue to aggressively pursue individuals who seek to exploit young children,” said United States Attorney Sally Quillian Yates. “Engaging in sexual acts with children is a vile and violent act, and perpetrators will be held accountable for this reprehensible conduct.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI’s various Child Exploitation Task Forces scattered throughout the country are designed to identify, investigate, and present for prosecution those individuals like Mr. Antti who choose to prey on our nation’s children. Mr. Antti, having been sentenced in federal court, will now have to answer for his predatory criminal conduct.”
According to United States Attorney Yates, the charges and other information presented in court: In June 2012, a special agent with the FBI’s Northwest Georgia Internet Crimes Against Children Task Force, working online and undercover, posted an ad on Craigslist. The agent posed as a stepfather looking for people interested in having sexual relations with his two young step-daughters. Antti responded to the ad. When Antti was told that the girls were only 11 and 14 years old, he replied that he had a fantasy to engage in sex acts with very young children. Antti then described in detail the sexual acts he intended to perform with the two young girls.
During subsequent on-line exchanges between the defendant and an undercover agent, Antti indicated that he would be traveling to Georgia from Chattanooga, Tenn. He agreed to meet the undercover agent and both girls at the Econolodge in Chickamauga, Ga. On the afternoon of June 8, 2012, Antti drove to the Econolodge in his gray BMW and was arrested. Agents recovered two boxes of condoms from his vehicle.Antti, 41, of Chattanooga, Tenn., has been sentenced by United States District Judge Robert L. Vining, Jr., to 15 years in prison today, followed by 15 years of supervised release. He was convicted of these charges on April 18, 2013, upon his plea of guilty. The defendant will be required to register as a sex offender when he is released from prison.
This case was investigated by the Federal Bureau of Investigation, the Rossville Police Department, the Murray County Sheriff’s Office, and the Walker County Sheriff’s Office.
Assistant United States Attorney Suzette A. Smikle prosecuted 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Clayton County Police Officer Assigned to U.S. Marshals Service Task Force Arrested on Public Corruption, Drug Trafficking, and Firearm ChargesRead the Press Release
ATLANTA – Dwayne Penn, a Clayton County Police Officer assigned to the U.S. Marshals Service fugitive task force, and Adrian Demetric Austin have been arrested on corruption, drug trafficking, and firearm charges.
“Penn’s abuse of trust is shocking,” said United States Attorney Sally Quillian Yates. “Police officers who manipulate their positions create mistrust with the people they are sworn to protect. As demonstrated by the number of police officer cases charged earlier this year, we are committed to pursuing these cases wherever they arise to restore the public’s trust in honest law enforcement.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “While public corruption matters overall are a priority criminal investigative program within the FBI, any allegation of public corruption involving law enforcement officers takes on a particular sense of urgency. This matter, involving Clayton County Police Officer and U.S. Marshals Task Force Officer Dwayne Penn, was worked with close cooperation and support by the U.S. Drug Enforcement Administration (DEA). While the arrest of Officer Penn is disconcerting, the public should be reminded that the vast majority of those individuals serving within the criminal justice system do so with honor and integrity.”
Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division stated, “The vast majority of law enforcement officers serve the public with honor and distinction. Officers like these unfortunately tarnish the badge of the committed men and women of law enforcement. This individual will now have to face the consequences for his deplorable actions. The success of this investigation would have not been possible without the dynamic level of law enforcement cooperation.”
“The Clayton County Police Department remains dedicated and committed to serving and protecting Clayton County residents and businesses, said Clayton County Deputy Police Chief Christopher L. Butler. “We ask that you continue your support of those unfaltering officers.”
According to United States Attorney Yates, the complaint and other information submitted in court: In August 2013, Penn, of the Clayton County Police Department, allegedly conspired with Austin, a suspected Atlanta-based drug dealer, to use Penn’s official position as a police officer to stage a fake traffic stop of a car that he and Austin believed would contain six kilograms of cocaine, conduct a fake arrest of the car’s occupant, seize the cocaine for themselves, and then sell the cocaine, sharing their ill-gotten gains. Fortunately, the person whom Penn and Austin sought to recruit for this corrupt endeavor was cooperating with federal law enforcement and agreed to record his/her meetings with Penn and Austin. In the lead up to the fake arrest and seizure, Penn and Austin met face-to-face with the confidential informant on two separate occasions to plan their operation.
The complaint alleges that the first planning meeting, which was surreptitiously recorded by law enforcement, occurred on August 21, 2013. Penn drove his police car to the meeting. While together, Penn, Austin, and the confidential informant discussed the confidential informant obtaining cocaine from his/her drug source of supply. Penn would then conduct a fake traffic stop and arrest of the confidential informant in front of the source, using Penn’s police vehicle and lights, and seize the cocaine, leading the source to mistakenly believe the drugs had been seized by law enforcement. They would divide up the seized cocaine among themselves according to the plan. As part of the charade, Penn agreed to handcuff the confidential informant, put the drugs in the trunk of his police car, and drive the confidential informant to a second location. Penn reassured the confidential informant that they could cover his/her tracks with the source of supply to deflect suspicion.
Penn, Austin, and the confidential informant met again on August 27, 2013, at a parking lot in Decatur where the drug deal was to occur. The meeting was at Penn’s request so they could further plan the operation. Like the August 21 meeting, the August 27 meeting was surreptitiously recorded by law enforcement. Penn drove his police car to the August 27 meeting as well. The confidential informant entered Penn’s police car, where Austin was already waiting. The three continued their discussion of the staged traffic stop, arrest, and seizure, which they agreed would occur the next day at that same parking lot. Penn worked through the logistics, including where he would park during the cocaine deal; how Penn would conduct the fake traffic stop, arrest, and seizure; and the eventual split of the seized six kilograms of cocaine. Penn drove Austin and the confidential informant around the parking lot, scouting out possible spots for various events the next day. Penn even asked if Austin wanted to ride with him the next day.
As planned, on the morning of August 28, 2013, Penn and Austin arrived at the Decatur parking lot. Penn drove his police car and parked it in view of where the drug deal was to occur. While waiting, Penn ran the tags of a number of vehicles in the area through law enforcement databases. The confidential informant met with the supposed drug dealer (also a law enforcement source) in the parking lot in view of Penn. The confidential informant received a shopping bag containing six kilogram-size bricks of fake cocaine, walked back to his/her vehicle, and placed the bag inside, placing two kilogram bricks in the back seat and leaving the remaining four kilogram bricks in the shopping bag in the front seat.
Shortly after the confidential informant emerged from the vehicle, Penn sped over in his police car with the lights on and blocked the confidential informant from leaving. Penn jumped out of his car with his firearm drawn and pointed it at the confidential informant. Penn was wearing a bulletproof vest, which read “Police,” and a black baseball hat. Penn ordered the confidential informant to get on the ground and to keep his/her “hands behind your back,” which the confidential informant did. Penn holstered his firearm, picked up the confidential informant from the ground, and patted him/her down. Penn then ushered the confidential informant into Penn’s police car. The confidential informant told Penn that s/he had already taken his/her two and that there were four in the bag. Penn then walked over to the confidential informant’s vehicle and removed the shopping bag with the four kilogram bricks from the front seat, leaving the confidential informant’s share (two kilograms) in the car. Penn placed the shopping bag in the trunk of his police car, told the confidential informant to “get out of here,” and drove away with the cocaine-like substance, leaving the confidential informant and the two kilogram bricks behind at the parking lot.
Penn and Austin were arrested shortly afterward in the vicinity of the Decatur parking lot. They are charged in a criminal complaint with drug trafficking and firearm charges; Penn is also charged with public corruption. They made their initial appearance in United States District Court for the Northern District of Georgia before United States Magistrate Judge Alan J. Baverman today.
If convicted, Penn, 38, and Austin, 38, both of Atlanta, Ga., face a maximum sentence of up to life imprisonment for the drug trafficking charges; up to life imprisonment for the firearm charge; and, for Penn, up to 20 years on the public corruption charge; as well as fines of over $10 million dollars.
Members of the public are reminded that the criminal complaint contains only allegations. A defendant is presumed innocent of the charges, and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by Special Agents of the Federal Bureau of Investigation and Drug Enforcement Administration.
Assistant United States Attorney Scott Ferber 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Norcross Woman Stole More Than $398,000 in Federal Retirement BenefitsRead the Press Release
ATLANTA - Deborah West has been sentenced to 18 months in federal prison for stealing federal retirement benefits.
“Federal employees work hard to earn retirement benefits to support them during their golden years,” said United States Attorney Sally Quillian Yates. “For fifteen years this defendant shamelessly stole from the federal retirement system, taking what she never worked for and never earned.”
“Fraudulently obtaining annuity payments is a crime of opportunity,” said Office of Personnel Management Inspector General Patrick E. McFarland. “It is all too easy for individuals to take advantage of an aging relative, neighbor, or ward – and even easier to do so once they have passed away. This conviction demonstrates that we are dedicated to holding these individuals accountable for their crimes.”
According to United States Attorney Yates, the charges and other information presented in court: The defendant’s parents were both federal employees who received federal retirement benefits. The defendant’s father passed away in 1980 and his benefits were legitimately transferred to West’s mother. The defendant’s mother, also a federal employee, collected her benefits and her husband’s benefits until 1993, when she died. At that time, all of the benefits should have ended. However, the federal government never learned of the death and continued to pay the benefits directly to the mother’s bank account. The defendant stole those benefits by writing checks to herself from her deceased mother’s account, forging her mother’s signature and keeping the money for herself. In sum, between 1993 and 2008 the defendant stole more than $398,000 of federal benefits to which she was not entitled.
West, 64, of Norcross, Ga., was sentenced to one year, six months in prison to be followed by three years of supervised release by United States District Judge Thomas W. Thrash, Jr. She was also ordered to pay restitution in the amount of $398,773.96. West was convicted on these charges on June 10, 2013, after she pleaded guilty.This case is being investigated by the Office of Personnel Management, Office of Inspector General.
The case was jointly prosecuted by Assistant United States Attorneys Christopher C. Bly in Atlanta and Kristi O’Malley of the District of Maryland.
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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Emory University to Pay $1.5 Million to Settle False Claims Act InvestigationRead the Press Release
University Overbilled Medicare and Medicaid for Patients Enrolled in Clinical Trial Research at Emory’s Winship Cancer Institute
ATLANTA - The United States Attorney’s Office for the Northern District of Georgia and Attorney General Sam Olens announced today they have reached a settlement with Emory University, which agreed to pay $1.5 million to settle claims that it violated the False Claims Act by billing Medicare and Medicaid for clinical trial services that were not permitted by the Medicare and Medicaid rules.
Providers generally are not permitted to bill Medicare for medical care and services for which the clinical trial sponsor has agreed to pay. Here, the United States and the State of Georgia alleged that Emory University billed Medicare and Medicaid for services the clinical trial sponsor agreed to pay (and, in some cases, actually did pay, thereby resulting in Emory’s being paid twice for the same service).
“This settlement demonstrates our office’s continued commitment to protect crucial Medicare and Medicaid dollars,” said United States Attorney Sally Quillian Yates. “Treatment of cancer is expensive, and Medicare and Medicaid dollars should be reserved for patients who need services that properly may be billed to these programs.”
“Our investigation of Emory University revealed the institution’s clinical trial false billing and led to today’s settlement,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General for the Atlanta region. “Protecting Medicare -- and taxpayer dollars -- remains a top priority.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Federal funds, to include those of Medicare and Medicaid, are limited and are to be used as intended. The FBI will continue to play a role in enforcing federal law that governs the use of these much needed funds.”
Attorney General Sam Olens stated, “Cancer research is paramount to saving and extending lives. However, strict rules govern the use of Georgia Medicaid dollars. My office takes seriously its obligation to ensure that these resources are used properly.”
This civil settlement resolves a lawsuit filed by Elizabeth Elliot under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery obtained. The case, pending in the Northern District of Georgia, is filed under United States of America and State of Georgia ex rel. Elizabeth Elliott v. Emory University, et al., Civ. No. 1:09-cv-3569-AT (N.D. Ga. Dec. 18, 2009). Ms. Elliot will receive a share of the settlement payment that resolves the qui tam suit that she filed. The claims settled in the civil settlement are allegations only, and there has been no determination of liability.
This case was investigated by the United States Attorney’s Office for the Northern District of Georgia; the U.S. Department of Health & Human Services, Office of Inspector General; the Federal Bureau of Investigation; and the Georgia Medicaid Fraud Control Unit.
The civil settlement was reached by Assistant United States Attorney Darcy F. Coty.
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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.Emory Settlement Agreement
Local Businessman Sentenced for Stealing over $835,000 from His Business InvestorsRead the Press Release
ATLANTA - Kevin Patrick Loughery, co-founder of the former Atlanta-area startup, Geometrix, has been sentenced for defrauding Geometrix’s investors by using approximately $835,000 in the investors’ funds for himself.
“The defendant had a duty to keep the investor funds secure in an escrow account and to use them for the benefit of Geometrix. Instead, he used the money to support his lavish lifestyle,” stated United States Attorney Sally Quillian Yates. “The prosecution of this case and today’s sentence reflects our ongoing commitment protect the public from individuals who offer seemingly attractive investment opportunities, when they only intend to enrich themselves at the expense of others.”Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing of Mr. Loughery will hopefully provide some sense of justice to those victim investors who now suffer substantial financial losses at the hands of Mr. Loughery’s greed. The FBI will continue to identify, investigate, and prosecute individuals such as Mr. Loughery who divert investor-based funds into their own bank accounts.”
According to United States Attorney Yates, the charges and other information presented in court: In 2008, Kevin Patrick Loughery began soliciting investments from his friends and business associates in Geometrix, a Georgia start-up company that he co-founded in 2007. Loughery assured investors both telephonically and via email that their investment would remain in escrow until the completion of Geometrix’s issuance of stock and accompanying documentation.
In an email to one such investor, Loughery assured the investor that the money would be kept in an escrow account, and Loughery instructed the investor to wire the money into such an account. However, the money never went to an escrow account because Loughery’s wiring instruction was not for an escrow account, but rather was for Loughery’s own account for a separate business, KLM Investments, of which Loughery was the sole proprietor. The investor wired over $300,000 into the account. Loughery then sent the investor an email stating that he would receive 400,000 shares of Geometrix for his investment, which the investor never received. In total, Loughery solicited $835,000 in investments from various investors that were supposed to be kept in escrow but instead were spent by Loughery. Loughery subsequently declared bankruptcy.Loughery, 49, of Atlanta, Ga., was sentenced to two years, six months in prison. He was also ordered to serve three years on supervised release following his prison term and to pay $780,000 in restitution to the victims of his fraud. On March 22, 2013, Loughery pleaded guilty to a Criminal Information charging him with wire fraud.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Karlyn J. Hunter 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Federal Employee Pleads Guilty to Extorting Money from Social Security BeneficiariesRead the Press Release
ATLANTA - Cordell Fleming pleaded guilty today in federal court to extorting money from individuals due Social Security benefits.
“A federal employee, in a position of public trust, preying on the disabled and the indigent shocks the conscience,” said United States Attorney Sally Quillian Yates. “This defendant extorted money from needy, disabled members of our community by promising them expedited Social Security payments in return.”
According to United States Attorney Yates, the charges and other information presented in court: Fleming worked as Claims Representative for the Social Security Administration. As part of his duties, he processed requests for Supplemental Security Income (SSI) payments for eligible individuals. However, Fleming offered to “expedite” the processing time of SSI payments to SSI beneficiaries and SSI beneficiary payees in exchange for a fee. In an attempt to make the expedited SSI payments appear legitimate, Fleming frequently created false documents that purportedly justified the expedited disbursement of SSI payments. During the course of the scheme, from October 2012 to April 2013, Fleming extorted and attempted to extort money (in amounts ranging from approximately $500 to $1,800) from at least nine SSI beneficiaries or their representative payees.On August 14, 2013, Fleming, 46, of Conyers, Ga., was charged with one count of extortion and he pleaded guilty to this count today. Fleming could receive a maximum sentence of 20 years in prison and a fine of up to $250,000. 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 is scheduled for November 14, 2013, at 11:30 a.m., before United States District Judge Timothy C. Batten, Sr.
This case is being investigated by Special Agents of the Social Security Administration - Office of the Inspector General.
Assistant United States Attorney Jeffrey W. Davis and Special Assistant United States Attorney Diane C. Schulman 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Businessman Sentenced to Two Years in Prison for Bribing Former Gwinnett County CommissionerRead the Press Release
ATLANTA - Mark Gary has been sentenced for bribing former Gwinnett County Commissioner Shirley Lasseter in 2009 to secure approval of a proposed waste transfer station in which he held a personal stake.
United States Attorney Sally Quillian Yates said, “Businessmen who pay to play are making a losing bet. Mr. Gary will now pay with his freedom for corrupting Gwinnett County’s approval of competing real estate developments.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing illustrates the consequences of bypassing proper procedures of securing contracts and doing business with government agencies. The FBI will continue to provide its investigative resources and expertise in addressing public corruption matters at all levels of government.”
According to United States Attorney Yates, the charges and other information presented in court: Mark Gary is a local Gwinnett County businessman. In or about October 2008, Gary sought to develop a $4 million solid waste transfer station, which would serve as a way station in the trash collection process, consolidating trash from haulers for shipment to more distant landfills. Gary submitted the necessary application to obtain the requisite County approvals and permits, which required approval by the Gwinnett County Board of Commissioners.
Shirley Lasseter was elected to the Gwinnett County Board of Commissioners as the District 1 representative in the fall of 2008 and took office in January 2009. Gary worked to help get Lasseter elected as a county commissioner. Almost immediately after taking office, Lasseter appointed Gary to the Gwinnett County Planning Commission.
In March or April 2009, Gary spoke with Lasseter and her son, John Fanning, about Gary’s pending application to allow development of the solid waste transfer station. Gary offered money to Lasseter and Fanning, who discussed amounts with Gary of as much as $100,000, in exchange for Lasseter’s Commission vote to approve the pending application. Given her public position and to avoid any scrutiny, Lasseter directed Gary to speak with and to provide the money to Fanning.
Gary’s permit application came before the Commission for approval on April 28, 2009. Consistent with her agreement with Gary, Lasseter voted to approve the development. Several months later, Gary lived up to his end of the bargain. In June 2009, Gary paid Fanning $30,000. Gary paid this amount by giving Fanning $30,000 worth of chips at an out-of-state casino.
Gary, 40, of Duluth, Ga., was sentenced to two years in prison to be followed by three years of supervised release. Gary was convicted on October 1, 2012, after he pleaded guilty to an Information charging him with this crime.
Lasseter was sentenced on September 5, 2012, to serve two years, nine months in prison for her role in accepting illegal bribes. Her son, John Fanning, was sentenced on September 18, 2012, to four years, nine months in prison for his role in soliciting and accepting illegal bribes for his mother, as well as a drug offense.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Man Pleads Guilty to Fraudulently Obtaining United States Citizenship and Bribing Federal OfficialRead the Press Release
ATLANTA – Hakeem Omar pleaded guilty in federal court to fraudulently obtaining his United States citizenship and for his role in a bribery conspiracy.
“This defendant’s attempts to subvert the immigration process by offering bribes to a federal agent were unsuccessful,” said United States Attorney Sally Quillian Yates. “The United States is the land of promise for many, but we are also a land of laws. Bribing a federal agent is against the law, and will only lead to jail and deportation, not U.S. citizenship.”
“Maintaining the integrity of our immigration system is a core mission of the Department of Homeland Security,” said David P. D’Amato, special agent in charge of ICE’s Office of Professional Responsibility (OPR) for the Southeast Region. “Those who seek to undermine the law through bribery and corruption will be investigated, arrested and brought to justice. This guilty plea should be a strong warning that OPR and the U.S. Attorney’s Office take this crime seriously and will prosecute it to the fullest extent of the law.”
According to United States Attorney Yates, the charges and other information presented in court: Beginning in September 2010, and continuing until at least July 2012, Omar paid a series of bribes to a Special Agent with the Department of Homeland Security who was working in an undercover capacity. In exchange for the bribes, Omar sought immigration benefits as well as other benefits. Over a two-year period, he paid thousands of dollars to the undercover special agent for what he believed was assistance with his immigration status in the United States, including obtaining United States citizenship through naturalization.
Omar, 31, of Atlanta, Ga., could receive a maximum sentence of five years in prison and a fine of up to $250,000. The defendant will be stripped of his fraudulently obtained U. S. citizenship, and likely faces removal from the United States. However, 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 is scheduled for October 24, 2013, at 10 a.m., before United States District Judge Steven P. Jones.
This case is being investigated by the U.S. Immigration and Customs Enforcement’s Office of Professional Responsibility.
Assistant United States Attorney Skye 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.Cobb County Man Charged in Identity Theft SchemeRead the Press Release
Defendant Claimed Over $5.5 Million in Fraudulent Tax Refunds
ATLANTA - Bradford Thomas has been arraigned on charges of wire fraud, aggravated identity theft, and theft of government funds. Thomas was indicted by a federal grand jury on August 13, 2013.
“This defendant is accused of attempting to defraud the U.S. Treasury out of millions of dollars by seeking 1200 tax refunds in the names of unsuspecting taxpayers,” said United States Attorney Sally Quillian Yates.
“Identity thieves are becoming more devious, creative, and conniving,” stated Veronica Hyman-Pillot, Special Agent in Charge, IRS-Criminal Investigation. “They steal our identities, steal government money and prey upon innocent citizens. These criminals must be and will continue to be pursued in order to obtain justice for the victims as well as justice for our nation.”
According to United States Attorney Yates, the charges, and other information presented in court: From January 2010 through May 2013, Thomas orchestrated a scheme to file over 1,200 false tax returns using the names and social security numbers of various victims, many of whom were incarcerated in jails or prisons throughout the country. The false tax returns claimed over $5.5 million in fraudulent tax refunds which were directed to be deposited into bank accounts controlled by Thomas or individuals working with him. The scheme caused an actual loss of over $1.6 million in taxpayer money.
In conjunction with the arrest of Thomas, two locations, a business named “Immaculate Autos” in Kennesaw, Ga., and his primary residence in Acworth, Ga., were searched by federal agents. Both are suspected to be places where electronic returns were submitted to the IRS.
Bradford Thomas, 46, of Cobb County, Ga., was arraigned today before United States Magistrate Judge Linda T. Walker.
The indictment charges 10 counts of wire fraud, 10 counts of aggravated identity theft, and 8 counts of theft of government funds. Each wire fraud count carries a maximum sentence of 20 years in prison and each theft of government funds count carries a maximum sentence of 10 years in prison. In addition, the aggravated identity theft charges carry at least one mandatory two-year consecutive sentence to any other sentence imposed. Each count also carries a fine of up to $250,000. However, 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. The United States is also seeking the forfeiture of all funds derived from or involved in this scheme.
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 United States Attorneys Thomas J. Krepp and Mary F. Kruger 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Bremen Man Sentenced for Solicitation to Commit ArsonRead the Press Release
NEWNAN, Ga. - Hitendrafumar Patel has been sentenced to over two years in prison for hiring an undercover officer to burn his dry cleaning business.
“This defendant’s plot to burn down his own failing business could have had horrific consequences, possibly resulting in the destruction of property and loss of life to firefighters and innocent citizens,” said United States Attorney Sally Quillian Yates.
“ATF in partnership with our local law enforcement arrested a potentially violent individual who was posing a significant danger to public safety personnel and the community,” said ATF Assistant Special Agent in Charge Ray Brown. “Through this cooperative effort, we were able to stop any further potential harm to the citizens of Bremen, Georgia.”
According to United States Attorney Yates, the charges and other information presented in court: In April 2012, the Georgia Bureau of Investigation received a tip from a confidential informant that Hitendrafumar Patel had been making inquiries to find someone who would be willing to burn down his dry cleaning business, Economy Cleaners, located in Bremen, Ga. The confidential informant, acting at the direction of law enforcement officers, called Patel and gave him the telephone number of an undercover GBI agent, who would pose as an arsonist. Patel phoned the undercover agent and arranged a meeting at Economy Cleaners to discuss the intended arson. The meeting took place on June 12, 2012, and was audio-video recorded by the undercover agent. Patel told the agent that the business was not making money and that he wanted it burned so that he could pay off the mortgage and debts with the insurance proceeds. The agent and Patel agreed on a price for the arson job, and the agent gave Patel a list of materials that Patel needed to supply the agent to use for the fire. Patel also told the agent about another property he owned in Bowden, Ga., which Patel said he might hire the agent to burn after the Bremen arson was complete.
The agent returned to the dry cleaners on June 30, 2012. Patel had acquired the incendiary materials, and gave them to the undercover agent. He then showed the agent where he hid the key to the business, and instructed the agent on how to unlock the door. Patel paid the agent $250, promising to pay him an additional $750 after he had collected the insurance proceeds. Patel was arrested immediately after the agent left the meeting.
Patel, 44, of Bremen, Ga., was sentenced to two years, six months in prison to be followed by three years of supervised release by United States District Judge Timothy C. Batten, Sr. Patel was convicted of these charges on April 29, 2013, after he pleaded guilty.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistance was provided by the Georgia Bureau of Investigation and City of Bremen Fire/Rescue.
Assistant United States Attorney Teresa D. Hoyt 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Marietta Man Sentenced to Federal Prison for Filing False Claims with the IRSRead the Press Release
ATLANTA - Arnold Tobias Gervais, has been sentenced for defrauding the IRS out of more than $3.4 million in federal income tax refunds while he was in state custody.
“Those who cheat the IRS take money away from everyone who pays his or her fair share of taxes,” said United States Attorney Sally Quillian Yates. “The United States Attorney’s Office and the IRS are on the lookout for tax cheats and will aggressively pursue those individuals who try to beat the system.”
“Today’s sentence hopefully reassures the public that individuals who attempt to enrich themselves at the expense of the United States Treasury will be held accountable.” stated Special Agent in Charge, Veronica Hyman-Pillot. “IRS Criminal Investigation will continue to aggressively pursue those individuals who utilize fraudulent methods to steal from the American taxpayer.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “It is hoped that today’s sentencing of Mr. Gervais, the second conviction for him on false tax filing related charges, will have a sufficient deterrent impact on him. The FBI will continue to work with its various law enforcement partners in investigating such matters involving income tax refund fraud.”
According to United States Attorney Yates, the charges and other information presented in court: Gervais was convicted in May 2008 and sentenced to five years in prison by the Superior Court of Cobb County, Ga., for theft by taking after he submitted a fraudulent tax return in an attempt to obtain a tax refund of more than $600,000 from the State of Georgia. Gervais was incarcerated on that charge from July 13, 2007, through February 26, 2010.
On March 16, 2009, while in state custody, Gervais caused his then wife to file a phony 2008 Form 1040 with the IRS. The tax return contained a claim for payment of an income tax refund in the amount of $811,073, which Gervais knew to be false, fictitious, and fraudulent.
In addition, Gervais filed, or caused to be filed, six more false claims for federal income tax refunds - five in his own name for tax years 2004, 2005, 2006, 2007, and 2009, and one in the name of an acquaintance for tax year 2009. All seven of the returns claimed false wages and federal tax withholding. And all seven of the returns falsely claimed that the taxpayer had earned a significant amount of wages from a fictitious company called “Safety Shoes & More, Inc.,” which was allegedly located in Rome, Ga. The returns also falsely claimed that the corporation had withheld from those wages a significant amount of federal income tax. The total amount of fraudulent tax refunds that Gervais sought from the IRS was $3,488,135. Of that amount, the IRS paid $2,832,268.
The United States Attorney’s Office filed two civil forfeiture actions, which resulted in the seizure of $2,232,012 from accounts controlled by Gervais, thereby reducing the out-of-pocket loss to the IRS.
Gervais, 34, of Marietta, Ga., was sentenced by United States District Judge Timothy C. Batten, Sr. to serve the statutory maximum of 5 years in prison. He was also ordered to serve 3 years on supervised release following his prison term and ordered to pay $2,832,268 in restitution to the IRS. On January 16, 2013, Gervais pleaded guilty to a Criminal Information charging him with filing false claims for income tax refunds.
This case was investigated by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.
Assistant United States Attorneys Russell Phillips and Michael J. Brown 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.Former Consultant Pleads Guilty to His Role in Atlanta Public Schools Kickback SchemeRead the Press Release
ATLANTA – Mahendra Patel has pleaded guilty to conspiring with former Atlanta Public Schools (APS) Chief Information Officer (CIO) Jerome Oberlton to receive kickbacks in exchange for Oberlton using his influence at APS to award a $780,000 computer project to the firm.
“Patel subverted the fairness of the contracting process for his own benefit, and ultimately undermined the trust taxpayers place in APS to provide high-quality educational services,” said United States Attorney Sally Quillian Yates. “In a time when educational resources are scarce or often non-existent, his fraud helped steer a lucrative computer contract to the highest bidder – one that was willing to line his pockets in exchange for work.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “With today’s guilty plea, Mr. Patel acknowledges his criminal wrongdoing for which he will now be held accountable. The FBI will continue to provide its investigative resources and expertise in exposing such corrupt kickback-based contract deals that subvert the normal process and cost taxpayers additional money.”
“The prosecution of individuals who manipulate normal business transactions in an effort to enrich themselves, has always been a priority of IRS and our law enforcement partners,” stated Veronica Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “Individuals who line their pockets with profits from fraudulent schemes should know, they will not go undetected and will be held accountable.”
According to United States Attorney Yates, the indictment, and information presented in court: Oberlton had overall management responsibility for APS’ information technology program. In January 2007, APS issued a request for proposal (RFP) for a Data Warehousing (DW) project at the school system. The DW project was intended to centralize information relating to APS operations, including student information, so that it was maintained digitally in a secure, easily-accessible manner.
From the start of the project in January 2007, Patel and Oberlton conspired to influence the RFP process and, ultimately, caused the winning bidder to be selected in exchange for kickbacks paid to both. In order to hide the bribes, Oberlton created Global Technology Partners (GTP) and, later, Global Technology Services (GTS) and funneled the bribe payments through these shell companies. Oberlton was able to conceal his ownership of GTP and GTS from APS even when questions arose in 2007. In contrast, the kickbacks to Patel were disguised as sales commissions for non-existent consulting work that he supposedly performed for the shell companies. In reality, Patel acted as an intermediary, helping to negotiate the kickbacks between Oberlton and Company A and then signed fake sales consultant agreements to hide his role. The Detroit-based technology company ultimately paid approximately $60,000 in bribes to Oberlton and Patel over almost six months and, in return, the company received almost $800,000 in APS project work.
Oberlton was the CIO for APS between June 2004 and August 2007 and, most recently, was the Chief of Staff for the Dallas Independent School District before he resigned in May 2013, shortly after he was indicted.Patel, 45, of Kennesaw, Ga., pleaded guilty to conspiring with Oberlton to accept bribes, which carries a maximum term of imprisonment of five years and a fine of $250,000. 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. A sentencing date for Patel has not yet been set by the Court.
A trial date for Jerome Oberlton has not been set.
These cases are being investigated by the Federal Bureau of Investigation and Internal Revenue Service.
Assistant United States Attorneys Kurt R. Erskine and Jill Steinberg 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.Former Consultant Pleads Guilty to His Role in Atlanta Public Schools Kickback SchemeRead the Press Release
ATLANTA – Mahendra Patel has pleaded guilty to conspiring with former Atlanta Public Schools (APS) Chief Information Officer (CIO) Jerome Oberlton to receive kickbacks in exchange for Oberlton using his influence at APS to award a $780,000 computer project to the firm.
“Patel subverted the fairness of the contracting process for his own benefit, and ultimately undermined the trust taxpayers place in APS to provide high-quality educational services,” said United States Attorney Sally Quillian Yates. “In a time when educational resources are scarce or often non-existent, his fraud helped steer a lucrative computer contract to the highest bidder – one that was willing to line his pockets in exchange for work.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “With today’s guilty plea, Mr. Patel acknowledges his criminal wrongdoing for which he will now be held accountable. The FBI will continue to provide its investigative resources and expertise in exposing such corrupt kickback-based contract deals that subvert the normal process and cost taxpayers additional money.”
“The prosecution of individuals who manipulate normal business transactions in an effort to enrich themselves, has always been a priority of IRS and our law enforcement partners,” stated Veronica Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “Individuals who line their pockets with profits from fraudulent schemes should know, they will not go undetected and will be held accountable.”
According to United States Attorney Yates, the indictment, and information presented in court: Oberlton had overall management responsibility for APS’ information technology program. In January 2007, APS issued a request for proposal (RFP) for a Data Warehousing (DW) project at the school system. The DW project was intended to centralize information relating to APS operations, including student information, so that it was maintained digitally in a secure, easily-accessible manner.
From the start of the project in January 2007, Patel and Oberlton conspired to influence the RFP process and, ultimately, caused the winning bidder to be selected in exchange for kickbacks paid to both. In order to hide the bribes, Oberlton created Global Technology Partners (GTP) and, later, Global Technology Services (GTS) and funneled the bribe payments through these shell companies. Oberlton was able to conceal his ownership of GTP and GTS from APS even when questions arose in 2007. In contrast, the kickbacks to Patel were disguised as sales commissions for non-existent consulting work that he supposedly performed for the shell companies. In reality, Patel acted as an intermediary, helping to negotiate the kickbacks between Oberlton and the Detroit-based technology company and then signed fake sales consultant agreements to hide his role. The Detroit-based technology company ultimately paid approximately $60,000 in bribes to Oberlton and Patel over almost six months and, in return, the company received almost $800,000 in APS project work.
Oberlton was the CIO for APS between June 2004 and August 2007 and, most recently, was the Chief of Staff for the Dallas Independent School District before he resigned in May 2013, shortly after he was indicted.Patel, 45, of Kennesaw, Ga., pleaded guilty to conspiring with Oberlton to accept bribes, which carries a maximum term of imprisonment of five years and a fine of $250,000. 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. A sentencing date for Patel has not yet been set by the Court.
A trial date for Jerome Oberlton has not been set.
These cases are being investigated by the Federal Bureau of Investigation and Internal Revenue Service.
Assistant United States Attorneys Kurt R. Erskine and Jill Steinberg 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.Atlanta Attorney Admits to Stealing over $300,000 from Law Firm ClientsRead the Press Release
ATLANTA - Thomas Dickson has pleaded guilty to defrauding more than 50 clients out of funds that were deposited into his law firm’s trust account.
“As a lawyer, Dickson had a duty to act with his clients’ best interests in mind,” said United States Attorney Sally Quillian Yates. “Instead, he used his position at the law firm to steal from clients he was supposed to protect.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The defendant in this matter displayed a reckless disregard for his firm’s many clients by diverting monies due them to his personal account. The FBI will continue to investigate such cases of criminal misconduct and bring them forward for prosecution.”
According to United States Attorney Yates, the charges and other information presented in court: In December 2008, while employed with a large Atlanta law firm, Dickson was retained by tenants in common (TIC) owners of commercial real estate purchased through DBSI, Inc. DBSI, Inc., an Idaho based company, sold TIC investments or fractional ownership interests in commercial real estate to investors across the country. In November 2008, DBSI filed bankruptcy and many of the investors lost their life savings. In December 2008, several TIC property owners retained Dickson to represent their interests in the bankruptcy action. In 2009, Dickson encouraged TIC owners to transfer rents and other income into his law firm’s trust account.
Between February 24, 2010, and January 6, 2012, Dickson directed his law firm’s accounting department to unlawfully transfer over $300,000 from the law firm’s trust account to a business checking account in Plano, Texas. Dickson led the firm’s accounting department to believe that the funds were being transferred on behalf of TIC clients to pay third party expenses. Instead the money was transferred into a personal checking account controlled by Dickson and his wife.
In January 2012, the law firm initiated an internal investigation and Dickson, 52, of Atlanta, Ga., was terminated. In March 2013, Dickson was disbarred by the Georgia State Bar.The charge of wire fraud in this case carries a maximum sentence of 20 years in prison and a fine of up to $250,000.00.
Sentencing is scheduled for October 30, 2013, at 10:00 a.m. before United States District Judge Willis B. Hunt.
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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.South Carolina Man Sentenced for Traveling to Have Sex with Eight Year OldRead the Press Release
GAINESVILLE, Ga. – David Alan Wolf has been sentenced to 14 years for enticing a minor to engage in sexual activity.
“After this defendant used the internet to arrange for a sexual encounter with a vulnerable, eight-year-old girl, he then traveled to Atlanta in an effort to commit this repugnant act” said United States Attorney Sally Quillian Yates. “Thankfully, there was no eight-year-old, and law enforcement arrested him. Sexual predators have no place in our community and we will see to it that they are caught, prosecuted, and punished.”
“The Barrow County Sheriff’s Office will continue to be vigilant in our attempt to apprehend those who prey on our children,” said Barrow County Sheriff Jud Smith. “Our Investigators are working very hard every day to keep these predators off the streets and protect our communities.”
According to United States Attorney Yates, the criminal information, and material presented in court: In August 2012, a Barrow County investigator, operating undercover and posing as a thirty-four-year-old female with an eight-year-old daughter, was contacted online by an individual later identified as David Alan Wolf. Wolf indicated that he was interested in engaging in sex acts with the investigator’s eight-year-old daughter, including oral sex and intercourse. Wolf and the undercover investigator communicated online for close to two weeks. During that time, Wolf described in detail his sexual fantasies and the sex acts he would perform on the eight-year-old girl. On August 28, 2012, Wolf traveled from South Carolina to Georgia to meet the investigator and her fictitious daughter and was arrested upon his arrival.
Wolf, 63, of Rock Hill, S.C., was sentenced today by United States District Judge William C. O’Kelley to 14 years in prison to be followed by lifetime supervised release. He was also ordered to pay a fine of $5,000. The defendant will be required to register as a sex offender when he is released from prison.
This case was investigated by the Barrow County Sheriff’s Office.Assistant United States Attorney Jill E. Steinberg 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Three Defendants Sentenced for String of Armed Bank RobberiesRead the Press Release
ATLANTA - Torrey Marable and two codefendants, Rico Blackwell and Jason Blackwell, were sentenced today to federal prison for armed bank robbery.
“These men terrorized bank employees when they entered the banks they robbed with guns drawn,” said U.S. Attorney Sally Quillian Yates. “Serious violent crimes should be met with serious prison sentences, such as those imposed in this case, to protect our communities.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing ends a violent crime spree and removes four dangerous individuals from our streets. The FBI commends the many law enforcement officers and agents that worked hard in this matter but the contributions made by those observant and responsive officers of the Austell Police Department who conducted the car stop on these individuals after a bank casing there is particularly noteworthy and commendable.”According to United States Attorney Yates, the charges and other information presented in court: Beginning on August 9, 2012, and continuing until his arrest on September 5, 2012, Torrey Marable robbed banks located in Atlanta, Dunwoody, and Marietta, Ga. Deandre Markee King and Rico Blackwell joined Marable in the Dunwoody robbery, during which all three men brandished their guns and used them to move the tellers into the vault and force them to hand over more than $71,000.
On September 4, 2012, Marable and King canvassed another bank in Austell, Ga., forming their plan to rob the bank. On September 5, 2012, Jason Blackwell drove Marable, King and his half-brother Rico Blackwell, near a PNC Bank in Austell. At the same time, law enforcement was on the lookout for a car matching the description of the one Jason Blackwell was driving. They were also looking for a man with dreadlocks, which was the style of Marable’s hair. Before the robbery occurred, Austell police pulled the car Jason Blackwell was driving over, finding Marable, King and Rico Blackwell all with semi-automatic handguns within their reach. Police also found two surgical masks, two bandanas and latex gloves in the car.
Marable, 21, of Decatur, Ga., was sentenced by United States District Judge Evans to 27 years in prison to be followed by 5 years of supervised release. Marable was ordered to pay restitution in the amount of $89,644. He was convicted of these charges on April 4, 2013, upon his plea of guilty.
Rico Blackwell, 22, of Decatur, Ga., received 138 months in prison and was ordered to pay restitution in the amount of $71,668; and Jason Blackwell, 32, of Decatur, Ga., received 84 months in prison. These prison sentences will be followed with 3 years of supervised release. Deandre Markee King, 28, of Decatur, Ga. will be sentenced on August 28, 2013.
This case was investigated by the Federal Bureau of Investigation with assistance from the Cobb County Police Department and the Austell Police Department.Assistant United States Attorney Susan Coppedge 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Stone Mountain Man Sentenced for Eight Armed RobberiesRead the Press Release
ATLANTA - Laquan Smith was sentenced to 18 years in federal prison for the armed robbery of eight businesses and for possession of a stolen firearm.
“Over a short three-week span in December 2011, this defendant—who was already on state parole for armed robbery and on bond for burglary—went on an armed robbery rampage in the Memorial Drive area, going so far as to tie up his victims during three robberies,” said United States Attorney Sally Quillian Yates. “With this conviction and sentence, his life of crime on the streets has ended for the foreseeable future.
“The criminal history of Smith shows a complete and utter disregard for the law and lives of others,” said ATF Special Agent in Charge Christopher Shaefer. “As an agency and unified law enforcement community, we will not tolerate armed violent felons terrorizing and reducing the quality of life in the neighborhoods where we live, work, and play.”
“The sentencing of Laquan Smith exemplifies the joint commitment of local and federal law enforcement agencies to ensure violent offenders are brought to justice and are not allowed to continue to victimize our community. This type of lawless behavior is not acceptable and we are steadfast in our efforts to arrest those who engage in such crimes,” said DeKalb County Police Chief Cedric Alexander.
According to United States Attorney Yates, the charges and other information presented in court: From December 8 through December 27, 2011, Smith, who was aided by Troy Thomas in two robberies, robbed eight different businesses, including two Dollar General stores on December 20, and 27, 2011; three Family Dollar stores on December 8, 14, and 22, 2011; Pet Supermarket on December 18, 2011; Orbit Video on December 19, 2011; and a Subway on December 22, 2011. During the robberies, Smith took a total of approximately $7,410. Smith was arrested two weeks after the December 27, 2011, Dollar General robbery, after an alert individual recorded the license plate number of the getaway car used in that robbery and reported it to law enforcement.
Smith, 24, of Stone Mountain, Ga., was sentenced today by United States District Judge Richard W. Story to serve 18 years in federal prison to be followed by 5 years of supervised release, and fined $900. Smith was convicted of these charges on January 31, 2013, upon his plea of guilty.
Troy Thomas, Smith’s co-defendant who participated in two of the robberies, was sentenced to 11 years, 2 months on April 29, 2013, by Judge Richard W. Story.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the DeKalb County Police Department.
Assistant United States Attorney Joseph Plummer prosecuted the case.
For further information please contact the U.S. Attorney’s Public Information Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.Woman Pleads Guilty to Theft of Government FundsRead the Press Release
ATLANTA - Mary Bridges Clark has pleaded guilty in federal district court to theft of government funds.
“Theft of Social Security funds is, at its core, stealing from the elderly, the disabled, and those with the greatest need,” United States Attorney Sally Quillian Yates. “This defendant stole over $200,000 in Social Security benefits that were intended for her mother for nearly two decades after her mother passed away, even though she knew she was not entitled to them.”According to United States Attorney Yates, the charges and other information presented in court: Clark’s mother received monthly Social Security benefits which were deposited into a joint bank account Clark and her mother shared. Clark’s mother died in April 1993. After her mother’s death, Clark continued to receive her mother’s monthly benefits into the joint account. In total, the United States Treasury, acting on behalf of the Social Security Administration, deposited $219,133.00 into the joint account after her mother’s death. Clark knew this money was intended for her mother, yet she kept the money and used it for her own personal expenses, and attempted to conceal her mother’s death from the Social Security Administration.
Clark, 64, of Loganville, Ga., was charged in a Criminal Information on July 17, 2013, on one count of theft of government funds and pleaded guilty to that count. She could receive a maximum sentence of 10 years in prison and a fine of up to $250,000. 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 is scheduled for October 21, 2013, at 3 p.m. before United States District Judge Carnes.
This case is being investigated by Special Agents of the Social Security Administration, Office of Inspector General.
Assistant United States Attorney Glenn D. Baker and Special Assistant United States Attorney Diane C. Schulman 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Atlanta Man Sentenced for Filing Fraudulent Tax ReturnsRead the Press Release
ATLANTA - Frederick Roberts has been sentenced to serve over seven years in federal prison for filing fraudulent federal and state tax returns and for stealing the identities of his victims.
“Identity thieves who file fraudulent tax returns rob from the public fisc and cause immeasurable damage to the innocent victims whose names were stolen,” said United States Attorney Sally Quillian Yates. “We have a duty to protect the tax dollars paid by hardworking Americans, and we will not stand idly by while criminals like Roberts steal those funds.”
According to United States Attorney Yates, the charges and other information presented in court: Roberts prepared fraudulent federal and state income tax returns using stolen identities. He submitted tax returns in other people’s names seeking large refunds and had the checks sent to an address where he could retrieve the mail. He cashed the refund checks with unscrupulous check cashers, who were willing to accept the checks even though none of them were in Roberts’ name. Roberts sought over $899,000 in refunds between May 2009 and March 2011, and he actually received $866,436.66.
“Identity thieves are becoming more devious, creative, and conniving,” said Veronica Hyman-Pillot, Special Agent in Charge IRS Criminal Investigation. “They steal our identities, steal government money and prey upon our citizens. Be assured that IRS Criminal Investigation, with our law enforcement partners, will continue to be proactive in the investigation of individuals who engage in similar behavior. IRS is extremely grateful for the cooperation and assistance we have received from our partners at the local, state and federal level, especially the United States Secret Service, United States Postal Service and the Georgia Department of Revenue.”
“The United States Secret Service and our law enforcement partners take an aggressive approach towards investigating those who commit identity theft and bank fraud. We will continue to work closely with prosecutors to ensure offenders are put behind bars,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office.
Roberts, 51, of Atlanta, Ga., was sentenced today by United States District Judge William S. Duffey, Jr., to seven years, three months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $866,436.66. Roberts was convicted on these charges on March 8, 2013, after he pleaded guilty.
This case is being investigated by the Internal Revenue Service Criminal Investigation, the United States Secret Service, and the Georgia Department of Revenue Office of Special Investigations.
Assistant United States Attorney Christopher C. Bly 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Cobb County Bus Driver Sentenced for Producing Child PornographyRead the Press Release
Defendant’s Involvement in Church Youth Group Provided Access to Victim
ATLANTA - Stanley Keith Johnson has been sentenced for producing, receiving and possessing child pornography.
“As a school bus driver and church youth group volunteer, this defendant had access to some of the most innocent and vulnerable members of society,” United States Attorney Sally Quillian Yates said. “He downloaded child pornography and took explicit photographs of a fatherless young boy he was trusted to mentor. Children are not sexual objects, and persons who see them that way can expect to be caught and go to prison.”
“The U.S. Postal Inspection Service is pleased with today’s sentencing. As long as child predators use the U.S. mail to exploit children, Postal Inspectors will continue to target those responsible. The use of the U.S. mail to victimize children will not be tolerated, plain and simple,” said Keith Morris, Postal Inspector in Charge of the Atlanta Division.
“Individuals such as Mr. Johnson, who gain the confidence of children through a position of trust in order to victimize children, will be thoroughly investigated and held accountable,” said Vernon Keenan, Director of the Georgia Bureau of Investigation.
According to United States Attorney Yates, the charges and other information presented in court: From November 2010 to April 2011, the defendant placed orders with a foreign company for approximately 180 DVDs containing videos of nude boys between the ages of 8 and 14. He received those videos through the United States mail. A federal search warrant executed at his house in Mableton, Ga., in December 2012, revealed that he not only had received the videos but that he possessed child pornography on his home computer. A forensics examination of the computer showed that he had produced images of child pornography going back to May 2004. The victim was an 8-year-old child whom the defendant had befriended at his church, where he volunteered to work with the youth group and especially with young boys with no fathers in their lives.
After the search warrant was executed, Cobb County Public Schools fired the defendant from his position as a bus driver and bus driver supervisor. The defendant had been given a work computer to use for his supervisory duties. After he was fired, Cobb County Public Schools looked at the computer and saw that the defendant had downloaded images of child pornography on it. He also used his work computer to check on the delivery status of the child pornography videos that he had ordered.
Johnson, 57, of Mableton, Ga., was sentenced to 15 years in prison to be followed by a lifetime of supervised release. Johnson was convicted of these charges on April 26, 2013, after he pleaded guilty.
This case was investigated by the United States Postal Inspection Service with assistance from the Georgia Bureau of Investigation and the Cobb County Police Department.
Assistant United States Attorney Paul R. Jones prosecuted 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 HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.