Northern District of Illinois
Press releases recorded for this federal judicial district.
Justice Department Files Lawsuit Against United Airlines for Violating Employment Rights of U.S. Air Force ReservistRead the Press Release
The Justice Department filed a complaint today alleging that United Airlines Inc. violated the employment rights of U.S. Air Force Reservist Lieutenant Colonel Daniel Fandrei under the Uniformed Services Employment and Reemployment Rights Act (USERRA).
According to the complaint, United violated USERRA by denying Fandrei employment benefits during his military leave that it grants to other employees for similar types of leave. Specifically, the complaint alleges that United failed to credit Fandrei with sick leave for his active duty deployment in 2012 and 2013. During that time, Fandrei was mobilized as a KC-10 pilot in Southwest Asia. Fandrei served his country as part of the Air Force from 1990 until 2016.
“Individuals who serve bravely in our armed forces should be treated fairly by their employers while they are actively deployed,” said Principal Deputy Associate Attorney General Bill Baer. “Through the department’s newly-created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and continue using every tool at our disposal to protect the rights of the men and women who serve in our armed forces.”
“USERRA ensures that servicemembers like Lt. Col. Fandrei who answer our nation’s call to duty don’t return to civilian life and find their employment benefits denied and their civil rights violated,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Department of Justice will continue to vigorously enforce the law to safeguard the rights of those who defend our country and protect our freedom.”
“Lt. Col. Fandrei has made many sacrifices to serve our nation honorably, including spending months away from his job and family,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois. “When our servicemembers are deployed in the service of our country, they are entitled to retain their civilian employment and benefits, and to the protections of federal law that prevent them from being subject to discrimination based upon their military obligations.”
The lawsuit filed by the United States seeks damages equal to the amount of Fandrei’s lost benefits caused by United’s failure to comply with USERRA. It also seeks an order requiring United to comply with all provisions of USERRA.
USERRA protects the rights of uniformed servicemembers to retain their civilian employment prior to, during and following absences due to military service obligations, and provides that servicemembers shall not be discriminated against because of their military obligations. Under USERRA, the department has authority to represent a servicemember if the department is satisfied that the servicemember is entitled to the rights or benefits being sought.
Fandrei initially filed a complaint with the Department of Labor’s Veterans’ Employment and Training Service, which investigated this matter and, after resolution failed, referred it to the Justice Department’s Civil Rights Division. This lawsuit followed as a collaborative initiative between the Civil Rights Division and the U.S. Attorney’s Office of the Northern District of Illinois. The Justice Department has prioritized the enforcement of servicemembers’ rights under USERRA. Additional information about USERRA can be found on the department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
United Airlines Complaint
Chicago Man Sentenced to Eleven Years in Federal Prison for Robbing Six Stores and Two Banks on North SideRead the Press Release
CHICAGO — A federal judge sentenced a Chicago man to eleven years in prison for robbing six stores and two banks on the city’s North Side.
BLAKE FISHER-BRUNER, 32, robbed the same bank twice, bringing his total number of robberies to nine. Four of the heists occurred in the Wicker Park neighborhood.
Fisher-Bruner showed a gun to store employees or bank tellers in several of the robberies. During the armed robbery of the Chicago Teacher store at 1855 N. Milwaukee Ave. in Chicago on May 27, 2014 – Fisher-Bruner ordered a cashier and a customer to the floor at gunpoint before stealing cash, a children’s book and a marker. In another of the robberies – of North Community Bank at 1555 N. Damen Ave. in Chicago on June 23, 2014 – Fisher-Bruner threatened to shoot the tellers if they did not comply with his demands. Fisher-Bruner was arrested by Chicago Police on July 6, 2014, while sitting in a vehicle with a loaded firearm in his pocket.
Fisher-Bruner pleaded guilty in March to three counts of bank robbery and one count of brandishing a firearm during a crime of violence. U.S. District Judge John Z. Lee imposed the 132-month sentence Friday in federal court in Chicago.
“The defendant committed very serious, violent acts,” Assistant U.S. Attorney Christopher V. Parente argued in the government’s sentencing memorandum. “Robberies of any kind, but especially armed robberies, are very serious crimes that terrorize the victims who are standing at the other end of the defendant’s firearm.”
According to his plea agreement, Fisher-Bruner served as a lookout in the first robbery while his girlfriend robbed the North Community Bank branch on April 18, 2014. The girlfriend, NAKESHA SCOTT, 24, of Joliet, was previously convicted in the case. Scott pleaded guilty to one count of bank robbery and was sentenced last year to 30 months in prison.
The other robberies committed by Fisher-Bruner include:
May 15, 2014: North Community Bank, 1600 W. Chicago Ave. in Chicago.
May 30, 2014: Ember Smoke Shop store, 2827 W. Belden Ave., in Chicago.
June 8, 2014: 7-Eleven store, 1658 N. Milwaukee Ave., in Chicago.
June 8, 2014: Egor’s Dungeon store, 900 W. Belmont Ave., in Chicago.
June 14, 2014: MS News store, 2445 N. Clark St., in Chicago.
June 21, 2014: Dude I Forgot store, 1400 N. Milwaukee Ave., 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. The Chicago Police Department provided valuable assistance.
Rockford Man Pleads Guilty to Embezzling More Than $250,000 from UnionRead the Press Release
ROCKFORD — A Rockford resident pleaded guilty before U.S. District Judge Philip G. Reinhard today to embezzling from a labor organization.
DAVID FLEURY, 49, pleaded guilty to an information charging him with embezzling more than $250,000 from Local 6 of the International Union of Bricklayers and Allied Craftworkers.
According to the written plea agreement, between January 2011 and May 2015, Fleury was President of Local 6 and managed the daily operation of the union local. Although paid a salary in the form of weekly electronic deposits into his bank account, Fleury admitted in the plea agreement that he caused an additional 153 salary checks and electronic deposits totaling $284,286 to be paid to him. Fleury also admitted to making $6,132 in unauthorized purchases on Local 6’s credit card, embezzling $4,585 in cash dues paid by Local 6 members, and failing to turn over additional reimbursement amounts related to his use of Local 6’s credit card for travel expenses. In the plea agreement, Fleury stated that he used the embezzled funds to pay for personal expenses, gambling at casinos, and vacations. Fleury also admitted to approving and signing false reports with the United States Department of Labor.
Fleury faces a maximum sentence of five years’ imprisonment, a fine of up to $250,000, or twice the gross gain or gross loss resulting from the offense, whichever is greater, supervised release of up to three years, and probation of one to five years. The judge must also order Fleury to pay full restitution to Local 6. Sentencing for Fleury is set for Dec. 15, 2016, 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. Purcell, District Director of the Chicago office of the United States Department of Labor – Office of Labor-Management Standards.
The government is represented by Assistant U.S. Attorney John G. McKenzie.
Plea Agreement
Justice Department Reaches Settlement to Resolve Allegations Against HSBC for Illegally Repossessing Servicemembers’ CarsRead the Press Release
The Justice Department announced today that HSBC Finance Corporation, as successor to HSBC Auto Finance Inc., has agreed to pay $434,500 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 75 cars owned by protected servicemembers without obtaining the necessary court orders. The settlement is subject to approval by the U.S. District Court of the Northern District of Illinois.
During the investigation, the department learned that HSBC conducted repossessions without court orders even when it had evidence in its own records suggesting that a borrower could be a protected servicemember. In one such case, HSBC continued with a repossession after learning that an initial attempt was unsuccessful because guards would not allow the “repo truck” to enter a “secured military post” in Indiana, where the car was located.
“HSBC repossessed cars without taking into account their owners’ ongoing service to our country,” said Principal Deputy Associate Attorney General Bill Baer. “This settlement rights this wrong, compensates the affected servicemembers and honors our commitment to making sure military members are treated fairly at all times.”
“Servicemembers should never have to worry that they will lose their cars while they answer our nation’s call to duty,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “HSBC should have heeded these concerns before repossessing vehicles. I commend the company for working cooperatively to reach an appropriate resolution once the department raised the issue.”
The settlement covers repossessions that occurred between 2008 and 2010. HSBC Auto Finance Inc. originated and serviced car loans until 2010, when HSBC sold its car lending operations and assets to Santander Consumer USA Inc. In February 2015, the department entered a settlement with Santander that provides servicemembers with more than $10.5 million in compensation for repossessions that violated the SCRA. As part of the investigation of Santander’s repossession practices, the department learned that HSBC sold to Santander the right to collect debts owed by servicemembers after their cars had been repossessed by HSBC without court orders.
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, HSBC prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
Most of the servicemembers compensated through this settlement received partial compensation through the settlement with Santander, and this agreement requires HSBC to pay $5,500 to each of these servicemembers. HSBC must pay $11,000 to affected servicemembers who did not receive payments from the Santander settlement. HSBC also must repair the credit of all affected servicemembers. An independent settlement administrator will contact servicemembers to be compensated through this settlement in the upcoming months. The independent administrator will locate victims and distribute payments at no cost to the servicemembers.
The department’s enforcement of the SCRA and other fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.4 billion in monetary relief for individual borrowers and affected communities through its enforcement of the Fair Housing Act, the Equal Credit Opportunity Act and the SCRA.
The SCRA provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov. Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/content/locator.php.
HSBC Complaint
HSBC Proposed Consent Order
Two Men Indicted on Federal Drug Charges in Related CasesRead the Press Release
ROCKFORD — Two men were indicted today by a federal grand jury in Rockford, Ill., on drug charges in related cases.
GILBERTO VENEGAS-GARZA, 48, of Houston, Texas, was charged with one count of distributing cocaine on June 28, 2016. CONSTANCIO PALOMINO-CHAVEZ, 34, of Rockford, was charged with possessing cocaine with intent to distribute, also on June 28, 2016.
According to a criminal complaint, on June 28, 2016, Venegas-Garza drove a van from Bedford Park, Ill. to Rockford where he met with Palomino-Chavez. They went to a residence on Newberg Road. A short time later Venegas-Garza drove away. Venegas-Garza was stopped for a traffic offense by Illinois State Police officers. Inside the van officers discovered approximately $5,000 in U.S. currency and a hidden “trap” compartment, according to the complaint. Officers searched the Newberg Road residence and found five kilograms of cocaine under the floorboards of a shed, according to the complaint. Venegas-Garza and Palomino-Chavez were both arrested and have remained in custody since their arrest on June 28, 2016.
Distribution of cocaine and possession with intent to distribute cocaine each carry a maximum penalty of up to 20 years in prison, at least three years of supervised release following imprisonment, and a fine of up to $1 million. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment is only a charge and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The indictments were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; and Leo P. Schmitz, Director of the Illinois State Police.
The government is represented by Assistant U.S. Attorney Margaret J. Schneider.
Palomino-Chavez Indictment
Venegas-Garza Indictment
Naperville Man Admits Lying to U.S. Immigration Officials About Past Membership in Chinese Communist PartyRead the Press Release
CHICAGO — A Naperville man admitted in federal court today that he willingly failed to disclose his prior membership in the Chinese Communist Party when seeking naturalized citizenship in the United States.
LU LIN, 59, pleaded guilty to one count of making a false statement to an immigration officer. The conviction is punishable by up to five years in prison and a fine of up to $250,000.
U.S. District Judge Edmond E. Chang scheduled a sentencing hearing for Nov. 9, 2016, at 10:00 a.m.
According to the plea agreement, Lin is a citizen of the People’s Republic of China who reported on his application for naturalized United States citizenship that he had never used other names and had never been a member of the Chinese Communist Party. Lin made the same assertions while under oath in an interview with officials in the Chicago office of the Department of Homeland Security’s U.S. Citizenship and Immigration Services, the plea agreement states.
In reality, Lin had been a member of the Chinese Communist Party from 1987 to 1997, and had received an identification document identifying him as “Yeung Yung.” Lin admitted in the plea agreement that he made the misrepresentations so he would be granted U.S. citizenship. He further acknowledged that his misrepresentations were material to the United States’ subsequent decision to grant him citizenship.
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 the Federal Bureau of Investigation. The Department of Homeland Security’s U.S. Citizenship and Immigration Services assisted in the investigation.
Plea Agreement
Owner of North Side Medical Clinic Charged with Selling Pain Medication Prescriptions to Patients Who Lacked Medical Need for the NarcoticsRead the Press Release
CHICAGO — A federal grand jury in Chicago has indicted the owner of a North Side medical clinic for dispensing prescription painkillers to patients he knew did not have a legitimate medical need for the drugs.
MOHAMMED SHARIFF, the owner and manager of Midtown Medical Center in Chicago’s Uptown neighborhood, conspired with a physician and a physician assistant to sell prescriptions for oxycodone, hydrocodone and other medications to patients they knew did not have a medical reason for taking the drugs, according to a 16-count indictment returned in federal court in Chicago. In some instances the patients received prescriptions without a meaningful physical examination or medical test being performed, while at other times the physician, THEODORE GALVANI, saw multiple individuals at the same time before writing the prescriptions, according to the indictment. On some occasions, according to the indictment, Shariff directed Galvani to prescribe painkillers to individuals with whom Galvani had never met.
The indictment seeks forfeiture of approximately $584,188 from Shariff, Galvani and the physician assistant, IRFAN MOHAMMED, and an additional $180,268 from only Shariff.
Shariff, 66, of Lincolnwood, pleaded not guilty today during an arraignment before U.S. District Judge Harry D. Leinenweber in Chicago. Galvani, 59, of Spring Grove, and Mohammed, 37, of Rockville, Md., will appear for arraignments at a future date to be determined by the Court.
The indictment was returned earlier this month and unsealed today. It charges Shariff, Mohammed and Galvani with one count of conspiracy to knowingly and intentionally dispense controlled substances outside the course of professional practice and without a legitimate medical purpose. Shariff and Mohammed are also charged with eight counts of knowingly and intentionally dispensing oxycodone outside the course of professional practice and without a legitimate medical purpose, and six counts of dispensing hydrocodone outside the course of professional practice and without a legitimate medical purpose. Shariff and Galvani are also charged with one count of conspiracy to commit health care fraud.
According to the indictment, purported Midtown patients often met with Mohammed prior to seeing Galvani. During these meetings, Mohammed encouraged the individuals to tell Galvani that they suffered from ailments and injuries that Mohammed had fabricated for them, the indictment states. Mohammed also falsified medical files in an effort to substantiate the prescriptions written by Galvani, the indictment states.
If a purported Midtown patient was uninsured, Shariff, Mohammed and Galvani demanded a cash payment in exchange for the prescriptions, according to the indictment. For patients covered by Medicare, Shariff and Galvani allegedly agreed to falsely bill Medicare for services that were either not rendered or not medically necessary. The indictment states that Shariff, Galvani and others working on their behalf caused Midtown to fraudulently bill Medicare approximately $351,958.
The indictment 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 U.S. Drug Enforcement Administration; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Lamont Pugh III, Special Agent-in- Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General.
The conspiracy count against all three defendants carries a maximum sentence of 20 years in prison. Each count of dispensing oxycodone is punishable by up to 20 years, while the counts for dispensing hydrocodone and the health care conspiracy are each punishable by up to ten years.
The public is reminded that an indictment 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 statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Peter Flanagan.
Indictment
U.S. Attorney Zachary T. Fardon and Other Law Enforcement Officials to Hold News Conference Today at 2:00 P.M.Read the Press Release
U.S. Attorney Zachary T. Fardon, FBI Chicago Special Agent in Charge Michael J. Anderson, Chicago Police Superintendent Eddie T. Johnson and other law enforcement officials will hold a news conference today to announce significant new indictments.
The news conference will begin at 2:00 p.m. in the 9th Floor Press Room of the U.S. Attorney’s Office, Dirksen Federal Building, 219 S. Dearborn, Chicago IL 60604. Media credentials will be required to access the Press Room, which will be open beginning at 1:15 p.m.
WHO: 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 FBI; Eddie T. Johnson, Superintendent of the Chicago Police Department; and several other law enforcement officials from the Chicago area and Indiana.
WHAT: The officials will announce significant new indictments against numerous alleged gang members.
WHERE: U.S. Attorney’s Office, 9th Floor Press Room in the Dirksen Federal Building, 219 S. Dearborn, Chicago IL 60604
WHEN: Tuesday, July 26, 2016, 2:00 p.m.
Thirty Four Alleged Gang Members Charged with Participating in Racketeering Conspiracy Involving Guns, Assaults and Attempted Murders in Chicago and SuburbsRead the Press Release
CHICAGO — Two federal indictments unsealed in Chicago today charged 34 members of the Latin Kings street gang with participating in a criminal organization that assaults and attempts to murder its rivals and violently protects its territories in the city and suburbs.
Authorities uncovered the alleged gang activity through dual investigations conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF). During the course of the multi-year probes, law enforcement agents confiscated more than 40 firearms, including two AR-15 assault rifles.
The indictments allege that members of the Latin Kings violently enforced discipline within its ranks and retaliated against rivals and former members to prevent cooperation with law enforcement. Its members and associates engaged in various acts of violence, including murder, attempted murder, assault with dangerous weapons, arson, and extortion, according to the indictments. The charges include the attempted murders of rival gang members and a Melrose Park Police officer.
Thirty four alleged Latin Kings are charged with racketeering conspiracy. A 35th alleged Latin King is charged in the indictment with selling a firearm without a license. The 36th and final defendant is an alleged Latin King charged in a criminal complaint with being a felon in possession of a firearm.
Several of the defendants were arrested this week and have begun making initial appearances in federal court in Chicago.
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; Lindsay Murphy, Acting Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Eddie T. Johnson, Superintendent of the Chicago Police Department. The officials recognized the substantial investigative assistance of the Melrose Park Police Department, Maywood Police Department, Cook County Sheriff's Police Department, Joliet Police Department, Evergreen Park Police Department, Bolingbrook Police Department, Orland Park Police Department, Palos Park Police Department, Hammond (Ind.) Police Department, and East Chicago (Ind.) Police Department.
The indictments pertain to alleged Latin King activities in two Chicagoland areas – the Southeast Side of Chicago, including the south suburbs, and the western suburbs of Maywood and Melrose Park.
Southeast Region (Chicago and South Suburbs)
U.S.A. v. Cavillo, et al, 16 CR 463
The Southeast Region of the Latin Kings contains over a dozen chapters, all of which answer to a regional structure of leadership, according to the indictment. Each chapter is typically named after the city in which it operates, or by a street or streets that run through the chapter. Among the Chicago chapters included in the Southeast Region were 82nd Street, 88th and 89th Streets, 97th Street, 99th Street, 102nd Street, 104th Street, and the Roseland neighborhood. Other regional chapters operated in the south suburbs of Blue Island, Dolton, Harvey and Chicago Heights, as well as in Kankakee and communities across the border in Indiana, according to the indictment.
The indictment charges three alleged high-ranking Latin Kings who enforced discipline and adherence to the gang’s rules and were known as “Regional Enforcers.” The three Southeast Regional Enforcers charged in the indictment are RAUL CAVILLO, 33, of Chicago; JOEL NUNEZ, 39, of Chicago; and CARLOS PADILLA JR., 35, of Chicago.
Also charged in the indictment are several alleged chapter leaders, known within the hierarchy as “Incas,” and their second in command, known as “Caciques.” According to the indictment, PAUL VASQUEZ, 43, of Chicago, served as Inca of the 82nd Street chapter; RUBEN PORRAZ, 36, of Chicago, was Inca of the 89th Street chapter; EDWARD DELGADO JR., 31, of Chicago, and LUIS GOMEZ, 31, of Chicago, were at times Incas of the 97th Street chapter; MIGUEL DENAVA, 27, of Chicago, served as Inca of the 99th Street chapter; and ELOY FUENTES, 31, of Chicago, was Inca of the 104th Street chapter. Incas are considered the highest authority within a chapter and oversaw the unlawful affairs of the Latin Kings in their areas, according to the indictment.
Caciques charged in the indictment include RAYMOND VASQUEZ, 30, of Chicago, who worked in the 97th Street chapter; and CARLOS CARTAGENA, 35, of Calumet City, in the 102nd Street chapter, according to the indictment.
Raymond Vasquez and three “Soldiers” of the chapter are charged in the indictment with using a dangerous weapon to assault an individual on Dec. 2, 2012, in south suburban Burnham. The purpose of the assault was to maintain and increase their position in the Latin Kings, the indictment states. The soldiers are identified in the indictment as FERNANDO CHAVEZ, 31, of Lansing; ISRAEL MATA, 33, most recently in state custody in Indiana on firearm charges; and EDGAR GONZALEZ, 32, of Whiting, Ind. Chavez is a convicted felon who is also charged with illegally possessing a Smith & Wesson .38-caliber pistol in Chicago in the summer of 2014, the indictment states.
Several other firearm-related offenses are charged in the indictment. A chapter soldier, ROY VEGA, 33, of Chicago, is charged with brandishing and discharging a firearm during a violent assault on July 5, 2014, in Chicago. Paul Vasquez is charged with attempting to transfer a loaded Tec-DC9 semi-automatic pistol to other Latin King members on Oct. 25, 2015, in Chicago, according to the indictment. Delgado is charged with being a felon in possession of a loaded Tauras .380-caliber semi-automatic pistol in Chicago, the indictment states. Delgado also faces a drug-related charge for allegedly distributing cocaine in the city in April 2014.
Also charged in the indictment is JUAN JIMENEZ, 33, of Blue Island, who allegedly served as the Southeast Regional Treasurer. Jimenez collected dues from the chapters as a way of financially supporting the activities of the region, the indictment states.
“M-Town” Section (Melrose Park and Maywood)
U.S.A. v. Gennell, et al, 16 CR 462
Included within the Midwest Region of the Latin Kings were numerous sections of the gang, including the Maywood section and the Melrose Park section, which collectively were referred to as the “M-Town” section. The geographical location controlled by the Maywood section included the area east of 25th Avenue, west of 1st Avenue, north of Lake Street, and south of North Avenue, in the western suburbs of Maywood and Melrose Park, according to the indictment.
The M-Town section was divided into two groups, known as “circles,” the indictment states. A group of older members were referred to as the “junior” circle or “older” circle, while a group of younger members were referred to as the “Pee-Wee” or “Shorty” circle. During periods when the M-Town section was split into an older and younger circle, each circle had its own set of leaders, but the ranking members of the younger circle still reported to the ranking members of the older circle, according to the indictment.
The hierarchy within the M-Town section was similar to the rankings in other Latin King sections, including the roles of Incas, Caciques, Enforcers, Soldiers and others, the indictment states. Several leaders of the M-Section, including three Incas and three Caciques, have been charged in the indictment. The three Incas are identified as PIERE PAOLO GENNELL, 30, of Melrose Park, and JOSE F. HERNANDEZ, 45, of Maywood, both of whom served at various times as Inca of the older circle; and DAVID PEREZ, 26, of Melrose Park, an Inca of the younger circle. The Caciques include older circle members ULISES DE LA CRUZ, 28, of Melrose Park, and MIGUEL MARTINEZ, 31, of Grayslake; and younger circle Cacique RUBEN MORENO, 24, of Melrose Park.
Gennell and Perez, along with two younger circle enforcers and a soldier, are charged in the indictment with attempting to murder an individual in Melrose Park on May 11, 2014, according to the indictment. During the attempted murder, the two enforcers, EFRAIN MEDINA, 26, of Maywood, and JOSE PENA, 21, of Melrose Park, personally discharged a firearm that left the victim badly injured and permanently disfigured, according to the indictment.
EDGAR VELARDE-SALDANA, 33, of Maywood, a soldier in the younger circle of the M-Town section, is charged in the indictment with attempting to murder a Melrose Park police officer on July 6, 2014. The officer was assisting agents from the Federal Bureau of Investigation at the time of the attempted killing, according to the indictment. The following month, Velarde-Saldana brandished and discharged a .45-caliber pistol during the course of a separate violent crime in Maywood, the indictment states.
Several other firearm-related offenses are charged in the indictment. Perez is facing gun charges for being a felon in possession of five pistols, a shotgun and a rifle in Maywood, Melrose Park and Hinsdale in the summer of 2014, according to the indictment. MARIO A. HERNANDEZ, 41, of Maywood, is a convicted felon who allegedly illegally possessed a Smith & Wesson 556-caliber rifle.
The investigations were conducted under the umbrella of the OCDETF program, a partnership between federal, state and local law enforcement agencies. The principal mission of OCDETF is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations.
The public is reminded that indictments contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The racketeering conspiracy charge generally carries a maximum sentence of 20 years in prison, but a life sentence is possible for certain underlying racketeering activities referenced in the indictments. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Assistant U.S. Attorneys Brian Wallach, Derek Owens and Vikas Didwania are representing the government in the Cavillo, et al, case.
Assistant U.S. Attorneys Jennie Levin, Matthew Hernandez and Morris Pasqual are representing the government in the Gennell, et al, case.
Gennell et al indictment
Cavillo et al indictment
Head of Schaumburg Home Health Company Sentenced to Six Years for Scheming to Fraudulently Bill Medicare for Unnecessary CareRead the Press Release
CHICAGO — A federal judge today sentenced the head of a Schaumburg home health company to six years in prison for scheming to bill Medicare for millions of dollars in unnecessary services.
As the manager of Suburban Home Physicians, which did business as Doctor at Home, DIANA JOCELYN GUMILA directed employees to perform in-home visits with patients who were physically capable of leaving their residences and not in need of in-home treatment. Gumila also inflated the costs incurred by Medicare by directing employees to bill the treatment at the most complicated levels, even though the visits were typically routine and did not qualify for the elevated billing.
A jury in April convicted Gumila, 47, of Streamwood, on 21 counts of health care fraud and three counts of making false statements in a health care matter. In addition to the 72-month sentence, U.S. District Judge Charles P. Kocoras ordered the defendant to pay $15.6 million in restitution.
“Home-health fraud has become a significant problem nationally and particularly in the Chicago area,” Assistant U.S. Attorney Stephen Chahn Lee argued in the government’s sentencing memorandum. “Such fraud cannot happen without people like defendant, who abuse Medicare’s rules and abuse the trust placed in them by Medicare and their patients.”
Gumila is one of several defendants convicted in the federal investigation of Doctor at Home. The prior convictions include ALAN NEWMAN, a physician from Chicago, and JAMES ADEMIJU, a nurse from Matteson who operated two nursing agencies. In a plea agreement, Newman admitted falsely certifying patients for nursing services even when he knew the patients did not need such care. Newman admitted causing approximately $2.6 million in losses to Medicare, according to his plea agreement. Ademiju pleaded guilty to billing for unnecessary services that were improperly authorized by physicians from Doctor at Home, and he acknowledged making illegal payments for patient referrals.
Evidence presented at Gumila’s two-week trial included a surreptitious audio recording in which Gumila can be heard telling a new doctor to “paint the picture” of patients so as to make them appear confined to their homes. Emails from Gumila were also shown to the jury, including one in which she referred to a physician who did not read orders before signing them as “the type of doctor we need [b]ecause he will just do what we tell him to do.”
Gumila’s conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Kristie Osswald, Special Agent-in-Charge of the Chicago Office of the Railroad Retirement Board Office of the Inspector General.
The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and the U.S. Department of Health and Human Services to prevent fraud and to enforce anti-fraud laws around the country. Dozens of defendants have been charged in numerous fraud cases since the strike force began operating in Chicago in 2011.
The government is represented by Mr. Lee and Assistant U.S. Attorney Vikas Didwania.
Former Owner of Rooftop Building Across from Wrigley Field Convicted of Defrauding Chicago Cubs and Municipal Taxing AgenciesRead the Press Release
CHICAGO — A federal jury today convicted the former owner of a rooftop building overlooking Wrigley Field of defrauding the Chicago Cubs and municipal taxing agencies by underreporting attendance figures and gross revenues.
After a nine-day trial in U.S. District Court in Chicago, R. MARC HAMID, 47, of Lincolnwood, was convicted on four counts of mail fraud and five counts of illegally structuring financial transactions. The conviction carries a maximum sentence of 105 years in prison.
U.S. District Judge Thomas M. Durkin scheduled a sentencing hearing for Dec. 6, 2016.
Hamid is a licensed Illinois attorney and an owner and operator of Right Field Rooftops LLC, which did business as Skybox on Sheffield, a rooftop entertainment venue located across the street from Wrigley Field’s right field wall. Hamid also owned and operated JustGreatTickets.com Inc. and Just Great Seats LLC, companies that purchased and re-sold tickets to entertainment and sporting events.
Skybox on Sheffield and other rooftop venues surrounding Wrigley Field had an agreement with the Cubs that required, among other things, that each rooftop pay the Cubs a royalty of 17% of their gross annual revenues. In addition, Cook County and the city of Chicago required the rooftops to pay an amusement tax on admission fees, and to report its amusement tax returns to the municipalities. The state of Illinois also required Skybox on Sheffield to file sales tax returns and to pay the state a certain dollar amount per ticket sold.
Evidence at trial revealed that for the years 2008 through 2011, Hamid caused Skybox on Sheffield to submit false annual royalty statements to the Cubs that under-reported attendance figures by thousands of paid attendees, and under-reported gross revenues by at least $1.5 million. At Hamid’s direction, sales from Skybox on Sheffield were diverted to the two ticket companies, thus concealing from the Cubs, Cook County and the city of Chicago Skybox on Sheffield’s true revenue. Hamid’s accountant, JOSEPH GURDAK, further reduced the attendance and revenue figures reported to the Cubs.
Gurdak, 73, pleaded guilty prior to trial to one count of mail fraud and one count of willfully filing a false income tax return. Gurdak faces a maximum sentence of 23 years in prison. Gurdak’s sentencing hearing before Judge Durkin has not yet been scheduled.
Hamid’s conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation in Chicago; and Antonio Gómez, Postal Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
The government is represented by Assistant U.S. Attorneys Barry Jonas, Sean Driscoll and Katherine Welsh.
U.S. Authorities Charge Owner of Most-Visited Illegal File-Sharing Website with Copyright InfringementRead the Press Release
U.S. authorities have charged the alleged owner of today’s most visited illegal file-sharing website with criminal copyright infringement and have seized domain names associated with the website.
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, Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.
Artem Vaulin, 30, of Kharkiv, Ukraine, was arrested today in Poland and is charged by criminal complaint, filed in U.S. District Court in Chicago, with one count of conspiracy to commit criminal copyright infringement, one count of conspiracy to commit money laundering and two counts of criminal copyright infringement. The United States will seek to extradite Vaulin to the United States.
“Vaulin is charged with running today’s most visited illegal file-sharing website, responsible for unlawfully distributing well over $1 billion of copyrighted materials,” said Assistant Attorney General Caldwell. “In an effort to evade law enforcement, Vaulin allegedly relied on servers located in countries around the world and moved his domains due to repeated seizures and civil lawsuits. His arrest in Poland, however, demonstrates again that cybercriminals can run, but they cannot hide from justice.”
“Copyright infringement exacts a large toll, a very human one, on the artists and businesses whose livelihood hinges on their creative inventions,” said U.S. Attorney Fardon. “Vaulin allegedly used the Internet to cause enormous harm to those artists. Our Cybercrimes Unit at the U.S. Attorney’s Office in Chicago will continue to work with our law enforcement partners around the globe to identify, investigate and prosecute those who attempt to illegally profit from the innovation of others.”
“Artem Vaulin was allegedly running a worldwide digital piracy website that stole more than $1 billion in profits from the U.S. entertainment industry,” said Executive Associate Director Edge. “Protecting legitimate commerce is one of HSI’s highest priorities. With the cooperation of our law enforcement partners, we will continue to aggressively bring to justice those who enrich themselves by stealing the creative work of U.S. artists.”
“Investigating cyber-enabled schemes is a top priority for CI,” said Chief Weber. “Websites such as the one seized today brazenly facilitate all kinds of illegal commerce. Criminal Investigation is committed to thoroughly investigating financial crimes, regardless of the medium. We will continue to work with our law enforcement partners to unravel this and other complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their income and use the Internet to mask their true identity.”
According to the complaint, Vaulin allegedly owns and operates Kickass Torrents or KAT, a commercial website that has enabled users to illegally reproduce and distribute hundreds of millions of copyrighted motion pictures, video games, television programs, musical recordings and other electronic media since 2008. The copyrighted material is collectively valued at well over $1 billion, according to the complaint. The complaint alleges that KAT receives more than 50 million unique visitors per month and is estimated to be the 69th most frequently visited website on the internet.
In addition, a federal court in Chicago ordered the seizure of one bank account and seven domain names associated with the alleged KAT conspiracy.
According to the complaint, KAT has consistently made available for download movies that were still in theaters and displayed advertising throughout its site. KAT’s net worth has been estimated at more than $54 million, with estimated annual advertising revenue in the range of $12.5 million to $22.3 million, according to the complaint. The complaint alleges that the site operates in approximately 28 languages. KAT has moved its domains several times due to numerous seizures and copyright lawsuits, and it has been ordered blocked by courts in the United Kingdom, Ireland, Italy, Denmark, Belgium and Malaysia, according to the complaint. KAT has allegedly operated at various times under the domains kickasstorrents.com, kat.ph, kickass.to, kickass.so and kat.cr, and relied on a network of computer servers located around the world, including in Chicago.
Several motion pictures currently available for download and sharing on KAT are still showing in theatres, including “Captain America: Civil War,” “Now You See Me 2,” “Independence Day: Resurgence” and “Finding Dory,” according to the complaint. The complaint alleges that Vaulin, who used the screen name “tirm,” was involved in designing KAT’s original website, oversaw KAT’s operations and, during the latter part of the conspiracy, Vaulin allegedly operated KAT under the auspices of a Ukrainian-based front company called Cryptoneat.
The charges and allegations contained in the complaint are merely accusations. The defendant is presumed innocent until and unless proven guilty.
HSI and IRS-CI investigated the case with substantial assistance from the International Organized Crime Intelligence and Operations Center, the National Intellectual Property Rights Coordination Center, the Criminal Division’s Office of International Affairs and the Polish Border Guard and National Prosecutor’s Office.
Senior Counsel Ryan K. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys William E. Ridgway and Devlin N. Su of the Northern District of Illinois are prosecuting the case. The Criminal Division’s Office of International Affairs also provided significant assistance in this case.
Owner of Most-Visited Illegal File-Sharing Website Charged with Criminal Copyright InfringementRead the Press Release
CHICAGO — Federal authorities in Chicago have charged the alleged owner of today’s most-visited illegal file-sharing website with criminal copyright infringement and have seized domain names associated with the website.
ARTEM VAULIN, 30, of Kharkiv, Ukraine, allegedly owns and operates Kickass Torrents, or KAT, a commercial website that since 2008 has enabled users to illegally reproduce and distribute hundreds of millions of copies of copyrighted motion pictures, video games, television programs, musical recordings and other electronic media, collectively valued at more than $1 billion, according to a criminal complaint filed in U.S. District Court in Chicago. KAT receives more than 50 million unique monthly visitors and is estimated to be the 69th most frequently visited website on the Internet, according to the complaint.
Vaulin was arrested today by authorities in Poland. The complaint charges Vaulin with one count of conspiracy to commit criminal copyright infringement, one count of conspiracy to commit money laundering, and two counts of criminal copyright infringement. The United States will seek to extradite Vaulin to the United States.
The complaint and arrest were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI); and Richard Weber, Chief, Internal Revenue Service Criminal Investigation. Substantial assistance was provided by the International Organized Crime Intelligence and Operations Center, the National Intellectual Property Rights Coordination Center, the Criminal Division’s Office of International Affairs, and the Polish Border Guard and National Public Prosecutor’s Office.
“Copyright infringement exacts a large toll, a very human one, on the artists and businesses whose livelihood hinges on their creative inventions,” said U.S. Attorney Fardon. “Vaulin allegedly used the Internet to cause enormous harm to those artists. Our Cybercrimes unit at the U.S. Attorney’s Office in Chicago will continue to work with our law enforcement partners around the globe to identify, investigate and prosecute those who attempt to illegally profit from the innovation of others.”
“Vaulin is charged with running today’s most visited illegal file-sharing website, responsible for unlawfully distributing well over $1 billion of copyrighted materials,” said Assistant Attorney General Caldwell. “In an effort to evade law enforcement, Vaulin allegedly relied on servers located in countries around the world and moved his domains due to repeated seizures and civil lawsuits. His arrest in Poland, however, demonstrates again that cybercriminals can run, but they cannot hide from justice.”
“Artem Vaulin was allegedly running a worldwide digital piracy website that stole more than $1 billion in profits from the U.S. entertainment industry,” said Executive Associate Director Edge. “Protecting legitimate commerce is one of HSI’s highest priorities. With the cooperation of our law enforcement partners, we will continue to aggressively bring to justice those who enrich themselves by stealing the creative work of U.S. artists.”
“Investigating cyber-enabled schemes is a top priority for CI,” said Chief Weber. “Websites such as the one seized today brazenly facilitate all kinds of illegal commerce. Criminal Investigation is committed to thoroughly investigating financial crimes, regardless of the medium. We will continue to work with our law enforcement partners to unravel this and other complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their income and use the Internet to mask their true identity.”
KAT operates in approximately 28 languages, according to the complaint. KAT’s net worth has been estimated at more than $54 million, with estimated annual advertising revenue in the range of $12.5 million to $22.3 million, according to the complaint. KAT has moved its domain several times due to numerous seizures and copyright lawsuits, and it has been ordered blocked by courts in the United Kingdom, Ireland, Italy, Denmark, Belgium and Malaysia, the complaint states.
In addition to the charges, a federal court in Chicago ordered the seizure of seven domain names associated with the alleged KAT conspiracy. The site relies on a network of computer servers around the world, including servers located in Chicago, and has operated at various times under the domains kickasstorrents.com, kat.ph, kickass.to, kastatic.com, kickass.so, thekat.tv and kat.cr, according to the complaint.
According to the complaint, movies that were still in theaters have consistently been made available for download by the KAT conspiracy. Films that KAT recently made available for download include “Captain America: Civil War,” “Now You See Me 2,” “Independence Day: Resurgence,” and “Finding Dory,” according to the complaint.
Vaulin, who used the online screen name “tirm,” was involved in designing KAT’s original website and oversaw KAT’s operations, according to the complaint. During the latter part of the conspiracy, Vaulin allegedly operated KAT under the auspices of a Ukrainian-based front company called Cryptoneat.
Criminal copyright infringement and conspiracy to commit criminal copyright infringement carry a maximum sentence of five years in prison. Conspiracy to commit money laundering is punishable by up to 20 years.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys William E. Ridgway and Devlin N. Su of the U.S. Attorney’s Office for the Northern District of Illinois; and Senior Counsel Ryan K. Dickey of the Criminal Division’s Computer Crime & Intellectual Property Section.
Complaint
High-Frequency Trader Sentenced to Three Years in Prison for Disrupting Futures Market in First Federal Prosecution of "Spoofing"Read the Press Release
CHICAGO — In the first federal prosecution of its kind, a high-frequency trader was sentenced today to three years in prison for disrupting commodity futures prices in a $1.4 million fraud scheme.
MICHAEL COSCIA, 54, used an automated trading technique known as “spoofing” to earn illegal profits from orders he placed through Chicago-based CME Group and London-based ICE Futures Europe. Coscia commissioned the design of computer programs, known as algorithms, to implement the fraudulent strategy at his New Jersey trading firm.
A federal jury in Chicago last year convicted Coscia, of Rumson, N.J., on six counts of commodities fraud and six counts of spoofing. U.S. District Judge Harry D. Leinenweber imposed the 36-month sentence in federal court in Chicago.
“Traders contemplating sophisticated scams will think twice if they know that there are more significant consequences than a civil lawsuit or a regulatory action,” Assistant U.S. Attorney Sunil Harjani argued in recommending a term of imprisonment in the government’s sentencing memorandum. “Hedge funds and proprietary trading firms will closely review their trades, and strike down get-rich-quick manipulation trading schemes because the cost is not worth the benefit.”
The indictment against Coscia marked the first federal prosecution under the anti-spoofing provision enacted in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The case was prosecuted by the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago. The section, which was created in 2014 by United States Attorney Zachary T. Fardon, is dedicated to protecting markets and preserving investors’ confidence.
Mr. Fardon announced the sentence along with Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
High-frequency trading is a form of automated trading that uses algorithms for placing a high volume of orders in milliseconds. It is illegal for traders to engage in spoofing, which involves placing “bids” to buy or “offers” to sell a futures contract with the intent to cancel the bid or the offer before execution.
Evidence at Coscia’s seven-day trial in November 2015 showed that he engaged in spoofing in the markets of various commodities, including gold, soybean meal, soybean oil, high-grade copper, Euro FX and Pounds FX currency futures. In less than three months in 2011, Coscia illegally profited nearly $1.4 million.
Behr Iron & Steel Inc. Sentenced on OSHA Violation Causing Death of EmployeeRead the Press Release
ROCKFORD — A Rockford-based company was sentenced today by U.S. Magistrate Judge Iain D. Johnston for willfully violating Occupational Safety and Health Administration regulations, resulting in the death of an employee at the company’s facility in South Beloit, Ill.
BEHR IRON & STEEL INC., a high volume ferrous and nonferrous scrap processor, was sentenced to 5 years’ probation and ordered to pay restitution of $350,000 to the victim’s estate. Behr was also previously ordered to pay a fine of $520,000 in a related administrative OSHA case.
The company pleaded guilty to the charge on March 8, 2016, and admitted in a plea agreement that on March 10, 2014, the company failed to provide lockout/tagout protection and confined space protection as required under OSHA regulations for the company’s employees who were cleaning a shredder discharge pit. The company admitted that those violations caused the death of an employee who got caught in a moving, unguarded conveyor belt.
Behr’s South Beloit facility recycles metals contained in such things as automobiles and refrigerators. According to the plea agreement, OSHA regulations require employers to adopt safety procedures to ensure that dangerous machines are properly shut off and unable to start up again prior to the completion of maintenance or servicing work. The safety procedures include placing a lock on the power source of the machine and a tag on the lock warning that the machine cannot be operated until the warning is removed, and identifying the employee who has the key to the lock. OSHA also promulgated regulations that address the need to protect employees from entering a confined space without safety precautions.
Metals shredded through a shredding machine in Behr’s South Beloit facility fall onto a conveyor belt located about ten feet underground in a shredder discharge pit, which was approximately six feet long and six feet wide. The shredded materials were then moved by a conveyor belt out of the discharge pit and through a sorting process. Some of the shredded metals fall onto the ground of the discharge pit near the conveyor belt. One or two Behr employees working on the shredding machine were required to clean the discharge pit on a daily basis. The employees shoveled shredded materials from the floor of the discharge pit onto the running conveyor belt.
On March 10, 2014, a Behr employee was cleaning the discharge pit when the employee’s arm was caught by the unguarded conveyor belt. The employee was pulled into the machinery and killed.
Behr admitted that there was no lock or operable emergency shut off switch in the discharge pit for the conveyor belt, and the conveyor belt did not have guards designed to protect employees. Behr also admitted that employees in the discharge pit were not adequately trained to use the shredder or the conveyor belt, and that the company had not developed and implemented confined space protection for employees entering the discharge pit.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Ken Nishiyama Atha, Regional Administrator of OSHA in Chicago.
The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.
Chicago-Based Return Preparer Who Targeted City Employees in Fraudulent Tax Return Schemes Permanently Shut down by Federal CourtRead the Press Release
WASHINGTON — According to a civil complaint the United States filed in 2014, a Chicago-based tax return preparer prepared returns that falsely claimed that recipients of discrimination awards related to a class-action lawsuit could claim large deductions on their federal tax returns and that falsely inflated the amount of wages that city of Chicago employees claimed were withheld from their paychecks. Now a federal court has completely barred this tax return preparer from preparing tax returns for others.
VICTOR M. CROWN promoted two false and fraudulent schemes through which he claimed that his customers could obtain significant federal income tax refunds, the complaint alleged. In the first scheme, as set out in the complaint, Crown falsely inflated the amount of income tax that was withheld from his customers’ paychecks because the city of Chicago purportedly calculated an incorrect withholding amount. Taxpayers may not claim a withholding credit larger than the amount that was actually withheld from their wages. The second scheme is founded on the 1969 class-action lawsuit Shakman v. Democratic Organization of Cook County, et al., No. 69-cv-2145 (N.D. Ill.), according to the United States’ complaint. Shakman was a discrimination case against the city of Chicago that alleged that the city improperly used political patronage when hiring and promoting public officials. As part of an agreed Shakman settlement order, the city set up a $12 million fund to compensate claimants for violations of the federal district court’s orders. Claims were submitted to the court-appointed monitor, who was responsible for evaluating the claims and, if justified, assigning a monetary award amount. According to the United States’ complaint against Crown, Crown asserted that his customers who were Shakman award recipients were entitled to claim net operating loss deductions for the difference between their claim and the amount they actually received in their award. The federal tax law does not permit a deduction in the amount of a denied discrimination claim.
In explaining its reasons for enjoining Crown, the court noted that the scope of Crown’s misconduct involved “at least 2,900 fraudulent tax returns,” as well as his “failure to accept responsibility and cease his operations.” The court’s injunction order forbids Crown from preparing tax returns for others and from making false statements about securing any tax benefit by virtue of receiving or not receiving an award in the Shakman litigation. It also requires Crown to give the United States a list of all his tax-preparation customers since 2010.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Four Conspirators Indicted in Chicago-Based Stolen Identity Refund Fraud SchemeRead the Press Release
WASHINGTON – A federal grand jury sitting in Chicago, Illinois, returned an indictment, which was unsealed yesterday, charging four Chicago-area residents with conspiracy to commit theft of government money, wire fraud, theft of government money, aggravated identity theft and access device fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.
The indictment charges ROXANN GIST, DOMINIQUE KING, NELLYVETTE MOJICA and ROSA ALVERIO with conspiracy to commit theft of government money. Gist and King also are charged with wire fraud, aggravated identity theft and access device fraud. Mojica and Alverio also are charged with theft of government money.
According to the indictment, Gist and King used the means of identification of other individuals without their knowledge and consent in order to prepare and file false tax returns that claimed large tax refunds. The refund checks were mailed to addresses in the Chicago area or electronically deposited into bank accounts controlled by the defendants and others. After Mojica and Alverio received a number of the fraudulent refund checks into accounts under their control, they split the proceeds with Gist and King. From 2012 to 2015, the defendants and others received in excess of $1.3 million in fraudulent tax refunds.
If convicted, the defendants each face a statutory maximum sentence of five years in prison for the conspiracy count. Gist and King also face a statutory maximum sentence of 20 years in prison for wire fraud, 10 years in prison for access device fraud and a mandatory minimum sentence of two years in prison for each count of aggravated identity theft, which must run consecutive to any other sentence imposed by the court. Mojica and Alverio also face a statutory maximum sentence of 10 years in prison for the theft of government money counts. In addition, the defendants face potential fines, forfeiture and restitution.
An indictment merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Ryan R. Raybould and Timothy M. Russo of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Spanish Investor Charged with Impeding Federal Investigation into $4.6 Million Insider Trading SchemeRead the Press Release
CHICAGO — A federal grand jury in Chicago has indicted a Spanish investor for allegedly covering up an international insider trading scheme that netted more than $4.6 million.
LUIS MARTIN-CARO SANCHEZ bought options of Canadian fertilizer producer Potash Corporation of Saskatchewan Inc., a few days before the company publicly announced an unsolicited buyout offer that drove its stock price up 27.7%, according to the indictment. Sanchez made the timely trades after communicating with banking and investor friends in Spain, the indictment states.
In five days in August 2010 Sanchez netted approximately $496,953 – a return of approximately 1,046% on his investment, the indictment states. Two of his friends made similar trades and profited approximately $993,183, while a Spanish businessman in Greece profited more than $3.1 million after communicating with a mutual acquaintance of Sanchez, according to the indictment. In subsequent civil litigation brought against him by the U.S. Securities and Exchange Commission, Sanchez allegedly lied under oath and withheld key financial evidence.
The indictment was returned yesterday in U.S. District Court in Chicago. It charges Sanchez, 42, of Madrid, Spain, with one count of obstruction of justice and two counts of perjury.
Federal authorities will seek to extradite Sanchez to the United States. An arraignment date in federal court in Chicago has not yet been scheduled.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; David Glockner, Regional Director of the SEC’s Chicago Regional Office; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
According to the charges, Australian mining company BHP Billiton decided in August 2010 to make a tender offer for all of Potash’s common stock. BHP dealt with several foreign investment banks to secure confidential financing commitments in an effort to underwrite the offer. During a meeting in Chicago on Aug. 12, 2010, BHP’s chief executive officer conveyed a $38.6 billion buyout offer to Potash’s chief executive. Potash rejected the offer, but it did not publicly announce the matter until Aug. 17, 2010, according to the indictment.
During those interim five days, Sanchez communicated extensively with his banking and investor friends, the indictment states. On August 12 and 13, 2010, Sanchez purchased approximately 331 out-of-the-money call option contracts for Potash stock via an account at Interactive Brokers LLC, according to the indictment. Sanchez’s contracts were set to expire within weeks of the purchase date, the indictment states.
In a telephonic deposition taken as part of the SEC lawsuit on July 1, 2011, Sanchez allegedly lied under oath when he denied knowing other people who purchased Potash securities in advance of Potash’s announcement of the buyout offer. He also allegedly lied when he denied knowing the telephone numbers of two of those individuals. Telephone records indicate that Sanchez had called each of them numerous times in the days between the private offer and Potash’s public announcement of it, the indictment states.
In late 2010 a friend who profited approximately $540,493 from Potash options sales sent 100,000 euros to Sanchez’s bank account in Zurich, Switzerland, the indictment states. Sanchez withheld information about his Swiss account from the SEC during its investigation, according to the indictment. The SEC discovered the account and the friend’s payment in January 2014 – more than two years after the SEC’s lawsuit against Sanchez had ended, the indictment states.
The obstruction count is punishable by up to 20 years in prison, while the perjury counts each carry a maximum sentence of five years. 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. 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 William Hogan.
Indictment
Rockford Man Charged with the Robbery of Rockford Banks and a Coin and Stamp StoreRead the Press Release
ROCKFORD — A local man was indicted June 21, 2016 by a federal grand jury in Rockford, Ill. on bank robbery, robbery affecting interstate commerce and firearm charges.
DAVID J. SANDERS, 33, was charged with one count of attempted bank robbery, two counts of bank robbery, one count of robbery affecting interstate commerce, one count of using and carrying a firearm in relation to a crime of violence, and one count of possessing a firearm as a convicted felon.
The indictment alleges that on May 31, 2016, Sanders attempted to commit a robbery of the BMO Harris Bank, 2510 S. Alpine Rd., Rockford, Ill. The indictment further alleges that on May 31, 2016, Sanders robbed the BMO Harris Bank, 1480 S. Alpine Rd., Rockford, Ill and that he obtained $2,260 from bank employees during that robbery. The indictment further alleges on June 11, 2016 Sanders robbed Rockford Coin and Stamps, 4402 Center Ter., Rockford, Ill. while using and carrying a firearm during a crime of violence and that he obtained $500 and a Remington shotgun from Rockford Coin and Stamps employees during that robbery. The indictment further alleges that between June 11, 2016 and June 14, 2016, Sanders possessed a firearm as a convicted felon. The indictment further alleges that on June 14, 2016, Sanders robbed PNC Bank, 4615 E. State St., Rockford, Ill. and that he obtained $3,010 from bank employees during that robbery.
Each count of attempted bank robbery, bank robbery and robbery affecting interstate commerce carries a maximum penalty of up to 20 years in prison, up to 3 years of supervised release following imprisonment, a fine of up to $250,000, and full restitution. The charge of using and carrying a firearm in furtherance of a crime of violence carries a mandatory minimum sentence of 7 years, maximum penalty of up to life imprisonment, up to 5 years of supervised release following imprisonment, and a fine of up to $250,000. The sentence imposed for this charge must be consecutive to any other sentence imposed. The charge of possessing a firearm as a convicted felon carries a maximum penalty of 10 years, up to 3 years of supervised release, and a fine of up to $250,000. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Sanders has been in custody since his arrest on June 14, 2016 and pleaded not guilty during his arraignment yesterday before U.S. Magistrate Judge Iain D. Johnston. Sanders was previously ordered to be held in federal custody pending trial. Sanders is next scheduled to appear before U.S. Magistrate Judge Johnson for a status hearing on Aug. 16, 2016 at 11:00 a.m.
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; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Dan O’Shea, Chief of the Rockford Police Department. The investigation was conducted under the auspices of the FBI Safe Streets Task Force, which includes representatives from the FBI, ATF, Loves Park Police Department, Winnebago County Sheriff’s Department, and Rockford Police Department.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Elgin Man Pleads Guilty to Federal Fraud ChargesRead the Press Release
ROCKFORD — An Elgin resident pleaded guilty today before U.S. District Judge Frederick J. Kapala to federal fraud charges.
STEPHEN T. ANGERMAN, 48, pleaded guilty to bank fraud, money laundering, and testifying falsely in a bankruptcy case.
According to the written plea agreement, from December 2009 through March 31, 2010, Angerman schemed to fraudulently obtain a $510,000 loan from Alliant Credit Union and a $64,590 loan from Prairie Community Bank in order to purchase a home on Wrenwood Circle in Elgin. Angerman admitted to making false statements on his loan application to Alliant about his employment, assets, and liabilities. Further, Angerman admitted to submitting fictitious bank account statements, pay stubs, and a W-2 earnings form, and a fraudulent Certificate of Gift form to the credit union in support of his application. Alliant issued the loan based upon Angerman’s representations.
Angerman admitted that in December 2009 and January 2010, he applied for and obtained a $64,590 loan from Prairie Community Bank by pledging a 2008 Chevrolet Corvette as collateral without disclosing that the Corvette was subject to a prior lien of approximately $40,000 held by another bank.
With regard to the money laundering charge, Angerman admitted that on March 23, 2010, he transferred most of the proceeds, $64,500, from his checking account at Allied Credit Union to an account in the name of a relative at a different bank in an attempt to conceal his bank fraud against Prairie Community Bank.
On Jan. 3, 2011, Angerman filed for bankruptcy in Rockford. Angerman admitted that on Feb. 7, 2011, he falsely testified under oath at a meeting of creditors by stating he did not own any real estate other than what he had listed in his bankruptcy schedules, and that he did not own a car, when in fact he owned the home on Wrenwood Circle in Elgin and the Corvette.
Angerman faces up to 30 years’ imprisonment for bank fraud, a fine of up to $1,000,000, and a term of supervised release of up to 5 years. For money laundering, Angerman faces a sentence of up to 20 years’ imprisonment, a fine of up to $500,000, and a term of supervised release of not more than 3 years. Angerman also is subject to a civil penalty of twice the value of the property involved in the transaction. For falsely testifying in his bankruptcy case, Angerman faces up to 5 years in prison, a $250,000 fine, and supervised release of up to 3 years. The judge must also order Angerman to pay restitution. Sentencing is set for Oct. 3, 2016, at 2:30 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 Federal Bureau of Investigation; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service - Criminal Investigation Division in Chicago.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Plea Agreement
Two North Suburban Doctors Charged as Part of Largest National Medicare Fraud Takedown in HistoryRead the Press Release
CHICAGO — Two north suburban doctors have been charged as part of the largest national Medicare fraud takedown in history, federal authorities announced today.
Attorney General Loretta E. Lynch and Department of Health and Human Services Secretary Sylvia Mathews Burwell announced the unprecedented nationwide sweep that resulted in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-three state Medicaid Fraud Control Units participated in the takedown. In addition, the HHS Centers for Medicare & Medicaid Services (CMS) is suspending payment to a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in history, both in terms of the number of defendants charged and the loss amount.
“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – it is a serious crime,” said Attorney General Lynch. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people – many of them in need of significant medical care. They promise effective cures and therapies, but they provide none. Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends. The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”
Two registered Illinois physicians were charged as part of the investigations, announced Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
DR. YEVGENY ODESSKY, a physician with an office in Buffalo Grove, took cash kickbacks in exchange for referring patients to a home health care agency in the north suburbs, according to a criminal complaint filed last week in federal court in Chicago. Unbeknownst to Dr. Odessky, the owner of the agency was cooperating with federal authorities and had agreed to secretly record meetings with Dr. Odessky, according to the complaint. In one recorded meeting in Dr. Odessky’s clinic on April 26, 2014, Dr. Odessky agreed to accept $300 for each Medicare beneficiary he referred to the agency, according to the complaint. Speaking in Russian, Dr. Odessky is heard on the recording laughing while telling the agency owner, “Public Aid will choke,” according to the complaint.
Dr. Odessky, 66, of Highland Park, is charged with one count of violating the federal Medicare and Medicaid Anti-Kickback Statute, which is punishable by up to five years in prison and a fine of up to $250,000. A preliminary hearing in federal court in Chicago is scheduled for July 11, 2016, at 1:00 p.m.
DR. ZOYA KOSMAN, a physician with an office in Skokie, allegedly caused the submission of false medical evidence to help a claimant obtain federal disability benefits to which the claimant was not entitled. Dr. Kosman knowingly lied about the claimant’s complaints, symptoms, and functional abilities in documentation submitted in support of the claimant’s application for benefits, according to an indictment returned yesterday in federal court in Chicago.
The indictment charges Dr. Kosman, 58, of Skokie, with one count of making false statements in an application for federal benefits. The charge carries a maximum sentence of ten years in prison and a fine of up to $250,000. An arraignment in federal court in Chicago has not yet been scheduled.
The cases announced today were investigated by the national Medicare Fraud Strike Force, whose operations are part of the Health Care Fraud Prevention & Enforcement Action Team. Since its inception in March 2007, the Strike Force has charged more than 2,900 defendants who collectively have falsely billed the Medicare program more than $8.9 billion.
The Illinois cases are being prosecuted by the U.S. Attorney’s Office for the Northern District of Illinois. The government in Dr. Odessky’s case is represented by Assistant U.S. Attorney Nathalina A. Hudson, and in Dr. Kosman’s case by Special Assistant U.S. Attorney Jared C. Jodrey.
The national cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with agents from the Federal Bureau of Investigation, HHS-OIG, Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.
The public is reminded that charges are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Husband and Wife Owners of First Mutual Bancorp of Illinois Indicted in Scheme to Hide Millions of Dollars in Cash and Assets from CreditorsRead the Press Release
CHICAGO — An Oak Brook couple who owned First Mutual Bancorp of Illinois and other financial entities intentionally hid cash and assets from creditors after defaulting on $40 million in personal and corporate loans, according to an indictment returned in federal court in Chicago.
PETHINAIDU VELUCHAMY and his wife, PARAMESWARI VELUCHAMY, were the principal shareholders of First Mutual Bancorp of Illinois Inc., a holding company for Mutual Bank. In June 2009, according to the indictment, the couple defaulted on personal and corporate loans totaling $40 million. The following month, Mutual Bank was shut down by federal regulators. Prior to the shutdown and continuing until at least November 2015, the couple hid millions of dollars in assets by falsifying documents, moving money into domestic and foreign bank accounts, and directing employees to destroy financial records, the indictment states. The couple also transferred cash to their two adult children, with nearly $8.5 million going to one and more than $10.1 million to the other, according to the indictment.
The 12-count indictment was returned yesterday in U.S. District Court in Chicago. It charges Pethinaidu Veluchamy, 70, with four counts of bank fraud, two counts of destroying records to obstruct a bankruptcy proceeding, two counts of making a false statement under oath in a bankruptcy proceeding, and one count of making a false statement in an application for a U.S. passport. Parameswari Veluchamy, 65, is charged with four counts of bank fraud, two counts of destroying records to obstruct a bankruptcy proceeding, one count of making a false statement under oath in a bankruptcy proceeding, and one count of making a false statement in an application for a U.S. passport.
Arraignments in federal court in Chicago have not yet been scheduled.
According to the charges, Pethinaidu Veluchamy caused his relatives to obtain legal judgments against him for loans for which he knew he was not personally liable, so that he could later assert those liens as superior to a bank creditor’s anticipated judgments. In a 2011 deposition in a separate court case, Pethinaidu Veluchamy fraudulently claimed that certain funds transferred to his adult children represented indemnity obligations for their investments in First Mutual Bancorp, according to the indictment. He produced a document to support this claim, but when questioned about the timing of the creation of the document, Pethinaidu Veluchamy claimed the computer he had used to create it crashed in a snowstorm, according to the indictment.
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.
Each count of bank fraud is punishable by up to 30 years in prison and a $1 million fine. Destroying records to obstruct a bankruptcy proceeding carries a maximum sentence of 20 years. The maximum sentence for making a false statement under oath in a bankruptcy proceeding is five years, while making a false statement in an application for a U.S. passport is punishable by up to ten years.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and 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 statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Bethany Biesenthal and Special Assistant U.S. Attorney Jeffrey Snell.
Indictment
Department of Justice to Host Public Forums to Hear from Community as Part of Investigation of Chicago Police DepartmentRead the Press Release
CHICAGO — The Civil Rights Division of the United States Department of Justice, along with the United States Attorney’s Office for the Northern District of Illinois, are conducting a civil pattern or practice investigation into the Chicago Police Department. As part of the investigation, officials will be hosting public forums to provide information about the investigative process, and to offer time for community members to share their experiences with policing in Chicago.
The dates and locations of the forums are as follows:
June 22, 6:30 p.m. to 8:30 p.m.
Kennedy King City College (U Building)
740 W. 63rd St., Chicago IL 60621
July 12, 6:30 p.m. to 8:30 p.m.
Truman City College
1145 W. Wilson Ave., Chicago IL 60640
July 14, 6:30 p.m. to 8:30 p.m.
KROC Center Chapel
1250 W. 119th St., Chicago IL 60643
The forums are free of charge and open to the public and the media.
The purpose of the pattern or practice investigation is to determine whether there are systemic violations of the Constitution or federal law by the Chicago Police Department. The investigation is focused on use of force, including racial, ethnic and other disparities in its use of force, as well as police accountability systems, including how internal investigations are conducted, how the police department responds to citizen complaints, and how it handles officer discipline.
Community members who are unable to attend the forums but wish to share information relevant to the investigation are encouraged to contact the Department of Justice by phone: (844) 401-3735 or email: [email protected].
Jury Convicts Lockport Contractor of Defrauding City of Chicago’s Women-Owned Business Entity Procurement ProgramRead the Press Release
CHICAGO — A federal jury today convicted a Lockport subcontractor on fraud charges for scheming to help a general contractor falsely satisfy its female hiring requirement on city of Chicago construction projects.
As the owner of a certified Women’s Business Enterprise, ELIZABETH PERINO agreed to allow her company to be claimed as a subcontractor on city projects so that the general contractor could satisfy its requirement to assign a portion of the work to female-owned businesses. Perino falsified paperwork to conceal the fact that her business, Perdel Contracting Co., would perform no actual work on the projects. As a result of Perino’s fraud, Perdel expected to receive payment equivalent to a percentage of the work that Perdel fraudulently claimed to have performed.
Perino, 62, of Willowbrook, was convicted on three counts of wire fraud and one count of mail fraud. The conviction is punishable by a maximum sentence of 80 years in prison.
U.S. District Judge Gary Feinerman will schedule a sentencing hearing at a later date.
A city of Chicago ordinance establishes an overall goal of awarding at least 5% of total annual funding of all city contracts to WBEs. For contracts with values exceeding $10,000, each contractor has to commit a certain percentage of labor to WBEs, either as a joint venture or subcontractor, or by purchasing goods or services from a WBE. In addition to being a WBE, Lockport-based Perdel, which specializes in concrete and carpentry work, also qualified to participate in city projects as a certified Disadvantaged Business Enterprise.
Evidence at the four-day trial revealed that Perino and a co-worker agreed to act as a “pass-through” WBE/DBE on two city projects, meaning that Perdel’s employees would perform no work and Perdel’s equipment would not be used. For one of the projects – at O’Hare International Airport – Perino agreed to place the general contractor’s employees on Perdel’s payroll to perform the work that would be credited to Perdel. Perino also entered into a sham contract to “purchase” street sweepers from the general contractor and title them in Perdel’s name while the general contractor’s workers performed the street sweeping as purported employees of Perdel. Perino and the general contractor further agreed that, at the conclusion of the O’Hare project, the street sweepers would be returned to the general contractor for $1 per machine, and Perdel would receive 18% on top of the labor costs and $20 per hour for the street sweepers.
The conviction 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; Thomas Ullom, Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General in Chicago; James Vanderberg, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Joseph M. Ferguson, Inspector General for the City of Chicago.
The government is represented by Assistant U.S. Attorneys Megan Cunniff Church and Matthew Kutcher.
Youth Basketball Coach Indicted on Child Pornography Charges for Allegedly Enticing Boys to Engage in Sexually Explicit Photos and VideosRead the Press Release
CHICAGO — A youth basketball coach from Chicago has been indicted on federal child pornography charges for allegedly paying minor boys to be photographed and video-recorded while engaged in sexually explicit conduct.
BRADLEY J. AMES, 35, and a co-conspirator paid approximately $100 to $650 to the minor boys in return for being photographed and video-recorded while engaged in various sexual acts, according to the indictment. Ames and the co-conspirator then transmitted the photos and videos over the Internet, the indictment states.
The pair met most of the minors online after the co-conspirator set up a Facebook profile for a fictitious female named “Hannah,” and used it to encourage young males to share photos and information about themselves, according to the indictment. Ames then selected certain minors who had communicated with “Hannah” so that the co-conspirator could pursue sexually explicit photos and videos of them, the indictment states.
The six-count indictment was returned yesterday in federal court in Chicago. It charges Ames with one count of conspiracy to produce child pornography, four counts of producing child pornography, and one count of knowingly receiving child pornography.
Ames will be arraigned before U.S. Magistrate Judge Jeffrey T. Gilbert on June 15, 2016, at 1:45 p.m.
In addition to contacting children online, the indictment alleges that Ames identified at least one minor victim through a boy he met while coaching youth basketball. Ames provided the minor’s Facebook page to the co-conspirator to facilitate contacting the child, the indictment states. The indictment further alleges that Ames sometimes paid the co-conspirator to engage in sexually explicit conduct with the minors.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and James M. Gibbons, Acting Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
The conspiracy and production counts are punishable by a minimum sentence of 15 years in prison and a maximum of 30 years, while knowingly receiving child pornography carries a minimum sentence of five years in prison and a maximum of 20 years.
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. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Yusef Dale.
Indictment
Lindenhurst Man Detained in Federal Custody for Allegedly Constructing Potentially Destructive Pipe BombsRead the Press Release
CHICAGO — A man who allegedly manufactured explosive devices and kept them in the bedroom of his Lindenhurst home was ordered detained in federal custody today.
U.S. Magistrate Judge Sidney Schenkier ordered MICHAEL SUOPYS, 28, held without bond on a charge of knowingly possessing an unregistered destructive device. A detention hearing is scheduled for June 15, 2016, at 10:30 a.m.
A federal criminal complaint alleges that Suopys built two pipe bombs by filling a metal pipe with Nitrocellulose and adding a wick. Suopys was also charged in Lake County Circuit Court with possessing bombs containing an explosive substance, which is a Class 3 felony. The state charge was dismissed this morning.
“Thankfully, law enforcement at the federal, state and local level was able to identify and safely interrupt the threat described in the complaint,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “The Federal Bureau of Investigation, Lake County State’s Attorney’s Office and Lindenhurst Police Department are to be commended for their diligence and collaboration in this investigation.”
The federal complaint was announced by Mr. Fardon, along with Michael J. Anderson, Special Agent in Charge of the Chicago office of the FBI; Michael G. Nerheim, Lake County State’s Attorney; and Tom Jones, Chief of the Lindenhurst Police Department.
The federal charge carries a maximum sentence of ten years in prison and a fine of up to $250,000.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Matthew Hiller.
Owner of West Suburban Weight Loss Center Indicted in Scheme to Illegally Dispense Appetite-Suppressant DrugsRead the Press Release
CHICAGO — The owner of a Lombard weight-loss center and a Burr Ridge physician have been charged with conspiracy and other crimes related to dispensing appetite-suppressant drugs without a legitimate medical purpose.
According to a 17-count federal indictment, MICHAEL JENNINGS, the owner of Results Weight Loss Center, made cash payments to the doctor in exchange for using the physician’s federal registration number to order and dispense hundreds of thousands of dosages of Phendimetrazine and Phentermine. The physician, WILLIAM MIKAITIS, was rarely present at the weight-loss center, according to the indictment. Instead, Jennings, who is not a doctor and lacks medical training, identified himself to patients as “Dr. Mikaitis” and ordered the prescriptions without conducting meaningful examinations or tests, the indictment states.
The indictment alleges that between approximately February 2013 and January 2015, Jennings made cash deposits of approximately $75,000 into Mikaitis’ bank account. The indictment seeks a total forfeiture from the defendants of approximately $790,000 in illegal proceeds from the scheme.
The indictment was returned yesterday in federal court in Chicago. It charges Jennings, 48, of Naperville, and Mikaitis, 72, of Burr Ridge, with one count of conspiracy to distribute controlled substances outside the course of professional practice and without a legitimate medical purpose, seven counts of distributing controlled substances outside the course of professional practice and without a legitimate medical purpose, seven counts of dispensing prescription drugs without a valid prescription, and one count of conspiracy to conduct a financial transaction involving the proceeds of unlawful activity. The counts are punishable by a maximum combined sentence of 95 years in prison.
Mikaitis, who maintains a medical practice in Lockport, is also charged individually with one count of engaging in a monetary transaction involving criminally derived property valued at more than $10,000. This count carries a maximum sentence of ten years in prison.
Jennings and Mikaitis will be arraigned before U.S. District Judge Virginia M. Kendall on June 9, 2016, at 9:30 a.m.
The indictment 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 U.S. Drug Enforcement Administration; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The U.S. Food and Drug Administration’s Chicago Office and the Naperville Police Department assisted in the investigation, which was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF).
The public is reminded that an indictment 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 statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Matthew Schneider.
Indictment
Leader of Drug Trafficking Organization Admits Distributing Kilograms of Marijuana and Laundering the Proceeds Through Luxury Auto PurchasesRead the Press Release
CHICAGO — The leader of a Chicago drug trafficking organization pleaded guilty in federal court today to distributing more than 1,000 kilograms of marijuana and laundering the proceeds by purchasing luxury cars and leasing high-rent properties.
JONATHAN TANKSON admitted in a plea agreement that he coordinated bulk shipments of marijuana from large-scale growers in California. Between December 2010 and December 2013, Tankson flew to California at least twice per month, typically bringing with him on the plane $400,000 to $500,000 in cash. Tankson often purchased 100 to 200 pounds of marijuana at a time, with the drugs being shipped on vans and tractor trailers to stash houses in Chicago, according to the plea agreement. One of the stash houses was located in the Lincoln Park neighborhood of Chicago, while another was set up in a penthouse apartment in the city’s River West neighborhood.
Tankson, 32, of Evanston, pleaded guilty to one count of conspiracy to possess a controlled substance with the intent to deliver, and one count of conspiracy to commit money laundering. The conviction carries a maximum sentence of 40 years in prison and a maximum fine of $1.5 million.
U.S. District Judge Matthew F. Kennelly scheduled a sentencing hearing for August 25, 2016, at 1:30 p.m.
According to the plea agreement, Tankson used drug proceeds to purchase several luxury automobiles through straw purchasers. Between June 2011 and December 2013, Tankson orchestrated the purchases of a Porsche Cayenne sport utility vehicle for $140,000, a Mercedes-Benz S63 sedan for $108,000, an Audi A8 sedan for $80,000, and several other expensive vehicles, according to the plea agreement. Tankson acknowledged in the plea agreement that the auto transactions were intended to conceal the source of the drug proceeds.
Tankson was arrested in December 2013. During a search of his Lincoln Park stash house, law enforcement discovered more than $1 million in cash, approximately 75 kilograms of cannabis stuffed into numerous plastic bags, five suitcases filled with cannabis, 20 rounds of 9mm ammunition and two 9mm pistol magazines, according to a federal criminal complaint filed against him in January 2014.
Investigators thereafter began an extensive money laundering investigation that led to charges against two other defendants. An alleged straw buyer of the vehicles, SONGHANE TRAORE, of Chicago, is charged with one count of conspiracy to possess a controlled substance with the intent to deliver, one count of conspiracy to commit money laundering, and one count of money laundering. JEROME B. MARSHALL, of Chicago, is charged with one count of money laundering for allegedly helping Tankson to fraudulently lease the Lincoln Park apartment.
Traore and Marshall have pleaded not guilty to the charges. Traore’s next court appearance before Judge Kennelly is scheduled for June 3, 2016, at 1:00 p.m., while Marshall will next appear before Judge Kennelly on June 13, 2016, at 10:00 a.m.
Tankson’s guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery Magee, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division; and Eddie T. Johnson, Chicago Police Superintendent.
The government is represented by Assistant U.S. Attorney Kartik K. Raman.
Plea Agreement
Des Plaines Resident Sentenced to Ten Years in Federal Prison for Conspiring to Manufacture Marijuana in Rockford WarehouseRead the Press Release
ROCKFORD — A Des Plaines man was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for his role in a conspiracy to manufacture and distribute marijuana.
JEREMIAH N. CLEMENT, 38, of Des Plaines, was sentenced to 10 years in federal prison, to be followed by 5 years of supervised release. On Oct. 6, 2015, a federal grand jury in Rockford charged Clement and six other individuals, five men and a woman, with conspiring to manufacture, possess and distribute 1,000 or more marijuana plants. The indictment alleges that between Jan. 2, 2013, and Jan. 6, 2015, the defendants conspired to illegally grow and store marijuana in a warehouse located at 1916 11th Street in Rockford. The warehouse was destroyed by a fire on Jan. 6, 2015.
Clement pleaded guilty to the charge on Dec. 18, 2015, admitting that he conspired to manufacture and distribute marijuana with co-defendants GEORGE H. BACUS, 52, of Niles, Ill.; YOUSIF Y. PIRA, 63, of Chicago, Ill.; JUSTIN T. PAGLUSCH, 34, of Ingleside, Ill.; SHLIMON SHIMON, 47, of Chicago, Ill.; CASEY WILLIAMS, 29, of Great Falls, Mont.; and DESTINY FREEMAN, 22, of Palmer, Alaska. According to the written plea agreement, on Jan. 2, 2013, Bacus purchased the warehouse at 1916 11th Street in Rockford, Ill. on installment contract, using money provided by Shimon or an associate of Shimon. Shimon, Bacus and Pira used the warehouse to illegally grow and harvest marijuana plants, then process the marijuana sale to others. Between March and June of 2014, Shimon recruited Clement to join the conspiracy and participate in processing the initial crop.
Clement admitted in the plea agreement that in late July or early August of 2014, a new marijuana crop was planted. On Sept. 12, 2014, at Shimon’s direction, Clement entered into a contract to purchase the warehouse, and the contract that Bacus had entered into was terminated. Shimon provided the money to pay for the warehouse and the use of the warehouse was under Shimon’s control. The plea agreement also states that Shimon retained Bacus to monitor Clement’s activities at the warehouse and report to Shimon.
In addition, the plea agreement states that in August of 2014, Clement recruited Williams to join the conspirators, who in turn recruited Freeman. Clement paid for Williams and Freeman to travel from Montana to Rockford, using money provided by Shimon. With Shimon's permission, Clement allowed Williams and Freeman to live in the warehouse while they assisted in the marijuana growing operation, using money from Shimon to pay for food while they lived in the warehouse. In December of 2014, Clement recruited Paglusch to join the conspiracy.
As further stated in the plea agreement, Shimon provided the plants, equipment and nutrients for growing the new marijuana crop. Williams and Freeman watered and cared for the marijuana crop as it was growing, and Clement supervised them. Shimon came to the warehouse for a few hours a day when he was in the area. Clement, Shimon, Bacus, Williams, Freeman and Paglusch all participated in the processing of the new marijuana crop, which was stored in a vault at the warehouse, with the combination to the lock known by Shimon, but not Clement. The initial marijuana crop and the new marijuana crop totaled more than 1,000 marijuana plants. In addition, as stated in the plea agreement, during the period of the conspiracy, Shimon kept a revolver at the warehouse for protection, which Clement possessed from time to time. At sentencing, Judge Kapala found as an aggravating factor that Clement intentionally set the fire that destroyed the warehouse located at 1916 11th Street on Jan. 6, 2015.
Freeman pleaded guilty on June 1, 2016, and remains free on her own recognizance pending sentencing set for Sept. 15, 2016, at 2:30 p.m. Freeman faces a maximum sentence of 5 years' imprisonment, a term of supervised release following imprisonment of at least 2 years, and a maximum fine of $250,000.
Bacus and Pira were arrested in April 2015 and released pending trial. Williams was arrested in October 2015 and is in federal custody pending trial. Paglusch was arrested this morning in Wichita Falls, Tex., and an initial appearance is pending. An arrest warrant was issued for Shimon, who is still at large.
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 is only a charge and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The sentencing today was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; Derek Bergsten, Chief of the Rockford Fire Department; and Anthony Scarpelli, Chief of the Skokie, Ill. Police Department. The Winnebago County Sheriff’s Department Narcotics Unit and Rockford Police Department Narcotics Unit assisted in the investigation.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Former Winnebago County Purchasing Director Sally Claassen Pleads Guilty to Federal Charges of Stealing over $400,000Read the Press Release
ROCKFORD — The former Winnebago County Purchasing Director pleaded guilty today before U.S. District Judge Frederick J. Kapala to two counts of theft from a program receiving federal funds. SALLY A. CLAASSEN, 57, of Roscoe, Ill., was an employee of Winnebago County from March 3, 1997, until she resigned on Sept. 11, 2015. Claassen’s job title prior to her resignation was Purchasing Director.
According to the written plea agreement, as Purchasing Director for Winnebago County, Claassen was responsible for receiving and reviewing invoices submitted by vendors and submitting payment to vendors. As stated in the plea agreement, from Feb. 25, 2014 through April 27, 2015, Claassen used her position as the approver for payments from Winnebago County to vendors to steal approximately $368,137 from the County. Claassen admitted that she accomplished this theft by asking two Winnebago County vendors to submit false invoices to Winnebago County for work that was not performed, which Claassen then paid with County funds. Claassen then directed the two vendors to provide her with checks made out to “Cash” or to “JP Morgan Chase” for the full amounts that the vendors were paid. As Claassen further admitted, she told the two vendors that she needed them to submit the false invoices and then provide her with the checks for the full amount of the payments to help her allocate Winnebago County money to a project being funded by a charitable organization. In reality, Claassen stole the money by depositing the checks into her personal bank accounts. One of the vendors provided Claassen with 5 checks that totaled $45,000. The other vendor provided Claassen with 7 checks that totaled $323,137. No money given to Claassen by either vendor was ever used for the purpose for which she told the vendors that it was to be used.
As further stated in the plea agreement, in her position as Purchasing Director, Claassen held a Winnebago County-issued credit card that she was authorized to use to make purchases for official County business. Claassen was required to submit invoices and supporting documentation to the County to demonstrate that items purchased were for County business. Claassen also had the ability to purchase items for Winnebago County by requesting that Winnebago County issue a check to a particular vendor. Claassen was required to submit invoices and supporting documentation to Winnebago County to demonstrate that the requested check was to be used to purchase items for Winnebago County business. Claassen admitted in the plea agreement that from April 15, 2014 to July 1, 2015, she used her Winnebago County-issued credit card and checks from Winnebago County to purchase items for her personal use, including home remodeling items and personal vacations. Claassen admitted she primarily accomplished this by either using her Winnebago County-issued credit card to make personal purchases and then submitting false or altered supporting documentation so the County would pay for the charges, or modifying or creating false invoices and submitting them to Winnebago County so the County would issue a check for the purchase.
According to the plea agreement, as an example of using the Winnebago County-issued credit card to accomplish the theft, on Jan. 29, 2015, Claassen used the credit card at a local vendor to purchase granite countertops for her kitchen in the amount of $6,109. While the sales order for this purchase listed the customer as Claassen at her home address, on Feb. 12, 2015, Claassen submitted an altered version of the sales order to the County listing Winnebago County as the customer with an altered description of the items purchased.
Another example in the plea agreement was that on May 20, 2014, Claassen ordered approximately $13,214 worth of furniture for her home and gift cards from a vendor. The sales order provided to Claassen noted that the customer was Claassen at her home address and listed various items of furniture that had been ordered. On the same date, Claassen caused an employee in her department to submit a request for Winnebago County to issue a payment by check to that vendor in the amount of $13,125. In the plea agreement, Claassen admitted that with the request she submitted an altered sales order from that vendor that listed Winnebago County as the customer with an altered description of the items purchased.
In total, using these methods, it is the government’s position in the plea agreement that Claassen stole approximately $451,353 from Winnebago County in 2014 and 2015. In the plea agreement, Claassen reserved the right to dispute this amount. Claassen also agreed in the plea agreement to the entry of a forfeiture judgment to the United States all right, title, and interest that she has in any property constituting or derived from proceeds obtained, directly or indirectly and further agreed not to contest forfeiture of approximately $292,525 already seized by the United States.
On each count Claassen faces a maximum sentence of up to 10 years’ imprisonment, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater, and full restitution. In addition, Claassen faces a term of supervised release of up to 5 years following imprisonment. Claassen remains free on her own recognizance pending sentencing, which U.S. District Judge Frederick J. Kapala set for September 13, 2016, at 9:30 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 the Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Margaret J. Schneider.
Plea Agreement
California Man Pleads Guilty to Defrauding Investors of More Than $550,000Read the Press Release
ROCKFORD — A California man pleaded guilty today before U.S. District Judge Philip G. Reinhard to wire fraud. According to the written plea agreement, TRAVIS OLIVER, 39, admitted to defrauding investors by making false representations regarding their investments in Electus Asset Holdings.
In the plea agreement, Oliver admitted that he was the sole managing member of Electus Asset Holdings, and that both he and his co-defendant, TODD C. SMITH, 48, of Rockford, engaged in a scheme between July 15, 2009, and March 2012, to defraud investors. Oliver admitted that he falsely represented to potential investors that their investments would be returned in one year, yielding a guaranteed rate of interest per month, and that the funds could be withdrawn at any time without penalty. Oliver further admitted that he knew a majority of the investors’ funds was used to pay for his own personal expenses and other items, including sales commissions paid to Oliver and Smith.
Oliver further admitted that in order to conceal his scheme and prevent the investors from demanding the return of their investments, he used funds from new investors to pay interest and principal to prior investors in Electus Asset Holdings and in a previous investment Oliver had offered. Oliver admitted that he had mailed monthly statements and IRS forms to investors that falsely stated the investors had earned interest on their investments.
According to the plea agreement, when investors requested the return of their interest and principal, Oliver made false statements and promises to conceal the fact the investors’ money had been spent or lost in high risk investments, including that investors’ checks were going to be issued shortly, that their checks were lost in the mail, and that investors’ funds had been invested in a company whose assets had been frozen by the Federal Trade Commission.
Wire fraud carries a maximum penalty of 20 years in prison, and a maximum fine of $250,000 or twice the loss or twice the gain derived from the offense, whichever is greater. Sentencing is set for September 19, 2016, at 9:00 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 Federal Bureau of Investigation; and Antonio Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The Illinois Secretary of State's Securities Department assisted in the investigation.
As to co-defendant Todd C. Smith, the public is reminded that an indictment contains only charges and is not evidence of guilt. Smith 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 Joseph C. Pedersen.
Rockford Brothers Sentenced on Federal Drug ChargesRead the Press Release
ROCKFORD — Two Rockford, Ill. brothers were sentenced before U.S. District Judge Frederick J. Kapala on drug charges. Today, TIERRE A. BAZZELLE, 39, who pleaded guilty on Dec. 16, 2015, to conspiracy to distribute cocaine, was sentenced to 127 months in federal prison, to be followed by four years’ supervised release.
According to the written plea agreement, between Feb. 1, 2014 and May 6, 2014, Bazzelle conspired with his brother, co-defendant TALIB O. BAZZELLE, to distribute 500 grams or more of cocaine and cocaine base, commonly referred to as “crack.” Between March 14, 2014 and May 6, 2014, Tierre Bazzelle purchased approximately 1,456 grams of cocaine that he sold to his customers. Tierre Bazzelle provided a portion of the 1,456 grams of cocaine to Talib Bazzelle, and directed him to distribute it to Tierre Bazzelle’s customers. Tierre Bazzelle also directed his brother to collect money owed to Tierre Bazzelle for cocaine provided to customers on credit. Tierre Bazzelle also admitted that he converted a portion of the cocaine to “crack,” and provided Talib Bazzelle with a total of at least 168 grams of crack cocaine between Feb. 1, 2014 and May 6, 2014. As stated in the plea agreement, on May 6, 2014, the two brothers met with an individual in a grocery parking lot in Rockford, then drove a short distance into a neighborhood where Tierre Bazzelle purchased cocaine. After driving a short distance away, Tierre Bazzelle’s vehicle was stopped by law enforcement agents. When the defendant was searched, a bag containing the 7.5 ounces of cocaine was located in his pants.
As further stated in the plea agreement, the defendant possessed a .45 caliber handgun that was found between the cushions of a couch in the living room of his residence. The gun was loaded with 12 rounds of ammunition in the magazine and one round in the chamber, and a box of ammunition was also found hidden under a cushion of a love seat in the living room. Other drug paraphernalia used to convert powder cocaine to crack, and package powder and crack cocaine were located in the home.
Talib Bazzelle, 34, pleaded guilty on Dec. 4, 2015, to possessing cocaine with intent to distribute. He was sentenced on March 17, 2016, to 162 months in federal prison, to be followed by a period of three years of supervised release.
The sentencing of Tierre Bazzelle 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 case was a result of a joint investigation by the Winnebago County Sheriff’s Office Narcotics Unit and the FBI.
The government was represented by Assistant U.S. Attorney Joseph C. Pedersen.
Former Winnebago County Purchasing Director Sally Claaasen Charged with Theft from Winnebago CountyRead the Press Release
ROCKFORD — The former Winnebago County Purchasing Director was charged yesterday in federal court on two counts of theft from a program receiving federal funds. SALLY A. CLAASSEN, 57, of Roscoe, Ill., was an employee of Winnebago County from March 3, 1997, until she resigned on Sept. 11, 2015. Claassen’s job title prior to her resignation was Purchasing Director.
According to the information filed, Claassen was an agent of Winnebago County, a local government that received federal funding. As Purchasing Director, Claassen was responsible for receiving and reviewing invoices submitted by vendors to Winnebago County and submitting payments to vendors. The information alleges that Claassen held a Winnebago County-issued credit card that she was authorized to use to make purchases for official Winnebago County business. Claassen was required to submit invoices and supporting documentation to Winnebago County to demonstrate that items purchased were for Winnebago County business. The information alleges that Claassen also had the ability to purchase items for Winnebago County by requesting that Winnebago County issue a check to a particular vendor. Claassen was required to submit invoices and supporting documentation to Winnebago County to demonstrate that the requested check was to be used to purchase items for Winnebago County business.
The information alleges that for each of the periods of Feb. 24, 2014 through December 31, 2014, and Jan. 1, 2015 through July 1, 2015, Claassen embezzled or stole at least $5,000 from Winnebago County.
The information also seeks forfeiture of all property constituting, and derived from, and traceable to, proceeds obtained, directly or indirectly, as a result of defendant’s alleged violations including approximately $451,353, which includes approximately $292,525 in funds already seized by the United States.
Each count of theft from a program receiving federal funds carries a maximum sentence of up to 10 years’ imprisonment, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater, and full restitution, as well as a period of supervised release following imprisonment of up to 5 years. Claassen remains free on her own recognizance pending an initial appearance and entry of plea set before U.S. District Judge Frederick J. Kapala on June 1, 2016, at 10:30 a.m.
The charges 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 Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Margaret J. Schneider.
Information
Federal Jury Convicts Indiana Man of Bringing Guns Across the Border into Illinois and Illegally Selling Them on the Streets of ChicagoRead the Press Release
CHICAGO — An Indiana man has been convicted of unlawfully dealing firearms after purchasing guns from licensed dealers in Indiana and selling them to gang members on the West Side of Chicago.
In the fall of 2013 WILLIE LEE BILES JR. made multiple trips on a Megabus to Chicago from his home in Indianapolis, each time bringing with him a gym bag full of handguns. Biles had legally purchased more than 30 firearms from licensed dealers in Indiana.
Once in Chicago, Biles would sit on the porch of a residence on the city’s West Side and sell firearms to individuals for two to three times the price that Biles had paid for them. Biles never asked any of his customers for identification, and he failed to verify whether they could legally possess firearms. At least one of his customers was a convicted felon who could not legally possess a firearm.
Seven of the firearms Biles sold were later recovered by law enforcement in the Chicagoland area.
The jury yesterday convicted Biles, 44, of willfully dealing firearms without a license. The charge carries a maximum sentence of five years in prison and a fine of up to $250,000. U.S. District Judge Sara L. Ellis scheduled a sentencing hearing for Nov. 16, 2016, at 10:30 a.m.
The convicted felon to whom Biles sold four guns was previously imprisoned in the case. OTTO LEWELLEN, of Bellwood, pleaded guilty last year to one count of being a felon in possession of a firearm. Lewellen admitted in a plea agreement that he purchased four firearms from Biles. Authorities recovered two revolvers, but Lewellen said he sold the two other guns to a man he knew only as “Red.” Officials have not been able to locate Red or the two guns. Judge Ellis last year sentenced Lewellen to 18 months in prison.
The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Jeffery Magee, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The investigation was conducted with the Chicago High Intensity Drug Trafficking Task Force (HIDTA). Substantial assistance was provided by the Illinois State Police, Chicago Police Department, Bellwood Police Department and ATF Indianapolis Field Division.
The government is represented by Assistant U.S. Attorneys Christopher V. Parente and Elizabeth R. Pozolo.
U.S. Attorney Zachary T. Fardon Hosts Fourth Community Roundtable to Discuss Strengthening Trust Between the Public and Law EnforcementRead the Press Release
CHICAGO — Civic, religious and community leaders joined top law enforcement personnel today to continue an ongoing dialogue about building trust between law enforcement and the Chicagoland community.
The Community Roundtable was convened by Zachary T. Fardon, United States Attorney for the Northern District of Illinois. It was held at Kennedy-King College in the Englewood neighborhood on Chicago’s South Side. Today’s event was the fourth such discussion, following up on productive sessions in December 2014, March 2015 and November 2015.
“Today’s roundtable brought together fervent leaders from various experiences and backgrounds,” said Mr. Fardon. “We all share the collective goal of cultivating community trust and making Chicago an even stronger and safer place. We had a candid and inspiring conversation about how to maximize the resources of the many talented service providers our city has to offer, and how to better incorporate law enforcement into their efforts to serve our most at-risk communities.”
Among the more than 50 participants in today’s meeting were Chicago Police Superintendent Eddie T. Johnson and other top members of the Chicago Police Department, as well as representatives from the Cook County State’s Attorney’s Office, U.S. Drug Enforcement Administration, Federal Bureau of Investigation, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the Cook County Sheriff’s Department, Chicago Independent Police Review Authority, U.S. Marshal’s Service, KLEO Community Family Life Center, Chicago Board of Rabbis, Bowen High School, A Better Chicago, Purpose Over Pain, Chicago Community Trust, University of Chicago Crime Lab, YMCA, Mikva Challenge, Chicago Violence Reduction Strategy, YWCA Metropolitan Chicago, Chicago Urban League, Back of the Yards Neighborhood Council, Better Boys Foundation, Council of Islamic Organizations of Greater Chicago, and Becoming A Man.
The U.S. Department of Justice has made the issue of community policing a top priority. The Community Roundtables focus on developing tangible initiatives for improving the relationship between law enforcement and the community.
Kennedy-King College, one of seven City Colleges of Chicago, is named after slain civil rights leaders Robert F. Kennedy and Dr. Martin Luther King Jr. It is located at 6301 S. Halsted St. in Chicago.
Poplar Grove Man Charged with Selling MethamphetamineRead the Press Release
ROCKFORD — A Poplar Grove, Ill. resident was indicted yesterday in federal court in Rockford on a charge of distributing 448 grams of methamphetamine, announced U.S. Attorney Zachary T. Fardon, Boone County Sheriff David Ernest, and Belvidere Police Chief Jan Noble.
According to the indictment, ARMAN M. DINO, 45, distributed the methamphetamine on May 19, 2016, in Poplar Grove. A criminal complaint filed on May 19, 2016, stated that Dino sold the drugs at his residence in Candlewick Lake to an individual who was cooperating with the government. After that sale, law enforcement agents executed a search warrant on Dino’s residence. According to the complaint, additional methamphetamine, the original $10,000 in “buy money,” and more currency were found inside the residence. According to the complaint, Dino was arrested that same day.
Dino appeared before United States Magistrate Judge Iain D. Johnston on May 23, 2016, in Rockford, and was ordered detained pending trial. His arraignment on the indictment is set for May 26, 2016, at 11:00 a.m. before Magistrate Judge Johnston. The charge carries a mandatory minimum sentence of 5 years and a maximum sentence of 40 years in prison.
The multi-jurisdictional investigation was conducted by the Belvidere/Boone County Metro Narcotics Unit, along with agents from the Federal Bureau of Investigation and Drug Enforcement Administration and Rockford Police Department Detectives. Assistant U.S. Attorneys Joseph C. Pedersen and John G. McKenzie are prosecuting the case.
The public is reminded that an indictment contains only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Ohio Man Sentenced to 22 Years in Federal Prison for Bringing Minors to Chicago from Iowa to Engage in ProstitutionRead the Press Release
CHICAGO — An Ohio man was sentenced today to 22 years in federal prison for his role in a sex trafficking ring involving minor girls who were brought to Chicago from Iowa to engage in prostitution.
WILLIE WOODS, 46, of Toledo, Ohio, helped transport the minor girls from Iowa City in 2012. Once in Chicago, Woods and his co-conspirators forced the girls to engage in prostitution. At the time, one victim was 14 years old, one victim was 16 years old, and one victim was 17 years old.
A jury last year convicted Woods on one count of sex trafficking conspiracy; three counts of sex trafficking of minors by force, fraud or coercion; one count of transporting minors to engage in prostitution; and one count of obstruction of justice.
U.S. District Judge Sharon Johnson Coleman imposed the 264-month sentence in federal court in Chicago.
Woods “humiliated these girls, robbed them of their childhood and their innocence, and set them off on a path of self-destructive behavior,” Assistant U.S. Attorney Bethany K. Biesenthal argued in the government’s sentencing memorandum. “The girls will never be able to fully recover from the pain defendant inflicted.”
Woods is one of three defendants convicted in the case. MALIK MCKEE and his sister, SHUNTINA MCKEE, both of Iowa City, previously pleaded guilty to one count of sex trafficking conspiracy. Judge Coleman in 2014 sentenced Malik McKee to 102 months in prison, plus restitution of $6,000. Shuntina McKee is scheduled to be sentenced by Judge Coleman on May 31, 2016, at 9:30 a.m.
Evidence at Woods’ seven-day trial revealed that the defendants forced the minor girls to engage in prostitution in Iowa and Chicago. The defendants took photographs of the minors and used them in advertisements on websites, including Backpage.com. When individuals responded to the advertisement, the defendants arranged the meeting and then pocketed the proceeds.
The three minor girls testified at trial about their ordeals. The girls described the defendants’ violent and abusive acts, which included using power and coercion to force the girls to perform sex acts for money. One of the girls testified that Woods starved her by withholding food until she submitted to his demands to engage in prostitution.
The conviction 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 Eddie T. Johnson, Superintendent of the Chicago Police Department. The FBI and Chicago Police conducted the investigation in coordination with the Cook County Human Trafficking Task Force. Federal law enforcement authorities in the Southern District of Iowa and the Northern District of Ohio, as well as the Iowa State Police, assisted in the case.
The government is represented by Ms. Biesenthal and Assistant U.S. Attorney Megan Cunniff Church.
High-Ranking Gang Members Among Several Defendants Arrested for Dealing Narcotics and Guns on Chicago’s South SideRead the Press Release
CHICAGO — Several suspects, including high-ranking members of a Chicago street gang, are facing drug or gun charges for their alleged roles in dealing narcotics and firearms on the city’s South Side.
The investigation, dubbed “Operation Cornerstone,” spanned more than two years and included seizures of distribution quantities of cocaine and heroin, as well as confiscations of firearms and cash proceeds from drug sales. Authorities uncovered the criminal activity through the use of wiretapped cellular phones, cooperating witnesses, controlled purchases of narcotics and guns, and extensive surveillance.
Several suspects were arrested today without incident. While attempting to arrest a suspect at a residence in Park Forest, two agents of the Federal Bureau of Investigation were wounded. The agents survived the shooting and their injuries are not believed to be life threatening. The suspect, MELVIN TORAN, 50, of Park Forest, was later found dead inside the home. Toran was a high-ranking member of the Black P-Stone Nation street gang. He was set to be charged in federal court with distributing heroin.
Several defendants will be charged in criminal complaints to be filed in federal court in Chicago. One defendant will be charged in a complaint filed in state court.
In addition to Toran, the investigation revealed that a number of the suspects are ranking members of the Black P-Stone Nation. One of them arranged for the sale of 225 grams of heroin for $15,700 on Nov. 6, 2015. Unbeknownst to him, the buyer was cooperating with law enforcement and had surreptitiously recorded both the negotiation – in a restaurant in the Back of the Yards neighborhood – and the transaction itself in a residence in Englewood.
The investigation also uncovered a heroin and cocaine operation being run out of a South Side clothing store. A source cooperating with law enforcement informed authorities that when picking up narcotics from the store, the normal practice was to purchase an item of clothing as a pretext. When paying for the clothing at the checkout counter, the owner of the store or one of the employees would bag the item of clothing and also pass over an additional bag containing the narcotics. In the summer of 2015, a cooperating source – working at the direction of investigators – purchased more than 1,000 grams of heroin from the store owner for $72,720.
In addition to the drug offenses, the investigation also involved a probe into federal gun violations. On Feb. 23, 2015, a .380-caliber firearm and chrome magazine was sold by a suspect for $500 to an individual who was cooperating with law enforcement. In a related case indicted last month, JAMES JONES, 41, of Chicago, was charged with being a felon in possession of a firearm. Chicago Police officers arrested Jones after a traffic stop on Dec. 7, 2015. In the backseat of Jones’ vehicle were an infant child and two loaded semiautomatic pistols hidden in a baby bag, according a complaint filed in December in Jones’ case. Jones has pleaded not guilty and is being held without bond while awaiting trial.
The investigation was conducted by a joint gang task force of the FBI and Chicago Police Department.
The arrests 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 FBI; Anita Alvarez, Cook County State’s Attorney; and Eddie T. Johnson, Superintendent of the Chicago Police Department. The Park Forest Police Department provided assistance.
Assistant United States Attorneys Shoba Pillay, Sean J.B. Franzblau and Christine M. O’Neill will represent the government in the federal cases. The Cook County State’s Attorney’s Office will prosecute the state case.
Local Physician Pleads Guilty to Health Care FraudRead the Press Release
ROCKFORD — A suspended physician pleaded guilty today in federal court to charges of health care fraud. CHARLES S. DEHANN, 61, of Belvidere, Ill., pleaded guilty before Judge Frederick J. Kapala to two counts of health care fraud in a scheme to defraud Medicare that included overbilling and billing Medicare for treatment of patients that were already deceased.
According to the written plea agreement, DeHaan, during the course of the scheme, was a physician licensed in Illinois, who between January 2009 and January 24, 2014, primarily billed Medicare for in-home patient visits and certifications for patients he deemed homebound. DeHaan admitted in the plea agreement that he knew Medicare authorized payment for home visits and physician services only if those services were actually provided and were medically necessary because of disease, infirmity, or impairment. The plea agreement further states that DeHaan billed Medicare for medical services purportedly provided to patients when he knew he did not provide any reimbursable medical service. This included DeHaan billing Medicare at the highest reimbursement levels for routine, non-complex visits with new and established patients even though DeHaan knew the visit did not qualify for the highest levels of reimbursement, and billing Medicare for patients DeHaan never actually treated. According to the plea agreement, some of the patients DeHaan billed at the highest reimbursement levels but did not actually see were deceased on the date of the alleged visit.
On each count DeHaan faces a maximum potential penalty of up to 10 years in prison, a term of supervised release of up to 3 years following imprisonment, and a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater, as well as full restitution. Sentencing for DeHaan is scheduled for Sept. 21, 2016, at 9:30 a.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Lamont Pugh, III, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General. The Illinois Department of Financial and Professional Regulation assisted in the investigation.
The government is represented by Assistant U.S. Attorneys Scott R. Paccagnini and Talia Bucci.
Plea Agreement
Chicago Investment Advisor Charged with Fraud for Allegedly Misappropriating More Than $1.5 Million in Client FundsRead the Press Release
CHICAGO — The owner of Chicago financial firms defrauded dozens of clients out of more than $1.5 million by pocketing most of their money instead of investing it, according to federal criminal charges filed today.
Between 2010 and 2013, CLAYTON ANDREW COHN controlled Chicago-based Marketaction Inc., Marketaction Advisors LLC, and the hedge fund Marketaction Capital Management LLC. During this period, Cohn told potential investors that his firms were thriving from particular trading strategies, and that it had stakes in numerous private equity investments, when in reality there was very little investment activity, according to a criminal information filed in U.S. District Court in Chicago. During this time, Cohn made only minimal investments and instead misappropriated a large amount of his clients’ funds for his own personal benefit, the information states. Approximately 37 investors sustained losses of more than $1.5 million, according to the information.
The information charges Cohn, 29, of Chicago, with one count of wire fraud. An arraignment is scheduled for May 26, 2016, at 10:00 a.m., in federal court in Chicago.
According to the information, Cohn falsely represented to investors and prospective clients that redemption of their investments would be “simple” and “easy,” and would be available on a monthly basis. Cohn also deceived investors by distributing account statements that falsely stated the value of investor accounts, the information states.
Cohn falsely maintained that Marketaction retained a “fund accountant” to calculate the value of the fund, and an “auditor” to annually inspect it, according to the information. Cohn prepared and filed with the U.S. Securities and Exchange Commission false and misleading reports about his hedge fund, including how it was subject to annual audits, according to the information.
The information 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.
In August 2013 the SEC, which provided helpful information to the criminal investigation, filed a civil lawsuit against Cohn and Marketaction Advisors LLC.
Wire fraud carries a maximum penalty of 20 years in prison, restitution to be determined by the Court, and a fine of up to $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.
The public is reminded that an information 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. 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 United States Attorney Daniel Gillogly.
Information
Schaumburg Contractor Charged with Underpaying Union Employees and Underfunding Their Pension and Welfare FundsRead the Press Release
CHICAGO — The owner of a Schaumburg construction company intentionally underpaid his union-affiliated employees by more than $1.5 million while underfunding their pension and welfare funds by another $1 million, according to federal criminal charges filed today.
JOSEPH LAMPIGNANO, the co-owner of A Lamp Concrete Contractors Inc., assigned laborers to work on government-funded road construction projects without paying the union-negotiated wage rate, according to a criminal information filed in U.S. District Court in Chicago. From approximately 2008 to 2013, Lampignano violated collectively bargained agreements with the laborers’ union by failing to pay the union wage rate to certain laborers, underpaying them by a total of more than $1.5 million, according to the information.
Over the same time period, Lampignano also submitted false reports to the unions’ pension and welfare funds that underreported the number of hours worked by certain laborers, thereby lowering the amount of contributions that A Lamp was required to make to the funds on behalf of its employees, according to the information. The shortfall to the funds totaled more than $1 million, the information states.
The information charges Lampignano, 43, of Itasca, with one count of mail fraud. The charge carries a maximum penalty of 20 years in prison.
The information also describes a scheme in which Lampignano and his superintendent, GIOVANNI “JOHN” TRAVERSA, induced employees to re-pay a portion of settlement proceeds they received from the company in resolution of a civil lawsuit. In 2013 A Lamp paid a total of $545,357 to 24 employees to satisfy unpaid wages and resolve the suit brought by the union. Subsequent to paying the settlement funds, Lampignano, Traversa and others used their positions of authority to induce certain laborers to pay some of the money back to the company, according to the information. Several employees eventually kicked back a total of at least $64,000, the information states.
Traversa, 46, of Bartlett, is charged with one count of making false statements to the Federal Bureau of Investigation and the U.S. Department of Labor Office of Inspector General regarding the settlement kickbacks. The charge is punishable by up to five years in prison.
Arraignments for Lampignano and Traversa in U.S. District Court in Chicago have not yet been scheduled.
The information 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 FBI; James Vanderberg, Special Agent-in-Charge of the Chicago Region of the Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the Department of Labor - Employee Benefits Security Administration; and Cook County Sheriff Thomas J. Dart.
The public is reminded that an information 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 U.S. Sentencing Guidelines.
The government is represented by Assistant United States Attorney Brian Havey.
Information
Leader of Armed Drug-Dealing Group Sentenced to 40 Years for Trying to Kill a Federal Informant in Retaliation for Assisting Law EnforcementRead the Press Release
CHICAGO — The leader of a group of armed drug dealers who sold crack cocaine and heroin on Chicago’s West Side and western suburbs was sentenced today to 40 years in prison for trying to murder a federal informant who was assisting law enforcement.
TOBY 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, 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 Toby Jones’ older brother, KELSEY JONES, approached the informant’s car 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.
Toby Jones, 38, and Kelsey Jones, 39, both of Chicago, were convicted earlier this year of conspiring with each other in the attempted murder of the informant. Toby Jones was convicted after a bench trial before U.S. District Judge Amy J. St. Eve, who also found him guilty of distributing cocaine and illegally possessing a firearm. Kelsey Jones was found guilty after a jury trial. The jury also convicted him on gun and drug charges.
Judge St. Eve today imposed the sentence on Toby Jones. A sentencing date for Kelsey Jones has not yet been scheduled.
“The south and west sides of Chicago are racked with armed drug dealers who terrorize the community with the violence and social decay that inevitably accompanies their pernicious trade,” Assistant U.S. Attorney Sean J.B. Franzblau argued in the government’s sentencing memorandum. Attempting to murder a federal witness is “an effort to weaken the institutions and processes that maintain social order.”
Testimony at the Jones’ trial revealed that Toby Jones led a group of armed cocaine and heroin dealers. 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. During these meetings, Toby Jones negotiated 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 last year to participating in a drug conspiracy and possessing a firearm. He was sentenced last week to nine years and nine months in prison.
Today’s sentencing of Toby Jones was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Jeffery Magee, Special Agent in Charge of the Chicago Field Division of ATF. The Oak Park Police Department assisted in the investigation.
The government is represented by Mr. Franzblau and Assistant U.S. Attorney Brian Hayes.
Naperville Man Charged with Violently Forcing Women to Engage in ProstitutionRead the Press Release
CHICAGO — A Naperville man has been arrested for allegedly forcing women to engage in commercial sex acts and brutally abusing them if they wouldn’t comply with his orders.
BENJAMIN BIANCOFIORI used the promise of financial security to entice women into performing commercial sex acts on his behalf, according to a criminal complaint filed in U.S. District Court in Chicago. Biancofiori ran his sex-trafficking operation primarily out of his townhouse in Naperville, the complaint states. The complaint alleges that Biancofiori often beat and punched the women, and that he arranged for one of his victims to be returned to him at gunpoint after she tried to run away. Biancofiori kept a vast majority of the proceeds earned by the women, the complaint states.
Biancofiori, 36, was arrested Wednesday in Colorado. The complaint charges him with one count of sex trafficking by means of force, fraud and coercion. An initial appearance in federal court in Chicago has not yet been scheduled.
The complaint states that once Biancofiori enticed the victims to work for him, he would post their information in commercial sex advertisements on Backpage.com. He then arranged for the women to travel to meet clients at various locations in the Chicago area, the complaint states. Biancofiori recruited one of his victims through an online messaging service on Facebook, according to the complaint.
For the past several weeks Biancofiori has been traveling in the western U.S., according to the complaint. Biancofiori allegedly advertised one of his victims on Backpage.com while in Phoenix and Denver in March.
The complaint 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. Substantial assistance was provided by the U.S. Attorney’s Office for the District of Colorado, the Denver office of the FBI, the Carol Stream Police Department and the Naperville Police Department.
The sex trafficking charge carries a minimum sentence of 15 years in prison and a maximum sentence of life in prison.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Abigail Peluso and Erika Csicsila.
Chicago Restaurateur Charged with Failing to Pay Taxes on Cash Receipts from Nine of His EateriesRead the Press Release
CHICAGO — The owner of several Chinese restaurants in the Chicago area intentionally withheld state taxes by underreporting the receipts paid in cash, according to federal criminal charges filed today.
HU XIAOJUN, also known as “Tony Hu,” 48, of Chicago, is charged in a criminal information with one count of wire fraud and one count of money laundering. An arraignment in U.S. District Court in Chicago has not yet been scheduled.
Hu owns and operates several restaurants in Chicago and the suburbs, including the eateries Lao Sze Chuan and Lao You Ju. The charges allege that from January 2010 to September 2014, Hu intentionally withheld sales taxes from the Illinois Department of Revenue for receipts that customers paid in cash. Although Hu collected or caused to be collected all of the daily receipts, he and others discarded most of the bills from the cash sales, according to the information.
A new total without most of the cash purchases was then calculated, and Hu fraudulently reported it to the State, according to the information. Hu deposited the unreported cash into his personal bank account – and caused others to do the same – and used the money to pay personal expenses, the information states.
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 two counts in the information are punishable by a combined maximum sentence of 30 years in prison and a fine of up to $500,000 or twice the gross gain or gross loss resulting from that offense, whichever is greater.
The public is reminded that an information 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. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys William Ridgway and Joel Hammerman.
Information
Leader of West Side Street Gang Sentenced to Life in Prison in Connection with Murder and Drug ConspiraciesRead the Press Release
CHICAGO — The head of a violent street gang that terrorized the West Side of Chicago through murder and drug trafficking was sentenced today to life in prison.
While leading the Imperial Insane Vice Lords, NATHANIEL HOSKINS ordered at least one murder and oversaw the operation of an open-air drug market near Humboldt Park in Chicago. Hoskins assigned roles for each member of the gang to play in the drug market, and he personally handled the purchases of heroin and cocaine that fueled it.
More than 30 individuals with alleged ties to the Imperial Insane Vice Lords have been arrested and charged as part of the investigation, and authorities shut down the open-air market.
Hoskins, 47, of Chicago, was convicted in a bench trial last year of participating in drug and murder conspiracies, and leading a racketeering enterprise. U.S. District Judge Elaine E. Bucklo imposed the life sentence in federal court in Chicago.
“Gang-related violence is a tremendous problem in Chicago,” Assistant U.S. Attorney Rajnath P. Laud argued in the government’s sentencing memorandum. “A sentence of life is the only sentence that reflects the seriousness of the offense, particularly given defendant’s leadership role and the other serious crimes he committed as leader of a violent street gang.”
Evidence at trial revealed that Hoskins made it clear to others that he was the king of the gang. He ordered his subordinate gang members to commit violence to strengthen the group’s control over West Side neighborhoods. One such order from Hoskins resulted in the killing of a man whom Hoskins believed was a rival gang member.
The sentencing 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; Eddie Johnson, Chicago Police Superintendent; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division; and Cook County State’s Attorney Anita Alvarez.
The investigation was conducted through the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) Chicago Strike Force, which ― in addition to the DEA, IRS-CID and CPD narcotics officers ― consists of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Federal Bureau of Investigation, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, and task force officers from various state and local law enforcement agencies, including the Cook County Sheriff’s Police and the Illinois State Police.
The government is represented by Mr. Laud and Assistant U.S. Attorneys Scott M. Edenfield and Sean Franzblau.
Jury Convicts North Suburban Lawyer of Immigration Fraud for Falsifying Clients’ Applications for U.S. AsylumRead the Press Release
CHICAGO — A federal jury today convicted a north suburban attorney of submitting false information to immigration authorities to help his clients seek asylum in the United States.
ROBERT DEKELAITA accepted fees from foreign nationals in exchange for submitting the false documents to the U.S. Department of Homeland Security’s Citizenship and Immigration Services. DeKelaita’s fraudulent statements often falsely portrayed his clients as victims of persecution by religious extremists in the Middle East.
DeKelaita, 53, of Glenview, was convicted on one count of conspiracy to commit asylum fraud, two counts of knowingly offering false statements in an asylum application, and one count of procuring perjury during asylum interviews. The conviction is punishable by a maximum sentence of 35 years in prison.
U.S. District Judge Matthew F. Kennelly scheduled a sentencing hearing for Aug. 3, 2016, at 1:30 p.m.
Asylum is a benefit the U.S. government extends to immigrants who have suffered persecution in their native country or who fear future persecution on account of race, religion, nationality, membership in a particular social group, or political opinion. To apply for asylum, the immigrant must submit an application detailing his or her personal history and provide a specific account of the alleged persecution. The application is signed by the immigrant, the immigrant’s attorney, and, if translation services were provided, the interpreter. An interview is then held before immigration authorities, with all of the signors present. A grant of asylum confers numerous benefits upon the immigrant, including eligibility to apply for permanent residency status.
DeKelaita is a licensed attorney whose Morton Grove firm, R.W. DeKelaita & Associates LLC, specializes in immigration law. Evidence at trial revealed that from approximately 2000 to 2011, DeKelaita prepared and submitted asylum applications that contained material lies, including tales of rape, murder, torture, kidnappings, bombings and other forms of religious oppression in the Middle East. As a result, several of DeKelaita’s clients were granted asylum and eventually permanent residency and citizenship status.
Two interpreters who provided Arabic and Assyrian translations for DeKelaita’s clients were also charged in the scheme. ADAM BENJAMIN, of Skokie, pleaded guilty last year to one count of conspiracy to commit asylum fraud. Benjamin admitted in a plea agreement that he instructed DeKelaita’s clients to present false stories of persecution in order to secure asylum. Benjamin was sentenced in July 2015 to six months in prison. YOUSIF YOUSIF, of Skokie, has pleaded not guilty to immigration fraud charges and is scheduled for trial on Aug. 29, 2016, before Judge Kennelly.
DeKelaita’s conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Armando Lopez, Special Agent-in-Charge of the Homeland Security Office of Inspector General in Chicago; and Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. Assisting in the investigation were Homeland Security’s U.S. Citizenship and Immigration Services; Homeland Security’s U.S. Customs and Border Protection; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and the Farmington Hills, Mich., Police Department.
The government is represented by Assistant U.S. Attorneys Lindsay Jenkins and Andrianna Kastanek.
Federal Jury Convicts Leader of Violent Robbery Crew That Targeted Cell Phone Stores in Chicago SuburbsRead the Press Release
CHICAGO — A Park Forest man has been convicted in federal court of leading a crew of armed robbers that targeted cellular telephone stores in the Chicago suburbs.
ERIC CURTIS recruited several individuals to join the crew and armed them with firearms to carry out the robberies. The crew stole hundreds of cell phones while terrorizing store employees and customers at gunpoint. After the robberies, Curtis helped sell the phones and divided the profits among the thieves.
The robberies occurred in 2013 in cell phone stores in the Chicago suburbs of Addison, Norridge, Deerfield and Woodridge.
After a nearly two-week trial in federal court in Chicago, the jury yesterday convicted Curtis, 31, on one count of conspiracy to commit robbery, three counts of robbery, one count of being a felon in possession of a firearm, and three counts of using a firearm in a crime of violence. The conviction is punishable by a mandatory minimum sentence of 57 years in a prison, and a maximum sentence of life in prison.
U.S. District Judge Charles P. Kocoras scheduled a sentencing hearing for Aug. 4, 2016, at 9:45 a.m.
Evidence at trial revealed that Curtis’ crew conducted takeover-style robberies. Crew members would enter a store, brandish firearms and order employees and customers to the back of the store. The robbers would take as many cell phones as they could stuff into their duffel bags.
Seven other members of the crew previously pleaded guilty and are awaiting sentencing. The prior convictions include another top leader, ERIC ROGERS of Hazel Crest. Rogers admitted in a plea agreement that the crew also robbed cell phone stores in Joliet and downstate East Peoria, as well as a store in La Porte, Ind.
Curtis’ conviction 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 police departments from Woodridge, Deerfield, Joliet, Norridge and East Peoria provided substantial assistance in the investigation.
The government is represented by Assistant United States Attorneys Christopher V. Parente and Allison A. Ray.
Chicago-Based Financial Advisor Admits Steering Clients into Phony Investments and Pocketing the CashRead the Press Release
CHICAGO — A Chicago-based financial advisor pleaded guilty in federal court today to pocketing her clients’ money after counseling them to purchase phony securities.
DELORES J. MOSIER admitted in a plea agreement that she advised her clients to invest in bogus debt securities purportedly called “Chicago Anticipatory Notes.” Mosier falsely represented that the notes were issued by the City of Chicago and would earn annual interest of 7% or higher, according to the plea agreement. The securities did not exist, and Mosier pocketed the investment money, the plea agreement states. The government contends that Mosier fraudulently obtained more than $4.2 million from approximately nine victims.
Mosier, 72, of La Porte, Ind., pleaded guilty to one count of mail fraud. The conviction carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.
U.S. District Judge Gary Feinerman scheduled a sentencing hearing for Aug. 12, 2016, at 9:30 a.m.
Mosier is a licensed financial broker and investor who operated Chicago-based D.J. Mosier and Associates Inc. According to the plea agreement, Mosier told her clients to make their investment checks payable to “Chicago Anticipatory Note,” knowing that she had opened a bank account in her name that was titled “CAN.” Mosier deposited the clients’ checks into the account and used the money for her own benefit, including purchasing household expenses and making mortgage payments on a property in La Porte, Ind., according to the plea agreement.
Mosier concealed the scheme by using some of the money to make purported interest payments to other victims who had also purchased the fictitious notes. She attempted to make the scam appear legitimate by providing the victims with fraudulent documents that she created, including fictitious disclosure statements, phony quarterly interest statements, and bogus balance statements that purported to reflect the clients’ growing investment proceeds.
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 the Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Yusef Dale.
Joliet Man Charged with Arson for Allegedly Setting Fire to His Employer’s Warehouse in WoodridgeRead the Press Release
CHICAGO — A Joliet man was charged with arson today for allegedly causing a fire that destroyed his employer’s furniture distribution center in west suburban Woodridge.
RUBEN ANTONIO OCHOA CRUZ, a high lift operator in the warehouse, used a Bic lighter to spark the fire on April 21, 2016, according to a criminal complaint filed in U.S. District Court in Chicago. He set the fire after meeting with his supervisors regarding an issue with his attendance at work, according to the complaint. Approximately 65 employees were working at the warehouse at the time of the fire, and all of them escaped safely.
The complaint charges Cruz, 20, with one count of arson. He made an initial appearance today before U.S. Magistrate Judge Maria Valdez and was ordered held in federal custody. A detention hearing was scheduled for May 4, 2016, at 11:00 a.m.
According to the complaint, firefighters from approximately 30 departments worked for seven hours to extinguish the blaze, which caused millions of dollars in damage. The distribution center was burned to the ground, the complaint states. No firefighters were injured.
The arson charge carries a minimum sentence of five years in prison and a maximum sentence of 20 years.
The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Jeffery Magee, Special Agent in Charge of the Chicago Field Division of ATF. The officials praised the bravery of the firefighters who worked tirelessly to extinguish the blaze.
The Woodridge Police Department, Lemont Police Department and the Office of the Illinois State Fire Marshal provided substantial assistance in the investigation.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Misty Wright.
Disbarred Illinois Attorney Sentenced to More Than Four Years in Prison for Deceiving Homeowners in Mortgage Fraud SchemeRead the Press Release
CHICAGO ― A disbarred Illinois lawyer has been sentenced to more than four years in federal prison for her role in a mortgage fraud scheme that bilked lenders and vulnerable homeowners out of more than $725,000.
AVALON BETTS-GASTON contrived fraudulent real estate transactions to defraud homeowners and financial institutions. She and a co-defendant, Dimona Ross, arranged for the submission of materially false information on mortgage loan documents in four Cook County real estate transactions worth more than $725,000.
A federal jury last year convicted Betts-Gaston, 47, of Naperville, on two counts of wire fraud. In addition to the 57-month prison term, U.S. District Judge Charles R. Norgle yesterday ordered Betts-Gaston to pay restitution in the amount of $239,550.48.
“This case demonstrates a sophisticated scheme to take advantage of the trust that mortgage lenders placed in the loan applications they received, and the trust that the homeowners placed in her,” Assistant U.S. Attorney Stephen Chahn Lee argued in the government’s sentencing memorandum. “The homeowners believed that she was there to help them, and instead she put their homes and equity at risk.”
Betts-Gaston graduated from law school and was admitted to the Illinois bar in 2000. Ross was a licensed real estate loan officer. Together they founded IJCN Investments, which was based in Chicago Ridge and purportedly helped distressed homeowners refinance their homes to avoid foreclosure.
IJCN was involved in various Cook County real estate transactions, with Betts-Gaston handling the legal aspects and Ross obtaining the mortgages. Evidence at trial revealed that instead of refinancing the homes, the defendants arranged for the properties to be sold to a straw buyer. In doing so, the pair submitted false applications for mortgage loans, eradicated the homeowners’ legal rights in their properties, and obtained all of the homeowners’ equity. Betts-Gaston and Ross received fees for the deals, and the straw buyers were paid thousands of dollars.
IJCN was dissolved in 2008, and Betts-Gaston was disbarred in 2012.
Ross pleaded guilty to one count of wire fraud. She is scheduled to be sentenced by Judge Norgle on May 11, 2016, at 10:00 a.m.
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. Lee and Assistant U.S. Attorney Timothy Storino.