Northern District of Illinois
Press releases recorded for this federal judicial district.
U.S. Attorney’s Office Charges Chicago Man with Attempted Carjacking on City’s Near North SideRead the Press Release
CHICAGO — The U.S. Attorney’s Office has charged a Chicago man with attempted carjacking for allegedly trying to take a vehicle at gunpoint on the city’s Near North Side.
EARRIOUS MOORE, 23, discharged a firearm while attempting to hijack a Mercedes-Benz sedan in the 1400 block of North Lake Shore Drive on April 26, 2018, according to a criminal complaint filed in U.S. District Court in Chicago. An individual sitting in the car was shot and wounded and subsequently transported to a hospital for treatment, the complaint states. Moore ran away from the vehicle and was apprehended by Chicago Police Department officers in the lobby of a nearby building, the complaint states.
The complaint was filed Friday. It charges Moore with one count of attempted carjacking. An initial court appearance will be held on April 30, 2018, in federal court in Chicago.
The complaint 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 Cook County State’s Attorney’s Office provided valuable assistance.
The officials noted that the investigation continues.
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.
“Citizens of Chicago and visitors to our city must be able to live their lives without fear of violent attacks,” said U.S. Attorney Lausch. “Our office will use every available federal resource in working with CPD and our other law enforcement partners to pursue and prosecute violent offenders. Our message to would-be carjackers and those using guns to commit crimes is simple: Committing a senseless act of violence like carjacking will earn you a home in federal prison for a long time.”
“Each and everyday CPD officers and detectives work hand in hand with our federal partners to make Chicago safer,” said Superintendent Johnson. “Today's federal prosecution demonstrates the strength and commitment of CPD and the United States Attorney's Office to combat violence, and sends a simple and clear message that we will not tolerate carjackings and individuals will be held accountable for their actions before a federal court.”
“This case should serve as a warning to all violent offenders preying on innocent people,” said Special Agent-in-Charge Nunez. “ATF and our law enforcement partners are joining resources to put an end to the senseless violence and restore peace in our neighborhoods.”
According to the complaint, Chicago Police Department officers on routine patrol were alerted to a carjacking incident in which an offender used a handgun to take a Jeep sport-utility vehicle from a victim in the 1000 block of North Rush Street in Chicago. Soon after, the officers were alerted to the attempted carjacking of the Mercedes-Benz, the complaint states.
The carjacking charge 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 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 government is represented by Assistant U.S. Attorney Matthew L. Kutcher.
Suburban Physician Indicted for Allegedly Pocketing Nearly $1 Million in Medicare and Insurer Payments for Nonexistent TreatmentRead the Press Release
CHICAGO — A suburban physician has been indicted on federal fraud charges for allegedly pocketing nearly $1 million in payments from Medicare and a private insurer for nonexistent treatment.
DR. PRANAV PATEL owned and operated Palos Medical Care, S.C., in Palos Heights. The 12-count indictment alleges that Dr. Patel submitted fraudulent claims for purported medical tests and examinations that were never performed. He allegedly used some of his patients’ names without their knowledge to submit fraudulent claims. From 2008 to 2013, Dr. Patel fraudulently obtained, or caused his clinic to obtain, at least $950,000 in payments from Medicare and Blue Cross and Blue Shield of Illinois, the indictment states.
The indictment was returned Thursday in U.S. District Court in Chicago. It charges Dr. Patel, 51, of Burr Ridge, with seven counts of health care fraud, three counts of making false statements in relation to a health care matter, and two counts of aggravated identity theft. Arraignment is set for May 15, 2018, at 8:45 a.m., before U.S. District Judge Amy J. St. Eve.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
The indictment describes several instances in which Dr. Patel submitted a claim to BCBS or Medicare for a non-invasive “duplex scan” purportedly performed on a patient, when, in fact, no such test was actually completed. On at least one occasion, according to the charges, Dr. Patel prepared a seven-page electronic medical record indicating that a patient had come to the office for a follow-up visit and examination, when the patient had actually come to the office to re-fill a prescription.
The public is reminded that an indictment 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.
Aggravated identity theft is punishable by a mandatory sentence of two years in prison. Health care fraud is punishable by up to ten years, while false statements carry a maximum of five years. If convicted, 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 Stephen Chahn Lee and Kaarina Salovaara.
Rockford Man Arrested on Drug Trafficking and Firearm ChargesRead the Press Release
ROCKFORD — A Rockford man was arrested Tuesday by federal law enforcement officers on drug trafficking and firearm charges.
ANTWON D. TATE, 29, was indicted on April 10, 2018, by a federal grand jury in Rockford on five counts of distributing heroin in Rockford in January and February, two counts of illegally possessing a firearm (two 9mm Hi-Point rifles) as a convicted felon, and one count of possessing a firearm with an obliterated serial number.
The indictment 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 & Explosives.
Tate was arraigned Tuesday before U.S. Magistrate Judge Iain D. Johnston and pleaded not guilty. Tate is currently in custody and scheduled to appear before Judge Johnston for a detention hearing on April 26, 2018.
The public is reminded that an indictment 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.
Each count of distributing heroin carries a maximum sentence of 20 years in prison. Each charge of illegally possessing a firearm as a convicted felon carries a maximum sentence of ten years in prison, and the charge of possessing a firearm with an obliterated serial number carries a maximum sentence of up to five years in prison. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Margaret J. Schneider.
President of Florida-Based Financial Firm Sentenced to 10 Years in Prison for Role in $179 Million Sham Loan SchemeRead the Press Release
CHICAGO — A federal judge in Chicago today sentenced the former president of a Florida-based financial firm to ten years in prison for his role in a $179 million sham loan scheme.
TIMOTHY G. FISHER was the president and chief operating officer of First Farmers Financial LLC when the company sold 26 non-existent loans to a Milwaukee investment firm for $179 million. The company submitted documents to the Milwaukee investment firm that falsely created the appearance that the loans were issued to borrowers in Florida and Georgia and had been guaranteed, in part, by the federal government. In fact, the sham loans, which purportedly had principal amounts ranging from $2.5 to $10 million, did not exist. The Milwaukee firm, which purchased the loans as an investment vehicle for its clients, including community banks, retirement plans, municipalities, and subdivisions in Illinois and elsewhere, suffered a loss of $179 million.
First Farmers’ former chief executive officer, NIKESH A. PATEL, of Windermere, Fla., was also charged in connection with the fraud. Patel pleaded guilty to five counts of wire fraud and was sentenced last month to 25 years in prison.
U.S. District Judge Charles P. Kocoras today imposed Fisher’s ten-year sentence after a hearing in federal court in Chicago. Fisher, 41, of Pasadena, Calif., previously pleaded guilty to one count of money laundering.
The sentencings 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 Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration.
“The defendant’s dishonesty was not a single lapse of judgment, but rather, involved years of significant deceit,” Assistant U.S. Attorney Patrick J. King, Jr., argued in the government’s sentencing memorandum. “His scheme, born of greed, won him millions and was devastating to the investors who were unwitting victims.”
“Fraudulent transactions like these cause harm to companies, the financial industry, and the individuals whose hard-earned money is invested as a means of planning for their future,” said Director Monhart. “These crimes undermine legitimate companies and compromise the financial integrity of benefit plans.”
Fisher admitted in a plea agreement that he created fictitious financial statements that were sent to the Milwaukee company. After receiving money from the Milwaukee firm, Fisher unlawfully engaged in monetary transactions with a portion of the fraudulently obtained funds, including a wire transfer of $450,000 of scheme proceeds. Fisher caused these proceeds to be transferred from First Farmers’ account in Florida to his personal bank account in California. He then transferred these funds to a bank account belonging to a business in Nevada in connection with an investment in that business.
Patel submitted false statements to the U.S. Department of Agriculture to obtain certification in a USDA program that guarantees a percentage of loans issued to borrowers who improve the economic and environmental climate in rural communities. First Farmers, which had offices in Florida, Georgia and California, obtained USDA certification after Patel submitted the false statements about the company’s assets and officers.
McHenry Man Charged in Federal Court with Bankruptcy CrimeRead the Press Release
ROCKFORD — JOSEPH F. RUIZ, 54, of McHenry, was indicted today by a federal grand jury in Rockford for concealment of an asset in a bankruptcy case.
As alleged in the indictment, Ruiz filed a Chapter Seven Bankruptcy Petition on January 25, 2013. The indictment alleges that Ruiz fraudulently concealed a personal injury claim from the bankruptcy trustee. The personal injury claim allegedly arose out of injuries suffered by Ruiz on March 19, 2009.
The charge in this case carries a maximum potential penalty of up to five years in prison, and a fine of up to $250,000 or twice the gross gain or gross loss resulting from that offense, whichever is greater. The Court may also impose a sentence of probation of one to five years, and a term of supervised release of up to three years. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
The public is reminded that an indictment 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.
The investigation was conducted by the United States Postal Inspection Service.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and William Hedrick, Acting Postal Inspector in Charge, Chicago.
The government is represented by Assistant U.S. Attorney Michael D. Love.
More Than a Dozen Defendants Charged in Federal Drug Probe on West Side of ChicagoRead the Press Release
CHICAGO — More than a dozen individuals, including the owner of an auto body shop where drugs were stashed, are facing criminal charges as part of a federal investigation into drug trafficking on the West Side of Chicago.
The investigation, dubbed “Operation Broken Roe,” centered on drug sales in the city’s Little Village and West Garfield Park neighborhoods, and resulted in the seizure of distribution quantities of heroin, fentanyl, MDMA pills and cocaine. Authorities also seized 12 illegal firearms, including an assault rifle, and nearly $60,000 in narcotics proceeds.
One of the defendants publicly advertised the sale of MDMA pills – commonly known as ecstasy – on social media. His Instagram posting displayed a photo of dozens of pills, alongside a telephone number. Another defendant owned an auto body shop where illegal narcotics were mixed, packaged and stored.
The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task 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.
Criminal complaints and affidavits filed in federal court in Chicago charge 14 defendants with various drug offenses. Several of the defendants were arrested Wednesday. Detention hearings will be held on April 24, 2018, before U.S. Magistrate Judge Jeffrey Cole. Five other defendants were charged in state complaints and will appear at a later time in Cook County Criminal Court.
The federal 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; 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 and Explosives. The Cook County State’s Attorney’s Office and the Internal Revenue Service Criminal Investigation, Chicago Field Office, provided valuable assistance.
According to the charges, JONATHAN REYNA, 25, of Berwyn, and MARCO MENDOZA, 24, of Lyons, operated a drug trafficking organization that distributed heroin and fentanyl in the Chicago area. COREY BENSON, 23, of Chicago, participated in the organization by regularly distributing Reyna’s and Mendoza’s narcotics and collecting payment from customers, according to the charges. ANTON COLE, 23, of Chicago, ANTON LITTLE JR., 20, of Chicago, and DEVONTAY JOHNSON, 26, of Chicago, worked with Benson to distribute heroin to customers. PRINCE BRUNT, 36, of Chicago, who owns the auto body shop in the 3300 block of West Cermak Road in Chicago, participated in the organization by permitting Benson to manufacture and store narcotics at the shop, according to the charges. LARRY JONES, 55, of Chicago, and COMMANDER WHITE, 27, of Chicago, also distributed Reyna’s and Mendoza’s narcotics, the complaint states.
Undercover law enforcement officers purchased various quantities of heroin and MDMA pills from Johnson in the summer and fall of 2017, the complaints state. The purchases occurred near a residence in the 4300 block of West Wilcox Street in Chicago, where NATASHA SUMMERVILLE, 30, of Chicago, maintained a drug stash house, the charges allege. It was Johnson – using the profile name deadendboi_vtay – who publicly posted the photo of the MDMA pills on Instagram, the complaint states. Johnson’s sources for the pills were MAURICE CARROLL, 28, of Chicago, and HENRY MERRILL, 31, of Chicago, 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.
Assistant U.S. Attorneys Elizabeth R. Pozolo and Aaron R. Bond are representing the government.
North Suburban Bookkeeper Pleads Guilty to Causing More Than $24 Million in Tax Losses from Fraudulent Tax SchemesRead the Press Release
CHICAGO — The bookkeeper for two Chicago-area staffing companies has admitted in federal court that he conspired to defraud the IRS for at least a decade by falsifying corporate tax returns and W-2 forms to reduce the taxes assessed against the companies and their owners.
BARRY POTICHA, 73, of Northbrook, pleaded guilty Monday to one count of conspiracy to defraud the United States. Poticha admitted in a plea agreement that he caused a total federal tax loss of more than $24 million.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Gabriel Grchan, Special Agent-in-Charge, IRS Criminal Investigation, Chicago Field Office. The government is represented by Assistant U.S. Attorney Kathryn E. Malizia.
Poticha admitted that beginning no later than 2000 and continuing through December 19, 2011, he conspired with an independent contractor to falsify information supplied to the IRS in the quarterly Employment Tax Returns (Form 941) filed by the companies, as well as in false W-2 forms the companies provided to their employees and the IRS. When employees discovered discrepancies in the W-2 forms, Poticha issued letters to conceal the fraud. This conduct resulted in a federal tax loss of approximately $24,450,609.
In addition to defrauding the IRS for the benefit of the employers and their owners, Poticha also admitted filing false personal income tax returns on his own behalf for tax years 2010 through 2015. In each of these years, Poticha fraudulently underreported his own income and over-reported his income tax withholding, resulting in a federal tax loss of $341,621 and a state tax loss of $32,604.
The conviction is punishable by up to five years in prison. The Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
U.S. District Judge Gary Feinerman set sentencing for Aug. 14, 2018, at 10:30 a.m.
Chicago Investment Advisor Sentenced to More Than 12 Years in Federal Prison for Misappropriating $5.2 Million in Client FundsRead the Press Release
CHICAGO — A Chicago investment advisor was sentenced today to more than 12 years in federal prison for stealing $5.2 million from several clients, including his elderly in-laws.
DANIEL GLICK, who owned three accounting and financial services firms in Orland Park, Ill., misappropriated the money from 2011 to 2017. Most of the money belonged to elderly clients, including Glick’s mother-in-law and father-in-law and two individuals in nursing homes. He used some of the stolen funds to pay personal and business expenses, including the purchase of a Mercedes-Benz automobile and payment of his mortgage.
U.S. District Judge Robert W. Gettleman imposed a 151-month prison sentence and ordered Glick to pay $5.2 million in restitution. Glick, 65, of Chicago, pleaded guilty earlier this year to one count of wire fraud.
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 Bill Hedrick, Acting Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The U.S. Securities and Exchange Commission and the Illinois Attorney General’s Office provided valuable assistance.
“Criminal conduct was a pervasive part of Glick’s business,” Assistant U.S. Attorney Jacqueline Stern argued in the government’s sentencing memorandum. “The victims have been devastated by the loss of their money.”
Glick owned and operated Financial Management Strategies Inc., Glick Accounting Services Inc., and Glick & Associates Ltd. The firms purported to provide accounting, tax, investment, and financial services. During the scheme, Glick furnished forged checks and other phony documents to financial institutions, and he lied to clients about the use and safety of their investments. He also misappropriated client funds to pay hundreds of thousands of dollars to two business associates, and to make Ponzi-type payments to clients.
Michigan Man Sentenced to 45 Years in Federal Prison for Violently Forcing Children to Engage in ProstitutionRead the Press Release
CHICAGO — A Michigan man has been sentenced to 45 years in federal prison for violently forcing two children and a young woman to engage in prostitution.
FABRIEAL DELANEY, 32, brought some of his victims to the Chicago area from Michigan to perform sex acts for money. He used violence, verbal abuse and drug addiction to maintain control over his victims, all of whom were 16 years old or younger when he befriended them and began grooming them for prostitution.
U.S. District Judge Manish S. Shah on Wednesday imposed the 45-year sentence in federal court in Chicago. Delaney, of Battle Creek, Mich., and formerly of Palatine, Ill., was previously convicted by a jury on eight sex trafficking counts.
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. Substantial assistance was provided by the Cook County Sheriff’s Police Department, the Illinois State Police, the Will County State’s Attorney’s Office, the FBI field divisions in Detroit and Kalamazoo, Mich., the Kalamazoo, Mich., Police Department, the Battle Creek, Mich., Police Department, and the Stop-It Program of the Salvation Army Family and Community Services.
“The defendant preyed upon young and vulnerable girls for his own profit,” Assistant U.S. Attorney Rajnath Laud argued in the government’s sentencing memorandum. “Defendant’s crime is incredibly serious, and warrants a sentence of several decades in prison.”
Evidence at trial revealed that Delaney took photographs of the girls and posted them in online advertisements offering commercial sex. He rented hotel rooms that were used for encounters with individuals who responded to the advertisements. Delaney at first took half of the money earned by his victims, but eventually he took all of it.
In July 2011, Delaney transported two minor females and a young woman from Michigan to a hotel in Tinley Park, Ill., to engage in prostitution at what Delaney believed was a bachelor party. Delaney expected the victims to engage in sexual activity with up to 12 men for $150 to $300 per customer. Unbeknownst to Delaney, the purported bachelor party was a ruse set up by federal law enforcement that had been investigating his sex trafficking crimes. Delaney was arrested and has remained in custody ever since.
Some of Delaney’s victims testified at trial about their ordeals. The adult victim testified that Delaney threatened her by holding a hot iron next to her face.
Federal Prosecutions Serve as Reminder to Comply with Tax Obligations as Filing Deadline ApproachesRead the Press Release
CHICAGO — Federal authorities today announced criminal charges against several Chicago-area defendants for a variety of alleged tax schemes. With tax season in full swing, the prosecutions serve as a warning that individual taxpayers are responsible for the contents of their own return.
The criminal prosecutions announced today include charges against two Chicago tax preparers who allegedly assisted clients in obtaining thousands of dollars in fraudulent refunds, as well as charges against individuals accused of knowingly filing false tax returns or willfully failing to file tax returns as required.
In addition to potential criminal penalties, including incarceration, tax evaders remain responsible for all taxes and interest due, as well as civil penalties. The nation’s tax deadline this year is April 17.
“Tax offenses are neither victimless nor without consequence,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. “Taxes are how governments provide essential services. Our office strives to preserve the integrity of the federal tax system through vigorous criminal enforcement of the internal revenue laws.”
“Federal income tax compliance should be equally shared among all of the roughly 9.5 million Chicagoland residents,” said Gabriel Grchan, Special Agent in Charge, IRS Criminal Investigation, Chicago Field Office. “IRS-CI will continue focusing investigative efforts on individuals who contribute to the tax gap and do not comply with the law. With the filing deadline approaching, Chicagoans who might be thinking about cheating should think twice or risk the consequences.”
In an indictment returned last month, a federal grand jury charged JOHN OCWIEJA, 49, of Chicago, with six counts of willfully failing to file an income tax return. Ocwieja allegedly failed to file individual returns for the calendar years 2011 through 2016. Ocwieja has pleaded not guilty to the charges. A status hearing is set for May 9, 2018, before U.S. Magistrate Judge M. David Weisman. The government in Ocwieja’s case is represented by Assistant U.S. Attorney Andrianna Kastanek.
In another tax prosecution, professional tax preparer ANNA PLATOS, 58, of Hickory Hills, is charged with 19 counts of preparing and filing false and fraudulent income tax returns, and one count of obstructing the IRS. Platos, who owned Chicago-based Midway Accounting, filed the returns on behalf of numerous individuals for the tax years 2011 and 2012, according to the indictment. The returns claimed false tax deductions for car and truck expenditures, medical expenses, charitable gifts, and educational expenses, the indictment states. Platos has pleaded not guilty to the charges. A status hearing is set for May 8, 2018, before U.S. District Judge Amy J. St. Eve. The government in Platos’s case is represented by Assistant U.S. Attorney James P. Durkin.
The other professional tax preparer recently charged is IRVING BROWN SR., 69, of Chicago, who operated Irving Brown Sr. Tax Services. According to the indictment, Brown understated his own taxable income for the tax years 2011 and 2012, and he filed returns for taxpayers that he knew to contain false business losses. Brown also allegedly obstructed an IRS audit by fabricating documents and causing a taxpayer to submit them to the IRS. He is charged with two counts of subscribing a false tax return, twelve counts of aiding and abetting the filing of a false tax return, and one count of interfering with the administration of internal revenue laws. Brown has pleaded not guilty to the charges. A status hearing is set for May 9, 2018, before U.S. District Judge Robert W. Gettleman. The government in Brown’s case is represented by Assistant U.S. Attorney Andrew Erskine.
The U.S. Attorney’s Office also recently charged TARA D. SMITH, of Charlotte, N.C., with one count of willfully filing a false income tax return on her own behalf. Smith pleaded guilty to the charge earlier this week. In a plea agreement, Smith admitted that for the calendar year 2014, she filed a return that falsely claimed her total income was approximately $18,260, when she knew that her total income substantially exceeded that amount. Smith’s sentencing is set for July 20, 2018, before U.S. District Judge Sara L. Ellis. The government in Smith’s case is represented by Assistant U.S. Attorney Erika L. Csicsila. The City of Chicago Inspector General’s Office assisted in the Smith investigation.
A criminal information filed this month charges MICHAEL CIELAK, 54, of Chicago, with filing false tax returns. The charges allege that Cielak operated a business that generated scrap metal, and that he failed to report the income he received from the sale of scrap. Cielak will be arraigned on April 17, 2018, before U.S. Magistrate Judge Daniel G. Martin. The government in Cielak’s case is represented by Assistant U.S. Attorney Patrick King.
Earlier this month, the U.S. Attorney’s Office charged BARRY POTICHA, 73, of Northbrook, with scheming to impede the IRS. According to the charges, Poticha worked as the office manager and bookkeeper for two Chicago-area staffing companies. From 2000 through 2010, Poticha allegedly prepared and filed fraudulent tax returns to avoid the payment of employment taxes owed by the companies. Poticha will be arraigned on April 16, 2018, before U.S. District Judge Gary Feinerman. The government in Poticha’s case is represented by Assistant U.S. Attorney Kathryn E. Malizia.
A federal grand jury earlier this month indicted LATASHA MOSS, 30, of Cicero, with theft of government funds in relation to the theft of federal income tax refunds issued for returns filed in the name of other individuals. Moss will be arraigned on April 12, 2018, before U.S. Magistrate Judge Jeffrey T. Gilbert. The government in Moss’s case is represented by Assistant U.S. Attorney Sean K. Driscoll.
The public is reminded that charges are not evidence of guilt. The defendants with pending charges are 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 reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.
For tips to assist taxpayers in choosing a reputable tax professional or preparing their own taxes, visit the official IRS website: https://www.irs.gov/help-resources.
Bookkeeper at Two West Loop Restaurants Arrested on Federal Fraud Charge for Allegedly Misappropriating More Than $600,000Read the Press Release
CHICAGO — A former bookkeeper for two restaurants in the West Loop neighborhood of Chicago was arrested today on a federal fraud charge for allegedly misappropriating more than $600,000 from the eateries.
RENEE M. JOHNSON worked as a bookkeeper for One Off Hospitality LLC, which owns several bars and restaurants in Chicago, including the West Loop eateries Blackbird and Avec. Johnson was a signatory on One Off’s bank accounts, and her duties included processing checks to vendors who provided food, labor and utilities to the restaurants. According to a federal criminal complaint, Johnson wrote hundreds of unauthorized checks from One Off’s accounts to pay for her personal expenses, including credit card debt and mortgages on real estate holdings in Chicago. From 2011 to 2017, the scheme caused a loss of approximately $604,113, mostly sustained by Blackbird and Avec, the complaint states.
Johnson, 60, of Chicago, was charged with one count of mail fraud. She was taken into custody this morning and is scheduled to make an initial court appearance at 3:00 p.m. today before U.S. Magistrate Judge Sheila M. Finnegan.
The complaint 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.
According to the complaint, Johnson made fraudulent entries in One Off’s accounting system to hide the theft. She often made a check payable to one of her own personal creditors, but deleted the entry in One Off’s system, the complaint states. In some instances Johnson cut a check to pay personal expenses, and then quickly cut a new check with the same check number to pay for a legitimate corporate expenditure, according to 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.
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 Sunil R. Harjani.
Three Individuals Charged with Federal Drug Offenses for Allegedly Conspiring to Sell Synthetic Cannabinoids at Chicago Convenience StoreRead the Press Release
CHICAGO — The U.S. Attorney’s Office today charged three individuals with federal drug offenses for allegedly conspiring to sell synthetic cannabinoids at a Chicago convenience store.
FOUAD MASOUD, JAMIL ABDELRAHMAN JAD ALLAH, and ADIL KHAN MOHAMMED conspired to sell the synthetic cannabinoids, known as “K2,” at King Mini Mart in the North Lawndale neighborhood of Chicago, according to a criminal complaint and affidavit filed in federal court in Chicago. Multiple people recently experienced adverse symptoms, including unusual bleeding, after using synthetic cannabinoids obtained from the store, the complaint states. Some of these individuals recently sought treatment in Chicago-area emergency rooms, the complaint states.
The three defendants were arrested Sunday. The complaint charges Masoud, 48, of Justice, Jad Allah, 44, of Justice, and Mohammed, 44, of Chicago, with conspiracy to knowingly and intentionally possess with intent to distribute, and to distribute, a controlled substance. Masoud made an initial court appearance today before U.S. Magistrate Judge Daniel G. Martin. Judge Martin ordered him to remain in federal custody until a detention hearing on Thursday at 1:00 p.m. Initial court appearances for Jad Allah and Mohammed are set for Tuesday at 11:00 a.m. before Judge Martin.
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 Drug Enforcement Administration; and Eddie Johnson, Superintendent of the Chicago Police Department. The Illinois State Police and the Illinois Department of Public Health provided assistance.
According to the charges, the three defendants worked at King Mini Mart, located in the 1300 block of South Kedzie Avenue in Chicago. Last week, undercover law enforcement officers purchased K2 from Jad Allah and Mohammed inside the store, the complaint states. The synthetic cannabinoids were packaged in sealed containers and labeled with such names as “Matrix,” “Blue Giant,” and “Crazy Monkey,” according to the charges. Preliminary testing of some of the cannabinoids purchased by the undercover officer revealed a detectable amount of brodifacoum, a toxic substance frequently used in rat poison, the complaint states.
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 drug conspiracy charge carries 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 Matthew Hernandez is representing the government.
Three Men Charged with Violent Robbery of Hinsdale Jewelry StoreRead the Press Release
CHICAGO — A federal grand jury has indicted three men on robbery and weapons offenses for allegedly stealing expensive watches and jewelry at gunpoint from a Hinsdale store.
The robbers brandished firearms during the heist at Razny Jewelers, 37 S. Washington St., in the western suburb, on March 17, 2017, according to the indictment. They took more than $200,000 in merchandise, including watches by luxury brands Frederique Constant, Patek Phillipe, and Tudor, the indictment states. They allegedly sold or disposed of some of the stolen items in the Chicago area and Atlanta, Ga.
The indictment was returned Thursday in U.S. District Court in Chicago. It charges TOBIAS DIGGS, 24, of Chicago, MARVON HAMBERLIN, 39, of Chicago, and JOSHUA MCCLELLAN, 29, of Oak Lawn, with robbery and robbery conspiracy; transportation of stolen goods; and using, carrying, and brandishing firearms during a crime of violence.
The charges 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 Hinsdale Police Department and Oak Lawn Police Department provided valuable assistance.
According to the charges, the defendants conducted surveillance of the store in advance of the robbery. They brought hoods, masks and other items to the store to conceal their identities, the indictment states. The robbers used actual and threatened force against store employees to take the watches and jewelry, before escaping in a Lexus sport-utility vehicle.
McClellan was arrested Friday, and he pleaded not guilty at a Friday afternoon arraignment before U.S. Magistrate Judge Sidney I. Schenkier. A detention hearing is set for Tuesday at 11:45 a.m. before Judge Schenkier.
Diggs is currently in state custody in DuPage County. His arraignment on the federal charges has not yet been scheduled.
Hamberlin is not in custody, and a warrant has been issued for his arrest.
The charge of using and brandishing a firearm carries a maximum sentence of life in prison. The conspiracy and robbery counts each carry maximum sentences of 20 years in prison. Transportation of stolen goods is punishable by up to ten years.
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. 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 Albert Berry III and Lindsay Jenkins.
Russian Citizen Sentenced to 18 Months in Federal Prison for Attempting to Illegally Export More Than $100,000 in Firearm Parts and AccessoriesRead the Press Release
CHICAGO — A Russian citizen was sentenced today to 18 months in federal prison for attempting to illegally export from the United States more than $100,000 in firearm parts, ammunition and accessories, including parts designed for assault rifles.
KONSTANTIN CHEKHOVSKOI was apprehended by Homeland Security Investigations (HSI) Special Agents at O’Hare International Airport in Chicago on April 26, 2017, as he attempted to board a flight for Stockholm, Sweden. In Chekhovskoi’s eleven checked bags were the firearm parts, ammunition and accessories, including bullets, rifle magazines, triggers, stocks, muzzle brakes and scopes, many of which were designed for assault rifles such as AK-47s and M4s. Chekhovskoi lacked the required license for the export-controlled items.
Chekhovskoi, 44, of St. Petersburg, Russia, pleaded guilty last year to one count of attempting to fraudulently and knowingly export firearm parts. U.S. District Judge Sara L. Ellis imposed the 18-month prison term and fined Chekhovskoi $100,000.
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.
Uncle and Nephew and Two Brothers-In-Law Among Six Defendants Charged in Federal Drug and Gun Probe in West Suburbs of ChicagoRead the Press Release
CHICAGO — Six defendants, including two brothers-in-law and a man and his nephew, are facing criminal charges as part of a federal investigation into drug and gun trafficking in Chicago’s western suburbs.
The investigation centered on drug sales in Maywood, Bellwood and Hillside, and resulted in the seizure of approximately 700 grams of heroin, some of which tested positive for fentanyl, and more than $15,000 in narcotics proceeds. Authorities also seized four military-style assault rifles, three handguns and several hundred rounds of ammunition that one of the defendants allegedly sold to an individual who was cooperating with law enforcement.
The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task 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 and weapons trafficking organizations.
Criminal complaints and affidavits filed in federal court in Chicago charge four defendants with conspiracy to possess a controlled substance with intent to deliver; one defendant with distribution of a controlled substance; and one defendant with illegal possession of a firearm by a felon. Several of the defendants were arrested Tuesday. Detention hearings will be held on Thursday and Friday before U.S. Magistrate Judge Sidney I. Schenkier.
The 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 Cook County Sheriff’s Police Department, Maywood Police Department, Chicago Police Department, Illinois State Police, and Johnsburg Police Department.
According to the charges, WINDELL REEDY, 43, of Hillside, operated a drug trafficking organization in the western suburbs. A source cooperating with law enforcement purchased various quantities of heroin from Windell Reedy on multiple occasions, the complaint states.
Windell Reedy allegedly worked with his uncle, DANNY REEDY, 56, of Bloomingdale, to purchase and obtain wholesale quantities of heroin in the Chicago area and transport it to Memphis, Tenn. RONALD SCALES, 53, of Hillside, and his brother-in-law, HOWARD BAKER, 58, of Hillside, worked with the Reedys to distribute the heroin, including to the individual in Tennessee, the charges allege. The complaint accuses DARYL KIMBROUGH, 48, of Bellwood, of performing quality tests on the heroin obtained by the Reedys, and distributing the drug.
The defendant charged with illegal gun possession is KENNETH LOGAN, 38, of Maywood. Logan sold the rifles and handguns to the cooperating source on four occasions in November and December of last year, the complaint states. The transactions allegedly occurred in Maywood. Logan is a convicted felon who was not legally allowed to possess a firearm.
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 conspiracy charge against Danny Reedy, Scales, Baker and Kimbrough carries a mandatory minimum sentence of ten years in prison and maximum of life, while the distribution charge against Windell Reedy is punishable by up to 20 years and the firearm charge against Logan by up to ten years. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Assistant U.S. Attorneys James P. Durkin and Philip Fluhr, Jr., are representing the government.
U.S. Attorney’s Office to Conduct Election Day MonitoringRead the Press Release
CHICAGO — The U.S. Attorney’s Office will monitor the federal, state and local primary elections in Chicago and surrounding suburbs on March 20, 2018, John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, announced today.
As part of the monitoring effort, the office will operate a telephone hotline for citizens to report complaints related to the voting process. Assistant U.S. Attorneys and other office personnel will monitor the hotline and respond to complaints as needed.
The hotline number, staffed on Election Day only, is (312) 469-6157.
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations wherever they occur. The Department’s longstanding Election Day Program seeks to ensure public confidence in the voting process.
Federal voting-rights laws protect the rights of voters to mark their own ballot or be assisted by a person of their choice. Actions designed to interrupt or intimidate voters at polling places may constitute a violation. Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. Violations carry penalties ranging from one to ten years in prison and fines of up to $250,000.
For information as to the location and hours of polling sites, Illinois residents are advised to contact the Illinois State Board of Elections by logging on to www.elections.il.gov or by calling (312) 814-6440.
North Suburban Trader Facing Federal Criminal Charge for Allegedly Defrauding InvestorsRead the Press Release
CHICAGO — A north suburban trader has been charged with fraud for allegedly misappropriating at least $750,000 from investors.
RICHARD D. CARTER, 49, of Mundelein, was charged in a federal criminal complaint with one count of wire fraud. He was arrested Tuesday and made an initial court appearance that day before U.S. Magistrate Judge Maria Valdez. Judge Valdez ordered him released on a $50,000 unsecured bond. The next court date in U.S. District Court in Chicago has not yet been set.
Carter worked as a trader at Blue Guru Trading LLC, a Lincolnshire firm that claimed to specialize in trading futures contracts. According to the charges, Carter advised existing and potential clients that his firm’s proprietary trading model was profitable, and he furnished account statements and other documentation that purportedly showed significant returns on investments. In reality, Carter had falsified the documents to conceal the fact that he misappropriated much of the money, according to the complaint.
The complaint 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 Commodity Futures Trading Commission, which earlier this year filed a civil enforcement lawsuit against Carter, provided assistance.
According to the complaint, the fraud scheme began in June 2016 and continued to January of this year. Carter allegedly told clients their investments would be traded through a clearinghouse called Straits Financial, and he sent some of them Straits Financial account statements showing that Carter’s firm held a balance of more than $6.1 million. Carter had actually created the statements himself, knowing that Blue Guru held only $9,000 in investor funds, the complaint states.
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.
Wire 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 Matthew S. Ebert.
More Than Ten Defendants Charged in Federal Investigation of Drug Trafficking on Chicago’s South SideRead the Press Release
CHICAGO — More than ten defendants are facing federal drug charges for allegedly trafficking fentanyl, heroin and cocaine on Chicago’s South Side.
The investigation, dubbed “Operation Box Car Willie,” centered on drug sales in the city’s Woodlawn neighborhood and resulted in the seizure of distribution quantities of fentanyl, heroin and crack cocaine. The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task 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.
A criminal complaint and affidavit filed Tuesday in federal court in Chicago charges ten defendants with conspiracy to possess controlled substances with intent to deliver. One other defendant is charged individually with possessing controlled substances with intent to deliver, bringing the total number of defendants to eleven.
Several of the defendants were arrested Wednesday. Detention hearings will be held next week 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; 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; Eddie Johnson, Superintendent of the Chicago Police Department; Leo P. Schmitz, Director of the Illinois State Police; and Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. Substantial assistance was provided by the Illinois Secretary of State Police Department and the Illinois Department of Corrections.
According to the charges, JONATHAN MASON, 42, of Chicago, operated a drug trafficking organization in the 6400 block of South Champlain Avenue in Chicago. Mason conspired with DEON PUGH, 37, of Chicago, and KEVIN TWYMAN, 35, of Chicago, as well as others, to obtain wholesale quantities of cocaine, fentanyl, heroin and marijuana for distribution in the Chicago area, the complaint states. The other charged conspirators who allegedly distributed the narcotics include DERRICK WILTZ, 44; EDUARDO ANDERSON, 51; DENNIS MYERS, 59; RYAN PEARSON, 40; ALVIN WILLIAMS, 48; PARIS OBRYANT, 37; and MARTELL WHITE, 31; all of Chicago.
The conspirators allegedly sold drugs inside two stores in the Woodlawn neighborhood – one on East 63rd Street and the other on East 67th Street. On two occasions last month, undercover law enforcement officers purchased cocaine and heroin from Pearson and Obryant inside the 63rd Street store, the complaint states.
The defendant charged individually with possession is WILLIAM RUTLEDGE, 34, of Cedar Rapids, Iowa. Rutledge is identified in the complaint as a customer of Mason and Pugh who allegedly purchased more than 100 grams of crack cocaine from the pair last month.
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 conspiracy charge carries a maximum sentence of life in prison, while the possession charge against Rutledge is punishable by up to 20 years. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Assistant U.S. Attorneys Matthew Kutcher and Kristen Viglione are representing the government.
Former Partner in Global Consulting Firm Sentenced to Two Years in Federal Prison for Billing $586,000 in Bogus Consulting Work and Travel ExpensesRead the Press Release
CHICAGO — A former Chicago-based partner in a global consulting firm has been sentenced to two years in federal prison for scheming with a client to bilk their companies out of hundreds of thousands of dollars in purported consulting work that was never performed.
NAVDEEP ARORA, a former partner in the Chicago office of McKinsey & Company Inc., plotted with a former internal consultant at State Farm Mutual Automobile Insurance Co. to defraud both companies out of phony consulting fees. Arora also fraudulently obtained money from McKinsey, State Farm and other McKinsey clients in the form of purported work-related travel reimbursements for expenses that were actually incurred on Arora’s personal trips. Arora falsely expensed personal trips to Scottsdale, Ariz.; Vail, Colo.; Las Vegas, Nev.; London, England; Prague, Czech Republic; Munich, Germany; and elsewhere. He took the State Farm employee, MATTHEW SORENSEN, on two personal vacations – to Napa, Calif. and New York, N.Y. – and expensed them to State Farm as business expenses. The costs included flights, hotels, meals, car services and other items.
Arora, 53, of London, England, and formerly of Chicago, was arrested in 2016 at JFK International Airport in New York after arriving on an overseas flight. He pleaded guilty last year to one count of wire fraud. U.S. District Judge Ronald A. Guzman imposed the 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; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
Arora and Sorensen “concocted a fraudulent scheme to benefit themselves during their employment,” Assistant U.S. Attorney Sunil R. Harjani argued in the government’s sentencing memorandum. “The defendants’ actions have caused both companies to undertake time and expense uncovering this fraud, destroyed a longstanding relationship between these two companies, and caused reputational harm.”
Sorensen, of Bloomington, Ill., also pleaded guilty to a wire fraud charge. Judge Guzman in September 2017 sentenced Sorensen to one year and one day in prison.
Arora and Sorensen had a longstanding business relationship through Arora’s work overseeing the consulting services McKinsey provided to State Farm. At State Farm, Sorensen provided input and recommendations about whether to hire outside consultants for company projects and who to retain.
According to the charges, their fraud scheme began in 2007. Arora and Sorensen used two corporate entities – “Gabriel Solutions” and “Andy’s BCB” – to defraud their employers out of the phony fees. Sorensen billed McKinsey for the bogus work purportedly performed by the companies, while Arora allocated the fees to the State Farm projects to which he was assigned. As a result, McKinsey and State Farm paid $38,265 for consulting services purportedly performed by “Andy’s BCB,” and $452,710 in fees billed by “Gabriel Solutions.”
Sorensen pocketed a large majority of the money, while Arora received a substantial salary and benefits from McKinsey for maintaining its business relationship with State Farm.
Suburban Man Indicted on Federal Drug Charges for Allegedly Importing a Fentanyl Analogue from ChinaRead the Press Release
CHICAGO — A south suburban man has been charged with federal drug offenses for allegedly conspiring to import a fentanyl analogue from China into the Chicago area.
In the fall of last year, SANCHEZ LACKLAND, 35, of Hazel Crest, imported methoxyacetyl fentanyl from China, according to an indictment returned Wednesday in federal court in Chicago. Lackland and others had the substances shipped through the U.S. mail to approximately 19 Chicago-area addresses, according to the indictment and a criminal complaint previously filed in the case. In December, law enforcement agents executed a search warrant at Lackland’s home and seized quantities of heroin, methoxyacetyl fentanyl and acryl fentanyl, as well as a loaded revolver and approximately $300,000 in cash, the complaint states.
The indictment charges Lackland with drug and firearm offenses. Lackland is a convicted felon who is not legally allowed to possess firearms.
The indictment was 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; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; and Bill Hedrick, Acting Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The government is represented by Assistant U.S. Attorney Andrew C. Erskine.
The indictment also charges JERMOL MIXON, 35, of Orland Park, with drug and weapons offenses. On Dec. 12, 2017, law enforcement agents followed Lackland as he delivered a package to Mixon’s home, according to the complaint. A subsequent court-authorized search of Mixon’s home uncovered quantities of heroin, methoxyacetyl fentanyl, acryl fentanyl, $10,000 in cash and materials used to manufacture drugs, the complaint states.
During the search of Mixon’s home, agents encountered him in an upstairs room within arm’s reach of a loaded handgun, the complaint states. Mixon is a convicted felon who cannot legally possess firearms.
Arraignments for both defendants are set for March 14, 2018, at 11:00 a.m., before U.S. Magistrate Judge Young B. Kim.
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. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Owner of North Suburban Home Health Care Company Sentenced to 18 Months in Prison for Cash-for-Patients Kickback SchemeRead the Press Release
CHICAGO — The owner of a north suburban home health care company has been sentenced to 18 months in federal prison for paying illegal kickbacks for patient referrals.
As the owner of Glenview-based TLC Healthcare Services of Illinois Inc., NORMA DE LA CRUZ paid recruiters $500 to $600 for each Medicare patient referred to her company. TLC then billed Medicare for home health services purportedly provided to the patients. De la Cruz attempted to conceal the payments by using sham contracts that claimed the recruiters provided “marketing” services. From 2012 to 2014, TLC fraudulently caused Medicare to pay out more than $390,000.
De la Cruz, 81, of Glenview, pleaded guilty last year to one count of conspiracy to offer and pay unlawful kickbacks. U.S. District Judge Rebecca R. Pallmeyer imposed the 18-month prison sentence Monday in federal court in Chicago.
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 Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General.
The government is represented by Trial Attorney Leslie S. Garthwaite of the Justice Department’s Criminal Division Fraud Section and First Assistant U.S. Attorney Joel R. Levin of the Northern District of Illinois.
De la Cruz, who was also a registered nurse at the time of the scheme, controlled bank accounts in TLC’s name as well as an account she held personally, both of which were used to pay bribes and kickbacks. She admitted in a plea agreement that she sought recruiters who would refer patients to TLC in exchange for a per-patient referral fee. De la Cruz paid one recruiter at least $65,000 in exchange for his patient referrals.
The government argued in its sentencing memorandum that de la Cruz used much of the proceeds from the conspiracy to gamble at a Chicago-area casino. During the approximate period of the conspiracy, de la Cruz incurred gambling losses of $245,000. The government also noted in its sentencing memorandum that de la Cruz had an additional $76,000 in gambling losses in the period from her initial court appearance in this case in June 2016 until her guilty plea in October 2017.
Federal Jury Convicts Two Postal Service Employees for Scheming to Deliver Marijuana Through the MailRead the Press Release
CHICAGO — A federal jury in Chicago has convicted two U.S. Postal Service employees for scheming to deliver marijuana through the mail.
MARVIN JONES and ANGELA WANSLEY worked at the Tinley Park Post Office. Over a five-month period in 2016, the pair intercepted parcels of marijuana and other controlled substances that had been mailed to the post office by a co-defendant, JAYSON SMITH. Jones and Wansley then furnished the intercepted parcels to Smith or a fourth defendant, COURTNEY POINDEXTER, in exchange for cash.
After a four-day trial in federal court in Chicago, the jury on Thursday convicted Jones, 51, of Hazel Crest, and Wansley, 44, of Harvey, of accepting bribes to perform official postal duties, conspiring to commit obstruction of correspondence, and obstruction of correspondence. The bribery charge is punishable by up to 15 years in prison, while the conspiracy and obstruction charges are punishable by up to five years. U.S. District Judge Robert W. Gettleman will set sentencing hearings at a later date.
The conviction was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Scott Caspall, Special Agent-in-Charge of the Chicago Great Lakes Area Field Office of the U.S. Postal Service Office of Inspector General; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The government is represented by Special Assistant U.S. Attorney William Novak and Assistant U.S. Attorney Peter Flanagan.
According to evidence at trial, Jones was a letter carrier and supervisor while Wansley worked as a sales associate. Jones provided Smith with information about unoccupied P.O. boxes and customers who had placed mail-hold requests at the Tinley Park Post Office. Smith then mailed or caused to be mailed the parcels of controlled substances, and he provided Jones with the tracking information so that Jones or Wansley could intercept them.
Smith, 34, of Country Club Hills, and Poindexter, 38, of Country Club Hills, pleaded guilty prior to trial. They are awaiting sentencing before Judge Gettleman.
Six Former Employees of Chicago Post-Secondary School Indicted for Allegedly Swindling Federal Financial Aid Program out of MillionsRead the Press Release
CHICAGO — Six former employees of a non-profit Chicago post-secondary education institute schemed to enroll fake students in classes as part of a conspiracy to swindle federal financial aid programs out of millions of dollars, according to an indictment returned in federal court in Chicago.
The six defendants were employed at the Chicago campus of the Center for Employment Training, a California-based institution of post-secondary, non-degree, vocational and technical education with campuses throughout the country. From 2005 to 2013, the defendants applied for and obtained federal grants and loans for students who were ineligible to receive the funds, the indictment states. One of the purported students was marked present at CET classes even though the student was deceased at the time, the indictment states.
The scheme caused the U.S. Department of Education to disburse to CET millions of dollars in fraudulent financial aid, the indictment states.
The indictment was returned Thursday. It charges the defendants with one count of conspiracy to fraudulently obtain federal financial assistance, one count of fraudulently obtaining federal financial assistance, and three counts of wire fraud. The defendants are MARIE PICKETT, 59, of Chicago; JANIE BLAKENEY, 63, of Chicago; DEBORAH WILLIAMS, 58, of Chicago; JENNY MORALES, 36, of Cicero; HEATHER SMITH, 43, of Cicero; and TAMAURA BALARK, 45, of Chicago. Arraignments in federal court in Chicago 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 Thomas D. Utz, Jr., Special Agent-in-Charge of the U.S. Department of Education Office of Inspector General’s Midwestern Regional Office. The government is represented by Assistant U.S. Attorney John Mitchell.
According to the charges, Pickett served as the Director of CET’s Chicago campus; Blakeney was the Admissions Advisor; Williams and Morales were Financial Aid Officers; and Smith and Balark were instructors in the Medical Assistance Program. As part of the conspiracy, some of the defendants created and furnished to the Department of Education phony Free Application for Federal Student Aid (FAFSA) applications on behalf of purported students who were not eligible to receive financial aid because they had not graduated from high school or received an equivalency certificate, the charges state. For one purported student, the conspirators created a fictitious diploma that fraudulently alleged the student had graduated from a Chicago public high school, the indictment states. The fictitious diploma was then placed in the student’s CET file in an effort to meet the Department of Education’s requirements for financial aid, according to the indictment.
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.
Each count of wire fraud is punishable by up to 20 years in prison, while the financial assistance fraud counts carry a maximum sentence of five years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Federal Indictment Charges Two Chicago Teenagers with Carjacking and Weapons OffensesRead the Press Release
CHICAGO — A federal grand jury has indicted two teenagers on carjacking and weapons offenses for allegedly taking a sport-utility vehicle at gunpoint in Chicago’s Goose Island neighborhood.
JASON DORTCH, 19, and DAVONTAE JONES, 18, brandished firearms while forcibly taking a Jeep Grand Cherokee on Nov. 13, 2017, according to an indictment returned Thursday in U.S. District Court in Chicago. Dortch is a convicted felon who was not legally allowed to possess the firearm, the indictment states.
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; Kimberly M. Foxx, Cook County State’s Attorney; and Eddie Johnson, Superintendent of the Chicago Police Department.
The case was investigated by the Chicago 11th District Violent Crimes Task Force, which consists of agents and officers from the FBI, Chicago Police, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Drug Enforcement Administration, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Additionally, the Cook County Sheriff’s Office, Oak Park Police Department and Illinois State Police assisted in the apprehension of the defendants.
“Our office will use every available federal resource to vigorously pursue and prosecute violent carjackers,” said U.S. Attorney Lausch. “We are committed to working with our state and local law enforcement partners to aggressively fight violent crime and protect Chicago’s neighborhoods from gun offenders.”
“The FBI views carjackings as a particularly violent and heinous crime,” said FBI SAC Sallet. “We are proud to work side by side with the U.S. Attorney’s Office, the Cook County State’s Attorney’s Office, Chicago Police Department, Cook County Sheriff’s Office, Oak Park Police Department, Illinois State Police, and our federal law enforcement partners, to bring these individuals to justice. Anyone who commits a crime like this should know, we are coming for you.”
The indictment charges Dortch and Jones with one count of carjacking and one count of using and brandishing a firearm during a crime of violence. Dortch is also charged with one count of illegal possession of a firearm by a felon. The using and brandishing charge carries a maximum sentence of life in prison, the carjacking charge is punishable by up to 15 years, and the felon-in-possession charge is punishable by up ten years.
Arraignments in federal court in Chicago have not yet been scheduled.
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. 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 Jeannice Appenteng and Special Assistant U.S. Attorney Marny Zimmer.
Naperville Man Convicted of Violently Forcing Women into ProstitutionRead the Press Release
CHICAGO — A federal jury today convicted a Naperville man on sex trafficking charges for violently forcing women to engage in prostitution between 2007 and 2016.
BENJAMIN BIANCOFIORI, 38, used the promise of financial security to entice women into performing commercial sex acts on his behalf. Biancofiori often beat and punched the women, and he kept almost all of the proceeds they earned through prostitution. On one occasion, Biancofiori arranged for a victim to be returned to him at gunpoint after she tried to run away. He ran his sex-trafficking operation primarily out of his residences in the western suburbs of Chicago.
The jury convicted Biancofiori on 14 of the 15 counts against him, including conspiracy to engage in sex trafficking by force, threats of force, fraud, or coercion; engaging in sex trafficking by force, threats of force, fraud, or coercion; and obstructing, attempting to obstruct, or interfering with the enforcement of the sex trafficking statute.
Biancofiori has remained in federal custody since his arrest in May 2016. The conviction carries a minimum sentence of 15 years in prison and a maximum sentence of life in prison. U.S. District Judge Harry D. Leinenweber set sentencing for May 30, 2018, at 9:45 a.m.
The conviction 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 Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. Substantial assistance was provided by the U.S. Attorney’s Office for the District of Colorado, the Denver office of the FBI, the Carol Stream Police Department and the Naperville Police Department. The government is represented by Assistant U.S. Attorneys Abigail Peluso and Erika Csicsila.
According to evidence at trial, Biancofiori lied to his victims to entice them to work for him and posted their information in commercial sex advertisements online, including the websites Backpage.com and Craigslist.com. Biancofiori also recruited multiple victims through social media. He arranged for the women to travel to meet clients at various locations throughout the United States, including in the Chicago area.
Five of the victims testified at trial about their ordeals.
Two co-defendants of Biancofiori pleaded guilty prior to trial. MARCUS WILLIS, 39, of Wheaton, and NATHAN PEREZ, 32, of West Chicago, admitted in written plea agreements that they conspired with Biancofiori to engage in sex trafficking. Judge Leinenweber will set sentencing hearings for Willis and Perez at a later date.
Federal Jury Convicts Illinois Attorney in Mortgage Fraud SchemeRead the Press Release
CHICAGO — A federal jury today convicted an Illinois attorney of fraudulently obtaining loans related to the purchase, maintenance and sale of properties on Chicago’s South Side.
JESSICA ARONG O’BRIEN fraudulently caused lenders to issue and refinance approximately $1.4 million in mortgage and commercial loans by making false representations and concealing material facts in documents submitted to the lenders. O’Brien used the fraudulently obtained mortgage loan proceeds to purchase an investment property in the 600 block of West 46th Street in Chicago. She fraudulently refinanced the mortgage on the property, as well as on a second investment property in the 800 block of West 54th Street in Chicago. O’Brien then fraudulently obtained a commercial line of credit to maintain the properties, before selling them to a loan officer – co-defendant MARIA BARTKO – and a straw buyer whom O’Brien knew would fraudulently obtain mortgage loans.
The jury convicted O’Brien, 50, of Chicago, on both counts against her, including one count of mail fraud affecting a financial institution, and one count of bank fraud. Each count is punishable by a maximum sentence of 30 years in prison. U.S. District Judge Thomas M. Durkin set sentencing for July 6, 2018.
The conviction 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 Catherine Huber, Special Agent-in-Charge of the Central Region of the Federal Housing Finance Agency, Office of Inspector General. The government is represented by Assistant U.S. Attorneys Matthew F. Madden and Tyler C. Murray.
Evidence at trial revealed that O’Brien carried out the fraud scheme from 2004 to 2007. At the time, O’Brien was employed as a Special Assistant Attorney General for the Illinois Department of Revenue, while also owning a real estate company, O’Brien Realty LLC, and working part time as a loan officer for Amronbanc Mortgage Corp. in Lincolnwood. At the time, Bartko was employed at Amronbanc as a loan officer.
Bartko, of Chicago, pleaded guilty before trial to one count of mail fraud affecting a financial institution. Judge Durkin will schedule Bartko’s sentencing hearing at a later date.
Chicago Trader Facing Federal Fraud Charge for Allegedly Misappropriating $2 Million in CryptocurrenciesRead the Press Release
CHICAGO — In the first criminal prosecution in Chicago involving the cryptocurrency trading industry, a Chicago trader was charged today with fraud for allegedly misappropriating $2 million in Bitcoin and Litecoin.
JOSEPH KIM, 24, of Chicago, was charged in a federal criminal complaint with one count of wire fraud. He is scheduled to make an initial court appearance on Feb. 16, 2018, at 10:30 a.m., before U.S. Magistrate Judge Daniel G. Martin in Courtroom 1743 of the Dirksen Federal Building in Chicago.
Kim worked as an assistant trader for Consolidated Trading LLC, a Chicago trading firm that recently formed a cryptocurrency group to engage in cryptocurrency trading, the complaint states. Over a two-month period in the fall of last year, Kim misappropriated at least $2 million of the firm’s Bitcoin and Litecoin cryptocurrency for his own personal benefit, and he made false statements and representations to the company’s management in order to conceal the theft, according to the complaint.
The complaint 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.
According to the complaint, from September through November 2017, Kim transferred more than $2 million of the trading firm’s Bitcoin and Litecoin to personal accounts to cover his own trading losses, which had been incurred while trading cryptocurrency futures on foreign exchanges. In order to conceal the transfers, Kim lied to the firm’s management about the location of the company’s cryptocurrency and his trading of the company’s cryptocurrency, the complaint states. Consolidated’s management team discovered the misappropriation in late November, the complaint states.
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.
Wire 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. Attorneys Sunil Harjani and Sheri Mecklenburg.
Rockford Man Sentenced to More Than 12 Years in Federal Prison for Cocaine and Firearm ChargesRead the Press Release
ROCKFORD — A Rockford man was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for possessing cocaine with the intent to distribute it and possessing a firearm as a convicted felon on April 8, 2016.
RYAN A. PANCYRZ, 29, was sentenced to 12 years and seven months in federal prison, to be followed by three years of supervised release. Pancyrz pleaded guilty to the charge on Nov. 6, 2017.
According to the written plea agreement, on April 8, 2016, Pancyrz, a convicted felon, possessed a loaded .32-caliber revolver and 49 plastic baggies of cocaine at a residence on South Fifth Street in Rockford. In the plea agreement, he admitted that he intended to sell the cocaine. He further admitted that he possessed other items associated with drug distribution, including a digital scale, two bottles of Inositol, a vitamin supplement used to dilute controlled substances, and $666 in cash. Pancyrz was arrested by Winnebago County Sheriff’s Office deputies at the residence on South Fifth Street on April 8, 2016, and has remained in custody since his arrest.
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 & Explosives; Joseph Bruscato, Winnebago County State’s Attorney; and Gary Caruana, Winnebago County Sheriff.
The government was represented by Assistant U.S. Attorney Joseph C. Pedersen.
Chicago Restaurateur Charged with Fraud for Allegedly Swindling Investors in His West Loop EateryRead the Press Release
CHICAGO — A Chicago restaurateur was charged today with misappropriating funds and swindling investors in his West Loop eatery.
ATTILA GYULAI, who together with a relative owned a majority stake in Embeya restaurant, used company funds to pay personal expenses and illegally pocketed cash from investors, according to a criminal complaint and affidavit filed today in U.S. District Court in Chicago. From approximately 2011 to 2016, Gyulai misappropriated at least $300,000, to the detriment of co-owners and investors, the complaint states.
Embeya, which was located in the 500 block of West Randolph Street in Chicago, closed in 2016.
The complaint charges Gyulai, 45, most recently of Chicago, with wire fraud. In addition to the complaint, the Court today also authorized a warrant for Gyulai’s arrest.
The complaint 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.
In order to open the restaurant and obtain a bank loan, Gyulai represented to shareholders that he and his relative had invested $140,000 of their own funds, the complaint states. Gyulai had in fact borrowed those funds from family and friends, and in 2013, he used company funds to pay them back, while concealing the payments from other shareholders, the complaint states. The following year, Gyulai made payments to himself and his relative totaling approximately $140,000 as a purported return of their initial capital, even though they had not invested their own money in the restaurant, the complaint states. Gyulai had thus paid himself and his relative double the purported initial investment amount, to the detriment of other shareholders, according to the complaint. He also used company funds for personal stock trading during the operation of the restaurant, the complaint states.
Not long before Embeya closed, Gyulai wired $103,750 from the restaurant’s corporate account to an account held overseas, the complaint states. The money represented a substantial amount of funds remaining in Embeya’s account at the time, the complaint states. Gyulai left the United States soon after transferring the funds.
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.
Wire 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 Sunil Harjani.
14 New Defendants Added to Federal Racketeering Indictment Against Chicago Gang Members; New Charges Allege Multiple Murders and Acts of ViolenceRead the Press Release
CHICAGO — A federal indictment unsealed this week charges 34 alleged members of the Latin Kings street gang with participating in a criminal organization that murdered its rivals and violently protected its drug-dealing territories in Chicago and the suburbs.
Authorities uncovered the criminal activity through an investigation conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF). During the course of the probe, law enforcement agents confiscated 18 firearms.
Original charges in the case were filed in 2016 against 20 alleged members of the Latin Kings. The superseding indictment unsealed this week adds 14 more defendants and charges numerous acts of violence, including six murders, three attempted murders, and three arsons. Thirty three of the defendants are charged with racketeering conspiracy, while the 34th defendant faces a firearm charge.
The superseding 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; and Eddie T. Johnson, Superintendent of the Chicago Police Department. Substantial investigative assistance was provided by the Cook County Sheriff's Police Department and Hammond (Ind.) Police Department. The FBI Task Force investigating the case was comprised of agents and task force officers from the Joliet Police Department, Evergreen Park Police Department, Bolingbrook Police Department, Orland Park Police Department, Cook County Sheriff's Police Department, Will County Sheriff’s Office, and the Internal Revenue Service Criminal Investigation Division. Additional support was provided by the Merrillville (Ind.) FBI office, and the U.S. Attorney’s Office for the Northern District of Indiana.
The superseding indictment was returned on Feb. 1, 2018, and ordered unsealed this week. Several of the new defendants were arrested this week, and arraignments for most of the defendants have been held in federal court in Chicago.
The superseding indictment alleges that members of the Latin Kings violently enforced discipline within their ranks and retaliated against rivals and former members to prevent cooperation with law enforcement. The charges accuse nine defendants of committing six murders in furtherance of the gang’s activities:
ALONZO HORTA, 20, of Hammond, Ind., and GEOVANNI LOPEZ, 28, of Oak Forest, allegedly murdered Alfonso Calderon on April 9, 2017, in Chicago.
DEAN TREVINO, 25, of Chicago, and EMANUEL MENDEZ, 29, of Hammond, Ind., allegedly murdered Ismael Perez on Nov. 3, 2012, in Chicago.
GERONIA FORD, 23, of Chicago, and WILLIAM HAYSLETTE, 24, of Chicago, allegedly murdered Sergio Hernandez on May 15, 2012, in Chicago.
JUAN JIMENEZ, 35, of Blue Island, allegedly murdered Isiah Cintron on Jan. 18, 2007, in Hammond, Ind.
THOMAS LUCZAK, 44, of Chicago, allegedly murdered Juan Serratos on June 11, 2000, in Chicago.
JOSE JARAMILLO, 35, of Hammond, Ind., allegedly murdered Jeremy Ward on Nov. 15, 1999, in Chicago.
Mendez and two other defendants – ORLANDO MARIN, 29, of Chicago, and ROY VEGA, 35, of Chicago – are also charged with committing attempted murders.
The defendants participated in the Southeast Region of the Latin Kings, which contains more than a dozen chapters answering to a regional structure of leadership, according to the indictment. Each chapter is typically named after the city in which it operates, or by a street or streets that run through the chapter. Among the Chicago chapters in the Southeast Region are 82nd Street, 88th and 89th Streets, 97th Street, 99th Street, 102nd Street, 104th Street, and the Roseland neighborhood. Other regional chapters operated in the south suburbs of Blue Island, Dolton, Harvey and Chicago Heights, as well as in Kankakee and communities across the border in Indiana, according to the indictment.
The indictment charges defendants who serve in various high-ranking positions of the Latin Kings. These positions include “Regional Enforcers,” who violently instill discipline within the ranks; “Incas,” who serve as chapter leaders; “Caciques,” who are second in command behind the Incas; “Soldiers,” who often carry dangerous weapons to carry out the gang’s activities; and “Regional Treasurer,” who collects dues from Latin King chapters to finance the gang’s activities.
Several firearm offenses are also charged in the indictment, including unlawful possession of guns, assault with a dangerous weapon, illegal dealing of guns, and multiple counts of witness intimidation.
The investigation was conducted under the umbrella of the OCDETF program, 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, weapons trafficking and money laundering organizations.
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.
Racketeering conspiracy generally carries a maximum sentence of 20 years in prison, but a life sentence is possible for certain underlying racketeering activities, including certain murders charged in the indictment. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Assistant U.S. Attorneys Brian Wallach, Derek Owens and Vikas Didwania are representing the government.
U.S. Attorney’s Office Collected Nearly $75 Million in Civil, Criminal and Asset Forfeiture Actions in Fiscal Year 2017Read the Press Release
CHICAGO — The United States Attorney’s Office for the Northern District of Illinois collected nearly $75 million in criminal, civil and asset forfeiture actions in Fiscal Year 2017, John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, announced today.
The 2017 collections included $29.7 million in criminal actions, $28.7 million in civil actions, and $16.07 million in asset forfeiture actions. The total exceeds $74.5 million and is more than double the office’s Fiscal Year 2017 budget of approximately $29.2 million.
“Our attorneys and staff work diligently to recover meaningful funds for the federal treasury and victims of federal crimes,” said U.S. Attorney Lausch. “We have an important responsibility to do everything within our power to ensure that the proceeds of criminal and civil fraud are recovered, and that restitution is made to the victims whenever possible.”
The collections included $234,308 in criminally forfeited proceeds from the tax prosecution of northwest suburban couple Patty and Mario Cordoba, and $315,170 in criminal and administrative forfeitures arising from the south suburban drug prosecution of Emiliano Cruz.
The office in Fiscal Year 2017 restored more than $2 million to victims of federal crimes, including a significant amount to the victims of Chicago accountant Nina Mendez’s fraud scheme.
The office worked with other U.S. Attorney’s Offices across the country and components of the Department of Justice to collect an additional $218.9 million in criminal and civil cases pursued jointly with those offices.
Nationally, the Department of Justice collected more than $15 billion in civil and criminal actions in Fiscal Year 2017, which ended Sept. 30, 2017. The largest collections nationally were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct, or collected fines imposed on individuals or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Federal Charges Filed Against Man Who Allegedly Posted Online Threats of Violence at Women’s Reproductive ClinicsRead the Press Release
CHICAGO — An Indiana man is facing federal charges for allegedly threatening to commit violence at women’s reproductive health services clinics in Chicago and northwest Indiana.
LUKE DANIEL WIERSMA, 33, of Dyer, Ind., is charged with transmitting threats to injure and using threats of force to intimidate or interfere with reproductive health services.
Wiersma posted online threats of violence on at least seven occasions in October and November of last year, according to a criminal complaint and affidavit filed today in U.S. District Court in Chicago. Wiersma submitted the threats through the clinics’ websites, the complaint states. The clinic in Chicago provides reproductive health services, while the clinic in Hammond, Ind., provides counseling services related to women’s reproductive health.
Wiersma was arrested on Tuesday. A detention hearing is scheduled for Feb. 9, 2018, at 1:00 p.m., before U.S. Magistrate Judge Sidney I. Schenkier in Chicago.
The 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. The Indianapolis, Ind., Office of the FBI and the Dyer, Ind., Police Department provided valuable assistance.
In one of the threats transmitted to the Chicago clinic on Oct. 29, 2017, Wiersma allegedly stated, “I will do anything and everything to stop the unmitigated murders of fetuses. I will do anything to stop the atrocities committed by your clinic every minute of every day at your clinic. You are all pieces of [expletive] and I will kill to stop these atrocities. I will blow you up if I have to, burn the clinic down. I will do whatever is necessary I swear to God I will. After that you are in God’s hands and He will do His thing.”
Transmitting a threat to injure is punishable by a maximum sentence of five years in prison, while using threats of force to intimidate or interfere with reproductive health services is punishable by up to one year in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint 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. Attorneys Abigail Peluso and Georgia Alexakis.
McHenry Man Convicted of Child Pornography ChargesRead the Press Release
ROCKFORD — A McHenry man was found guilty of child pornography charges following a four-day jury trial in federal court in Rockford.
MICHAEL L. CHAPARRO, 29, was charged with 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.
Transporting child pornography carries a mandatory minimum sentence of five years and a maximum of 20 years in prison, and accessing child pornography carries a maximum of ten years in prison and up to 20 years in prison for an offense involving a minor under 12 years of age. Each count carries a $250,000 maximum fine. The court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. A sentencing hearing will be set by the Court at a later date.
The conviction 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 is represented by Assistant U.S. Attorneys Michael D. Love and Margaret J. Schneider.
Aspiring Rapper Sentenced to More Than 15 Years in Federal Prison for Illegally Possessing a Gun While Filming a Music VideoRead the Press Release
CHICAGO — An aspiring rapper from Chicago has been sentenced to more than 15 years in federal prison for illegally possessing a handgun while filming a music video.
RICARDO BURGOS, 31, possessed the gun in January 2016 while filming the rap music video in a north suburban hotel room. Burgos, who performs under the name “Nation,” can be seen in the video holding two firearms while rapping about selling drugs, committing acts of violence, and disrespecting law enforcement. Burgos had previously been convicted of multiple felonies and was not legally allowed to possess a firearm.
Burgos pleaded guilty to one count of illegal possession of a firearm by a felon, and one count of distribution of a controlled substance. U.S. District Judge Ronald A. Guzman on Tuesday imposed a 188-month prison sentence.
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 Eddie T. Johnson, Superintendent of the Chicago Police Department.
Burgos admitted in a plea declaration that he possessed a .45-caliber semi-automatic pistol while filming the video in a hotel room in Deerfield. Shortly thereafter, Burgos brought the gun to the Austin neighborhood on the West Side of Chicago, where Chicago Police officers arrested him.
Law enforcement subsequently determined that the .45-caliber pistol had been stolen from a store in Indiana. The gun was also used in a shooting in Chicago two days before the music video was filmed.
The drug charge arose from multiple illegal narcotic sales by Burgos in 2015. Burgos sold 4 grams of crack cocaine and 1.4 grams of heroin to several individuals, all of whom were undercover police officers.
The government is represented by Assistant U.S. Attorney Jordan M. Matthews.
Chicago Man Sentenced to Four and a Half Years in Federal Prison for Illegally Buying Guns in Indiana and Bringing Them to ChicagoRead the Press Release
CHICAGO — A Chicago man has been sentenced to four and a half years in federal prison for illegally buying 17 handguns in Indiana and bringing them across the border to Chicago.
RICKY HATCH, also known as “Rick Hatchet” and “Ricky Hatchet,” purchased the firearms from an unlicensed individual in a parking lot in Bloomington, Ind., on three occasions in February 2015. In the first sale, Hatch recruited a resident of Indianapolis, Ind., to serve as the ostensible buyer. The seller reviewed the Indiana resident’s driver’s license and listed some of her information on a purported “firearms bill of sale” before selling the guns to Hatch in exchange for cash. Although the Indiana resident did not accompany Hatch to the next two transactions, Hatch used aliases in those deals to conceal his identity.
After each purchase, Hatch brought the guns to Chicago. The Chicago Police Department has subsequently recovered five of the guns from individuals other than Hatch.
Hatch, 25, pleaded guilty last year to unlawful interstate transportation of firearms. On Jan. 18, 2018, U.S. District Judge Ronald A. Guzman imposed a 55-month prison sentence.
The sentence 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 impact of firearms brought from Indiana and sold to individuals in Illinois is well documented,” Assistant U.S. Attorney Brian S. Wallach argued in the government’s sentencing memorandum. “Defendant’s actions, and those like him who bring gun after gun into this city, are fueling the violence that we read about on a daily basis.”
The government was represented by Mr. Wallach and Assistant U.S. Attorney Katie M. Durick.
Indiana Man Indicted on Federal Kidnapping Charge for Allegedly Abducting a Child in Calumet CityRead the Press Release
CHICAGO — An Indiana man has been indicted on a federal kidnapping charge for allegedly abducting a child from a Calumet City street in broad daylight last month.
On Dec. 20, 2017, at approximately 3:30 p.m., BRYAN PROTHO grabbed the child as she walked on the sidewalk near 153rd Street and Burnham Avenue in Calumet City, according to an indictment returned Thursday and a criminal complaint previously filed in the case. Protho forced the minor into his red Ford Explorer sport-utility vehicle and drove away, the complaint states. He then parked the vehicle in an alley and assaulted the child, the complaint states. The victim was able to escape and flag down a passing vehicle, and law enforcement was contacted.
Protho, 38, of East Chicago, Ind., was arrested on Dec. 27, 2017, and he remains in federal custody. The indictment charges him with one count of kidnapping. Arraignment is set for Feb. 20, 2018, at 9:30 a.m., before U.S. District Judge Charles P. Kocoras.
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; Christopher Fletcher, Chief of the Calumet City Police Department; and Dennis Murrin, Jr., Chief of the Lansing Police Department. The FBI and the local departments jointly investigated the case.
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 kidnapping charge is punishable by a minimum sentence of 20 years in prison and a maximum sentence of life. 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 Christopher V. Parente.
Bank Teller Sentenced to 15 Months in Federal Prison for Gradually Embezzling $180,000 from South Side BankRead the Press Release
CHICAGO — A former teller at a South Side bank has been sentenced to 15 months in federal prison for gradually embezzling approximately $180,000 in bank funds.
PATRICK GALVAN worked as a teller at Chicago Community Bank in the city’s Bridgeport neighborhood. Galvan pocketed cash from his teller drawer and concealed the theft by falsely inflating the amount of coins held in the bank’s vault. Galvan took the money over a two-and-a-half year period, occasionally processing coins through a coin counter at his teller station in order to give the appearance that he was handling large amounts of coins from customers.
Galvan, 39, of Chicago, pleaded guilty last year to one count of embezzlement. U.S. District Judge John Robert Blakey on Wednesday imposed the 15-month prison sentence.
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 Joseph Moriarty, Special Agent-in-Charge of the Chicago Regional Office of the Federal Deposit Insurance Corporation - Office of Inspector General.
“This was a serious, calculated, and deliberate crime, and the defendant took advantage of the trust placed in him by his employer to pull it off,” Assistant U.S. Attorney Amarjeet S. Bhachu argued in the government’s sentencing memorandum.
In addition to his teller duties, Galvan managed the bank’s coin accounts and was responsible for reporting the total amount of coins present in the vault. Galvan admitted in a plea declaration that he pocketed the cash and falsely reported the coin total from 2008 to 2010.
Rockford Man Indicted for Drug Trafficking and Firearm OffensesRead the Press Release
ROCKFORD — A Rockford man was indicted Tuesday in federal court on multiple counts of drug trafficking and firearm offenses.
ANTWAN D. MANLEY, 25, was charged with possessing with intent to distribute heroin, cocaine base and marijuana, in Rockford on Jan. 11, 2018. Manley was also charged with possessing a 9-mm pistol as a convicted felon on Jan. 11, 2018, and possessing that firearm in furtherance of a drug-trafficking crime. In addition, Manley was charged with distributing heroin in Rockford on Nov. 27, 2017, and Dec. 6, 2017.
Manley, who has been in federal custody since his arrest on Jan. 11, 2018, will appear before U.S. Magistrate Judge Iain D. Johnston for his arraignment today at 3:30 p.m.
Each of the drug-trafficking charges carries a maximum sentence of 20 years in prison. The charge of illegally possessing a firearm as a convicted felon carries a maximum sentence of ten years in prison, and the charge of possessing a firearm in furtherance of a drug-trafficking crime carries a mandatory minimum sentence of five years in prison and a maximum sentence of life imprisonment. 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 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 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 Bureau of Alcohol, Tobacco, Firearms & Explosives; and Dan O’Shea, Chief of the Rockford Police Department. 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 Winnebago County Sheriff’s Office also assisted in the investigation.
The government is represented by Assistant U.S. Attorney Talia Bucci.
Rockford Man Charged in Federal Court with Bank RobberiesRead the Press Release
ROCKFORD — A Rockford man was indicted Tuesday by a federal grand jury in Rockford for the robberies of two Rockford banks.
ALBERT K. STALLWORTH, 62, was charged with two counts of bank robbery. According to the indictment, on Aug. 25, 2017, Stallworth robbed the Midwest Community Bank on North Perryville Road in Rockford of $4,989. The indictment further alleges that on Jan. 9, 2018, Stallworth robbed the Associated Bank on Center Terrace in Rockford of $1,620.
Stallworth appeared before U.S. Magistrate Judge Iain D. Johnston today for arraignment. His case was set for a status hearing on March 8, 2018, at 11:00 a.m.
Each count of bank robbery carries a maximum potential penalty of up to 20 years in prison, to be followed by up to three years of supervised release. Each count also carries a fine of up to $250,000. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines, and order the defendant to pay full restitution to Midwest Community Bank and Associated Bank.
The public is reminded that an indictment 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.
The investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force consisting of law enforcement officers and agents from the FBI, Rockford Police Department, Loves Park Police Department, and Freeport Police Department.
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 Field Office of Federal Bureau of Investigation; and Dan O’Shea, Chief of the Rockford Police Department.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Machesney Park Man Charged in Federal Court with Armed RobberiesRead the Press Release
ROCKFORD — A Machesney Park man was indicted Tuesday by a federal grand jury in Rockford for the armed robberies of a convenience store and a bank.
DAVID M. BANEY, 32, was charged with one count of armed robbery, one count of armed bank robbery, and two counts of using and carrying a firearm during a crime of violence. According to the indictment, on Jan. 11, 2018, Baney used a semi-automatic pistol to rob Kelley’s Market/Mobil gas station on North Second Street in Machesney Park, of $170 in cash and two cartons of cigarettes. The indictment further alleges that on the same day Baney used a revolver to rob a Chase Bank on North Alpine Road in Loves Park, of $24,402.
Baney is currently in custody at the Winnebago County Jail on state charges related to the robbery of Kelley’s Market. He will appear in federal court in Rockford today at 10:00 a.m. for an initial appearance before U.S. Magistrate Judge Iain D. Johnston.
Armed bank robbery carries a maximum potential penalty of up to 25 years in prison, to be followed by up to five years of supervised release, while armed robbery carries a maximum potential penalty of up to 20 years in prison, to be followed by up to three years of supervised release. The first charge of using and carrying a firearm during a crime of violence carries a minimum consecutive sentence of seven years in prison, and the second charge of using and carrying a firearm during a crime of violence carries a minimum consecutive sentence of 25 years in prison. Each charge also carries a fine of up to $250,000. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines, and order the defendant to pay full restitution to Kelley’s Market/Mobile gas station and Chase Bank.
The public is reminded that an indictment 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.
The investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force consisting of law enforcement officers and agents from the FBI, Rockford Police Department, Loves Park Police Department, and Freeport Police Department. Officers from the Loves Park Police Department and the Winnebago County Sheriff’s Department participated in the investigation.
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 Field Office of Federal Bureau of Investigation; Gary Caruana, Winnebago County Sheriff; and Chuck Lynde, Chief of the Loves Park Police Department.
The government is represented by Assistant U.S. Attorney John G. McKenzie.
Chicago Futures Trader Pleads Guilty to Causing More Than $13 Million in Losses from Fraudulent Trading SchemeRead the Press Release
CHICAGO — A Chicago futures trader admitted in federal court that he caused more than $13 million in losses through a fraudulent trading scheme that resulted in the collapse of his firm.
THOMAS LINDSTROM used deep out-of-the-money options on ten-year Treasury Note futures to make it fraudulently appear that his trading at Chicago-based Rock Capital Markets LLC was profitable, thereby obtaining greater financial compensation for himself. Over a six-month period in 2014 and 2015, Lindstrom obtained compensation of $285,000, while his fraud scheme caused a loss of more than $13.7 million and led to the collapse of Rock Capital.
Lindstrom, 55, of Winnetka, pleaded guilty Tuesday to one count of wire fraud. U.S. District Judge Harry D. Leinenweber set sentencing for June 19, 2018. Lindstrom acknowledged in the plea agreement that at the time of sentencing, the Court will order him to make full restitution in the amount of $13,776,518.
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. The government is represented by Assistant U.S. Attorney Sunil Harjani and Special Assistant U.S. Attorney Lindsey Evans of the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago. The Commodity Futures Trading Commission, which filed a civil enforcement lawsuit against Lindstrom, provided assistance.
A tick is the minimum price increment at which an option on a futures contract could trade. Prior to 2016, the Chicago Board of Trade set the minimum settlement value of all options on futures contracts at one tick, even if the actual value of the option was considerably less. For options on ten-year Treasury Note futures contracts, one tick was approximately $15.63.
Lindstrom admitted in a plea agreement that he acquired hundreds of thousands of deep out-of-the-money options on ten-year Treasury Note futures, and on certain occasions he used spread transactions to pay effectively less than one tick apiece. Lindstrom made the trades knowing that these options would likely expire worthless – resulting in losses – but would temporarily appear to have substantial value in his trading account because the minimum settlement value was one tick.
Lindstrom concealed the scheme by telling Rock Capital’s owner that the options were profitable, when in reality Lindstrom’s trading was causing substantial losses.
Wire fraud is punishable by a maximum sentence of 20 years in prison. The Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
North Suburban Businessman Guilty of 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 has pleaded guilty to willfully failing to pay more than $800,000 in personal and corporate income taxes.
JORDAN ECKERLING, the owner of Pagecomm of Illinois Inc., admitted in a plea agreement 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, the plea agreement states. Eckerling also caused the company to directly pay a housekeeper to regularly clean Eckerling’s boat and his primary and secondary residences, the plea agreement states. Eckerling also charged personal expenses to Pagecomm’s credit card accounts, including for a family vacation to Cancun, Mexico.
Eckerling, 52, of Highland Park, pleaded guilty Wednesday to one count of tax evasion. The conviction is punishable by up to five years in prison and a fine of up to $100,000. U.S. District Judge Virginia M. Kendall set sentencing for May 17, 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; 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.
In addition to the tax evasion, Eckerling admitted in his plea agreement that he added a relative to the payroll of Pagecomm and its successor company, PCW Holdings Inc., even though the relative was employed elsewhere and did no work for either company. Eckerling did this so that he could obtain health insurance for his family under the relative’s name instead of his own, thereby concealing that he was an income-earning employee of the companies, the plea agreement states.
The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.
Indiana Man Sentenced to 8 Years in Federal Prison for Bringing Guns and Ammunition to Chicago Area and Illegally Selling ThemRead the Press Release
CHICAGO — An Indiana man has been sentenced to eight years in federal prison for bringing firearms and ammunition across the border into Chicago and illegally selling them.
DARICK HUDSON, 47, of Michigan City, Ind., sold six firearms and ammunition on three occasions in the fall of 2015. The weapons included five handguns and a rifle. Unbeknownst to Hudson, the buyer was cooperating with law enforcement.
Hudson also agreed to sell to the cooperating individual four additional firearms – two shotguns, a rifle and a handgun – but he fled from the transaction location when Chicago Police officers approached his vehicle. Hudson drove into Indiana, where law enforcement officers ultimately stopped his vehicle and apprehended him.
Hudson previously pleaded guilty to illegal possession of a firearm by a felon. On Jan. 10, 2018, U.S. District Judge Rebecca R. Pallmeyer imposed a 96-month prison sentence.
The sentence 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 and Explosives; and Eddie Johnson, Superintendent of the Chicago Police Department. The LaPorte County (Ind.) Sheriff’s Office and the Lake County (Ind.) Sheriff’s Office provided valuable assistance.
“The defendant trafficked in and attempted to profit from violence,” Assistant U.S. Attorney Brian S. Wallach argued in the government’s sentencing memorandum. “There is a need to make clear to individuals who find themselves in a similar position that a decision to pick up firearms – whether for personal use or to sell – will have serious consequences.”
The three successful sales occurred in October and November 2015. The transactions occurred in a store parking lot on Torrence Avenue in south suburban Lansing, a store on 83rd Street in Chicago, and a store parking lot on River Oaks Drive in south suburban Calumet City. In exchange for the six firearms and ammunition, the informant paid Hudson a total of $2,550 in cash.
The fourth sale was supposed to have occurred in a store parking lot on 79th Street in Chicago. When the informant arrived at the meeting, Hudson directed him to an alternative location – a store on 159th Street in Calumet City. Shortly after Hudson arrived at the new location, Chicago Police officers approached his vehicle, and Hudson fled to Indiana. Law enforcement officers subsequently stopped his vehicle in Michigan City, Ind., and took him into custody.
Suburban Man Sentenced to Ten Years in Federal Prison for Manufacturing Synthetic CannabinoidsRead the Press Release
CHICAGO — A south suburban man has been sentenced to ten years in federal prison for manufacturing synthetic cannabinoids into a smokeable drug known as K2, or “spice.”
KHALID HAMDAN, 51, of Justice, mixed the synthetic cannabinoids with leaves and other substances to create the drug. Hamdan then sold wholesale quantities of the drug to customers under various brand names, including “Diablo,” “Bomb Marley,” “Joker,” and “7H Hydro.”
U.S. District Judge Manish S. Shah on Tuesday sentenced Hamdan to ten years in prison. It is the highest sentence to date in the Northern District of Illinois for manufacturing a synthetic cannabinoid.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Robert Bell, Acting Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration. The Bridgeview Police Department initiated the investigation with the DEA. The Federal Bureau of Investigation’s Cryptanalysis and Racketeering Records Unit also assisted with the investigation.
“Synthetic cannabinoids are often falsely marketed as the ‘legal,’ equivalent alternative to marijuana, but the effects are much stronger, more adverse, and less predictable than marijuana,” Assistant U.S. Attorneys Kelly M. Greening and Matthew Schneider argued in the government’s sentencing memorandum. “Defendant was a large-scale drug trafficker who manufactured and sold kilograms and kilograms of these drugs to customers across Illinois, Indiana and other states.”
A jury last year convicted Hamdan on one count of conspiracy to manufacture the synthetic cannabinoid XLR 11, and two counts of possessing XLR 11 with the intent to distribute.
Evidence at trial showed that Hamdan used storage units in Bridgeview and Chicago Ridge to manufacture and store the XLR 11 chemical and the finished K2 product. A law enforcement search of the Chicago Ridge storage unit in 2014 revealed tools and products for manufacturing the drugs, including the raw XLR 11 powder, cans of acetone, bottles of flavoring, boxes of untreated damiana tea leaves, and boxes for packaging.
Once manufactured, the drug was sold to consumers in baggies with professionally printed, animated designer labels.
Illinois Man Sentenced to Prison for Using Stolen IDs of U.S. Air Force Members to File Fraudulent Tax ReturnsRead the Press Release
A Harvey, Illinois, man was sentenced to 63 months in prison today for his role in a stolen identity refund fraud scheme, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois.
According to documents filed with the court, from around November 2014 to March 2015, Jonathan Herring, 34, working with at least two others, prepared and filed income tax returns with the Internal Revenue Service (IRS) using stolen names and social security numbers of U.S. Air Force service members, and deposited the fraudulently obtained tax refunds into bank accounts that he controlled. In total, Herring filed approximately 225 fraudulent returns seeking approximately $845,979 in tax refunds.
In addition to the term of imprisonment, Herring was ordered to serve four years of supervised release and to pay $593,786 in restitution to the IRS. Herring pleaded guilty to wire fraud and aggravated identity theft in February 2016.
Principal Deputy Assistant Attorney General Zuckerman and U.S Attorney Lausch thanked agents of IRS Criminal Investigation, who conducted the investigation and Trial Attorneys Michael C. Boteler and Timothy M. Russo of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Convicted Felon Sentenced to More Than 19 Years in Federal Prison for Illegally Possessing a Loaded Handgun on Chicago’s West SideRead the Press Release
CHICAGO — A convicted felon has been sentenced to more than 19 years in federal prison for illegally possessing a loaded handgun during a traffic stop on the West Side of Chicago.
DEMONE RULE, 37, of Chicago, possessed the gun on the evening of Dec. 27, 2015, in the city’s Austin neighborhood. Rule had previously been convicted of several felonies, including attempted murder, and was not legally allowed to possess a firearm.
A jury last year convicted Rule on one count of illegal possession of a firearm by a felon. U.S. District Judge John Robert Blakey on Thursday imposed a 235-month prison sentence after determining Rule’s status as an Armed Career Criminal under federal law. The Armed Career Criminal Act of 1984 provides for enhanced penalties for firearm offenses committed by felons who were previously convicted of certain crimes three or more times.
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 T. Johnson, Superintendent of the Chicago Police Department. The Illinois Department of Corrections provided valuable assistance.
“Defendant kept a loaded gun in his waistband in Chicago, a city plagued by gun violence, endangering our communities,” Assistant U.S. Attorneys Misty N. Wright and Devlin Su argued in the government’s sentencing memorandum. “Defendant and other felons who carry guns must understand that illegally possessing weapons on the streets of Chicago translates to real consequences and real punishment, including meaningful time in prison.”
According to evidence at trial, Chicago Police officers observed Rule commit a traffic violation by using an alley as a thoroughfare. The officers pulled over the green Buick Rule was driving, but when they approached his car, Rule sped off. Several blocks away, Rule stopped his car in the middle of the street with the keys still in the ignition, and fled on foot. Officers caught up with Rule in a nearby vacant lot, put him in handcuffs and recovered the gun from his waistband. The firearm had six live rounds in the magazine, and one in the chamber.
Attorney General Jeff Sessions Selects Northern District of Illinois to Receive Three New Assistant U.S. Attorney Positions to Combat Violent CrimeRead the Press Release
CHICAGO — Attorney General Jeff Sessions has selected the Northern District of Illinois to receive additional resources for the fight against violent crime. The Northern District of Illinois will receive three additional Assistant U.S. Attorney positions to focus exclusively on violent crime. Nationally, 40 new federal prosecutors will be assigned to 27 districts throughout the United States.
“Led by our 94 United States Attorney’s Offices, Project Safe Neighborhoods task forces are hitting the streets across America to apprehend and bring violent criminals to justice,” said Attorney General Sessions. “I have asked Congress for additional PSN funding because I believe nothing will be more effective at reducing violent crime. Under this program, I am asking a great deal of our United States Attorneys. I am both empowering them and holding them accountable for results. To put them in the best position to impact and reduce violent crime, it is my privilege to announce that through a re-allocation of resources, we will be enlisting and deploying 40 additional violent crime prosecutors across the United States."
“We welcome the additional resources,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. “Our Assistant U.S. Attorneys work tirelessly to prosecute violent offenders and reduce violent crime in Chicago and throughout northern Illinois, and these new positions will strengthen those efforts."
Under the Attorney General’s re-allocation, the Northern District of Illinois and the District of Maryland received the highest number of new Assistant U.S. Attorney positions.
New AUSA Positions by District
Northern District of Alabama - 1
Eastern District of Arkansas - 1
Northern District of California - 2
Southern District of California - 1
District of Connecticut - 1
District of Columbia - 1
Central District of Illinois - 1
Northern District of Illinois - 3
Southern District of Indiana - 1
Eastern District of Louisiana - 1
District of Maryland - 3
Western District of Michigan - 1
Eastern District of Missouri - 2
Western District of Missouri - 1
District of Nevada - 2
District of New Mexico - 1
Eastern District of New York - 2
Western District of New York - 1
Northern District of Ohio - 2
Eastern District of Pennsylvania - 1
Middle District of Tennessee - 2
Western District of Tennessee - 2
Eastern District of Texas - 1
Northern District of Texas - 1Federal Jury Convicts Leader of Armed Robbery Crew in Nine Heists of Chicago Retail Stores and BusinessesRead the Press Release
CHICAGO — A federal jury has convicted a Chicago man of leading an armed robbery crew that targeted retail stores and businesses on the city’s North and Northwest Sides.
ROBERT L. BERRIOS, 50, committed the nine armed robberies in 2012. His crew mainly struck at cellular telephone stores, often terrorizing store employees by wearing masks and brandishing firearms. In some of the heists, the robbers physically restrained store employees with zip ties. The heists netted the crew tens of thousands of dollars in cash and cell phones.
After an eight-day trial in federal court in Chicago, the jury on Thursday convicted Berrios on all twelve robbery, firearm and conspiracy charges against him. U.S. District Judge Matthew F. Kennelly set sentencing for March 22, 2018, at 1:30 p.m. Berrios faces a mandatory minimum sentence of 22 years in prison, and a maximum sentence of life in prison.
The conviction 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. The government is represented by Assistant U.S. Attorneys Angel M. Krull and Georgia Alexakis.
All four charged members of the robbery crew have now been convicted. The other charged members, JULIO RODRIGUEZ, 36, DAVID REVIS, 37, and LUIS DIAZ, 33, all of Chicago, previously pleaded guilty and admitted their roles in the heists. Revis was sentenced to 15 years in prison and Diaz was sentenced to three years. Rodriguez is awaiting sentencing.
Evidence at Berrios’ trial revealed that the crew worked together to identify businesses to target and obtain intelligence about the locations, including store hours and number of employees working at a given time. The crew communicated with one another via cell phone to plan the robberies and procure the necessary tools, including the masks, zip ties, firearms and getaway vehicles.
The jury convicted Berrios of leading the crew in nine robberies:
July 1, 2012: Walgreens store, 5935 W. Addison St., Chicago.
July 28, 2012: Currency Exchange, 2753 N. Ashland Ave., Chicago.
Aug. 15, 2012: Currency Exchange, 2814 N. Milwaukee Ave., Chicago.
Sept. 19, 2012: T-Mobile store, 1552 W. Chicago Ave., Chicago.
Sept. 28, 2012: T-Mobile store, 1958 W. Irving Park Rd., Chicago.
Oct. 2, 2012: T-Mobile store, 4000 W. Fullerton Ave., Chicago.
Oct. 13, 2012: T-Mobile store, 3951 N. Kimball Ave., Chicago.
Oct. 16, 2012: Cricket store, 3200 W. Armitage Ave., Chicago.
Oct. 22, 2012: AT&T store, 3955 W. Belmont Ave., Chicago.
Lake in the Hills Man Indicted on Child Pornography ChargesRead the Press Release
ROCKFORD — A man from Lake in the Hills has been indicted by a federal grand jury in Rockford on charges of child pornography.
PAUL W. CHRISTMANN, 50, was charged Tuesday with two counts of transporting child pornography via the internet in 2013, and one count of possessing two computers in 2017 containing images of child pornography.
Each count of transporting child pornography carries a mandatory minimum sentence of five years and a maximum of 20 years in prison, and possessing child pornography carries a maximum of up to ten years in prison. Each count carries a $250,000 maximum fine. If Christmann is 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 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 indictment 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 Federal Bureau of Investigation in Chicago. The McHenry County Sheriff’s Office and Internet Crimes Against Children Task Force assisted in the investigation.
The government is represented by Assistant U.S. Attorney Michael D. Love.
United States Files Suit Against North Suburban Diagnostics Company for Allegedly Billing Medicare for Unnecessary Home Sleep TestsRead the Press Release
CHICAGO — The United States has filed a civil lawsuit accusing a north suburban diagnostics company of defrauding Medicare out of millions of dollars through kickbacks and unnecessary home sleep testing.
The suit alleges that SNAP DIAGNOSTICS LLC, its founder, GIL RAVIV, and its marketing vice president, STEPHEN BURTON, violated the federal False Claims Act by fraudulently billing Medicare for medically unnecessary services and for services that were occasioned by kickbacks. The suit alleges that Raviv directed SNAP to submit claims for Medicare recipients’ second and third nights of home sleep testing when, in fact, the company knew that only a single night of testing was needed to effectively diagnose obstructive sleep apnea and it routinely tested and claimed only the one night for non-Medicare beneficiaries. SNAP’s business model also relied on several unlawful kickback schemes, which incentivized physicians and their staffs to refer all of their home sleep testing services to SNAP, the suit alleges.
The government’s complaint was filed Monday in U.S. District Court in Chicago. On Oct. 18, 2017, the government notified the Court that it was intervening in two separate lawsuits, each initially filed under seal by a private citizen pursuant to the qui tam, or whistleblower, provisions of the False Claims Act.
The lawsuit 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. Department of Health and Human Services, the U.S. Railroad Retirement Board, and the U.S. Office of Personnel Management assisted in the investigation. The government is represented by Assistant U.S. Attorney Sarah J. North.
Wheeling-based SNAP is a nationwide provider of home sleep testing diagnostic services. SNAP’s home sleep tests are covered by Medicare when medically necessary to diagnose obstructive sleep apnea, a common disorder in which airflow is obstructed during sleep. Home sleep testing utilizes a portable monitor, unattended and initiated by the patient, to collect information about breathing and oxygen levels while the patient sleeps at home. The testing assists physicians in diagnosing apnea and establishing a treatment plan.
According to the government’s lawsuit, SNAP paid commissions and bonuses to its sales force for selling the multi-night testing to providers, and it gave free home sleep tests to physicians and their families to induce referrals. After the testing was performed, SNAP personnel interpreted the results and gave unsigned reports to referring physicians, who in turn would bill as if the physicians had performed the professional service of interpreting the results themselves, the suit states. The suit contends that SNAP intentionally allowed physicians to fraudulently bill for this service as a way of increasing referrals and driving the volume of SNAP’s business.
Since Medicare began covering home sleep testing in 2009, SNAP has received nearly $9 million from Medicare, almost all of it the result of fraud and kickbacks, according to the suit.
The False Claims Act permits private individuals to sue for false claims on behalf of the government and to share in any recovery. The Act also allows the government to intervene or take over the lawsuit, as it has done in this case, and to recover three times its damages plus civil penalties ranging from $5,500 to $11,000 for each false claim submitted by the defendants.
The public is reminded that civil allegations are accusations only, and there has been no determination of liability.