Northern District of Illinois
Press releases recorded for this federal judicial district.
Chicago Man Guilty of Illegally Selling More Than a Dozen FirearmsRead the Press Release
CHICAGO — A convicted felon from Chicago has pleaded guilty to federal firearm charges for illegally selling more than a dozen handguns and rifles.
JYMIL CAMPBELL, 31, admitted in a plea agreement that he sold ten handguns, four large-capacity magazines and three rifles during a nine-month period that ended with his arrest in August 2016. Most of the sales occurred in Campbell’s residence in the North Lawndale neighborhood of Chicago. The sales netted Campbell a total of $8,700 in cash, the plea agreement states. Unbeknownst to Campbell, the two buyers were confidential informants working on behalf of law enforcement. They provided the guns to law enforcement after each sale.
Campbell pleaded guilty Tuesday to one count of willfully dealing firearms without a license and one count of illegal possession of a firearm by a convicted felon. The convictions carry a maximum sentence of 15 years in prison. U.S. District Judge Robert W. Gettleman set sentencing for Nov. 15, 2018.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The government is represented by Assistant U.S. Attorney Devlin N. Su.
Campbell acknowledged in his plea agreement that he could not legally possess or deal firearms because he had previously been convicted of two felonies – home invasion and armed robbery – and he lacked a federal firearms license.
According to the plea agreement, one of the gun buyers put Campbell on notice that the guns would be used in illegal gun violence. Campbell nonetheless made the sale. Campbell also admitted telling the buyer that although Campbell had personally fired one of the rifles, the firearm was essentially “brand new” and had not yet been “shot shot, like in a war.”
9 Defendants Charged in Joint Federal and State Investigation Targeting Drug Sales in JolietRead the Press Release
CHICAGO — Nine individuals are facing criminal charges as part of a joint federal and state investigation into heroin and cocaine sales in the Joliet area.
As part of the probe, law enforcement intercepted cellphone communications between the defendants, conducted extensive surveillance, and seized several items, including three firearms, more than three kilograms of cocaine, more than 60 grams of heroin, approximately $90,000 in illicit cash proceeds, and several vehicles. Authorities also carried out court-authorized searches of residences in the 800 block of Vine Street in Joliet, the 1400 block of Exposition Avenue in Aurora, and the 2100 block of Englewood Avenue in Lockport. The investigation was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies, whose principal mission is to identify, disrupt and dismantle the most serious drug trafficking organizations.
Seven defendants are charged in U.S. District Court in Chicago in conspiracies to possess controlled substances with the intent to distribute. Two defendants are charged in Will County with state drug offenses.
Several of the federal defendants were arrested last week and have made initial appearances in federal court in Chicago. The state defendants will appear in Will County Circuit Court at a later time.
The federal charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. Substantial assistance was provided by the Will County State’s Attorney’s Office, Joliet Police Department, Bolingbrook Police Department, Will County Sheriff's Office, Cook County Sheriff's Office, Orland Park Police Department, Evergreen Park Police Department, Aurora Police Department, and the U.S. Bureau of Prisons Joint Intelligence Sharing Initiative. Assistant U.S. Attorney Devlin N. Su represents the government in the federal cases.
Charged with federal conspiracies are WILLIAM NOBLES, 51, of Joliet; JARON NABORS, 38, of Joliet; ERICKA PRUITTE, 38, of Joliet; KALVIN STEWART, 51, of Aurora; GREGORY WARFIELD, 67, of Joliet; CAESAR ESTRADA, 44, of Joliet; and LUIS CONTRERAS, 40, of Joliet. Charged in state court are TASHAUN M. MCCARTER, 40, of Joliet; and DAVID L. WHITE, 53, of Joliet.
According to the federal complaints, Nobles is affiliated with the Joliet faction of the Black Gangster Disciples street gang and operates a drug trafficking organization in the Joliet area. Nabors has conspired with Nobles to distribute the drugs, while Pruitte served as a courier on behalf of Nabors, the charges allege. The complaints describe several instances in which the trio allegedly conspired to distribute narcotics, including in February 2018 when Nobles allegedly supplied Pruitte with cocaine that had been distributed to Nobles by Estrada and Contreras, knowing that Pruitte would then deliver the drugs to Nabors. After the meeting, law enforcement pulled over Pruitte’s vehicle and discovered cocaine, crack cocaine and heroin inside the car, the charges allege.
A separate cocaine seizure occurred in December 2017 after Stewart allegedly supplied Warfield with the drugs during a meeting in Aurora, knowing that Warfield would then deliver the drugs to Nobles. After the meeting, law enforcement pulled over Warfield’s pickup truck and discovered the cocaine in a shopping bag hidden in the passenger-side molding, according to the complaints. Officers also discovered a loaded handgun in the center console of the truck, the complaints state.
The federal conspiracy charges carry a mandatory minimum sentence of five years in prison and a maximum penalty of 40 years in prison. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
The public is reminded that charges contains only accusations and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Suburban Man Charged with Sharing Child PornographyRead the Press Release
CHICAGO — A suburban Chicago man has been indicted on federal criminal charges for allegedly sharing images of child pornography.
DUSTAN SETNER, 42, of Rosemont, is charged with three counts of transportation of child pornography and one count of possession of child pornography. Setner shared a photograph and two videos of child pornography in 2016 and 2017, the indictment states. The photograph was entitled, in part, “9yo in nylons and collar,” while one of the video files was entitled “Baby,” according to the indictment. Setner allegedly possessed the child pornography on his desktop computer and an external hard drive.
The indictment was returned Thursday in federal court in Chicago. Arraignment is set for Aug. 27, 2018, at 11:30 a.m., before U.S. Magistrate Judge Sheila M. Finnegan.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Forest Park Police Department provided valuable assistance. The government is represented by Assistant U.S. Attorney Aaron R. Bond.
Each count of transporting child pornography is punishable by a mandatory minimum sentence of five years in prison and a maximum of 20 years, while the possession charge carries a maximum sentence of ten years. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that charges are not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
If you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678. The hotline is available 24 hours a day, seven days a week.
Seven Rockford Residents Charged with Federal Wire Fraud, Food Stamp Fraud, and Money LaunderingRead the Press Release
ROCKFORD — Seven Rockford residents have been charged by a federal grand jury with multiple counts of wire fraud and additional offenses. FEUY KHAIKHAM, 57; LEEFORM XAYVANDY, SR., a.k.a. “John,” 37; BOUNLEUNG THAMONTRI, a.k.a. “Tommy,” 54; VANSY XAYVANDY a.k.a. “Dee,” 42; SOM XAYVANDY, 47; CHRISTIANA XAYVANDY, a.k.a. “Tina,” 26; and AUNG GYAW, a.k.a. “AJ,” 23, were each charged with seventeen counts of wire fraud in a superseding indictment returned on July 31, 2018.
The wire fraud charges relate to the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the food stamp program. SNAP is a federal benefit program that assists low-income individuals and families purchase food. The U.S. Department of Agriculture, Food and Nutrition Service (“USDA”) is responsible for administering and implementing SNAP in conjunction with state governments. The Illinois Department of Human Services, which administers SNAP in Illinois, provides benefits to eligible individuals and families on their Illinois Link cards. To use their SNAP benefits, Illinois recipients must present their Link card to a retailer authorized to participate in SNAP by the USDA. Stores authorized to participate in SNAP can accept SNAP benefits only as payment for eligible food items and cannot accept SNAP benefits in exchange for cash. The illegal exchange of SNAP benefits for cash is commonly referred to as SNAP trafficking.
The superseding indictment alleges that between April 2015 and January 18, 2017, the defendants schemed to defraud the USDA and the State of Illinois by fraudulently accepting and redeeming SNAP benefits exchanged for discounted amounts of cash, knowing that such exchanges were prohibited under SNAP. It is alleged that the seven defendants fraudulently obtained more than $3 million in reimbursement for SNAP benefits over the course of the SNAP trafficking scheme. Each count of wire fraud carries a maximum penalty of 20 years in prison and a fine of up to $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.
The superseding indictment also charges Khaikham, Leeform Xayvandy, Som Xayvandy, and Gyaw with one count each of SNAP fraud, and it charges Vansy Xayvandy with two counts of SNAP fraud. SNAP fraud carries a maximum penalty of 5 years in prison and a $10,000 fine.
In addition to wire fraud and SNAP fraud charges, the superseding indictment charges Khaikham, Leeform Xayvandy and Thamontri with conspiracy to commit money laundering and multiple counts of money laundering. The superseding indictment alleges that Khaikham and Thamontri recruited an individual to act as a nominee owner of a grocery store in Rockford, obtain SNAP authorization for the grocery store, and open a bank account for the grocery store in the nominee owner’s name. The superseding indictment alleges that proceeds of SNAP trafficking transactions conducted by Khaikham, Thamontri, and Leeform Xayvandy were deposited into the bank account, which was controlled by Khaikham and Thamontri. The superseding indictment further alleges that Khaikham, Thamontri, and Leeform Xayvandy conspired to conduct and attempt to conduct financial transactions to liquidate and distribute those proceeds while concealing the nature, control and ownership of the proceeds. Each count of money laundering and conspiracy to commit money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine.
The superseding indictment also charges Leeform Xayvandy with one count of engaging in a monetary transaction in criminally-derived property in an amount greater than $10,000. This count carries a maximum penalty of ten years in prison and a $250,000 fine.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Anthony Mohatt, Special Agent-in-Charge of the Midwest Regional Office of the U.S. Department of Agriculture, Office of Inspector General in Chicago; and Gabriel L. Grchan, Special Agent-in-Charge of the Chicago office of the Internal Revenue Service, Criminal Investigation Division. The Rockford Police Department and the Winnebago County Sheriff’s Office assisted in the investigation.
Leeform Xayvandy, Christiana Xayvandy and Gyaw were arraigned on Aug. 7, 2018, and pleaded not guilty to all charges. Vansy Xayvandy and Som Xayvandy were arraigned Tuesday and also pleaded not guilty to all charges. Khaikham is scheduled to be arraigned on the superseding indictment on Sept. 6, 2018, at 11:00 a.m. With the exception of Thamontri, who remains at large, the other defendants are currently released on bond pending trial.
The public is reminded that an indictment contains only charges and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines and order full restitution.
The government is represented by Assistant U.S. Attorney Talia Bucci.
Rockford Insurance Executive Sentenced to More Than 4 Years in Federal Prison for Defrauding ClientsRead the Press Release
ROCKFORD — A Rockford man was sentenced today by U.S. District Judge Frederick J. Kapala for mail fraud.
TODD J. FENDLER, 42, was sentenced to 50 months in federal prison, to be followed by three years of supervised release, in addition to being ordered to pay $965,879.63 in restitution.
Fendler, who pleaded guilty to the charge on Jan. 17, 2018, was a licensed insurance producer who owned and operated several insurance-related businesses in Rockford, including Surplus Market Solutions LLC, Northern Underwriting Managers Inc., Northern Illinois Insurance Billing Services, and Northern Illinois Insurance Agency Inc.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The government was represented by Assistant U.S. Attorneys John G. McKenzie and Scott R. Paccagnini.
According to a written plea agreement, Fendler obtained bank account information from businesses and individuals who had applied for insurance policies through Fendler’s companies. Using the victims’ bank account information, without authorization, Fendler used on-line services to create fictitious electronic checks purportedly issued by the victims and payable to Fender’s companies. Fendler deposited those fictitious checks into bank accounts he controlled and then kept those funds for his own purposes. Fendler also made unauthorized electronic withdrawals from his clients’ bank accounts and the bank accounts of insurance agents and agencies that Fendler did business with, and then kept those funds for his own purposes.
Two Chicago Pharmacy Technicians Indicted for Stealing Opioids and Selling Them for a ProfitRead the Press Release
CHICAGO — Two technicians at a Chicago pharmacy stole more than 56,000 pills of Hydrocodone and sold them for a profit, according to an indictment returned in federal court in Chicago.
ELIZABETH CRUZ and JACQUELINE GREEN worked at Allcare Discount Pharmacy, located in the 2700 block of West North Avenue in Chicago. From September 2015 to December 2017, the pair conspired to steal approximately 56,108 pills of Hydrocodone and sell them outside the pharmacy for a profit, the indictment states. Cruz and Green concealed the scheme by falsifying the pharmacy’s inventory to make it look like the pills had either not been received from the distributor or were dispensed to patients, according to the charges.
The indictment charges Cruz, 33, of Stone Park, and Green, 27, of Chicago, with conspiracy to possess a controlled substance with the intent to deliver. Both defendants were arrested on Aug. 9, 2018. Detention hearings are scheduled for today at 3:00 p.m., before U.S. Magistrate Judge Maria Valdez in Chicago.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration. The government is represented by Assistant U.S. Attorney Nani M. Gilkerson.
“Diversion of opioids contributes to addiction and illegal drug sales in our communities,” said U.S. Attorney Lausch. “Pharmacy employees who divert prescription drugs for their own profit will be prosecuted to the full extent of the law.”
“This investigation illustrates that the DEA and the U.S. Attorney’s Office will bring to justice those responsible for the theft and diversion of controlled substances, not only on the street, but also in pharmacies,” said Special Agent-in-Charge McKnight.
The conspiracy charge carries a maximum penalty of 20 years in prison. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines. The public is reminded that charges are not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Federal Grand Jury Indicts Former Chicago Man for Attempting to Join ISISRead the Press Release
CHICAGO — A federal grand jury has indicted a former Chicago man for allegedly attempting to join the Islamic State of Iraq and al Sham.
FARESS MUHAMMAD SHRAITEH, 21, is charged with one count of conspiracy to provide material support and resources to ISIS, and one count of attempting to provide material support and resources to ISIS. The indictment was returned Thursday in U.S. District Court in Chicago.
Shraiteh is a United States citizen who formerly resided in Chicago and now lives in Israel.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; John C. Demers, Assistant Attorney General for National Security at the U.S. Department of Justice; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of representatives from the FBI and numerous federal, state and local law enforcement agencies.
According to the indictment, Shraiteh and two other individuals began conspiring to join ISIS in November 2014. In May 2015 the trio traveled from Chicago to Egypt, where they allegedly spent time in Cairo and Sharm El-Sheik, before flying to Istanbul, Turkey. Shraiteh was denied entry into Turkey, while the two others were allowed in, the indictment states. Shraiteh went to Israel, where he has family, and later communicated with one of the other individuals that he planned to renew his passport and join them, the charges allege.
One of the other individuals was later killed while conducting a suicide attack on behalf of ISIS, the indictment states. The charges allege that Shraiteh knew ISIS was a terrorist organization when he conspired to join it.
Each charge in the indictment is punishable by up to 15 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines. The public is reminded that an indictment is not evidence of guilt. Shraiteh is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorneys Barry Jonas and Peter S. Salib of the Northern District of Illinois, and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
Owners of Five Chicago-Area Restaurants Charged in Federal Investigation Targeting Underreporting of Gross ReceiptsRead the Press Release
CHICAGO — The owners of five Chicago-area restaurants are facing criminal tax charges as part of a federal investigation into the underreporting of gross receipts.
The charges allege that the restaurant owners willfully avoided paying the full amount of federal taxes by reporting gross receipts that were substantially lower than the true amounts. The federal investigation, which remains ongoing, has focused on sales suppression software and other techniques used by restaurant owners to manipulate gross receipts.
Charged with willfully filing false tax returns are SHULI ZHAO, 59, of Westmont, the owner of Katy’s Dumpling House in Westmont; CHUN XU ZHANG, 42, of Aurora, the owner of Sushi City in Downers Grove; QUAN SHUN CHEN, 53, of Chicago, the owner of Hunan Spring in Evanston; SANDRA SANCHEZ, 44, of Morton Grove, the owner of Cesar’s Tacos on North Clark Street in Chicago; and ISRAEL SANCHEZ, 43, of Chicago, the owner of Cesar’s on Broadway on North Broadway in Chicago. Arraignments in U.S. District Court in Chicago have not yet been scheduled.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Connie Beard, Director of the Illinois Department of Revenue.
“These charges send a clear message that restaurant owners who choose to illegally underreport gross receipts will be held accountable,” said U.S. Attorney Lausch. “Recovering funds for the federal treasury is a top priority in our office.”
“The charges announced today are an important step in the fight against individuals and restaurants in our community that cheat on their taxes,” said Special Agent-in-Charge Grchan. “This is only the beginning. I want to warn those restaurants, gas stations, convenience stores, and other establishments that are currently using or thinking of using sales suppression software, that we are on to you and your methods. If you steal from the federal government, there will be serious consequences.”
“I commend the work of the Illinois Department of Revenue’s Criminal Investigations Division and the IRS as we continue efforts to protect taxpayers from tax fraud,” said Director Beard. “Today’s charges should send a message that technology cannot shield criminals from being held accountable.”
Zhao, Zhang and Chen were charged in indictments returned Tuesday in U.S. District Court in Chicago. Zhao allegedly underreported gross receipts for the calendar years 2013 to 2015; Zhang for the calendar years 2012 to 2015; and Chen for the fiscal years 2012 to 2015 and the calendar years 2015 and 2016. Assistant U.S. Attorney Sheri H. Mecklenburg represents the government in the Zhao, Zhang and Chen cases.
Sandra Sanchez and Israel Sanchez were charged in criminal informations filed Tuesday in U.S. District Court in Chicago. Sandra Sanchez and Israel Sanchez allegedly underreported gross receipts for the calendar year 2012. Assistant U.S. Attorney Yusef Dale represents the government in the Sandra Sanchez and Israel Sanchez cases.
The public is reminded that charges are not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Filing false tax returns carries a maximum penalty of three years in prison. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.
District Court Enters Permanent Injunction Against Chicago Companies to Stop Distribution of Adulterated and Misbranded Dietary Supplements and Unapproved and Misbranded DrugsRead the Press Release
The U.S. District Court for the Northern District of Illinois has entered a permanent injunction against three related Chicago companies — Global Marketing Enterprises, Inc., Lifeline Nutrients, Corp., and Pronto Foods Company — as well as their owner Eduardo S. Chua, and their operations manager Haidee V. Dawis. The injunction prevents the defendants from manufacturing, selling, and distributing adulterated and misbranded dietary supplements and unapproved and misbranded drugs, the Department of Justice announced today.
The Department filed a complaint on July 26, 2018, alleging that defendants manufacture, package, label, and distribute numerous products in violation of the Federal Food, Drug and Cosmetic Act (FDCA). The complaint further alleges that defendants’ dietary supplements were adulterated because they were not manufactured, prepared, packed, labeled or held in compliance with federal current good manufacturing practice (CGMP) regulations. FDA inspections of defendants’ plant in 2015 and 2017 revealed numerous failures to comply with CGMP regulations, including the failure to establish specifications for the identity, strength, composition and purity of their products and the failure to establish and follow written sanitation procedures. The complaint also alleges that many of the labels on defendants’ supplements were deficient, and caused the products to be misbranded under the FDCA.
Additionally, defendants marketed numerous products as drugs, according to the complaint, by making claims that these products could help treat or prevent a host of serious diseases, including Alzheimer’s disease, diabetes, HIV/AIDS, and Parkinson’s disease. Defendants sold these products to the public using these claims despite not having the required FDA approval.
The complaint alleges that defendants’ disease-related treatment claims were unsupported by any well-controlled clinical studies or other credible scientific substantiation. Additionally, defendants’ products did not contain adequate directions for such uses. The complaint asserts that directions for use, including dosages, warnings, and side effects, must be premised on clinical data derived from scientifically controlled investigation, and since defendants made disease-related treatment claims about their products in the absence of any such clinical data, the products were misbranded.
The defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction. The consent decree requires that if the defendants wish to resume manufacturing and distributing dietary supplements in the future, they must implement the remedial measures set forth in the consent decree, notify the FDA of the measure they have taken, and obtain written approval from the FDA that they appear to be in compliance with both the terms of the consent decree and the provisions of the FDCA.
“Consumers must be able to trust that the products they buy are safe and the claims on the product's label can be relied on,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Justice Department will continue to work with FDA to take action against manufacturers that employ substandard practices, so that the public can rely on the safety and integrity of the products they buy.”
“Marketing medical products that were not manufactured in compliance with FDA regulations and making unsubstantiated claims about those products can lead to serious consequences for unsuspecting buyers,” said U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois. “This case reflects our office’s ongoing commitment to safeguard consumers.”
“Companies that market dietary supplements with unproven health claims and also continue to violate manufacturing regulations put consumers’ health in jeopardy,” said Melinda Plaisier, FDA associate commissioner for regulatory affairs. “The FDA will take the enforcement actions necessary to protect consumers from this undue risk.”
This matter was handled by Trial Attorney James Harlow of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Donald Lorenzen of the U.S. Attorney’s Office for the Northern District of Illinois, with the assistance of Associate Chief Counsel Julie Lovas of the FDA’s Office of General Counsel, Department of Health and Human Services.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Illinois, visit its website at www.justice.gov/usao-ndil.
Former Financial Analyst for North Suburban Medical Waste Management Company Charged with Insider TradingRead the Press Release
CHICAGO — A former financial analyst for a north suburban medical waste management company used insider information to trade shares of the company ahead of an earnings report, according to a federal criminal charge filed today by the U.S. Attorney’s Office in Chicago.
In April 2016, MATTHEW C. BRUNSTRUM earned $158,707 in profits and avoided losses of $1,194 from the purchase and sale of securities in Lake Forest-based Stericycle Inc., where he worked as a financial analyst, according to a criminal information filed in federal court in Chicago. Brunstrum used material, non-public information to make the trades ahead of a public announcement by Stericycle regarding its lower-than-projected earnings for the first quarter of 2016, the information states. Brunstrum also directed or encouraged a relative to make similar trades ahead of the earnings announcement, the information alleges. The relative allegedly made profits of $146,028, and avoided losses of $24,224.
The information charges Brunstrum, 26, of Chicago, with one count of securities fraud by insider trading. The charge was filed by the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago. During the investigation, authorities seized $328,959 in illegal profits.
The charge was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission, which today filed a civil enforcement action against Brunstrum, provided valuable assistance.
The charge alleges that certain Stericycle personnel, including Brunstrum, became aware of the company’s first quarter earnings results in mid-April 2016. When trading on the Nasdaq Stock Market closed on April 28, 2016, Stericycle’s share price was $121.74. After the close of trading that day, Stericycle publicly announced the earnings results and its executives participated in a conference call with outside analysts. During the call, Stericycle’s chief financial officer acknowledged that earnings per share were approximately 5% lower than the company had projected. The following trading day, Stericycle’s stock price fell more than 20%, closing at approximately $95.56 per share.
The charge alleges that Brunstrum and his relative sold nearly 1,050 shares of Stericyle stock prior to the public earnings announcement. The pair also purchased more than 180 near-term, out-of-the-money put options for Stericycle shortly before the earnings announcement, and then sold those options at a profit after Stericycle’s stock declined, the information states.
The public is reminded that an information is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Arraignment is set for Aug. 2, 2018, at 1:30 p.m., before U.S. Magistrate Judge Jeffrey T. Gilbert. Securities fraud by insider trading is punishable by up to 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Assistant U.S. Attorney Paul H. Tzur represents the government in the criminal case.
Vice President of Insurance Underwriting Group Charged with Fraudulently Obtaining $13.5 Million in Phony “Matching Deductible” PoliciesRead the Press Release
CHICAGO — The vice president of an insurance underwriting group fraudulently obtained more than $13.5 million from a corporate client by fraudulently issuing and collecting premium payments on “matching deductible” policies, according to federal criminal charges filed today by the U.S. Attorney’s Office in Chicago.
DAVID BALLARD, 54, of Chicago, oversaw the Pennsylvania account of a large health care company. From 2005 to 2016, Ballard fraudulently issued “matching deductible” insurance renewal policies that his employer had not authorized, according to a criminal information filed in U.S. District Court in Chicago. Ballard created and submitted to the health care company phony estimates, invoices, binder letters and policies that outlined the purported terms of coverage, the charges allege. He then had the premium payments diverted to a shell company that he controlled, the information states. As a result of the scam, Ballard fraudulently pocketed more than $13.5 million, which he used to pay personal expenses, including credit card bills, expensive dinners, travel costs, and real estate for himself and his family, according to the charges.
Ballard is charged with one count of wire fraud, which is punishable by up to 20 years in prison. Arraignment in U.S. District Court in Chicago has not yet been scheduled.
The charge was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
The public is reminded that an information is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Jennie Levin.
Arkansas Man Sentenced to More Than 7 Years in Federal Prison for Illegally Selling Guns in Chicago AreaRead the Press Release
CHICAGO — An Arkansas man has been sentenced to more than seven years in federal prison for illegally selling numerous handguns and rifles in Chicago and the suburbs.
KLINT KELLEY brought the firearms from Arkansas to Chicago and illegally sold them to a convicted felon. Kelley sold a total of 21 guns to the felon on three occasions last year, including during the Fourth of July and Labor Day weekends. The weapons included eleven handguns, nine rifles and one shotgun. Several of the firearms were semi-automatic guns capable of accepting large-capacity magazines.
Kelley, 28, of Malvern, Ark., pleaded guilty earlier this year to one count of unlawfully engaging in the business of dealing firearms, and one count of selling firearms to a known felon. U.S. District Judge Ronald A. Guzman on Wednesday sentenced Kelley to seven years and three months in prison.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; and Eddie Johnson, Superintendent of the Chicago Police Department. The Illinois State Police provided valuable assistance.
“In a city that has seen shootings and homicides in astronomical numbers, illegal transportation of firearms and to a known convicted felon should not be tolerated,” Assistant U.S. Attorney Tobara S. Richardson argued in the government’s sentencing memorandum. “Defendant knowingly engaged in criminal conduct that contributes to one of the worst aspects of the city.”
Kelley’s plea agreement describes the three occasions when he illegally sold firearms to the felon. On April 3, 2017, in a residence in southwest suburban Frankfort, Kelley sold the felon five handguns and three semi-automatic rifles, in exchange for $4,750 in cash. On July 3, 2017, on Chicago’s West Side, Kelley sold the felon four handguns and one semi-automatic rifle, in exchange for $3,000 in cash. On Sept. 3, 2017, in a commercial area of southwest suburban Chicago Ridge, Kelley sold the felon five rifles, two handguns and one semi-automatic shotgun, in exchange for $7,000 in cash.
At least three of the 21 firearms had been reported stolen, including one gun taken in a burglary of a police officer’s residence.
Kelley grew up in Illinois and moved to Arkansas several years ago.
6 Defendants Charged in Federal Investigation Targeting Narcotics Sales in RockfordRead the Press Release
CHICAGO — Six individuals are facing federal criminal charges as part of an investigation into heroin and crack cocaine sales in the Rockford area.
As part of the probe, law enforcement conducted numerous controlled purchases of narcotics and conducted extensive physical and video surveillance. Authorities earlier this month searched a residence in the 4400 block of Grinnell Drive in Rockford and discovered distribution quantities of heroin.
The investigation was conducted by the Rockford Area Violent Gang Task Force and the Winnebago County Sheriff’s Police. The Rockford Area Violent Gang Task Force is led by the Federal Bureau of Investigation and includes members of the FBI and the Rockford, Loves Park, and Freeport Police Departments.
A criminal complaint and affidavit filed in U.S. District Court in Rockford charges six defendants with conspiracy to distribute and possess heroin, cocaine, and crack cocaine, with intent to distribute. Several of the defendants were arrested Wednesday. Detention hearings will be held next week in U.S. District Court in Rockford.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Gary Caruana, Winnebago County Sheriff. The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives assisted in the investigation. Assistant U.S. Attorney Talia Bucci represents the government.
“The charges in this case send a clear message that the distribution of illegal drugs in Rockford will not be tolerated,” said U.S. Attorney Lausch. “I commend our federal and local law enforcement partners for working together to shut down a significant drug trafficking organization.”
“These arrests and seizures demonstrate our overall strategy and relentless determination to eradicate the drug-fueled gang violence plaguing our community,” said FBI Special Agent-in-Charge Sallett. “We are proud to work side by side with the U.S. Attorney’s Office, the Rockford Area Violent Gang Task Force, and the Winnebago County Sheriff’s Office to bring these individuals to justice. Anyone who terrorizes our communities with their wanton drug dealing should know, we are coming for you.”
Winnebago County Sheriff Caruana thanked all law enforcement partners for their unselfish work to bring this case to a successful conclusion. “This operation makes the Winnebago County region a safer community and showcases Cooperative Law Enforcement,” Sheriff Caruana said.
According to the complaint, TYJUAN ANDERSON, 35, of Rockford, operated a drug-trafficking organization that distributed narcotics in the Rockford area. The complaint alleges that Anderson and other members of his crew, including CHRISTOPHER ARNOLD, 33, of Rockford, and LUMONT JOHNSON, 45, of Rockford, obtained narcotics from multiple suppliers and provided the drugs to other members of Anderson’s organization. The charges allege that CLEVELAND JOHNSON, 38, of Rockford, and DAVID APPLETON, 55, of Rockford, distributed the drugs to customers in the Rockford area.
According to the complaint, Anderson served as a mentor to JUSTIN HILL, 37, of Rockford, on how to operate a successful drug-trafficking business, manage money, and avoid police surveillance. At times when Anderson was low on narcotics, Hill would supply him with drugs to increase Anderson’s inventory, the complaint states.
The conspiracy charge carries a maximum penalty of 20 years in prison. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines. The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Michigan Man Guilty of Kidnapping Suburban Chicago Woman and Attacking Federal Jail EmployeeRead the Press Release
CHICAGO — A Michigan man has pleaded guilty to federal criminal charges for kidnapping and sexually assaulting a suburban Chicago woman whose home he burglarized.
CARLEOUS CLAY admitted in a plea agreement that he broke into the woman’s home in Lansing, Ill., in September 2015, took several items of value and carried them away. When he returned later that night to steal more items, Clay encountered the woman, who was returning home with groceries, the plea agreement states. Clay abducted the woman and drove her car to an ATM in Munster, Ind., where he used her PIN to withdraw $140 from her bank account. Clay then drove to the parking lot of a vacant commercial business in Burns Harbor, Ind., and sexually assaulted the woman in the backseat of her car, the plea agreement states.
Afterwards, Clay strangled the woman and used lighter fluid and a lighter to set her on fire in an effort to kill her, his plea agreement states. The victim survived but suffered permanent and life-threatening bodily injuries.
Clay, 35, of Holland, Mich., pleaded guilty Tuesday to one count of kidnapping, one count of attempted murder, and one count of using fire to commit a felony. The conviction is punishable by up to life in prison. U.S. District Judge Virginia M. Kendall set sentencing for Oct. 9, 2018, at 10:00 a.m.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. Valuable assistance was provided by police departments in Lansing, Ill.; Burns Harbor, Ind.; Ogden Dunes, Ind.; Munster, Ind.; Porter County, Ind.; Holland, Mich.; and Ottawa County, Mich. The government is represented by Assistant U.S. Attorneys Angel M. Krull and Ronald DeWald.
In addition to the kidnapping, Clay admitted in the plea agreement that he attacked a female case manager while jailed at the Metropolitan Correctional Center in downtown Chicago. The attack occurred in April 2017 in the case manager’s office on a residential floor of the MCC. Clay pretended to make a complaint about another inmate, but once inside the office he pushed the case manager to the floor and took her keys, which he used to lock himself inside the office with the victim, the plea agreement states. Clay admitted that he put a homemade knife to the case manager’s throat and threatened to kill her.
Multiple MCC staff members eventually entered the office, deployed pepper spray on Clay, and removed the case manager from the room.
North Suburban Businessman Sentenced to 24 months for Evading More Than $800,000 in State and Federal Income TaxesRead the Press Release
CHICAGO — A north suburban businessman who operated a cellular telephone distributorship throughout Illinois and other Midwestern states was sentenced last Friday to 24 months imprisonment for willfully failing to pay more than $800,000 in personal and corporate income taxes.
JORDAN ECKERLING, 53, of Highland Park, the owner of Pagecomm of Illinois Inc., pled guilty in January 2018, admitting that from 2008 to 2012 he caused tax losses to the United States and Illinois in the total amount of $806,099. As the sole shareholder and officer of Pagecomm, Eckerling attempted to conceal income by causing the company to issue him “business checks” that he cashed and used for personal expenses. Eckerling admitted he caused the company to pay personal expenses such as a housekeeper to regularly clean his boat and his primary and secondary residences, and charged personal expenses to Pagecomm’s credit card accounts, including for a family vacation to Cancun, Mexico. Eckerling also admitted that he used gift cards belonging to the company for personal expenses, and that he placed his wife on the company payroll to obtain health insurance in her name rather than his, even though she was not employed by the company.
U.S. District Judge Virginia M. Kendall imposed the sentence in federal court in Chicago. Eckerling was ordered to report to the Federal Bureau of Prisons on September 28, 2018. He paid the $806,099 tax obligations while the case was pending.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.
More Than 50 Defendants Charged in Joint Federal and State Narcotics Investigation Centered on West Side of ChicagoRead the Press Release
CHICAGO — More than 50 individuals, including a reputed gang member, are facing criminal charges as part of a joint federal and state investigation into heroin and fentanyl sales in Chicago.
The investigation, dubbed “Operation Fat Chance,” centered on drug sales on the city’s West Side and resulted in the seizures of more than three kilograms of heroin, more than a kilogram of cocaine, and more than 230 grams of fentanyl. Authorities also seized eight illegal firearms, including a semi-automatic assault rifle with a drum barrel magazine, and more than $100,000 in narcotics proceeds. As part of the investigation, law enforcement shut down two open-air drug markets in the city’s North Lawndale and East Garfield Park neighborhoods.
The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies, whose principal mission is to identify, disrupt and dismantle the most serious drug trafficking organizations.
Criminal complaints and affidavits filed in U.S. District Court in Chicago charge 15 defendants with various drug offenses. Two of the federal targets were arrested on Tuesday and several more were arrested Thursday. Detention hearings for some of the federal defendants will be held today and next week in U.S. District Court in Chicago.
Forty two other defendants were charged in state complaints, and many of them were also arrested Thursday. They have begun making initial appearances in Cook County Criminal Court.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; Kimberly M. Foxx, Cook County State’s Attorney; and Eddie Johnson, Superintendent of the Chicago Police Department. Substantial assistance was provided by the U.S. Marshals Service. Assistant U.S. Attorneys Nani Gilkerson and Jeannice Appenteng are representing the government.
According to the federal complaints, THOMAS BARFIELD, 36, of Chicago, is a reputed street-gang member who operated a drug trafficking organization that utilized street-level distributors (known as “pack workers”) to sell heroin and fentanyl to customers. Many of the deals were carried out at an open-air drug market near the intersection of Homan Avenue and Douglas Boulevard in Chicago, the complaints state. The sales were allegedly overseen by high-ranking members of Barfield’s organization, including CHARELLE THOMPSON, 28, of Chicago; NICOLE GREEN, 34, of Chicago; GLORIA ANDERSON, 60, of Chicago; and THOMAS SMITH, 65, of Chicago. QUIERA WALLS, 35, of Chicago, and JARVIS PAYNE, 30, or Chicago, are alleged to have assisted Barfield with the packaging and distribution of narcotics.
From December 2017 to April 2018, according to the complaints, law enforcement conducted numerous undercover drug purchases from Smith, Anderson, and the pack workers, including MICHAEL JACKSON, 44, of Chicago; ANTON BROWN, 46, of Chicago; and ALFRED JOHNSON, 54, of Chicago. Last month, agents searched Barfield’s home and three alleged stash houses on the West Side of Chicago, seizing heroin, cocaine, a rifle, two handguns, and drug-packaging materials, the complaints state.
The federal complaints also describe an April 2018 narcotics transaction in front of a grocery store in 4400 block of West Armitage Avenue in the Hermosa neighborhood of Chicago. According to the charges, JOSE HERNANDEZ, 48, of Chicago, delivered a kilogram of cocaine to OBED ORNELAS, 36, of Chicago, inside Ornelas’ Ford Mustang. When officers attempted to pull over the Mustang, Ornelas allegedly sped off and tossed the bag of cocaine out of the driver’s side window. Officers recovered the bag in the 2400 block of North Kedzie Avenue in Chicago, the complaints state. The complaints also allege that Ornelas supplied Barfield with narcotics.
Also charged in the federal complaints is another reputed gang member, WILLIE KELLEY, 26, of Chicago. Kelley allegedly managed heroin sales at an open-air drug market near the intersection of Lexington Street and Sacramento Avenue in Chicago’s East Garfield Park neighborhood.
The federal complaints also charge DARIUS FRANKLIN, 34, of Algonquin, and JONATHAN HARRIS, 26, of Cicero. According to the complaints, Franklin and Harris are alleged to have distributed heroin to various narcotics customers. Agents searched Franklin’s alleged stash house and recovered over two kilograms of heroin and drug-packaging materials. Franklin is also alleged to have provided heroin to Willie Kelley.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.
National Healthcare Fraud Takedown Results in Charges Against over 600 Individuals, Including Several Chicago-Area Medical ProfessionalsRead the Press Release
CHICAGO — Several Chicago-area medical professionals, including four physicians, are facing federal criminal charges as part of the largest health care fraud enforcement action in Department of Justice history, federal authorities announced today.
The national enforcement action taken by the Medicare Fraud Strike Force involved over 600 defendants charged throughout the country, including more than 150 physicians, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $2 billion in false billings. Several of the doctors were charged for their alleged roles in prescribing and distributing opioids and other dangerous narcotics. In addition, the Department of Health and Human Services has initiated suspension actions against numerous providers, including doctors, nurses and pharmacists.
The national enforcement action was announced by Attorney General Jeff Sessions; HHS Secretary Alex M. Azar III; Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Deputy Director David L. Bowdich of the Federal Bureau of Investigation; Assistant Administrator John Martin of the U.S. Drug Enforcement Administration; Inspector General Daniel R. Levinson of the HHS Office of Inspector General; Deputy Chief Eric Hylton of the Internal Revenue Service’s Criminal Investigation Division; Director Alec Alexander of the Centers for Medicare and Medicaid Services; and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service.
Today’s enforcement actions were led and coordinated by the DOJ Criminal Division Fraud Section’s Health Care Fraud Unit, in conjunction with the Medicare Fraud Strike Force – a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. The operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.
"Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer," said Attorney General Sessions. "In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever."
"Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money—it’s a dollar that can go toward providing healthcare for Americans in need," said HHS Secretary Azar. "This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work."
"Medicare and Medicaid are significant health care programs that pay for vital medical services," said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. "Our office will continue to investigate and prosecute any medical professional who knowingly violates the rules and abuses the trust placed in them by the government and their patients."
"Our nation’s opioid epidemic has no boundaries, and today’s actions highlight just that," said Brian M. McKnight, Special Agent-in-Charge of the Chicago Field Division of the DEA. "Opioid addiction and the criminal activity driving it extend far beyond the cartels and gang violence to the rogue medical professionals identified today."
Several Chicago-area medical professionals, including four doctors, were charged as part of investigations in the Northern District of Illinois. The local charges were announced by U.S. Attorney Lausch; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General; DEA Chicago SAC McKnight; Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of HHS-OIG.
Two of the Illinois cases involved licensed physicians who allegedly falsely certified patients for home-health services reimbursed by Medicare. The indictments against DR. FLORENTINO LEONG and DR. RUBEN INOCENCIO allege that the doctors authorized in-home services even though they knew the patients were not confined to their homes and did not require such services. Dr. Leong, 78, of Orland Park, and Dr. Inocencio, 77, of Skokie, are charged with health care fraud and making false statements in a health care matter. Arraignment for Dr. Leong is set for today at 10:00 a.m. before U.S. District Judge Manish S. Shah, while arraignment for Dr. Inocencio has not yet been scheduled. Their cases are being prosecuted by Assistant U.S. Attorney Stephen Chahn Lee.
Another Illinois case involves a licensed psychiatrist, DR. KIRK HOPKINS, who allegedly earned more than $5.5 million by falsely billing Medicaid and Medicare for psychotherapy services that were never performed. Dr. Hopkins, 44, of Chicago, pleaded not guilty to five counts of wire fraud during his arraignment Wednesday before U.S. District Judge Joan H. Lefkow. A status hearing is set for July 25, 2018, at 9:00 a.m. The case is being prosecuted by Assistant U.S. Attorney Sheri H. Mecklenburg. Substantial investigative assistance was provided by the Illinois State Police Medicaid Fraud Control Bureau – North.
The fourth Illinois physician charged as part of the enforcement action is DR. SYED ATHER, who owned two home-visiting physician companies in Lincolnwood – Mobile Physicians S.C. and M&F Medical Services Ltd. Dr. Ather allegedly billed Medicare for at least $2.8 million of unnecessary and "up-coded" home-physician visits from 2010 to 2018. Dr. Ather, 44, of Lincolnwood, pleaded not guilty to 14 counts of health care fraud during his arraignment Wednesday before U.S. District Judge Matthew F. Kennelly. A status hearing is set for Sept. 24, 2018. The case is being prosecuted by Trial Attorney Leslie S. Garthwaite of the Justice Department’s Criminal Division Fraud Section.
Federal charges were also filed in Illinois against a patient marketer, LINDA HAWKINS, who recruited home-health patients on behalf of at least four agencies in the Chicago area. Hawkins allegedly promoted the services of her home-health agency clients at churches and senior buildings, and received more than $180,000 in bribes and kickbacks from the agencies from 2010 to 2016. An indictment charges Hawkins, of Robbins, with one count of conspiracy to solicit and receive health care kickbacks, and six counts of soliciting and receiving health care kickbacks. She is scheduled to be arraigned today at 1:30 p.m. before U.S. Magistrate Judge Michael T. Mason. The case is being prosecuted by Trial Attorney Patrick Mott of the Justice Department’s Criminal Division Fraud Section.
The owner of a home health agency was also charged as part of the Chicago-area investigations. YURI LUDVINSKY, 55, of Chicago, was charged with three counts of violating the Anti-Kickback Statute, stemming from alleged kickback payments Ludvinsky made to a physician for referring patients to Ludvinsky’s agency. Arraignment in federal court in Chicago has not yet been scheduled. The case is being prosecuted by Assistant U.S. Attorney Nathalina Hudson.
The Medicare Fraud Strike Force operates in nine locations nationwide. Its operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force has charged more than 3,700 defendants who collectively have falsely billed the Medicare program for more than $14 billion.
The public is reminded that charges are merely allegations, and all defendants are presumed innocent until proven guilty.
McHenry Man Sentenced to More Than 17 Years in Federal Prison on Child Pornography ChargesRead the Press Release
ROCKFORD — A McHenry man was sentenced today by U.S. District Judge Frederick J. Kapala to 210 months in federal prison, to be followed by five years of supervised release, on child pornography charges.
Following a four-day jury trial in federal court, MICHAEL L. CHAPARRO, 29, was found guilty on Feb. 2, 2018, of one count of transporting child pornography via the internet, and two counts of accessing child pornography that had crossed state lines, including an image of a prepubescent minor and a minor under 12 years of age, with intent to view the child pornography.
According to the indictment and the evidence at trial, on Aug. 7, 2014, Chaparro knowingly transported to Pennsylvania and Texas materials depicting one or more actual minors engaged in sexually explicit conduct. In addition, evidence at trial indicated that Chaparro accessed a smart phone on Nov. 24, 2014, and computer hard drive on July 30, 2013, with intent to view child pornography, knowing that one or more persons depicted in an image involved a prepubescent minor or a minor who had not attained 12 years of age.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey Sallet, Special Agent-in-Charge of the Chicago office of Federal Bureau of Investigation; and Bill Prim, McHenry County Sheriff. The Illinois Internet Crimes Against Children Task Force assisted in the investigation.
The government was represented by Assistant U.S. Attorneys Michael D. Love and Margaret J. Schneider.
Financial Advisor Indicted on Fraud Charges for Allegedly Swindling Investors out of $4.7 MillionRead the Press Release
CHICAGO — A financial advisor who told clients they were guaranteed to make money by investing with him has been indicted for allegedly defrauding those clients out of $4.7 million.
DARAYL DAVIS falsely represented to clients that they were guaranteed to receive annual interest payments of at least 6% if they invested with Davis’s two firms, Washington, D.C.-based Financial Assurance Corp. and Los Angeles, Calif.-based Affluent Advisory Group LLC, according to a superseding indictment returned Tuesday in U.S. District Court in Chicago. Davis also claimed that his clients’ principal investments were protected against losses and that some of the purported investments were backed by a well-known multinational life insurance company, the superseding indictment states. The charges describe how Davis defrauded some of his 22 victims by causing them to “roll over” their retirement savings into an account controlled by Davis. In reality, Davis did not invest the funds as promised, and none of the purported investments offered by Davis through FAC and AAG had any affiliation with the life insurance company, the charges allege.
Instead of investing his clients’ money, Davis spent the money for his own personal benefit, including $706,000 on credit card payments, $476,500 to rent a mansion in Los Angeles, $102,000 on airline tickets, $45,000 on car rentals, $42,500 on membership in an exclusive club, $42,000 on luxury hotels, and $25,000 on theater tickets, the indictment states. Davis also used the investors’ funds to make Ponzi-type payments to newer investors to conceal the scam, the charges allege. The alleged fraud scheme began in 2003 and continued until this year.
The indictment charges Davis, 45, of Bowie, Md., with six counts of money laundering, five counts of wire fraud, four counts of mail fraud, and one count of aggravated identity theft. Arraignment is scheduled for June 28, 2018, at 9:30 a.m., before U.S. District Judge Robert W. Gettleman.
The superseding indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. Valuable assistance was provided by the U.S. Securities and Exchange Commission, which previously filed a civil complaint against Davis.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count of wire fraud, mail fraud and money laundering is punishable by up to 20 years in prison, while aggravated identity theft carries a mandatory consecutive prison term of two years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Jennie H. Levin.
United States Reaches Settlement with Two Suburban Hospitals to Ensure Effective Communication with Deaf and Hard-of-Hearing PatientsRead the Press Release
CHICAGO — The U.S. Attorney’s Office today announced a settlement agreement with two west suburban hospitals to ensure effective communication with deaf and hard-of-hearing patients, pursuant to the Americans with Disabilities Act.
The agreement requires the hospitals – Adventist La Grange Memorial Hospital and Adventist Hinsdale Hospital – to provide appropriate auxiliary aids and services, including qualified American Sign Language interpreters, to ensure effective communication with deaf and hard-of-hearing patients and their companions. Per the terms of the agreement, the hospitals will provide mandatory training to their employees on how to address the needs of deaf and hard-of-hearing patients. The hospitals will also designate at least one employee as an ADA administrator, who will coordinate immediate access to the proper services – free of charge to the patient.
The settlement amicably resolves a complaint filed with the Department of Justice by a deaf patient who alleged that personnel at the hospitals discriminated against him by failing to provide the proper services under the ADA. The hospitals will pay $10,000 in damages to the complainant. Although the United States and the complainant agreed not to institute a civil lawsuit, the United States may review compliance with the settlement at any time, and reserves the right to file suit if it believes any portion has been violated.
The settlement, which became effective Monday, was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. The United States is represented by Assistant U.S. Attorneys Sarah J. North and Patrick Johnson.
The ADA prohibits public accommodations, including hospitals, from discriminating on the basis of disability in the full and equal enjoyment of their goods and services. The complainant alleged that the hospitals failed, during two visits in 2015, to provide sign language interpretive services in a manner that ensured effective communication. In both visits, the complainant said he requested an interpreter so he could fully communicate with medical personnel, but his requests were denied and the auxiliary aids and services that were provided did not ensure effective communication.
The agreement does not represent an admission of liability by the hospitals, which are part of Adventist Midwest Health, a system of health providers serving the western suburbs of Chicago and a component of Adventist Health Systems. Adventist Midwest Health fully cooperated in the U.S. Attorney’s Office’s investigation of this matter.
To learn more about the ADA and other laws protecting the rights of the deaf and hard of hearing, log on to www.ada.gov or call the Justice Department's toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD).
Federal Charges Accuse Owners of Suburban Bulk-Mailing Company of Defrauding the Postal Service out of $16 MillionRead the Press Release
CHICAGO — The owners of a suburban bulk-mailing company swindled the U.S. Postal Service out of at least $16 million by forging documents and secretly using an official date stamp to fraudulently authenticate payment of postage for than 80 million pieces of mail, according to criminal charges filed today by the U.S. Attorney’s Office in Chicago.
YOGESH PATEL and ARVIND LAKKAMSANI owned and operated Prodigy Mailing Services Inc., which was based in Bolingbrook and later in Woodridge. Prodigy assembled bulk mailings from customers and provided the mailings – along with fraudulent payment and verification forms – to the Postal Service for delivery, without paying postage on those mailings. According to the charges, Patel and Lakkamsani schemed with a third defendant, DAVID GARGANO, to fraudulently cause the Postal Service to deliver numerous bulk mailings without payment. The trio forged a Postal Service clerk’s signature on the verification forms and secretly used an official Postal Service date stamp to make it falsely appear that the clerk had authenticated postage, the charges allege.
From 2010 to 2015, the defendants caused a loss to the Postal Service of at least $16 million, according to the charges.
A criminal information charges each of the three defendants – Patel, 58, of Orlando, Fla., Lakkamsani, 57, of Northbrook, Ill., and Gargano, 51, of Barrington, Ill. – with one count of mail fraud. Arraignments in U.S. District Court in Chicago have not yet been scheduled.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and William Hedrick, Acting Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
According to the charges, Gargano owned Illinois-based Direct Mail Resources Inc., which collected a fee to match customers seeking to make bulk mailings with companies who could perform those services, such as Prodigy. Gargano referred two energy companies to Prodigy for bulk mailing services. The two energy companies provided millions of dollars to the defendants to pay the postage for the companies’ bulk mailings. Instead of using those funds to pay the postage, the defendants split the money amongst themselves and used it for their own benefit, the charges allege.
The information alleges that the defendants made the mailings but kept the postage money from the energy companies without paying postage to the Postal Service. Patel and Lakkamsani fraudulently maintained a key to a Postal Service mail unit, which was located inside Prodigy’s facility, and used the key to secretly access an official date-stamp without the Postal Service’s knowledge or approval, the information states. By forging the Postal clerk’s signature and fraudulently stamping the mailings, the defendants made it falsely appear that the verification forms – which identified the amount of postage paid for the bulk mailings – were authentic and that postage had been appropriately paid, the charges allege.
The public is reminded that an information is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Mail fraud is punishable by up to 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Jacqueline Stern.
Rockford Man Arrested on Drug Trafficking ChargesRead the Press Release
ROCKFORD — A Rockford man was arrested Wednesday night on drug trafficking charges.
DEVONTE GORDON, 33, also known as "Slim," was indicted on June 19, 2018, and charged with one count of conspiracy to possess with intent to distribute a quantity of heroin and 500 grams or more of cocaine in Rockford between September and November 2017, as well as one count of possessing with intent to distribute 500 grams or more of cocaine in Rockford on Oct. 4, 2017. Gordon was arraigned today before U.S. Magistrate Judge Iain D. Johnston and pleaded not guilty. Gordon is scheduled to appear for a detention hearing on June 28, 2018, at 2:00 p.m.
TERVARIE T. LOTTIE, 30, of Rockford, also known as "Varie," "V," and "Ferrari," was also charged in the indictment with conspiracy to possess with intent to distribute a quantity of heroin and 500 grams or more of cocaine in Rockford between September and November 2017. Lottie was already in federal custody pending trial on other charges.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; Gary Caruana, Winnebago County Sheriff; and Dan O’Shea, Rockford Police Chief. The investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force, which includes the above agencies as well as the Loves Park and Freeport Police Departments.
Each count in the indictment carries a mandatory minimum penalty of five years in prison and a maximum penalty of up to 40 years in prison, followed by a period of supervised release of at least four years and up to life, and a fine of up to $5 million. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorney Talia Bucci.
Newly Unsealed Federal Indictment Charges Iranian Businessman with Illegally Exporting Nuclear Nonproliferation-Controlled Materials from IllinoisRead the Press Release
CHICAGO — An Iranian businessman schemed with the owner of a European company to illegally export nuclear nonproliferation-controlled materials to Iran from Illinois, according to a newly unsealed federal indictment.
SAEED VALADBAIGI, also known as “Saeed Valad” and “Saeed Baigi,” plotted in 2011 to illegally export U.S.-origin 7075 T6 Aluminum tubing from Illinois to Iran by way of Belgium and Malaysia, the indictment states. The size and type of the aluminum was used in the missile and aerospace industry and was subject to U.S. regulations for nuclear nonproliferation purposes, the indictment states. Valadbaigi’s smuggling plan was part of an effort to evade U.S. laws and export-control regulations, according to the charges.
The eight-count indictment was returned in 2016 in U.S. District Court in Chicago and ordered unsealed Wednesday. It charges Valadbaigi with three counts of wire fraud, two counts of attempting to violate the International Emergency Economic Powers Act, one count of conspiracy to defraud the United States, one count of illegally exporting articles from the United States, and one count of making false statements on a U.S. export form.
Valadbaigi, 56, of Iran, is considered a fugitive. A warrant for his arrest was issued in 2016 and remains outstanding.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Dan Clutch, Special Agent-in-Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Chicago Field Office. The government is represented by Assistant U.S. Attorney Rajnath Laud.
In addition to the 7075 Aluminum tubing, the newly unsealed indictment accuses Valadbaigi of illegally exporting titanium sheets from a company in northern Illinois, to Iran, by way of the Republic of Georgia, the United Arab Emirates and Malaysia. At the time of that deal in 2009, Valadbaigi controlled various companies in all three of those countries, the indictment states. The charges further allege that Valadbaigi in 2012 ordered acrylic sheets from a company in Connecticut, and falsely claimed that the sheets would be used only in Hong Kong. He later allegedly arranged for the acrylic sheets to be transshipped to Iran.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count of wire fraud and attempting to violate the IEEPA carries a maximum sentence of 20 years in prison. The illegal export charge is punishable by up to ten years in prison, while the conspiracy and false statement counts are each punishable by up to five years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The charges against Valadbaigi are part of an investigation that previously resulted in the conviction of NICHOLAS KAIGA, who managed and later owned the Belgium company that did business with Valadbaigi. Kaiga admitted in a plea agreement that he knew the 7075 Aluminum was subject to U.S. export controls and that it could not be exported to Malaysia without a license from the U.S. Department of Commerce, which neither he nor Valadbaigi possessed. Kaiga admitted that he nonetheless used his company, Industrial Metals and Commodities, as an intermediary to export the 7075 Aluminum tubing from a company in northern Illinois, to Belgium and then to Malaysia, on behalf of Valadbaigi. Kaiga pleaded guilty to violating U.S. export-control regulations and was sentenced in 2015 to two years and three months in a U.S. prison.
Former Postal Employee Indicted for Theft from U.S. MailRead the Press Release
ROCKFORD — A McHenry woman was indicted Tuesday by a federal grand jury for theft from the U.S. mail.
JENNIFER L. DUNCAN, 51, a former U.S. Postal worker, was charged in a one-count indictment. As alleged in the indictment, on Feb. 20, 2018, Duncan removed approximately $3,500 from mail addressed to an individual in Tennessee.
Mail theft carries a maximum potential penalty of up to five years in prison, a period of supervised release of up to three years following imprisonment, a fine of up to $250,000, and full restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. Duncan will be arraigned on a date yet to be determined in U.S. District Court in Rockford.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Scott Caspall, Special Agent-In-Charge of the Chicago Great Lakes Area Field Office of the U.S. Postal Service Office of Inspector General.
The public is reminded that an indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Mexican National Arrested for Allegedly Selling a Kilogram of Fentanyl to Undercover Law Enforcement Agent in ChicagoRead the Press Release
CHICAGO — A Mexican national has been arrested for allegedly selling a kilogram of fentanyl to an undercover law enforcement agent near Midway Airport in Chicago.
JAVIER GONZALEZ-LOZA, 40, sold the fentanyl for $40,000 during a February 2018 meeting in an alley in the 5600 block of South Kilbourn Avenue in Chicago, according to a criminal complaint and affidavit filed in federal court. Unbeknownst to Gonzalez-Loza, the purported buyer was an undercover law enforcement agent, the complaint states.
The complaint charges Gonzalez-Loza with one count of distribution of a controlled substance. Gonzalez-Loza made an initial court appearance Wednesday before U.S. Magistrate Judge Daniel G. Martin, who ordered him to remain in federal custody. A preliminary hearing was scheduled for June 27, 2018, at 2:00 p.m.
Gonzalez-Loza had been deported to Mexico from the United States in 2013 after a prior criminal conviction, but was residing in Chicago at the time of the alleged drug deal, according to the complaint.
The arrest and complaint were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The government is represented by Assistant U.S. Attorney Philip Fluhr.
According to the complaint, a confidential source cooperating with law enforcement notified authorities about Gonzalez-Loza’s alleged drug dealing. An undercover agent began communicating with Gonzalez-Loza, and some of their conversations were surreptitiously recorded.
In January 2018, Gonzalez-Loza provided the undercover officer with “sample” quantities of heroin and fentanyl, the complaint states. The meetings at which Gonzalez-Loza supplied these samples occurred in a grocery store parking lot near West 59th Street and South Pulaski Road in Chicago, the complaint states. After those meetings, the undercover agent and Gonzalez-Loza arranged for the larger deal the following month, at which Gonzalez-Loza distributed approximately 998.7 grams of fentanyl, as stated in the complaint.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The drug distribution charge is punishable by a mandatory minimum sentence of ten years in prison and a maximum sentence of life in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
More Than 50 Defendants Charged in Joint Federal and State Narcotics Investigation Centered on West Side of ChicagoRead the Press Release
CHICAGO — More than 50 individuals, including an alleged Mexico-based drug trafficker and a Wisconsin-based courier, are facing criminal charges as part of a joint federal and state investigation into heroin and fentanyl sales in Chicago.
The investigation, dubbed “Operation Full Circle,” centered on drug sales on the city’s West Side, and resulted in the seizure of more than two kilograms of heroin, a kilogram of fentanyl, and 300 pounds of marijuana. Authorities also seized 17 illegal firearms, including three rifles, and approximately $8,000 in narcotics proceeds.
One of the defendants offered to kidnap a man who allegedly owed a debt to Mexico-based narcotics traffickers in exchange for cash and drugs. The defendant was arrested and a search of his vehicle revealed two firearms, steel chains and duct tape. Two other defendants engaged in a handgun-for-heroin transaction in December of last year, according to the federal charges.
The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), in cooperation with the Chicago High Intensity Drug Trafficking Task Force (HIDTA). OCDETF is a partnership between federal, state and local law enforcement agencies, whose principal mission is to identify, disrupt and dismantle the most serious drug trafficking organizations.
Criminal complaints and affidavits filed in U.S. District Court in Chicago charge seven defendants with various drug offenses, and two defendants with firearm offenses. Several of the federal defendants were arrested Tuesday. Detention hearings for some of the federal defendants will be held on June 22, 2018, before U.S. Magistrate Judge Daniel G. Martin.
Forty-eight other defendants were charged in state complaints, and many of them were also arrested Tuesday. They have begun making initial appearances in Cook County Criminal Court.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; Nicholas Roti, Director of HIDTA; Kimberly M. Foxx, Cook County State’s Attorney; Eddie Johnson, Superintendent of the Chicago Police Department; and Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. Substantial assistance was provided by HIDTA DEA Group 43, the U.S. Marshals Service, and the U.S. Postal Inspection Service in Chicago. Assistant U.S. Attorneys John Mitchell and Grayson Walker are representing the government.
According to the federal complaints, KRZYSZTOF RAK, 60, operates a drug trafficking organization in Mexico, and works with CHRISTOPHER J. DOSS, 47, of Racine, Wisc., to distribute wholesale quantities of fentanyl to customers in the Chicago area. DONALD HOLMES, SR., 56, of Chicago, and IVAN WALTON, 45, of Lynwood, participated in the organization by regularly distributing Rak’s narcotics in the Chicago area and collecting payment from customers, according to the charges. The federal complaints describe a meeting earlier this year between Doss and Walton in a restaurant parking lot in south suburban Matteson. During the meeting, Doss supplied Walton with more than 880 grams of fentanyl, the charges allege. Law enforcement conducted surveillance of the transaction after securing court authorization to wiretap certain telephones.
In another narcotics transaction described in the federal complaints, NAKIA MCCLINIC, 43, of Chicago, attempted to deliver heroin and fentanyl to an individual who had received the drug order from DESHAWN MOORE, 24, of Bellwood. Law enforcement was watching when McClinic arrived at the meeting in a parking lot near the University of Illinois at Chicago, the complaints state. Officers attempted to pull over McClinic’s vehicle but he sped off, tossing the drugs out of the driver’s side window, the charges allege. McClinic’s vehicle was successfully stopped a short while later, and the narcotics were recovered nearby.
The kidnapping plot involved TEKOA Q. TINCH, 30, of Bloomington, Ill., who allegedly agreed to carry out the kidnapping in exchange for drugs and a split of any money recovered from the victim. Last month, Tinch met with an undercover law enforcement officer, who was posing as a representative of the Mexico-based group, in a grocery store parking lot in the Little Village neighborhood of Chicago, the complaints state. During the meeting, Tinch accepted a sham kilogram of cocaine as a purported down payment on the kidnapping, the complaints state. Tinch was then arrested and his car was searched, revealing the guns, duct tape and chains, the charges allege.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Chicago Man Sentenced to 28 Years in Federal Prison for Producing and Sharing Child PornographyRead the Press Release
CHICAGO — A Chicago man has been sentenced to 28 years in federal prison for producing hundreds of photos and videos of child pornography.
CHRISTOPHER M. HALL, 44, arranged three sexual encounters for two underage girls whom he met through online mobile chat applications. One of the girls was 12 years old when she first encountered Hall online, and he groomed her through sexually explicit communications that included sending her child pornography. Hall directed each girl to write “Owned by CH” on her body, and then photograph it and send the image to Hall.
To set up the sexual encounters, Hall took or used sexually explicit photos of the girls and posted them in sex advertisements on Craigslist. Hall then directed the girls to have sexual intercourse with him and several men who responded to the ads, and took videos and photos of the encounters. Two of the encounters took place in Aurora, while another occurred in Gary, Ind.
Hall pleaded guilty earlier this year to one count of inducement and enticement of a minor for the production of child pornography and one count of knowingly transporting child pornography. U.S. District Judge Thomas M. Durkin on Monday sentenced Hall to 28 years in federal prison.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
The investigation began when one of Hall’s victims went missing from her home in Michigan. Law enforcement identified email communications between the girl and Hall. As part of the investigation, law enforcement searched Hall’s residence and discovered a collection of child pornography that included more than 7,000 images and videos of minors. Authorities were able to identify dozens of the exploited children in the videos and images, some of whom were less than 12 years old at the time the images were created. Nearly 30 of those victims submitted statements to the Court in advance of sentencing, detailing the harm caused by the exploitation of their images by individuals like Hall.
Loves Park Man Pleads Guilty to Producing Child PornographyRead the Press Release
ROCKFORD — A Loves Park man pleaded guilty Monday before U.S. District Judge Philip G. Reinhard to producing child pornography.
GRANT WOJAHN, 37, admitted in his written plea agreement that he created a Facebook account and posed as a female teenager. Wojahn admitted that on March 20, 2015, while using that profile, he contacted a minor female victim using the Facebook private messaging feature and persuaded and enticed the minor female victim to engage in sexually explicit conduct for the purposes of having the minor victim take photographs of the sexually explicit conduct and then having the minor victim transmit the images to Wojahn using the private messaging service on Facebook. According to the plea agreement, the female victim was 13 years of age at the time the pictures were produced and transmitted. Wojahn also admitted that between May 21, 2014, and April 5, 2015, he similarly persuaded six other minor female victims, who were between the ages of ten and 12, to do the same.
Wojahn also admitted that on March 25, 2015, he used the Facebook private messaging service to chat and send another user a number of images of child pornography depicting one of the minor victims. Wojahn further admitted that on Sept. 1, 2015, he possessed numerous images of child pornography on a USB storage device, a cellphone, and other devices, and that he possessed at least 43 videos of child pornography and at least 71 images of child pornography.
Wojahn faces a maximum sentence of 30 years’ imprisonment, and a statutory mandatory minimum sentence of 15 years, and a term of supervised release of five years to life. This offense also carries a maximum fine of $250,000.
Sentencing for Wojahn is set for Sept. 26, 2018, at 9:00 a.m., in federal court in Rockford.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey Sallet, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Margaret J. Schneider.
Claims Specialist at Social Security Administration Arrested on Fraud and Identity Theft Charges for Allegedly Misappropriating at Least $680,000 in Fraudulent BenefitsRead the Press Release
CHICAGO — A claims specialist for the U.S. Social Security Administration has been indicted on federal fraud and identity theft charges for allegedly approving and pocketing at least $680,000 in fraudulent benefits.
ANNE AROSTE, also known as “Ann Aroste,” worked as a claims specialist at the SSA’s field office in Aurora. Aroste was responsible for processing applications for Social Security benefits via the agency’s electronic records system. According to the indictment, Aroste created fraudulent applications for benefits on the Social Security earnings records of deceased workers. She then used her employee credentials to approve the applications and to route the payments to bank accounts she controlled, the indictment states.
From 2013 to last month, Aroste caused the U.S. Treasury Department to issue at least $680,962, in fraudulent payments, the indictment states.
The indictment charges Aroste, 42, of Montgomery, with five counts of wire fraud and five counts of aggravated identity theft. She was arrested this morning and pleaded not guilty at an afternoon arraignment before U.S. Magistrate Judge Daniel G. Martin. A detention hearing is set for June 13, 2018, at 11:00 a.m., before U.S. District Judge Manish S. Shah.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tracey Thanos, Special Agent-in-Charge of the Social Security Administration’s Office of Inspector General in Chicago; and Benjamin Sides, Special Agent-in-Charge of the U.S. Department of State, Diplomatic Security Service Chicago Field Office.
The indictment describes five instances in which Aroste allegedly caused an application for Social Security benefits to be submitted in the names of individuals whom Aroste falsely claimed had been married to deceased workers. Aroste used her employee credentials to approve the fraudulent applications for survivor’s benefits based on the Social Security earnings of the deceased workers, the indictment states. The Treasury then transmitted the benefit payments into Aroste’s bank accounts.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Each count of wire fraud is punishable by up to 20 years in prison, while each count of aggravated identity theft carries a mandatory, consecutive prison sentence of two years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Special Assistant U.S. Attorney Jared C. Jodrey.
Attorney General Jeff Sessions Selects Northern District of Illinois to Receive Six New Assistant U.S. Attorney PositionsRead the Press Release
CHICAGO — Attorney General Jeff Sessions and United States Attorney John R. Lausch, Jr., of the Northern District of Illinois, today announced that the district will receive additional resources to combat violent crime, enforce federal immigration laws and attack the opioid crisis. The Northern District of Illinois will receive six Assistant U.S. Attorney positions to focus exclusively on those priorities. Nationally, 311 new federal prosecutors will be assigned to districts throughout the country.
“Under President Trump’s strong leadership, the Department of Justice is going on offense against violent crime, illegal immigration, and the opioid crisis — and today we are sending in reinforcements,” said Attorney General Sessions. “We have a saying in my office that a new federal prosecutor is ‘the coin of the realm.’ When we can eliminate wasteful spending, one of my first questions to my staff is if we can deploy more prosecutors to where they are needed. I have personally worked to re-purpose existing funds to support this critical mission, and as a former federal prosecutor myself, my expectations could not be higher. These exceptional and talented prosecutors are key leaders in our crime fighting partnership. This addition of new Assistant U.S. Attorney positions represents the largest increase in decades.”
“We welcome the additional resources to reduce violent crime, enforce our country’s immigration laws and fight the opioid epidemic,” said U.S. Attorney Lausch. “Our Assistant U.S. Attorneys work tirelessly to keep the citizens of northern Illinois safe, and these new positions will strengthen those efforts. We will work quickly to fill these positions with highly skilled, highly motivated attorneys.”
Under the Attorney General’s allocation, four of the new Assistant U.S. Attorney positions in the Northern District of Illinois will focus exclusively on violent crime. The other two positions will be assigned to the office’s Civil Division, focusing on immigration cases and affirmative civil enforcement actions, which seek to recover government money lost to fraud or to impose penalties for violations of federal laws. Many of the new civil enforcement positions announced today will support the Department of Justice’s newly created Prescription Interdiction & Litigation Task Force, which targets the opioid crisis at every level of the distribution system.
Two Suburban Chicago Residents Charged with Illegally Selling Narcotics over the Internet; Law Enforcement Seizes WebsitesRead the Press Release
CHICAGO — Two suburban Chicago residents have been charged with federal drug offenses for illegally selling fentanyl or fentanyl precursors over the internet, and authorities have seized their websites.
LIANGFU “LARRY” HUANG used his company, Ark Pharm Inc., to sell controlled substances – including a fentanyl precursor – over the internet, despite not registering with federal or state authorities, according to a criminal complaint and affidavit filed in federal court in Chicago. Ark Pharm, which is based in Arlington Heights, Ill., offered various drugs for sale on its website (http://www.arkpharminc.com). Huang, 53, of Northbrook, Ill., was arrested Wednesday night after arriving at O’Hare International Airport in Chicago on a flight from China. He is charged with one count of conspiracy to knowingly and intentionally possess with intent to distribute, and to distribute, a controlled substance.
In a related case, WEI XU, also known as “Scarlett Hsu,” used her company, 1717 CheMall Corp., to illegally sell fentanyl and other controlled substances without registering with federal or state authorities, according to the complaint against her. 1717 CheMall Corp., which is based in Mundelein, Ill., offered various drugs for sale on its website (http://www.1717chem.com), including the opioids ocfentanil, oxycodone and hydrocodone, the complaint states. Visitors to the website could search for a drug and order it from the site’s “estore,” the complaint states. Xu, 52, of Vernon Hills, Ill., was arrested Wednesday. She is charged with one count of knowingly distributing a controlled substance.
Also Wednesday, law enforcement agents carried out court-authorized searches of Ark Pharm’s and 1717 CheMall’s businesses and seized their websites.
The charges were announced by Attorney General Jeff Sessions; John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. Valuable assistance was provided by the U.S. Food and Drug Administration; U.S. Customs and Border Protection; Mundelein, Ill., Police Department; Arlington Heights, Ill., Police Department; Skokie, Ill., Police Department; Northern Illinois Police Alarm System (NIPAS); and Weapons of Mass Destruction Special Response Team North.
“Synthetic opioids killed 20,000 Americans in 2016--more than any other kind of drug," said Attorney General Sessions. “The vast majority of these drugs originated in China and then either shipped through the mail or smuggled across our porous Southwest Border. Under President Trump's strong leadership, the Justice Department has taken historic new steps to target Chinese drug traffickers, and today's indictments are our next step. I want to thank DEA, U.S. Attorney John Lausch, Assistant U.S. Attorney Devlin Su, our partners with CBP, IRS, and the FDA and especially our state and local law enforcement partners who helped make this possible. The Department of Justice will remain relentless in our efforts to keep these deadly drugs out of our country and finally put an end to this unprecedented drug epidemic.”
“The charges announced today are the result of an exhaustive and far-reaching investigation,” said U.S. Attorney Lausch. “Whether it’s online or on the streets, our office is committed to aggressively stopping the flow of illegal drugs.”
“Powerful pharmaceutical medications, fentanyl and fentanyl-related substances are creating a chokehold on our society,” said Special Agent-in-Charge McKnight. “Today’s enforcement actions send a clear message to those who utilize the internet to poison our communities: We will find you and you will be held accountable.”
“There is no room in the Chicagoland area for the illegal selling of fentanyl and other pharmaceuticals,” said Special Agent-in-Charge Grchan. “IRS Criminal Investigation is committed to using its resources and financial expertise to partner with all law enforcement agencies in order to keep our communities safe from the illegal distribution and usages of these and other dangerous drugs.”
Huang and Xu appeared today before U.S. Magistrate Judge Mary M. Rowland, who ordered them to remain in federal custody. A detention hearing is set for June 5, 2018, at 11:00 a.m.
According to the complaint, authorities at the U.S. border seized a dozen packages of crystal meth and other controlled substances that had been shipped from China to Ark Pharm’s headquarters. The shipments purported to contain routine goods such as plastic toys. From November 2016 to earlier this month, law enforcement surreptitiously corresponded with email accounts belonging to Ark Pharm, and conducted five undercover purchases of controlled substances from the company. The drugs were shipped via FedEx, often with Huang’s name listed as the sender, the complaint states.
Authorities performed similar controlled purchases of narcotics at 1717 CheMall Corp. from August 2017 to earlier this month. During the ordering process, agents corresponded via email and phone with Xu, who was using her “Scarlett Hsu” alias, according to the complaint. The drugs from 1717 CheMall were shipped via FedEx, with Xu’s name listed as the sender, the charges allege.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. The charges against Huang and Xu each carry a maximum sentence of 20 years. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Assistant U.S. Attorney Devlin N. Su represents the government.
Grand Jury Indicts Man on Federal Carjacking and Firearm Charges for Allegedly Stealing Vehicles at Gunpoint in ChicagoRead the Press Release
CHICAGO — A federal grand jury has indicted a Chicago man on carjacking and firearm charges for allegedly stealing multiple vehicles at gunpoint last month.
EARRIOUS MOORE, 24, stole three cars, attempted to steal two others, and twice discharged a handgun during a series of crimes in Chicago on April 26, 2018, according to a ten-count indictment returned Thursday. The indictment charges Moore with three counts of carjacking, two counts of attempted carjacking, three counts of using, carrying and brandishing a firearm during a crime of violence, and two counts of discharging a firearm during a crime of violence.
Moore was originally charged in a criminal complaint last month. The firearm charges in the indictment each carry a maximum sentence of life in federal prison, while each attempted carjacking is punishable by up to 25 years due to the alleged firearm discharge during the attempts, and each carjacking by up to 15 years. Arraignment in U.S. District Court in Chicago has not yet been scheduled.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Eddie Johnson, Superintendent of the Chicago Police Department; and Celinez Nunez, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives.
The case was investigated by the Vehicular Hijacking Task Force, a joint federal and state initiative consisting of officers, agents and prosecutors from the U.S. Attorney’s Office, Chicago Police Department, ATF, Federal Bureau of Investigation, Cook County State’s Attorney’s Office, Illinois State Police, and suburban police departments.
“Carjacking is a senseless act of violence that has no place in our society,” said U.S. Attorney Lausch. “Our office is committed to working closely with CPD, ATF and other law enforcement partners to pursue and prosecute violent offenders. The carjacking and gun charges announced today are the direct result of that strong partnership.”
“Today's federal indictment sends a very clear message of just how serious we are taking carjackings throughout Chicago,” said Superintendent Johnson. “U.S. Attorney Lausch continues to be a formidable partner to the Chicago Police Department and shares our commitment and dedication to holding individuals accountable and keeping our streets safe.”
“There is no place in our society for violent criminals targeting innocent people,” said Special Agent-in-Charge Nunez. “Chicago is a great city. Citizens and visitors have the right to feel safe and ATF will continue to work closely with the United States Attorney’s Office and our law enforcement partners to restore peace and bring violent criminals to justice.”
According to the indictment, Moore carjacked two sport-utility vehicles and a sedan, and attempted to carjack two other vehicles. He brandished a loaded .40-caliber pistol during all three carjackings, and he discharged the pistol during the two attempted carjackings. In the final attempted carjacking, an individual sitting in a Mercedes-Benz in the 1400 block of North Lake Shore Drive was shot and wounded and subsequently treated at a hospital, according to the criminal complaint previously filed in the case. Moore ran away from that vehicle and was apprehended by Chicago Police Department officers in the lobby of a nearby building, the complaint states.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Matthew L. Kutcher.
Suburban Man Indicted on Federal Drug Charges for Allegedly Importing a Fentanyl Analogue from ChinaRead the Press Release
CHICAGO — An Elmwood Park man has been charged with federal drug offenses for allegedly importing a fentanyl analogue from China to the Chicago area.
ROLANDO ESTRADA, 42, imported furanyl fentanyl from China in the summer of 2016, according to an indictment returned this week in federal court in Chicago. Estrada arranged to have the substances shipped to the Chicago area from a Chinese chemical company, according to a criminal complaint filed against him in 2016. In June 2016, law enforcement agents intercepted and seized two packages from China that contained approximately four kilograms of furanyl fentanyl, the complaint states. The following month, authorities seized more than five kilograms of cocaine and $90,000 in cash from Estrada’s residence in Elmwood Park.
Estrada fled to Mexico in July 2016, and a warrant was issued for his arrest. He was taken into custody last month in Querètaro, Mexico.
The five-count indictment was returned Tuesday. It charges Estrada with two counts of distribution of a controlled substance, two counts of importing a controlled substance from outside the U.S., and one count of possession of a controlled substance with the intent to distribute. Arraignment is set for May 24, 2018, at 11:00 a.m., before U.S. Magistrate Judge Maria Valdez.
The arrest and indictment were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian M. McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and William Hedrick, Acting Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. Substantial assistance was provided by the Downers Grove Police Department, Chicago Police Department, U.S. Marshals Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection, Illinois State Police, and Berwyn Police Department. The government is represented by Assistant U.S. Attorneys Eric Pruitt and Matthew Kutcher.
The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF) Chicago Strike Force, a partnership between federal, state and local law enforcement agencies. The principal mission of OCDETF is to identify, disrupt and dismantle the most serious drug trafficking organizations.
According to a search warrant and affidavit previously filed in the case, Estrada continued to coordinate shipments of fentanyl to Chicago after fleeing to Mexico. The fentanyl was allegedly mixed with other substances before being sold to customers in the Chicago area. After the sales, Estrada allegedly directed an associate to convert some of the proceeds into Bitcoin, a virtual currency typically circulated via the internet. Estrada also allegedly instructed the associate on how to use a cellphone application to transfer Bitcoin to Estrada’s virtual wallet.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The charges against Estrada carry a maximum potential sentence of life in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Suburban Man Sentenced to 16 Years in Prison for Leading Chicago-Area Cell of International Drug Trafficking OrganizationRead the Press Release
CHICAGO — A federal judge in Chicago has sentenced a suburban man to 16 years in prison for leading a Chicago-area cell of an international drug trafficking organization.
JESUS SALGADO ran a stash house in Bensenville where heroin and cash from drug sales were stored. He also sold drugs in the Chicago area. Before meeting with customers, Jesus Salgado would often pick up the heroin from the stash house, and then drop off the proceeds at the house after the sales.
Jesus Salgado was charged as part of “Operation Over the Top,” a federal probe that spanned more than two years and disrupted a Mexico-to-Chicago drug pipeline. Authorities seized four kilograms of heroin from the Bensenville stash house and shut it down as part of the investigation. The probe was led by the U.S. Drug Enforcement Administration and conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF).
Jesus Salgado, 25, of Bensenville, pleaded guilty last year to a drug conspiracy charge. U.S. District Judge John Robert Blakey imposed the 16-year sentence Wednesday in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian M. McKnight, Special Agent-in-Charge of the Chicago Field Division of the DEA; and James M. Gibbons, Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
“The streets of this city are made immeasurably more dangerous because of the drug trade,” Assistant U.S. Attorneys Kelly M. Greening, Misty Wright and John Cooke argued in the government’s sentencing memorandum. “People like defendant, who regularly supplied kilogram quantities of heroin and cocaine to wholesale buyers, perpetuate the drug trafficking crisis in Chicago and all that goes with it, including addiction, crime, and violence.”
Jesus Salgado’s drug-dealing operation was allegedly overseen by his father, LORENZO SALGADO, who resides in Mexico but communicated with his son via phone, according to the indictment filed against both men. Lorenzo Salgado allegedly directed the narcotics sales and the subsequent transportation of the proceeds to Mexico. Lorenzo Salgado is charged with drug conspiracy and is considered a fugitive.
In his written plea agreement, Jesus Salgado stated that he operated the Bensenville stash house with his girlfriend, RUBY JOY BUENAVENTURA, 27, of Chicago, and that he and Buenaventura delivered drugs to customers in the Chicago area. One of the deals occurred in a grocery store parking lot in Bensenville on May 3, 2016, when Jesus Salgado delivered two kilograms of heroin to SERGIO AREVALO-GOMEZ, 23, of Chicago.
Arevalo-Gomez pleaded guilty to a drug distribution charge and was sentenced last year to four years in prison. Buenaventura also pleaded guilty to a drug charge and was sentenced last year to three years in prison.
Investment Advisor Sentenced to More Than 5 Years in Prison for Misappropriating $6.5 Million in Client FundsRead the Press Release
CHICAGO — An investment advisor was sentenced today to more than five years in federal prison for stealing $6.5 million from several clients, including family members in the Chicago area.
HENRY MEYER, who owned HCM Asset Management LLC in Coral Gables, Fla., misappropriated the money from 2009 to 2016. Most of Meyer’s clients were his family members and friends, some of whom were elderly and had invested their retirement savings. Meyer used some of the stolen funds to pay personal expenses, including rent, utilities and car payments. His credit card statements reflect expensive purchases at restaurants, including lavish tips in the hundreds of dollars.
U.S. District Judge Charles R. Norgle imposed the 69-month prison sentence and ordered Meyer to pay $6.5 million in restitution to the victims. Meyer, 47, of Coral Gables, Fla., pleaded guilty last year to one count of mail fraud.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
“This case is about a bold and brash con man who has little concern for anybody but himself,” Assistant U.S. Attorney Sunil R. Harjani argued in the government’s sentencing memorandum. “The harm he has caused the victims is hard to overstate.”
According to his plea agreement, Meyer told investors that their funds would be placed in a “European Derivative Investment Program,” whose performance was purportedly premised on the failures of several European economies. In soliciting investors, Meyer claimed the program had partnerships with several European firms, and that he was part of a group of highly successful investment firms operating in the European derivatives markets. Meyer represented that his firm produced investment returns as high as 600%.
In reality, the European Derivative Investment Program did not exist. There was no support from other European companies, and Meyer’s firm never produced any successful returns.
In 2016, Meyer was arrested and a search warrant was executed at his apartment. Among other things, the FBI found a document on Meyer’s desk entitled “Battle Plan.” Part of the document discussed Meyer’s attempt to obtain more funding from new investors in order to make Ponzi-type payments to older investors. Another part of the document discussed how to expedite Meyer’s passport application as part of a plan to evade law enforcement. Meyer’s “Battle Plan” set forth a strategy to travel initially to a location in the southern United States, followed by an “international escape” to such locations as the Bahamas, Thailand, Singapore, Korea, Australia or New Zealand.
Three Men Charged in Scheme to Purchase Firearms in Kentucky and Illegally Re-Sell Them in Chicago AreaRead the Press Release
CHICAGO — Three men have been charged with federal firearms violations for scheming to purchase dozens of guns in Kentucky and illegally re-sell them in the Chicago area.
On several occasions in 2016 and 2017, CHRISTOPHER HENDERSON and JOHN L. PHILLIPS purchased firearms from private sellers in Kentucky and brought them to the Chicago area, according to a criminal complaint and affidavit filed in federal court in Chicago. The pair then worked with JAIQAIL WRIGHT to re-sell the guns to buyers in Chicago and the surrounding suburbs, the charges allege. Many of the guns were recovered by law enforcement during criminal investigations, the complaint states. Authorities estimate that 80 to 90 firearms recovered by law enforcement in the Chicago area are associated with the defendants’ firearms trafficking.
All three defendants were arrested last week. The complaint charges Henderson, 23, of Louisville, Ky., Phillips, 23, of Hillside, and Wright, 23, of Chicago, with dealing firearms without a license. Phillips, who was previously convicted of a firearm-related felony, also faces a charge of illegal possession of a firearm by a felon. Detention hearings are scheduled for May 17, 2018, at 11:00 a.m., before U.S. Magistrate Judge Maria Valdez.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. Valuable assistance was provided by the Louisville, Ky., ATF Field Division, Chicago Police Department, Illinois State Police, and the Chicago High Intensity Drug Trafficking Area (HIDTA).
According to the charges, Henderson and Phillips bought the guns in Kentucky from individuals they met on Armslist.com, a website dedicated to the sale or trade of firearms and firearm-related items, such as ammunition and gun parts. Using various names and email addresses, the pair contacted sellers on the website and arranged to meet them in Kentucky, the complaint states. After the purchases, Phillips and Henderson transported the guns to the Chicago area, where they worked with Wright to re-sell them, the charges allege.
Wright allegedly acted as a broker, using Facebook and other means to advertise the weapons. In one transaction described in the complaint, Wright brokered a deal to sell six handguns to a documented gang member. The complaint also describes a purchase by Henderson of a .45-caliber pistol on or about Dec. 23, 2016. The gun was recovered by law enforcement less than three months later while investigating a vehicular hijacking in the western suburbs, the complaint states.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Dealing firearms without a license is punishable by a maximum sentence of five years in prison. The felon-in-possession charge against Phillips carries a maximum sentence of ten years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Elizabeth Pozolo and Kalia Coleman.
Convicted Felon Sentenced to Seven and a Half Years in Prison for Stealing Firearms from Cargo TrainRead the Press Release
CHICAGO — A federal judge today sentenced a convicted felon to seven and a half years in prison in connection with the theft of more than a hundred firearms from a cargo train on the South Side of Chicago.
On April 12, 2015, ALEXANDER PEEBLES and seven other men burglarized the cargo train while it was parked in a railyard in Chicago’s Avalon Park neighborhood. The cargo train was en route from a Ruger factory in New Hampshire to Spokane, Wash. The thieves broke locks on a train car and spent over four hours unloading approximately 104 firearms, which they transported to a stash house in the city’s Englewood neighborhood.
To date, law enforcement has recovered 33 of the stolen firearms at various locations, including 17 at crime scenes in Chicago and the surrounding area.
All eleven defendants charged in the case have now been sentenced. The other defendants are: FREDERICK LEWIS (sentenced to 15 years in prison); TERRY WALKER (12 and a half years in prison); ANDREW SHELTON (ten years in prison); PATRICK EDWARDS (eleven years in prison); NATHAN DRIGGERS (eight years in prison); DANDRE MOODY (seven years and nine months in prison); WARREN GATES (five years and three months in prison); ELGIN LIPSCOMB (five years in prison); MARCEL TURNER (four years in prison); and LORI SHELTON (three years of probation).
Peebles, 47, of Chicago, pleaded guilty in 2016 to one count of illegal possession of a firearm by a felon, and one count of possession of a stolen firearm. U.S. District Judge John J. Tharp Jr. imposed the 90-month sentence in federal court in Chicago.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The Chicago Police Department and the Norfolk Southern Railroad Police Department provided valuable assistance.
The government is represented by Assistant U.S. Attorney Christopher V. Parente.
Former Mexican Federal Police Commander Enters No Contest Plea to Obstructing United States Investigation into Drug CartelRead the Press Release
CHICAGO — A former high-ranking commander in the Mexican Federal Police entered a no contest plea in U.S. District Court today to the charges of obstruction of justice and conspiring with others to corruptly impede a U.S.-based narcotics trafficking investigation. A no contest plea is one in which a defendant acknowledges that the facts of the case would result in a verdict of guilt, although the defendant is not admitting to those facts.
IVAN REYES ARZATE, 46, of Mexico City, also known as "La Reina," entered a no contest plea to charges that he obstructed and conspired to obstruct an investigation being carried out by the U.S. Drug Enforcement Administration. Reyes acquired information regarding the United States investigation through his position as a commander in the Mexican Federal Police, which was working with the DEA and the U.S. Attorney’s Office in Chicago to investigate an international drug trafficking and money laundering organization.
An indictment was returned in July 2017 charging Reyes and he has been in custody since the announcement of the charges. U.S. District Judge Amy St. Eve accepted the plea, and set the sentencing for August 29, 2018 at 9:30.
Today’s plea was announced by John R. Lausch Jr., United States Attorney for the Northern District of Illinois; and Brian McKnight, Special Agent in Charge of the Chicago Field Division of the DEA. The investigation was conducted through the Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force in cooperation with the U.S. Attorney’s Office for the Southern District of California, the Chicago Police Department, the Illinois Department of Corrections, the Illinois State Police, and the U.S. Department of Homeland Security.
"Today’s plea is historic in that it represents the first time in this district that a high level foreign law enforcement officer is being held criminally accountable in a U.S. courtroom for obstructing a U.S. investigation targeting transnational organized crime," said U.S. Attorney Lausch. "This result follows over a year of hard work on behalf of our partners at the DEA and our counterparts in Mexico. We remain steadfast in our commitment to disrupt and dismantle drug trafficking organizations and fight against corruption at all levels."
"The Drug Enforcement Administration continues to work tirelessly with the US Attorney’s Office as well as our Mexican counterparts in this shared fight against transnational organized crime, violence and drug trafficking," remarked Special Agent in Charge McKnight. "Chasing corruption across the border and holding those accountable for obstructing lawful investigations reinforces to narcotics traffickers that justice does prevail."
The obstruction of justice charge carries a maximum sentence of twenty years in prison. The conspiracy charge carries a maximum sentence of five years in prison. The Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Katherine Sawyer and Devlin Su.
Former United States Congressman Sentenced to Six Months in Prison for Failing to File Federal Income Tax ReturnsRead the Press Release
CHICAGO — MELVIN REYNOLDS, a former member of the United States House of Representatives, was sentenced today to six months in federal prison for failing to file four years of federal income tax returns, with two months of credit for time served.
Reynolds, 66, was found guilty after a bench trial last year of four counts of willfully failing to file a federal income tax return. Reynolds failed to file returns for the calendar years 2009, 2010, 2011 and 2012.
U.S. District Judge Robert W. Gettleman imposed the sentence in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The government is represented by Assistant U.S. Attorneys Barry Jonas and Georgia Alexakis.
Evidence at trial showed that Reynolds received gross income in excess of the minimum amount required to file a tax return. As a result, he was required by law to file a federal income tax return, but he willfully failed to do so.
Federal Grand Jury Indicts Two Chicago Police Officers for Fraudulently Obtaining Search Warrants and Stealing EvidenceRead the Press Release
CHICAGO — Two Chicago Police Officers assigned to a gang unit on the city's West Side knowingly submitted false affidavits to judges to obtain search warrants and stole cash and drugs from properties they searched, according to a federal indictment announced today.
Officers XAVIER ELIZONDO and DAVID SALGADO were assigned to a gang team in the Chicago Police Department's Tenth District. Elizondo is a sergeant who oversaw the team. According to the charges, the officers conspired to submit materially false information to state court judges to obtain search warrants that enabled them to enter various properties and seize cash and drugs. The officers also stole property and falsified police reports to conceal the thefts, the indictment states. The charges describe how Elizondo and Salgado pocketed $4,200 in cash recovered during a search of a rental vehicle in Chicago on Jan. 28, 2018.
The indictment was returned Wednesday in federal court in Chicago. It charges Elizondo, 45, of Chicago, and Salgado, 37, of Chicago, with one count of conspiracy to commit theft and one count of embezzlement. Salgado is also charged individually with one count of making a false statement to the Federal Bureau of Investigation. Arraignments in U.S. District Court have not yet been scheduled.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Eddie Johnson, Superintendent of the Chicago Police Department.
"When police officers fail to discharge their duties with honesty and integrity, they betray not only the citizens of Chicago, but their fellow officers who do their jobs the right way," said U.S. Attorney Lausch. "Our office will continue to vigorously prosecute corruption at all levels, and hold accountable public servants who choose to violate the public trust for personal gain."
"Law enforcement corruption undermines the integrity of the criminal justice system," remarked Special Agent-in-Charge Sallet. "The Chicago Police Department and the FBI will continue to partner aggressively to combat corruption and civil rights abuses, ensuring the integrity of Chicago law enforcement. These charges illustrate the Chicago Police Department’s and the FBI’s commitment and ability to address isolated incidents where officers betray the badge."
"Over the last two years, CPD has worked tirelessly to build trust and partnerships with the communities we serve. That is why the alleged conduct is very troubling – it dishonors what I and every member of CPD have dedicated our lives to and risk our lives for each and every day," said CPD Superintendent Eddie Johnson. "I have zero tolerance for any behavior that violates the hard work of the people who wear this star. That is why I'm proud CPD played a central role in this investigation, working side by side with our Federal partners since the very beginning."
According to the indictment, Elizondo and Salgado submitted the false applications for "J. Doe" search warrants, which rely on information provided by confidential informants with knowledge of the criminal activity. In order to obtain such a warrant, officers must submit a sworn complaint that details the information alleged by the informant, and then bring the informant before the judge so that the judge could personally examine the truthfulness of the information. The charges allege that Elizondo and Salgado caused two Chicago residents to pose as "J. Doe" confidential informants and furnish false information to the court. After using the warrants to seize cash, drugs and cartons of cigarettes from Chicago properties, the officers allegedly gave a portion of those items to the purported informants.
The false statement charge accuses Salgado of lying to the FBI about his whereabouts during his police shift on the day after the theft from the rental car. On Jan. 29, 2018, after Elizondo discovered that law enforcement was potentially investigating him and Salgado, Elizondo instructed
Salgado to remove property from Salgado’s home, the indictment states. When interviewed by the FBI the following day, Salgado falsely claimed that he did not remember whether he had returned home during his shift, according to the charges.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The embezzlement count carries a maximum sentence of ten years, while the conspiracy and false statement counts are each punishable by up to five years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Sean J.B. Franzblau and Ankur Srivastava.
elizondo_salgado._indictment_0.pdfRockford Man Sentenced to More Than 15 Years in Federal Prison for Illegally Possessing A FirearmRead the Press Release
ROCKFORD — A Rockford, Ill., man was sentenced today by U.S. District Judge Philip G. Reinhard for illegally possessing a firearm as a convicted felon. ALBERT DOWTHARD, 37, was sentenced to 186 months in federal prison, in addition to 4 years of supervised release following his imprisonment, for illegally possessing a .38 revolver on Nov. 14, 2016. Dowthard pleaded guilty to the charge on Oct. 12, 2017, and also admitted to possessing .38 caliber ammunition at the time. In imposing the sentence, Judge Reinhard found that Dowthard was an “armed career criminal” under a federal firearm law mandating non-paroleable prison sentences of 15 years or more for felons with extensive records of prior convictions who illegally possess or sell guns, which resulted in Dowthard receiving a higher sentence.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; and Dan O’Shea, Rockford Police Chief.
The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.
Rockford Man Sentenced to 17 Years in Federal Prison for Distributing Heroin in RockfordRead the Press Release
ROCKFORD — A Rockford man was sentenced today by U.S. District Judge Philip G. Reinhard on a federal drug trafficking charge. QUINCY L. ATMORE (also known as “Q”), 46, of Rockford, Ill., was sentenced to 17 years in federal prison, to be followed by 3 years of supervised release. Atmore pleaded guilty to distributing heroin on Jan. 17, 2018. In the written plea agreement, Atmore admitted that between October 2015 and September 2016, he operated a heroin trafficking business in the Rockford area, and maintained two cell phone lines as heroin hotlines for customers to order and purchase heroin. Atmore typically sold user quantity amounts of heroin, such as a gram or one-half gram, but occasionally did larger transactions. Atmore admitted he engaged in a large number of transactions each day, selling at least 10 to 15 grams of heroin a day resulting in sales of at least 4500 grams of heroin during the time period that he operated his heroin trafficking business. Atmore also admitted that on Sept. 7, 2016, he possessed a firearm in a vehicle he was driving near a BP Station on Auburn Street and that he possessed the firearm for protection when conducting drug transactions.
MAURICE D. NEAL (also known as “Moe”), 35, of Rockford, is also charged with conspiracy to distribute a kilogram or more of heroin, in addition to charges of distributing heroin in Rockford, Ill., from October 2015 through September 2016. Neal is currently in federal custody pending trial. The public is reminded that an indictment contains only charges and is not evidence of guilt. Neal is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. The drug conspiracy charge carries a 10-year mandatory minimum sentence and a maximum potential penalty of up to life in federal prison, and a fine of up to $10 million. Each count of distribution of heroin carries a maximum potential penalty of up to 20 years in prison, and a fine of up to $1 million. If Neal is convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian M. McKnight, Special Agent in Charge of the Chicago Office of the Drug Enforcement Administration; and Leo P. Schmitz, Director of the Illinois State Police. The case was investigated by the Rockford Resident Agency of the Drug Enforcement Administration’s Chicago Field Office, and the Stateline Area Narcotics Team (“SLANT”), a task force led by the Illinois State Police. The Bureau of Alcohol, Tobacco, Firearms & Explosives, the Federal Bureau of Investigation, the Winnebago County Sheriff’s Department, and the Rockford Police Department assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Margaret J. Schneider.
Lake in the Hills Man Sentenced to 3 Years in Federal Prison for Wire FraudRead the Press Release
ROCKFORD — A Lake in the Hills, Ill. man was sentenced on May 7, 2018, by U.S. District Judge Frederick J. Kapala for wire fraud. SALVATORE CRIBARI (also known as “Sal Fradillio”), 61, was sentencing to 3 years in federal prison, to be followed by 3 years of supervised release, and was also ordered to pay restitution in the amount of $342,489.52. Cribari pleaded guilty to wire fraud on December 11, 2017.
According to the written plea agreement, between February 2008 and September 2016, Cribari fraudulently obtained hundreds of thousands of dollars in store credit from various locations of a nationwide home improvement store by returning stolen merchandise without a receipt in exchange for store credit. Cribari later used the fraudulently-obtained store credit to purchase large-ticket items, including flooring, water heaters, appliances, home organization units, kitchen cabinets and countertops, and personal utility trailers, and to pay for installation services. Some of the fraudulently-obtained products were installed at Cribari’s home, condominium units that he owned and rented to others, and a business he operated. Cribari admitted he used over 1,300 false or fictitious Illinois identification or driver’s license numbers to conduct the non-receipted returns. As part of the scheme, Cribari resold fraudulently-obtained personal utility trailers for cash to purchasers who were not aware of his scheme. Cribari also sold fraudulently-obtained store credit at a discount for cash to an individual purchaser who was not aware of his scheme. Over the course of the scheme, Cribari fraudulently obtained over $400,000 in store credit and redeemed approximately $339,989 of that store credit for merchandise and services. Approximately $64,895 in fraudulently-obtained store credit and various stolen or fraudulently-obtained merchandise was recovered as part of the investigation.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Jeff Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Lake County Sheriff’s Office and the Lake in the Hills Police Department assisted in the investigation.
The government was represented by Assistant U.S. Attorney Talia Bucci.
Freeport Man Sentenced to Two and A Half Years in Federal Prison for Gun TraffickingRead the Press Release
ROCKFORD — A Freeport, Ill. man was sentenced yesterday by U.S. District Judge Frederick J. Kapala on a gun trafficking charge. RYAN ALAN LORING, 38, was sentencing to two and a half years in federal prison, to be followed by 3 years of supervised release. Loring pleaded guilty on January 26, 2018 to transferring firearms to a convicted felon. According to the written plea agreement, on April 4, 2014, Loring purchased four firearms from a licensed dealer in Rockford. Included among those firearms were three .380 caliber pistols, which Loring then immediately transferred to an individual Loring knew was a convicted felon. Loring admitted that he purchased approximately 10 additional firearms for the same individual between March and November 2014 from licensed firearms dealers located in Rockford or Freeport. Loring admitted that he made false written statements to the licensed firearms dealers in connection with the purchases of those firearms. Loring admitted that he misrepresented on written forms that he was the actual buyer of the firearms when Loring knew that the other individual was in fact the buyer of the firearms.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives.
The government was represented by Assistant U.S. Attorney Talia Bucci.
Chicago Man Faces Federal Charges for Shooting an ATF AgentRead the Press Release
CHICAGO – ERNESTO GODINEZ, 27, of Chicago, was charged in connection with the shooting of an ATF Agent engaged in his official duties. A federal criminal complaint charges him with assault of a Federal Officer with a dangerous and deadly weapon.
Godinez made an initial court appearance today before United States Magistrate Judge Maria Valdez, who ordered him detained until a detention hearing on Thursday, May 17th at 11:00 am.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Celinez Nunez, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; and Eddie Johnson, Superintendent of the Chicago Police Department. Substantial assistance in the investigation of and search for Godinez was provided by the United States Marshals Service, the Federal Bureau of Investigation, the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Drug Enforcement Administration, the Illinois State Police, and several other local police departments.
The officials noted that the investigation continues.
"Violent assaults on law enforcement agents working to make the community safer will not be tolerated," remarked U.S. Attorney Lausch. "The U.S. Attorney’s Office is committed to holding such offenders accountable, as are our local, state, and Federal law enforcement partners, whose tireless investigation to identify and locate the defendant after the shooting made this prosecution possible."
"ATF is dedicated, determined and committed to making our community safer," said Special Agent in Charge Celinez Nunez. "We cannot let the people committing these violent acts to continue to terrorize our neighborhoods. We can make a difference if we stand together and hold them accountable."
"Each and every day members of law enforcement run toward the danger to keep Chicagoans safe, which is something we witnessed firsthand last Friday," said CPD Superintendent Eddie Johnson. "CPD was proud to work with our partner agencies to apprehend the individual responsible and I would like to thank the residents in the Back of the Yards community for their close cooperation in making our neighborhoods safer."
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Assault of a Federal Officer with a dangerous and deadly weapon carries a maximum sentence of 20 years in prison. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Assistant U.S. Attorneys Kavitha Babu and Nicholas Eichenseer are representing the government.
Ernesto Godinez Complaint.pdfWisconsin Woman Sentenced to 41 Months in Federal Prison for Stealing More Than $2 Million from Illinois CompaniesRead the Press Release
ROCKFORD — A Gratiot, Wisc., woman was sentenced today by U.S. District Judge Frederick J. Kapala for stealing more than $2 million from her former employer and related companies.
TERESA L. JOHNSON, 53, was sentenced to 41 months in federal prison, to be followed by three years of supervised release, and was also ordered to pay $2,204,508 in restitution. Johnson pleaded guilty to a wire fraud charge on Dec. 13, 2017.
According to the written plea agreement, Johnson was a credit and collections specialist for a company located in Winslow, Ill. Johnson also did credit and collections work for two other companies, all of which had the same ownership. As a part of her duties, Johnson would send payment instructions to customers that owed money to the companies. From Jan. 18, 2012, through Aug. 15, 2016, Johnson created payment instructions for customers making payment by electronic bank transfer that contained her personal bank account number and provided those instructions to customers of the companies.
As stated in the plea agreement, the customers electronically submitted payments to the bank account number provided by Johnson, rather than to the companies. Johnson received the customers’ payments, totaling more than $2 million, in her personal bank account. Johnson also admitted that she used various methods to conceal her scheme, including using prepayments on balances due from customers and applying those prepayments to the past due balances of the customers whose money she took.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Jeffrey Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.
Rockford Man Sentenced to Three Years in Federal Prison for Mail FraudRead the Press Release
ROCKFORD — A Rockford man was sentenced today by U.S. District Judge Frederick J. Kapala for mail fraud.
CHARLES R. (“CHUCK”) HANSEN, 63, a financial planner, was sentenced to three years in federal prison, to be followed by two years of supervised release, and ordered to pay $739,705 in restitution.
Hansen pleaded guilty to the charge on Sept. 12, 2017, and admitted that he schemed to defraud investors out of more than $700,000, using the mail to further his scheme. According to the written plea agreement, between 1996 and 2014, Hansen operated financial planning and real estate companies, including Senior Securities of Rockford LLC and Chicago Wealth Partners LLC. As part of his financial planning business, Hansen sold fixed annuities to retirement-age investors. In 2008, Hansen began to encourage some individuals to whom Hansen had previously sold secure investments in fixed annuities to move their money to investments in Senior Securities and Chicago Wealth Partners, which Hansen told investors were real estate companies in which the investors could make a higher rate of return on their investment. Hansen used the investments in those two companies to rehab and sell homes in the Rockford and Chicago areas.
Hansen admitted that he did not explain the risky nature of that sort of investment and told investors that their investments would remain secure. Hansen further admitted that he entered into promissory notes with investors promising a high rate of return, and that he convinced investors to renew their promissory notes for additional terms. At the time of the renewals, Hansen did not disclose to the investors that Senior Securities and Chicago Wealth Partners were failing and that he lacked sufficient funds to repay the investors the amounts owed to them pursuant to the original promissory notes.
Hansen admitted that, as a result of his scheme, he caused investors to invest approximately $842,150 in Senior Securities and Chicago Wealth Partners, and that only $109,792 of that amount was returned to them, causing the investors to suffer losses totaling approximately $732,257.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; William Hedrick, Acting Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; and Tanya Solov, Director of the Illinois Securities Department of the Illinois Secretary of State. The government was represented by Assistant U.S. Attorney Margaret J. Schneider.
Chicago Man Sentenced to 37 Years in Federal Prison for Producing and Possessing Child PornographyRead the Press Release
CHICAGO — A Chicago man was sentenced today to 37 years in federal prison for producing and possessing thousands of photographs and videos of child pornography.
SCOTT RESKEY, 62, possessed more than 400,000 images and more than 1,400 videos of child pornography on his laptop and other devices. Reskey also groomed and sexually abused a child under the age of ten. On more than one occasion Reskey directed the girl to engage in sex acts with him, while he filmed it.
Reskey pleaded guilty last year to one count of production of child pornography and one count of possession of child pornography. U.S. District Judge Matthew F. Kennelly sentenced Reskey to 25 years on the production charge and a consecutive 12 years on the possession charge, for a total sentence of 37 years.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Chicago Police Department provided valuable assistance.
“Reskey’s offense conduct is morally abhorrent and among the most serious child pornography offenses imaginable,” Assistant U.S. Attorney Grayson Walker argued in the government’s sentencing memorandum.
The case against Reskey arose from a covert federal investigation of an online community that sent and received child pornography via a website called “PlayPen.” Reskey accessed the site using the name “peanuty123.” In addition to the images and videos, authorities recovered from Reskey’s laptop a document entitled “The Pedophile’s Handbook.” The handbook spans more than 500 pages and explains how to groom and abuse minors.
Reskey was arrested in February 2017. Authorities were able to identify hundreds of the children who were exploited in the images and videos possessed by Reskey. Dozens of those victims submitted statements to the Court in advance of sentencing, detailing the harm caused by the production, distribution and possession of their images by individuals like Reskey.
Charges Filed Against Two Lake County Men for Heroin Distribution in RockfordRead the Press Release
ROCKFORD — Two men from Lake County have been arrested for distributing heroin in Rockford.
JAVIER A. PEREZ, 27, of Park City, and JOSE ARMANDO OCHOA-LOPEZ, 27, of Zion, were indicted by a federal grand jury on March 7, 2018, on charges of distributing and conspiring to distribute 100 grams or more of heroin in Rockford in October 2017.
Perez was arrested Tuesday by federal law enforcement and appeared for arraignment before U.S. Magistrate Judge Iain D. Johnston in Rockford today. He was ordered to be held in federal custody until a detention hearing on May 4, 2018, at 9:15 a.m.
Ochoa-Lopez was arrested on March 14, 2018, and remains in federal custody pending trial. Both defendants have pleaded not guilty to the charges.
Each count of the indictment carries a mandatory minimum penalty of five years in prison and a maximum penalty of up to 40 years in prison, in addition to a fine of up to $5 million. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Dan O’Shea, Rockford Police Chief; and Gary Caruana, Winnebago County Sheriff. The federal investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force, which includes the above agencies as well as the Loves Park and Freeport Police Departments. The Lake County Gang Task Force, consisting of the Lake County Sheriff’s Office, Grayslake Police Department, Wauconda Police Department, Mundelein Police Department, U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives, and U.S. Department of Homeland Security's Homeland Security Investigations also assisted in the investigation.
The government is represented by Assistant U.S. Attorney Talia Bucci.
**Update: Defendant Suzy Tamras-Martin was acquitted of the charges alleged in the indictment described in this news release.**Read the Press Release
CHICAGO — The elevator foreman at the University of Illinois at Chicago received bribes from the owner of a suburban company in exchange for steering the school’s elevator repair work to it, according to an indictment returned in federal court in Chicago.
The indictment accuses the UIC employee, JAMES HERNANDEZ, of pocketing more than $200,000 in bribes from SUZY TAMRAS-MARTIN, the owner of Willbrook-based Smart Elevators Co. Tamras-Martin concealed the bribes by issuing checks payable to Hernandez’s daughter, and falsely describing the payments in company records as “professional fees,” the indictment states. Hernandez allegedly forged his daughter’s endorsement on the checks and deposited them into a bank account he controlled. The charges allege that Tamras-Martin made the payments with the intent to influence and reward Hernandez in connection with his official duties at UIC, which included the referral of the school’s elevator service and repair work.
The seven-count indictment was returned Tuesday and ordered unsealed today. It charges Hernandez, 54, of Tinley Park, and Tamras-Martin, 68, of Naperville, with one count of conspiracy to commit federal program bribery, and three counts apiece of federal program bribery.
Hernandez was arrested this morning. He pleaded not guilty at an afternoon arraignment before U.S. District Judge Edmond E. Chang and was ordered released on a recognizance bond. An arraignment date for Tamras-Martin has not yet been scheduled.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The government is represented by Assistant U.S. Attorneys Yasmin N. Best and Rick D. Young.
From 2011 to 2015, UIC paid Smart Elevators more than $5 million for servicing and repairing elevators. The bribery scheme began in April 2013 and continued through at least August 2015, the indictment states. The indictment seeks forfeiture from Hernandez of approximately $208,700 in cash.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The conspiracy charge is punishable by up to five years in prison, while the maximum sentence for federal program bribery is ten years. If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.