Northern District of Illinois

CHICAGO — An Ohio man will be arraigned today on a federal drug charge in the first Chicago-area prosecution related to the synthetic opioid carfentanil.

CLIFFORD REED allegedly purchased multi-kilogram quantities of heroin from various sources in Chicago, and then mixed it with carfentanil to increase the amount of heroin he could distribute.  Carfentanil is a synthetic opioid listed federally as a Schedule II controlled substance.  The drug is approximately 100 times stronger than fentanyl and approximately 10,000 times stronger than morphine.  Carfentanil is most frequently used as a tranquilizer for elephants and other large mammals in zoos and wildlife environments.

Reed, 27, of Cincinnati, Ohio, was indicted earlier this month by a federal grand jury in Chicago on one count of distributing a kilogram or more of a substance containing a mixture of heroin, fentanyl and carfentanil.  His arraignment is scheduled for 1:30 p.m. today before U.S. District Judge Sara L. Ellis.

The indictment was announced by Zachary T. Fardon, 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 Illinois State Police provided assistance in the investigation.

“Investigating heroin and opioid trafficking is the number one narcotics enforcement priority in our office,” said U.S. Attorney Fardon.  “Carfentanil-laced narcotics pose an extremely serious threat to our communities, and anyone who attempts to distribute it will be held accountable.”

“Carfentanil is an insidious opioid with deadly consequences for users and first responders alike,” said Special Agent-in-Charge Gibbons. “This is the first carfentanil case to be charged in federal court here, clearly demonstrating the tenacity with which HSI is combatting the ongoing epidemic affecting our country.  We are committed to protecting public safety by keeping this dangerous substance out of our communities and holding those responsible for fueling this public health crisis to the fullest extent of the law.”

The federal investigation revealed that Reed traveled to the South Side of Chicago earlier this year to distribute carfentanil-laced heroin to an individual who, unbeknownst to Reed, was cooperating with law enforcement, according to a criminal complaint and affidavit previously filed in the case.  The transaction between Reed and the cooperating source occurred on Sept. 9, 2016, in a vehicle near 93rd Street and Stony Island Avenue, the complaint states.  Shortly after the audio-recorded deal, law enforcement officers stopped the vehicle and arrested Reed on an outstanding warrant from Ohio, the complaint states.  The officers seized from the vehicle approximately one kilogram of the carfentanil-laced heroin, according to the complaint.

Federal authorities recently took custody of Reed and transported him to Chicago for the arraignment.  His indictment marks the first time a defendant has been charged in the Northern District of Illinois with distributing carfentanil-laced heroin.

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 distribution count in the indictment is punishable by a mandatory minimum sentence of ten years in prison, and a maximum sentence of life.  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 Christopher Hotaling.

CHICAGO — The owner of two recycling businesses was arrested today for allegedly operating a multi-million dollar fraud scheme involving the illegal landfilling or re-selling of potentially hazardous electronic waste.

BRIAN BRUNDAGE, the former owner of Intercon Solutions Inc. and the current owner of EnviroGreen Processing LLC, caused thousands of tons of e-waste and other potentially hazardous materials to be landfilled, re-sold to customers who shipped the materials overseas, or stockpiled, according to an indictment returned in U.S. District Court in Chicago.  Brundage fraudulently misrepresented to his customers that the materials had been disassembled and recycled in an environmentally sound manner, the indictment states. 

The indictment was returned earlier this month and ordered unsealed after Brundage's arrest this morning.  The indictment charges Brundage, 45, of Dyer, Ind., with five counts of income tax evasion, four counts of mail fraud and two counts of wire fraud.  He is scheduled to make an initial appearance at 3:00 p.m. today before U.S. Magistrate Judge M. David Weisman in Chicago.

The indictment seeks forfeiture of $10 million in cash.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John K. Gauthier, Acting Special Agent-in-Charge the U.S. Environmental Protection Agency’s Criminal Investigation Division in Chicago; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division; James M. Gibbons, Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Carol Fortine Ochoa, Inspector General of the U.S. General Services Administration.

According to the indictment, several private companies and governmental entities hired Chicago Heights-based Intercon and Gary, Ind.-based EnviroGreen for the disassembly, recycling or destruction of e-waste and other materials.  The customer agreements stipulated that Intercon and EnviroGreen would handle all materials in an environmentally sound manner, without landfilling or exporting, and without reselling the materials in whole form.  Intercon specifically represented that it engaged in “absolutely no reselling, no remarketing, no landfilling, no incineration, and no exportation,” the indictment states.

Unbeknownst to their customers, Intercon and EnviroGreen for more than a decade knowingly sold the e-waste and other materials, including potentially hazardous glass and batteries, to vendors whom Brundage knew would ship the materials overseas.  Some of the materials contained Cathode Ray Tubes, which are the glass video display components of certain electronic devices, such as computer and television monitors, and which contain potentially hazardous amounts of lead, according to the indictment.  The indictment further alleges that Brundage caused multiple tons of CRT glass and other potentially hazardous materials to be destroyed in environmentally unsafe ways and later landfilled, all in direct contravention to Intercon’s public representations regarding its recycling practices.

At one point in 2011, Intercon was publicly accused of shipping potentially hazardous materials to Hong Kong.  In response, Brundage began a fraudulent effort to publicly deny and conceal Intercon’s involvement in the shipment, the indictment states.  Brundage destroyed business records related to the shipment and made efforts to conceal other overseas shipments of large quantities of e-waste, according to the indictment.  The fraud scheme continued for another five years, the indictment states.

The tax charges relate to Brundage’s efforts to evade paying thousands of dollars in income taxes during the scheme, according to the indictment.  Brundage often caused Intercon to pay his own personal expenses, including wages for his nanny and payments to the Horseshoe Casino in Hammond, Ind., while later deducting the expenditures as business expenses on Intercon’s corporate tax returns, the indictment states.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. 

Each count of income tax evasion is punishable by up to five years in prison.  The wire fraud and mail fraud counts each carry a maximum sentence of 20 years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Sean J.B. Franzblau and Special Assistant U.S. Attorney Crissy Pellegrin.

ROCKFORD — A California man claiming to have been a Navy SEAL was sentenced today by U.S. District Judge Philip G. Reinhard to federal prison for defrauding non-profit organizations.  

WILLIAM J. BURLEY, 36, formerly of Yucaipa, Calif., was sentenced to three years in federal prison, to be followed by three years of supervised release for defrauding International Aid Services – USA Inc. (IAS America), a non-profit organization located in Crystal Lake, and International Aid Services (IAS International), a non-profit organization based in Stockholm, Sweden.  Burley was also ordered to pay full restitution of $32,454 to IAS America.  Burley pleaded guilty on Aug. 30, 2016, to wire fraud.

In his written plea agreement, Burley admitted that between July 17, 2012, and Oct. 8, 2012, he devised a scheme to defraud IAS America and IAS International.  The two non-profit organizations provided relief to, and assistance in, the economic development of poverty-stricken individuals in Africa.  On July 11, 2012, while doing humanitarian work, four IAS International workers were ambushed and assaulted in Somalia.  Three of the workers, including a woman, were kidnapped.  The fourth worker was shot and left behind.

Burley approached IAS International and offered to assist it in negotiating with the Somali captors for the release of the employees and, if necessary, to assist in the rescue of the captives.  In so doing, Burley claimed to have been a former Navy SEAL and to have received numerous citations while in the Navy, including a Presidential Unit Citation, an Afghanistan Campaign Medal, a Silver Lifesavings Medal, and a Global War on Terrorism Medal. 

All of those claims were false.  The defendant also falsely claimed to have attended the University of Delaware and University of Maryland and to have been a consultant for the Navy, the Department of Defense, and the Department of State.

Burley was able to convince IAS America to pay him $30,000 and to pay for his travel expenses to Kenya.  At Burley’s request, IAS America also paid for another individual to fly to Kenya to assist Burley in Burley’s efforts to either negotiate with the Somali pirates or to arrange for a rescue operation.  When he was unable to obtain the release of the hostages, Burley returned to the United States.  In September 2012 he went to Crystal Lake, where he presented a “rescue plan” for the hostages to IAS America and made additional false representations about his past achievements.  When IAS America learned that Burley was not a SEAL, it ended its relationship with him.

The three hostages in Somalia were not released until May 2014.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The government was represented by Assistant U.S. Attorney John G. McKenzie.

CHICAGO — A suburban investment advisor has been indicted on federal fraud charges for allegedly allocating profitable trades to his personal accounts while assigning unprofitable trades to his clients.

CHARLES J. DUSHEK, the president of Lisle-based Capital Management Associates Inc., placed more than $400 million in securities trades without designating in advance whether he was trading personal funds or client funds, according to the indictment.  He then waited up to five days to allocate the trades so that he could select the profitable ones for his personal accounts and assign the losing trades to the accounts of unsuspecting clients, the indictment states.  From July 2008 to August 2012, Dushek withdrew from his personal accounts more than $1 million in gains realized from the scheme, according to the indictment.

The ten-count indictment was returned Wednesday in U.S. District Court in Chicago.  It charges Dushek, 72, of Warrenville, with nine counts of securities fraud and one count of employing a scheme to defraud a client.  Arraignment has been scheduled for Dec. 20, 2016, at 9:30 a.m., before U.S. District Judge Virginia M. Kendall.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The U.S. Securities and Exchange Commission, which previously filed a civil enforcement lawsuit against Dushek, provided valuable assistance.

According to the indictment, Dushek made more than 16,000 purchases of publicly traded securities valued at more than $400 million at the time of purchase.  The purchases included shares in Walgreens, Avon Products, British Petroleum, Caterpillar and PepsiCo.  Dushek maintained spreadsheets that identified whether particular trades should be allocated to client accounts or his personal account, knowing that he had manipulated the allocations by waiting one to five days after the trades were complete before allocating them, the indictment states.  The delay fraudulently ensured that profitable trades were allocated to Dushek’s personal accounts while unprofitable trades were assigned to client accounts, the indictment states.

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. 

Each count of securities fraud is punishable by up to 25 years in prison.  Employing a scheme to defraud a client carries 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.

The government is represented by Assistant U.S. Attorneys Rick Young and Kruti Trivedi.

CHICAGO — An Oklahoma man has been sentenced to 25 years in federal prison for producing sexually explicit images of children with whom he communicated online.

In several online conversations in 2014 and 2015, TODD NOBLE persuaded three minor girls to take sexually explicit photographs and videos of themselves.  He then convinced the girls to send the images to him via text message or online messaging service.  Several of the images depicted the victims’ private areas. 

Noble was arrested in April 2015 after the parents of one of the girls, who lived in Evanston, discovered the images on their child’s iPhone.

Noble, 51, of Lindsay, Okla., pleaded guilty earlier this year to one count of production of child pornography.  U.S. District Judge Andrea R. Wood imposed the sentence Thursday in federal court in Chicago.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

“Defendant preyed upon the most innocent and vulnerable of victims – children,” Assistant U.S. Attorney April M. Perry argued in the government’s sentencing memorandum.  “Defendant invaded the sanctity of these girls’ homes, victimizing them when they were just yards away from their parents who believed that that their daughters were safe.” 

The Evanston victim was eleven years old when Noble began communicating with her online.  In numerous conversations over the course of several weeks, Noble asked her to take sexually explicit photos and videos of herself and send them to him.  According to Noble’s plea agreement, in one conversation the girl told him she was “not so sure,” and that she had “never done it before.”  Noble responded with instructions on how to make the images more sexually explicit, the plea agreement states.

Noble admitted in the plea agreement that he engaged in similar online conduct with minor girls from Texas and Oklahoma.  Noble told those girls that he was a teenager, and he sent the Oklahoma victim a photograph of what appeared to be a teenage boy, the plea agreement states.

The government is represented by Ms. Perry.

ROCKFORD — A former union local president was sentenced today by U.S. District Judge Philip G. Reinhard to federal prison for embezzling from the union.  

DAVID FLEURY, 50, of Rockford, was sentenced to two years in federal prison, to be followed by three years of supervised release. Fleury was also ordered to pay full restitution of $318,036 to Local 6 of the International Union of Bricklayers and Allied Craftworkers.  Judge Reinhard granted the government’s request that it use funds in Fleury’s retirement account to pay restitution.  Fleury had pleaded guilty on August 9, 2016, to embezzlement.

Fleury was the president of Local 6 from 2009 until 2015.  In his written plea agreement, Fleury admitted that between January 2011 and May 2015, he embezzled over $250,000 from Local 6.  He did so, according to the plea agreement, by having additional salary checks paid to him, using a union credit card for his personal expenses, siphoning off union dues that had been paid in cash, and using his union credit card to pay for travel expenses related to various union funds and keeping the reimbursements he received from those funds.  Fleury admitted to using the embezzled monies to pay for personal expenses, including vacations and gambling at casinos.  Fleury also admitted to signing false reports with the United States Department of Labor.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Purcell, District Director of the Chicago office of the United States Department of Labor – Office of Labor-Management Standards.

The government was represented by Assistant U.S. Attorney John G. McKenzie.

ROCKFORD — A Belvidere man was sentenced Wednesday on firearms charges by U.S. District Judge Philip G. Reinhard. 

MICHAEL TAPIA, 26, was sentenced to a total of 20 years in federal prison and to three years of supervised release following imprisonment.  Tapia did not appear at the sentencing and was sentenced in absentia after Judge Reinhard found that Tapia was knowingly and voluntarily absent.

On Aug. 25, 2016, following a four-day jury trial, Tapia was found guilty of one count of conspiring to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition; one count of receiving, possessing, concealing, and storing stolen firearms and ammunition; and one count of illegally possessing firearms and ammunition as a convicted felon.  

Three other area men who were also charged in the case previously pleaded guilty to firearm charges: TEOVANNI CUNNINGHAM, 32, of Rockford, MICHAEL SCHAFFER, 34, and DARRELL REED, 28, both of Byron.

According to the indictment and evidence at trial, on Dec. 31, 2012, Tapia and Cunningham broke into a residence in northern Illinois and stole over 21 firearms and ammunition.  Tapia and Cunningham later transferred some of the stolen firearms to their co-defendants and stored some of the firearms at other locations. 

Cunningham pleaded guilty on May 31, 2016, to conspiring to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition; receiving, possessing, concealing, and storing stolen firearms and ammunition; and illegally possessing firearms and ammunition as a felon.  Cunningham was sentenced on Sept. 20, 2016, to a total of 188 months in federal prison, to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $12,723.99.

Reed pleaded guilty on June 15, 2016, to receiving, possessing, concealing, storing, selling, and disposing of stolen firearms, and was sentenced on Oct. 17, 2016, to one year and one day in federal prison, to be followed by 3 years of supervised release, and ordered to pay restitution in the amount of $750.00. 

Schaffer pleaded guilty on June 3, 2016, to conspiring to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition.  Schaffer has not yet been sentenced.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and George Lauder, Acting Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives.  The Federal Bureau of Investigation, Winnebago County Sheriff’s Department, Rockton Police Department and Rockford Police Department assisted in the investigation.

The government was represented by Assistant U.S. Attorneys Talia Bucci and Michael D. Love.

CHICAGO — A convicted felon who fired a handgun near Wrigley Field pleaded guilty today to a federal firearm charge.

HOYTUAN PIERCE discharged the handgun on Oct. 13, 2015, during a dispute with several individuals in the 3400 block of North Clark Street in Chicago.  No one was injured.  Pierce had previously been convicted of a felony and was not legally allowed to possess the gun. 

The incident occurred at approximately 11:30 p.m.  Earlier that evening at nearby Wrigley Field, the Chicago Cubs defeated the St. Louis Cardinals to clinch the National League Division Series.

Pierce, 33, of Chicago, pleaded guilty in a plea declaration to one count of being a felon-in-possession of a firearm.  The conviction carries a maximum sentence of ten years in prison.  U.S. District Judge Elaine E. Bucklo set sentencing for April 7, 2017.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; George Lauder, Acting Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; and Eddie Johnson, Chicago Police Superintendent.

The government is represented by Assistant U.S. Attorneys Cornelius Vandenberg and Ankur Srivastava.

CHICAGO — A federal grand jury has indicted City of Chicago Alderman WILLIE B. COCHRAN on charges he pocketed money from a charitable fund that was intended to help families and children in his South Side ward.

The 15-count indictment alleges that Cochran used money from the 20th Ward Activities Fund to pay his daughter’s college tuition and to finance his gambling expenses, as well as to purchase items for use in his home.  The indictment also charges Cochran with extorting money from a lawyer and a liquor store owner in exchange for Cochran’s aldermanic support.

The indictment was returned Tuesday in federal court in Chicago.  It charges Cochran, 64, of Chicago, with eleven counts of wire fraud, two counts of federal program bribery, and two counts of extortion.  An arraignment date has not yet been set.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The FBI initiated the investigation after receiving information from the former City of Chicago Legislative Inspector General’s Office, which was headed at that time by Faisal Khan.

“When an elected official uses public power for personal gain, the average citizen pays and our democratic system suffers,” said U.S. Attorney Fardon.  “We will continue to vigorously investigate and prosecute any elected official who attempts to use their office to enrich themselves.”

According to the indictment, Cochran corruptly solicited and demanded $1,500 from an Illinois attorney who represented real estate developers with properties in Cochran’s ward.  Cochran solicited and obtained the money for his continued and future aldermanic support of the developments, which included a property developed under the federal Neighborhood Stabilization Program, according to the indictment.

The indictment also charges Cochran with corruptly soliciting and demanding payment from a 20th Ward liquor store owner who sought an amendment to the Municipal Code of Chicago to allow package goods licenses on the store’s side of South Cottage Grove Avenue.  Shortly after soliciting the payment, the City Council of Chicago in April 2015 passed a Cochran-sponsored amendment that allowed for issuance of the licenses on that block, according to the indictment.

The indictment alleges that Cochran was the sole signatory on a bank account for the 20th Ward Activities Fund, a charitable endeavor that purported to host ward events such as a summer back-to-school picnic, a Valentine’s Day party for senior citizens, and events during the holiday season.  In reality, Cochran used a portion of the money contributed by donors for his own personal use, the indictment states.  These expenses included $5,000 toward his daughter’s college tuition, and approximately $25,000 that Cochran withdrew from automated teller machines in or near casinos where he gambled, according to the indictment.

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.

The charges in the indictment are punishable by a total maximum sentence of 280 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 Heather McShain and Christopher Stetler.

A Chicago man pleaded guilty today to conspiring with his cousin and his cousin’s girlfriend to kill a U.S. citizen at an Indonesian resort in 2014.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division made the announcement. 

Robert Ryan Justin Bibbs, 26, of Chicago, pleaded guilty to one count of conspiracy to commit the foreign murder of a U.S. national before U.S. District Judge Rebecca R. Pallmeyer of the Northern District of Illinois, who set sentencing for March 23, 2017.

According to admissions made in connection with his plea agreement, in 2014, Bibbs’s cousin Tommy Schaefer informed Bibbs that Heather Mack, Schaefer’s girlfriend, had offered Schaefer approximately $50,000 to kill her mother, Sheila Von Wiese.  In approximately late July or early August 2014, Mack told Bibbs that she wished her mother was dead and she asked Bibbs whether he knew someone who would kill her mother in exchange for money.  Bibbs knew that Von Wiese was wealthy and that she and Mack were taking a vacation in Indonesia in early August 2014.  Schaefer had conveyed to Bibbs that Mack was planning to kill her mother while they were overseas and Schaefer intended to travel to Indonesia to join Mack.

According to the plea agreement, while Schaefer waited for his flight to depart O’Hare International Airport, he texted Bibbs, “In about a year or so I’ll have all that money . . . Not all of it . . . A couple mil prob.”  Bibbs understood this to mean that Von Wiese’s murder was imminent, that Schaefer expected to receive millions of dollars as a result of the murder and that he would share some of this money with Bibbs.

According to the plea agreement, after Schaefer arrived in Bali, he informed Bibbs that Mack had unsuccessfully attempted to kill Von Wiese.  Bibbs then texted Schaefer alternative ways to kill Von Wiese, including by drowning her.  A short time later, Schaefer texted Bibbs that, “She wants me to right now . . . While she snoozing,” which Bibbs understood to mean that Mack asked Schaefer to help her kill her mother while Von Wiese was asleep.  In response, Bibbs texted Schaefer, “Go sit on her face wit a pillow then,” suggesting that Schaefer should suffocate Von Wiese.

In addition, Bibbs admitted that Schaefer then texted asking what Bibbs would do, to which Bibbs replied that Schaefer should murder Von Wiese as long as no cameras were present.  Bibbs also counseled Schaefer to be careful and further encouraged his cousin to kill Von Wiese.

A short time later, Schaefer bludgeoned Von Wiese to death, then, with Mack, stuffed Von Wiese’s body into a suitcase, placed the suitcase into a taxi cab and fled the resort.  Schaefer and Mack were subsequently arrested and convicted in Indonesian court, and are serving respective 18- and 10-year sentences in prison.    

The FBI investigated the case.  Trial Attorneys Hope Olds and Christine Duey of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Bolling Haxall of the Northern District of Illinois are prosecuting the case.   

CHICAGO — A Chicago man pleaded guilty in federal court today to charges he aided his cousin and Heather Mack in the 2014 killing of Mack’s mother at an Indonesian resort.

ROBERT RYAN JUSTIN BIBBS, also known as “Ryan Bibbs,” admitted in a plea agreement that he advised his cousin, Tommy Schaefer, and Mack about how to kill Mack’s mother, Sheila A. Von Wiese.  Von Wiese, 62, was bludgeoned to death in her hotel room at the St. Regis Bali resort on Aug. 12, 2014.

Bibbs acknowledged in his plea agreement that he was aware of the couple’s plot to carry out the murder, and he counseled Schaefer on how to get away with it.  Bibbs believed Schaefer would gain access to Von Wiese’s estate through Mack, and that Schaefer would share a portion of the inheritance with him, according to the plea agreement.

Bibbs, 26, pleaded guilty to one count of conspiracy to commit the foreign murder of a U.S. national.  Per the plea agreement, the government and defendant’s counsel have agreed that the maximum sentence will be no more than 20 years in prison.  Other than the agreed maximum prison term, the Court remains free to impose the sentence it deems appropriate.  U.S. District Judge Rebecca R. Pallmeyer set sentencing for March 23, 2017, at 12:00 p.m.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

An Indonesian court in 2015 convicted Schaefer and Mack of charges related to Von Wiese’s murder.  Schaefer was sentenced to 18 years in an Indonesian prison, while Mack was sentenced to ten years.

Evidence discovered by the FBI revealed that Bibbs and Schaefer engaged in several discussions via text message leading up to the killing.  Mack and her mother shared a hotel room, and Schaefer arrived at the resort on the morning of the murder.  Soon after his arrival, Schaefer sent a text message to Bibbs, who was in the United States.  The message stated that Mack had unsuccessfully attempted to kill Von Wiese, the plea agreement states.  Bibbs replied with advice about alternative ways to carry out the murder, including by drowning, the plea agreement states.

Later that morning Schaefer sent a text message to Bibbs, stating, in part, “She wants me to right now… While she snoozing,” which Bibbs understood to mean that Mack had asked Schaefer to help her kill Von Wiese, the plea agreement states.  Bibbs replied to Schaefer, “Go sit on her face wit a pillow then,” according to the plea agreement.  Bibbs intended this message to mean that Schaefer should go and suffocate Von Wiese, the plea agreement states.  Subsequent messages from Bibbs encouraged Schaefer to kill Von Wiese but to be careful while doing so, according to the plea agreement. 

A short time later, Schaefer entered the hotel room occupied by Mack and Von Wiese and bludgeoned Von Wiese to death, the plea agreement states.  Schaefer and Mack subsequently stuffed Von Wiese’s body into a suitcase, placed the suitcase in a taxicab and fled the resort, the plea agreement states.

Schaefer and Mack were arrested the following day by police in Indonesia.  Federal authorities in the U.S. arrested Bibbs on Sept. 23, 2015.

The government is represented by Assistant U.S. Attorney Bolling Haxall, as well as Hope Olds and Christine Duey, trial attorneys from the U.S. Department of Justice’s Human Rights and Special Prosecutions Section.

CHICAGO — A former sergeant in the Chicago Police Department was sentenced today to six months in federal prison for taking cash payments from a liquor store clerk in exchange for disclosing government information.

RAY M. RAMIREZ served as a sergeant in the 12th Police District on the city’s Near West Side.  Ramirez admitted in a plea agreement that he obtained information from law enforcement databases and passed it to the store clerk in exchange for cash payments of $150 to $200.  The information included a criminal background check on a prospective store employee, a vehicle registration check, and a review of police incidents occurring in and around the store.

Ramirez also admitted that he shook down the clerk and other store employees for cash payments ranging from $70 to $200.  Ramirez often wore his police uniform and was on duty when he demanded the payments.

Ramirez, 53, of Chicago, pleaded guilty last year to one misdemeanor count of exceeding his authorized use a police department computer.  U.S. District Judge Ronald A. Guzman imposed the six-month sentence in federal court in Chicago.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

The government is represented by Assistant U.S. Attorney Megan Cunniff Church.

CHICAGO — A convicted felon who sold guns out of his garage in the Auburn Gresham neighborhood of Chicago has been found guilty of illegally possessing firearms.

On July 23, 2014, JAMEL DAVIS participated in a gun transaction involving two .38-caliber revolvers in the garage of his home in the 7600 block of South Seeley Avenue in Chicago.  Davis was previously convicted of a felony and was not legally authorized to possess the firearms.

The case against Davis arose during the course of a larger federal investigation that has removed more than 100 guns from the streets of Chicago.  The probe involved controlled firearm sales to cooperating individuals.

The jury on Wednesday convicted Davis, 28, of illegal possession of a firearm by a felon.  The conviction carries a maximum sentence of ten years in prison.  U.S. District Judge Sara L. Ellis scheduled a sentencing hearing for March 14, 2017.

The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and George Lauder, Acting Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.

Evidence at trial revealed that Davis provided one of the firearms to an individual in the garage of Davis’ home.  Unbeknownst to Davis, the individual was cooperating with law enforcement and had surreptitiously recorded the transaction.

The government is represented by Assistant U.S. Attorneys Nicole Kim and Carol Bell.

CHICAGO — The CEO of a Florida-based financial firm has pleaded guilty to fraud charges in connection with the sale of $179 million in sham loans to a Milwaukee investment company.

NIKESH A. PATEL was the Chief Executive Officer of First Farmers Financial LLC when the company sold three fabricated loans totaling approximately $20 million to a Tennessee-based investment firm, and 26 fabricated loans to a Milwaukee investment firm for $179 million.  Between November 2012 and September 2014, Patel created and assisted in creating false documents sent to the investment firms in support of these loans.  Patel submitted documents to the Milwaukee investment firm that falsely created the appearance that his company had lent money to borrowers in Florida and Georgia – in amounts ranging from $2.5 million to $10 million – and that a portion of the loans were guaranteed by the federal government under a program administered by the U.S. Department of Agriculture.  All 26 loans were completely fabricated with no actual borrower, no pre-existing loan, and no government guarantee.

Patel, 33, of Windermere, Fla., pleaded guilty on Tuesday to five counts of wire fraud.  The conviction carries a maximum sentence of 100 years in prison and a fine of $1,250,000.  U.S. District Judge Charles P. Kocoras set sentencing for April 6, 2017, at 9:45 a.m.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, 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.

First Farmers’ president, TIMOTHY G. FISHER, was also convicted in connection with the fraud.  Fisher, of Pasadena, Calif., pleaded guilty last month to one count of money laundering.  Fisher faces up to ten years in prison when he is sentenced by Judge Kocoras on May 4, 2017, at 9:45 a.m.

Evidence in the case revealed that Patel created fictitious business names and false USDA loan identification numbers, and forged the signatures of USDA employees and purported borrowers.  Patel also assisted in creating false financial documents, including what purported to be a certified audit by a fictitious accountant that he submitted to the investment firm to obtain the funds. 

Based upon the false statements, the Milwaukee firm’s clients, which included community banks, retirement plans, municipalities and subdivisions in Illinois and elsewhere, suffered a loss of $179 million.  Although a portion of the funds were used to make interest payments to the investors, the bulk of the funds were used to pay existing debts, acquire assets, pay personal expenses, invest in other unrelated businesses, and repurchase loans that Patel had previously sold to the Tennessee investment advisor.

The government is represented by Assistant U.S. Attorneys Patrick King and Rick Young.

ROCKFORD — A Solon Mills man was indicted today by a federal grand jury on charges of child pornography. 

WAYNE GIBBONS, 66, was charged with two counts of transporting child pornography via the Internet in June 2013. 

Each count of transporting child pornography carries a mandatory minimum sentence of five years in prison and a maximum of 20 years, as well as a $250,000 maximum fine.  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 Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.

 The government is represented by Assistant U.S. Attorney Michael D. Love.

ROCKFORD — A Rockford man pleaded guilty today before U.S. District Court Judge Frederick J. Kapala to robbery and a gun charge. 

JAMES T. WOODFORD, 25, of Rockford, pleaded guilty to the July 30, 2015, robbery of the Phillips 66 gas station at 4402 Linden Rd. in Rockford, and to possessing a firearm in furtherance of the robbery. 

Also charged with the robbery was co-defendant DAKOTA DIEHL, 21, formerly of Janesville, Wisc.

According to Woodford’s written plea agreement, at approximately 1:13 a.m. on July 30, 2015, Woodford and Diehl ran into the Phillips 66 gas station.  Woodford, who was wielding a 12-gauge shotgun, jumped over the cashier’s counter next to the gas station employee and demanded that the employee give him money from the store’s two cash registers.  Diehl went behind the counter and stole various tobacco products from the store, while Woodford held the firearm next to the employee and forced the employee to empty the cash registers.  Taking approximately $209 and various tobacco products, Woodford and Diehl fled from the Phillips 66 gas station and ran to a getaway vehicle parked nearby.  

Woodford faces a maximum sentence of 20 years’ imprisonment, followed by a term of supervised release of up to three years, for the robbery, and a mandatory minimum sentence of five years and a maximum sentence of life imprisonment for the firearms offense.  The sentence imposed for the firearms offense is required to be consecutive to any other sentence imposed.  Each charge also carries a potential fine of up to $250,000.  Sentencing for Woodford is set for March 6, 2017, at 2:30 p.m.

Diehl previously pleaded guilty to robbing the Phillips 66 gas station with Woodford and to possessing a firearm in furtherance of that robbery.  Diehl also pleaded guilty to robbing a Mobil gas station at 6536 11th St. in New Milford, on two occasions in July 2015.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; Gary Caruana, Winnebago County Sheriff; and Daniel O’Shea, Chief of the Rockford Police Department.

The government is represented by Assistant U.S. Attorney Talia Bucci.

CHICAGO — A high-ranking associate of two Mexican drug trafficking organizations has been sentenced to 27 years in U.S. prison for his role in transporting large amounts of cocaine to the Chicago area.

MANUEL FERNANDEZ-VALENCIA, also known as Manuel Fernandez-Navarro, used the shared resources of the Sinaloa Cartel and the Beltran-Leyva Organization to smuggle large quantities of narcotics into the United States from Mexico.  The cartels covertly transported the drugs via private aircraft, submarines, container ships, fishing vessels, buses, tractor-trailers and automobiles.  The narcotics were initially stashed in safe houses in southern California before being shipped to various parts of the United States, including the Chicago area.  The drug trade was protected by guards armed with handguns and assault rifles.

Fernandez-Valencia, 48, pleaded guilty last year to one count of conspiracy to possess with the intent to distribute controlled substances.  U.S. District Judge Ronald A. Guzman on Wednesday imposed the 324-month sentence in federal court in Chicago.

“The defendant was operating at the very highest levels of large and violent international drug trafficking organizations,” Assistant U.S. Attorney Erika Csicsila argued in the government’s sentencing memorandum.  “The damage that those drugs, and the violence resulting from the drug trade, have caused to communities in Chicago and elsewhere is immeasurable.”

Fernandez-Valencia’s sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Chicago Police Superintendent Eddie Johnson.

The U.S. Attorney’s Office in Chicago has worked closely with federal and local law enforcement agencies to target senior leadership of the Sinaloa Cartel and the Beltran-Leyva Organization.  Fernandez-Valencia is one of more than 20 alleged members of the cartels to be indicted in federal court in Chicago, including the Sinaloa Cartel’s leader, JOAQUIN “CHAPO” GUZMAN, and the former head of the Beltran-Leyva Organization, the late ARTURO BELTRAN-LEYVA.  The Chicago-based investigations have resulted in seizures of approximately $30.8 million, approximately eleven tons of cocaine, 265 kilograms of methamphetamine and 78 kilograms of heroin. 

Fernandez-Valencia has been in custody since his arrest in his native Mexico in 2010.  In his plea declaration, he admitted conspiring with twin brothers from Chicago to distribute cocaine in the fall of 2008.  The twins, PEDRO FLORES and MARGARITO FLORES, operated a Chicago-based wholesale distribution network for both the Sinaloa Cartel and the Beltran-Leyva Organization.  The cocaine was purchased in South America and delivered to Fernandez-Valencia in Mexicali, a city in northwest Mexico, before being smuggled into the U.S., according to his plea declaration.  In three separate raids in November 2008 federal agents seized from Fernandez-Valencia more than a ton of cocaine and more than 93 kilograms of methamphetamine.

The Flores brothers pleaded guilty to federal drug charges in 2012 and were each sentenced to 14 years in prison. 

The government is represented by Ms. Csicsila and Assistant U.S. Attorneys Michael Ferrara, Kathryn Malizia, Georgia Alexakis, Sean Franzblau, and James Durkin.

ROCKFORD — A former Rockford physician was sentenced today by U.S. District Judge Frederick J. Kapala for making false statements in a bankruptcy case. 

LYNN Y. ZOIOPOULOS, also known as Lynn Shelton-Zoiopoulos, 60, now of Chicago, was sentenced to 30 months in federal prison, to be followed by six months of supervised release, and was also ordered to pay restitution of $858,765.68.  Zoiopoulos pleaded guilty to the charge on Feb. 8, 2016. 

According to the written plea agreement, Zoiopoulos filed a Chapter Seven Bankruptcy Petition on Aug. 11, 2009, signing a declaration under penalty of perjury that the schedules she filed in the bankruptcy case were true and correct to the best of her knowledge, information, and belief.  However, as Zoiopoulos admitted in the plea agreement, she had an interest in the estate of her deceased grandmother that she had intentionally concealed in order to deceive the bankruptcy trustee.

In the plea agreement, Zoiopoulos also admitted to defrauding her grandmother’s estate.  According to the plea agreement, Zoiopoulos was appointed Executor of her deceased grandmother’s estate in 2001.  As Executor, Zoiopoulos opened a bank account for the estate with the balance reaching $855,178 in May 2006.  In October 2008, Zoiopoulos used $550,000 of the estate’s money in that account to purchase an annuity contract.  She later embezzled all of the funds in the annuity.  Between June 2008 and November 2012, with the intent to deceive and defraud the estate, Zoiopoulos embezzled assets of the estate by converting them to her own use, knowing she had a fiduciary duty not to use the assets of the estate for her personal benefit.  Zoiopoulos further admitted she tried to conceal her embezzlements by not filing the required inventory, accounting, tax returns, and status reports for the estate.

Zoiopoulos also admitted she intended to conceal her embezzlements by sending $35,000 to her sister for the purpose of lulling her sister into believing the estate was being properly administered.  Along with the payment, Zoiopoulos sent a letter indicating she had invested the rest of the estate money.  Zoiopoulos admitted in the plea agreement that she had not reinvested the money, but had embezzled it, and had sent the letter to her sister for the purpose of preventing her sister from making further inquiries into the status of the estate.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.  

Zoiopoulos must surrender to the authorities on Jan. 27, 2017.

The government was represented by Assistant U.S. Attorneys Michael D. Love and Margaret J. Schneider.

CHICAGO — The chief executive of a publicly-traded consulting firm has been charged in federal court with fraudulently misrepresenting the company’s financial condition and lying to regulators.

NANDU THONDAVADI, the CEO of Schaumburg-based Quadrant 4 System Corp., intentionally misrepresented the firm’s cash flow and concealed its liabilities in filings with the U.S. Securities and Exchange Commission, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Thondavadi certified filings that misrepresented and concealed from the company’s auditors and shareholders the terms of certain acquisitions and the amount of a liability stemming from a lawsuit, the complaint states.  The misrepresentations and concealments were intended to artificially inflate the company’s share price, according to the complaint.

The complaint charges Thondavadi and Quadrant 4’s chief financial officer, DHRU DESAI, with one count of wire fraud and one count of willfully certifying false financial reports.  Thondavadi faces an additional charge of making false statements to the SEC.

Thondavadi, 62, of North Barrington, and Desai, 55, of Barrington, were arrested this morning.  They are scheduled to make initial court appearances today at 11:30 a.m. before U.S. Magistrate Judge Michael T. Mason.

Also this morning, federal authorities executed a search warrant at Quadrant 4’s corporate headquarters in the 1500 block of East Woodfield Road in Schaumburg.

The complaint and arrests were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation.  The SEC assisted in the investigation.

Quadrant 4 has offices in seven U.S. states as well as India.  It provides software products, platforms and consulting services to customers in the healthcare and education sectors.  As a publicly traded company, Quadrant 4 is required to provide to the SEC on a quarterly and annual basis a detailed report of its financial condition.

Federal authorities launched an investigation of the company earlier this year based on indications that the firm’s recent annual reports to the SEC contained false information, the complaint states.  The investigation revealed that Thondavadi and Desai certified the reports even though they knew the documents did not fairly present the true financial condition of the company, according to the complaint.  Thondavadi then lied under oath when questioned by the SEC in May about some of the falsehoods, the complaint states.

The public is reminded that a complaint is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. 

Wire fraud and willfully certifying false financial reports are each punishable by up to 20 years in prison, while making false statements to the SEC is punishable by up to five years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Matthew Madden.

ROCKFORD — A Rockford man has been indicted by a federal grand jury on child pornography charges. 

NATHAN R. TAUCK, 25, was charged Thursday with one count of enticing and coercing a minor victim to engage in sexually explicit conduct that exhibited the minor’s genitals and pubic area for the purpose of producing a visual depiction of the sexually explicit conduct; and four counts of transporting child pornography via the internet. 

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Chicago.

The charge of enticing a minor victim to engage in sexually explicit conduct carries a mandatory minimum sentence of 15 years in prison and a maximum of 30 years, and a $250,000 maximum fine; each count of transporting child pornography carries a mandatory minimum sentence of five years in prison and a maximum of 20 years, as well as $250,000 maximum fine.  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 government is represented by Assistant U.S. Attorney Michael D. Love.

WASHINGTON – The Justice Department filed a civil lawsuit today against the village of Tinley Park, alleging that the southwest suburb violated the Fair Housing Act when it refused to approve a low-income housing development in response to race-based community opposition.

The suit alleges that in 2015, the Buckeye Community Hope Foundation sought to build a 47-unit apartment complex for low-income individuals just outside of Tinley Park’s downtown.  The project would be financed through Low Income Housing Tax Credits administered by the Illinois Housing and Development Authority.  The suit alleges that Tinley Park discriminated against prospective tenants of the proposed development when it refused to approve the project despite the Tinley Park Planning Department’s finding that the project was in “precise conformance” with the applicable building requirements.  Under Tinley Park’s zoning ordinances, Tinley Park’s Plan Commission should have approved the project and allowed construction to begin.  Instead, the lawsuit alleges that in response to vocal and, at times, race-based community opposition, Tinley Park trustees requested the Plan Commission table consideration of the project.  The Plan Commission did so, stalling the project indefinitely.      

“Our office is committed to fighting unlawful discrimination wherever it occurs, including in fair housing,” said United States Attorney Zachary T. Fardon of the Northern District of Illinois.  “Where appropriate, we will pursue local governments that try to reduce affordable housing opportunities for discriminatory purposes.”

“The Fair Housing Act requires that cities make housing-related zoning and land use decisions based on the merits – not on race,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department's Civil Rights Division.  “When discrimination interferes with the housing and zoning approval process, entire communities suffer.”

The lawsuit was filed in the U.S. District Court for the Northern District of Illinois.  The suit seeks a court order requiring Tinley Park to approve the development and to take other action to ensure compliance with the Fair Housing Act.  It also seeks monetary damages for persons harmed by Tinley Park’s actions as well as a civil penalty.  A separate suit brought by Buckeye against Tinley Park is also pending in the Northern District of Illinois.

The lawsuit is an allegation of unlawful conduct.  The allegations must still be proven in federal court. 

The Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.  Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, email the Justice Department at [email protected] or contact HUD at 1-800-669-9777.

The Justice Department filed a civil lawsuit today against the village of Tinley Park, Illinois, alleging that the suburb of Chicago violated the Fair Housing Act when it refused to approve a low-income housing development in response to race-based community opposition.

The suit alleges that in 2015, the Buckeye Community Hope Foundation sought to build a 47-unit apartment complex for low-income individuals just outside of Tinley Park’s downtown.  The project would be financed through Low Income Housing Tax Credits administered by the Illinois Housing and Development Authority.  The suit alleges that Tinley Park discriminated against prospective tenants of the proposed development when it refused to approve the project despite the Tinley Park Planning Department’s finding that the project was in “precise conformance” with the applicable building requirements.  Under Tinley Park’s zoning ordinances, Tinley Park’s Plan Commission should have approved the project and allowed construction to begin.  Instead, the lawsuit alleges that in response to vocal and, at times, race-based community opposition, Tinley Park trustees requested the Plan Commission table consideration of the project.  The Plan Commission did so, stalling the project indefinitely. 

“The Fair Housing Act requires that cities make housing-related zoning and land use decisions based on the merits – not on race,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “When discrimination interferes with the housing and zoning approval process, entire communities suffer.”          

“Our office is committed to fighting unlawful discrimination wherever it occurs, including in fair housing,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.  “Where appropriate, we will pursue local governments that try to reduce affordable housing opportunities for discriminatory purposes.” 

The lawsuit was filed in the U.S. District Court for the Northern District of Illinois.  The suit seeks a court order requiring Tinley Park to approve the development and to take other action to ensure compliance with the Fair Housing Act.  It also seeks monetary damages for persons harmed by Tinley Park’s actions as well as a civil penalty.  A separate suit brought by Buckeye against Tinley Park is also pending in the Northern District of Illinois.
  
The lawsuit is an allegation of unlawful conduct.  The allegations must still be proven in federal court.  

The Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.  Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, email the Justice Department at [email protected] or contact HUD at 1-800-669-9777.

CHICAGO — An Arlington Heights man was sentenced today to five years in federal prison for receiving sexually explicit images of a ten-year-old girl with whom he communicated online.

In several online conversations in 2014, DANIEL SANTIAGO attempted to persuade the girl to engage in sexually explicit conduct.  Santiago eventually received an image over the internet that depicted the child’s private area.  He then uploaded the image to an online file-sharing application that allowed others to view the image.   

Santiago, 25, pleaded guilty in August to one count of knowingly receiving child pornography.  U.S. District Judge Robert W. Gettleman imposed the sentence in federal court in Chicago.

“The evidence shows that Santiago actively sought out child pornography,” Special Assistant U.S. Attorney Jared C. Jodrey argued in the government’s sentencing memorandum.  “The images that are the subject of the charges in this case concern a ten-year-old girl whom Santiago exploited.” 

According to his written plea agreement, Santiago used the file-sharing application to store, access and share other images of child pornography.  He amassed a collection of approximately 2,210 pictures and 25 videos, the plea agreement states.  Santiago admitted that his collection included images of prepubescent minors, as well as sadistic and masochistic conduct, according to the plea agreement.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

The investigation was conducted by the FBI’s Child Exploitation Task Force.  The CETF is part of a nationwide effort known as the Innocence Lost National Initiative targeting the commercial sexual exploitation of children in the United States.  In Chicago, the CETF is composed of FBI special agents and investigators from the Chicago Police Department, the Cook County Sheriff’s Office, and the Cook County State’s Attorney’s Office.

The government is represented by Mr. Jodrey.

CHICAGO — The president of a Florida-based financial firm has pleaded guilty to a money laundering charge in connection with the sale of $179 million in sham loans to a Milwaukee investment company.

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 had been issued to borrowers in Florida and Georgia and were guaranteed in part by the federal government.  In fact, the sham loans, which purportedly had principal amounts ranging from $2.5 million to $10 million, did not exist.  The Milwaukee firm, which purchased the loans as an investment vehicle for its clients, which included community banks, retirement plans, municipalities, and subdivisions in Illinois and elsewhere, suffered a loss of $179 million.

Fisher, 39, of Pasadena, Calif., pleaded guilty on Thursday to one count of money laundering.  The conviction carries a maximum sentence of ten years in prison and a maximum fine of $900,000.  U.S. District Judge Charles P. Kocoras set sentencing for May 4, 2017, at 9:45 a.m.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, 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.

According to his plea agreement, Fisher 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 the bank account belonging to a business in Nevada in connection with an investment in that business.

First Farmers’ chief executive officer, NIKESH A. PATEL, has also been charged in connection with the fraud on the Milwaukee investment business.  Patel allegedly 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 has offices in Florida, Georgia and California, obtained USDA certification after Patel submitted the false statements about the company’s assets and officers, according to his indictment returned last year.

Patel, of Windermere, Fla., has pleaded not guilty to five counts of wire fraud.  His next court appearance before Judge Kocoras is set for Dec. 6, 2016, at 9:45 a.m.

The government is represented by Assistant U.S. Attorneys Patrick King and Rick Young.

Mohammed Hamzah Khan, 21, of Bolingbrook, Illinois, was sentenced to 40 months in federal prison and 20 years supervised release, for attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, by attempting to travel overseas to Syria to join ISIL.

The announcement was made by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Zachary T. Fardon for the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Field Office.

U.S. District Judge John J. Tharp Jr. imposed the 40-month prison term and ordered that it be followed by 20 years of intensive supervised release.  Among the special terms of supervised release, Khan must participate in a mental health treatment program; consent at any time to a search by a probation officer or designated law enforcement official of his home, property and electronic communication devices in his possession and control; attend violent extremism counseling; and comply with the requirements of a computer monitoring program, which includes the installation of computer-monitoring software on all devices in Khan’s possession and control that are capable of accessing the Internet.

Pursuant to the plea agreement, Khan agreed to fully and truthfully cooperate in any matter in which he is called upon by the U.S. Attorney’s Office for the Northern District of Illinois.

Khan, a U.S. citizen from southwest suburban Bolingbrook, has been detained in federal custody since his arrest on Oct. 4, 2014, at O’Hare International Airport in Chicago, Illinois. Khan pleaded guilty to these charges in 2015. According to his plea agreement, beginning no later than about February 2014, Khan used the internet to obtain introductions to ISIL members in Syria and to assist him with traveling there to join the terrorist group. Khan admitted to then speaking with ISIL members to coordinate the logistics of his admission into ISIL-controlled territory.

Khan further admitted in the plea agreement that he knew ISIL had been designated by the U.S. as a foreign terrorist organization. Khan intended to work in Syria under the direction and control of ISIL, and to be under the requirement to take any assignment ISIL gave him.

The case was investigated by the FBI-led Joint Terrorism Task Force (JTTF). The Chicago JTTF is comprised of FBI special agents, the Chicago Police Department officers and representatives from an additional 20 federal, state and local law enforcement agencies. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement Homeland Security Investigations, and the Illinois State Police provided significant assistance in the investigation.

This case was prosecuted by Assistant U.S. Attorneys Matt Hiller, Angel Krull and Sean Driscoll of the Northern District of Illinois, and Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.

CHICAGO — The owner of several Chinese restaurants in the Chicago area was sentenced today to a year and a day in federal prison for withholding taxes by underreporting receipts paid in cash.

HU XIAOJUN, also known as “Tony Hu,” owns and operates several restaurants in Chicago and the suburbs, including the eateries operating under the Lao Sze Chuan brand.  From January 2010 to September 2014, Hu intentionally withheld sales taxes from the Illinois Department of Revenue and the city of Chicago for receipts that customers paid in cash.  Hu deposited the unreported cash into his personal bank account and used the money to pay personal expenses.

All told, Hu hid more than $1 million in taxes from state and local government from more than $9.8 million in cash sales.

Hu, 49, of Chicago, pleaded guilty in May to one count of wire fraud and one count of money laundering.  In addition to the prison term, U.S. District Judge Amy J. St. Eve also fined Hu $100,000.

“Business leaders like the defendant owe a special obligation to abide by our tax laws and pay their fair share,” Assistant U.S. Attorney William Ridgway argued in the government’s sentencing memorandum.  “When they fraudulently hide income it erodes the public’s trust in the tax system.”

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.

The government is represented by Mr. Ridgway.

CHICAGO — A Bolingbrook man was sentenced today to 40 months in federal prison, followed by 20 years of supervised release, for attempting to travel overseas to join a foreign terrorist organization in Syria.

MOHAMMED HAMZAH KHAN, 21, pleaded guilty last year to one count of attempting to provide material support to a foreign terrorist organization.  The organization is identified in a written plea agreement as the Islamic State of Iraq and the Levant (“ISIL”).

U.S. District Judge John J. Tharp Jr. imposed the 40-month prison term and ordered that it be followed by 20 years of intensive supervised release.  Among the special terms of supervised release, Khan must participate in a mental health treatment program; consent at any time to a search by a probation officer or designated law enforcement official of his home, property and electronic communication devices in his possession and control; attend violent extremism counseling; and comply with the requirements of a computer monitoring program, which includes the installation of computer-monitoring software on all devices in Khan’s possession and control that are capable of accessing the Internet.

Pursuant to the plea agreement, Khan agreed to fully and truthfully cooperate in any matter in which he is called upon by the U.S. Attorney’s Office for the Northern District of Illinois.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Mary B. McCord, Acting Assistant Attorney General for National Security; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

Khan, a U.S. citizen from southwest suburban Bolingbrook, has been detained in federal custody since his arrest on Oct. 4, 2014, at O’Hare International Airport in Chicago.  According to his plea agreement, beginning no later than approximately February 2014, Khan used the Internet to obtain introductions to ISIL members in Syria and to assist him with traveling there to join the terrorist group.  Khan admitted speaking with ISIL members to coordinate the logistics of his admission into ISIL-controlled territory, the plea agreement states.

Khan further admitted in the plea agreement that he knew ISIL had been designated by the United States as a foreign terrorist organization.  Khan intended to work in Syria under the direction and control of ISIL, and be required to take any assignment ISIL gave him.

The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of FBI special agents, Chicago Police Department officers, and representatives from an additional 20 federal, state and local law enforcement agencies.  U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), and the Illinois State Police provided significant assistance in the investigation.

The government is represented by Assistant United States Attorneys Matt Hiller, Angel Krull and Sean Driscoll; and U.S. Department of Justice Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.

CHICAGO — A north suburban man who operated a manufacturing business in Wisconsin was sentenced to nine months in federal prison for failing to pay taxes on more than $2.3 million in cash receipts.

HERBERT C. WATTS, the owner and president of Branko Perforating FWD Inc., of Bristol, Wisc., failed to report cash receipts as income on his taxes for the calendar years 2009 to 2014.  During those years, Branko received more than $2.3 million in cash from the sale of scrap metal to a Cicero-based company.  The scrap sales were not reported in Branko’s business records, and the cash income was concealed from accountants who prepared tax returns for Watts and the company.

The case is part an ongoing investigation of cash transactions in the local scrap metal industry that has resulted in several other convictions.

Watts, 70, of Grayslake, pleaded guilty earlier this year to filing a false tax return.  In addition to the nine-month prison term, U.S. District Judge John Robert Blakey on Tuesday fined Watts $10,000.  Prior to sentencing, Watts paid the taxes he owed to the federal government and the state of Illinois.

“Defendant’s conduct was little more than repetitive evasion motivated by greed,” Assistant U.S. Attorney Patrick King argued in the government’s sentencing memorandum.  “Evasion feeds on itself, reducing respect for the integrity of the tax system and leading to more cheating.”

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

CHICAGO — A property manager has been charged in federal court with fraudulently pocketing more than $150,000 in illegal fees from a condominium association in Chicago’s Edgewater neighborhood.

ALAN P. GOLD, the owner and operator of Chicago-based A.P. Gold Realty & Management Inc., overbilled the Edgewater condo association for management services that were never performed, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  He also skimmed from the association’s reserve account by paying himself monies to which he was not entitled, the complaint states.

Gold is suspected of pilfering an additional $750,000 from eight other Chicago condominium associations, according to the complaint.

The complaint charges Gold, 65, of Chicago, with one count of mail fraud.  He was arrested on Nov. 9, 2016, and made an initial appearance that day before U.S. Magistrate Judge Susan E. Cox. Judge Cox ordered Gold released on a $10,000 personal recognizance bond.

The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation.

According to the complaint, Gold had signature authority over the Edgewater condo association’s bank accounts and was supposed to draw a monthly fee of $650 for management services, which included collecting special assessments and paying utility providers.  Gold overbilled the association by withdrawing multiple $650 checks in the same month, and he tapped into its reserve fund to write substantially higher checks to himself, the complaint states.  All told, Gold stole approximately $154,271 from the Edgewater condo association between 2010 and 2014. 

Gold defrauded the other associations in a similar manner, the complaint states.  He concealed the frauds by furnishing fraudulent monthly statements to the condo associations that showed their balances to be higher than they actually were, 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 Vikas Didwania.

CHICAGO — A drug dealer who sold crack cocaine and heroin on Chicago’s West Side and western suburbs was sentenced today to 35 years in prison for trying to murder a federal informant who was assisting law enforcement.

KELSEY JONES and his associates tried to kill the informant on two occasions in the spring of 2014 in retaliation for the informant’s cooperation with the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives.  In the first attempt, Jones’ younger brother, TOBY JONES, fired several shots through the front door of an apartment in the informant’s building in Oak Park.  The informant was not injured, but an innocent victim was wounded.  The second attempt occurred a week later, when Kelsey Jones approached the informant’s vehicle outside of the same building and fired several shots, wounding the informant and another occupant.  Both victims survived, as did the victim of the first shooting.

Kelsey Jones, 40, and Toby Jones, 39, both of Chicago, were convicted earlier this year of conspiring with each other in the attempted murder of the informant, as well as gun and drug charges.  Toby Jones was sentenced in May to 40 years in prison.

“Defendant’s crimes are among the most serious of federal offenses,” Assistant U.S. Attorney Sean J.B. Franzblau argued in the government’s sentencing memorandum in Kelsey Jones’ case.  “When a federal undercover operation disrupted his drug trade, defendant had the audacity to join his brother Toby in an attempt to murder the informant.”

In handing down the sentence today for Kelsey Jones, Judge Amy J. St. Eve also found that he obstructed justice by lying at a 2015 suppression hearing in a failed effort to prevent the jury from hearing about admissions he made to ATF agents after his arrest.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and George Lauder, Acting Special Agent in Charge of the Chicago Field Division of ATF.  The Oak Park Police Department assisted in the investigation.

Testimony at trial revealed that Toby Jones led a small group of cocaine and heroin dealers, and actively sought to obtain firearms in connection with his drug dealing activities.  In December 2013, a confidential informant introduced an undercover ATF agent to Toby Jones, and for the next several months the agent and the informant purchased crack cocaine from him.  Toby Jones also planned to purchase from the undercover agent a firearm with a high-capacity magazine in exchange for crack cocaine. 

On March 26, 2014, Toby Jones sent one of his drug dealers, WESLEY FIELDS, to meet with the undercover agent and purchase the gun.  Fields was arrested by federal authorities shortly after he arrived at the meeting.  Toby Jones thereafter began a week-long effort to track down and murder the confidential informant who set up the deal, culminating in the shootings in Oak Park.

Fields, of Chicago, pleaded guilty to participating in a drug conspiracy and possessing a firearm.  He was sentenced in May to nine years and nine months in prison.

The government is represented by Mr. Franzblau and Assistant U.S. Attorney Brian Hayes.

CHICAGO — The former chief executive of Chicago’s first red-light camera vendor was sentenced today to 30 months in federal prison and over $2 million in restitution for paying bribes to a city official to help procure the contracts.

 

As the CEO of Redflex Traffic Systems Inc., KAREN FINLEY would funnel cash and other financial benefits to the city official, JOHN BILLS, and his friend, MARTIN O’MALLEY, in exchange for improper assistance in awarding city red-light camera contracts to Redflex. The benefits included golf trips, hotels and meals, as well as hiring O’Malley as a highly compensated contractor for Redflex, some of which compensation was passed on to Bills.

The benefits flowed for nearly a decade, during which time the city expanded the Digital Automated Red Light Enforcement Program by awarding millions of dollars in contracts to Phoenix-based Redflex.

 

Finley, 57, of Cave Creek, Ariz., pleaded guilty last year to one count of conspiracy to commit bribery in a federal program. U.S. District Judge Virginia Kendall imposed the sentence in federal court in Chicago.

 

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Joseph M. Ferguson, Inspector General for the City of Chicago; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

 

All three defendants in the federal case have now been convicted and sentenced. Bills was sentenced in August to ten years in prison, while O’Malley was sentenced in September to six months in prison.

 

Redflex’s technology uses cameras to automatically record and ticket drivers who run red lights. The company was awarded its first contract with the city of Chicago in 2003. Over the next eight years, Bills used his influence as a transportation official to expand Redflex’s business with the city, resulting in millions of dollars in contracts for the installation of hundreds of red-light cameras.

 

Finley hired O’Malley as a contractor to ensure that Bills would continue to provide assistance to Redflex in obtaining and expanding contracts with the city. Finley personally signed O’Malley’s contract, which included provisions for lucrative increases in O’Malley’s compensation as new cameras were added. O’Malley testified at Bills’ trial that O’Malley often stuffed money he received from Redflex into envelopes and gave it to Bills during meals in Chicago restaurants. O’Malley also used some of the Redflex money to purchase and pay all expenses on a condo in Arizona that Bills used as his own.

 

The government is represented in the case by Mr. Fardon and Assistant U.S. Attorneys Laurie Barsella and Timothy Storino.

CHICAGO — Two Chicago men have been charged with federal drug and firearm violations for allegedly selling heroin out of a backyard in the North Lawndale neighborhood.

DIANTE DAVIS and MARKIEASE COUSINS were arrested on Oct. 17, 2016, after they sold four zip-lock bags of heroin to an undercover law enforcement officer in the backyard of a residence in the 3400 block of West Lexington Avenue in Chicago, according to a criminal complaint filed in U.S. District Court.  After purchasing the heroin, the undercover officer turned to leave, but Davis called him back and pointed a handgun in the officer’s face, the complaint states.  Davis accused the officer of working for law enforcement, saying “You’re probably recording me right now,” according to the complaint.

As it turned out, the drug deal was indeed surreptitiously videotaped by law enforcement, according to the complaint.  Davis and Cousins were placed under arrest shortly thereafter, the complaint states.  The undercover officer was not harmed.

Davis, 27, and Cousins, 19, are each charged with one count of conspiracy to distribute a controlled substance and one count of carrying a firearm during a drug trafficking crime.  Davis is scheduled to make an initial appearance on Nov. 10, 2016, before U.S. Magistrate Judge Susan Cox.  Cousins is scheduled to appear for a detention hearing on Nov. 14, 2016, before Judge Cox.

The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; and Chicago Police Superintendent Eddie Johnson.  The Illinois State Police assisted in the investigation, which was conducted with the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) Chicago Strike Force and the Chicago High Intensity Drug Trafficking Task Force (HIDTA).

According to the complaint, when Davis was taken into custody he was found to be in possession of a second firearm and additional zip-lock bags of narcotics.  Some of the drugs contained a mix of heroin and fentanyl, while some was cocaine, the complaint states.

The drug conspiracy charge carries a maximum sentence of 20 years in prison, while the firearm count is punishable by a minimum sentence of five years and a maximum of life.  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 defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The government is represented by Assistant U.S. Attorney Erik Hogstrom.

CHICAGO — A Milwaukee man was sentenced today to more than 21 years in federal prison for transporting an underage girl to the Chicago area from Wisconsin to engage in prostitution.

DAJUAN KEY, 31, brought the girl to the Chicago area from Madison, Wisc., in September 2013.  At the time, the victim was 15 years old.  Once in the Chicago area, Key forced the girl to engage in commercial sex acts, with Key keeping all of the money.

A jury in February convicted Key on one count of knowingly transporting a minor from Wisconsin to Illinois to engage in prostitution.  U.S. District Judge Virginia M. Kendall imposed the 262-month sentence in federal court in Chicago.

“All of the defendant’s reprehensible conduct in this case evidences a person driven by greed, willing to engage in manipulation, deception, and psychological abuse, solely for his own personal profit,” Assistant U.S. Attorney Katherine Sawyer argued in the government’s sentencing memorandum. 

Evidence at Key’s trial revealed that Key encountered a minor online and travelled to Madison to pick her up and bring her to southwest suburban Romeoville.  Key took photographs of the girl, provided her with lingerie to wear, and posted advertisements on the website Backpage.com.  Key rented multiple hotel rooms that were used for encounters with individuals who responded to the advertisements.  Key then collected all of the money earned by the minor victim.

The victim was rescued by officers of the Romeoville Police Department on Sept. 10, 2013, and Key was arrested.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.  The Romeoville Police Department and the Madison, Wisc., Police Department assisted in the case.

The investigation was conducted by the FBI’s Child Exploitation Task Force.  The CETF is part of a nationwide effort known as the Innocence Lost National Initiative targeting the commercial sexual exploitation of children in the United States.  In Chicago, the CETF is composed of FBI special agents and investigators from the Chicago Police Department, the Cook County Sheriff’s Office, and the Cook County State’s Attorney’s Office.

The government is represented by Ms. Sawyer and Assistant U.S. Attorney Christopher V. Parente.

CHICAGO — The founder of a Geneva investment firm has been sentenced to five years in federal prison for using client funds to purchase a yacht and luxury vehicle and to trade his own stocks.

STEPHEN C. BROWERE, the founder of Geneva-based Stephens Capital Management Inc., used the promise of lucrative and guaranteed returns to persuade several clients to purchase $1.66 million in promissory notes in Douglas Capital Corp., located in Lisle.  Many of the investors pledged their life savings or funds from retirement plans.  Browere did not tell investors that his relative was the president of Douglas Capital, and that Browere ran Douglas Capital’s day-to-day operations and had access to its lines of credit.  Instead of investing the funds in the promissory notes, Browere used the money to perform trades within his own investment portfolio, and to cover personal purchases such as a yacht and a BMW automobile.

Browere, 57, of Geneva, pleaded guilty in June to one count of mail fraud.  U.S. District Judge Matthew F. Kennelly on Friday sentenced Browere to 60 months in prison.  Judge Kennelly also ordered Browere to pay $3.7 million in restitution to the victims.

“Each investor thought defendant was investing his or her money in safe, stable investments that would provide income well into retirement,” Assistant U.S. Attorney Patrick Otlewski argued in the government’s sentencing memorandum.  “They did not agree to give defendant free reign to use the savings as his personal slush fund to support a lavish lifestyle.”

Browere’s scheme began no later than 2007 and continued until approximately February 2014.  In addition to spending the victims' funds on himself, Browere concealed the fraud by using principal payments from some investors to make interest payments to others in a Ponzi-like fashion.

Browere also obtained the power of attorney on behalf of an elderly client who was infirm and suffering from dementia.  The power of attorney gave Browere access to the client’s cash and property, which were valued at more than $2.1 million.  Browere misappropriated some of this money to purchase four vacant lots in Lisle and to make interest payments to other clients.  After the client died, Browere maintained control over the estate and continued to misuse the estate’s assets.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration; and E.C. Woodson, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The Illinois Secretary of State’s Office provided valuable assistance in the investigation.

The government is represented by Mr. Otlewski.

CHICAGO — A federal grand jury in Chicago has indicted a Naperville man on charges of possessing child pornography, obstruction of justice and conversion of government property.

FLOYD O’HARA, 62, is charged with one count of possessing child pornography, one count of conversion of government property, and two counts of obstruction of justice.  Arraignment is scheduled for Nov. 10, 2016, at 9:30 a.m., before U.S. District Judge Rebecca R. Pallmeyer in Chicago.

According to the indictment, O’Hara possessed child pornography, which was discovered on a laptop computer and a flash drive.  O’Hara obstructed justice by altering, destroying and concealing two hard drives in an effort to prevent their use in a prosecution against him, according to the indictment.

O’Hara was formerly employed by the U.S. Environmental Protection Agency.  The indictment alleges O’Hara converted for his own use eight devices owned by the EPA without the EPA’s authorization.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Acting Special Agent in Charge Joseph Gonzales of the EPA Inspector General’s Office. 

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.

The charges in the indictment are punishable by a total maximum sentence of 70 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 Kutcher.

Indictment

CHICAGO — A federal jury has convicted an Indiana man on fraud charges for holding himself out as a psychiatrist while prescribing medications to a nine-year-old child and dozens of others.

SCOTT C. REDMAN, 37, of Hammond, Ind., used the identity of an Illinois physician to see patients and prescribe medications at a clinic on Chicago’s Near North Side.  The real physician is employed by a different Illinois medical facility.

Redman assumed the physician’s name to prescribe medications to more than 40 individuals from September 2015 to February 2016.  The purported patients included a nine-year-old child, for whom Redman prescribed a 30-day supply of Vyvanse, a medication that treats attention deficit hyperactivity disorder.

After a four-day trial in federal court in Chicago, the jury Thursday convicted Redman on three counts of wire fraud, one count of aggravated identity theft, one count of furnishing false information to the Drug Enforcement Administration, and five counts of distributing a controlled substance.

U.S. District Judge Samuel Der-Yeghiayan set sentencing for Feb. 8, 2017, at 10:30 a.m.

The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the DEA.

Evidence at trial revealed that Redman maintained office hours at the clinic to treat his supposed patients.  A purported profile of Redman on the clinic’s website contained the name of the real physician, alongside a photograph of Redman and fraudulent biographical and educational information.  In addition to the Vyvanse, Redman prescribed other controlled substances, including Adderall, Clonazepam and Xanax.

The conviction carries a maximum sentence of 166 years in prison.  The Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is represented by Assistant U.S. Attorneys Katie M. Durick and Matthew F. Madden.

CHICAGO — A criminal complaint unsealed in federal court today charges a Chicago man with sex trafficking for allegedly engaging in paid sexual acts with an underage girl.

WILLIAM WHITLEY paid the minor to engage in sex acts with him on multiple occasions last year, according to the complaint.  Whitley paid the girl between $60 and $150 for each of the sexual encounters, the complaint states.  Whitley also took nude photographs of the girl and sent the pictures to her via text message, the complaint states.

Whitley, 60, was arrested Tuesday afternoon.  He made an initial appearance today before U.S. Magistrate Judge Maria Valdez, who ordered him to remain in federal custody.  Judge Valdez scheduled a detention hearing for Nov. 7, 2016, at 11:00 a.m.

The two-count complaint charges Whitley with sex trafficking and production of child pornography.

The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation.  The Carol Stream Police Department assisted in the investigation.

The government is represented by Assistant U.S. Attorneys Sarah Streicker, Elizabeth Pozolo and Michelle Petersen.

According to the charges, a woman identified in the complaint as “Individual A” introduced the girl to Whitley.  The victim was 14 years old when Whitley paid her to engage in sex acts with him, according to the complaint.

The complaint also describes how Individual A introduced another female victim to Whitley.  This other victim was 16 years old when she encountered Whitley at a party hosted by Individual A, according to the complaint.  Individual A’s party was attended by older men and young runaway girls, the complaint states.  Whitley paid the 16-year-old girl to engage in sex acts, 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. 

The sex trafficking count is punishable by a statutory minimum sentence of ten years in prison, and a maximum of life.  Production of child pornography carries a minimum sentence of 15 years, and a maximum of 30 years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

If you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678.  The hotline is available 24 hours a day, 7 days a week.

CHICAGO — A Tennessee man was sentenced today to nearly four years in federal prison for launching cyber-attacks on corporations, universities and governmental entities throughout the world.

As a member of the hacking group “NullCrew,” TIMOTHY JUSTEN FRENCH exploited computer vulnerabilities to obtain unauthorized access and steal confidential information, including encrypted personal data of thousands of individuals.  French’s cyber-attacks caused at least $792,000 in monetary loss to victim companies, universities and governmental bodies.

U.S. District Judge Gary Feinerman imposed the 45-month sentence today in federal court in Chicago.

“The defendant played a central role in an extensive, deliberate, and destructive hacking campaign that inflicted widespread and serious harm to businesses, governments, non-profits, and thousands of individuals,” Assistant U.S. Attorney William Ridgway argued in the government’s sentencing memorandum.  “He disseminated online the usernames, email accounts, and passwords for thousands of individuals, which not only violated their privacy and sense of online security, it exposed them to financial fraud and identity theft.”

French, 22, of Morristown, Tenn., pleaded guilty last year to one count of intentionally damaging a protected computer without authorization. 

NullCrew is a group of computer hackers who carried out a series of cyber-attacks in the United States and throughout the world.  To publicize their intrusions, French and other members of NullCrew maintained Twitter accounts, including @NullCrew_FTS and @OfficialNull, which they used to announce their cyber-attacks and ridicule their victims by publicly disclosing the confidential information they had stolen, according to French's plea declaration.  French hid his true identity by using Internet aliases, including “Orbit,” “@Orbit_g1rl,” “crysis,” “rootcrysis,” and “c0rps3.”

French participated in at least seven cyber-attacks while a member of NullCrew from 2012 to 2014.  One of the attacks was carried out against a large Canadian telecommunications company, while another attack targeted a U.S. state, according to the plea declaration.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The government is represented by Mr. Ridgway.

CHICAGO — Federal charges unsealed today accused 24 individuals of various drug offenses for allegedly using Amtrak trains to transport heroin and cocaine to Chicago from California.

One of the defendants is an Amtrak employee who allegedly stole a package of cocaine upon arrival at Chicago’s Union Station.

Authorities uncovered the alleged drug trafficking through a multi-year investigation dubbed Operation Derailed.  During the course of the probe and other closely related enforcement actions, authorities confiscated more than 60 kilograms of cocaine, more than 30 kilograms of heroin, a kilogram of fentanyl, five handguns, two rifles, and more than $1.8 million in cash.  The charges seek forfeiture of approximately $9.3 million in illegal profits.

The indictments and complaints allege that wholesale quantities of heroin and cocaine were obtained from traffickers in Mexico and southern California, and transported from Los Angeles to Chicago aboard Amtrak’s commercial train line, Amtrak Express.  Some of the drugs were concealed in automobile parts and pool filters, according to the charges.  The drugs were picked up at Chicago’s Union Station and sold throughout the Chicago area, with some of the profits laundered back to southern California.

Several of the defendants were arrested this week.  Arraignments and initial appearances in federal court in Chicago have not yet been scheduled.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration; and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.  Substantial assistance was provided by the Amtrak Inspector General’s Office and the Amtrak Police Department.

The investigation 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, weapons trafficking and money laundering organizations.

“Our Office is working harder than ever with the DEA and other federal, state and local law enforcement partners to stop the flow of dangerous narcotics and opioids into Chicago,” said U.S. Attorney Fardon.  “We will continue to aggressively investigate and prosecute the drug traffickers responsible for bringing these drugs into our communities.”

"Too many families are forever scarred by heroin,” said Special Agent in Charge Wichern.  “I'm proud of the work done by these agents, officers and prosecutors who worked tirelessly to achieve these results, and I’m confident that with our continued partnership we will have increasing success."

“When IRS Criminal Investigation gets involved, the drug dealer's profits get derailed," said Special Agent in Charge Robnett.  “IRS Criminal Investigation is committed to providing the resources and working together with the DEA and the United States Attorney's Office to fight the war on drugs.  IRS CI brings and will continue to bring our money laundering expertise to disrupt and dismantle the trafficking of drugs into our communities.”

In U.S.A. v. Roque et al, 15 CR 485, 12 defendants were indicted for conspiracy to possess with the intent to distribute controlled substances: EDGAR ROQUE, 30, of Paramount, Calif.; RICHARD ROQUE, 32, of Paramount, Calif.; ANGELICA CERVANTES, 31, of Chicago; JUAN J. CERVANTES, 30, of Chicago; IVAN DIAZ, 26, of Downey, Calif.; PHILLIP DIAZ, 26, of Paramount, Calif.; MARTELL JACKSON, 33, of Chicago; ANTHONY KOON, 55, of Pueblo, Colo.; JOSÉ ANTONIO MIRELES, JR., 31, of Paramount, Calif.; JORGE LUIS OCHOA-CANELA, 36, of Paramount, Calif.; OMAR RAMIREZ, 24, of Compton, Calif.; and GERARDO SANCHEZ, 23, of Los Angeles, Calif.  A 13th defendant, JESUS VALENCIA, 34, of Chicago, is charged in the indictment with attempting to possess with the intent to distribute a controlled substance.  The indictment seeks forfeiture of approximately $5 million in cash.

In U.S.A. v. Aragon Contreras et al, 15 CR 447, six defendants were indicted for conspiracy to possess with the intent to distribute controlled substances, and conspiracy to commit money laundering: MANUEL ARAGON CONTRERAS, 32, of Paramount, Calif.; CESAR CARRILLO, 24, of South Gate, Calif.; EDUARDO FRANCO, 30, of Pico Rivera, Calif.; JOSE DAVILA, 33, of Pico Rivera, Calif.; RAFAEL COLLAZO, 22, of Paramount, Calif.; and BRIAN RIOS, 23, of Long Beach, Calif.  The indictment seeks forfeiture of approximately $4.3 million in cash.

According to the charges, some of the defendants also transported the narcotics via FedEx from the Los Angeles area to hotels and other locations in Chicago.  In the Amtrak shipments, some of the defendants placed GPS tracking devices inside parcels to allow them to monitor the narcotics as the packages travelled aboard trains to Chicago. 

One of the packages containing cocaine was allegedly stolen by an Amtrak employee when it arrived in Chicago’s Union Station on July 31, 2014.  The Amtrak employee, ROY J. GRIFFIN, 45, of Calumet City, and an acquaintance, DANIEL DOUGLAS, 43, of Blue Island, were indicted in U.S.A. v. Griffin et al, 15 CR 484, with theft of goods from a railroad car and possession with the intent to distribute a controlled substance.

Three defendants were charged in individual criminal complaints.  ROY W. BURRIS, 36, of Hawaiian Gardens, Calif., was charged with possession with the intent to distribute cocaine.  Authorities seized more than $144,000 in cash and five kilograms of cocaine after Burris allegedly sold the drugs to a buyer in the Los Angeles area on March 30, 2016, according to the complaint.  STEVEN MENDOZA, 24, of Lynwood, Calif., was charged with conspiracy to possess a controlled substance with intent to distribute.  Mendoza travelled to Chicago’s Union Station on at least four occasions in 2015 to pick up packages containing narcotics, according to the complaint.  JULIO ANDRADE, 35, of Paramount, Calif., was charged with conspiracy to possess a controlled substance with intent to distribute.  Andrade picked up a package of narcotics at Chicago’s Union Station in July 2014, according to the complaint.

The public is reminded that indictments and complaints contain only charges and are not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

Assistant U.S. Attorneys Paul Tzur and Kavitha Babu are representing the government in Roque et al and Griffin et al, and Mr. Tzur is representing the government in the cases against Burris and Mendoza.  Assistant U.S. Attorney Sean J.B. Franzblau represents the government in Aragon Contreras et al, and the case against Andrade.

CHICAGO — A federal grand jury in Chicago has indicted a Morris man on attempted murder charges for allegedly trying to kill two DEA Task Force officers during an undercover drug sting in Joliet.

ADAN GODINEZ, 31, of Morris, tried to kill the officers during an undercover operation in a parking lot of the Louis Joliet Mall on Aug. 30, 2016, according to the indictment.  In addition to the attempted murder charge, the indictment charges him with one count of conspiracy to possess with the intent to distribute a controlled substance, one count of possession with the intent to distribute a controlled substance, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of brandishing and discharging a firearm during a crime of violence.

A co-defendant, FERNANDO GODINEZ, 44, of Cicero, was also at the scene of the undercover operation.  He is charged in the indictment with one count of conspiracy to possess with the intent to distribute a controlled substance, one count of possession with the intent to distribute a controlled substance, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of being a convicted felon in possession of a firearm.

Arraignments are scheduled for Oct. 27, 2016, at 11:30 a.m., before U.S. Magistrate Judge Susan E. Cox.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration.  The Joliet Police Department provided valuable assistance.

The sting operation was arranged after Adan Godinez agreed to sell cocaine to an individual who, unbeknownst to Godinez, was an undercover Task Force officer for the DEA, according to a criminal complaint previously filed in the case.  The defendants drove together to meet the undercover, at which point Adan Godinez got out of their car and entered the undercover’s vehicle, the complaint states.  After Adan Godinez provided the cocaine to the undercover, other law enforcement personnel approached to arrest him, according to the complaint.  Adan Godinez saw law enforcement personnel approaching, got out of the officer’s vehicle, pulled out a firearm and shot at the officers, the complaint states.  An exchange of gunfire ensued. 

Adan Godinez was wounded but survived.  No officers were injured.  Both defendants were arrested in the mall parking lot, and they have remained in custody without bond.

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 charges against Adan Godinez carry a mandatory minimum sentence of 35 years in prison, and a maximum sentence of life in prison.  The charges against Fernando Godinez are punishable by a mandatory minimum sentence of 10 years, and a maximum of life in prison.

The government is represented by Assistant U.S. Attorneys Brian S. Wallach and Richard M. Rothblatt.

CHICAGO — The U.S. Attorney’s Office will monitor the federal and local elections in Chicago and surrounding suburbs on Nov. 8, 2016, Zachary T. Fardon, 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 candidates or the public to report complaints related to the voting process.  Assistant U.S. Attorneys and other Office personnel will monitor the hotline and be available to respond to complaints as needed.

The hotline number, staffed on Election Day only, is (312) 469-6157.

“A citizen who is entitled to vote should in no way be prevented from doing so,” said Mr. Fardon. “Our Office will act promptly and aggressively to protect the integrity of the election process.”

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 furthers these goals, and also seeks to ensure public confidence in the voting process.

In addition, the Federal Bureau of Investigation will have special agents available in each field office throughout the country to receive allegations of election fraud and other election abuses on Election Day.  The Chicago FBI Field Office can be reached by phone at (312) 421-6700.

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.  It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them.  For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law.  Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.  Violations of federal voting rights statutes carry penalties ranging from one to ten years in prison and fines of up to $250,000.

Complaints about possible violations of the federal voting rights laws can also be made directly to the Voting Section of the Justice Department’s Civil Rights Division in Washington, D.C., by phone at (800) 253-3931 or (202) 307-2767, by email at [email protected], or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

For information as to the location and hours of polling locations, 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.

CHICAGO — A former correctional officer for the Cook County Sheriff’s Office has been indicted on a federal civil rights charge for allegedly using unreasonable force against a detainee while on duty.

ROBERT DARTT, 46, of Jacksonville, Fla., is charged with one count of deprivation of rights under color of law, and one count of filing a false report.  Dartt is alleged to have used unreasonable force while on duty as a correctional officer for the Cook County Sheriff’s Office on Oct. 31, 2011.  The victim suffered bodily injury as a result of the unreasonable force, the indictment states.

The false report charge arises from false statements Dartt filed with the Sheriff’s Office and the Cook County Department of Corrections after the incident, according to the indictment.

The indictment was returned Thursday in federal court in Chicago.  An arraignment date has not yet been set.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

Deprivation of rights is punishable by up to ten years in prison, while filing a false report carries a maximum sentence of 20 years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The public is reminded that an indictment is not evidence of guilt.  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 Kutcher.

CHICAGO — A Chicago woman was arrested today for allegedly operating a multi-million dollar fraud scheme that duped investors into believing she could earn profits on the secondary market for concert and sporting event tickets.

TRACY MONTI fraudulently obtained more than $5 million from investors by misrepresenting that she would purchase tickets for sporting events and concerts from primary market sources at face value and then re-sell them for a profit on the secondary market, according to a nine-count indictment returned Thursday in federal court in Chicago.  In reality, Monti used the victims’ funds to purchase a house in Chicago and a vehicle, and to make Ponzi-type payments to other investors, according to the indictment.

Monti, 42, of Chicago, was arrested this morning.  She pleaded not guilty during an arraignment today before U.S. District Judge Manish S. Shah.  Monti was ordered released on a recognizance bond, and a status hearing was scheduled for Nov. 9, 2016.

The indictment charges Monti with seven counts of wire fraud and two counts of money laundering.  Each count of wire fraud is punishable by up to 20 years in prison, while each money laundering count carries a maximum sentence of ten years.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation; and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.

According to the indictment, Monti misrepresented to investors that she had business relationships with multiple primary market sources, such as event promoters and venues, through which she purportedly purchased tickets at face value.  The indictment alleges that these relationships didn’t actually exist, and that Monti did not purchase tickets at face value.  

The indictment seeks forfeiture of a house in the Austin neighborhood of Chicago and approximately $5.02 million in cash.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Jessica Romero.

The following are remarks by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, as prepared for delivery at Northwestern University Pritzker School of Law's "Opioids: An Interdisciplinary Symposium," on October 20, 2016:

Thank you Professor Geraghty for that kind introduction, and thank you Northwestern for having me.  It’s great to be here.  I’m grateful that you’re shining your light on this terrible epidemic.

Opiate consumption is a full-on crisis in this country.  It is nothing shy of an historic national public health and safety epidemic.  Opioids are now killing more people in this country than gun violence.  Opioids are now killing more people in this country than car crashes.

Heroin is everywhere.  It’s in our cities, suburbs, schools and homes.  The good old days of black tar heroin being expensive and hard to obtain, and ugly to use because it’s intravenous – those days are long gone.  Now powder heroin is cheap; it can be snorted or smoked; and in some neighborhoods, it’s easier to find than a fresh head of lettuce.

Heroin is rampant in Chicago.  You can go buy some right now for $10 on the West Side just off the Eisenhower Expressway, now known to some as the “Heroin Highway.”  And it’s all too cheap and easy to find heroin now in our collar counties as well: DuPage County, Lake County, Kane County, Will County and beyond. 

In Chicago, about a person a day is dying right now from a heroin overdose.  And about one additional person dies every day from an opioid other than heroin.  In the collar counties, we’re now seeing about one person every three days, dying from heroin or opioid overdose. 

Heroin is an equal-opportunity killer.  It is killing men, women, Blacks, Whites, Hispanics, friends, neighbors, loved ones.  It doesn’t discriminate; young and old, rich and poor, urban and rural, inner city and suburb.

According to the CDC, between 2002 and 2013, the heroin death rate across the country nearly quadrupled – from 0.7 deaths per 10,000 people to 2.7 deaths per 10,000.  During that same time frame, heroin use doubled among women, it increased 114% among whites, and it increased 109% among all 18-25 year olds. 

The mean age of first use of heroin in this country is now 18 years old.  And heroin has one of the highest dependency liability profiles of any drug, licit or illicit.  Only nicotine ranks higher.  Of those who are offered heroin, about 20% will try it, and of those who do, 25% will become addicted. 

And for those who become dependent, the prognosis is not good; mortality rates for heroin addicts are extremely high.  Over 50% of heroin addicts will be dead before the age of 50, with the average age of death being 30.

If all of that is not scary enough, here’s the kicker – heroin isn’t necessarily the biggest threat this crisis presents.  Heroin now has an even more dangerous cousin on the streets: fentanyl.  We are seeing an explosion right now, from a law enforcement perspective, in presence of fentanyl and fentanyl analogues. 

Many folks still don’t know what fentanyl is. Fentanyl is made in a lab.  Traditionally, it has been a very powerful prescription pain medication used for end of life situations or for those in extreme pain.  But now, it’s being cooked up in Mexican super labs run by drug cartels, and it’s being manufactured in China and sold to those cartels, or otherwise smuggled into the U.S. for illicit use.

Drug dealers are using fentanyl to dilute and increase the volume of the heroin they are selling on our streets.  While heroin is cheap, fentanyl is even cheaper, and so dealers are juicing their profits by mixing fentanyl into their heroin street products.   

And that means more people are dying.  Fentanyl is 40 to 50 times stronger than heroin.  Fentanyl is 80 to 100 times stronger than morphine.  Fentanyl has the power to kill with the ingestion, inhalation or skin absorption of just two milligrams.  By point of reference, that sweetener packet your kids play with at the restaurant table – that contains 1,000 milligrams per packet.  Two milligrams of fentanyl can be lethal. 

Fentanyl-laced heroin is increasingly killing people in our area.  Cook County has seen at least 124 fentanyl-related deaths since January 2015.  Many drug users don’t even know that heroin they are using may be laced with fentanyl.  They don’t know until it’s too late.

And because of its potency, fentanyl poses an unwitting risk not only to those heroin users but also to first responders.  For cops or agents who are seizing dope or searching a crime scene and unwittingly touch or inhale powder fentanyl, their lives are also at stake.

And fentanyl has analogues.  We’ve recently seen one called carfentanil – an analogue literally used in zoos to tranquilize elephants.  An elephant tranquilizer.  Carfentanil is roughly 100 times stronger than common fentanyl.  I mentioned that two milligrams of fentanyl is enough to kill a person.  Well, that same two milligrams of carfentanil is enough to knock out a 2,000-pound African elephant. 

So it’s no surprise then that carfentanil-laced heroin is a killer.  Last month, it was responsible for at least 8 overdose deaths in the Cincinnati, Ohio, area.  And unfortunately I can tell you that carfentanil is not limited to Ohio and points east.  It is right here in Chicago.  Right now.

Another similar analogue that has popped up recently is called W-18, which like carfentanil is 10,000 times more powerful than morphine.  Earlier this month, the Will County Coroner confirmed that a man who died from an overdose in April of this year had W-18 in his system. 

Fentanyl and its analogues are finding their way into heroin powder.  By itself, that is frightening.  But here’s more: we are now seeing a swell of illicit counterfeit pills containing fentanyl.  Hundreds of thousands of counterfeit prescription pills – pills made to look like oxycodone or hydrocodone but containing fentanyl -- are now being trafficked in the U.S.  Some of these counterfeit pills are manufactured outside the U.S. and smuggled in, principally through Mexico and Canada. But we also now are finding clandestine pill operations domestically. 

Just two weeks ago, the Wall Street Journal ran a front page story about how two people in San Francisco were charged this summer with manufacturing fentanyl-laced pills.  The pills were made to look like oxycodone but actually contained fentanyl.  During a search of a San Francisco home, the DEA found fentanyl powder, mixing equipment, and a $1,000 pill press.

On the other coast, in January of this year, DEA, after making undercover purchases of about 6,000 counterfeit pills, arrested a counterfeiter in New York.  Again, the pills were made to look like 30 milligram oxycodone pills but contained fentanyl.  Just like the couple in San Francisco, this counterfeiter in New York was making those pills in his home. 

And there’s a reason we’re seeing more and more of that.  It’s called profit.  The pill presses are easy to acquire and are fairly cheap.  And you can purchase a kilo of fentanyl powder from China for a few thousand dollars.  That kilo, plus the press, can generate millions in quick profit. 

Let’s say you make a batch at 1.5 milligrams of fentanyl per pill.  Then one kilo can generate about 666,666 counterfeit pills.  According to DEA, counterfeit pills containing fentanyl are now retailing between $10 and $20 per pill.  That means between $6.5 and $13 million in sales from pills made for a few thousand bucks.  That is a serious problem.

And these counterfeit pills closely resemble the authentic medications. The presence of fentanyl is often only detected through laboratory analysis.  The people taking these pills may have no idea that the pill contains a potentially deadly substance.  They may not know until it’s too late.

That is a dire diagnosis.  And I’m sorry for the parade of horribles to begin this speech, but I think it’s important that we be honest about the nature and scope of the problem before discussing solutions. 

Let me talk now about some of the things we are doing federally to push back against this epidemic.  And I’ll start with criminal enforcement, but first let me make this clear up front: while our primary function at the U.S. Attorney’s Office is to investigate and prosecute crimes, criminal enforcement alone cannot solve, and will never solve this crisis.  Treatment and prevention are equally if not more important ingredients to any solution.  This crisis demands a coordinated response across all elements of government and society.  After I talk about criminal enforcement, I’ll offer some thoughts and ideas, from my Office’s perspective, about treatment and prevention. 

Enforcement

First, enforcement.  Under the leadership of the Drug Enforcement Administration, the FBI, and other federal, state and local law enforcement partners, we are working harder than ever right now to attack the illicit opioids supply chain. 

The vast majority of heroin that’s flooding our Chicago region is brought here by international drug cartels and specifically Mexican-based cartels like the Sinaloa Cartel, the Juarez Cartel, the New Generation Cartel, the Zetas and others.  While it is impossible to know exactly how much heroin the cartels are smuggling into the Chicago area, based on recent seizure and source information, I think it’s safe to say that thousands of kilograms are now being imported here every year.

Why is the heroin problem particularly acute in Chicago?  Because we are a transshipment hub for cartels; because our location and transportation networks - air, rail and road – make Chicago an ideal transshipment point.  So we have a profound supply problem, and of course that eases distribution to street gangs that plague so many of our communities. 

So we are committing more and more federal resources here to investigating and prosecuting suppliers - heroin traffickers from the cartel leaders to the street gangs.  Between 2005 and 2014, the number of heroin-related arrests by DEA surged more than 200 percent.  2014 was the first year ever that DEA arrested more defendants for heroin trafficking than cocaine.  And that trajectory has only escalated since then.  DEA Chicago has proclaimed combatting heroin and opioid crime its number 1 priority for our district.

At the U.S. Attorney’s Office, I’ve instructed all of our prosecutors who work narcotics cases that investigating heroin and opioid trafficking is now our number one narcotics enforcement priority.  As little as three years ago, the majority of new case initiations in our office involved cocaine trafficking.  Since the beginning of this year, over 75% of the major narcotics investigations we’ve logged in at the U.S. Attorney’s Office are heroin, fentanyl or other illicit opioid trafficking cases.

One recent example is Operation Over the Top.  In the spring of this year, DEA agents, working with Assistant U.S. Attorneys in my office, identified a heroin trafficking organization that was responsible for transporting, in the hollowed out axles of tractor-trucks, 20-30 kilograms of heroin every week into the Chicago area.  We made multiple seizures resulting in the recovery of almost 100 kilos of heroin.  Until we made those seizures and stopped this particular distribution line, this group had been smuggling all of this heroin into our city for at least two years.  And that’s just one organization and one investigation.  We have many more charged and in the investigative pipeline.

Last year, in an Operation titled G.I. Joe, DEA agents and the Chicago Police Department took down what may have been the largest open-air heroin market in Chicago history, at Grenshaw and Independence on the West Side.  CPD and DEA made over 70 undercover purchases of heroin from gang members operating the drug spot, and seized over two kilos of heroin.  Before we took it down, conservative estimates based on the volume of customer traffic indicate heroin sales were in excess of $2.6 million per year at that spot alone. 

So we’re going after the gangs and drug trafficking organizations that are moving heroin into our communities.  We’re also committing significant resources to going after the cartels bringing the dope here in the first instance. 

I hope most of you have heard something about the Sinaloa Cartel prosecutions we have brought recently in my Office.  The Sinaloa Cartel is perhaps the single biggest transnational criminal organization in the world, responsible for the distribution of hundreds of tons of illegal drugs, including heroin, to virtually every corner of the world.  Because Sinaloa has decided to use Chicago as one of its principal transshipment points in the United States, my office together with our law enforcement partners, have targeted the cartel with every resource and tool at our disposal. 

And we have been successful.  We have brought indictments against all levels of the cartel and its infrastructure – from the cartel’s command and control based in Mexico, to its Chicago-based distribution cells, and all the way down to the street gangs who push the cartel’s dope onto the streets of Chicago and the surrounding communities.  We’ve indicted over 70 individuals, including Sinaloa leader Chapo Guzman, his sons and a slew of the other highest-ranking Sinaloa members in Mexico and here in Chicago.   Of those, we have convicted all but 18, and among the rest some are awaiting trial and others are fugitives from justice, including some now in custody awaiting extradition from Mexico.  And we have seized over eleven tons of Sinaloa cocaine, 80 kilograms of heroin, and $30 million in cartel assets – the lifeblood of their organization.  Because Sinaloa is the number 1 importer of heroin into our district, we have, and will continue to, take the fight directly to them.

Our fentanyl enforcement activities here in Chicago are also a focus of my Office right now.  We are working closely and constantly with our partners to track and prosecute fentanyl distributors.  About a month ago, we joined the Cook County State’s Attorney’s Office, DEA, CPD and others, to announce new charges against more than 30 defendants for distributing fentanyl and heroin on the West Side of Chicago. 

In addition to cartels and gangs and fentanyl, we’re also focused federally on diversion – which is a different kind of supply-side problem.  Abuse of prescription medications like hydrocodone and oxycodone are a gateway to heroin use.  According to the CDC, 45% of people who use heroin are also addicted to prescription painkillers.  And nearly 80% of new heroin users previously used prescription medications.  Just last month, HHS released new stats showing that at least 3.8 million Americans age 12 years and older are misusing prescription medications.  That is, sadly, our future heroin and fentanyl overdose population.

To beat the heroin and fentanyl problem, we have to stem the tide of prescription medications diverted for unlawful use.  To that end, my office and DEA are ramping up our investigations of doctors, pharmacists, and pharmacy employees who illegally prescribe and dispense hydrocodone and oxycodone.  To give one recent example, at the end of last year, we brought federal charges against a doctor in Lockport, Illinois, who wrote an astounding 500-plus prescriptions to one person for both oxycodone and Adderall.  From these prescriptions, 37,000 oxy and Adderall pills were illegally diverted from their intended pharmaceutical use to those who suffer from opioid addiction.

Because research shows that abuse of prescription opioids is a gateway to heroin use, it is vital that law enforcement identify and prosecute those in the medical field who abuse their oath by illegally diverting opioids for their own financial gain.  That’s another important piece of our long-term strategy for success.

Treatment      

So those are some of the things we’re doing on the enforcement front.  Let me say a few words about treatment.  Enforcement is all about supply side.  Treatment flips the script; it’s about demand. 

Cartels wouldn’t be importing heroin into our district if there wasn’t a market.  The hard truth is that demand for heroin in our district appears to be at an all-time high. 

According to an August 2015 study, admissions for heroin treatment in Illinois are significantly higher than the nation as a whole.  Nationally, heroin-treatment admissions comprise about 16% of total state-funded treatment admissions, whereas in Illinois, heroin caused about 25% of all such treatment admissions.  Heroin is now the second most common reason for citizens in our state to enter state-funded treatment programs, only behind alcohol addiction.

And the growing heroin addiction problem is not just an adult problem.  It’s now affecting our kids, and that situation is rapidly getting worse.  In 2013, 3.8% of Illinois youth reported using heroin in the past year.  3.8% of all kids in this state said ‘yes, I’ve used heroin within the last year.’  That is a disturbing reality and trend.

So, with this seemingly endless flow of heroin into our area, what can we in law enforcement do about demand and addiction?  Here are a few quick thoughts and ideas. 

First, from a criminal justice perspective, we have to make sure we are separating users and addicts from traffickers and profiteers.  When we catch users in the act, or with heroin in their pocket, and we arrest and incarcerate that user without any attention to the underlying problem, we’ve not only ignored the problem, we’ve made it worse.  Those addicts, without help, will use again upon release (if not while in jail).  And meanwhile we are straining our jails and our budgets by locking up people who are sick and no risk to society.

This issue is principally a state and local justice systems issue.  And across the state, I have seen many courts and prosecutors' offices recognize this dilemma and respond to it.  In Cook, DuPage, Lake, Kane, McHenry Counties and others, there are now drug courts and diversion programs designed to separate drug users from other defendants and put those users on a pathway not of incarceration but of treatment and rehabilitation.  Those efforts are laudable, and critical.  And while a lot has been done on that front, we do need to make sure those kinds of efforts are being duplicated across our local justice systems, including in rural areas. 

One great example is the partnership between the Chicago High Intensity Drug Trafficking Area, or HIDTA, and the Cook County State’s Attorney’s Office, where they have established a program under which individuals caught distributing heroin or other drugs but who themselves are substance abusers or addicts and have minor, non-violent criminal histories, those individuals are immediately evaluated by addiction treatment professionals and given the option of entering treatment.  If the addict decides to avail himself of the treatment opportunity, then the arrest for distribution is dismissed.  This is the type of forward-thinking approach to addiction and treatment that can make a real difference.   

More broadly, inside and outside of our justice systems, we have to do a better job of providing addiction treatment for those who are in the throes of abuse.  Whether public, private or philanthropic, we need to stretch and find ways to fund treatment for those who don’t have insurance or otherwise can’t afford it.  While I realize that presents enormous challenges - and I also realize that I may be swimming outside my lane - the truth is that the alternative won’t work.  If we don’t improve treatment, we will pay more in the end – more in connection with medical emergency responses to increasing overdoses, more through enforcement, arrests, and incarceration, and more as measured by lives lost.    So, however we do it, we have to improve our game statewide on the treatment front. 

As a component of that, we need to make sure our educators and community leaders understand the nature of opioid addiction and are prepared to help those who are opioid dependent.  Rather than responding to someone’s heroin or opioid abuse as a crime, we need folks to respond to it as a threshold matter for what it is: an illness that requires medical treatment and a pathway to rehabilitation.

Lastly on the treatment front, I’d like to make a related but different point.  I want to make a strong plug for the continued proliferation, particularly to our first responders, including fireman and patrol officers, of naloxone, most commonly referred to by the brand name Narcan.  Narcan is an easy-to-use, lifesaving antidote for heroin and opioid overdoses.  Used in hospitals for decades, the medication has no abuse potential, is not that expensive, and is easy to administer.  Well over a hundred lives in the Chicagoland area have been saved already this year by use of Narcan, and that number will only increase as the heroin crisis continues. 

I have heard some concerns and criticism that naloxone emboldens addicts to push their limits.  If they believe they can be brought back from overdose, then the risk/reward analysis of that higher dosage arguably can change.  I get that.  But I also know that people are dying right now.  And with the increased presence of fentanyl, more of those overdoses than ever are unexpected.  So, for now, I don’t think we as a society have a next best responsible choice.  We need to embrace training and investment in naloxone as a way to save lives.   We have to keep spreading the word and making those investments. 

Prevention

So that’s enforcement and treatment.  Let me, as promised, say something briefly about prevention.  I start from this base point: as I said earlier, we have to be honest and recognize that prosecutions alone will not solve this problem.  Until we stem demand, the supply chain will continue to fight and find a way.  So we have to get every bit as aggressive about education and prevention as we are already about enforcement.

One of the great attributes of this conference today is that it has brought together professionals from so many different disciplines that touch on this crisis.  It is not every day that lawyers, doctors, economists, and law enforcement are all together under the same roof talking about the same problem.  And having you all here together gives me the opportunity to mention a phenomenon that I worry contributes significantly to the heroin and opioid problem in this country.  And that is the over-prescription of pain medications.

I have attended too many events where I hear the same story told, over and over.  How a teenager or young adult playing sports is injured and goes to a doctor for treatment, receives a multi-week course of prescription opioid pain medications, and even though he or she may not need all of those meds to manage the pain, they take them and become dependent, leading to a crippling downward spiral of abuse that eventually leads to heroin. 

And I’ve heard about parents who received a large prescription for pain medications after a surgery and took some, but nowhere near all, of those pills.  And the pills then sat forgotten in the medicine cabinet, until one day they were found by a teenager living in the house.  And so the downward spiral begins.

These stories, which are real and are happening every day across this country, give color to the sobering statistic that the United States, with roughly 5% of the world’s population, consumes more than 75% of the world’s prescription drugs.  There is something wrong there. 

When I say I love doctors, it’s literal.  I am the son of an orthopedic surgeon.  I know that the issue of prescribing pain medications is a difficult and complex balance.  And I also know that the lions’ share of doctors work hard every day, patient by patient, to get that balance right. 

But the system as a whole is not working; 75% consumption of the world’s opioids reflects a problem, an imbalance in our health care system in this country.  And so I ask our physicians and health care providers to work even harder to come up with ideas and solutions for the underlying issue of over-prescription.  It’s imperative that you stretch.  It’s imperative that we all stretch.

Every one of us has to do more and do better at teaching our citizens and kids that pain medications can begin dependency that can lead to downward spiral into heroin use and death.  We have to be open and honest about how common opioid addiction is in this country, about the stark realities of that downward spiral, about the ravages heroin reeks on the body, and the devastation it brings on an addict’s friends and family. 

Everyone has to own this.  We need to leverage every medium we can think of – from print to TV to internet and social media.  We need to talk and educate in our schools, our churches, our businesses, and our community organizations.  And maybe most importantly, we need to talk in our homes.  No parent can any longer afford to wait and hope the opportunity to try heroin never finds your kid.  It will.  So let’s talk to our kids about it now, so they will be ready when that day soon comes.

And maybe most fundamentally, it’s time to de-stigmatize heroin addiction.  For decades, heroin was linked in our public consciousness with dirty needles, dark alleys, and perforated forearms.  That’s no longer our reality.  Heroin and opioid abuse is all around us.  It’s in our poorest communities and our wealthiest enclaves.  It no longer knows socioeconomic bounds.  It’s happening under city bridges, and at suburban high school proms. 

Heroin is not a rich or poor issue, not a black or white issue, it’s not a man or woman issue.  It’s a human issue.  So let’s lift the shadows.  No more hushed silence and whispering in shame.  This not shameful.  It’s tragic.  We are all impacted, and we all are in this together.

Today’s event is an important step.  We at the U.S. Attorney’s Office look forward to continuing this discussion and working with each and all of you until we reach a solution.  Thanks for having me and for listening.

CHICAGO — A former building inspector for the City of Chicago admitted in federal court today that he solicited a $300 bribe from a property owner in exchange for allowing renovation work without a permit.

ROBERTO URIBE, 55, of Frankfort, demanded the bribe from an owner of a two-story building in Chicago, according to a written plea agreement.  Unbeknownst to Uribe, the building owner was cooperating with federal authorities and had surreptitiously recorded the bribery demand. 

In a recorded conversation on Nov. 9, 2015, Uribe boasted of his ability to shut down the renovation work unless the owner paid him $300.  “So now, what’s happening now is you’re gonna give me some appreciation, and you’re gonna hurry up and get this done,” Uribe told the building owner, according to the plea agreement.  “And that appreciation is gonna be $300.  Now how quickly can you get me my money to keep my mouth shut?”

A few days later, the property owner paid $300 in cash to Uribe during a meeting at the property, the plea agreement states.  The property owner was equipped with a recording device that recorded this meeting.

Uribe pleaded guilty to one count of attempted extortion under color of official right.  The conviction is punishable by up to 20 years in prison and a maximum fine of $250,000.  U.S. District Judge Jorge L. Alonso set sentencing for Feb. 2, 2017, at 11:00 a.m.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph M. Ferguson, Inspector General for the City of Chicago.

The government is represented by Assistant U.S. Attorney Sarah Streicker.

ROCKFORD — Two Rockford men were arrested today on federal drug trafficking charges.

 

QUINCY L. ATMORE, 44, and MAURICE D. NEAL, 34, both of Rockford, are charged in an eight-count indictment returned by a federal grand jury in Rockford.  Both men were charged with conspiracy to distribute a kilogram or more of heroin, in addition to charges of distributing heroin in Rockford from October 2015 through September 2016.

 

Atmore appeared today for arraignment in federal court in Rockford before U.S. Magistrate Judge Iain D. Johnston.  He remains in custody pending a detention hearing scheduled for Oct. 24, 2016, at 3:30 p.m.

 

Neal will appear for arraignment on Oct. 20, 2016, at 9:30 a.m., before Judge Johnston.

 

The drug conspiracy charge carries a ten-year mandatory minimum sentence, a maximum potential penalty of up to life in federal prison, and a maximum fine of up to $10 million. Each count of distribution of heroin carries a maximum potential penalty of up to 20 years in prison, and a maximum fine of up to $1 million.

 

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.

 

If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

 

The arrests were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis Wichern, Special Agent in Charge of the Chicago Office of the Drug Enforcement Administration; and Leo P. Schmitz, Director of the Illinois State Police. The case was investigated by the Rockford Resident Agency of the Drug Enforcement Administration’s Chicago Field Office, and the Stateline Area Narcotics Team ("SLANT"), a task force led by the Illinois State Police. The Bureau of Alcohol, Tobacco, Firearms & Explosives, the Federal Bureau of Investigation, the Winnebago County Sheriff’s Department, and the Rockford Police Department assisted in the investigation.

 

The government is represented by Assistant U.S. Attorney Margaret J. Schneider.

 

Indictment

CHICAGO — A federal grand jury in Chicago has indicted a south suburban man on sex trafficking charges for allegedly bringing a minor to Wisconsin to engage in prostitution.

DERONARTE NORWOOD, 30, of Harvey, forced the minor to engage in a commercial sex act, according to the indictment.  In May 2015 he brought the minor to Wisconsin from Illinois for the purpose of engaging in prostitution, the indictment states.

Norwood was arrested last night in Waukegan.  He pleaded not guilty during an arraignment in Chicago this afternoon before U.S. Magistrate Judge Mary M. Rowland.  Judge Rowland ordered Norwood held in custody until a detention hearing on Oct. 24, 2016, at 2:00 p.m.

The two-count indictment charges Norwood with sex trafficking and knowingly transporting a minor to engage in prostitution.  Both counts are punishable by a maximum sentence of life in prison.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation.  Substantial assistance was provided by the Lake County Gang Task Force, a multi-jurisdictional task force with federal and local law enforcement members.

The government is represented by Assistant U.S. Attorneys Nicole M. Kim and Abigail Peluso.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

If you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678.  The hotline is available 24 hours a day, 7 days a week.

Indictment

CHICAGO — The owner of two education-services companies admitted in federal court today that he offered bribes and kickbacks to former Chicago Public Schools chief BARBARA BYRD-BENNETT in exchange for obtaining a $2.09 million contract to train principals.

GARY SOLOMON admitted in a written plea agreement that he offered bribes and kickbacks to then-CPS chief Byrd-Bennett in exchange for her efforts to steer the sole-source contract to Solomon’s companies, THE SUPES ACADEMY LLC and SYNESI ASSOCIATES LLC.  Byrd-Bennett had previously worked for the companies, and her fraudulent arrangement with Solomon called for her to return there as a consultant upon leaving CPS, according to the plea agreement.  Solomon maintained a line item within the companies’ internal financial statements to set aside the kickback money, which would be paid to Byrd-Bennett in the form of a one-time signing bonus on her first day back, the plea agreement states.  Solomon told Byrd-Bennett in an email, “If you only join for the day, you will be the highest paid person on the planet for that day. Regardless, it will be paid out on day one.”

In addition to arranging the kickbacks, Solomon also provided Byrd-Bennett with numerous other benefits, including meals and tickets to sporting events.

Solomon, 48, of Wilmette, pleaded guilty to one count of honest services wire fraud.  The conviction carries a maximum sentence of 20 years in prison.

The Wilmette-based SUPES and Evanston-based Synesi also pleaded guilty today as corporate defendants to one count of honest services wire fraud.  Each company faces a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.  The government anticipates that the advisory guideline fine will be in the range of $3.2 million to $6.4 million.

In addition to potential prison terms and fines, the individual and corporate defendants also will be ordered to join in a restitution payment to CPS.  The defendants and the government agree that the total amount of restitution is $254,000, minus any credit for funds repaid prior to sentencing.

A sentencing hearing for Solomon, SUPES and Synesi has been scheduled for March 24, 2017, before U.S. District Judge Edmond E. Chang.

The guilty pleas were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Nicholas J. Schuler, Inspector General for the Chicago Public Schools.

All five defendants charged in the case have now been convicted.  Byrd-Bennett, 67, of Solon, Ohio, pleaded guilty last year to one count of honest services wire fraud, which carries a maximum sentence of 20 years in prison.  THOMAS VRANAS, a co-owner of SUPES and Synesi, pleaded guilty earlier this year to one count of conspiracy to commit federal program bribery.  Vranas, 35, of Glenview, faces up to five years in prison.  A sentencing hearing for Byrd-Bennett and Vranas has not yet been scheduled.

The government is represented by Assistant United States Attorneys Megan Cunniff Church and Lindsay Jenkins.

ROCKFORD — A Loves Park man pleaded guilty today before U.S. District Judge Philip G. Reinhard to producing child pornography. 

ZACHARY RODRIGUEZ, 26, of Loves Park, admitted in his written plea agreement that on Nov. 6, 2014, he persuaded and enticed a minor female victim to engage in sexually explicit conduct for the purposes of having her use a cell phone to take photographs of the sexually explicit conduct, and then having her text the images to Rodriguez by cell phone from Iowa to Loves Park.  According to the plea agreement, the female victim was 14 years of age at the time the pictures were produced and transmitted. 

Rodriguez further admitted that between Aug. 9, 2014, and Jan. 20, 2015, he similarly persuaded four other minor female victims, who were between the ages of 14-17, to do the same.  The minor victims resided in Ohio, Arizona, Connecticut, and Wisconsin.  Each time, Rodriguez persuaded the victims to text the photographs to him in Illinois.

Rodriguez faces a statutory mandatory minimum sentence of 15 years in prison, a maximum sentence of 30 years, and a term of supervised release of at least five years up to life.  The offense carries a maximum fine of $250,000. 

Sentencing for Rodriguez is set for May 8, 2017, at 9:00 a.m. 

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.  The Loves Park Police Department assisted in the investigation.

The government is represented by Assistant U.S. Attorney Michael D. Love.

Plea Agreement

CHICAGO — Eleven people fraudulently obtained multiple credit cards and quickly maxed out the credit limits, with no intention of ever paying back the balance, according to an indictment unsealed in federal court in Chicago.

The defendants applied for the credit cards online, using false employment and income information to secure approval and bolster the credit limits, according to the indictment.  Upon receipt of the cards, the defendants purchased goods and services, and quickly reached the maximum credit limits to obtain as much money as possible from the financial institutions who issued the cards, the indictment states.  Some of the defendants later filed for bankruptcy in order to discharge the debts they had charged to the credit cards.  The scam began in April 2010 and continued until at least October 2015, according to the indictment.

The indictment states that several of the defendants also created phony corporations and linked mobile payment accounts to them.  Fictitious purchases were then made through the bogus corporations, creating charges that were reimbursed by the credit card issuers, the indictment states.

Charged with one count of bank fraud are GABRIEL CWYNAR, 37, of Chicago; IZABELA KAPUSCIAK, also known as “Izabela Cwynar,” 39, of Chicago; JAROSLAW WYSOCKI, 48, of Schaumburg; BARTOSZ POZNIAK, 42, of Mount Prospect; JOLANTA WYSOCKA, 50, of Schaumburg; MONIKA SZCZUREK, 36, of Lombard; MARCIN CYCHOWSKI; 41, of Addison; DANIEL NOGA, also known as “Daniel Terlecki,” 41, or Des Plaines; FRANCISZEK BYSTRON, 37, of Park Ridge; ARTHUR RADOLINSKI, 32, of Lisle; and ELZBIETA BUCZEK, 37, of Bensenville.

The eleven-count indictment was returned Sept. 29, 2016, and ordered unsealed yesterday.  It seeks forfeiture of at least $1.3 million.

The defendants pleaded not guilty during arraignments yesterday before U.S. Magistrate Judge Young B. Kim.  A status hearing is scheduled for Dec. 1, 2016, before U.S. District Judge James B. Zagel.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

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 bank fraud is punishable by up to 30 years in prison and a $1 million fine.  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 Timothy J. Chapman and Kavitha Babu.

Indictment