Northern District of Illinois
Press releases recorded for this federal judicial district.
Taiwanese Businessman Pleads Guilty to Conspiring to Violate U.S. Laws Preventing Proliferation of Weapons of Mass DestructionRead the Press Release
CHICAGO — A former resident of Taiwan, who the United States has linked to the supply of weapons manufacturing machinery to North Korea, pleaded guilty today to conspiracy to violate U.S. regulations regarding the proliferation of weapons of mass destruction. The defendant, HSIEN TAI TSAI, admitted that he engaged in illegal business transactions involving the export of U.S. origin goods and machinery.
Tsai, 69, also known as “Alex Tsai,” was arrested in May 2013 in Tallinn, Estonia, and later was extradited to the United States, where he remains in federal custody.
Tsai pleaded guilty to conspiracy to defraud the United States in its enforcement of regulations targeting proliferators of weapons of mass destruction before U.S. District Judge Charles Norgle in Federal Court in Chicago. A sentencing status hearing was set for Dec. 5. Tsai faces a maximum sentence of five years in prison and a $250,000 fine. Under the terms of his plea agreement, the government will recommend a sentence of approximately 30 months in prison provided Tsai continues to fully cooperate with the United States.
According to court documents, Tsai was associated with at least three companies based in Taiwan – Global Interface Company, Inc., Trans Merits Co., Ltd., and Trans Multi Mechanics Co., Ltd. – that purchased and then exported, and attempted to purchase and then export, from the United States and other countries machinery used to fabricate metals and other materials with a high degree of precision.
In January 2009, under Executive Order 13382 which sanctions proliferators of weapons of mass destruction and their supporters, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated Tsai, Global Interface, and Trans Merits as proliferators of weapons of mass destruction, isolating them from the U.S. financial and commercial systems and prohibiting any person or company in the United States from knowingly engaging in any transaction or dealing with them.
The Treasury Department said at the time that Tsai was designated for providing, or attempting to provide, financial, technological, or other support for, or goods or services in support of the Korea Mining Development Trading Corporation (KOMID), which was designated as a proliferator by President George W. Bush in June 2005. The Treasury Department asserted that Tsai “has been supplying goods with weapons production capabilities to KOMID and its subordinates since the late 1990s, and he has been involved in shipping items to North Korea that could be used to support North Korea’s advanced weapons program.” The Treasury Department further said that Global Interface was designated “for being owned or controlled by Tsai,” who was a shareholder of the company and acted as its president. Tsai was also the general manager of Trans Merits Co. Ltd., which was designated for being a subsidiary owned or controlled by Global Interface Company Inc. www.treasury.gov/press-center/press-releases/Pages/hp1359.aspx
After the OFAC designations, Tsai and others allegedly continued to conduct business together, but attempted to hide Tsai’s and Trans Merit’s involvement in those transactions by conducting business under different company names, including Trans Multi Mechanics. For example, by August 2009 – approximately eight months after the OFAC designations –Tsai and others allegedly began using Trans Multi Mechanics to purchase and export machinery on behalf of Trans Merits and Tsai.
In pleading guilty, Tsai admitted that in September 2009 he was involved in the purchase of a Bryant center hole grinder from a U.S. company based in suburban Chicago, and exported it to Taiwan using the company Trans Multi Mechanics. A Bryant center hole grinder is a machine tool used to grind a center hole, with precisely smooth sides, through the length of a material. Tsai also admitted a role in Trans Merits’ transaction involving LED road lights and an oil pump.
Charges remain pending against Tsai’s son, YUEH-HSUN TSAI, 37, of Glenview, Ill., also known as “Gary” Tsai. He was released on bond after he was arrested in May 2013 and has pleaded not guilty.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Gary Hartwig, Special Agent-in-Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Chicago; and Ronald B. Orzel, Special Agent-in-Charge for the Chicago Field Office of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement. The Justice Department’s National Security Division and Office International Affairs assisted with the investigation. The Estonian Internal Security Service and the Estonian Prosecutor’s Office cooperated with the United States.
The government is being represented by Assistant U.S. Attorney Brian Hayes and Justice Department Trial Attorney Brandon L. Van Grack.
Plea Agreement
Chicago Man Convicted of Conspiracy to Violate U.S. Sanctions by Providing Services to Zimbabwean President Mugabe and OthersRead the Press Release
CHICAGO — A Chicago man was convicted today by a federal jury of conspiracy to violate U.S. sanctions from late 2008 through early 2010 by agreeing to assist Zimbabwe President Robert Mugabe and others in an effort to lift economic sanctions against Zimbabwe. The defendant, C. GREGORY TURNER, met multiple times in the United States and in Africa with Zimbabwean government officials, including President Mugabe and Gideon Gono, governor of the Reserve Bank of Zimbabwe, who were individually subject to U.S. sanctions. A November 2008 “consulting agreement” provided for total payment of $3.4 million in fees for Turner and a co-defendant to engage in public relations, political consulting, and lobbying efforts to have sanctions removed by meeting with and attempting to persuade federal and state government officials, including Illinois members of Congress and state legislators, to oppose the sanctions.
Turner, 72, also known as “Greg Turner,” of Chicago and Israel, was found guilty of violating the International Emergency Economic Powers Act (IEEPA), following a trial that began Sept. 29 in U.S. District Court. The jury, which began deliberating on Wednesday, acquitted Turner of one count each of conspiracy and acting as an agent in the United States of a foreign government without providing prior notification to the Attorney General.
Turner remains free on bond while awaiting sentencing, which U.S. District Judge Elaine Bucklo, set for Jan. 9, 2015. He faces a maximum penalty of 20 years in prison and a $1 million fine. The Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
Turner’s co-defendant, PRINCE ASIEL BEN ISRAEL, 73, of Chicago, was sentenced in August to seven months in prison after pleading guilty to violating the Foreign Agents Registration Act (FARA).
The sanctions against President Mugabe and other specially designated individuals in Zimbabwe ― for human rights abuses ― were initially imposed in 2003 by President George W. Bush, and have been continued annually by President Obama, starting in March 2009. President Mugabe and his ruling ZANU-PF party have governed Zimbabwe since its independence in 1980. The sanctions neither bar travel to Zimbabwe nor prohibit public officials from meeting with specially designated nationals to discuss removing the sanctions, but individuals may not provide services on behalf of or for the benefit of specially designated nationals.
According to the evidence at trial, in early November 2008, Turner and Ben Israel began having discussions with Mugabe, Gono, and other ZANU-PF leaders regarding the influence Turner and Ben Israel could wield to have the sanctions removed. The defendants discussed with Mugabe, Gono, and others their association with many public officials who purportedly had close connections with then President-Elect Obama. Turner violated IEEPA by conspiring to engage in public relations, political consulting, and lobbying efforts on behalf of President Mugabe and other Zimbabwe officials. In early December 2008, Ben Israel’s U.S. bank blocked a wire transfer of $89,970 into his account from a Zimbabwe official affiliated with ZANU-PF, and Ben Israel later traveled to Africa and personally withdrew $90,000 from the bank account of that same Zimbabwe official.
Turner and Ben Israel arranged for trips by federal and state government officials to meet with President Mugabe and other Zimbabwean officials, including in November and December 2008, and January and December 2009; attempted to have Gono and other Zimbabwean officials speak at an issues forum in Washington, D.C., sponsored by a then U.S. Representative from California, and to assist those officials in obtaining visas to travel to the U.S. to attend the event; arranged for President Mugabe to meet with federal and state government officials in New York; lobbied a caucus of state legislators on behalf of Zimbabwean officials; and failed to apply to the Treasury Department for a license to engage in transactions and services on behalf of specially designated nationals.
In early December 2008, Turner and Ben Israel arranged for a delegation to travel to Zimbabwe. After members of the delegation returned, President-Elect Obama’s transition team forwarded information about contact from a member of the delegation to the FBI based on its concerns that sanctions may have been violated sanctions by traveling to Zimbabwe, which was not itself prohibited.
Throughout 2009, Turner and Ben Israel continued to pass communications between Zimbabwean leaders and, purportedly, U.S. public officials while seeking payment for their services from Gono. Turner led an effort to have Gono speak at an issues forum hosted by a then U.S. Representative from California in September 2009. Turner attempted to assist Gono, as well as two other Zimbabwean officials, obtain visas to ensure that they could attend and participate in the forum.
The guilty verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John Carlin, Assistant Attorney General for the National Security Division; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The Justice Department’s Counterespionage Section assisted in the investigation.
The government is being represented by Assistant U.S. Attorneys Barry Jonas and Georgia Alexakis, and David Recker, a trial attorney with the Justice Department’s Counterespionage Section.
Rockford Man Pleads Guilty to Bank RobberyRead the Press Release
ROCKFORD — A Rockford man pleaded guilty today in Federal Court to bank robbery. PEDRO J. CORDERO, 52, of Rockford, Ill., pleaded guilty before U.S. District Judge Frederick J. Kapala to the robbery of BMO Harris Bank, N.A., 2510 S. Alpine Rd., Rockford, Ill., on July 12, 2014. Cordero also admitted to robbing two other local banks.
According to the written plea agreement, at approximately 10:00 a.m. on July 12, 2014, Cordero approached a teller at the counter of BMO Harris Bank, 2510 S. Alpine Rd., in Rockford, wearing an inside out San Antonio Spurs baseball cap and carrying a white and blue Kane County Cougars umbrella. Cordero slid the teller a note demanding large bills out of the drawer and stated he had a gun. The teller removed money and provided Cordero banded stacks of U.S. currency. Cordero grabbed the money and left the bank.
The next day, Cordero was stopped by the Rockford Police for a traffic violation. In his car, Cordero possessed the San Antonio Spurs baseball hat he wore and the blue and white Kane County Cougars umbrella that he carried the previous day during the BMO Harris Bank robbery, as well as a large amount of U.S. currency from the bank robbery.
In addition, Cordero admitted in the plea agreement to robbing the U.S. Bank located at 1107 East State St., Rockford, Ill., on May 8, 2014. According to the plea agreement, Cordero wore a San Antonio Spurs baseball cap during the robbery. Cordero approached a teller at the counter and slid the teller a note that indicated he had a gun. Cordero then asked for large bills, told the teller not to activate any alarms and stated that he had a gun. The teller provided Cordero with money which he grabbed and then left the bank.
Cordero also admitted in the plea agreement that on June 2, 2014, he robbed the Associated Bank located at 4400 Center Terrace, Rockford, Ill. Cordero admitted that he wore an inside out San Antonio Spurs baseball cap and carried a blue and white Kane County Cougars umbrella during the robbery. Cordero approached a teller at the counter and said he needed to make a withdrawal. Cordero handed the teller a blank withdrawal slip, told the teller to give him all the large bills and that he had a gun. The teller removed money, which Cordero grabbed and then left the bank.
Bank robbery carries a maximum penalty of 20 years in prison, up to 5 years probation, a term of supervised release of up to 3 years following imprisonment, a fine of up to $250,000, and full restitution. The Court must impose a reasonable sentence guided by the advisory United States Sentencing Guidelines. Sentencing for Cordero is set for January 13, 2015, at 2:30 p.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Chet Epperson, Chief of the Rockford Police Department.
The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.
FBI Arrests Suburban Chicago Man for Allegedly Attempting to Support Terrorism OverseasRead the Press Release
CHICAGO — A southwest suburban Bolingbrook man was arrested Saturday night for allegedly attempting to travel overseas to join a foreign terrorist organization operating inside Iraq and Syria, federal law enforcement officials announced today. The defendant, MOHAMMED HAMZAH KHAN, 19, a U.S. citizen, was charged with attempting to join the Islamic State of Iraq and the Levant (ISIL), also known as the Islamic State of Iraq and Syria (ISIS).
Khan was taken into custody without incident at O’Hare International Airport by members of the Chicago FBI’s Joint Terrorism Task Force before he attempted to fly to Vienna, Austria, on his way to Istanbul, Turkey.
Khan was charged in a criminal complaint filed today in U.S. District Court with one count of attempting to provide material support to a foreign terrorist organization. He appeared this morning in U.S. District Court before U.S. Magistrate Judge Susan Cox, and remains in federal custody pending a detention hearing at 10:30 a.m. Thursday.
According to the complaint affidavit, a roundtrip ticket was purchased for Khan on Sep. 26 to travel from Chicago to Istanbul, departing on Saturday, and returning later this week.
Law enforcement agents observed Khan passing through the security screening checkpoint Saturday afternoon at O’Hare’s international terminal. Federal agents then executed a search warrant at Khan’s residence and recovered multiple handwritten documents that appeared to be drafted by Khan and/or others, which expressed support for ISIL, the affidavit alleges. Some of those documents, including travel plans and materials referencing ISIL and jihad, are described in the complaint affidavit.
Khan was initially approached by U.S. Customs and Border Protection officers and was later interviewed later by FBI agents at the airport.
Attempting to provide material support to a foreign terrorist organization carries a maximum penalty of 15 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The JTTF is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies. The Justice Department’s National Security Division assisted in the investigation. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), and the Illinois State Police also provided significant assistance.
The arrest and complaint were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The investigation is continuing, they said.
The government is being represented by Assistant U.S. Attorneys Matthew Hiller and Angel Krull.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
Former Investment Adviser Sentenced to 3½ Years in Prison for $3 Million Loss to Victims in Financing Fraud SchemeRead the Press Release
CHICAGO ― A former investment adviser was sentenced to 3½ years in federal prison for fraudulently obtaining approximately $4 million from more than 30 victims and misusing the money to make Ponzi-type payments to investors, pay personal expenses, and personal gambling, resulting in a loss of just over $3 million. The defendant, OSCAR DONALD OVERBEY, JR., was a financial adviser at two north suburban locations for Ameriprise Financial, Inc., who engaged in a fraudulent financing scheme between approximately 1996 and 2007.
Overbey, 47, of Country Club Hills and formerly of Evanston, was ordered today to pay $3,090,833 in restitution by U.S. District Judge Gary S. Feinerman, who imposed the sentence yesterday in Federal Court. Overbey was ordered to begin serving his 42-month sentence on Jan. 12, 2015. Following his sentence, the judge ordered Overbey to be placed on supervised release for three years and prohibited him from gambling or visiting casinos or racetracks during that time. Overbey was indicted in 2012 and pleaded guilty to wire fraud last February.
According to court documents, among Overbey’s victims were two university workers and their two daughters. He convinced them to invest $150,000 in a purported short-term, government-backed investment paying 10 percent interest. The victims obtained funds from refinancing their home and from a home equity line of credit to make the investment. Instead of investing the funds, Overbey misappropriated the entire amount to pay personal expenses and to make more than 10 Ponzi-type payments to other victims.
“The victims placed their trust in [Overbey], but never had a chance. [Overbey] abused that trust and misused his education and skills as an investment advisor to benefit himself and to keep his scheme going,” Assistant U.S. Attorney Edward Kohler argued at sentencing.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Antonio Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The Illinois Securities Department cooperated with the investigation.
High-Frequency Trader Indicted for Manipulating Commodities Futures Markets in First Federal Prosecution for "Spoofing"Read the Press Release
CHICAGO ― In the first federal prosecution of its kind, a high-frequency trader was indicted for allegedly manipulating commodities futures prices and illegally profiting nearly $1.6 million as a result of trading orders he placed through CME Group and European futures markets in 2011. The defendant, MICHAEL COSCIA, was the manager and sole owner of the former Panther Energy Trading LLC, of Red Bank, N.J., which he formed in 2007.
Coscia, 52, of Rumson, N.J., a registered commodities trader since 1988, was charged with six counts of commodities fraud and six counts of “spoofing” in a 12-count indictment returned yesterday by a federal grand jury, Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, announced today.
The indictment marks the first federal prosecution nationwide under the anti-spoofing provision that was added to the Commodity Exchange Act by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
Coscia will be arraigned on a date to be determined in U.S. District Court in Chicago.
“Traders and investors deserve a level playing field, and when the field is tilted by market manipulators, regardless of their speed or sophistication, we will prosecute criminal violations to help ensure fairness and restore market integrity,” Mr. Fardon said. “This case reflects the reasons why, earlier this year, we established a Securities and Commodities Fraud Section, which is dedicated to protecting markets and preserving investors’ confidence,” he added.
According to the indictment, high-frequency trading is a form of automated trading that uses computer algorithms for decision-making and placing a high volume of trading orders, quotes, or cancelation of orders in milliseconds. Coscia designed two computer programs he allegedly used in 17 different CME Group markets and three different markets on the London-based ICE Futures Europe exchange, including gold, soybean meal, soybean oil, high-grade copper, Euro FX and Pounds FX currency futures, to implement his fraudulent strategy. It was illegal for traders to place orders in the form of “bids” to buy or “offers” to sell a futures contract with the intent to cancel the bid or offer before execution.
Between August and October 2011, Coscia allegedly defrauded participants in the CME Group and ICE Futures Europe markets. In August 2011, Coscia began a high-frequency trading strategy in which he entered large-volume orders that he intended to immediately cancel before they could filled by other traders, the indictment alleges.
Coscia devised this strategy to create a false impression regarding the number of contracts available in the market, and to fraudulently induce other market participants to react to the deceptive market information he created, the indictment states. His strategy moved the markets in a direction favorable to him, enabling him to purchase contracts at prices lower than, or sell contracts at prices higher than, the prices available in the market before he entered and canceled his large-volume orders, it adds. Coscia then allegedly repeated this strategy in the opposite direction to immediately obtain a profit by buying futures contracts at a lower price than he paid for them, or by selling contracts at a higher price than he paid for them. Each such trade allegedly occurred in a matter of milliseconds. As a result of the aggregate of those fraudulent high-frequency trades, Coscia illegally profited approximately $1,592,867 over approximately three months, the indictment alleges.
As part of the scheme, Coscia’s trading programs looked for market conditions such as price stability, low volume at the best prices, and a narrow difference between the prices at which prospective purchasers were willing to buy and prospective sellers were willing to sell because his allegedly fraudulent trading strategy worked best under these conditions. His trading programs sometimes placed a “ping order” of one contract to test the market and ensure that conditions would allow his strategy to work well.
Coscia allegedly designed his trading programs to place a “trade order” on one side of the market, intending that the trade order be filled. He profited from his fraudulent strategy by filling the “trade order,” the charges allege.
He also designed his programs to place several layers of “quote orders” on the other side of the market from his trade orders ― either to buy contracts at a price higher than the prevailing offer, or to sell contracts at a price lower than the prevailing bid ― to create the illusion of market interest. The quote orders would typically be the largest orders in the market within three ticks (the minimum price increment at which a futures contract could trade) of the best bid or offer price, usually doubling or tripling the total quantity of contracts within the best bid or offer price.
The indictment alleges that Coscia designed his programs to cancel the quote orders within a fraction of a second automatically, without regard to market conditions, even if the market moved in a direction favorable to the quote orders. He programmed the quote orders to cancel because he did not intend for them to be filled, but instead intended to trick other traders into reacting to the false price and volume information, it adds. Further, Coscia designed his programs to cancel all fraudulent and misleading quote orders immediately if any of them were even partially filled, because he intended them only to trick other traders into reacting to what appeared to be a substantial change in the market.
After Coscia filled his trade order through the use of fraudulent and misleading quote orders, he immediately entered a second trade order on the other side of the market and repeated his steps with misleading quote orders, causing the second trade order to be filled. As a result, Coscia allegedly profited on the difference in price between the first and second trade orders.
The indictment details an example through trades that Coscia placed milliseconds apart in the Euro FX market during the early morning on Sept. 1, 2011. By entering large orders that he intended to cancel at the time he placed them, and caused to be canceled before other traders could fill them, Coscia made a profit by buying 14 contracts at 14288 ticks and selling them at 14289 ticks less than one second later.
The government is being represented by Assistant U.S. Attorney Renato Mariotti.
Each count of commodities fraud carries a maximum sentence of 25 years in prison and a $250,000 fine, and each count of spoofing carries a maximum penalty of 10 years in prison and a $1 million fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Bolingbrook Man Pleads Guilty to Illegally Exporting Carbon Fiber and Other Controlled Items to PakistanRead the Press Release
CHICAGO ― A Bolingbrook man pleaded guilty today to violating U.S. export laws, admitting that he shipped carbon fiber and microwave laminates, and attempted to ship a thermal imaging camera, from his company in Schaumburg to Pakistan without obtaining licenses from the U.S. Commerce Department, federal law enforcement officials announced today.
The defendant, BILAL AHMED, 34, was the president, agent, and owner of Trexim Corp., which used the address of a virtual office in Schaumburg. He pleaded guilty to one count of violating the International Emergency Economic Powers Act (IEEPA). Ahmed was arrested in March and remains free on a $100,000 secured bond pending sentencing on Jan. 15, 2015, in U.S District Court.
He faces a maximum penalty of 20 years in prison and a $1 million fine. His plea agreement anticipates an advisory United States Sentencing Guidelines range of 57 to 71 months in prison.
In pleading guilty, Ahmed admitted that in 2009, he shipped carbon fiber ― Tenax-E HTS40 F13 12K 800 tex ― to Pakistan’s Space and Upper Atmosphere Research Commission (SUPARCO), believing that it would be used to make bullet-proof vests. Ahmed knew that designated “dual use” goods required a license from the Commerce Department to be exported and that no goods could be shipped to certain entities, such as SUPARCO, without first receiving a U.S. export license.
Ahmed knew that the carbon fiber was subject to export regulation. Specifically, the material was controlled for nuclear nonproliferation and anti-terrorism reasons and required a license from the Commerce Department’s Bureau of Industry and Security to be exported to Pakistan. Neither Ahmed nor Trexim ever applied for or obtained the necessary license.
Ahmed also admitted that in 2103, he shipped microwave laminate ― RT/duroid 5870 High Frequency Laminates ― to SUPARCO in Pakistan without applying for or obtaining the required export license.
Ahmed was arrested in March as he attempted to ship to Pakistan a FLIR HRC-U thermal imaging camera, which was on a Commerce Department list of controlled export goods for reasons of national security and regional stability.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, and Edward Holland, Supervisory Special Agent, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Chicago Field Office. The Justice Department’s National Security Division provided assistance in the case.
The government is being represented by Assistant U.S. Attorney Bethany Biesenthal.
Plea
22 Defendants Charged for Alleged Roles in Connected Drug Rings Extending from Mexico to Chicago and Across the U.S.Read the Press Release
CHICAGO — Twenty-two defendants are facing federal narcotics charges here for their alleged roles in importing, supplying, and distributing kilogram quantities of heroin and cocaine through interconnected drug trafficking organizations that operated in the Chicago area, as well as in Mexico, California, Oregon, Indiana, Ohio, and Pennsylvania. The investigation resulted in the seizure of more than $3.9 million from a residence in suburban Park Ridge in April 2013, as well as dozens of kilograms of cocaine, heroin, and marijuana.
Beginning Monday night through yesterday, 14 defendants were arrested in the Chicago area, two in California, and one each in Iowa and Pennsylvania, following an investigation led by FBI and DEA agents and other law enforcement partners assigned to the Chicago Strike Force, a permanent task force of centrally housed federal, state, and local law enforcement agencies targeting the intersection of drug cartels’ large-scale smuggling of narcotics and local street gangs’ extensive distribution organizations. Three others were already in custody, and one is a fugitive believed to be in Mexico.
Approximately $500,000 and a kilogram of cocaine were seized yesterday during the arrest of one defendant in Philadelphia. In Chicago, a loaded .32 caliber revolver, thousands of dollars in cash, and quantities of cocaine and heroin were seized during the arrests. In total, agents seized approximately $5 million, 78 kilos of cocaine, and 20 kilos of heroin, and a large quantity of marijuana during the entire investigation.
The defendants were charged with conspiracy or possession with intent to distribute narcotics in three separate criminal complaints that were filed Monday in U.S. District Court and unsealed following the arrests. The defendants arrested here had their initial appearances yesterday and were scheduled to have detention hearings starting tomorrow and continuing through Monday before U.S. Magistrate Judge Susan Cox in U.S. District Court.
“The Chicago Strike Force is a powerful collaboration of local, state, and federal law enforcement focused on the choke point between narcotics suppliers and street-level distributors,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “This investigation demonstrates the wisdom of the Strike Force and illustrates how dedicated teamwork can rise above jurisdictional and geographic borders, across state and international lines, to stem the flow of narcotics into our communities,” he said.
Mr. Fardon announced the charges with Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of investigation; Jack Riley, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; Gary Hartwig, Special Agent-in-Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI); and Garry F. McCarthy, Superintendent of the Chicago Police Department. The Addison, Berwyn, Oak Lawn, and Park Ridge police departments and the DuPage Metropolitan Enforcement Group also assisted in the investigation.
The Chicago Strike Force ― in addition to the DEA, FBI, HSI, and CPD ― also consists of the Internal Revenue Service Criminal Investigation Division, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, and officers from various state and local law enforcement agencies, including the Cook County Sheriff’s Police Department and the Illinois State Police.
“These Strike Force arrests demonstrate our collaborative and continuing endeavor to attack the persistent problem of drug trafficking in Chicago and the surrounding communities. I’d like to thank the United States Attorney’s Office and the DEA, our partners in this investigation, as well as the Chicago Police Department and Homeland Security Investigations, whose contributions were vital to the success of yesterday’s operation,” Mr. Holley said.
“This investigation is an example of the extraordinary work being done by the men and women at the Chicago Strike Force. Guns and drugs continue to be the underlying source of much of our city’s violence and yesterday’s arrests effectively dismantled a significant international criminal organization and its distribution network, responsible for trafficking narcotics on the streets of Chicago,” Mr. Riley said. “I applaud the FBI and the U.S. Attorney’s Office, as well as the other members of the Strike Force, for the exceptional job they did investigating these organizations.”
One of the three complaints charges VICTOR MATA MADRIGAL, 37, of Lombard, and eight members or associates of his alleged drug trafficking organization. Mata Madrigal allegedly imported wholesale amounts of cocaine and marijuana from Mexico into Chicago and distributed those narcotics to various wholesale customers.
On April 16, 2013, Strike Force agents seized $3,927,359 in alleged drug proceeds belonging to the Mata Madrigal organization from a residence in the 700 block of North Lincoln Avenue in Park Ridge. The cash was found inside numerous duffel bags, roller bags, and backpacks. Also seized were multiple cell phones, money counters, and packaging materials used to secure the cash. Mata Madrigal was arrested the same day and the complaint alleges that he continued to direct the drug operation while he was in custody.
The complaint charges that between April 2012 and May 2014 Mata Madrigal conspired with co-defendants JORGE SANCHEZ, of Philadelphia; JORGE MICHEL-MONROY, 45, of Philadelphia; SERGIO ZEPEDA, 30, of Berwyn; RAMON CONTRERAS, 23, of Chicago; ANTONIO MEIJA RODRIGUEZ, believed to be in Mexico; BALMORE URBANO, 31, of Bensenville; and STEPHANIE ARREDONDO, 22, of Franklin Park, to possess and distribute cocaine. The complaint also charges RICARDO HERNANDEZ, 30, of Chicago, and Urbano with possession with intent to distribute cocaine. If convicted, these nine defendants face a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine.
Another complaint charges DANIEL CONTRERAS, 36, of Bellwood, with working with multiple individuals to obtain and sell wholesale quantities of cocaine. Daniel Contreras and codefendants ROBERTO CORTEZ, 39, of Rialto, Calif., and MICHAEL AGUIRRE, 26, of Maywood, allegedly purchased cocaine from the Mata Madrigal organization. Daniel Contreras also allegedly worked separately with HECTOR MURILLO, 29, of Cicero, and ADAN BACA, 36, of Schaumburg, to sell distribution-sized quantities of cocaine. Co-defendants RAFAEL RUIZ, 36, of Bellwood; ARMANDO GARCIA, 38, of Bellwood; and JOSEPH DE LA VEGA, 52, of Chicago, were allegedly wholesale cocaine customers of Daniel Contreras. EITEL MENDOZA, 37, of Culver, Ore., allegedly worked with Cortez to transport kilos of cocaine from Oregon to Illinois. If convicted, eight of these defendants face a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine, while De La Vega alone faces a maximum sentence of 20 years in prison and a $1 million fine.
The third complaint charges JUAN MOYANO, 33, of Chicago, with purchasing narcotics from the Mata Madrigal organization and managing his own drug trafficking organization in Chicago that distributed heroin and cocaine, as well as possessed and transferred firearms. Moyano allegedly conspired with co-defendants NIKKOLAS CASILLO, 28, of Chicago, and JOSE VASQUEZ, 30, of Chicago, to distribute narcotics to their customers. Co-defendant JIM BAARTZ, 41, of Crystal Lake, was an alleged heroin customer of Moyano. If convicted, Moyano, Casillo, and Vasquez face a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine, while Baartz alone faces a maximum sentence of 20 years in prison and a $1 million fine.
The government is being represented by Assistant United States Attorneys Patrick Otlewski and Nicole Kim.
The public is reminded that complaints 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.
Madrigal Complaint
Contreras Complaint
Moyano ComplaintChicago Taxicab Operator Indicted and Arrested for Allegedly Conspiring to Falsify Titles of Salvaged and Rebuilt TaxisRead the Press Release
CHICAGO ― A Chicago used car broker and taxicab operator was arrested today after being indicted on federal charges for allegedly causing at least 180 vehicles that were salvaged or rebuilt to illegally obtain clean titles from Indiana and Illinois and, as a result, to illegally operate as licensed and registered taxicabs in the City of Chicago.
The defendant, ALEXANDER IGOLNIKOV, 67, of Northbrook, was charged with one count of conspiracy and two counts each of interstate transportation of false automobile titles and possession of false auto titles in a five-count indictment that was returned by a federal grand jury on Aug. 27 and unsealed today following his arrest.
Ignolikov was scheduled to appear at 3 p.m. today before U.S. Magistrate Judge Jeffrey T. Gilbert in Courtroom 1386 in U.S. District Court.
Igolnikov, also known as “Alexandr Igolnikov” and “Alex,” was the owner of Seven Amigos Used Cars and vice president of Chicago Elite Cab Corp., which operated taxis under city taxi medallions managed by Chicago Elite Cab and related entities affiliated with Chicago Carriage Taxi Company. City taxi medallion rules prohibit any vehicle that was ever issued a “salvage” or “rebuilt” title in any state from being used as a taxicab in Chicago.
The indictment alleges that between 2007 and April 2010 Ignolikov conspired with three unnamed auto brokers, two in Indiana and one in Illinois, to purchase vehicles with salvage titles from online auction sites; fraudulently obtain either clean or rebuilt Indiana titles for those vehicles by submitting false paperwork to the Indiana Bureau of Motor Vehicles; and then using those re-issued Indiana titles to obtain clean Illinois titles, concealing that the vehicles were previously issued salvage or rebuilt titles.
According to the indictment, in many instances, Ignolikov agreed with three auto brokers to have the damaged vehicles towed from the online auctions sites’ yards in out-of-state locations to the premises of Seven Amigos and Chicago Carriage near 26th Street and South Wabash Avenue in Chicago, where the vehicles would be repaired.
In addition to submitting false paperwork concealing the vehicles’ history and damage to Indiana authorities, Ignolikov and the brokers also submitted a false affidavit certifying that an Indiana law enforcement officer had personally examined the vehicles and verified certain identifying information, the charges allege. In reality, no officer had examined the vehicle and the affidavit of a police officer was signed by unnamed Officer A for a fee, or unnamed Officer B, or other individuals without any physical inspection, according to the indictment.
In some instances, based on the allegedly false towing paperwork and false police affidavits, the Indiana Bureau of Motor Vehicles issued clean titles to various auto brokers for vehicles that were previously issued salvage titles. In other instances, other individuals obtained Indiana rebuilt titles through fraud and then placed stickers on those titles concealing that the titles identified the vehicles as being rebuilt. After obtaining either a clean or rebuilt Indiana title for the vehicles, Ignolikov purchased the vehicles in the name of Seven Amigos, Chicago Elite Cab, or other businesses and paid a premium above the purchase price in exchange for the brokers’ work in securing the clean or rebuilt Indiana titles, the indictment alleges.
Finally, Ignolikov and his business associates allegedly used the clean and rebuilt Indiana titles to obtain clean Illinois titles for the vehicles, and later concealed from the City of Chicago the fact that the vehicles were previously issued salvage or rebuilt titles, which prohibited them from being used as taxis.
The arrests and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph Ferguson, Inspector General for the City of Chicago. The investigation is continuing, they said.
The government is being represented by Assistant U.S. Attorneys Margaret Schneider and Steven Dollear.
Conspiracy carries a maximum sentence of five years in prison, while each count of interstate transportation and possession of false auto titles carries a maximum penalty of 10 years in prison and all five counts carry a $250,000 maximum fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Chicago Area Man Sentenced to 22 Years in Prison for Manufacturing Child PornogrphyRead the Press Release
CHICAGO ― A Chicago area man was sentenced today to 22 years in federal prison for producing child pornography involving two 16-year-old girls he met in private Internet chat rooms in 2012 and induced to take sexually explicit photos of themselves and send them to him. The defendant, MARK BARRETO, 36, of Elmwood Park and formerly of Chicago, who has been in custody since he was arrested on federal charges a year ago, pleaded guilty in June of this year to one count of manufacturing child pornography.
In imposing the sentence, U.S. District Judge Edmond Chang noted the “extremely serious” nature of Barreto’s crime and the vulnerability of both the teenage victims and others as young as 5-years-old who were discovered in pornographic images that Barreto possessed. The judge also ordered Barreto placed on court supervision for 10 years following his release from prison, and ordered him to pay $8,600 restitution to a known victim of child pornography who was identified through the National Center for Missing and Exploited Children.
“Whatever face [Barreto] may have presented to his family, co-workers, and the world at large, it is now apparent that he spent considerable time collecting and viewing images and videos of young children being raped and sexually abused,” Assistant U.S. Attorney Katherine Sawyer argued in seeking a lengthy sentence.
Manufacturing child pornography carries a mandatory minimum sentence of 15 years and a maximum of 30 years in prison.
U.S. postal inspectors conducted a search of Barreto’s residence in October 2012 and found a laptop computer that contained approximately 433 images and 15 videos of child pornography, as well as email accounts showing that he had been communicating with various minor females, including the two he induced to produce images and videos of child pornography for him.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tony Gómez, Special Agent-in-Charge of the U.S. Postal Inspection Service in Chicago. The Bolingbrook and Naperville police departments and the Will County State’s Attorney’s Office, which initially charged Barreto before the case was adopted federally, assisted in the investigation.
Suburban Immigration Attorney and Interpreter Indicted and Arrested for Allegedly Falsifying Clients’ Asylum RequestsRead the Press Release
CHICAGO ― A suburban immigration attorney and a man who provided translation services for the lawyer and his law firm were arrested today after being indicted on federal charges for allegedly falsifying requests for asylum for a dozen clients over approximately a decade. In some instances, the charges allege that the attorney and interpreter falsely claimed that their clients were seeking asylum because their clients were subjected to religious persecution by Islamic extremists in Iraq.
The attorney, ROBERT DEKELAITA, 51, of Glenview, and his contract interpreter, ADAM BENJAMIN, 61, of Skokie, were each charged with one count of conspiracy to commit immigration and naturalization fraud. DeKelaita was also charged with three counts each of immigration fraud and suborning perjury, and Benjamin was also charged with two counts each of immigration fraud and suborning perjury in a seven-count indictment that was returned by a federal grand jury on Sept. 4 and unsealed today following their arrests.
Federal agents with the Department of Homeland Security Office of Inspector General and the FBI today executed a search warrant at the law offices of R.W. DeKelaita & Associates, LLC, located in the 5800 block of West Dempster Street, in Morton Grove.
DeKelaita and Benjamin were scheduled to be arraigned at 2 p.m. today before U.S. District Judge Matthew Kennelly in Federal Court.
The arrests and indictment were 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 Robert J. Holley, Special Agentin- Charge of the Chicago Office of the Federal Bureau of Investigation. Homeland Security’s U.S. Citizenship and Immigration Services (USCIS), U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), and Customs and Border Protection, as well as the Farmington Hills, Mich., Police Department, assisted in the investigation.
Individuals granted asylum may later seek lawful permanent residence and, eventually, naturalized U.S. citizenship. The DHS Office of Inspector General will coordinate with other DHS branches to review the immigration status of DeKelaita’s clients, Mr. Lopez said.
The indictment alleges that between 2000 and 2011, in exchange for fees, DeKelaita and Benjamin agreed to submit false information to USCIS on behalf of clients who were foreign nationals, as well as coach these clients on how to best present the false information to an asylum officer, and represent these clients in presenting the false information during asylum interviews.
As part of the conspiracy, DeKelaita allegedly conducted screening interviews of his clients to determine information that might bar clients from lawfully receiving asylum. He then completed immigration forms on their behalf using false names, false religions, false travel dates, false dates of entry into the United States, false birthdays, and false family histories, and allegedly submitted these forms to USCIS. DeKelaita also wrote and created false asylum statements detailing fictitious accounts of purported religious persecution, including false accounts of rape and murder, the charges allege. The indictment alleges examples in which DeKelaita’s clients falsely claimed that they or immediate family members were victims of violence or threatened with violence by Islamic extremists in Iraq.
DeKelaita allegedly also submitted and caused the submission of false affidavits, baptismal certificates, identity documents, and other documents to USCIS and the Executive Office for Immigration Review on behalf of their clients. DeKelaita signed his clients’ names on certain immigration forms without their knowledge or permission, the indictment alleges.
DeKelaita and Benjamin allegedly assisted clients in memorizing false information in preparing them for asylum interviews. Benjamin allegedly intentionally mistranslated answers given by clients and added testimony not actually stated by them in an effort to secure asylum on their behalf. DeKelaita and Benjamin agreed and intended that their clients would obtain asylum and use it to seek lawful permanent residence and naturalization, according to the charges.
The government is being represented by Assistant U.S. Attorney Christopher Grohman.
Conspiracy to commit immigration and naturalization fraud, as well as each count of suborning perjury, carries a maximum sentence of five years in prison and a $250,000 fine, while each count of immigration fraud carries a maximum penalty of 10 years in prison and a $250,000 fine. The indictment also seeks forfeiture of approximately $60,000 from DeKelaita. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Crystal Lake Man Sentenced to 59 Months in Federal Prison for Secret Shopper SchemeRead the Press Release
ROCKFORD — A Crystal Lake, Ill. man was sentenced today to federal prison for mail fraud involving a secret shopper scheme. U.S. District Judge Frederick J. Kapala sentenced MICHAEL S. MACKAY, 48, of Crystal Lake, Ill., to 59 months in federal prison, to be followed by 3 years of supervised release. In addition, Mackay was sentenced to pay restitution of $26,971.39 to the victims of his scheme.
Mackay pleaded guilty to one count of mail fraud on June 13, 2014, admitting that from Sept. 2011 to at least May 16, 2012, he participated in a scheme to defraud victims into falsely believing they were hired to work as “secret shoppers” or payment processors. According to the written plea agreement, after applying to work-at-home advertisements on the Internet, victims would receive a letter with at least one counterfeit negotiable instrument, such as a counterfeit money order. The victims were instructed to deposit the counterfeit negotiable instrument in their financial institution, retain a certain percentage as payment for their services, go to the nearest Western Union and wire transfer the remaining proceeds as instructed. The victims were also instructed to report their experience, believing they were hired as secret shoppers to evaluate local businesses, via email to an email address contained in the letter. The participants in the scheme received the proceeds via the wire transfers before the victims learned that the money orders were counterfeit.
Mackay admitted that during the course of the scheme he received at least $2.5 million in counterfeit negotiable instruments in packages sent to Crystal Lake from New York, Nigeria, and Ghana, and other locations. Each package contained counterfeit money orders and other negotiable instruments in amounts ranging from $500 to $2,000 each of which appeared to be issued by either the United States Postal Service, American Express, Capital One Bank, Citizens National Bank of Texas, First National Bank, or the Navy Federal Credit Union. Mackay received emails from other scheme participants that contained instructions, a “secret shopper” letter, and United States Postal Service Express mailing labels. Mackay then placed a “secret shopper” letter in a United States Postal Service express mailing envelope along with at least two counterfeit money orders to multiple victims throughout the United States. Mackay received wire transfers of at least $10,000 from his victims and others involved in the scheme as payment for his role in the scheme before the victims learned that the negotiable instruments were counterfeit.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Antonio Gomez, Postal Inspector-In-Charge of the Chicago Division of the U.S. Postal Inspection Service.
The government was represented by Assistant U.S. Attorney Michael D. Love.
West Side Gang Leader Responsible for Killing Off-Duty Detective and Woman Sentenced to 35 Years in Prison for Heroin ConspiracyRead the Press Release
CHICAGO ― A high-ranking leader of the Traveling Vice Lords street gang who directed a violent west side drug-trafficking conspiracy was sentenced today to 35 years in federal prison after a judge ruled that he “very likely” murdered an off-duty Chicago police detective and a woman in August 2008.
“Your drug trafficking activities were a scourge on your community,” Judge Lefkow said.
The judge also ruled that the government met its burden in proving by a preponderance of evidence that it was “very likely” that Austin committed the murders of Det. Robert Soto and Kathryn Romberg on Aug. 13, 2008, and then subsequently attempted to obstruct the murder investigation. The victims were shot as they sat in a parked car in the 3000 block of West Franklin, about three blocks east Kedzie and one block south of Ohio. During a sentencing hearing that began last month, the government presented evidence that Austin shot and killed the pair after mistaking them from for a rival drug dealer and the drug dealer’s companion.
“We are gratified that the Court found Austin responsible for the murders of Detective Soto and Ms. Romberg. Jason Austin is a violent drug dealer, and today’s 35-year sentence provides a modest measure of justice,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
“Jason Austin sold heroin and crack cocaine in the area of Kedzie and Ohio for years. He ran the block, had employees who worked for him, and he sold thousands of dollars of heroin a day. Austin controlled his territory through fear, violence, and threats of violence. He kept guns at the ready to stave off the competition. Austin thought of Kedzie and Ohio as his,” Assistant U.S. Attorneys Maribel Fernandez-Harvath and Matthew Madden argued in seeking a significant sentence.
Austin and 30 other members and associates of the Traveling Vice Lords were arrested in November 2010 as part of Operation Blue Knight, which focused on around-the-clock retail street sales of crack cocaine and heroin in the area of Kedzie and Ohio, known as “KO.” Significant amounts of crack cocaine and heroin were seized during the two-year investigation, which the Chicago Police Department’s Organized Crime Division began in 2008 and the Federal Bureau of Investigation joined several months later. Overall, their efforts resulted in a total of 104 defendants being arrested on state and federal charges in this and related investigations.
The evidence at trial showed that Austin conspired with others to distribute heroin to customers via hand-to-hand transactions in the “KO.” The heroin, named “Blue Magic,” alone accounted for as much as $8,000 a day in sales, between approximately 6 a.m. and 11 p.m., seven days a week. During the investigation, law enforcement officers repeatedly observed the conduct of co-conspirators at KO. Surveillance, often video recorded, documented hand-to-hand drug transactions, controlled purchases of narcotics by undercover Chicago police officers, and controlled purchases of narcotics by confidential sources.
Mr. Fardon announced the sentence with Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Garry McCarthy, Superintendent of the Chicago Police Department. The investigation was conducted by the Chicago Police Department’s Organized Crime Division and the FBI’s Safe Street Task Force, together comprising the FBI-CPD Joint Task Force on Gangs. It was also conducted under the umbrella of U.S. Organized Crime Drug Enforcement Task Force (OCDETF), with assistance from the High Intensity Drug Trafficking Area Task Force (HIDTA).
Former McHenry County Sheriff's Deputy Sentenced to 50 Years in Federal Prison for Child Sexual Abuse and ExploitationRead the Press Release
ROCKFORD — A former McHenry County sheriff’s deputy who was that department’s representative on the state’s Internet Crimes Against Children Task Force was sentenced today to 50 years in federal prison for child sexual abuse and exploitation. The defendant, GREGORY M. PYLE, 39, of Crest Hills, Ill., formerly of Crystal Lake, Ill., was also placed on lifetime supervision after release from custody by U.S. District Court Judge Frederick J. Kapala, who imposed the sentence in Federal Court in Rockford.
Pyle, a sheriff’s deputy for more than a decade, pleaded guilty on Jan. 3 of this year, admitting that he crossed a state line with intent to engage in a sexual act with a minor. Today’s sentencing hearing will be completed at 2:30 p.m. on Oct. 21, 2014, when restitution and special conditions of supervised release will be imposed.
“For over five years, [Pyle] was entrusted with the efforts of the McHenry County Sheriff’s Office to protect children from exploitation and abuse. When he knew he was under investigation, [Pyle] successfully obstructed investigators determining the full scope of his criminal conduct,” Assistant U.S. Attorney Michael D. Love argued in requesting a 50-year sentence.
In pleading guilty, Pyle admitted that on Dec. 13, 2008, he had custody of a child under 12 years of age, when he drove the child from Crystal Lake, Ill. to Milwaukee, Wis., intending to engage in sexual acts with the child and to produce visual depictions of the sexual conduct. Pyle admitted that he stayed overnight in a Milwaukee hotel and engaged in sexual acts with the child that were sadistic, masochistic, and violent. The defendant produced images of the child engaged in these sexual acts and later distributed the images over the Internet.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. The Illinois State Police, the McHenry County Sheriff’s Department, and the Illinois Internet Crimes Against Children Taskforce assisted in the investigation.
The government was represented by Assistant U.S. Attorney Michael D. Love.
Former Chicago Man Sentenced to 40 Years in Federal Prison for Sexually Abusing Two Girls and Producing Child PornographyRead the Press Release
CHICAGO ― A Mexican national who fled to Mexico, was arrested there, and agreed to extradition, was sentenced today to the maximum of 40 years in federal prison for sexually molesting two minor girls and producing child pornography. The defendant, EDGAR HERNANDEZ, 36, pleaded guilty earlier this year to one count each of manufacturing child pornography and possessing child pornography.
At a sentencing hearing today, one victim, who was 15 at the time, and a relative of the other victim, who was 7 at the time, told U.S. District Judge Samuel Der-Yeghiayan about the traumatic damage that Hernandez inflicted upon the victims’ lives. “The defendant scarred the victims for life,” Assistant U.S. Attorney John Kness argued in seeking a high sentence after the victim’s statements were presented.
Judge Der-Yeghiayan imposed the maximum sentence of 30 years in prison on the manufacturing count, to be served consecutively with the 10-year maximum term on the possession count. Hernandez is subject to deportation upon release from custody, but he was also ordered to remain under court supervision for 10 years, and he must serve at least 85 percent of his sentence. There is no parole in the federal prison system.
According to court records, Hernandez resided in a Chicago apartment and the 7-year-old victim was entrusted to his care and had a series of occasional overnight visits between September and December 2009. Hernandez engaged in sexual conduct with the victim on approximately a dozen occasions, and he used the digital video camera on his cellular telephone to make two video recordings of the sexual abuse in November 2009. The victim’s relative discovered the videos in December and contacted the Chicago Police Department, which began an investigation that was soon joined by the FBI. During the investigation, law enforcement discovered Hernandez’s sexual abuse of the 15-year-old victim, including additional video recordings.
Upon learning that the younger victim’s relative had reported his crimes to law enforcement, Hernandez fled to Mexico on Dec. 24, 2009, taking the older victim with him. That victim was reunited with her family in early 2010, but Hernandez remained a fugitive after he was charged. He was arrested in Mexico in April 2013 and was returned to Chicago last October after agreeing to summary extradition.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Garry McCarthy, Superintendent of the Chicago Police Department.
Former Cook County Sheriff’s Deputy Pleads Guilty to Using Excessive Force Against Detainee in Maywood Lockup in 2010Read the Press Release
CHICAGO — A former Cook County sheriff’s deputy pleaded guilty today to violating the civil rights of a man being held in the county’s detention lockup facility in Maywood in 2010. The defendant, RAFAEL MUNOZ, pleaded guilty at his arraignment after he was charged last week with using unreasonable force.
Munoz, 39, of Chicago, admitted that he grabbed and forcibly pulled the chain that connected a pretrial detainee’s ankle shackles to each other, causing the victim to flip forward and his head and face to hit the concrete floor. As a result of using excessive force, the victim suffered injuries, including a broken nose, a broken tooth, swelling, bruising, and bleeding from cuts to his lip and nose.
Munoz, who became a sheriff’s deputy in August 2006 and resigned last year, is scheduled to be sentenced on Dec. 10 by U.S. Magistrate Judge Maria Valdez in U.S. District Court. He faces a maximum sentence of a year in prison and a $100,000 fine. Munoz also agreed not to seek or accept any future law enforcement employment or any position that would require or permit him to supervise or care for detainees or prisoners.
According to Munoz’s plea agreement, the victim, identified as M.O., was arrested on July 8, 2010, and transported to the Maywood lockup, where he was detained in a holding cell. In that cell, M.O. was restrained with his hands handcuffed behind his back and his legs in ankle shackles. Shortly after 2 a.m. on July 8, 2010, Munoz entered the cell in response to M.O.’s request to loosen his handcuffs. Munoz ordered M.O. to turn around and face the wall and M.O. complied with Munoz’s instructions such that M.O.’s back and handcuffs faced Munoz while M.O. faced the rear of the cell. Throughout Munoz’s interaction with M.O., the victim complied with Munoz’s orders and did not pose a threat to Munoz, any other person, or himself.
After forcing the victim to fall by pulling his ankle chain, Munoz admitted that he attempted to cover up his use of excessive force by completing three false law enforcement reports. In each of those documents, Munoz reported that he entered the cell and “grabbed [M.O.’s] handcuffs to loosen at which time [M.O.] rolled onto the cell floor,” which Munoz knew was false.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Acting Assistant Attorney General Molly Moran of the Justice Department’s Civil Division; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorneys Andrianna Kastanek and Nathalina Hudson and DOJ Trial Attorney Ali Ahmad.
Plea Agreement
Former Burnham Village Clerk Sentenced to 1½ Years in Prison for Stealing from Revenue Payments and Cheating on TaxesRead the Press Release
CHICAGO — The former longtime elected clerk for the Village of Burnham was sentenced today to 18 months in federal prison for stealing more than $650,000 from her office at the south suburb’s village hall and using most of the cash to gamble at casinos. The defendant, NANCY DOBROWSKI, pleaded guilty in May to one count each of wire fraud and filing a false federal income tax return, admitting that she stole at least $650,862, and failed to pay more than $200,000 in federal income taxes.
Dobrowski, 70, of Burnham, served as Burnham’s elected clerk from 1980 until she resigned on May 29, 2013, when FBI agents executed a federal search warrant at the clerk’s village hall office. As clerk, Dobrowski was responsible for managing Burnham’s finances and depositing cash and checks collected by the clerk’s office into the village’s bank accounts.
Dobrowski committed “nine years of pillage,” U.S. District Judge Charles Kocoras said, and ordered her to begin serving her sentence on Oct. 21. He also ordered Dobrowski to pay a total of $913,704 in restitution ― $709,501 to Burnham and $204,203 to the Internal Revenue Service ― but noted Dobrowski’s inability to pay such an amount. Before imposing the sentence in U.S. District Court, the judge heard statements from Burnham Mayor Robert Polk and a Burnham police sergeant, as well as a letter from the chief of the village’s volunteer fire department, about the debilitating financial effect that Dobrowksi’s theft had on public safety and village services. The amount she stole was enough to fund the police department for six months and leaves the small, working class village in debt, the mayor said.
Between at least 2004 and May 2013, Dobrowski took cash the village received as payment for fees and fines from the public. She then used most of the cash to gamble at casinos in Indiana and elsewhere either by taking cash to casinos or by depositing the money into her personal bank account and then withdrawing it from automated teller machines at casinos. She falsely represented the village’s finances to auditors and covered up her fraud scheme by causing false entries in village books.
As part of the fraud scheme, Dobrowski took cash from both the village cash register and the collection of money received as tow bonds. She recorded false amounts of tow bond money that had been received to make it appear that the village collected less cash than it had actually received, and sometimes she used tow bond money to balance the cash register.
To conceal her misappropriation of cash from the village cash register, Dobrowski waited a week to deposit cash into the village’s bank accounts instead of making daily deposits. By delaying deposits, Dobrowski could use funds received by the village in the later week to make up for funds she had taken during the prior week, making the deposit appear to match the revenues despite having taken cash from the register.
Dobrowski further concealed the scheme by failing to record checks received from the public as payment for village fees and services. She would place the unrecorded checks into the register to compensate for an equal amount of cash she had taken, making the register appear balanced. She provided false information to the village’s outside audit firm regarding the village’s revenues and regularly disposed of the cash register tape to conceal that the village’s revenues often did not match the deposits into village bank accounts.
Dobrowski also admitted filing a false federal income tax return for the years 2007-12, knowing that her total income was substantially greater than what she reported because she failed to report the cash she misappropriated from the village as income. Dobrowski agreed that she caused a total tax loss of $204,203 during those years.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and James C. Lee, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.
The government is being represented by Assistant U.S. Attorney Steven Block.
Former Area Man Convicted of Sex-Trafficking Two Minors and an Adult Victim at Southwest Suburban MotelsRead the Press Release
CHICAGO ― A former suburban man who was living in Michigan when he was arrested in 2011 was convicted by a federal jury of sex-trafficking three victims, including two minors, federal law enforcement officials announced today. The defendant, FABRIEL DELANEY, was found guilty of all eight counts against him, including sex-trafficking by force, fraud and coercion, and of minors. The jury began deliberating late Wednesday and returned its verdict yesterday afternoon following a trial that began Aug. 25 in U.S. District Court.
Delaney, also known as “Face,” 28, formerly of Palatine, as well as Battle Creek and Kalamazoo, Mich., faces a mandatory minimum sentence of 15 years in prison and a maximum of life on multiple counts. U.S. District Judge John Darrah scheduled sentencing for Dec. 10.
Delaney has been in federal custody since July 2011 when he was arrested by FBI agents outside a hotel in Tinley Park. According to the evidence at trial, Delaney transported two minor females and a young woman from Kalamazoo to the hotel to engage in prostitution at what he believed was a bachelor party. Delaney specifically expected the victims to engage in sexual activity with 10 to 12 men for $150 to $300 per customer. Instead, Delaney was arrested at the hotel as part of a sting that followed a long-term investigation of his sex trafficking crimes.
All three victims, who were 16, 17, and 20-years-old at the time, testified about their prior involvement with Delaney at the trial. They testified that, at first, Delaney took half of the money they were paid and, later, took all of the money they were paid, after advertising their services on various Internet websites. The adult victim testified that Delaney threatened her by holding a hot iron next to her face, and there was additional testimony about beatings and other threats of violence.
The investigation began in September 2010 when Illinois State Police made a traffic stop in Will County and found Delaney driving with three female passengers, including one of the minor victims, who Delaney was sex-trafficking at a hotel in the Joliet area. Delaney typically met customers in a hotel parking lot to ensure they were not undercover police before sending them to the victim’s hotel room.
The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. FBI field divisions in Detroit and Indianapolis assisted in the investigation, as well as the Cook County Sheriff?s Police Department, the Illinois State Police, police departments in Kalamazoo and Battle Creek, Mich., and the Will County State’s Attorney?s Office.
The government is being represented by Assistant U.S. Attorneys Rajnath Laud and Dylan Smith.
Suspended Physician Pleads Guilty to Illegally Dispensing Oxycodone and Falsely Billing Medicare in Undercover ProbeRead the Press Release
CHICAGO — A suburban physician whose medical license was suspended after he was arrested earlier this year pleaded guilty today to health care fraud and illegally prescribing controlled substance medications. The defendant, SATHISH NARAYANAPPA BABU, who owned Anik Life Sciences Medical Corp., admitted that he illegally prescribed oxycodone and other controlled substances, and fraudulently billed Medicare approximately $500,000, and fraudulently collected approximately $216,000, for services he did not provide.
Babu, 47, of Bolingbrook, operated Anik Life Sciences, a home-visiting physician’s office, in Darien and, previously, in Arlington Heights. He was arrested in February following an investigation by the Drug Enforcement Administration, the U.S. Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation.
As part of his plea agreement, Babu agreed to surrender his DEA registration. He faces a maximum sentence of 10 years in prison on one count of health care fraud and four years in prison on one count of illegally prescribing a controlled substance, and a $250,000 maximum fine on each count. The government anticipates an advisory United States Sentencing Guidelines range of 57 to 71 months in prison, according to Babu’s plea agreement.
Babu remains free on bond, which prohibits him from writing any prescriptions or submitting any claims to Medicare, while awaiting sentencing on Jan. 21, 2015, by U.S. District Judge John J. Tharp, Jr.
Babu also agreed to forfeit approximately $126,000 that was seized when he was arrested, as well as three automobiles ― a 2013 BMW, a 2001 BMW, and a 2010 Lexus.
In pleading guilty, Babu admitted that between November 2012 and December 2013, he issued multiple prescriptions for controlled substances to a purported patient who was actually an undercover agent, despite never having seen or examined the patient. The prescriptions totaled approximately 300 pills containing 80mg strength oxycodone, 180 pills containing 5-325mg strength hydrocodone, and 120 pills containing 1 mg strength of alprazolam. Babu also permitted unlicensed personnel associated with Anik Life Sciences to issue prescriptions to the patient. During the same period, Babu submitted false claims to Medicare for services purportedly provided to the patient that were not rendered by Babu or another licensed medical professional.
According to court documents, the undercover agent posed as a healthy individual purportedly covered by Medicare and seeking physician services to obtain prescription medication, including oxycodone. The agent claimed to have shoulder pain from a previous injury and to be on disability. On approximately 10 occasions, representatives from Anik Life Sciences, none of whom were licensed as physicians, nurses, or other medical professionals, visited the undercover agent in his purported apartment.
Babu caused unlicensed personnel from Anik Life Sciences to provide purported medical care ― including prescriptions issued under Babu’s name and DEA registration number for controlled substances ― to the undercover agent and then billed Medicare for that purported care. Medicare and its contractor paid about $4,000 to cover the costs of the prescriptions that Babu issued to the undercover agent.
In addition to the undercover agent, Babu had other patients, whom he certified and re-certified as eligible for home health services under Medicare, and submitted claims for care he purportedly provided, including home visits and diagnostic testing and review, without regard to whether the claimed services were medically necessary. Babu hired three foreign medical school graduates who were not licensed physicians in the United States to conduct home visits and advertised these individuals as “MDs” or doctors. Babu submitted Medicare claims indicating that he personally conducted the patient visits and provided comprehensive medical evaluations that he did not actually perform.
Babu also maintained an office staff that he directed to order certain diagnostic tests for every patient, including ultrasound and autonomic nervous system testing, without regard to medical necessity. He further prescribed controlled substances to patients who he had never seen or examined and permitted his unlicensed staff to fill out prescriptions and order refills for patients.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jack Riley, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The officials commended the assistance of United Healthcare in the investigation. The government is being represented by Assistant U.S. Attorney Sarah Streicker.
Plea Agreement
Former Suburban Chiropractor and His Wife Sentenced to Federal Prisonfor $1 Million Health Insurance Fraud SchemeRead the Press Release
CHICAGO ― A former suburban chiropractor and his wife, who was a fitness instructor and personal trainer, were sentenced to federal prison terms for engaging in a $1 million health insurance fraud scheme that continued for a year after they were indicted in 2011. WENDY CARR, 43, was sentenced today to 28 months in prison, a week after her husband, ANDREW CARR, 45, both of Lake in the Hills, was sentenced to eight years in prison.
Andrew Carr worked as a chiropractor at Premier Health in Palatine, Community Physical Medicine and Rehabilitation in Mundelein, Allied Health in Mundelein, Edgewater Rehabilitation and Wellness Center in Lake in the Hills, and Fusion Health and Fitness in Lakemoor.
“They pretended to be the victim patients’ friends, convinced the victim patients to take their fitness classes, and convinced the victim patients to get treatment from [Andrew Carr] when the classes caused physical pain or injury,” Assistant U.S. Attorney Shoba Pillay argued at sentencing.
Between 2005 and June 2011, Andrew Carr submitted health insurance claim forms for at least 376 patients to six different private health care insurers, knowing that more than $4.2 million worth of claims were for services that were not provided, and as a result, he fraudulently obtained payments totaling approximately $865,697.
Between January 2009, when Wendy Carr joined the scheme, and June 2011, she processed the insurance claims, knowing that nearly $1.6 million worth of claims were for services that were not provided, and, as a result, the couple fraudulently obtained payments during that time totaling approximately $328,964.
After the couple were indicted in June 2011, they submitted an additional 596 fraudulent claims totaling more than $475,000 for 51 additional patients over another year and, as a result, fraudulently obtained an additional $164,168. Each pleaded guilty to health care fraud earlier this year.
Andrew Carr was ordered to pay restitution totaling $1,029,865, and Wendy Carr was ordered to pay $493,132 in restitution by U.S. District Judge Robert M. Dow, Jr., who imposed the sentences in Federal Court. The restitution was ordered to be paid to the victim insurance companies ― Aetna, Inc., Allied Insurance, Blue Cross Blue Shield of Illinois, CIGNA, Professional Benefit Administrators, Inc., and United Healthcare, some of which provided coverage through union health and welfare funds they administered in the Chicago area.
Andrew Carr, who was sentenced on Aug. 25, has been in federal custody for approximately two years. Wendy Carr, was sentenced today and was ordered to begin serving her 28-month sentence on June 25, 2015, to be followed by six months of home detention.
The sentences were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of investigation; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago; and Donna J. Seermon, Acting Regional Director in Chicago of the U.S. Department of Labor’s Employee Benefits Security Administration.
Lakemoor Man Who Teaches in Buffalo Grove Middle School Arrested on Federal Child Sexual Exploitation ChargesRead the Press Release
CHICAGO ― A middle school teacher in northwest suburban Buffalo Grove was arrested this morning on federal charges for allegedly receiving child pornography and persuading a minor to produce pornographic images of himself. The defendant, JOHN C. VASTIS, also known as “Pete,” 51, of Lakemoor, which straddles Lake and McHenry counties, was arrested at his home early this morning by agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations at the same time they executed a federal search warrant.
Vastis is a teacher at the Meridian Middle School in Aptakisic-Tripp District 102 in Buffalo Grove. There are no allegations of any sexual exploitation of any students. School district officials are cooperating with the investigation.
Vastis was charged with two counts of producing child pornography and one count of receiving child pornography. He appeared before Magistrate Judge Jeffrey Cole and was ordered to remain in federal custody pending a detention hearing, which was scheduled for 9 a.m. Tuesday in U.S. District Court.
Anyone with information about this matter is encouraged to call HSI’s toll-free tip line at 1-866-DHS-2ICE (1-866-347-2423) or go to http://www.ice.gov/predator/# for further information. Callers may remain anonymous.. Callers may remain anonymous.
According to the complaint, on Aug. 15, HSI agents and local police executed a state search warrant at the residence of a 17-year-old youth who was suspected of possessing and distributing child pornography. The youth, identified as “Minor A,” told agents that he began communicating via Skype and text messages with an adult he identified as “Pete” when he was 16-years-old in September 2013. Agents later identified “Pete” as Vastis, the charges allege. Agents then analyzed data from Minor A’s computer and cell phone and recovered more than 3,200 lines of chat messages between Minor A and “Pete.” Excerpts of those chats are detailed in the complaint affidavit.
The sexual exploitation of a minor charges allege that on Jan. 18 and March 3, 2014, Vastis persuaded, induced, and enticed Minor A to produce pornographic images of himself and send them to Vastis. He was also charged with receiving a video containing child pornography on July 13.
Each count of producing child pornography carries a mandatory minimum sentence of 15 years and a maximum of 30 years in prison, while receiving child pornography carries a mandatory minimum of five years and a maximum of 20 years, and each count carries a $250,000 maximum fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The arrest and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Gary Hartwig, Special Agent-in-Charge of HSI in Chicago. The Lakemoor Police Department, together with state and local HSI task force officers and the Lake County State’s Attorney’s Office, are assisting in the investigation. The Buffalo Grove Police Department is also cooperating with the investigation. The government is being represented by Assistant U.S. Attorney John Kness.
The investigation is being conducted under HSI’s Operation Predator, an international initiative to protect children from sexual predators. Since its launch in 2003, HSI has arrested more than 10,000 individuals for crimes against children, including the production and distribution of online child pornography, traveling overseas for sex with minors, and sex trafficking of children. In fiscal year 2013, more than 2,000 individuals were arrested by HSI special agents under this initiative.
A complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
Former Cook County Employee Arrested for Allegedly Swindling $330,000 from $10.3 Million U.S. Flood Relief GrantRead the Press Release
CHICAGO — A former Cook County employee who managed a $10.3 million federal grant to assist county residents who were impacted by floods in 2008 was arrested today on federal charges for allegedly engaging in a fraud scheme with several contractors and swindling at least $330,000 from the program. A vendor who allegedly kicked-back more than $100,000 was indicted together with the former county official.
BARRY CROALL, 45, of Montgomery, Ill., was a county program manager who oversaw disbursement of the grant funds for Cook County’s Department of Homeland Security and Emergency Management. He was charged with two counts of wire fraud and one count of federal program theft in a five-count indictment that was returned by a federal grand jury yesterday and unsealed today following his arrest.
Croall was scheduled to be arraigned at 3:30 p.m. today before U.S. District Judge Andrea Wood in Courtroom 1725 in the Dirksen United States Courthouse.
RONALD FORD, 57, of Country Club Hills, who operated Strategic Management Services S.M.S. LLC, was charged with one count each of conspiracy and federal program theft. He was not arrested and is scheduled to be arraigned at 11 a.m. tomorrow before Judge Wood.
According to the indictment, between April 2010 and January 2011, Croall arranged for Strategic Management Services, a nonprofit corporation, and three other companies to perform services that were eligible to be paid for with grant funds. Croall allegedly arranged for the businesses to submit false documents inflating the amount of compensation they were entitled to and then obtained portions of the grant payments they received as kick-backs.
Croall allegedly used the funds for his own personal use, including mortgage payments for rental properties he owned in Yorkville through his company, Dove US; the purchase of a condominium unit in Yorkville; credit card payments; homeowner association fees; and an automobile. The indictment seeks forfeiture of at least $330,000 and the Yorkville condo.
The indictment alleges that Croall arranged for Strategic Management Services and Companies A and B to perform certain work on homes eligible for payment under the grant, including damage assessments, inspections, coordination of contractor visits, and related work. Strategic Management and Company A submitted invoices indicating that they had performed work at specified rates on approximately 900 and 500 homes, respectively, but the invoices allegedly overstated the number of homes and the amount of work that was performed.
As part of the scheme, Croall allegedly directed Strategic Management and other companies to submit their invoices to a nonprofit corporation, rather than to Cook County, for payment. Strategic Management and Companies A and B submitted a series of invoices in 2010, totaling approximately $741,000, to the nonprofit corporation, and the county then paid funds from the grant to the nonprofit corporation, based in part on Croall’s approval. Croall also allegedly arranged for Company C to install 1,000 appliances in eligible homes and to pay a commission to Company A as part of the scheme.
Croall then allegedly devised ways to obtain funds from the various vendors, including being employed by Company B as an independent contractor for a two-year term at $72,000 a year. Ford allegedly kicked-back at least $108,000 in cash to Croall.
The arrest and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Patrick Blanchard, Cook County Inspector General.
The government is being represented by Assistant U.S. Attorney Lindsay Jenkins.
Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, and restitution is mandatory. Each count of federal program theft carries a maximum sentence of 10 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The 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.
Indictment
Chicago Man Allegedly Exploited U.S. Visa Program to Defraud Chinese Investors of $160 Million in Purported O’Hare ComplexRead the Press Release
CHICAGO — A Chicago man who purported to be building a $912 million hotel and convention center complex near O’Hare International Airport was indicted today on federal charges for allegedly exploiting a U.S. visa program to fraudulently raise approximately $160 million from some 290 Chinese nationals who invested in the project while seeking U.S. residency.
The defendant, ANSHOO SETHI, 30, of Chicago, was charged with eight counts of wire fraud and two counts of making false statements in a 10-count indictment returned today by a federal grand jury. He was the founder and a managing member of A Chicago Convention Center, LLC, which purported to be building the hotel and convention center on nearly three acres of land located at 8201 West Higgins Rd., east of the airport. Sethi, who was also the managing member of the Intercontinental Regional Center Trust of Chicago, LLC, will be arraigned on a date yet to be determined in U.S. District Court.
The indictment seeks forfeiture of at least $11 million in administrative fees that Sethi allegedly collected from Chinese investors and expended as part of the fraud scheme. Sethi misappropriated at least $320,000 of the fees to purchase luxury goods for himself, his family, and friends, and for an unrelated civil lawsuit settlement, to fund a cosmetic surgery business, and for other personal expenses, the indictment alleges.
The U.S. Securities and Exchange Commission sued Sethi over the purported project in early 2013 and the case was settled earlier this year. Approximately $147 million, which had been escrowed by Sethi and frozen by the SEC, was returned to Chinese investors.
The indictment alleges that between January 2011 and February 2013, Sethi defrauded investors and deceived the U.S. Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS) in its review of visa applications through false statements and representations about the participation of established hotel brands in the project; the appraised value of the project site; government financing; the City of Chicago’s provision of Tax Increment Financing; the development of the project; and the use of the investors’ administrative fee.
According to the indictment, foreign nationals may obtain an EB-5 visa, qualifying them for U.S. residency, if they invested $1 million, or if they invested at least $500,000 in a domestic project in a high unemployment or rural area and their investment would create or preserve at least 10 jobs for U.S. workers. In addition, EB-5 visas were set aside to be granted to foreign investors in Regional Centers that promoted economic development, such as Sethi’s Intercontinental Regional Center Trust of Chicago. The USCIS granted Sethi’s application for Regional Center status in June 2011.
Sethi solicited Chinese nationals who were interested in obtaining EB-5 visas to invest $500,000 each plus a $41,500 administrative fee in A Chicago Convention Center and the Intercontinental Regional Center, representing that the $500,000 would be used for construction of the complex and the $41,500 would be used for administrative and marketing expenses, the indictment alleges. Each Chinese national who invested $541,500 in the project also applied for an EB-5 visa with USCIS, but no EB-5 visas were actually granted to investors through the convention center project.
A Private Offering Memorandum stated that each investment interest constituted approximately 0.025 percent ownership of the project, and it projected raising $249 million through investor contributions. Additional funding for the project would be obtained through a contribution of the three-acre site on Higgins Road, which Sethi allegedly represented had a greatly inflated appraised value of $177 million, approximately $339 million in government bond financing, and various government tax credits and grants, the memorandum stated.
To raise investment funds, Sethi used employees and foreign sales agents and provided them with numerous documents and marketing materials to distribute to investors in China. Sethi also made presentations regarding the project directly to investors in China, according to the indictment.
A Private Offering Memorandum stated that each investment interest constituted approximately 0.025 percent ownership of the project, and it projected raising $249 million through investor contributions. Additional funding for the project would be obtained through a contribution of the three-acre site on Higgins Road, which Sethi allegedly represented had a greatly inflated appraised value of $177 million, approximately $339 million in government bond financing, and various government tax credits and grants, the memorandum stated.
To raise investment funds, Sethi used employees and foreign sales agents and provided them with numerous documents and marketing materials to distribute to investors in China. Sethi also made presentations regarding the project directly to investors in China, according to the indictment.
The indictment further alleges that Sethi falsely represented that the project had executed franchise agreements with established hotel brands, namely Hyatt, Starwood, and Intercontinental Hotel Group, to operate at least three separate hotels at the complex, knowing at the time that no such agreements existed.
Sethi also allegedly falsely represented that that the State of Illinois and the federal government were investing funds and providing tax credits for the project, including circulating a forged letter stating that the project qualified for financing through the Illinois Finance Authority. He also falsely represented that the City of Chicago had agreed to provide approximately $97 million through Tax Increment Financing, and he distributed a fake agreement and a fake city ordinance as evidence that the project had been approved for TIF financing, the indictment alleges.
Sethi further falsely represented that the $41,500 administrative fee was fully refundable if the investors’ EB-5 visas were not approved, even though he knew that he had spent nearly all of the administrative fees collected and did not have the resources to repay the investors.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The SEC and the USICS assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Sunil Harjani.
Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, and restitution is mandatory. Each count of making false statements carries a maximum sentence of five years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
14 Area Defendants, Including 12 Felons, Charged with Illegally Possessing or Selling Firearms; More Than 100 Guns SeizedRead the Press Release
CHICAGO ― More than 100 assorted pistols, revolvers, rifles, and shotguns have been seized and 14 Chicago area defendants are facing federal firearms charges as a result of an investigation that ended yesterday and was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives. ATF agents, together with Chicago police and other state and local law enforcement partners, executed arrest and search warrants yesterday and seized 17 firearms from a residence in Gary, Ind. The investigation, which began in January, relied in part on three confidential informants, including one who posed as a broker for an individual who sold firearms overseas.
Nine defendants were arrested yesterday while three others were already in state custody. Nine separate criminal complaints were unsealed charging 12 defendants with being felons-in-possession of firearms, one with dealing firearms without a federal license, and one with illegal possession of a machine gun with an obliterated serial number. Those arrested yesterday remain in federal custody pending detention hearings, which Magistrate Judge Jeffrey Cole scheduled for Thursday and Friday in U.S. District Court.
This investigation is the culmination of ATF’s 2014 Firearms Trafficking and Violent Crime Strategy, also known as the “Chicago Initiative,” a four-month mission involving concentrated resources and efforts to attack violent crime associated with illegal firearms and narcotics. During the broader initiative, and including yesterday’s developments, ATF agents arrested 90 state and federal defendants, executed 25 search warrants, and seized more than 270 firearms, as well as seized more than four kilograms of marijuana, more than a kilogram of heroin, and nearly a kilogram each of powder cocaine and crack cocaine.
“This investigation, coupled with our enhanced efforts over the last four months, makes a difference by reducing the potential for violence that is associated with the illegal possession and sale of firearms,” said Carl J. Vasilko, Special Agent-in-Charge of ATF’s Chicago Field Division.
“Every gun we take out of the hands of individuals who allegedly possess and sell them illegally helps reduce the risk of violent crimes occurring with those weapons,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
Chicago Police Superintendent Garry McCarthy said: “You have heard me say it repeatedly and I will say it again, we have too many illegal guns flooding our streets. But every little bit helps, and certainly this mission and confiscating as many weapons as we did will keep our communities safer.”
The Illinois State Police, the Cook County Sheriff’s Department, the Lake County, Ind., Sheriff’s Department, and task force officers from the Indiana State Police, and the Gary, Ind., Police Department also assisted in the investigation.
According to the complaints, in March of this year, one of the confidential informants (CI-3) identified an individual known as “Batman,” who agents later identified as JOHN THOMAS, as one of CI-3’s sources of illegally obtained firearms. CI-3 and Thomas had previously agreed that CI-3 would pay Thomas approximately $100 for every handgun and $150 for every long gun purchase that Thomas arranged for CI-3. Thomas allegedly arranged firearms transactions between CI-3 and other defendants, including ANTHONY LOGAN, who in turn allegedly arranged additional firearms transactions between CI-3 and other defendants. CI-3 also allegedly purchased firearms directly from STEVE THOMAS and WESLEY PICKETT. During these controlled purchases with the defendants, CI-3 posed as a firearms broker for an individual who sold firearms overseas. The complaint affidavits together detail 45 firearms that CI-3 purchased during the investigation. All of those guns were among a total of 108 firearms that were purchased or seized during the investigation.
Details of the nine complaints follow:
JOHN THOMAS, aka “Batman,” 38, and DANIEL BINGMON, aka “Tiny,” 36, both of Chicago, were each charged with being a felon-in-possession of a 20-gauge shotgun. At the direction of ATF agents, CI-3 allegedly purchased a total of five firearms from Thomas and Bingmon on April 30 and May 8;
ANTHONY LOGAN, aka “Snake,” 29, of Chicago, was charged with being a felon-in-possession, and DANIEL JONES, 23, of Chicago, was charged with selling firearms without a federal license. Between April 10 and June 27, CI-3 allegedly purchased a total of 17 firearms, including six handguns and 11 long guns, from Logan and Jones;
LARRY McINTOSH, aka “Ten,” 38, of Gary, Ind., and CHARLES HAWKINS, 31, of Richton Park, were charged with being a felon-in-possession of various firearms. Between June 2 and July 2, McIntosh allegedly possessed nine firearms that he sold to CI-3, and Hawkins allegedly possessed three of those firearms that he delivered to CI-3 on McIntosh’s behalf;
TYRECE McCLINTON, 24, and RODEARL McELROY, 21, both of Chicago, were each charged with being a felon-in-possession of a firearm. McClinton, McElroy, and John Thomas allegedly sold a .38 caliber pistol to CI-3 on May 13;
TRAISON WATSON, 22, of Country Club Hills, was charged with illegally possessing and transferring a machine gun with an obliterated serial number. CI-3 allegedly purchased two firearms, including the machine gun and a 7.62 caliber rifle, from Watson and John Thomas on May 16. The machine gun had been modified from its original configuration as a 9 mm pistol making it capable of firing more than one shot with a single pull of the trigger, according to the complaint affidavit;
STEPHEN CARLOS, aka “Steve-O,” 26, of Chicago, was charged with being a felon-in-possession of a 12-gauge shotgun. CI-3 allegedly purchased a gun from Carlos and Logan on April 30, and two firearms from Carlos, Logan, and Jones on June 4;
STEVE THOMAS, 38, of Chicago, was charged with being a felon-in-possession of a firearm. Steve Thomas allegedly sold CI-3 four firearms between May 19 and July 8;
WESLEY PICKETT, 25, of Dolton, was charged with being a felon-in-possession of a firearm. Pickett allegedly sold CI-3 four firearms between March 20 and July 1; and
KENNETH SMITH, 30, and RICO SMITH, 38, both of Chicago, were each charged with being a felon-in-possession of a firearm. Both Smiths and Logan allegedly sold a .40 caliber pistol to CI-3 on May 20.
Being a felon-in-possession of a firearm carries a maximum sentence of 10 years in prison and a $250,000 fine. Dealing firearms without a federal license carries a maximum sentence of five years in prison and a $250,000 fine, and illegal possession of a machine gun with an obliterated serial number carries a maximum of 10 years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Nicole Kim and Lela Johnson.
Criminal complaints 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.
Complaint
Three Southwest Suburban Defendants Indicted in Alleged Scheme to Defraud Organ and Tissue Donor NetworkRead the Press Release
CHICAGO ― Three southwest suburban defendants were indicted on federal fraud charges for allegedly scheming to swindle hundreds of thousands of dollars from a not-for-profit network that coordinated organ and tissue donations in Illinois and northwest Indiana, federal law enforcement officials announced today.
The indictment seeks forfeiture of $652,298 in alleged proceeds of the fraud scheme.
One defendant, SHARI L. HANSEN, 41, of Bolingbrook, was the auditing coordinator for the organization and was responsible for reviewing and approving invoices from physicians who contracted to engage in organ and tissue procurement. Co-defendants, ERIC V. MURFF, 37, of Plainfield, and DEBRA A. SCHULTZ, 43, of Lockport, allegedly received the proceeds of false invoices and shared the funds with Hansen.
All three defendants will be arraigned on a date yet to be determined in U.S. District Court. Hansen was charged with six counts of wire fraud, and Murff and Schultz were each charged with three counts of wire fraud, in a six-count indictment that was returned yesterday by a federal grand jury.
According to the indictment, between March 2008 and April 2010, the defendants allegedly schemed to submit false invoices to the donor network, identified as Organization A, seeking payment to physicians for organ and tissue procurement work that they knew was not performed. Each false invoice claimed that either Murff or Individual A, both of whom were not physicians, purportedly performed the organ or tissue procurement specified. Hansen allegedly authorized the fraudulent payments to be made.
Murff and Schultz deposited checks from Organization A, which were payable to Murff and Individual A, into accounts they controlled and then transferred a portion of the funds to Hansen, the charges allege.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tony Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The government is being represented by Assistant U.S. Attorney Paul Tzur.
Wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine or an alternate fine of twice the loss or twice the gain, whichever is greater. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Two Suburban Men Indicted on Federal Gun Charges for Allegedly Illegally Possessing 40 FirearmsRead the Press Release
CHICAGO ― Two suburban men are facing federal gun charges for allegedly illegally possessing 40 firearms, and one of them was also charged with selling firearms without a federal license between 2010 and 2011, federal law enforcement officials announced today.
One defendant, WALTER FREEMAN, also known as “Charlie” and “Cha-Lay,” 35, whose last known residence was in Lisle, was charged with one count each of being a felon-inpossession of firearms, possession of stolen firearms, and dealing firearms without a federal license. Co-defendant, TIMOTHY VANA, 53, of Forest Park, was charged with one count each of being a felon-in-possession of firearms and possession of stolen firearms.
Both defendants are scheduled to be arraigned at 11 a.m. Wednesday before Magistrate Judge Susan Cox in U.S. District Court. They were charged together in a three-count indictment returned by a federal grand jury last Thursday.
According to the indictment, between October 2010 and July 2011, Freeman and Vana illegally possessed 40 assorted firearms, both as previously convicted felons and because they had reason to believe that those same firearms were stolen. Freeman was also charged with engaging in the business of dealing firearms without a federal license during the same time period. The firearms included various 9 and 25 mm, and .22, .38, and .45 caliber pistols.
Being a felon-in-possession of firearms and possessing stolen firearms each carry a maximum of 10 years in prison, and dealing firearms without a federal license carries a maximum sentence of five years in prison, and each count carries a $250,000 maximum fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Carl J. Vasilko, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Cook County Sheriff’s Police and the Illinois State Police assisted in the investigation. The government is being represented by Assistant U.S. Attorney Jennie Levin.
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.
Indictment
Former Redflex CEO, Liaison, and Chicago Official Indicted for Alleged Corruption in City’s Red Light Camera ContractsRead the Press Release
CHICAGO — A former chief executive officer of Chicago’s first red light camera vendor, Redflex Traffic Systems, Inc., and the company’s customer liaison with the city, were indicted today on federal corruption charges together with a retired city official who managed the red light camera program for nearly a decade, after he alone was charged initially in May.
A federal grand jury returned a 23-count indictment alleging that Redflex officials, including KAREN FINLEY, its former CEO, provided the retired city official, JOHN BILLS, with approximately $570,000 cash and other personal benefits in exchange for Bills’ providing inside information and assisting Redflex in obtaining, keeping, and expanding its Chicago contracts that grew to $124 million. Finley and other officials of Phoenix-based Redflex arranged to funnel the cash and benefits to Bills through his friend, MARTIN O’MALLEY, by hiring O’Malley as an independent contractor who passed much of his $2 million compensation on to Bills, the indictment alleges.
Finley, 54, of Cave Creek, Ariz., who was Redflex’s chief executive from late 2005 through February 2013 and its vice president of operations from 2001 until she became CEO, was charged with nine counts of mail fraud, three counts of wire fraud, three counts of federal program bribery, and one count of conspiracy to commit federal program bribery. O’Malley, 73, of south suburban Worth, who was an independent contractor for Redflex between 2003 and 2012, was charged with one count of conspiracy to commit federal program bribery.
Bills, 53, of Chicago, who was arrested in May on a criminal complaint and released on his own recognizance, was indicted on nine counts of mail fraud, three counts of wire fraud, three counts of federal program bribery, three counts of filing a false federal income tax return, and one count each of extortion and conspiracy to commit federal program bribery. A city employee for 32 years, Bills served as a member of the red light camera contract evaluation committee and retired as managing deputy commissioner of the city’s transportation department on June 30, 2011.
All three will be arraigned on a date yet to be determined in U.S. District Court in Chicago.
The indictment also seeks forfeiture from all three defendants of approximately $613,400 as well as the proceeds from the sale of a condominium in Gilbert, Ariz.
Between late 2002 and late 2012, Bills and Finley allegedly schemed to defraud the city of money and Bills’ honest services by providing Bills with cash, checks, and other personal benefits directly and indirectly, including meals, hotel stays, rental cars, and golf outings. In May 2008, O’Malley purchased the condominium for Bills, which Bills visited nearly two dozen times with friends and family until the fall of 2012.
“When public officials peddle influence for profit, the consequences are severe, and when corporate executives enable that corruption, the same rule applies. We will attack alleged public corruption from every angle,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
“Rooting out public corruption remains one of the FBI's highest priorities,” said Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. “Today's indictment underscores our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who allegedly violated the public’s trust,” he added.
“IRS Criminal Investigation ensures that all Americans, including public officials, are held to the same standard and that everyone pays their fair share of taxes,” said James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
“The alleged confluence of corrupt local officials and corrupt corporate officers demands a counterweight of local and federal agencies working to redeem the frayed confidence of the public,” said Joseph Ferguson Inspector General for the City of Chicago. “The Office of Inspector General is therefore grateful for the continuing leadership, dedication and collaboration of our federal partners in this matter.”
The investigation is continuing, the officials said.
According to the indictment and the complaint affidavit against Bills, in October 2003, the city awarded a contract to Redflex for the installation, maintenance and operation of the city’s first Digital Automated Red Light Enforcement Program (DARLEP), which used cameras to automatically record and ticket drivers who ran red lights. Between 2004 and 2008, the city paid Redflex approximately $25 million under this contract, and Redflex installed and maintained more than 100 red light cameras in Chicago intersections, and assisted in reviewing and processing violations. Bills, then assistant transportation commissioner, was a voting member of the city’s request for proposal (RFP) evaluation committee that recommended awarding the contract to Redflex after a one-month trial run of competing systems by Redflex and another finalist. In February 2008, the city awarded a new, non-competitive contract to Redflex to operate and maintain the previously installed camera systems, and paid Redflex approximately $33 million under that contract.
Also in February 2008, following the competitive RFP process, the city awarded a new DARLEP contract to Redflex that was similar to the first. Bills was an advisory member of this RFP evaluation committee. The city paid Redflex approximately $66 million under this contract, resulting in the installation of nearly 250 additional red light cameras.
By 2010, Chicago had the largest red light camera program in the United States, representing approximately 20 percent of the total camera systems that Redflex, a subsidiary of Australian-based Redflex Holdings Ltd., operated nationwide.
According to the indictment, Individual A, Redflex’s former vice president of sales and marketing, made a presentation to Bills regarding Redflex’s red light cameras in late 2002. Shortly after a Jan. 3, 2003, pre-bid meeting that Individual A attended with other vendors, Bills asked Individual A to get him a hotel room in Los Angeles. Individual A paid for the room and sought and received reimbursement from Redflex.
In February 2003, after Redflex and a competitor were selected for a pilot phase, Finley, Individual A, and others from Redflex met Bills at the John Hancock Center and Bills provided information in an effort to give Redflex an advantage over its competitor, the charges allege. Before the pilot phase, Bills recommended that Redflex hire Company A as a subcontractor. In May 2003, before the city contract was awarded, Bills, Individual A and, at times, Individual B, who was then Redflex’s CEO, allegedly strategized to ensure a favorable result for Redflex. On May 27, 2003, the evaluation committee and city transportation commissioner recommended that Redflex be awarded the DARLEP contract, effective in October 2003.
At a celebratory dinner in June 2003 in Los Angeles, Bills allegedly told Individual A words to the effect of, “It’s time to make good,” which Individual A understood to mean that Bills wanted and expected to be paid for helping Redflex win and maintain the Chicago contract. Bills allegedly discussed how much money he wanted based on the size of the contract, and suggested to Individual A alternative ways to funnel benefits to him, including paying him through the newly created Chicago customer liaison position.
Individual A relayed Bills’ demand to Finley and Individual B. In May 2003, Finley allegedly directed placing an advertisement in a Chicago newspaper for an account manager for Redflex’s Chicago contract, and Bills allegedly told O’Malley to look for and respond to the ad. O’Malley interviewed with Finley and Individual B and was hired in the summer of 2003. Bills allegedly indicated to O’Malley that he was working with Redflex on O’Malley’s employment contract and that O’Malley would give him a portion of the commissions that O’Malley received.
The indictment alleges that from 2003 through November 2012, O’Malley and Bills used several different methods, at Bills’ direction, to transfer funds to Bills, including: from 2004 through 2012, O’Malley withdrew more than $600,000 in cash and O’Malley gave Bills approximately $570,000 in cash; from 2008 to 2010, O’Malley wrote Bills checks totaling approximately $17,900, which Bills used to pay personal debts and expenses; and from 2007 to 2011, O’Malley wrote checks totaling approximately $5,500 to a political organization.
Also at Bills’ request, the indictment alleges that Redflex agents, including Individual A and O’Malley, paid for at least $20,000 worth of personal expenses for Bills, including hotels rooms, meals, golf games, and computers, with the approval of Finley and Individual B, and expensed these purchases through Redflex from 2003 through 2011. Neither Finley nor Bills reported the flow of benefits on financial disclosure or economic interest forms they each submitted in connection with the contracts and Bill’s employment, the charges allege.
Before Bills retired, he allegedly made it known to Individual A and other Redflex employees that he wanted a job with Redflex. Instead, Finley, Individual A and others arranged for Bills to get a job with Nonprofit Corporation A, and Redflex increased its monthly funding to Nonprofit Corporation A to help pay for Bills’ salary. That job lasted through the early spring of 2012.
The tax charges against Bills allege that he failed to report the income he received from O’Malley on his federal income tax returns for 2008, 2009 and 2011.
Each count of mail and wire fraud and extortion carries a maximum sentence of 20 years in prison; federal program bribery carries a maximum of 10 years in prison; and conspiracy carries a maximum of five years in prison, and each count carries a $250,000 maximum fine, while the mail and wire fraud counts also carry an alternate maximum fine of twice the gain, or twice the loss, whichever is greater. The tax counts against Bills each carry a maximum of three years in prison and a $250,000 fine. Defendants convicted of tax offenses must pay the costs of prosecution and remain civilly liable for any back taxes, as well as a potential civil fraud penalty of up to 75 percent of the underpayment plus interest. Restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is being represented by Assistant U.S. Attorneys Carrie Hamilton and Laurie Barsella.
Indictment
Former Bahrain Banker Pleads Guilty to $1.3 Million Federal Income Tax Fraud; Begins RepaymentRead the Press Release
CHICAGO — A former executive of a bank in Bahrain pleaded guilty today to federal income tax fraud, admitting that he filed three false tax returns and failed to file a fourth return, resulting in a tax loss to the United States of more than $1.3 million over four years. The defendant, AAMIR H. KHAN, pleaded guilty to one count of filing a false individual federal income tax return at his arraignment in U.S, District Court after he was charged in a single-count information filed late last month. He also agreed to pay the United States a $724,000 civil penalty for failing to report funds he held in foreign bank accounts.
Khan, 48, of Doha, Qatar, and formerly of Naperville, was the managing director – head of private equity for Unicorn Investment Bank BSC in Manama, Bahrain. A dual citizen of the United States and Pakistan, Khan voluntarily returned to the U.S. to resolve the tax charges. He was released on a $200,000 secured bond pending sentencing on Nov. 24 before U.S. District Judge Thomas M. Durkin.
Khan faces a maximum sentence of three years in prison and a $250,000 fine, and his plea agreement contemplates an advisory United States Sentencing Guidelines range of 30 to 37 months in prison. Khan made a partial restitution payment today of $300,000, and he remains liable for the total amount of back taxes and interest, as well as mandatory costs of prosecution.
As part of his guilty plea, Khan also agreed to pay the U.S. Treasury a civil penalty of $724,574, which represents 50 percent of the highest cumulative balance of five foreign bank accounts he maintained in the Middle East. The penalty resolves Khan’s civil liability for failing to file annual reports of Foreign Bank and Financial Accounts for the years 2007 through 2012.
In pleading guilty, Khan admitted that he caused a federal tax loss of just under $1.32 million by filing false tax returns for 2006-08 and failing to file a tax return for 2009. Khan did not provide accurate information to an accountant who prepared his returns. He reported that he had earned only slightly more than $100,000 on each of the three returns he filed, when, in fact, his wages and compensation totaled approximately $518,394 in 2006; $801,390 in 2007; and $2,029,331 in 2008. Khan’s gross income was approximately $1,238,604 in 2009 when he failed to file a tax return.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
Federal tax law requires that U.S. taxpayers pay taxes on all income earned worldwide and to report certain foreign financial accounts.
The government is being represented by Assistant U.S. Attorney Patrick King.
Plea Agreement
Dakota, Illinois Man Sentenced to 56 Months in Federal Prison for Charity Fraud SchemeRead the Press Release
ROCKFORD — A Dakota, Ill. man was sentenced yesterday afternoon to federal prison for conducting a scheme to defraud more than 3,600 victims out of more than $120,000 in charitable donations. Federal Judge Frederick J. Kapala sentenced CLIFFORD J. EDWARDS, JR., 34, (formerly of Dakota and Loves Park, Ill.) to 56 months in federal prison, to be followed by 3 years on supervised release. In addition, Edwards was sentenced to pay restitution of $122,468 to the victims of his scheme.
Edwards was indicted for mail fraud on June 18, 2013, and pleaded guilty to one count of mail fraud on May 1, 2014. In pleading guilty, Edwards admitted to establishing and operating two alleged charities – Helping Out, LLC and Smiles for Kids Foundations. According to his guilty plea, Edwards established call centers for the two charities and hired employees to make unsolicited telemarketing type telephone calls. Edwards admitted that he and his employees would falsely tell victims that donations they contributed would be used to benefit children with cancer and under-privileged children. In pleading guilty, Edwards admitted that instead of using the monies he raised for children, he kept all of the funds and used them for his own personal expenses and to operate his two phony charitable organizations. The scheme to defraud lasted for 3 years, between June 2010 and June 2013.
The case was investigated by the United States Postal Inspection Service in Chicago.
The sentence was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tony Gomez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
The government was represented by Assistant U.S. Attorney John G. McKenzie.
Thirty-Five Defendants Facing State or Federal Drug Charges for Allegedly Selling Heroin and Crack Cocaine on City’s West SideRead the Press Release
CHICAGO — The alleged patriarch of a Gangster Disciples street gang faction that operates in the two square blocks surrounding the 4500 block of West Jackson Boulevard on the city’s west side was arrested today and charged, together with 34 other defendants, with possessing and distributing heroin and crack cocaine at two open air drug spots. JOHNNY HERNDON allegedly supplied and directed a drug trafficking organization that sold heroin, crack, and other narcotics since the early 1990s, and used the proceeds to accumulate more than 30 real estate properties, mostly multi-unit rentals, valued at more than $1.6 million, over the last two decades.
In addition to Herndon, also known as “Goo,” Chicago police officers and ATF and IRS agents began arresting 20 federal and 15 state defendants early this morning. Three firearms, approximately $10,000, and more than a half-kilogram of heroin were seized this morning during the arrests. Another 13 firearms and hundreds of grams of heroin, crack cocaine, cocaine, and marijuana were seized during the investigation. Police and federal agents also executed 10 search warrants at several defendants’ residences and alleged stash houses.
Herndon’s drug territory is particularly lucrative due to the heavy traffic of drug customers and proximity to the Eisenhower Expressway, and his organization used violence, guns, and threats to control and protect this territory, according to federal charges unsealed today.
In two instances during the investigation, in March and June of this year, CHRISTOPHER HARRIS, allegedly the day-to-day manager of Herndon’s organization who was also arrested today, was intercepted in recorded conversations directing that guns be brought to him. The second instance occurred on June 7 when law enforcement believes that Harris allegedly was looking for guns and mobilizing the Herndon organization to respond immediately after the shooting death that night of a Gangster Disciples member in the 4400 block of West Jackson. Law enforcement quickly located Harris before there was any retaliation, and he was charged federally today with being a felon-in-possession of a firearm for allegedly possessing a .357 caliber revolver that night.
Controlling two “drug spots” ― in the 300 block of South Kilbourn Avenue and the 4400 block of West Congress Avenue ― Herndon’s organization allegedly sold 540 quarter-gram rocks of crack cocaine daily for $10 each, or 135 grams of crack for $5,400 a day on average. The retail side of the organization alone sold more than four kilograms of crack and generated approximately $162,000 in revenue in an average 30-day month, the charges allege.
Since 1993, Herndon, 55, who lives in a converted three-flat in the 4500 block of West Jackson, allegedly spent more than $1 million to purchase 31 properties in Chicago and the area, including Gary, Ind.. The properties were purchased with drug proceeds and proceeds from the sale of other appreciated properties that were purchased with drug proceeds that were then re3 invested to purchase additional properties. All of the properties were purchased outright, with no mortgage, and many have been rehabbed. The rental properties, including some Section 8 subsidized units, generate more than $20,000 a month in rental receipts for Herndon, the charges allege.
The federal defendants were charged with various narcotics offenses in an 11-count criminal complaint that was filed yesterday in U.S. District Court and unsealed following the arrests. The federal defendants began appearing this morning before U.S. Magistrate Judge Michael Mason in U.S. District Court. The state defendants were charged with possession or delivery of a controlled substance in separate complaints and will appear later in state court.
“Today’s takedown is another step in law enforcement’s Job One, and that is to build upon our decades’ long effort to wipe out drug gangs and gang factions that unfairly impact certain Chicago neighborhoods and make life dangerous for many fellow citizens,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “The U.S. Attorney’s Office remains committed to working with Cook County and our local and federal partners to fight gangs and violent crime until those neighborhoods are safe,” he added.
Mr. Fardon and Ms. Alvarez announced the charges with Garry F. McCarthy, Superintendent of the Chicago Police Department; Carl J. Vasilko, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives; and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division. The investigation was conducted through the U.S. Organized Crime Drug Enforcement Task Force (OCDETF), and the Chicago High Intensity Drug Trafficking Task Force (HIDTA) assisted in the investigation.
“Today’s action is a vivid display of the partnership between ATF and CPD and our commitment to eradicating violent drug and gun crimes in Chicago. As a result of our efforts, we have disrupted a violent drug trafficking organization on Chicago’s west side in a very short period of time,” Mr. Vasilko said.
“This investigation is a powerful and perfect testament of the good that can come when our agencies work together,” said Superintendent McCarthy. “I am extremely proud of not only our officers, but all the law enforcement personnel who contributed to bringing these alleged gang members to justice and making our streets a safer place.”
According to a 178-page affidavit in support of the federal arrests and search warrants, the investigation, which included extensive wiretaps, use of confidential sources, and surveillance, revealed that Herndon supplied crack cocaine to Harris, 34. If Herndon did not have crack, Harris obtained powder cocaine from other alleged suppliers, including EDUARDO ZAMUDIO, 27, and ROBERT RUSSELL, 48, and then converted it into crack. Harris, in turn, supplied the crack to JONATHAN GREEN, 27; FABIAN REDMOND, 28; JONATHAN O’LEARY, 30; and ANTWAION EDWARDS, 39, who allegedly were the drug spot managers. The managers oversaw the spot workers, including MARCUS LONGSTREET, 29; MANUEL MEEKS, 41; CAUIRENCE HERNDON, 34; DESHAWN RICHARDSON, 21; ANDREW JONES, 31; and PATRICIA NEAL, 35.
Johnny Herndon and other leaders of his organization also allegedly sold wholesale quantities of heroin and crack to other Gangster Disciples members, including KESHAW EUELL, 40, who controlled drug spots in the blocks surrounding their area. ROBERT SMITH, 59, was allegedly Herndon’s lead wholesale distributor of crack, selling up to several hundred grams at a time to various wholesale customers in Chicago and Indiana, including DARRYL JONES, 48; MILDRED SMITH, 59; and HARRY SMITH, 30. Another defendant, DARVEN MARION, 46, allegedly a Black Soul street gang member who had a close relationship with Herndon and Harris, was another wholesale supplier to Robert Smith.
Twelve federal defendants ― Johnny Herndon, Harris, Green, Redmond, O’Leary, Edwards, Longstreet, Meeks, Cauirence Herndon, Richardson, Jones, and Neal ― were charged with conspiracy to possess and distribute crack cocaine. If convicted, they each face a mandatory minimum sentence of 10 years in prison and a maximum of life imprisonment and a $10 million fine.
Harris alone faces an additional maximum sentence of 10 years in prison on the felon-inpossession charge. The remaining federal defendants were charged with various drug distribution counts that carry maximum penalties of either 20 years in prison and a $1 million fine, or a mandatory minimum of five years and a maximum of 40 years and a $5 million fine.
The state defendants are: JOSE ESCALARA, 43; LANORIS HOLMAN, 48; DERRICK HUGHES, 53, of Bellwood; ARTURO LARA, 54, of Schaumburg; SAMMIE LOCKHART, 58; PAMERA LONG, 42; CHARLES MARKESE, 57; RUSSELL MORAVEC, 49; DEANGELO PERCY, 34; EARL SMITH, 28; SHAWN SMITH, 46; SHAUNTAH LANGFORD, 32; GENE McCAULLEY, 34; JERROLD SANDERS, 44; and MICHEAL STOKES, 29, all of Chicago unless otherwise noted.
Assistant United States Attorneys Christopher Grohman and Rajnath Laud are representing the government in the federal cases. Assistant State’s Attorney Rita O’Connor is handling the state cases.
The public is reminded that complaints 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.
Complaint
Former Physician Sentenced to Nearly Six Years in Prison on Drug Charge for Trading Prescription Drugs for Sex and CashRead the Press Release
CHICAGO ― A former physician who was affiliated with three Chicago hospitals was sentenced today to nearly six years in federal prison for illegally distributing prescription drugs in exchange for sex and cash. The defendant, JOSHUA D. BARON, a pediatric neurologist, pleaded guilty in March, admitting that he provided approximately 149 prescriptions for controlled substance medications, totaling thousands of doses, to 16 individuals in exchange for sex between 2006 and 2011. These individuals were never patients of Baron, they never visited his office as a patient, and he never asked them about medical issues, took their medical history, conducted an examination, or attempted to diagnose them.
Baron, 40, of Forest Park and formerly of Oak Park, was ordered to begin serving his 70- month sentence on Sept. 12 by U.S. District Judge Rebecca Pallmeyer. The judge also placed Baron on supervised release for 10 years after his sentence and ordered him to pay a $1,000 fine and perform 1,000 hours of community service.
Between late 2006 and early 2011, Baron dispensed prescriptions for controlled substances to individuals outside of the usual course of professional practice and without a legitimate medical purpose. He posted at least 78 advertisements offering to trade various prescription drugs, including Adderall, Norco, Percocet, Xanax, Vicodin, Ativan, Ritalin, Darvocet, OxyContin, and Klonopin, on an online website, and all of the ads were placed through one of three email addresses he used under the sections, “Men Who Would Pay” and “Casual Encounters.” Through these prescriptions, Baron traded thousands of doses of various medications to 16 individuals, mostly for sexual favors and, in some instances, cash.
Baron was initially charged by the state in January 2011 after an undercover investigation by the Wilmette Police Department. He was charged federally in October 2011 following a broader investigation by the U.S. Drug Enforcement Administration and the Chicago Police Department.
Baron was licensed in Illinois in May 2006 and, until January 2011, treated patients at Rush University Medical Center, John H. Stroger, Jr., Hospital of Cook County, and St. Anthony=s Hospital, all in Chicago. He voluntarily surrendered his medical license and his DEA registration in 2011.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Jack Riley, Special Agent-in-Charge of the DEA=s Chicago Field Division. The Wilmette Police Department, the Chicago Police Department Organized Crime Division=s narcotics and gang section, and the Illinois Department of Financial and Professional Regulation assisted in the investigation.
The government was represented by Assistant U.S. Attorneys Carol Bell and Matthew Schneider.
Chicago Man Sentenced to 30 Years in Prison for Forced Sex-Trafficking of Four Victims, Including Two MinorsRead the Press Release
CHICAGO — A Chicago man was sentenced today to 30 years in federal prison for forced sex-trafficking of two minor and two young adult women. The defendant, CARL BRANDON SMITH, forced his victims to engage in commercial sex acts, used physical violence, and threatened to kill them if they ever left him between 2010 and early 2012.
Smith, also known as “Moo,” 27, pleaded guilty in January 2103 to transporting a minor from Wisconsin to Illinois for prostitution. He targeted young and vulnerable women and girls, ages 17 through 21. He psychologically manipulated them, convinced them that he was their boyfriend who loved them, and then forced them to earn their keep by working as prostitutes.
One victim spoke in court today, describing the physical and emotional impact that Smith’s crimes had on her. Addressing the defendant, she said she has moved on in her life, but she will remain permanently scarred.
“You were a violent pimp. . . . The pain, fear, and harm you’ve inflicted on these women is devastating,” U.S. District Judge Amy J. St. Eve said in imposing the sentence. Smith must serve at least 85 percent of his sentence and the judge placed him on five years’ supervised release after he is imprisoned. Smith was also ordered to pay approximately $239,000 in restitution to be allocated among the four victims based on a formula that takes into account the number of days each was prostituted, how many men they were forced to have sex on average each day, and the rate that Smith advertised their services.
“He did unspeakable things to his victims,” Assistant U.S Attorney Christopher Grohman argued at sentencing, adding in a written memo that the government could not “put into words the magnitude of harm or the life-altering consequences Smith caused his victims through his mosaic of cruelty.”
After the victims started in Smith’s employ, he kept them “in line” using a regime of verbal threats, drugs, physical beatings, and forcible sex acts. For just under two years, he “caused incalculable physical and psychological damage to his victims, in some cases scarring them physically and emotionally for life,” AUSA Grohman argued.
According to court documents, Smith met one victim in December 2010 and began contacting her via phone, text, and social media, asking her to move to Chicago, intending that she be his “girlfriend” and also engage in prostitution. In February 2011, Smith drove from Chicago to the victim’s residence in Wisconsin, and then drove her from Wisconsin to his apartment in Chicago, knowing that she was under 18 at the time.
Once in Chicago, Smith “dated” the victims for approximately a week before she began working as a prostitute under his employ between February and July 2011. Acting as her pimp, Smith advertised the victim for commercial sex on internet sites, and instructed her to have sex with customers in his apartment and in area motels, with Smith collecting the money she earned. The DuPage County Sheriff’s Office, the Naperville and Aurora police departments, and the Cook County Human Trafficking Task Force assisted in the investigation. The government was represented by Assistant U.S. Attorney Christopher Grohman.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Former Lyons Police Officer Sentenced to Five Years in Federal Prison for Extorting $48,000 from Targets of InvestigationsRead the Press Release
CHICAGO — A former west suburban Lyons police officer was sentenced today to five years in federal prison for illegally extorting more than $48,000 from targets of criminal investigations he was supposedly conducting during 2013. The defendant, JIMMY J. RODGERS, who was a 14-year veteran of the Lyons Police Department, was sentenced after pleading guilty in May to extortion.
Rodgers, 44, of Chicago, was assigned to a U.S. Food and Drug Administration, Office of Criminal Investigations, task force and his duties included investigating the sale of contraband and counterfeit cigarettes. In the course of his work, he set up six fake transactions with criminals, detained them, hand-cuffed them, stole their goods and funds for his own benefit, threatened them, and then lied and concealed the scam.
Rodgers, 44, of Chicago, was assigned to a U.S. Food and Drug Administration, Office of Criminal Investigations, task force and his duties included investigating the sale of contraband and counterfeit cigarettes. In the course of his work, he set up six fake transactions with criminals, detained them, hand-cuffed them, stole their goods and funds for his own benefit, threatened them, and then lied and concealed the scam.
“The temptation for police officers to extort illegal operations is great. People need to know they will go to jail for this conduct,” U.S. District Judge Thomas M. Durkin said in imposing the 60-month sentence. “The sentence here should serve as a reminder that the penalty for shaking people down is not a slap on the wrist.”
Rodgers was also fined $48,980 and was ordered to begin serving his sentence on Nov. 7. Rodgers was arrested last September and pleaded guilty in May.
According to court records, Rodgers recruited cooperating sources to assist in setting up transactions in which the source would sell contraband cigarettes to potential targets of the investigation. Rodgers agreed to pay the sources a fee for each transaction the sources conducted. Rodgers’ extortion was discovered by the FBI when one of the confidential sources reported the conduct after realizing that none of the targets were arrested, the transactions were not recorded, and Rodgers had begun paying him in cash from proceeds of the transactions instead of with checks from the Lyons Police Department as Rodgers had arranged previously.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation. The Lyons Police Department and FDA’s Office of Criminal Investigations assisted in the investigation.
The government was represented by Assistant U.S. Attorney Sunil Harjani.
Former Lombard Businessman Sentenced to Eight Years in Federal Prison for Soliciting Murder to Erase an $8 Million DebtRead the Press Release
CHICAGO — A former commercial real estate businessman was sentenced today to eight years in federal prison for soliciting the murder of a Texas businessman whom he owed an $8 million judgment. The defendant, DANIEL DVORKIN, was convicted of solicitation of murder and five counts of using a telephone and a car to commit a murder-for-hire following a week-long jury trial in August 2013 in U.S. District Court.
Dvorkin, 76, formerly of Lombard, was arrested in July 2012 and has been in federal custody since he was convicted last year. U.S. District Judge Edmond Chang imposed the sentence in Federal Court.
Dvorkin “was a calm, cool, collected businessman who negotiated the price of a hit man as though he were closing a real estate deal, who showed only real concern for his bank account over the life of [the victim],” Assistant U.S. Attorneys Heather K. McShain and Jeff Perconte argued in a government sentencing memo.
According to the evidence at trial, the victim obtained an $8 million judgment in February 2012 against Dvorkin and two of his businesses, and the judgment became collectible in May 2012 after the parties failed to settle through mediation. In April 2012, Dvorkin contacted an individual, who reported to local police and later to the FBI that Dvorkin had solicited him to hire a hit man to kill the victim over the $8 million judgment. The individual who Dvorkin solicited began cooperating with law enforcement and recorded a series of conversations and meetings with Dvorkin in furtherance of the murder-for-hire plot. Investigators feared that Dvorkin, after balking at the price being negotiated with the cooperating individual, had found a cheaper hit man who was not identified, and approached Dvorkin, who was later arrested in July 2012.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Oakbrook Terrace Police Department assisted in the investigation.
Grundy County Gun Dealer Indicted on Federal Charges for Allegedly Illegally Selling FirearmsRead the Press Release
CHICAGO ― A Grundy County gun dealer was indicted on federal firearms charges alleging that he illegally sold 11 firearms from either his store or his residence to an undercover law enforcement officer posing as a felon, as well as to a convicted felon who was cooperating with law enforcement, federal law enforcement officials announced today.
The defendant, PATRICK SEAN KEIRAN, 40, of Elwood, Ill., in Will County, has been a federally licensed firearms dealer since April 2013 and operated American Choice Firearms and Ammo in Gardner, Ill., in Grundy County.
A federal grand jury returned a six-count indictment yesterday charging Keiran with one count of selling firearms to an individual he had reason to believe was a convicted felon, one count of selling firearms to an individual who did not display a valid Firearm Owner’s Identification (FOID) Card, and four counts of selling firearms without recording the name, age, and residence of the purchaser.
Keiran will be arraigned on a date to be determined in U.S. District Court in Chicago. He was initially charged in a criminal complaint and arrested on July 2, and was released on bond. His gun store was closed at that time and the Bureau of Alcohol, Tobacco, Firearms, and Explosives removed the firearms and ammunition remaining in the store at that time.
According to the charges, between May 29 and June 20, 2014, Keiran illegally sold 11 firearms ― eight 9mm handguns, two .22 caliber rifles, and a .38 caliber revolver. ATF agents began investigating Keiran in May after receiving information from a confidential source that he was selling firearms to prohibited persons and falsifying ATF paperwork in an attempt to fraudulently legitimize the prohibited sales, according to the complaint. The charges allege that Keiran initially conducted the illegal sales with an undercover agent at his store and later conducted additional illegal sales with the agent and a cooperating individual at his residence.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Carl Vasilko, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Will County Sheriff’s Police Department, the Will County Metropolitan Area Narcotics Squad (MANS), and the Grundy County Sheriff’s Department assisted in the investigation.
Keiran faces five counts of illegally selling firearms that each carry a maximum sentence of five years in prison, and a sixth count that carries a maximum penalty of 10 years in prison, and all six counts carry a maximum fine of $250,000. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorney Christopher Parente.
Indictment
Complaint
Federal Officer Charged with Witness Tampering for Allegedly Hindering Investigation of Sham MarriageRead the Press Release
CHICAGO — A federal law enforcement officer was indicted on witness tampering charges for allegedly attempting to thwart an investigation of a sham marriage that she arranged a decade earlier. The defendant, ENKHCHIMEG ULZIIBAYAR EDWARDS, was charged with two counts of witness tampering in a federal grand jury indictment that was returned yesterday and announced today.
Edwards, also known as “Eni Edwards, 36, of Carpentersville, a U.S. Customs and Border Protection officer at O’Hare International Airport, will be arraigned on a later date to be determined in U.S. District Court.
The charges resulted from an investigation by the U.S. Department of State, Diplomatic Security Service Chicago Field Office. The U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Department of Homeland Security’s Office of Inspector General assisted in the investigation.
According to the indictment, Edwards arranged for Individual A, a Mongolian citizen, to marry a friend of hers, Individual B, who was a U.S. citizen. Edwards arranged the marriage so Individual A could apply for and obtain U.S. citizenship through marrying Individual B. In July 2003, Individuals A and B were married in Las Vegas. Shortly after they were married, the couple applied for Individual A to become a naturalized U.S. citizen. After the U.S. Citizenship and Immigration Services requested additional information, Individual B failed to provide the requested information and stopped pursuing U.S. citizenship for Individual A. After the naturalization petition was rejected, Individuals A and B divorced in May 2004.
By January 2013, federal law enforcement authorities were conducting an investigation of the role that Edwards played in the marriage of Individuals A and B. On Jan. 8, 2013, and again the following day, Edwards allegedly engaged in witness tampering by attempting to corruptly persuade Individual B, with intent to hinder, delay, and prevent Individual B from communicating information to law enforcement relating to a federal crime.
Each count of witness tampering carries a maximum penalty of 20 years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Scott F. Collins, Acting Special Agent-in-Charge of the U.S. Department of State, Diplomatic Security Service Chicago Field Office.
The government is being represented by Assistant U.S. Attorney Peter S. Salib.
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.
Indictment
Six Defendants Charged in Separate Fraud Schemes to Obtain $2.7 Million in Mortgages, Student Aid, Bank and Small Business LoansRead the Press Release
CHICAGO — Six defendants are facing federal fraud charges involving separate schemes to obtain a total of more than $2.7 million through fraudulent statements in loan applications submitted to banks, mortgage lenders, several community colleges, the U.S. Department of Education, and the Small Business Administration since 2006. Five of the defendants were indicted together yesterday for scheming to fraudulently obtain more than $2.4 million. The sixth defendant, who alone was arrested today, was indicted separately for allegedly scheming to fraudulently obtain an additional $300,000 in mortgage fraud and student loan fraud. Both indictments stem from the same investigation of fraudulent loan applications.
In an alleged mortgage fraud scheme, three of the five defendants ― ANTHONY TRICE, then president of Fifty One 06 Property Management and Acquisitions, Inc., JERROD L. WEATHERSBY, a director and vice president of the defunct company, and NOREEN B. MIAN, then a licensed loan officer for Exclusive Bancorp., Inc., in Lincolnwood ― were charged with scheming with others between 2006 and 2011 to fraudulently obtain more than $2.1 million in mortgage loans for 14 properties in Chicago and suburban Burnham and Park Forest. According to the indictment, Trice, 34,of Chicago; Weathersby, 36, of Harvey; and Mian, 34, of Chicago, prepared and submitted false documents and made false statements to lenders about the buyers’ qualifications for the loans. Trice also allegedly made false statements in requests for loan modifications related to two of the properties.
In an alleged student loan fraud scheme between 2010 and 2012, Trice and Weathersby, together with WARREN K. TAYLOR, 35, and DAVID N. EDWARDS, 37, both of Chicago, were charged with fraudulently seeking to obtain approximately $240,000, and successfully obtaining approximately $135,000 by submitting at least 40 fraudulent applications for admission and federal student aid from Harper College, Elgin Community College, and Joliet Junior College. According to the indictment, the defendants knew that the applicants — some of whose identities were acquired by Trice and Weathersby in connection with an earlier credit card fraud scheme — had not agreed to be enrolled in college, were ineligible for financial aid, and did not intend to use the financial aid funds for educational purposes. The defendants allegedly caused the financial aid checks to be sent to certain addresses in Chicago and Park Forest, and that they then cashed the checks and used the proceeds for themselves and others.
In an alleged credit card fraud scheme between 2006 and 2008, Trice and Weathersby were charged with obtaining individuals’ personal identifying information by promising to help them improve their credit ratings and obtain money. According to the indictment, Trice and Weathersby then made false statements in applications for lines of credit and credit card accounts and, without the consent of the applicants, withdrew more than $145,000 from the lines of credit and credit card accounts. During the same time, they also allegedly fraudulently obtained a $35,000 bank loan, which was guaranteed by the Small Business Administration, and used the proceeds for personal purposes.
Trice was charged with six counts of mail fraud, five counts of wire fraud, three counts of bank fraud, and one count each of making false statements on loan applications, student loan fraud, and aggravated identity theft. Weathersby was charged with one count each of wire fraud and aggravated identity theft. Taylor was charged with four counts of mail fraud and one count each of aggravated identity theft and student loan fraud. Mian was charged with two counts of wire fraud and one count of making false loan application statements, and Edwards was charged with one count each of mail fraud and student loan fraud.
The indictment also seeks forfeiture of more than $2.41 million from Trice, Taylor, Mian, and Edwards. All five defendants will be arraigned on later date to be determined in U.S. District Court and an arrest warrant was issued for Edwards alone.
In a separate indictment, DERREK L. CAMPBELL, II, 34, of Chicago, was charged with two counts of making false loan application statements and one count each of wire fraud and student loan fraud for allegedly obtaining more than $300,000 through false statements to mortgage lenders between 2009 and 2013 in connection with purchasing two properties in 2009, obtaining federal student aid in 2011, and seeking a loan modification on one of the properties in 2013. The indictment also seeks forfeiture of $302,420.
Campbell was arrested today and was scheduled to be arraigned this afternoon in Federal Court.
Each count of bank fraud, wire fraud affecting a financial institution, and making false loan application statements carries a maximum sentence of 30 years in prison and a $1 million fine; each count of mail fraud carries a maximum sentence of 20 years in prison and a $250,000 fine, and student loan fraud carries a maximum of five years in prison and a $250,000 fine. Aggravated identity theft carries a mandatory sentence of two years in prison consecutive to any other sentence and a $250,000 fine.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, together with officials of the U.S. Department of Education Office of Inspector General, the U.S. Small Business Administration, and the Federal Housing Finance Agency.
The government is represented by Assistant U.S. Attorney Christopher R. McFadden.
An indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Trice Complaint
Campbell ComplaintBankrupt Developer of Algonquin Project Sentenced to 15 Months in Federal Prison for $1 Million Bank FraudRead the Press Release
CHICAGO — The former owner of an area home building company that went bankrupt in 2008, leaving unfinished a commercial and residential property development in northwest suburban Algonquin, was sentenced today to 15 months in federal prison for bank fraud related to the collapse of the project, known as Riverside Square.
The defendant, BRUCE HAWKINS, 64, of Denver and formerly of Algonquin, who owned Aspen Homebuilders, Inc., was also ordered to pay $1,017,183 in restitution by U.S. District Judge Robert M. Dow, Jr. Hawkins, who pleaded guilty in January, was ordered to surrender to begin serving his sentence on Oct. 14.
“It is important that developers and general contractors know that if they commit fraud in the financing of their projects, their conduct will be met with serious consequences,” Assistant U.S. Attorney Sunil Harjani argued in a government sentencing memo. “It is important that developers know they will go to jail if they lie in bank documents in order to steal funds from financial institutions.”
Hawkins admitted defrauding Amcore Bank of more than $1 million from the proceeds of $13.5 million line of credit to finance the project. In September 2006, acting through Riverside Square, LLC, Hawkins obtained the bank loan to finance the construction of Riverside Square, located at 1100 West Algonquin Rd. Between January 2007 and June 2008, Hawkins fraudulently obtained slightly more than $1 million in loan proceeds from the bank by submitting false contractor statements, waiver of liens, and contract invoices that requested funds purportedly for village permits, construction work, and consulting work for the development.
To obtain funds from the bank loan, Hawkins submitted false contractor statements to the bank in which he verified that subcontractors and his company were owed funds for work performed on Riverside Square. Hawkins submitted, and caused the submission of, false lien waivers and invoices for work performed to the title company, which was designated by Amcore Bank to keep and disburse funds for the project. After these documents were submitted, the bank authorized the title company to disburse funds to Hawkins and the subcontractors.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and John Lucas, Special Agent-in-Charge of the Federal Deposit Insurance Corporation Office of Inspector General in Chicago.
Thirteen Rockford Area Residents Facing Federal Gun And/Or Drug ChargesRead the Press Release
ROCKFORD — Thirteen Rockford area residents are facing federal gun and/or narcotics charges, federal and local law enforcement officials announced today. The indictments stem from a year-long investigation into firearms and cocaine trafficking in the Rockford area led by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rockford Police Department. ATF agents, together with local police and other authorities, began executing arrest warrants this morning.
Zachary T. Fardon, United States Attorney for the Northern District of Illinois, praised the teamwork of the ATF and Rockford Police Department. Mr. Fardon announced the charges with Carl J. Vasilko, Special Agent-in-Charge of ATF in Chicago, and Chet Epperson, Rockford Police Chief. Also participating in the investigation and arrests were the Belvidere Police Department, Winnebago County Sheriff’s Office and the Illinois State Police.
Ten of the thirteen defendants were arrested today; one defendant was already in custody; and one defendant was previously arraigned. Those arrested today will appear before U.S. Magistrate Judge Iain D. Johnston and will remain in federal custody pending detention hearings.
Everardo Rodriguez, 28, Oscar Pina, 38, and Gabriel Rodriguez, 38, are each charged separately with selling cocaine. Mallek Sanchez, 28, is charged alone with selling cocaine, being a felon in possession of a firearm, and possessing a firearm with an obliterated serial number. Teovonni Cunningham, 29, Darrell Reed, 26, and Michael Schaffer, 31, are all charged together with conspiring to possess and sell stolen firearms. Cunningham is also charged with possession of 21 stolen firearms and numerous rounds of stolen ammunition, with being a felon in possession of those stolen firearms and ammunition, and with selling one of the stolen firearms and the stolen ammunition. Reed is also charged with possessing and selling four of the stolen firearms.
Daniel Guajardo, 24, is charged separately with being a felon in possession of a firearm and possession of a short-barreled shotgun. Jose G. Pagan, 37, is charged alone with being a felon in possession of a firearm and possessing a firearm with an obliterated serial number. Mario A. Guerra, 33, and Rosario Pillado, 21, are each charged separately with being a felon in possession of a firearm. Sergio Cazares, 20, and Jose M. Martinez, 26, are each charged separately with possessing a firearm with an obliterated serial number.
All of the defendants are Rockford residents, except for Darrell Reed who is a resident of Byron, Ill., and Mallek Sanchez, who is a resident of Belvidere, Ill.
Each drug distribution charge carries a maximum sentence of 20 years in prison and a $1 million fine. Each charge of a felon possessing a firearm, of possessing or selling a stolen firearm, or of possessing of a short-barreled firearm carries a maximum sentence of 10 years in prison and a maximum fine of $250,000. Each charge of possessing a firearm that has an obliterated serial number carries a maximum sentence of 5 years in prison and a maximum fine of $250,000. The charge of conspiring to possess and sell stolen firearms carries a maximum sentence of 5 years in prison and a maximum fine of $250,000. Upon conviction, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorney John G. McKenzie.
The public is reminded that an indictment contains 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 will have the burden of proving guilt beyond a reasonable doubt.
“Doctor at Home” Manager Arrested on Federal Health Care Fraud Charge; Allegedly Ran Extensive Medicare Fraud SchemeRead the Press Release
CHICAGO — A registered nurse who operates a suburban health care provider that sends physicians to patients’ homes was arrested today on a federal health care fraud charge. The defendant, DIANA JOCELYN GUMILA, who manages Suburban Home Physicians, doing business as Doctor At Home, was charged with health care fraud in a criminal complaint that was unsealed upon her arrest. The complaint alleges a scheme to defraud Medicare by falsely certifying patients as being confined to their homes and requiring home health services; falsely increasing, or “upcoding,” claims for services; over-scheduling and double-billing patient visits, submitting false claims for providing extensive oversight of patients’ home health services, and billing for tests that were not medically necessary.
Gumila, 45, a licensed registered nurse in Illinois since 1991, was scheduled to appear at 3 p.m. today before U.S. Magistrate Judge Young Kim in U.S. District Court.
Simultaneous with Gumila’s arrest, agents from the FBI, the U.S. Department of Health and Human Services Office of Inspector General, and other law enforcement agencies executed search warrants at the offices of Doctor At Home and an affiliated business, Xpress Mobile Imaging, both located in the 800 block of East Higgins Road in Schaumburg, as well as at Gumila’s residence in Streamwood. A warrant was also executed to seize alleged fraud proceeds in a bank account maintained by Suburban Home Physicians.
The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG. The Railroad Retirement Board Office of Inspector General is also participating in the investigation.
According to a 69-page affidavit in support of the arrest, search and seizure warrants, Doctor At Home sends physicians and physician’s assistants, who are accompanied and driven by a medical assistant, to visit patients in their homes. Doctor At Home gets many of its patients from home health agencies, which refer patients to Doctor At Home so that a physician will sign a form ordering the home health agency to provide nursing services to the patient.
According to Medicare claims data, from 2013 through May 2014, more than 300 home health agencies have submitted Medicare claims stating that they were ordered by just four Doctor At Home physicians to provide home health services to approximately 4,000 patients. Those home health agencies were paid more than $20 million as a result of their claims.
The affidavit alleges that most of Doctor At Home’s visits were billed to Medicare as if they were complicated, with the average payment for most visits approximately $120. As a result of alleged double-billing, over-billing, and certifying patients for home health services who were not confined to the home, Doctor At Home assisted home health agencies in falsely billing Medicare, allegedly causing Medicare to pay more than $1,000 a month on many patients simply so a nurse can visit once a week and conduct a basic check of the patient’s condition.
“Doctor At Home’s practices and processes regularly cause Medicare to pay more than $1,250 a month for basic maintenance of many patients who do not need such services,” the complaint alleges.
The affidavit states that agents have interviewed one current and seven former employees of Doctor at Home, including a current physician’s assistant who contacted law enforcement in January this year. Investigators have also reviewed an audio recording provided by a former Doctor At Home physician of an October 2013 meeting she had with Gumila, as well as emails and documents, claims data, and patient files, and have conducted interviews with patients of Doctor At Home and their primary care physicians whose statements contradict Doctor At Home’s billing and patient records.
In the recorded meeting, the doctor, identified as “Physician D,” who began working for Doctor At Home only a few weeks earlier, told Gumila that several patients did not qualify for certain services. Gumila responded by telling Physician D that she was an “artist” who should “paint the picture” of each patient in a way that Medicare would accept, the affidavit states.
Gumila allegedly overruled at least one physician and manipulated the certification of many patients as being confined to the home and requiring home health services. In doing so, she assisted home health agencies in billing Medicare for ineligible patients and medical services in exchange for Doctor At Home receiving patient referrals from the home health agencies. As part of the scheme, Doctor At Home allegedly scheduled patient visits on a monthly basis rather than based on patient need and billed Medicare as if the visits were complicated when they were actually routine and short in duration. Doctor At Home also frequently double-billed the same visit as a “patient visit” and also as a “wellness visit.” Doctor At Home also claimed that physicians and physician’s assistants provided extensive oversight of patients’ home health services when, in fact, employees in the Philippines prepared those oversight claims in part by counting routine visits toward oversight.
The complaint also alleges that Doctor At Home has billed Medicare for thousands of eye-movement tests that some providers believe were medically unnecessary, and it has referred thousands of echocardiograms and ultrasound tests to Xpress Mobile Imaging, which has several business ties to Doctor At Home.
Health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorney Stephen Chahn Lee.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The Medicare Fraud Strike Force began operating in Chicago in February 2011, and consists of agents from the FBI and HHS-OIG, working together with prosecutors from the U.S. Attorney’s Office and the Justice Department’s Fraud Section. The strike force is are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Scores of defendants have been charged locally in health care fraud cases since the strike force began operating in Chicago.
To report health care fraud to learn more about the Health Care Fraud Prevention & Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Complaint
Former Chicago Man Sentenced to More Than 36 Years in Federal Prison on Federal Drug Conspiracy ChargesRead the Press Release
ROCKFORD — A former Chicago, Ill. man was sentenced on July 22, 2014, in federal court on drug conspiracy charges. ROBERT PRESLEY, 34, also known as “Munchie,” was sentenced to 440 months in federal prison, to be followed by 5 years of supervised release. After a nine-day jury trial in the U.S. District Court in Rockford, Presley was convicted on June 14, 2012, of conspiracy to distribute at least one kilogram of heroin, one count of possessing a firearm in furtherance of a drug-trafficking crime, and two counts of being a felon in possession of a firearm.
According to the indictment and evidence at trial, Steven McDowell, 38, formerly of Rockford, also known as “Ty,” was the leader of an illegal drug trafficking operation in Rockford. Beginning as early as April 2010, and continuing into December 2010, the conspirators obtained large amounts of heroin from Chicago, transported the heroin to Rockford where it was diluted for resale and packaged in smaller zip lock bags or baggies for individual use, then grouped into packs. Presley’s role was to obtain raw heroin from Chicago and to assist in the distribution. The defendants used runners to distribute street-level quantities of heroin at numerous locations in Rockford. McDowell and other co-conspirators rented cars that were used to deliver heroin to their street-level dealers, and used cell phones to notify runners where to go to distribute heroin to a customer or for when a runner needed to be resupplied or have money picked up. Some of the co-conspirators, including Presley, used or possessed firearms for protection during their operations.
Two other men were also convicted on June 14, 2012, after the jury trial, and previously sentenced for their roles in the drug conspiracy:
STEVEN T. McDOWELL was convicted of one count of conspiracy to distribute at least one kilogram of heroin, and six counts of distribution of heroin, and was sentenced on Feb. 7, 2013, to 315 months in federal prison for his role in the conspiracy. McDowell was also ordered to serve 5 years of supervised release following his imprisonment.
JEREMY COOPER, 26, formerly of Chicago, also known as “J.D.,” was convicted of one count of conspiracy to distribute at least one kilogram of heroin, three counts of distribution of heroin, one count of possession with intent to distribute heroin, and one count of being a felon in possession of a firearm. Cooper was sentenced on Sept. 18, 2012, to 270 months in federal prison, and 5 years of supervised release following his imprisonment.
In addition, two other men pled guilty to their involvement in the conspiracy:
MURRAY STEVE HARRIS, JR., 38, formerly of Chicago, also known as “M,” pled guilty on Jan. 19, 2012, to conspiracy to distribute at least one kilogram of heroin, and was sentenced on April 19, 2012, to 130 months in federal prison, to be followed by 5 years of supervised release following his imprisonment.NORMAN BREEDLOVE, 48, formerly of Rockford, also known as “Way,” pled guilty on May 24, 2012, to one count of conspiracy to distribute at least one kilogram of heroin, and one count of possessing a firearm in furtherance of a drug trafficking crime, and is awaiting sentencing.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Richard Meyers, Winnebago County Sheriff; and Chet Epperson, Chief of the Rockford Police Department.
The government was represented by Assistant U.S. Attorney Mark T. Karner.
Three Operators of ATM Servicing Business Sentenced to Prison Terms Between 20 and 51 Months for $1.7 Million Frauid SchemeRead the Press Release
CHICAGO ― Three Chicago men are facing federal prison sentences ranging from 20 to 51 months for their roles in a seven-year fraud scheme that caused client banks of their ATM servicing business to lose more than $1.7 million. The last of the three defendants was sentenced today while the other two were sentenced last month.
The defendants, JAMES CARLSON, JOSEPH CABELLO, and THOMAS O’MALLEY, owned and operated ATS Uptime, Inc., from approximately 1999 through 2013, with offices in Chicago and Oswego. ATS had about a dozen clients and serviced approximately 800 ATMs, which included replenishing cash, collecting deposits, and maintain the banking machines.
Carlson, 46, was the president of ATS and beginning in the summer of 2010 was primarily responsible for the company’s vault, and loading cash into and repairing ATMs, including some he owned personally. As the fraud scheme was collapsing, Carlson voluntarily reported it to the FBI in September 2013 and cooperated extensively with the investigation, including recording conversations with Cabello and O’Malley. Carlson was sentenced today to 20 months in prison, beginning Sept. 19, and ordered to pay $658,572 in restitution.
“You cannot steal millions of dollars and not pay a substantial price,” U.S. District Judge Ronald Guzman said today in noting Carlson’s cooperation but rejecting his request for probation.
O’Malley, 42, was the chief financial officer, office manager, bookkeeper, and at times, responsible for the vault in Chicago. He was sentenced last month to 33 months in prison, beginning July 30, and ordered to pay $1,758,572 in restitution.
Cabello, 41, who personally owned some of the ATMs serviced by ATS, ran the Oswego office and was responsible for servicing ATMs. He was sentenced last month to 51 months in prison and ordered to pay $1,758,572 in restitution.
All three men pleaded guilty to one count of wire fraud after they were charged in September 2013.
According to court records, in 2005, Carlson discovered that approximately $200,000 of funds belonging to clients was missing. Around the same time, O’Malley said that he needed to use clients’ funds from the vault to pay for some of ATS’ moving expenses, and Carlson instructed Cabello and O’Malley to return the client funds and was assured they would be returned. In October 2010, shortly after Carlson began working in ATS’ Chicago vault, Carlson learned that ATS was missing approximately $1.1 million and did not have enough money to repay all of its clients. Prior to that time, Cabello and O’Malley had access to the cash in ATS’ Chicago vault.
O’Malley admitted that he stole at least $200,000 of clients’ funds for business purposes and his own personal use. Cabello admitted that he used clients’ funds for his own ATMs, and did not keep track of the amount he took or the amount he repaid.
Between 2007 and 2012, O’Malley and Cabello, and after October 2010, Carlson, used funds belonging to certain clients, which were stored in the vault, to fill ATMs that belonged to other clients, and to repay money owed to other clients, without authorization from the owners of those funds to use their money in that manner. As part of the fraud scheme, the defendants emailed account balance statements to their clients, falsely representing the amount of cash that ATS actually had on hand for them, both because of their thefts and commingling of client funds. They also deceived bank auditors into believing that ATS was properly handling client funds by moving the cash they had available from one owner to another.
The sentences were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Jacqueline Stern.
Seven Defendants Charged in Alleged Trafficking of Drugs and Firearms Between Suburban Harvey and Central OhioRead the Press Release
CHICAGO ― Seven defendants are facing federal charges here for their alleged participation in a drug and firearms trafficking operation between south suburban Harvey and Marion, Ohio, federal law enforcement officials announced today. At least 19 assorted firearms, many of them stolen from gun owners in central Ohio, were seized during the course of the investigation, which was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
One defendant was arrested today and one yesterday in Ohio, two were arrested last week (one here and one in Ohio), and three others are in state custody in Ohio. They were charged in three separate criminal complaints filed last week in U.S. District Court in Chicago, with the last complaint unsealed today.
One defendant, AUBREY BURKS, 22, of Harvey, allegedly led the trafficking operation. According to one of the complaints, five defendants conspired with Burks between January and April this year to distribute heroin and crack cocaine, some of which they obtained in the Chicago area, to drug customers in and around Marion, located approximately 50 miles north of Columbus. At times, Burks and five other defendants accepted firearms from their drug customers as payment. The defendants transported, or arranged for the transportation, of guns from Marion to Harvey, where they stored them at various residences. The defendants obtained drugs in the Chicago area by exchanging firearms for narcotics, or selling firearms for money they used to buy drugs, which they later sold to customers in Ohio, the charges allege.
Burks was charged alone in one complaint with being a felon-in-possession of firearms for allegedly possessing six firearms that were seized by Harvey police on Jan. 30, 2014, from a residence in Harvey. He was arrested last week in Ohio and is being transferred in custody to Chicago for prosecution.
Five defendants were charged together in a second complaint with conspiring with each other and Burks to possess and distribute heroin and crack cocaine, as well as to violate multiple federal firearms statutes, including dealing firearms without a federal license. They are: KIERRE WATERFORD, 24, also known as “Finess” and “Vaness;” KEVIN JACKSON, 23, aka “Ray-Ray” and “New York;” Burks’ brother, OMAR BURKS, 24, aka “T-O;” ANTHONY JACKSON, 20, aka “Smookie” and “B-D;” and DANIEL MURPHY, 28, all of whom have residential ties to Harvey and/or Marion.
Murphy was arrested today and Anthony Jackson was arrested yesterday, both in Ohio, while Waterford, Kevin Jackson, and Omar Burks are in state custody in Ohio.
The seventh defendant, ANTHONY GALVAN, 19, of Harvey, aka, “Ant,” was charged alone in a third complaint with selling firearms without a federal license. Galvan allegedly sold six firearms to an undercover police officer in a vehicle parked in front of his residence in Harvey during five transactions between Jan. 14 and Feb. 20, 2014. Galvan was arrested last week and remains in federal custody in Chicago without bond.
The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Carl Vasilko, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Also assisting in the investigation were the Chicago Police Department and the CPD/ATF Firearms Trafficking Task Force, the Illinois State Police, the Harvey Police Department, the Marion Metro Drug Enforcement Unit (MARMET), the Marion Police Department, the Marion County Sheriff’s Office, the Ohio State Police, the Columbus Field Division of ATF, the U.S. Attorney’s Offices for the Northern and Southern District of Ohio, and the Chicago High Intensity Drug Trafficking Task Force (HIDTA).
Conspiracy and dealing firearms without a federal license each carry a maximum sentence of five years in prison, while the felon-in-possession count against Aubrey Burks carries a maximum sentence of 10 years in prison. The drug distribution conspiracy against five defendants carries a maximum penalty of 20 years in prison and a $1 million fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorney Sharon Fairley.
The public is reminded that a complaint 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.
Burks Complaint
Galvan Complaint
Waterford ComplaintFormer North Chicago School Board Member Sentenced to 10 Years in Federal Prison for Bus Contracts Fraud SchemeRead the Press Release
CHICAGO ― A former North Chicago school board member was sentenced today to 10 years in federal prison for receiving at least $566,000 in kickbacks from three co-defendants who controlled several different transportation companies that received more than $21 million in student bus contracts over nearly a decade.
The defendant, GLORIA HARPER, 63, formerly of North Chicago, pleaded guilty last October to one count each of wire fraud and filing a false federal income tax return. Harper admitted that between 2001 and 2010 she schemed to deprive the approximately 4,000-student North Chicago Community Unit School District 187 (NCSD) of her honest services. Harper instigated and orchestrated the fraud scheme with four co-defendants, including Alice Sherrod, the district’s former transportation director. The three co-defendants funneled kickbacks totaling at least $800,000 to Harper and Sherrod and made more than $9.6 million in profits.
“This was a serious, serious offense that took advantage of an impoverished school district and the ultimate victims were the school children of North Chicago,” U.S. District Judge Sharon Johnson Coleman said in imposing the sentence today after a hearing that began last week. Judge Coleman ordered Harper to serve her sentence consecutive to a 30-month federal sentence that Harper received in 2012 in Louisiana for defrauding the federal E-Rate program that funds education technology. The judge also ordered Harper to pay approximately $7.2 million in restitution.
“The North Chicago School District has one of the highest low-income populations in the state. But rather than looking out for the interests of the district’s taxpayers and the children who depended on the schools for education, Harper selfishly used her position to enrich herself, and then filed false tax returns,” Assistant U.S. Attorney Matthew Getter argued at sentencing.
Sherrod, 62, of Berwyn and formerly of Gurnee; Tommie Boddie, 69, of Harvest, Ala., and formerly of Wadsworth; Derrick Eubanks, 50, of Lake Villa; and Barrett White, 55, of Matteson, have also pleaded guilty and are awaiting sentencing.
Harper, who was a member of the NCSD board from 1999 to May 2009, and Sherrod, who was District 187's transportation director from 2001 to July 2010, used their positions to enrich themselves secretly by soliciting and accepting gifts and cash from their three codefendants in exchange for favorable official action regarding student transportation contracts. Initially, Harper and Sherrod received kickbacks of approximately $4,000 to $5,000 a month but, by 2003, they were collecting approximately $20,000 a month.
From the late 1990s until mid-2003, the NCSD contracted with various companies to provide student transportation, including T&M Transportation, which was owned in part and controlled by Boddie, and Eubanks Transportation, which was owned in part and controlled by Eubanks. In 2001, Harper and Sherrod met with Boddie and agreed they would arrange for the NCSD to increase the number of students that T&M transported in exchange for kickback payments.
In May 2003, Harper suggested to Boddie and Eubanks that they join together to form one company ― Safety First Transportation, Inc., which won the NCSD’s transportation contract in 2003, and Harper, Sherrod, Boddie, and Eubanks agreed that they would split the profits from the contract. After an IRS audit of Safety First in 2006-2007, White, who had been acting as the “bagman” for the kickbacks, began receiving funds from Safety First as both an employee and a contractor, even though he provided little service other than being the bagman.
In April 2008, the defendants agreed to set up a new company, Quality Trans, LLC, to replace Safety First and to assume its contracts with the school district. All five agreed to continue splitting profits from Quality Trans, and Boddie, Eubanks and White continued making cash payments to Harper and Sherrod.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The North Chicago School District cooperated with the investigation.
Former CME Clerk Sentenced to Eight Months in Prison for Manipulating Trades to Profit More Than $200,000Read the Press Release
CHICAGO — A former clerk for a lean hogs futures trader was sentenced today to eight months in prison after being convicted in March of commodities fraud for manipulating trades to profit more than $200,000 for herself to the detriment of public customers.
The defendant, NICOLE M. GRAZIANO, 33, of Addison and formerly of Roselle, was also ordered to pay $212,000 in restitution to various clearing firms on behalf of victim investors. U.S. District Judge James Zagel, who found Graziano guilty of four counts of commodities fraud in March after a bench trial, imposed the sentence in Federal Court.
Graziano’s scheme resulted in an “almost unbelievable success rate” of 90 to 100 percent of winning trades for her own account, which would have been impossible in an ordinary market setting, Judge Zagel said when he delivered his verdict.
According to the evidence, Graziano, who was a clerk for a member broker at the Chicago Mercantile Exchange, now CME Group, secretly inserted order tickets for her own personal orders into the decks of tickets submitted by public customers. She provided the tickets and trade cards to brokers to execute during the closing bracket of trading in lean hogs futures contracts. Using her position as a clerk, Graziano fraudulently allocated favorable prices to her own trades (giving herself low prices for buy orders and high prices for sell orders), and reaped profits to the detriment of public customers. Between September 2009 and August 2010, Graziano submitted at least 89 fraudulent trade cards to the appropriate clearing firms, resulting in approximately $212,000 in illegal profits to her during the closing bracket.
Judge Zagel said that the scheme damaged “the legitimacy of the exchange itself” and hurt customers because she took away benefits that could have gone to them for her own advantage.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The CME Group assisted in the investigation.
The government was represented by Assistant U.S. Attorneys Christopher R. McFadden and Tiffany McCormick.
Skokie Couple Arrested for Allegedly Bilking Medicare and Paying Kickbacks for Patients in $800,000 Health Care Fraud SchemeRead the Press Release
CHICAGO — A Skokie couple was arrested today after they and their home health care company were indicted on federal health care fraud charges for allegedly bilking Medicare of more than $800,000 for physician services that were never provided to patients. The couple and their company were also charged with conspiring to pay another defendant $11,000 in illegal kickbacks for patient referrals.
The couple, JOHN YOUSEFZAI, and his wife, ARMANOUHI ARZOMANIAN, owned and operated MEDICOSE HOME HEALTH CARE SERVICE, Inc., which employed physicians and provided in-home medical services to patients. The couple operated Medicose from their home in Skokie, where federal agents executed a search warrant today.
Yousefzai, 66, and Arzomanian, 56, neither of whom is a licensed medical professional, were each charged with five counts of health care fraud, one count of conspiracy, and two counts of paying kickbacks for referrals of Medicare patients to Medicose, which was charged with five counts of health care fraud.
Also arrested today was WILSON NARSA, 52, of Chicago, who worked for a non-profit organization that provided services to the elderly and disabled. He was charged with conspiracy and two counts of receiving kickbacks for referring Medicare patients to Medicose.
The three individual defendants and Medicose pleaded not guilty at their arraignment this afternoon in U.S. District Court. Yousefzai and Arzomanian were each released on a $50,000 secured bond, and Narsa was released on his own recognizance. A status hearing was scheduled for Aug. 12 before U.S. District Judge Harry Leinenweber.
The defendants were charged in a 10-count indictment that was returned by a federal grand jury on July 1 and unsealed today following the arrests. The indictment also seeks forfeiture from the couple of at least $800,000 and a residence they own in Wilmette, as well as at least $11,000 from Narsa.
According to the indictment, Medicose employed four physicians licensed in Illinois. Between May 2008 and January 2014, Medicose sought more than $2.1 million in reimbursement from Medicare for physician home visits, and Medicare paid Medicose more than $1.4 million. Of that amount, Medicose, Yousefzai, and Arzomanian allegedly submitted more than $1.3 million in fraudulent claims to Medicare for physician services that were not actually provided. As a result, the couple and Medicose caused Medicare to lose more than $800,000. Those three defendants caused the fraud proceeds to be disbursed from Medicose’s corporate bank accounts for the couple’s personal benefit, the indictment alleges.
Between December 2010 and August 2013, all four defendants allegedly conspired to have Medicose pay kickbacks to Narsa and others, including at least $11,000 to Narsa, to induce Medicare patient referrals and increase the patient census at Medicose, which, in turn, enriched Medicose and its owners.
The indictment 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 Regional Office of the HHS-OIG; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorney William Ridgway.
Each count of health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine or a fine totaling twice the gain or loss, whichever is greater, while conspiracy and each count of violating the anti-kickback statute carry a maximum sentence of five years in prison and a $250,000 fine, and restitution is mandatory. Medicose faces a maximum corporate penalty of each count of five years’ probation and a $500,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
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.
Indictment
Former Milledgeville Credit Union Employee Sentenced for EmbezzlmentRead the Press Release
ROCKFORD — A former employee of Milledgeville Community Credit Union was sentenced by U.S. District Judge Frederick J. Kapala for embezzling money from Milledgeville Community Credit Union, in Milledgeville, Ill. KIMBERLY KENT, 53, who was also a former Treasurer of Wysox Township, was sentenced to 8 months in prison, to be followed by 2 years of supervised release requiring her to serve the first 6 months of supervision under home confinement, and a $5,000 fine. Kent was also ordered to pay restitution in the amount of $10,176.72 to Milledgeville Community Credit Union and $5,278.75 to Wysox Township, in addition to restitution in the amount of $231,823.15 that Kent already paid. Restitution included investigative costs incurred by the Credit Union and Township.
Kent pleaded guilty to the charge on February 24, 2014. According to Kent’s written plea agreement, from October 2005 through February 2012, Kent embezzled approximately $219,600 from Milledgeville Community Credit Union, where she was the manager and responsible for supervising other employees. Kent was also responsible for her own cash drawer and for handling various transactions on accounts, including the deposit and withdrawal of funds to and from customers’ accounts. As stated in the plea agreement, to conceal her embezzlement, Kent created fictitious loans using the names of family members and fictitious certificates of deposit. In 2009, Kent was elected treasurer of Wysox Township. Kent admitted that in August 2010, in her capacity as treasurer of Wysox Township, she used funds from Wysox Township’s account at Milledgeville Community Credit Union to cover her embezzlement. Kent used the money she embezzled for personal purposes. The deposits of the credit union were insured by the National Credit Union Administration Board.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.
Two California Men Indicted on Federal Charges for Allegedly Releasing 2,000 Minks and Damaging Morris, ILL., Mink Farm in 2013Read the Press Release
CHICAGO — Two California men were indicted on federal charges for allegedly damaging and interfering with the operations of a mink farm in Morris, Ill., last August. Property belonging to the mink farm, about 60 miles southwest of Chicago, was damaged and approximately 2,000 minks were released from captivity on Aug. 14, 2013. The defendants also allegedly conspired to damage and interfere with the operations of a fox farm in Roanoke, Ill., northeast of Peoria, around the same time.
One defendant, TYLER LANG, was arrested today by FBI agents in El Segundo, Calif. He was scheduled to appear this afternoon in Federal Court in Los Angeles before facing further court proceedings in U.S. District Court in Chicago. The second defendant, KEVIN JOHNSON, is in state custody in Woodford County, Illinois, and both defendants are scheduled to be arraigned in Federal Court in Chicago on July 29.
Johnson, 27, also known as “Kevin Olliff,” and Lang, 25, whose last known residences were in Los Angeles, were both charged with one count each of conspiracy and interstate travel to damage and interfere with the operations of an animal enterprise. The two-count indictment was returned by a federal grand jury in Chicago on Tuesday and it was unsealed following Lang’s arrest.
According to the indictment, the Morris mink farm and the Roanoke fox farm were in the business of breeding, raising, and selling the animals to fur manufacturers.
Between Aug. 5 and Aug. 15, 2013, Johnson and Lang allegedly conspired to travel throughout the United States, including through Illinois, Iowa, and Wisconsin, for the purpose of damaging and interfering with the operations of animal enterprises, including the mink and fox farms. On Aug. 14, 2013, they allegedly traveled interstate and damaged real and personal property (including animals and records) and interfered with the operations of the mink farm in Morris, located in Grundy County. The indictment alleges the offenses resulted in economic damage exceeding $10,000.
In addition to the release of approximately 2,000 minks from their cages, portions of the fence surrounding the farm were removed allowing the minks to escape from the property. A barn was painted with the words “Liberation is Love,” and a caustic substance was poured or sprayed on two farm vehicles, damaging the paint.
Each count carries a maximum penalty of five years in prison and a $250,000 fine, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The arrest and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Latin Kings’ Leader of Little Village Region Sentenced to 35 Years in Prison for RICO Conspiracy and Related Gang CrimesRead the Press Release
CHICAGO — A high-ranking leader of the Latin Kings street gang was sentenced today to 35 years in federal prison after being convicted of racketeering conspiracy and related charges involving narcotics trafficking and violence that plagued the Little Village neighborhood on the city’s west side. The defendant, JUAN AMAYA, 38, was convicted by a jury in March of this year after a trial in U.S. District Court.
In 2008, Amaya was the leader, or “Regional Inca,” of the Almighty Latin King Nation’s 26th Street Region, encompassing Little Village, the gang’s most important stronghold. Amaya was “in charge of over 1,000 soldiers ― many of whom were simply boys sent off to kill or be killed” under rules and policies he oversaw, the government argued in seeking a sentence of 40 years imprisonment.
Amaya was held responsible for participating in a conspiracy to commit murder, according to findings by U.S. District Judge Rebecca Pallmeyer, who imposed the sentence in Federal Court. Amaya must serve at least 85 percent of the sentence.
Last week, Nedal Issa, who was the Inca of the Latin Kings’ Cicero Section of the 26th Street Region and who pleaded guilty, cooperated, and testified as a government witness, was sentenced to nearly 17 years in prison by U.S. District Judge Charles Norgle. Amaya’s sentencing marks the last significant event in cases since 2008 that resulted in federal convictions of, and lengthy sentences for, Augustin Zambrano, the Latin Kings’ leader or “Corona;” Vicente Garcia, the gang’s “Supreme Regional Inca;” Fernando King, who preceded Garcia as second-incommand; and more than two dozen other top-ranking leaders.
“These sentences hold these defendants accountable for the barbaric enterprise known as the Latin Kings and for their roles in murder, attempted murder, shootings, beatings, drug trafficking, and other crimes,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “I want to thank our local, state and federal law enforcement partners for their brave and outstanding work resulting in a major impact on this gang enterprise,” Mr. Fardon added.
The evidence at Amaya’s trial showed that by 2008, just a couple of years after he was released on parole from a 24-year sentence for a 1992 murder conviction, Amaya was promoted to Regional Inca of the Little Village Region, reporting only to Garcia and Zambrano and effectively running the gang at their behest. During his tenure, Amaya discussed 25 shootings committed by his underlings while expressing pride at the consistency of violence. All told, hundreds of shootings resulting from Latin Kings conduct occurred in Little Village during the period of Amaya’s prominence, according to the government.
Amaya was indicted separately in 2012 following the 2008 and 2009 indictments of more than 30 top leaders of the Latin Kings. All have been convicted and sentenced except for a few defendants who remain fugitives. From its origin and base in the west side Little Village neighborhood, the Latin Kings spread throughout Chicago and Illinois and established branches in other states, where local leaders acted with some autonomy but adhered to the rules and hierarchy of the Chicago gang, according to trial evidence and court records.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Carl Vasilko, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The Chicago Police Department, the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI) in Chicago, the Cook County Sheriff’s Police, and the Joliet Metropolitan Area Narcotics Squad also had significant roles in the investigation, which was conducted through the federal High Intensity Drug-Trafficking Area (HIDTA) Task Force and under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF).
In late 2006, ATF agents led an investigation that resulted in federal drug trafficking and firearms charges against 38 Latin Kings members and associates. In 2008, the FBI led an investigation that resulted in state and federal charges against 40 Latin Kings members and associates, including Zambrano and numerous co-defendants. In total, nearly 100 Latin Kings members and associates have faced state or federal charges since 2006. The convictions resulted from a sustained, coordinated effort by federal law enforcement agencies, working together with the Chicago Police Department and other state and local partners, to dismantle the hierarchy of the Latin Kings and other highly-organized, often violent Chicago street gangs.
Zambrano was the highest-ranking Latin King to be convicted and sentenced since Gustavo “Gino” Colon, who also holds the title of “Corona,” was sentenced to life in prison in 2000.
The government was represented by Assistant U.S. Attorneys Andrew Porter, Nancy DePodesta and Tiffany McCormick.
Chicago Man Arrested on Federal Charges for Allegedly Impersonating A U.S. Marshal Service Employee Twice in 2013Read the Press Release
CHICAGO — A Chicago man was arrested today on federal charges for allegedly impersonating an employee of the U.S. Marshals Service on two occasions last year. The defendant, ROBERT P. ROZYCKI, was arrested without incident by deputy U.S. Marshals.
Rozycki, 37, was charged with two felony counts of impersonating a U.S. Marshals Service employee in an indictment that was returned by a federal grand jury yesterday and unsealed following his arrest. He is scheduled to be arraigned at 1:30 p.m. today before U.S. Magistrate Judge Michael Mason in Courtroom 2266 in the Dirksen Federal Courthouse.
The indictment charges Rozycki with falsely assuming the identity of and pretending to be a U.S. Marshals Service employee on March 3 and May 18, 2013.
Each count of impersonating a federal law enforcement officer carries a maximum penalty of three years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The arrest and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Darryl McPherson, United States Marshal for the Northern District of Illinois.
The government is being represented by Assistant U.S. Attorney Kathryn Malizia.
The public is reminded that an indictment complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment