Western District of Kentucky
Press releases recorded for this federal judicial district.
Former Teamsters Union Local President Indicted for Embezzlement of Union Funds, Illegal Loans, and Criminal Recordkeeping ViolationsRead the Press Release
– Jerry Thomas Vincent, Jr. was President of Teamsters Local 783 from 2006 to 2011
LOUISVILLE, KY - A federal grand jury in Louisville returned an indictment against Jerry Thomas Vincent, Jr., age 53, of Louisville, Kentucky, in Jefferson County, on charges of embezzling labor union funds, illegal labor union loans, and criminal recordkeeping violations, David J. Hale, United States Attorney for the Western District of Kentucky announced today.
The Indictment alleges that from October 5, 2009, through on or about August 17, 2011, Vincent embezzled approximately $17,272.84 in union funds from Teamsters Local 783, arranged $23,760 in illegal loans from the union local to himself from November 11, 2009 through July 28, 2011, and committed 13 criminal violations related to union records from October 5, 2009 through June 17, 2011.
Specifically, Vincent allegedly made false entries on credit card receipts, claiming false business purposes for transactions at Louisville restaurants and on four occasions Vincent allegedly caused the labor union to make loans to him in the amount of $2,970.00 and on July 14, 2011, caused the labor union to loan him $11,880.00.
In the event of a conviction, the maximum potential penalties are twenty-three years= imprisonment, a $2,050,000 fine, and supervised release for a period of three years.
The case is being prosecuted by Assistant United States Attorney Jason Snyder, and it was investigated by the United States Department of Labor, Office of Labor-Management Standards.
Vincent is scheduled to appear for arraignment before United States Magistrate Judge Dave Whalin on July 22, 2014, in Louisville, Kentucky.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Former President of Central Kentucky Glass Company Guilty of Fraud in Connection with the Installation of Glass and Windows at Ft. Knox High SchoolRead the Press Release
– Former president pleaded guilty to wire fraud and agreed to 27 month prison sentence
– Charges pending against the companyLOUISVILLE, Ky. – The former president of Central Kentucky Glass Company, headquartered in Lexington, Kentucky, pleaded guilty today, in United States District Court, to a single count of wire fraud, in connection with a multi-million dollar contract at Fort Knox High School, announced David J. Hale, United States Attorney for the Western District of Kentucky. Central Kentucky Glass Company was charged separately in a grand jury indictment, with wire fraud, mail fraud and major fraud against the United States.
According to the plea agreement, Dennis Martin, age 51, of Nicholasville, Kentucky, agreed to pay the Army Corp of Engineers and/or the United States Department of Defense $74,061.88 in restitution, and agreed to serve 27 months in prison in exchange for his admission of guilt. Also, Martin agreed that Barton Marlow Company suffered $558,780.44 in losses, but Barton Marlow Company and Central Kentucky Glass Company (CKG) reached a civil settlement for losses due to Martin’s conduct. The amount paid shall be joint and several with restitution owed by CKG.
According to court records, CKG Company was a subcontractor hired by the prime contractor, Barton Malow Company, as part of a multi-million dollar Army Corps of Engineers project which included the installation of glass and windows at Fort Knox High School, located in Hardin County, Kentucky. CKG was required to provide certifications that its glass and windows were tested and met contract requirements, including anti-terrorism standards.
Martin admitted in court today, that he forged certifications from two testing companies, Bowser-Morner, Inc., and National Certified Testing Laboratories, which falsely reflected that CKG’s glass and windows had been tested and met contract requirements. On October 22, 2008, the forged certifications were faxed from CKG’s office in Kentucky to Barton Malow’s office in Ohio. In fact, CKG’s glass and windows had not been tested per the specifications of the contract, and subsequent tests conducted on behalf of the Army Corp. of Engineers indicated that the glass and windows CKG installed at Fort Knox High School did not meet antiterrorism standards.
If convicted, at trial, the company faces a maximum fine of $6,000,000, and a three year period of supervised release. Martin faced no more than 20 years in prison, a fine of $250,000 and a three year period of supervised release.
Sentencing is scheduled before Senior District Judge Thomas B. Russell, on September 16, 2014, in Louisville.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the Department of Defense Office of Inspector General.
Monroe County, Kentucky, Physician Charged with Prescribing Pain Medications Outside the Course of Professional Medical Practice Which Resulted in the Death of A PatientRead the Press Release
BOWLING GREEN, Ky. – A Monroe County, Kentucky physician was charged by federal grand jury in Bowling Green, Kentucky today with prescribing pain medications outside the course of professional medical practice, which resulted in the death of a patient, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Clella Louise Hayes, whose medical practice is located in Tompkinsville, Kentucky, was charged in a 13 count indictment with dispensing and distributing Schedule II controlled substances and Schedule III controlled substances outside the course of her professional medical practice. Hayes, age 39, of Glasgow, Kentucky, is charged with issuing and authorizing prescriptions for fentanyl, morphine, Oxycodone, Demerol, hydrocodone, Cheratussin and valium. According to the indictment, the alleged activities occurred between June 2010 through March 2014 and included eight patients.
Specifically, the indictment alleges that on or about September 19, 2011, Hayes intentionally dispensed and distributed the Schedule II pain medication fentanyl to a patient, which resulted in the patient’s death. Further, between June 2009 and September 2011, Hayes is alleged to have intentionally dispensed and distributed Schedule II controlled substances to the same patient, outside the course of professional medical practice, by issuing and authorizing prescriptions for morphine, Oxycodone, and Demerol. During the same time period, the indictment charges Hayes with prescribing the Schedule III medication hydrocodone to the same patient outside the course of professional medical practice.
If convicted at trial, Hayes faces a minimum sentence of 20 years in prison, and a maximum sentence of life in prison, a fine of up to $2,500,000 and three years of supervised release.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the Kentucky State Police (KSP) Drug Enforcement/Special Investigations West, and the Federal Bureau of Investigation (FBI) with assistance from the Tompkinsville Police Department.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Owners of Elizabethtown Hematology Oncology, PLC Agree to Pay over $3.7 Million to Settle False Billings to Government Health Care ProgramsRead the Press Release
– United States alleges owners engaged in improper conduct by extending chemotherapy treatment times to maximize reimbursements and inappropriately billing office visits for infusion therapies
LOUISVILLE, Ky. –Elizabethtown Hematology Oncology, PLC, and its owners have agreed to pay $3,739,325.41 to resolve allegations that they submitted or caused to be submitted false claims for payment to the Medicare, Medicaid, TRICARE – the health care program for Uniformed Service members, retirees and their families worldwide – and the Federal Employee Health Benefit Program (FEHBP) for extending the duration of chemotherapy infusion treatment to patients and inappropriately billing office visits for infusion therapy treatments, announced the Office of Inspector General of the Department of Health and Human Services and David J. Hale, United States Attorney for the Western District of Kentucky.
"Manipulating treatment protocols and lengthening infusion times to increase reimbursement reflect an extraordinary lack of regard for patient welfare and the integrity of our health care system. This settlement will end these unacceptable practices and restore funds paid for improper claims during the relevant time period,” stated David J. Hale, United States Attorney for the Western District of Kentucky. “Pursuing health care fraud is a priority of my Office and the Department of Justice. We will continue to work with the Department of Health and Human Services to pursue medical providers who engage in improper conduct and overbill government health care programs."
"Improper and unnecessary services cost the taxpayers millions of dollars each year and drains our nation’s health care system," said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services in Atlanta. "The OIG will continue to aggressively pursue false claims cases that return much needed dollars to government health care programs."
"These health care providers did not only violate the laws of the United States - they violated the trust placed in them by their patients," said Patrick E. McFarland, Inspector General of the U.S. Office of Personnel Management. "To subject cancer patients to unnecessary treatments that are physically draining and emotionally stressful is utterly unconscionable. Every patient deserves health care providers that meet the highest standards of ethical and professional behavior. Today's settlement reminds all providers that they must observe those standards, and reflects the commitment of Federal law enforcement organizations to pursue improper and illegal conduct that puts the health and wellbeing of their patients at risk."
"We take very seriously our obligation to hold accountable those who put profits ahead of patient care," Attorney General Jack Conway said. "I remain committed to recovering taxpayer money that is lost to health care fraud in Kentucky. I appreciate the efforts of my Medicaid fraud investigators who work every day to ensure that health care providers participating in this type of deceptive behavior are held accountable, and I am proud that our Medicaid Fraud Unit has been recognized as one of the most aggressive in the country."
According to the settlement agreement, the United States and Commonwealth of Kentucky contend that Dr. Rafiq Ur Rahman and Dr. Yusuf K. Deshmukh, owners of Elizabethtown Hematology Oncology, PLC (EHO), billed Medicare, TRICARE, FEHBP and Medicaid from January 1, 2005, through December 31, 2010, for unnecessary office visit evaluations at the same time patients were receiving chemotherapy or other types of infusion treatments. The United States and Commonwealth of Kentucky contend that EHO did this by improperly billing evaluation and management codes using Modifier-25 (allows for billing evaluation and management necessary prior to the performance of a procedure).
The United States and Commonwealth of Kentucky further contend that during a seven year period, between January 1, 2006 and December 31, 2012, Dr. Rahman, Dr. Deshmukh, and EHO unnecessarily and improperly extended the duration of chemotherapy infusion treatment times for their patients in order to improperly bill Medicare, TRICARE, FEHBP and Medicaid for those additional hours of chemotherapy infusion treatments.
Some of the allegations covered by today’s settlement were raised in a lawsuit filed against EHO and its owners under the qui tam, or whistleblower, provisions of the federal False Claims Act. United States ex rel. Dr. Ijaz Mahmood v. Elizabethtown Hematology et al., Civil Action No. 3:11-cv-376-H (WDKY). The False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. In part of his lawsuit, Dr. Mahmood alleged that EHO developed written protocols that increased chemotherapy infusion times by a factor of three or more beyond generally recognized standards of medical practice. Dr. Mahmood alleged that EHO prolonged these chemotherapy infusion times for longer than was medically necessary in order to inflate billings. Relator, Dr. Ijaz Mahmood, will receive $283,412.90 as part of today’s settlement.
In addition to the $3.7 million payment, EHO and Dr. Deshmukh entered into a three-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The agreement requires enhanced accountability and wide-ranging monitoring activities conducted by both internal and independent external reviewers.his settlement agreement is neither an admission of liability by Rahman and Deshmukh nor a concession by the United States and Commonwealth of Kentucky that its claims are not well founded.
This case was prosecuted by Assistant United States Attorney Benjamin S. Schecter and it was investigated by the Office of Inspector General for the Department of Health and Human Services and by the Kentucky Attorney General’s Medicaid Fraud and Abuse Control Unit.
Founder of USA Harvest Guilty of Embezzling from the Charity and Tax FraudRead the Press Release
– Hugh “Stan” Curtis admits to stealing $183,354 in charitable donations
– Curtis failed to report $553,891.67 in income from donations made to USA HarvestLOUISVILLE, Ky. – USA Harvest founder, Hugh “Stan” Curtis pleaded guilty in United States District Court this afternoon before Chief Judge Joseph H. McKinley Jr, to a seven count federal indictment charging him with mail fraud, money laundering and filing false income tax returns with the Internal Revenue Service, announced David J. Hale, United States Attorney for the Western District of Kentucky.
“Stan Curtis used his position as sole officer of USA Harvest to divert donations meant for the poor and hungry – our neediest citizens,” stated U.S. Attorney David J. Hale. “He is now being held accountable for his actions. The investigation and prosecution of crimes against charitable entities will remain a priority of my office. Crimes such as this impact the entire community.”
Hugh “Stan” Curtis, 65, of Louisville, Kentucky, admitted that from September 2005 through September 2007, he stole $183,354 in donations that he solicited on behalf of USA Harvest, non-profit, I.R.C. 501(c)(3) organization he founded. Of these donated funds, Curtis acknowledged that he deposited $164,620 into his personal account and cashed donation checks totaling $18,734 – and thereafter used the funds for his personal benefit. The $164,620 includes checks written to USA Harvest on August 29, 2007 for $20,000 from Play Like the Pros, LLC and a September 5, 2007 donation from Richemont North America, Inc., for $25,000 which Curtis deposited into his own personal bank account and used for his own personal gain. Curtis did not report the $183,354 as income with the Internal Revenue Service.
Curtis also admitted that from 2005 through 2008, he failed to report to the Internal Revenue Service approximately $341,646 in personal income derived from donations made to USA Harvest. From 2005 through 2008 Curtis falsely included approximately $353,165 in unreimbursed travel expense deductions on his federal income tax returns. Of the $553,891.67 in unreported income, Curtis used approximately $370,537.67 in USA Harvest funds to pay for personal meals, personal travel and personal entertainment expenses. In total, defendant Curtis failed to pay $270,000 in federal income tax from calendar years 2005 through 2008.
Curtis admitted to filing false tax returns with the Internal Revenue Service. In 2005, Curtis failed to report approximately $160,549.56 in income and falsely deducted approximately $134,623 in unreimbursed travel expenses from USA Harvest on his 2005 federal income tax return filed on April 15, 2006. For the year 2006 Curtis failed to report approximately $217,085.18 income and falsely deducted approximately $130,739 in unreimbursed travel expenses from USA Harvest on his 2006 federal income tax return filed on May 9, 2007. For the year 2007 Curtis failed to report approximately $97,264.48 and falsely deducted approximately $87,803 in unreimbursed travel expenses from USA Harvest on his federal income tax return filed on April 15, 2008. For the year 2008 Curtis failed to report approximately $78,992.45 in income from USA Harvest on his 2008 federal income tax return filed on October 16, 2009. The return was filed by Curtis and signed under the penalty of perjury.
Curtis was determined to be competent to enter a guilty plea by Magistrate Judge Dave Whalin, following an earlier competency hearing held in U.S. District Court on November 8, 2013.
“Honest American taxpayers deserve to know that there are consequences for individuals who intentionally try to dodge their tax obligations. IRS Criminal Investigation will continue to investigate those who abuse the tax system and avoid paying their fair share. No one is above the law,” stated Christopher Henry, Special Agent in Charge, IRS Criminal Investigations-Nashville Field Office.
At sentencing, the United States will recommend a sentence of 24 months in prison and inform the court that it should order payment of a total of $183,354 in restitution. Restitution to the IRS will be handled independently by the civil division of the IRS, and the amount owed in taxes will be calculated independently by the IRS.
This case is being prosecuted by Assistant United States Attorney Bryan Calhoun and was investigated by the Internal Revenue Service, Criminal Investigations Division.
Convicted Felon Sentenced to 110 Months in Prison for Violating Federal Drug Trafficking and Gun LawsRead the Press Release
PADUCAH, Kentucky –Senior United States District Judge Thomas B. Russell sentenced a Fulton, Kentucky, man to 110 months in prison followed by a three-year term of Supervised Release for violating federal drug trafficking and gun laws, announced David J. Hale, United States Attorney for the Western District of Kentucky. White will serve the federal sentence after he completes a current state sentence. There is no parole in the federal system.
Joshua White, age 23, of Fulton, Kentucky, had previously pleaded guilty to trafficking in methamphetamine and being a felon in possession of a firearm. White had a previous felony conviction for drug trafficking. On or about February 11, 2010, White was convicted in criminal case number 09-CR-00042 in Fulton Circuit (Kentucky) Court, of first degree trafficking in a controlled substance (cocaine) in violation of Ky. Rev. Stat. 218A.1412 and trafficking in a controlled substance within 1,000 yards of a school in violation of Ky. Rev. Stat. 218A.1411.
According to court records, on March 25, 2013, in Fulton County, Kentucky, White knowingly and intentionally possessed with the intent to distribute methamphetamine. On that same date, he possessed a loaded Hi-Point, .380 caliber pistol, bearing serial number P8051850. He used the pistol to shoot at a Kentucky State Police Trooper.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Kentucky State Police conducted the investigation.
Owensboro, Kentucky, Man Charged in Second Home Improvement Scam - Robert Gray Charged with Defrauding Union County, Kentucky, Couple of Nearly $150,000Read the Press Release
– Recently pleaded guilty in U.S. District Court to defrauding elderly Daviess County couple of $200,000 in similar home improvement scam
OWENSBORO, Ky. – An Owensboro, Kentucky man is being held by the U.S. Marshals Service following his arrest May 9th for devising a scheme to defraud a Union County, Kentucky couple of nearly $150,000 in a home improvement scam announced David J. Hale, United States Attorney for the Western District of Kentucky. Robert K. Gray was awaiting sentencing in a similar case in which he had pleaded guilty to mail fraud in connection with defrauding over $200,000 from an elderly Daviess County, Kentucky, couple and agreed to pay $220,000 restitution.
Defendant Gray, age 49, was charged in a 14 count federal grand jury indictment this week with two counts of wire fraud and 12 counts of structuring financial transactions in order to evade federal reporting requirements.
According to the indictment, between January 17, 2014 and April 14, 2014, Gray was paid a total of $149,839 for work on the home of a Union County, Kentucky couple. Payment was made in the form of 24 checks drawn on their personal checking account at Old National Bank. It is alleged that defendant Gray never completed any of the home improvement projects he’d undertaken to perform. Further, Gray is charged with requesting payments be made in amounts under $10,000 and then cashing each of the checks at different branches of a financial institution in order to avoid the bank’s requirement to report currency transactions over $10,000 to the Internal Revenue Service. According to the indictment, between February 16, 2014 and February 27, 2014, in Daviess, Union, Henderson, and Hopkins Counties, defendant Gray knowingly and for the purposes of evading reporting requirements cashed checks, drawn on an Old National Bank account, in amounts less than $10,000.
If convicted at trial, Gray faces a combined term of not more than 100 years in prison, a fine of up to $1,000,000 and a term of supervised release of up to five years.
In a separate case, in February, 2014, Gray admitted to defrauding an elderly Daviess County couple of their retirement fund, by making material misrepresentations about an investment opportunity in the defendant’s construction company. Defendant Gray also made home improvements to the couple’s residence in excess of $300,000, an amount that is more than double the assessed value of the property.
Gray admitted to using investment funds he received from the victim to pay for personal expenses and to purchase vehicles, including a 2006 Hummer for $25,000 the day after Gray received and deposited the first investment check, and, approximately two weeks later, to purchase a 2006 Kawasaki motorcycle for $5,000. Gray is scheduled for sentencing before Chief Judge Joseph H. McKinley Jr., on June 26, 2014, in U.S. District Court in Owensboro.
This case is being prosecuted by Assistant United States Attorney Marisa Ford, and is being investigated by the Federal Bureau of Investigation (FBI).
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Army Soldier Sentenced for Facilitating Thefts of Fuel in AfghanistanRead the Press Release
WASHINGTON – United States Army soldier Albert Kelly III of Fort Knox, Kentucky, was sentenced to serve 18 months in prison for his role in stealing fuel at Forward Operating Base (FOB) Salerno in Afghanistan. In addition to his prison term, Kelly was sentenced to three years of supervised release and ordered to pay $100,000 in restitution.
Acting Assistant Attorney General David O’Neil of the Justice Department’s Criminal Division and U.S. Attorney David J. Hale of the Western District of Kentucky made the announcement after the sentence was imposed by Senior U.S. District Court Judge Charles R. Simpson III in the Western District of Kentucky.
According to court documents, from January 2011 to January 2012, Kelly was assigned to FOB Salerno, and for most of that time he served as a specialist. Kelly’s duties included overseeing the delivery of fuel into FOB Salerno. Typically, the fuel was brought into the base by Afghan trucking companies driven by Afghan nationals. Kelly’s duties included verifying the amounts of the fuel that were delivered at FOB Salerno and preparing and certifying documents that accounted for the fuel that was delivered.
From in or about November 2011 through January 2012, Kelly diverted and permitted the diversion of fuel delivery trucks from FOB Salerno to other locations, where the diverted fuel would then be removed from the trucks and stolen. To conceal this diversion, he falsely certified that the diverted fuel was in fact delivered at FOB Salerno.
Also according to court documents, in exchange for assisting in the theft of fuel as described, Kelly received approximately $57,000 from the Afghan trucking company. He admitted the amount of fuel he permitted to be diverted amounted to approximately 25,000 gallons. The United States Army paid approximately $4.00 per gallon for that fuel, and the loss to the government was approximately $100,000.
The case was investigated by the Special Inspector General for Afghanistan Reconstruction. This case was handled by Special Trial Attorney Mark H. Dubester, on detail from the Special Inspector General for Afghanistan Reconstruction, and Assistant U.S. Attorney Michael Bennett of the Western District of Kentucky.
Clinton County, Kentucky Man Charged with Filing False Tax ReturnsRead the Press Release
– Allegedly failed to report earnings and pay income taxes on $386,183.67 during a six year period and overstated business expenses of $581,519.91
BOWLING GREEN, Ky. – A Clinton County, Kentucky man was charged by a federal grand jury in Bowling Green, Kentucky this week, for failing to report approximately $386,183.67 in income and royalty income during a six year period and for overstating business expenses of $581,519.91 announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the six count indictment, Steven L. Burchett did willfully make and subscribe U.S. Individual Tax Returns, for the calendar years 2006 through 2011,which were written under the penalty of perjury and filed with the Internal Revenue Service, (IRS) and included information he did not believe to be true and correct.
Specifically, the indictment states that on October 11, 2008, defendant Burchett filed a U.S. Individual Tax Return for calendar year 2006, with the IRS, in which he failed to report approximately $224,735.76 of additional income on Form 1040 line 22.
On October 8, 2008, defendant Burchett filed a U.S. Individual Tax Return, for the calendar year 2007, with the IRS, in which he failed to report approximately $27,003.91 of additional income on Form 1040, Line 22.
On October 15, 2009, defendant Burchett filed a U.S. Individual Tax Return, for the calendar year 2008, with the IRS, and included information he did not believe to be true and correct. Specifically, the return overstated approximately $41,394 in business expenses on Schedule C, Line 28, and failed to report royalty income of approximately $18,236 and understated approximately $56,895 in additional income on Form 1040, Line 22.
On April 15, 2010, defendant Burchett filed a U.S. Individual Tax Return, for the calendar year 2009, which was made under the penalty of perjury and was filed with the IRS, and included information he did not believe to be true and correct. Specifically, the return overstated approximately $90,650 in business expenses on Schedule C, Line 28, and failed to report approximately $38,323 in royalty income and understated approximately $123,225 in additional income on Form 1040, Line 22.
On April 15, 2011, defendant Burchett filed a U.S. Individual Tax Return, for the calendar year 2010, which was made under the penalty of perjury and was filed with the IRS, and included information he did not believe to be true and correct. Specifically, the return overstated approximately $305,564 in business expenses on Schedule C, Line 28, and failed to report approximately $64,490 in royalty income and understated approximately $360,380 in additional income on Form 1040, Line 22.
On April 15, 2012, defendant Burchett filed a U.S. Individual Tax Return, for the calendar year 2011, which was made under the penalty of perjury and was filed with the IRS, and included information he did not believe to be true and correct. Specifically, the return overstated approximately $72,050 in business expenses on Schedule C, Line 28, and failed to report approximately$74,778 in royalty income and understated approximately $135,611 in additional income on Form 1040, Line 22.
If convicted at trial, Burchett faces up to three years in prison on each of the six charges for a total of eighteen years, a total fine of $1,500,000., and a period of up to six years of supervised release.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and is being investigated by the Criminal Investigation division of the Internal Revenue Service.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Henderson County, Kentucky, Man Charged with Human Trafficking for Recruiting Minors to Engage in Commercial Sex ActsRead the Press Release
BOWLING GREEN, Ky. – A Henderson County, Kentucky, man was charged today, by a federal grand jury in Bowling Green, with human trafficking after allegedly recruiting two minors to engage in commercial sex acts announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the two count indictment, between March 16, 2014, and March 20, 2014, in Henderson County and elsewhere, the defendant, Jathar Williams, age 31, knowingly recruited, enticed, harbored, transported, provided, obtained, and maintained by any means, two minor females, who the defendant knew through observation, had not attained the age of 18 years, and caused the minors to engage in a commercial sex act.
If convicted at trial, defendant Williams faces no less than 10 years in prison, no more than life in prison, a fine of up to $250,000 for each count, and a five year period of supervised release.
This case is being prosecuted by Assistant United States Attorney Amanda Gregory and is being investigated by the Federal Bureau of Investigation (FBI) and the Henderson, Kentucky Police Department.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Convicted Sex Offender Residing in Logan County, Kentucky, Sentenced to 15 Years in Prison for Possession of Child PornographyRead the Press Release
BOWLING GREEN, Ky. – A previously convicted sex offender, living in Logan County, Kentucky, was sentenced to 15 years in prison followed by a life term of Supervised Release, on Thursday, May 1, 2014, by Senior District Judge Thomas B. Russell, for violating federal child pornography laws, announced David J. Hale, United States Attorney for the Western District of Kentucky. There is no parole in the federal system.
Jeffrey Lynn Hines, age 40, of Russellville, Kentucky, had previously pleaded guilty to a three-count Superseding Indictment that charged him with receiving child pornography, by way of the United States Postal Service and the Internet between August 2010 and April 2011. The Indictment also charged him with possession of child pornography and of being a convicted felon in possession of firearms. Hines admitted to ordering the child pornography, through a website, from a company located outside the United States and to downloading images of child pornography from the Internet.
Law enforcement officials executed a federal Search Warrant on Hines home in Russellville. Among the items located and seized pursuant to the Warrant were several computers containing numerous still images and video files depicting child pornography, a binder with printed images of child pornography, numerous VHS tapes, and more than 30 DVDs (including the ones Hines had ordered from the international company containing child pornography). Law enforcement officials also found and seized a Remington, Wingmaster model 870, 12-gauge semi-automatic pump shotgun; a Maverick model 88, 12-gauge semi-automatic pump shotgun; a Westpoint model 948E, 20-gauge single shot shotgun; and a Bauer Firearms Corp., model Bauer Automatic .25 caliber semi-automatic pistol.
Information from the Kentucky State Police Sex Offender Registry website showed that Hines was a sex offender registrant. The underlying conviction arose in Logan County, Kentucky Circuit Court. On June 5, 1995, Hines was convicted of first degree sexual abuse of a six-year-old little boy (a crime punishable by imprisonment for more than one year). In 2004, Hines was again charged with first degree sexual abuse of a child (a four-year-old boy). He received diversion for a period of five years. During that time period, in 2010, Hines failed to comply with sex offender registration requirements. At the time of his arrest in this case, he was compliant with the registration.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The United States Postal Inspection Service led the investigation. The Kentucky State Police and Logan County Sheriff’s Department assisted with execution of the Search Warrant and the Bureau of Alcohol, Tobacco, Firearms & Explosives aided with the firearms charge.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Convicted Sex Offender Residing in Allen County, Kentucky, Sentenced to 15 Years in Prison for Possession of Child PornographyRead the Press Release
BOWLING GREEN, Ky. – A previously convicted sex offender, living in Allen County, Kentucky was sentenced to 15 years in prison followed by a life term of Supervised Release, on Thursday, May 1, 2014, by Senior District Judge Thomas B. Russell, for violating federal child pornography laws, announced David J. Hale, United States Attorney for the Western District of Kentucky. There is no parole in the federal system.
Gerald Burnham, age 73, of Adolphus, Kentucky, had previously pleaded guilty to a two-count Indictment that charged him with receiving child pornography, by way of the United States Postal Service and the Internet. The Indictment also charged him with possession of child pornography. Burnham admitted to ordering the child pornography, through a website, from a company located outside the United States and to downloading images of child pornography from the Internet.
Burnham admitted to placing orders and making purchases of DVDs from the International Company on 12 occasions between November 3, 2010, and March 4, 2011. Those orders included 20 separate video titles from the company’s website. Burnham spent at total of $510.50 in United States currency for the DVDs. Burnham was identified as a customer through an investigation by the United States Postal Inspection Service (USPIS) and a foreign law enforcement agency.
Law enforcement officials executed a federal Search Warrant on Burnham’s home in Kentucky on May 2, 2013. Among the items located and seized pursuant to the Warrant were a desktop computer, DVDs (the ones ordered from the international company), framed photographs of nude boys, photo albums and a binder containing sexually explicit photos of male and female children, miscellaneous nudist books and erotic writings belonging to Burnham.
Information from the Kentucky State Police Sex Offender Registry website showed that Burnham was a lifetime sex offender registrant. At the time of his arrest on the federal charges, Burnham was compliant with his sex offender registration requirement. The underlying conviction arose in Maine for unlawful sexual contact with a minor, possession of sexually explicit material, and sexual abuse of a minor. Burnham sexually abused a child in Maine for eight years, beginning when the child was only eight years old.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The United States Postal Inspection Service led the investigation. The Allen County Sheriff’s Department assisted with execution of the Search Warrant.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Todd County, Kentucky Man Sentenced to 30 Months in Prison for Selling MarijuanaRead the Press Release
– 452 pounds of processed marijuana recovered at his Elkton home
BOWLING GREEN, Ky. – A Todd County, Kentucky man was sentenced to 30 month in prison followed by three years of supervised release by Senior District Judge Thomas B. Russell on May 2, 2014, for the manufacture, possession and distribution of marijuana announced David J. Hale, United States Attorney for the Western District of Kentucky.
Mervin Sears, age 64, of Elkton, Kentucky pleaded guilty to a two count federal indictment on August 6, 2013. Sears admitted in court that on January 8, 2013, he knowingly and intentionally sold approximately three pounds of marijuana to a confidential informant for $4500. The transaction was monitored and recorded by law enforcement officers from the Kentucky State Police and the South Central Kentucky Drug Task Force. A search warrant for the defendant's property in Elkton resulted in 307 marijuana plants and 452 pounds of processed marijuana being seized. Also, the search revealed $16,349.00 in U.S. currency, 10 firearms, indoor grow equipment and assorted drug paraphernalia including scales and baggies.
In addition to the prison term, Sears agreed to pay the United States $120,000 (in lieu of forfeiture of his residence), and to forfeit $16,000 in cash seized during his arrest, as well as numerous vehicles and firearms, with all forfeiture proceeds to be divided among the law enforcement agencies involved in the investigation.
This case was prosecuted by Assistant United States Attorney Larry Fentress and was investigated by KSP DESI West and South Central Kentucky Drug Task Force. KSP Post 2 and Pennyrile Narcotics task force assisted with the search.
Warren County, Kentucky, Construction Company Owner Sentenced to 24 Months for Income Tax EvasionRead the Press Release
– Concealed $1,045,327 in income from the IRS
– Failed to disclose his ownership in Tri-State Construction and income receivedBOWLING GREEN, Ky. – The owner of a Warren County, Kentucky construction company was sentenced in U.S. District Court yesterday by Senior Judge Thomas B. Russell to 24 months in prison and was ordered to pay $571,000 in restitution for tax evasion, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Darrell Mathis, age 48, owner of Tri-State Construction, pleaded guilty before United States Magistrate Judge James Moyer on April 22, 2013 to five counts of income tax evasion due for the tax years 1999 through 2001 and 2005 through 2009. The returns were filed with the Internal Revenue Service (IRS).
According to the plea agreement, from June 2004 until December 2011, Mathis evaded payment of $177,634 in federal income taxes due for the tax years 1999 through 2001. During this time period, among other things, he falsely submitted an IRS Offer-in-Compromise Form 656 in which he concealed his ownership and control of his personal assets, including vehicles and boats, and his business, Tri-State Construction and the company’s bank accounts. Throughout this period he owned and operated Tri-State construction but concealed his ownership and income from the IRS by placing it in the name of a nominee and directing IRS W-2 Forms not be filed in his name. For the tax years 2005 through 2008 Mathis received approximately $1,045,327 in income from Tri-State construction that he concealed from the IRS by not reporting the income on his federal income tax returns. The resulting additional tax due and owing for 2005 through 2009, is $383,558. Mathis knowingly signed his 2005 through 2008 federal income tax returns under the penalty of perjury.
The tax evasion counts to which Mathis pleaded guilty also charged that in December 2007 Mathis purchased a piece of real estate at Cooper Dearing Road for $144,900 in the name of a nominee to conceal the purchase from the IRS. In January 2008, he sold this piece of real estate for $235,000 and purchased property located at 121 Timber Ridge Court, Alvaton, Kentucky, again in the name of a nominee. Further, in 2009 and 2010, Mathis caused the owner of Southside Auto Sales to file liens on his vehicles to conceal his equity in them from the IRS. Lastly, in January 2007, Mathis purchased a Keystone camper, titling the camper in a nominee name to conceal his ownership.
This case was prosecuted by Assistant United States Attorney Bryan Calhoun and Joshua Judd and was investigated by the IRS, Division of Criminal Investigation.
Russell County, Kentucky Man Sentenced to 41 Months in Prison for Embezzling $625,096 from His Former EmployerRead the Press Release
– Ordered to pay full amount in restitution
BOWLING GREEN, Ky. – The former controller of a Russell County, Kentucky manufacturing company was sentenced by Senior District Judge Thomas B. Russell yesterday to 41 months in prison for wire fraud and was ordered to pay restitution in the amount of $625,096, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Kyle W. Robertson, age 34, of Russell County, Kentucky, admitted in court to causing 36 illegal wire transfers from his employer’s bank account to his personal bank account during a nearly four-year period, beginning on April 28, 2009 and continuing through January 14, 2013. Robertson pleaded guilty to the 12-count federal indictment on December 3, 2013.
According to the plea agreement, Robertson was employed by Bruss North America, Inc., an auto parts manufacturing company located in Russell Springs, Kentucky as the plant’s controller. Robertson admitted to making false account entries in order to conceal his theft from the German-owned company, with its North America headquarters in Russell Springs. Robertson would fraudulently inflate the value of fixed assets in Bruss accounts and enter the value of assets in Euros rather than dollars to conceal his theft on the balance sheet. Robertson further admitted to causing wire transfers from the company’s bank account at Deutsch Bank in New York, New York to a bank account he maintained with the Monticello Banking Company in Russell Springs, Kentucky. The wire transfers listed in the federal indictment ranged in amount from $12,856.56 to $27,000.00.
This case was prosecuted by Assistant United States Attorney Joshua Judd and was investigated by the Federal Bureau of Investigation (FBI) and the Kentucky State Police.
Former Dawson Springs Letter Carrier Sentenced to Prison Term for Destroying and Delaying the Delivery of at Least 44,900 Pieces of MailRead the Press Release
OWENSBORO, Ky. – A former United States Postal Service Employee from Dawson Springs, Kentucky was sentenced on April 17, 2014 to six months in prison followed by six months of home incarceration for destroying, hiding and delaying the delivery of at least 44,900 pieces of mail announced David J. Hale, United States Attorney for the Western District of Kentucky.
William “Brent” Morse, age 34, also was ordered to pay $14,808.01 by Chief Judge Joseph H. McKinley Jr., for losses suffered by individual residents and a local bank and for losses to two businesses which attempted to mail commercial circulars during the time period when defendant Morse did not deliver the United States Postal Service (USPS) mail.
In court, Morse admitted that for a two year period, beginning around March 2011, until March 30, 2013, when he resigned from the USPS, he destroyed at least 1,000 pieces of undelivered USPS mail and stored at least 44,900 pieces of undelivered mail at his deceased mother’s home and at rented storage facilities located in Dawson Springs. The majority of the undelivered mail was meant for delivery in the Dawson Springs community. The USPS has since delivered the recovered mail. Morse was charged in a single count, grand jury indictment, on August 14, 2013. He was not charged with stealing the contents of the undelivered mail.
This case was prosecuted by Special Assistant United States Attorney Sungtae Kang and the case was investigated by the United States Postal Inspection Service with assistance from the Dawson Springs Police Department.
Henderson County, Kentucky, Woman Sentenced to 125 Months in Prison for Bank RobberyRead the Press Release
OWENSBORO, Ky. – A Henderson County, Kentucky woman was sentenced in U.S. District Court this week, by Chief Judge Joseph H. McKinley Jr., to 125 months in prison followed by three years of supervised release for robbing a bank and brandishing a firearm during a crime of violence, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Meiesha R. Sharp, 25, of Henderson, was sentenced after pleading guilty to brandishing a .380 caliber pistol while robbing the Fifth Third Bank located in Henderson of $29,068.95 on June 29, 2012. According to the charges, Sharp put the life of another person in jeopardy by the use of a firearm. In return for the guilty plea, the United States agreed to drop four additional charges in a Superseding Indictment. There was no order of restitution because the stolen money was recovered by the Henderson Police Department. Sharp was ordered to remain in custody. There is no parole from federal prison.
This case was prosecuted by Assistant United States Attorneys Thomas W. Dyke and Sungtae Kang, and was investigated by the Henderson Police Department and the Federal Bureau of Investigation (FBI).
Three Indicted for Possession with Intent to Distribute Approximately Seven Pounds of MethamphetamineRead the Press Release
– Street Value of Approximately $210,000
LOUISVILLE, Ky. – An Ohio woman and two men from California were indicted by a federal grand jury in Louisville this week on charges of conspiring to knowingly and intentionally possessing with the intent to distribute fifty grams or more of methamphetamine, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Brenda Buenrostro, age 21, of Fairborn, Ohio, Ricardo Morales, age 27, of Los Angeles, California, and Luis Villa, age 29, of Milpitas, California were charged in a two count indictment. Because of the interstate nature of the crime and the large quantity of methamphetamine seized, the case was referred for federal prosecution.
According to a Metro Louisville Police Department arrest report, on March 27, 2014, police initiated an investigation after observing suspicious activity by the defendants. The investigation led to the search of the defendants’ room at the Economy Inn located at 3304 Bardstown Road, and resulted in the seizure of approximately seven pounds of methamphetamine, with an estimated street value of $210,000, along with various items of drug paraphernalia.
If convicted, the defendants face a mandatory minimum sentence of ten years in prison, a maximum sentence of life in prison, a fine of $10,000,000 and a term of supervised release of at least five years upon release from prison.
This case is being prosecuted by Assistant United States Attorney Larry Fentress and is being investigated by the Louisville Metro Police Department and the Federal Bureau of Investigation (FBI).
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Jury Convicts Christian County, Kentucky Man for Stealing Trade Secrets from His Former EmployerRead the Press Release
PADUCAH, KY– A Christian County, Kentucky man was convicted by a federal jury for stealing trade secrets announced David J. Hale, United States Attorney for the Western District of Kentucky.
Defendant Phillip Lee Groves, was convicted on April 11, 2014, following a ten-day trial, for stealing trade secret information owned by White Drive Products, Inc., located in Hopkinsville, Kentucky. Groves stole the trade secret information while employed by the manufacturing company.
The theft took place between November 30, 2007 and September 22, 2008. At trial, the United States presented evidence that proved defendant Groves, without authorization, copied and transferred onto a USB portable hard drive approximately 30,000 files on February 22d and February 27th, 2008, which Groves intended to use as part of his employment with a White Drive Competitor. On May 5, 2008, defendant Groves resigned his job with White Drive Products, Inc., and on May 12, 2008, Groves began employment with the competitor.
Defendants Gregory Lee Wampler and Eric Dale Tinderholt were acquitted of charges by the jury.
Defendant Groves faces no more than 40 years in prison, three years of supervised release and a fine of $1,000,000. He will be sentenced by Senior District Judge Thomas B. Russell on July 23, 2014 at 11:00 AM in Paducah.
This case was prosecuted by Assistant United States Attorney Marisa Ford and was investigated by the Federal Bureau of Investigation (FBI).
Warren County, Kentucky, Woman Charged with Arson of the Horse Cave, Kentucky Dollar General StoreRead the Press Release
– Also charged with bankruptcy fraud in a superseding indictment
BOWLING GREEN, Ky. – A Warren County, Kentucky woman was charged by a federal grand jury meeting in Bowling Green this week, with a single count of maliciously damaging and destroying, and attempting to damage and destroy, by means of fire, the Dollar General Store, a building, real, and personal property, located in Horse Cave, Kentucky, announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the indictment, on June 27, 2011, Debra Fowler Kessinger, age 57, attempted to destroy, by means of fire, the Dollar General Store located at 1015 East Main Street in Horse Cave, Kentucky.
Further, the defendant was charged in a separate two-count superseding indictment, this week, by a grand jury in Bowling Green, with bankruptcy fraud. According to the indictment, beginning in April 2008, and continuing through December 2009, Kessinger knowingly devised a scheme to defraud her creditors, the U.S. Trustee, and the Bankruptcy Court, by submitting a fraudulent Chapter 7 Bankruptcy petition, In re Debra K. Fowler, Case No. 08-11653, that concealed and failed to disclose the purchase and possession of property, and the receipt and transfer of life insurance proceeds and retirement benefits of her late husband to the bank accounts of family members and others for her own benefit.
If convicted at trial, Kessinger faces between 5 and up to 20 years in prison for destroying property by means of fire, a $250,000 fine and 3 years of supervised release. Kessinger also faces forfeiture of property, no more than 10 years in prison for bankruptcy fraud, a fine of $500,000 and 3 years of supervised release.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and is being investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Former University of Louisville Executive Charged with Embezzling Funds Tied to UofL Medical Groups and Tax FraudRead the Press Release
– Diverted $2.8 million
– Failed to report $2,470,735 to Internal Revenue ServiceLOUISVILLE, Ky. – A former University of Louisville accountant, promoted to Executive Director of the Department of Family & Geriatric Medicine at the University of Louisville School of Medicine (DFGM) was arraigned today on a seven-count federal indictment charging theft and bribery in programs that receive federal funds, money laundering, mail fraud, and filing false federal income tax returns, announced David J. Hale, United States Attorney for the Western District of Kentucky.
As part of the nearly six year scheme, Perry Chadwick Vaughn, 36, of Sellersburg, Indiana, allegedly diverted contractual checks and patient payments to the University Family and Geriatric Medicine Associates account then withdrew $2,809,489 for his personal use and benefit.
According to the indictment, between January 2007 through August 2013, Vaughn was the Executive Director of the Department of Family and Geriatric Medicine at the University of Louisville School of Medicine (DFGM-UofL) and business manager of its affiliated private physician practice groups (collectively “DFGM-Practice Groups”). As Executive Director, he was responsible for all business and accounting functions, including payroll, budgeting, tax reporting, accounts receivable, accounts payable, and bank reconciliations. The DFGM-Practice Groups included the Department of Family and Community Medicine, University Family Practice, University Family and Geriatric Medicine Associates, and University Family Practice Associates Center for Primary Care. The indictment alleges Vaughn used his position as Executive Director to defraud and obtain money by false pretenses from DFGM-UofL and used his position as business manager to defraud and obtain money by false pretenses from four UofL private physician practice groups.
Between November 2007 through March 2013, Vaughn allegedly diverted forty contractual checks issued to DFGM-UofL to bank accounts of DFGM-Practice Groups totaling $666,810. He then made withdrawals and payments from DFGM-Practice Groups bank accounts for his own personal use and benefit. Between January 2007 and August 2013, Vaughn allegedly diverted $604,025 in patient payments from DFGM-UofL accounts into bank accounts of the DFGM-practice groups. He then made withdrawals and payments from DFGM-Practice Groups bank accounts for his own personal use and benefit. During that same time period, Vaughn allegedly made withdrawals and payments from DFGM-Practice Groups bank accounts totaling $2,809,489 for his personal use and benefit. $1,270,835 of the funds were from payments diverted from DFGM-UofL to DFGM-Practice Groups bank accounts. The remaining $1,538,654 in funds taken from the DFGM-Practice Group bank accounts were from general funds of the DFGM-Practice Groups. During that same time period Vaughn allegedly made a number of misrepresentations to University of Louisville Audit Services by transferring funds between bank accounts to conceal his theft and by providing false bank statements of the DFGM Practice Groups.
Further, Vaughn is charged with money laundering for making financial transactions involving the proceeds of unlawful activities designed to conceal the nature, location, source, ownership, or the control of the proceeds of the specified unlawful activities. According to an Affidavit attached to a criminal complaint, from 2011 to 2013, Vaughn purchased/leased nine luxury vehicles with a combined value of nearly $475,000. Further, Vaughn purchased real estate, a $9,000 bracelet, luxury vacations, and a Las Vegas casino.
Further, Vaughn is charged with four counts of filing false federal income taxes with the United States Internal Revenue Service (IRS) for calendar years 2008 through 2012. Vaughn is charged with failure to report $377,492 in total income for calendar year 2008, $610,470 in total income for calendar year 2009, $160,121 in total income for calendar year 2010, $546,022 in total income for calendar year 2011, and $776,630 in total income for calendar year 2012.
In addition, on September 3, 2013, U.S. District Judge John G. Heyburn II granted the United States’ motion for Temporary Restraining Order enjoining and prohibiting Vaughn, (including family members, financial institutions, and other entities having possession or control of Vaughn's assets), from transferring, selling, dissipating, concealing, or otherwise disposing of, in any manner, his assets in real or personal property, owned, gained or acquired by him or on behalf of his ex-wife.
A trial date has been set for June 3, 2014. If convicted at trial, Vaughn faces up to 55 years in prison, a 16 year period of supervised release, and a fine of $1,250,000.
This case is being prosecuted by Assistant United States Attorney Bryan Calhoun and is being investigated by the University of Louisville Police Department, the United States Secret Service, the Internal Revenue Service, Criminal Investigations, and the United States Postal Inspection Service.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Russell Springs, Kentucky Business Agrees to Pay $750,000 in Restitution for Role in Contraband Cigarette TraffickingRead the Press Release
– Tantus Tobacco, LLC. Pleads guilty to a superseding information
BOWLING GREEN, Ky. – A Russell Springs, Kentucky company pleaded guilty today, before Chief Judge Joseph H. McKinley Jr., to a single charge of conspiracy to engage in contraband cigarette trafficking; and the company has agreed to pay $750,000 in restitution and forfeitures; announced David J. Hale, United States Attorney for the Western District of Kentucky.
Tantus Tobacco, LLC pleaded guilty to a Superseding Information and will pay restitution in the amount of $200,000 to the Kentucky Revenue Cabinet in lost taxes and $60,000 to the Kentucky Attorney General’s Office for its assistance in the investigation. Tantus Tobacco, LLC will forfeit $490,000 to the United States.
Tantus Tobacco, a cigarette manufacturing facility located in Russell Springs, Kentucky, acting by and through its officers and employees, aided and abetted by Jerry Burke and Charles Wells, pleaded guilty to making false material statements in reports required to be made to governmental tobacco regulatory divisions of the United States and the State of Mississippi between October 2007 through July 2008.
According to the plea agreement, from at least January 2008 to May 2008, Tantus Tobacco manufactured Berley and Berkley brand cigarettes, which they sold to Charles Wells, a cigarette wholesale distributor in Kentucky. Escrow payments are due on the Berley cigarettes, but not the Berkley. Wells would obtain the cigarettes directly from the Tantus Tobacco facility located in Russell Springs, Kentucky. However, Tantus Tobacco aided and abetted the creation of false documentation indicating that the cigarettes had been sold to J&B Wholesale (owned and operated by Jerry Burke) in Mississippi, which false documents were submitted to the State of Mississippi. These false documents allowed Tantus Tobacco to avoid making manufacturer Non-Participating Manufacturer escrow payments on the subject cigarettes and to sell the cigarettes to Wells at a discount. J&B Wholesale, in turn, submitted false and fraudulent Mississippi Tobacco Excise Returns reporting that the cigarettes were received and sold in Mississippi to the State Tax Commission in Mississippi in violation of tobacco sales reporting requirements. These false Mississippi Tobacco Excise Returns were submitted, in whole or in part, due to the cigarette diversion scheme described above in which Tantus Tobacco was an active participant.
A wholesaler selling cigarettes in Mississippi must file a monthly Tobacco Excise Return with the State Tax Commission showing the number of unstamped cigarettes received that month, plus the cigarettes stamped and available for sale that month, plus the cigarettes sold to licensed wholesalers and exempt persons that month, as well the cigarettes shipped or sold out of state, and the net taxable cigarettes and other pertinent information.
This case was prosecuted by Assistant United States Attorney Randy Ream and was investigated by the Federal Bureau of Investigation (FBI) Mississippi Division, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Former Taylor County, Kentucky Deputy Sheriff Guilty of Distribution of Anabolic SteroidsRead the Press Release
– Wore Taylor County Sheriff’s Department uniform and drove law enforcement vehicle during distribution
BOWLING GREEN, Ky. – A former Taylor County, Kentucky deputy sheriff pleaded guilty today, before Chief Judge Joseph H. McKinley Jr., to charges of distributing anabolic steroids, a Schedule III controlled substance, announced David J. Hale, United States Attorney for the Western District of Kentucky.
William Allen Rice, age 38, of Campbellsville, pleaded guilty to all charges in a three-count federal indictment. According to the plea agreement, Rice sold Schedule III controlled substances on three separate occasions, between May 17, 2013 and August 10, 2013. On May 17, 2013, the defendant sold a bottle of Boldenone Undecylenate, a Schedule III non-narcotic, to another individual for $150. On August 8, 2013, the defendant sold a bottle of Nandrolone Decanoate, a Schedule III non-narcotic, to another individual for $150. On August 22, 2013, the defendant sold ten bottles of Testosterone Enanthate from Lightning Pharmaceuticals in Cambridge, Massachusetts, an anabolic steroid and a Schedule III non-narcotic, to another individual for $950.
Rice was observed driving his assigned Taylor County Sheriff’s Office vehicle to prearranged meeting locations and wore his Taylor County Sheriff’s Office uniform and a pistol on his hip during one transaction with a confidential human source.
Rice was charged in a criminal complaint on October 1, 2013 and subsequently charged by federal grand jury indictment on October 16, 2013. The charges exposed Rice to a combined maximum term of imprisonment of 30 years, a combined maximum fine of $1,500,000, and a 2-year term of supervised release.
This case is being prosecuted by Assistant United States Attorney Amanda E. Gregory and was investigated by the Federal Bureau of Investigation (FBI) and Kentucky State Police.
Bowling Green Man Guilty of Growing Marijuana in Mammoth Cave National Park and Warren CountyRead the Press Release
BOWLING GREEN, Ky. - A Bowling Green, Kentucky man pleaded guilty today, in United States District Court to conspiracy to manufacture marijuana inside Mammoth Cave National Park and inside a residence located in Warren County, Kentucky announced David J. Hale, United States Attorney for the Western District of Kentucky.
Robert Williams, age 28, pleaded guilty to a four-count federal indictment admitting that between May 4, 2011, and continuing to on or about October 8, 2011, he and co-defendant Ryan Pitcock, of Bowling Green, knowingly and intentionally conspired and agreed together and with each other to manufacture less than 50 Kilograms of marijuana, a schedule I controlled substance inside Mammoth Cave National Park. Williams also admitted to manufacturing marijuana and mushrooms containing psilocin and psilocybin within their residence in Warren County.
According to the plea agreement, search warrants obtained by Kentucky State Police for Williams’ and Pitcock’s apartment in Warren County revealed an extensive marijuana growing operation, processed marijuana for distribution, mushrooms containing psilocin and psilocybin being grown and packaged for distribution, and several stun guns.
Pitcock pleaded guilty to the charges on August 21, 2012 and was sentenced by Chief Judge Joseph H. McKinley, Jr. to 12 months and one day in prison followed by a two year period of supervised release.
If convicted at trial, Williams faces a combined maximum term of 20 years in prison, a fine of $1,5000,000 and a two year period of supervised release.
The case is being prosecuted by Assistant United States Attorney Joshua Judd, and it was investigated by the National Park Service Rangers and the Kentucky State Police.
Allen County, Kentucky, Resident Guilty of Stealing Hydrocodone Pills from Her Employer – A Scottsville, Kentucky, PharmacyRead the Press Release
– Former pharmacy employee further admits to conspiring with others to sell and distribute the stolen hydrocodone pills worth $29,808
BOWLING GREEN, Ky. – A former employee of Stovall’s Prescription Shop, located in Scottsville, Kentucky, pleaded guilty today in United States District Court, to conspiracy to distribute the pain killer, hydrocodone, that was stolen from her employer, and conspiring to sell over $5,000 of stolen hydrocodone that had not been made available to consumers for retail purchase, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Lynn Harper Denton, age 46, of Allen County, Kentucky pleaded guilty before Chief Judge Joseph H. McKinley Jr., to two charges in a seven count indictment. According to the plea agreement, between May 2012, and continuing to October 16, 2012, in Allen County, Kentucky, Denton, a former employee of Stovall’s Prescription Shop, conspired with Jeffrey Clay Stinson and Katherine Virginia Rookstool, to knowingly possess and distribute hydrocodone. Denton admitted to stealing over 10,000 hydrocodone pills from Stovall’s Prescription Shop and selling them to Rookstool, who then sold the pills to Stinson. Stinson sold the pills to others. Stinson pleaded guilty to federal charges and is awaiting sentencing. Rookstool has an April 21, 2014 trial date.
Further, Denton admitted that while employed at Stovall’s Prescription Shop, between May 2012, and continuing through October 16, 2012, that she and Rookstool conspired to sell and distribute over $5,000 of stolen hydrocodone that had not been made available to consumers for retail purchase. This is a violation of 18 USC § 670 (theft of medical products) and is the first such prosecution in the Western District of Kentucky. The retail value of the stolen hydrocodone was $29,808.
The charges against Denton expose her to a maximum sentence of no more than 30 years in prison, a $750,000 fine, and a period of five years of supervised release.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the U.S. Food and Drug Administration's Office of Criminal Investigations, Owensboro domicile, the Allen County Sheriff’s Department, and the Scottsville, Kentucky Police Department.
Todd County, Kentucky Man Charged with Coercing Minors to Engage in Sexually Explicit Conduct and Receiving Child PornographyRead the Press Release
BOWLING GREEN, Ky. – A Todd County, Kentucky man was charged in a three count indictment this week, with persuading, inducing and coercing two minor females to engage in sexually explicit conduct and with receiving child pornography announced David J. Hale, United States Attorney for the Western District of Kentucky.
Jesse Sanford Williams, age 34, was arrested on March 7, 2014, by federal agents in Kentucky, following an investigation that began in the state of Washington on March 28, 2013. According to an Affidavit attached to a criminal complaint, Williams allegedly blackmailed, by threat, at least two minor, teen girls, in order to receive sexually explicit images of them, by means of multiple Gmail and Yahoo internet accounts. The alleged activities took place between June 2011 and March 2013. Victim-1 lived in Washington, and was 13 years of age at the onset of the Internet threats. Victim-2 lived in Todd County, and was approximately the same age. At all times, Williams concealed his age and identity from the victims. A subpoena of email accounts determined all email accounts shared the same Internet Protocol (IP) address from an account located at Logan Aluminum, a large manufacturing facility located near Russellville, Kentucky. Logan Aluminum officials assisted federal agents in identifying Williams, an employee, as the email account holder, through a comparison of computer login times to company work schedules and attendance records, and by reviewing footage from a video camera located inside the plant and near the computer that Williams used. Williams also faces one count of knowingly receiving child pornography between June 2011 and March 2013.
If convicted at trial, Williams faces no more than a combined 60 year term in prison, a fine of $750,000 and a term of supervised release including up to life.
This case is being prosecuted by Assistant United States Attorney Marisa Ford and is being investigated by the Federal Bureau of Investigation (FBI) Louisville and Seattle Divisions and police in Washington State.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Two Who Conspired in Identity Theft Scheme Sentenced to Nearly Four Years in Federal PrisonRead the Press Release
LOUISVILLE, Ky. – Two Louisville residents were sentenced today by Senior U.S. District Judge Thomas B. Russell to 42 months in prison, for their roles in a conspiracy to commit wire fraud and aggravated identity theft announced David J. Hale, United States Attorney for the Western District of Kentucky.
Darnell Brown, age 28 , and Tierra Beans, age 30, received 18 months for wire fraud, to be served consecutively to 24 months for aggravated identity theft for a total of 42 months in prison followed by a term of supervised release for 3 years and ordered to pay $16,554.58 in restitution.
Brown and Beans admitted in court to using the personal identifier of a real person, to open fraudulent lines of credit at Best Buy and J.C. Penney and thereby defrauded HSBC Bank and GE Capital Bank. The lines of credit were opened in Louisville, Kentucky, to purchase merchandise causing an interstate wire communications. The total loss amount was $17,248.25.
The defendants agreed to forfeit two Apple Ipads, one Best Buy Gift Card ($200), two Olive Garden Gift Cards ($25), on J.C. Penny Gift Card ($350), three J.C. Penny Gift Cards ($500) and various fraudulent identification cards.
This case was prosecuted by Assistant United States Attorney Joshua Judd and was investigated by the United States Secret Service.
Owner of Bankrupt Young Oil Company Guilty of Securities Fraud, Mail Fraud,Failure to File Income Tax Returns, and Illegal Possession of A FirearmRead the Press Release
LOUISVILLE, Ky. – The owner of bankrupt Young Oil Company pleaded guilty today, in United States District Court, to charges in three separate indictments including failure to file an income tax return with the Internal Revenue Service, mail fraud in connection with the solicitation of investor funds for oil drilling partnerships, securities fraud, submitting false statements for the purchase of a firearm, and for the illegal possession of a firearm by a person addicted to controlled substances announced David J. Hale, United States Attorney for the Western District of Kentucky.
Anthony L. Young, 54, of Metcalfe County, Kentucky admitted in court that from November 2007 through December 2008, he fraudulently solicited investments through his company, Young Oil Corporation. According to the plea agreement, Young falsely represented the cost to investors in three separate oil drilling partnerships. Investors believed the $750,000 solicited for each oil well represented the total drilling costs. However, Young admitted to using the majority of the money for other purposes including personal. Also, during this same period, Young, by use of the United States mail, did defraud others, make untrue statements of material fact, and engage in acts, that operated as a fraud and deceit upon investors under programs under Young Oil Corporation with the purchase and sale of a security. Young did this by misrepresenting the total costs for each of the three Prospects and by misrepresenting his actual use of investor money.
Young also admitted that he failed to file federal income tax returns as required by law for calendar years 2005 and 2006. During this time Young received taxable income of $496,000 in 2005, and his tax due was $133,943. In calendar year 2006, Young received taxable income of $1,167,000, and, was therefore legally required to file a federal income tax return. His tax due was $359,485 for 2006.
Young also pleaded guilty today in court to two charges in a third indictment. Young admitted that on June 7, 2010, in Metcalf County, Kentucky, he caused another person to knowingly make a false statement and representation on an ATF Form 4473 in purchasing a .45 caliber pistol from a licensed firearms dealer and that he possessed the Hi-Point, Model JHP, .45 caliber pistol while being a person addicted to controlled substances, including cocaine and oxycodone.
At sentencing, Young faces a combined maximum term of 57 years in prison, a combined maximum fine of $1,200,000 and a three year term of supervised release. Sentencing is scheduled before Senior U.S. District Judge Thomas B. Russell on July 17, 2014, Louisville, Kentucky.
Young was found guilty in 2009, in Franklin County, Kentucky Circuit Court of violating the Kentucky Securities Act and committing fraud.
This case is being prosecuted by Assistant United States Attorney Bryan Calhoun and was investigated by the Kentucky Department of Financial Institutions, Division of Securities, the Internal Revenue Service Criminal Investigation Division, U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Louisville Man Sentenced to 27 Years in Prison for Sexual Abuse of A Minor Under the Age of Seven in the Production of Child PornographyRead the Press Release
LOUISVILLE, Ky – A Louisville man was sentenced by Senior U.S. District Judge Thomas B. Russell, to 27 years in prison and a lifetime of supervised release for sexually abusing a minor under the age of seven during the production of child pornography, today announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the plea agreement, Thomas Evan Middleton, age 50, admitted to sexually abusing a minor female during the creation of pornography, while babysitting the minor at his home on five separate occasions between August 2009 and May 2011.
This case was initially investigated by the Louisiana Attorney General's Office (LAGO) who contacted law enforcement in Louisville, Kentucky regarding a peer-to-peer investigation into Louisiana resident Robert Swan. The LAGO had previously executed a search warrant on Swan’s residence on January 30, 2013. During the review process of Swan’s electronic storage devices the LAGO discovered images of Swan and a then unknown individual engaged in the sexual exploitation of a minor. The unknown man had a cross tattoo on his right middle finger, and was later identified as Thomas Middleton through identifying information located on Swan’s computer. During the course of their investigation, thousands of digital images of child pornography were recovered, including images with Swan and Middleton sexually abusing a 4 to 5 year old female.
On July 24, 2013, a federal search warrant was executed on Middleton’s residence in Kentucky. Several items in the residence appeared to be the same as items observed in some of the sexual abuse images found on Swan’s computer. During the execution of the search warrant, Middleton identified the child victim depicted in the pictures with him.
This case was prosecuted by Assistant United States Attorney A. Spencer McKiness and was investigated by the Federal Bureau of Investigation with assistance from the Louisiana Attorney General’s Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Army Soldier Sentenced in Kentucky on Bribery Charges for Facilitating Thefts of Fuel in AfghanistanRead the Press Release
PADUCAH, Ky. – A U.S. Army soldier was sentenced to serve 12 months and one day in prison for his role in stealing fuel at Forward Operating Base (FOB) Fenty near Jalalabad, Afghanistan.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David J. Hale of the Western District of Kentucky made the announcement after sentencing by U.S. District Court Judge Thomas B. Russell in the Western District of Kentucky.
According to court documents, in May and June 2010, U.S. Army Sergeant Kevin Bilal Abdullah, 40, of Clarksville, Tenn., was involved in overseeing the delivery of fuel from FOB Fenty to other military bases. Abdullah created fraudulent documents called Transportation Movement Requests purporting to authorize the transport of fuel from FOB Fenty to other military bases, even though no legitimate fuel transportation was required. After the trucks were filled with fuel, these fraudulent documents were used by the drivers of the fuel trucks at FOB Fenty’s departure checkpoint to justify the trucks’ departures. In truth, the fuel was simply stolen, and Abdullah and his co-conspirators received payment in cash from a representative of the Afghan trucking company that allegedly stole the fuel.
Abdullah pleaded guilty on Aug. 29, 2013, to receiving payments from a representative of the trucking company in exchange for facilitating the theft of fuel in approximately 25 fuel trucks. He pleaded guilty to conspiracy to commit bribery and to the substantive count of bribery. At sentencing, he was ordered to pay $466,250 in restitution.
Abdullah’s sentencing was the fourth conviction arising from this investigation of fuel thefts at FOB Fenty. On Aug. 3, 2012, Jonathan Hightower, a civilian employee of a military contractor who had conspired with Abdullah and others, pleaded guilty to similar charges. After cooperating with the government, he was sentenced on Oct. 28, 2013, to serve 27 months in prison. On Oct.10, 2012, Christopher Weaver, another conspirator, pleaded guilty to fuel theft charges and, after cooperating with the government, was sentenced on Oct. 28, 2013, to serve 37 months in prison. On Sept. 5, 2013, former Specialist Stephanie Charboneau pleaded guilty, and on Feb. 4, 2014, she was sentenced to serve 87 months in prison. Weaver, Hightower and Charboneau were prosecuted in the District of Colorado.
These cases were investigated by the Special Inspector General for Afghanistan Reconstruction (SIGAR), the Department of the Army - Criminal Investigation Division, the Defense Criminal Investigative Service and the FBI.
The Abdullah case was handled by Special Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section, on detail from SIGAR, and Assistant U.S. Attorney Michael A. Bennett from the Western District of Kentucky.
Bowling Green, Kentucky, Man Guilty of Shipping Firearms InternationallyRead the Press Release
– Firearms were secreted inside video game systems for shipment to foreign addresses
BOWLING GREEN, Ky. – A Bowling Green, Kentucky, man pled guilty in United States District Court today, to a four-count federal Indictment charging him with exporting firearms from the United States announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the Plea Agreement, Adam Bunger, age 34, between June 13, 2013, and August 8, 2013, knowingly exported and sent firearms from the United States. He did so contrary to the laws and regulations of the United States. Specifically, he placed in the United States Mail – parcels that included firearms that had been hidden inside videogame systems. He shipped the firearms to Australia, Sweden, and the United Kingdom. Two of the firearms shipped in foreign commerce had the manufacturer’s serial number removed, obliterated, and altered.
Bunger was not a licensed importer, licensed manufacturer, or licensed dealer of firearms. Nevertheless, he willfully engaged in the business of dealing in firearms. In the course of that conduct, he shipped and transported firearms in foreign commerce as specified above. He also knowingly and willfully delivered packages to a common or contract carrier for transportation and shipment in foreign commerce. The persons receiving the shipments from Bunger were not licensed importers, licensed manufacturers, licensed dealers, or licensed collectors of firearms. Additionally, Bunger did not provide written notice to the carrier that the packages contained firearms or ammunition.
According to an Affidavit attached to a Criminal Complaint, Australian Federal Police contacted a Special Agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives on July 8, 2013, after a forensic examination of a parcel shipped from Bowling Green, Kentucky, revealed two empty magazines, gun parts and a Modelo Super 9mm pistol inside an Xbox game system’s interior cavity. The gun sale was made through a website -- Black Market Reloaded. On July 18, 2013, two international packages were seized from the Bowling Green Post Office and a search warrant revealed a disassembled, Uzi-style pistol having an obliterated serial number contained inside a hollow Xbox console, addressed to an individual in the United Kingdom. The second international package, addressed to an individual in Australia, contained firearm parts for an assault rifle which were concealed inside a DVD player. On August 9, 2013, a federal search warrant was obtained and executed on the other international package seized from the U.S. Post Office branch in Bowling Green. The package, addressed to an individual in Sweden, contained a disassembled Taurus .22 caliber pistol with an obliterated serial number and magazine. The firearm was contained inside a metal computer switching power supply box. Two postal clerks identified the defendant, Adam Bunger, as the individual who attempted to ship the international packages.
Bunger faces a maximum 25-year prison term, a $1,000,000 fine and a three-year period of Supervised Release. Sentencing is scheduled before Chief United States District Judge Joseph H. McKinley, Jr., on May 29, 2014, at 10:00 a.m., in Bowling Green.
Assistant United States Attorney Jo E. Lawless is prosecuting the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), in conjunction with the Australian Federal Police, and with the assistance of the United States Postal Inspection Service, conducted the investigation.
Greenup County, Kentucky, Teen Sentenced to 24 Months for Threatening to Kill A Federal Judge and A Federal ProsecutorRead the Press Release
LONDON, Ky. – A Greenup County, Kentucky, teenager was sentenced to 24 months in prison, after he pleaded guilty this week, in U.S. District Court, to threatening to kill a federal judge and a federal prosecutor, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Michael A. Collins, age 19, was sentenced by U.S. District Judge Gregory Van Tatenhove following a change of plea hearing held yesterday in London, Kentucky, during which Collins pleaded guilty to two of three charges in a federal indictment. As part of the plea agreement, the United States agreed to dismiss count three at sentencing.
Specifically, Collins admitted that on December 10, 2012, while a student at the Appalachian Challenge Academy, located in Harlan, Kentucky, he told a residential counselor that upon graduation he would purchase a gun and kill everyone involved in the prosecution and imprisonment of his father, John Collins. The defendant’s father is currently serving an eleven year prison sentence after pleading guilty to possession of child pornography.
Further, Collins admitted to planning the attacks including the number of weapons and amount of ammunition he would need. A mental evaluation of Collins at the Appalachian Regional Healthcare facility found that the defendant represented a significant risk or harm to others.
The defendant’s father, John Collins was prosecuted by the United States Attorney’s Office for the Eastern District of Kentucky in 2011. Yesterday, Collins admitted in court that he threatened to kill Assistant United States Attorney Jason Denny and U.S. District Judge David Bunning in retaliation of their performance while in their official capacity.
This case was prosecuted by Assistant United States Attorney A. Spencer McKiness and was investigated by the United States Marshals Service.
Owensboro, Kentucky, Man Guilty of Defrauding Elderly Couple of over $200,000 in Retirement SavingsRead the Press Release
– Money was spent on personal expenses including Hummer vehicle and motorcycle
OWENSBORO, Ky. – An Owensboro, Kentucky man pleaded guilty this week in United States District Court to mail fraud in connection with defrauding over $200,000 from an elderly Daviess County, Kentucky, couple and agreed to pay restitution in the amount of $220,000 announced David J. Hale, United States Attorney for the Western District of Kentucky.
Robert K. Gray, age 49, admitted to defrauding the couple of their retirement fund, by making material misrepresentations about an investment opportunity in the defendant’s construction company, after home improvements to the couple’s residence in excess of $300,000 were completed, an amount that is more than double the assessed value of the property.
Specifically, between January 13, 2010, through August 5, 2010, C.R. paid $338,000 to the defendant Robert Gray, and to his brother (not a defendant in the indictment), for renovations to his home which, in 2013, according to the property valuation records kept by the City of Owensboro was valued at $148,000.
Further, between July 10, 2010, and December 17, 2010, Gray is charged with devising a scheme to defraud C.R. and U.R. of their GE retirement fund in the amount of $220,000. Specifically, Gray asked C.R. to invest in his start-up company, Unlimited Constructors, to fund commercial construction projects Gray said the company had in Madisonville, Kentucky and on Highway 54 in Owensboro. Gray promised C.R. a substantial return on his investment, and promised C.R. he would get all of his investment back, with interest, when in truth and in fact, Gray knew Unlimited Constructors did not have construction projects for a shopping center in Madisonville, Kentucky, or for any commercial development on Highway 54 in Owensboro.
It was further part of the scheme to defraud that an Unlimited Constructors bank account was opened by defendant Gray at US Bank on September 27, 2010. According to the indictment, none of the funds obtained from C.R. were used in construction projects in Madisonville or Owensboro. According to bank records, the account was almost entirely funded by checks drawn on C.R.’s retirement fund, made payable to C.R. and U.R. Gray allegedly used the funds to pay for personal expenses and to purchase vehicles including a 2006 Hummer for $25,000 the day after the account was opened, and, approximately two weeks later, to purchase a 2006 Kawasaki motorcycle for $5,000.
If convicted at trial, Gray faced 120 years in prison, a $1,500,000 fine, and a three year period of supervised release. Gray is scheduled for sentencing before Chief Judge Joseph H. McKinley Jr., on May 22, 2014, in U.S. District Court in Owensboro.
This case is being prosecuted by Assistant United States Attorney Marisa Ford, and was investigated by the Federal Bureau of Investigation (FBI).
Justice Department Highlights Efforts to Combat Stolen Identity Tax Refund FraudRead the Press Release
WASHINGTON – Today, the Justice Department announced the results of its ongoing efforts to combat tax refund fraud that involves identity theft. The Tax Division, in conjunction with the Internal Revenue Service (IRS) and U.S. Attorneys’ Offices (USAOs) nationwide, has prioritized the investigation and prosecution of individuals who engage in stolen identity refund fraud (SIRF). According to the IRS, from 2008 through May 2012, the IRS identified more than 550,000 taxpayers who have had their identities stolen for the purpose of claiming false refunds in their names. In fiscal year 2013, the department filed more than 580 indictments or informations charging more than 880 defendants with SIRF-related crimes.
SIRF is the use of stolen or otherwise wrongfully acquired personal identification information to file a fraudulent claim with the IRS for a tax refund. These crimes occur when a social security number, or list of numbers, is stolen or bought; a false tax return showing a refund due is filed electronically, usually at the beginning of filing season before the legitimate taxpayer has filed for the year; and the refund is loaded to a prepaid card, sent to a bank account or mailed to an address accessible by those involved in the scheme.
The actual implementation of SIRF schemes is often complex to carry out. In an increasing number of cases, the identities are stolen or bought in one place; the returns are electronically filed from another location, often through difficult to trace Wi-Fi connections; refunds are directed to a distant location; checks are cashed in yet another location; and the currency then moves again.
“The Department of Justice is committed to constant vigilance in investigating and prosecuting SIRF crimes,” said Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division. “Too often the victims of identity theft are the most vulnerable in our communities – those whose identities are stolen from medical services or nursing homes, or grieving families who learn that the identities of deceased loved ones have been fraudulently used – and all honest taxpayers are victims when wrongful refund claims are paid out. We are determined to work with the IRS to stop this crime at the door, and to seek the conviction and punishment of these criminals.”
Some of the prosecutions from 2013 that resulted in significant prison sentences for SIRF crimes include:
- Vernon Harrison, a corrupt U.S. Postal Service mail carrier, was sentenced to serve 111 months in prison in October 2013. According to court documents, tax refunds were placed on debit cards and mailed to addresses on Harrison’s postal route in Montgomery, Ala., which he then stole from the mail and provided to a co-conspirator in exchange for cash.
- Lea’Tice Phillips worked for an Alabama state agency and had access to databases that contained personal identifying information. As alleged in court documents, Phillips conspired with Antoinette Djonret and others to file false tax returns using identities stolen from the database. In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds. Djonret was sentenced in February 2013 to serve 12 years in prison, and Phillips was sentenced in September 2013 to serve 94 months in prison.
- Angela Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge, La. According to court documents, Myers electronically filed false claims for refunds using the names and social security numbers of identity theft victims, many of whom were nursing home patients. Myers was sentenced to serve 132 months in prison in July 2013.
- Leslie Brewster, a tax return preparer from Durham, N.C., was sentenced to serve 70 months in prison. According to court documents, Brewster was the manager of a branch office of a tax preparation franchise called Nothing But Taxes, and purchased personal identifying information to claim false dependents on tax returns she prepared for clients.
- Quentin Collick and Deatrice Williams were sentenced in November 2013 to serve 85 and 51 months in prison, respectively. Corey Thompson, a co-conspirator, was sentenced to serve 30 months in jail. Williams worked for a debt collection company and stole the identities of a number of individuals, then provided the stolen information to Collick, her son-in-law. Thompson worked as an independent contractor for a cable company installing cable and internet access for customers. To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers' internet service, and, along with Collick, filed false tax returns using the customers' internet access. Thompson and Collick then directed the fraudulent tax refunds to be placed on pre-paid debit cards.
In 2014, the department has continued to pursue numerous prosecutions against SIRF criminals. On Jan. 24, 2014, a jury convicted current and former corrections officers of identity theft and tax fraud; according to court documents and evidence presented at trial, the pair accessed a state prison database and used the stolen identity information to file false tax returns. A check casher was sentenced to 37 months in prison on Jan. 16, 2014, for cashing refund checks in the names of individuals who did not authorize him to cash the checks, according to court documents. A nursing home employee was convicted by a jury on Jan. 14, 2014, of conspiracy, aggravated identity theft and other SIRF-related crimes; according to court documents and the evidence presented at trial, she stole the identity information of nursing home patients and used that information to create false tax returns. An Alabama man pleaded guilty on Jan. 13, 2014, for his role in a SIRF fraud. According to court documents, he obtained stolen identities from an Alabama state employee, used those identities to file false tax returns, and recruited a bank employee to assist him in having the false tax refunds deposited into various bank accounts. A social worker pleaded guilty on Jan. 10, 2014, to identity theft and tax fraud charges. According to court documents, she illegally obtained the identifying information of her clients – minors and disabled adults who may have been abused or neglected – and sold that information to others who used the stolen identities to claim as false dependents on fraudulent tax returns they prepared.
"We're fighting identity theft head-on at the IRS and making substantial progress with the help of the Justice Department and local law enforcement," said Commissioner John Koskinen for the IRS. "We're stopping more identity theft before these fraudulent refunds go out the door. The IRS initiated nearly 1,500 identity theft related criminal investigations last year, an increase of 66 percent over 2012. Fighting fraud is an ongoing battle as identity thieves continue to create new ways of stealing personal information. The IRS is continually reviewing our policies to strengthen our systems, minimize the incidence of identity theft and help victims." The sentences imposed against those committing SIRF crimes are significant and reflect the seriousness of these crimes. The Justice Department is committed to investigating and prosecuting tax refund fraud that involves identity theft, and will continue to work with the IRS, FBI, U.S. Secret Service, U.S. Postal Inspection Service, other federal law enforcement agencies as well as state and local law enforcement agencies to combat SIRF-related crimes. Each U.S. Attorney’s Office has a point of contact to coordinate SIRF matters for its district.
The IRS has taken steps to detect and prevent the fraud before it occurs. For example, the IRS has designed new software filters to spot false returns before they are processed and before a refund is issued. The IRS has also expanded efforts to place identity-theft indicators on taxpayer accounts to track and manage identity-theft incidents. For information from the IRS on how to protect your identity and what to do if you are a victim of identity theft, please visit the IRS’s Identity Protection webpage.
More information on the department’s enforcement efforts is available on the Tax Division’s website, as are links to identity theft information and resources.
Nelson County, Kentucky, Felon Guilty of Possession with the Intent to Distribute 400 Pounds of MarijuanaRead the Press Release
LOUISVILLE, Ky. – A Nelson County, Kentucky, felon pleaded guilty in United States District Court today to a single count indictment charging him with possession and intent to distribute marijuana announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to information presented in court, Joseph P. O’Bryan, age 45, attempted to sell 400 pounds of marijuana for $320,000 to a law enforcement confidential informant on October 8, 2013. At the time of the sale, defendant O’Bryan was on supervised release for a prior, federal felony conviction. According to conduct stipulated in the plea agreement, O’Bryan will forfeit $22,100 to the United States for money received during the sale of 22 pounds of marijuana to a law enforcement confidential informant on February 28, 2013.
If convicted at trial, defendant O’Bryan would face a mandatory minimum sentence of five years in prison, a maximum sentence of 40 years in prison, and a period of supervised release up to and including life.
O’Bryan is scheduled for sentencing before Senior Judge Charles R. Simpson III, on Friday, May 16, 2014 at 3:00pm in Louisville.
This case is being prosecuted by Assistant United States Attorney Stephanie Zimdahl and was investigated by the United States Drug Enforcement Administration (DEA).
Louisville, Kentucky, Man Sentenced to 22 ½ Years for Producing Child PornographyRead the Press Release
– Sentencing resolved separate pending state court child sexual abuse case
LOUISVILLE, Ky. - A Louisville, Kentucky, man was sentenced to 22 ½ years today, by Senior United States District Judge Thomas B. Russell, for violating federal child pornography laws, namely, the production of child pornography, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Jamar Garrett a/k/a Darnell Hamilton, age 35, admitted in court that during June through July, 2012, he represented himself as Darnell Hamilton and lived in Jefferson County, Kentucky. During that time period, he rented a room in a home (where a nine-year-old female child also lived). On July 1, 2012, Garrett engaged in sexually explicit conduct with the nine-year-old female child. He used his cellular telephone to record the sexual activity in the form of a video. Approximately one week later, an adult living in the home viewed the contents of the cellular telephone, confronted the child, and called the police to report the matter.
According to court records, Garrett fled the jurisdiction. However, Louisville Metro Police obtained a federal arrest warrant for Garrett, which was recorded in the Federal Bureau of Investigation’s National Crime Information Center (NCIC). Law enforcement officials arrested Garrett on the outstanding warrant when he was stopped for a traffic violation in Toledo, Ohio.
Under the terms of the Plea Agreement, which called for a 22½ year term of imprisonment followed by a life term of Supervised Release, Garrett also pleaded guilty in Jefferson Circuit Court to sexually abusing a six-year-old child. The Jefferson Circuit Court case involved a different victim than the federal case. The state court sentence will run concurrently with the federal sentence.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Louisville Metro Police Department’s Crimes Against Children Unit, in conjunction with the Federal Bureau of Investigation, conducted the investigation as part of Kentucky’s Internet Crimes Against Children Task Force.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Army Soldier Pleads Guilty for Role in Stealing Fuel in AfghanistanRead the Press Release
LOUISVILLE, Ky. – U.S. Army Sergeant Albert Kelly III, 28, of Fort Knox, Ky., pleaded guilty today to theft charges for his role in the theft of fuel at Forward Operating Base (FOB) Salerno in Afghanistan.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and David J. Hale, U.S. Attorney for the Western District of Kentucky made the announcement.
The plea was entered in federal court in Louisville, Ky., before Magistrate Judge James D. Moyer of the Western District of Kentucky. Kelly faces a maximum penalty of 10 years in prison and a restitution order of $100,000 when he is sentenced on May 22, 2014, by U.S. District Judge John G. Heyburn II.
"The theft of critical military supplies in Afghanistan jeopardizes mission readiness and potentially the safety of our soldiers," stated U.S. Attorney Hale. "We will continue to work with our military and law enforcement partners to investigate and prosecute those responsible for these types of crimes."
According to court records, Kelly was a soldier in the United States Army and was assigned to FOB Salerno from January 2011 to January 2012. For most of that time, Kelly served as a specialist, and his duties included overseeing the delivery of fuel into FOB Salerno. Typically, the fuel was brought into the base by Afghan trucking companies driven by Afghan nationals. Kelly’s duties included verifying the amounts of the fuel that were downloaded at FOB Salerno and preparing and certifying documents that accounted for the fuel that was downloaded.
From in or about November 2011 through January 2012, Kelly diverted and permitted the diversion of fuel delivery trucks from FOB Salerno to other locations, where the trucks would then be downloaded and the fuel stolen. To conceal this diversion, he falsely certified that the diverted fuel was in fact delivered and downloaded at FOB Salerno.
In exchange for assisting the fuel theft, Kelly received approximately $57,000 from the Afghan trucking company for diverting approximately 25,000 gallons of fuel. The loss to the government was approximately $100,000.
This case was investigated by the Special Inspector General for Afghanistan Reconstruction (SIGAR). The prosecution is being handled by Special Trial Attorney Mark H. Dubester, on detail to the Criminal Division’s Fraud Section from SIGAR, and Assistant United States Attorney Michael A. Bennett of the Western District of Kentucky.
W.R. Grace Pays over $63 Million Toward Cleanup and Restoration of Hazardous Waste Sites in Communities Across the CountryRead the Press Release
– Settlement includes two Kentucky Superfund sites
WASHINGTON – W.R. Grace & Co, based in Columbia, Md., paid over $63 million to the U.S. government under its bankruptcy plan of reorganization to resolve claims for environmental cleanups at approximately 39 sites in 21 states, the U.S. Department of Justice and U.S. Environmental Protection Agency (EPA) announced today.
“Communities across the United States will benefit from this payment of present and future cleanup costs,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division. “The Justice Department is committed to holding polluters responsible for their environmental legacy, and won’t just walk away leaving taxpayers to pick up the tab.”
“Cleaning up toxic pollution in communities is the responsibility of the company that created it, not the American taxpayer,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “This money will be used to clean up contaminated sites and to make a tangible difference for local communities across the country.”
W.R. Grace’s payment includes approximately $54 million for the EPA. The company agreed to pay another $9 million to other federal agencies, including the U.S. Department of Interior and the U.S. Army.
W.R. Grace, a global supplier of specialty chemicals, and 61 affiliated companies filed for bankruptcy in April 2001. In 2003, EPA filed claims against the company to recover past and future cleanup costs at sites contaminated by asbestos and other hazardous substances.
Numerous agreements to resolve the agency’s environmental liability claims against the company and its affiliates were negotiated as part of the company’s bankruptcy proceedings between April 2008 and February 2013. The company continues to be responsible for all of the sites it owns or operates and for any additional sites that were not known or resolved under the earlier settlements.
W.R. Grace’s liability for asbestos contamination in the town of Libby, Mont., was addressed in a separate June 2008 settlement that resulted in a payment of $250 million to EPA. W.R. Grace continues to be responsible for addressing cleanup at the Libby Mine.
The approximately $54 million payment to EPA will reimburse the agency for cleanup costs or provide funds for future cleanup at the following Superfund sites:
Acton Plant - Acton, Mass.
Amber Oil - Milwaukee, Wis.
Aqua Tech - Greer, S.C.
Big Tex Site - San Antonio, Texas
Blackburn and Union Privileges - Walpole, Mass.
Cambridge, Plant, Cambridge, Mass.
Casmalia Resources - Santa Barbara, Calif.
Central Chemical - Hagerstown, Md.
Galaxy/Spectron - Elkton, Md.
Green River - Maceo, Ky.
Harrington Tools - Glendale, Calif.
Intermountain Insulation - Salt Lake City, Utah
IWI Site - Summit, Ill.
Li Tungsten - Glen Cove, N.Y.
Malone Services Co. - Texas County, Texas
Massachusetts Military Reservation (MMR) – Barnstable County, Mass.
N-Forcer Site - Dearborn, Mich.
Operating Industries, Inc. - Monterey Park, Calif.
R & H Oil/Tropicana - San Antonio, Texas
RAMP Industries - Denver, Colo.
Reclamation Oil - Detroit, Mich.
Robinson Insulation - Minot, N.D.
Solvents Recovery Service of NE - Southington, Conn.
Vermiculite Exfoliation Site – Nashville, Tenn.
Vermiculite Expansion Site – High Point, N.C.
Vermiculite Intermountain - Salt Lake City, Utah
Vermiculite Northwest - Spokane, Wash.
Watson Johnson LF - Richland Township, Pa.
Wells G & H (Source & Central Areas) - Woburn, Mass.
Western Minerals Processing - Denver, Colo.
Western Minerals Products - Minneapolis, Minn.
W.R. Grace – Weedsport, N.Y.
Zonolite - Wilder, Ky.
Zonolite/W.R. Grace – Easthampton, Mass.
Zonolite - Prince George’s Co., Md.
Zonolite - Hamilton Township, N.J.
Zonolite - Ellwood City, Pa.
Zonolite - New Castle, Pa.
Zonolite Road – Atlanta, Ga.More information on W.R. Grace’s payments to EPA under their plan of reorganization: http://www2.epa.gov/enforcement/case-summary-epa-receives-over-54-million-wr-grace-bankruptcy.
More information on Cleanup Enforcement: http://www2.epa.gov/enforcement/waste-chemical-and-cleanup-enforcement#cleanup.
Louisville Based Tobacco Wholesaler Sentenced to 18 Months for Role in Contraband Cigarette TradeRead the Press Release
LOUISVILLE, KY - A Louisville based tobacco wholesaler and retailer was sentenced in U.S. District Court yesterday, by Chief District Judge Joseph H. McKinley, Jr., to 18 months in prison followed by two years of supervised release for his role in a scheme that defrauded the Commonwealth of Kentucky of excise tax returns totaling more than $2 million announced David J. Hale, United States Attorney for the Western District of Kentucky.
Pedro “Peter” Bello, age 43, of Miami, Florida, pleaded guilty to conspiracy to commit wire fraud on May 30, 2013. According to the plea agreement, between April 5, 2007 and December 1, 2009, Bello, a/k/a Peter Bello, d/b/a, GT Northeast of Indiana/Kentucky, conspired with Israel Chavez, both of whom were licensees with the Kentucky Department of Revenue, Excise Tax Division, to deprive Kentucky of excise tax revenues. Chavez was the owner of Chavez, Inc., d/b/a, Cigarettes Direct to You (CD2U). Bello and Chavez, created fraudulent cigarette invoices for the sale of cigarettes to Chavez's business in Louisville, and made the invoices appear as if the cigarettes in question had been sold and shipped from an out of state vendor - specifically, GT Northeast of St. Louis, a business not licensed by Kentucky tax authorities, when, in fact, the cigarettes had been sold by Bello to Chavez, both of whom were license holders and therefore payment of taxes were due at the time the cigarettes were transferred.
Chavez was sentenced on December 13, 2013 to 12 months and one day in prison and agreed to restitution in the amount of $2,090,571.00 to the Kentucky Department of Revenue, from $3,214,035.66 he agreed to forfeit to the United States. Further, Chavez agreed to forfeit 10,842,192 tobacco products and tax stamps valued at $108,000 which were returned to the Kentucky Department of Revenue.
"This ATF investigation included the Kentucky Attorney General's Office of Criminal Investigations, the Louisville Metro Police Department, the U.S. Postal Inspection Service and the U.S. Internal Revenue Service. In addition, coordination with various states’ revenue/regulatory agencies has led to the collection of over $40 million in state excise taxes previously lost due to these illicit operations," stated ATF Special Agent in Charge Stuart Lowrey.
This case is being prosecuted by Assistant United States Attorneys Randy Ream and Amanda Gregory, and the civil forfeiture case was prosecuted by Assistant United States Attorney Amy Sullivan. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the United States Postal Inspection Service.
Campbellsville Man Sentenced to 15 Years in Prison for Distributing and Possessing Child PornographyRead the Press Release
– Defendant had prior child pornography conviction in Massachusetts
LOUISVILLE, Ky. – A Campbellsville man who previously pled guilty to violating federal child exploitation laws, was sentenced to 15 years in prison, followed by 15 years of supervised release yesterday, by Chief United States District Court Judge Joseph H. McKinley, Jr., announced David J. Hale, United States Attorney for the Western District of Kentucky.
Michael William Bolter, age 42, pleaded guilty to a two-count Indictment on November 15, 2013. The Indictment charged him with distributing and possessing child pornography. Bolter had a 2001 child pornography conviction in Bristol Superior Court of Massachusetts.
While working online in an undercover capacity on December 19, 2012, a Deputy Sheriff in Taylor County observed an IP address for a computer that had been sharing images of child pornography. The Deputy Sheriff downloaded numerous files of child pornography from the computer with the previously-identified IP address. He obtained and executed a state search warrant (on January 29, 2013), at the physical address associated with the IP address during which law enforcement officials seized a Toshiba laptop.
Law enforcement officials identified Michael William Bolter as the person using the computer to trade child pornography. During an interview conducted simultaneously with execution of the search warrant, Bolter admitted that child pornography images would be on his computer. Subsequent forensic examination of the computer by the Federal Bureau of Investigation revealed approximately 3,000 still images and 50 movie files containing child pornography. Many of the files were recovered from a folder labeled AMy shared folder@ within a peer-to-peer file sharing program on the Toshiba laptop.
Assistant U. S. Attorney Jo E. Lawless prosecuted the case. The Taylor County Sheriff’s Department and Louisville Division of the Federal Bureau of Investigation (both members of the Kentucky Internet Crimes Against Children Task Force), conducted the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab.
Owners of Durable Medical Equipment Companies Sentenced to 54 Months in Prison for Their Roles in A Multi-Million Dollar Health Care Fraud SchemeRead the Press Release
– Operated sham medical supply companies in Louisville
– Supplies billed to Medicare included deceased patientsLOUISVILLE, KY – The former owners of two, now defunct durable medical equipment companies were sentenced to 54 months in prison, and ordered to pay $1,940,043.84 in restitution, by U.S. District Judge John G. Heyburn II, for conspiracy, health care fraud, submitting false claims and wire fraud announced David J. Hale, United State Attorney for the Western District of Kentucky.
Yunior Lopez, age 36, of Miami, Florida and Arturo Esquivel, age 42, of Hialeah, Florida, through their corporations, Universal of Work Services and Steel Quality Medical, submitted false and fraudulent claims totaling approximately $4 million, to Medicare Services, for products which were not authorized and were not provided to patients. Between September 2007 through November 2008, Lopez and Esquivel submitted claims on behalf of Florida patients, living and deceased, who were purportedly treated by Kentucky physicians, when in fact neither the patients nor the physicians had any knowledge of one another.
Moreover, investigators learned that the products, including surgical dressings that were billed to Medicare, were never provided by Universal of Work Services and Steel Quality. Search warrants executed on Universal of Work Services located on Bishops Lane, and Steel Quality Services, Inc. located on Envoy Circle, found both businesses were almost devoid of any products it claimed to have been providing. Further, Lopez and Esquivel concealed their ownership in the companies by enlisting “nominee” owners. Lopez and Esquivel were charged in a 13 count federal indictment on August 1, 2011, and were sentenced Friday, January 17, 2014.
The case was prosecuted by Assistant United States Attorney Lettricea Jefferson-Webb, and it was investigated by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.
Leitchfield, Kentucky Man Sentenced to Ten Years in Prison for Possession and Distribution of Child Pornography ImagesRead the Press Release
OWENSBORO, Ky. - A Leitchfield, Kentucky man was sentenced to ten years in prison, followed by ten years of supervised release today, in United States District Court, before Chief District Judge Joseph H. McKinley Jr., after pleading guilty to violating federal child pornography laws including the possession and distribution of child pornography announced David J. Hale, United States Attorney for the Western District of Kentucky.
Michael Brandon Thompson, age 29, admitted in court to using a peer to peer file sharing network to allow others to download images of child pornography between July 18, 2011 and September 2, 2011. According to the factual basis found in an Affidavit attached to a Criminal Complaint, a detective with the Colorado Springs Police Department, utilizing the peer-to-peer file sharing network downloaded several password-protected files from Thompson. During the download, the detective was able to preview approximately 300 video files containing images of children engaged in sexually explicit conduct. The Colorado law enforcement official forwarded the lead to the Kentucky State Police who executed a state search warrant on Thompson’s home. They seized computer equipment and storage devices for digital media. A forensic examination of those items revealed tens of thousands of videos and still images of child pornography, including the depictions of infants being sexually abused.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Kentucky State Police conducted the investigation through Kentucky’s Internet Crimes Against Children “ICAC” task force.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Oil Well Operators in Hart County, Kentucky Sentenced for Violations of the Safe Drinking Water ActRead the Press Release
BOWLING GREEN, Ky. – Two oil well operators in Hart County, and Logsdon Valley Oil Co. Inc., were sentenced today in United States District Court by Senior Judge Joseph H. McKinley Jr., for continued violations of the Safe Drinking Water Act, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Charles L. Stinson, 75, of Horse Cave, Kentucky, and Ralph Dowell, 75, of Edmonton, Kentucky, operators of Logsdon Valley Oil Co. Inc., were sentenced to two years’ probation. Stinson and Logsdon Valley Oil Co. Inc., were ordered to pay fines for the continued conspiracy to inject fluids, without a permit, into sinkholes and wells, located in Hart County, Kentucky, from March 13, 2008 through July 18, 2012, in violation of the Safe Drinking Water Act.
According to the plea agreement, Stinson and Logsdon Valley Oil Co. Inc., agreed to a fine of $45,000 to be paid at sentencing. According to the terms, Stinson was to pay the fine personally, with $25,000 paid to the Commonwealth of Kentucky, $10,000 to the Environmental Protection Agency, and $10,000 to the United States. Also, as part of the terms, Stinson agreed to provide adequate documentation to EPA that the Stinson #6 (the well used for illegal injection) is plugged and abandoned in such a manner that protects underground sources of drinking water from contamination.
Stinson and Dowell were charged in an eight count federal Superseding Indictment, on August 15, 2012, with conspiring to violate the Safe Drinking Water Act. They pleaded guilty to violating a requirement of an applicable underground injection control program. Specifically, they configured piping to inject produced brine water (fluids brought to the surface in connection with oil production) from the tank battery to sinkholes, and injected produced brine water into a sinkhole, and conveyed fluids into sinkholes, in violation of the Safe Drinking Water Act, Title 42, United States Code, Section 300h-2(b)(2) and Title 40, Code of Federal Regulations, Section 144.11.
In furtherance of the conspiracy, on May 24, 2010, the defendants improperly conveyed fluids into a sinkhole at the Carter-Cheney (McGee) lease; and on May 24, 2010, they improperly conveyed fluids into sinkholes on Payton #7 East lease, both located in Hart County, Kentucky.
“America’s environmental laws are designed to protect clean and safe water sources,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in Kentucky. “The defendants ignored orders to stop discharging hazardous wastewater into a nearby sinkhole, thereby threatening groundwater quality by allowing harmful materials to enter below-ground aquifers. Today’s sentencing demonstrates that EPA and its partner agencies will actively pursue those who flout environmental laws designed to protect the public.”
The case was prosecuted by Assistant United States Attorney Joshua Judd, and it was investigated by the United States Environmental Protection Agency/Criminal Investigations Division and the Kentucky Department of Environmental Protection.
Louisville Felon Guilty of Bank Fraud and Illegal Possession of A FirearmRead the Press Release
– Accomplices cashed more than 300 counterfeit checks totaling $200,000
– 70 area business were affectedLOUISVILLE, Ky. – A Louisville felon pleaded guilty, in United States District Court this week, to making more than 300 counterfeit checks totaling over $200,000 and recruiting 15 co-conspirators to pass the counterfeit checks at businesses and financial institutions in Jefferson County and the surrounding area announced David J. Hale, United States Attorney for the Western District of Kentucky.
Phillip Walker, age 40, pleaded guilty to 26 charges in two federal indictments including one count of conspiracy, 19 counts of bank fraud, and one count of possession of a firearm by a convicted felon. According to the plea agreement, Walker admitted from July 2011 through August 2013, that he manufactured approximately 300 counterfeit checks totaling over $200,000. Walker recruited approximately 15 co-conspirators, to pass the checks and would split the proceeds of the checks with the co-conspirators after the checks were successfully negotiated. Walker also caused an unnamed co-defendant to open bank accounts at Your Community Bank and U.S. Bank for the purpose of negotiating counterfeit checks. During the course of the fraud more than 70 area retail outlets were affected. Walker made the counterfeit checks utilizing a computer and two printers, at his home located on West Kentucky Street in Louisville. In furtherance of the crime, Walker admitted to buying stolen driver’s licenses or state identification cards and would make the counterfeit check payable to that person’s name. Walker would then attempt to recruit people who looked similar to the photo of the person on the stolen driver’s license or state identification card to cash the counterfeit check. Further, on August 16, 2013, in Jefferson County, Walker knowingly possessed an American Tactical C45 pistol and eight rounds of .45 caliber ammunition, as well as numerous rounds of assorted ammunition. Walker had previously been convicted of a crime punishable by a term of imprisonment exceeding one year.
If convicted at trial, Walker faced a combined maximum sentence of 325 years, a fine of $9.5 million and a five year term of supervised release.
This case is being prosecuted by Assistant United States Attorney Bryan R. Calhoun and Special Assistant Attorney Sungtae Kang and is being investigated by the United States Secret Service, the Louisville Metro Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Louisville Man Sentenced to 20 Years in Prison for Online Enticement of A Minor and Production of Child PornographyRead the Press Release
LOUISVILLE, Ky. – A Louisville Man who pleaded guilty to violating federal child exploitation laws, was sentenced to 20 years in prison, followed by 12 years of supervised release this week, by Senior U.S. District Court Judge Charles R. Simpson, III, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Marvin Duane Monk, age 46, Monk pleaded guilty to a two-count Indictment returned by a federal grand jury on October 2, 2012. Monk was previously charged in a September 6, 2012, Criminal Complaint.
According to court records, on August 19, 2012, Monk’s spouse discovered that he had been engaging in sexual activities with her minor daughter in their Louisville residence. Monk left the residence in Louisville, and moved to a hotel in Clark County, Indiana. Shortly thereafter, he took the minor from Louisville to Indiana with him. Not knowing where her daughter was, the mother contacted the Louisville Metro Police Department and filed a missing person report. She also filed for, and received, an Emergency Protection Order (EPO) against Monk in Jefferson County, Kentucky. The EPO included an order that Monk have no contact with either his wife or the minor stepdaughter.
Two days later, the mother learned that Monk and her daughter were staying at a motel in Clarksville, Indiana. Clark County Sheriff’s deputies were dispatched to the motel where they found Monk and the minor. Monk subsequently admitted to law enforcement officers that he brought his stepdaughter to Indiana from her home in Louisville. Monk also admitted to engaging in a sexual relationship with the minor, and to recording the sexual activity. The Clark County Sheriff’s Department executed a search warrant on the motel room. Evidence seized included a video recorder, video tapes, and cellular telephones.
Assistant U. S. Attorney Jo E. Lawless prosecuted the case. The Louisville Metro Police Department Crimes Against Children Unit, Louisville Division of the FBI, and Clark County (Indiana) Sheriff’s Department, conducted the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab.
Jefferson County, Kentucky, Man Guilty of Multiple Bank RobberiesRead the Press Release
LOUISVILLE, Ky. – A Louisville man pleaded guilty today in United States District Court to robbing four banks located in Jefferson County, Kentucky, during a two week period, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Robert Scott Manley, age 47, admitted to using force, violence, and intimidation when he robbed four banks in Jefferson County between December 20, 2012 and December 31, 2012. Count 1, of the indictment, charged Manley with taking $2,170.00 from the PNC Bank, located at 3910 Taylorsville Road, on December 20, 2012. Count 2, of the indictment, charged Manley with taking approximately $3,580.00 from the Chase Bank, located at 8120 New LaGrange Road, on December 24, 2012. Count 3, of the indictment, charged Manley with taking approximately $1,510.00 from the BB&T Bank, located at 10403 Dixie Highway on December 27, 2012, and Count 4 charged Manley with taking approximately $4,750.00 from the River City Bank, located at 2501 Bardstown Road. At the time of the robberies, all deposits were insured by the Federal Deposit Insurance Corporation (FDIC).
If convicted at trial, Manley faced a sentence of no more than 80 years in federal prison, a fine of $1,000,000., and a period of no more than five years of supervised release. Manley was arrested by U.S. Marshals on January 2, 2013.
This case is being prosecuted by Assistant United States Attorney Randy Ream and was investigated by Louisville Metro Police and the Federal Bureau of Investigation (FBI).
Southern Indiana Man Listed on the National Registry of Sex Offenders Sentenced to 10 Years in Prison for Possession of Child PornographyRead the Press Release
LOUISVILLE, Ky. – A Georgetown, Indiana man listed on the National Registry of Sex Offenders was sentenced in United States District Court on January 9, 2014, by U.S. District Judge John G. Heyburn II, to 10 years in prison followed by a lifetime of supervised release, for possession of child pornography announced David J. Hale, U.S. Attorney for the Western District of Kentucky.
James W. Dotts, Jr., 38, was subject to supervised release from the Southern District of Indiana, which began on February 13, 2012, as a result of a conviction for possession of child pornography. On February 12, 2013, Dotts admitted to downloading over 500 computer image files and approximately 12 movie files depicting child pornography onto a computer at his employer's facility located in Louisville, Kentucky. He admitted to defeating his employer's security software, downloading the images from the Internet, saving the images to the computer, and transferring the images to a USB thumb drive that he carried back and forth from home to his job site. Dotts admitted that he began downloading adult pornography in June 2012, then began downloading child pornography in January 2013.
A search of Dotts' locker at his place of employment resulted in the discovery of four high-capacity thumb drives. Dotts admitted that the thumb drives contained images of non-nude children, which he had downloaded from the Internet. The USB drives and the computers used to download the child pornography were seized by the FBI for forensic analysis. The forensic analysis revealed 5 images of child pornography located on one of the computers and approximately 270 images of child erotica. At the time those files were downloaded, Dotts was the only employee with access to the computers.
This case was prosecuted by Assistant United States Attorney A. Spencer McKiness and was investigated by the Federal Bureau of Investigation (FBI).
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Oldham County Man Sentenced to 18 Months in Prison for Bank FraudRead the Press Release
– Ordered to pay $114,936.98 in restitution
LOUISVILLE, Ky. – An Oldham County, Kentucky man was sentenced to 18 months in prison and ordered to pay a $114,936.98 in restitution yesterday, by U.S. District Court Judge John G. Heyburn II, for defrauding five banks located in Oldham County announced David J. Hale, United States Attorney for the Western District of Kentucky.
James Distler, age 45, pleaded guilty to a five count federal grand jury indictment on September 20, 2013. The charges included three counts of bank fraud and two counts of wire fraud.
In court, Distler admitted to opening bank accounts, under false names, between August 2009 and November 2011, to negotiate and attempt to negotiate worthless checks totaling nearly $115,000.
According to the plea agreement, between August and December of 2009 Distler opened a bank account in the name of Air Vegas at Bank of America in Oldham County, Kentucky, and then knowingly used the bank account to negotiate and attempt to negotiate worthless checks totaling $78,845. Between June and July of 2010 Distler opened a bank account in the name of Express Jet at U.S. Bank in Oldham County and then knowingly used U.S. Bank's check processing company, Elavon, Inc., to negotiate and attempt to negotiate worthless checks totaling $40,778.51. During the course of the scheme he caused an interstate wire communication between Knoxville, Tennessee, and Oldham County, Kentucky. Then, between July and August of 2010 Distler opened a bank account in the name of Express Jet at Capital One Bank in Oldham County, and then knowingly used the bank account to negotiate and attempt to negotiate worthless checks totaling $18,302. Between July and August of 2010 James Distler opened a bank account in the name of Express Jet at Old National Bank in Oldham County, and then knowingly used the bank account to negotiate and attempt to negotiate worthless checks totaling $16,756. Lastly, between November 2010 and January of 2011 Distler opened a bank account in the name of Ejet Solutions at PNC Bank in the name of Ejet Solutions and then used the account to negotiate payments processed by Erentpayment, LLC, to negotiate and attempt to negotiate worthless rent payments totaling $16,380. During the course of the scheme he caused an interstate wire communication between Denver, Colorado, and Oldham County, Kentucky.
This case was prosecuted by Assistant United States Attorney Bryan Calhoun and was investigated by the United States Secret Service.
Former HealthEssentials Solutions Inc. Executives to Pay More Than $1 Million to Resolve Allegations of Submitting False Claims to Federal Health Care ProgramRead the Press Release
WASHINGTON – Michael R. Barr, former chief executive officer of Louisville, Kentucky-based HealthEssentials Solutions Inc., has paid $1 million to resolve allegations that he knowingly caused HealthEssentials to submit false claims to Medicare between 1999 and 2004, the Justice Department announced today. Norman J. Pfaadt, HealthEssentials’ former chief financial officer, also agreed to pay $20,000 to resolve similar allegations. HealthEssentials provided primary medical care to patients in nursing facilities, assisted living facilities and other settings from 1998 until it filed for bankruptcy and ceased operations in 2005. Barr founded HealthEssentials and served as its president, chief executive and board chairman. Pfaadt served as HealthEssentials’ senior vice president and chief financial officer.
“Healthcare executives should lead by example and create cultures of compliance within their companies, not pressure their employees to cheat the taxpayers,” said Assistant Attorney General for the Civil Division Stuart F. Delery. “We will continue to hold health care executives personally accountable for their dealings with Medicare.”
“Pursuing health care fraud is a priority of this office and the Department of Justice,” said U.S. Attorney for the Western District of Kentucky David J. Hale. “We will continue to work with the Department of Health and Human Services and the public to ensure that fraudulent claims are investigated and those responsible are required to pay.”
In March 2008, HealthEssentials pleaded guilty to submitting false statements to Medicare relating to services it provided to patients in assisted living facilities and entered into a civil settlement with the government. In May 2011, HealthEssentials’ former director of billing, Karen Stone, pleaded guilty for her role in the company’s billing scheme.
The settlement announced today resolves Barr’s and Pfaadt’s alleged liability under the False Claims Act for their roles in HealthEssentials’ false billings. The government alleged that, between 1999 and 2004, HealthEssentials billed for services that were inflated or not medically necessary and that Barr and Pfaadt pressured HealthEssentials employees to inflate the company’s billings, despite having been advised by attorneys and others that doing so would be improper. The government further alleged that Barr pressured HealthEssentials employees to conduct special medical assessments on patients, without regard to whether the patients required the assessments, solely to increase the amount that HealthEssentials could bill for the visits. As part of the settlement, Barr has agreed to a three-year period of exclusion from participating in federally funded health care programs.
“Executives cheating taxpayers and patients – as alleged in this case – should beware of exclusion from Medicare, Medicaid and all other federal health programs, as well as criminal and civil liability,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “Vulnerable beneficiaries deserve protection from potentially harmful, medically unnecessary services.”
The allegations that were resolved by the settlement arose in part from a lawsuit filed by former HealthEssentials employees Michael and Leigh RoBards under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring suit on behalf of the government and to share in any recovery. Mr. and Mrs. RoBards will receive a total of $153,000.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The case was handled by the Commercial Litigation Branch, Civil Division, U.S. Department of Justice and the U.S. Attorney’s Office for the Western District of Kentucky, with assistance from the Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.
The claims settled by this agreement are allegations only; there has been no determination of liability. The case is captioned United States ex rel. Stydinger, et al. v. Michael R. Barr and Norman J. Pfaadt, Civil No. 3:03-cv-00380-TBR (W.D. Ky.).
Jefferson County, Kentucky Woman Sentenced to 18 Years and 10 Months in Prison for Armed Robbery of Metro Louisville BankRead the Press Release
– Ordered to pay $213,785.62 restitution
– Getaway driver sentenced to 54 monthsLOUISVILLE, Ky. – Jillian Wojciechowski, age 30, was sentenced to 18 years and 10 months in prison, and ordered to pay restitution of $213,785.62 to Your Community Bank, by U.S. District Court Judge John G. Heyburn II, this week, for two armed robberies of the bank’s branch office located on Magisterial Drive in Jefferson County, Kentucky, announced David J. Hale, United States Attorney for the Western District of Kentucky. Dean Martin Ridge Jr., age 34, who pleaded guilty to conspiracy to rob the bank as well as unrelated drug and firearm charges, was sentenced today to 54 months by Judge Heyburn.
According to the plea agreements, Wojciechowski, Ridge and defendant John Hatton, age 30, of Louisville, conspired and robbed the Your Community Bank Branch located at 13205 Magisterial Drive, Louisville, Kentucky on September 23, 2011. Wojciechowski and Hatton brandished firearms in order to accomplish the robbery and obtained $120,714.62 in cash from the teller drawers and the bank’s vault. After taking the cash, Wojciechowski and Hatton forced the bank employees to lie on the floor and then covered them up with an entrance rug.
Further, Wojciechowski, Ridge and defendant Joshua Ewing, age 23, of Louisville, conspired and robbed the bank a second time on January 23, 2012. Wojciechowski and Ewing brandished firearms in order to accomplish the robbery and obtained $93,071.00 in cash from the teller drawers and the bank’s vault. On both occasions Ridge drove the defendants to the bank to commit the robberies and drove them away following the robberies.
Ewing was found guilty of robbing the Your Community Bank Branch and brandishing a firearm in order to accomplish the robbery, by a federal jury in Louisville, on July 3, 2013 and sentenced by Judge Heyburn to 13 years and 5 months in prison, followed by four years of supervised release and ordered to pay $93,071.00 in restitution.
Hatton was found guilty by a federal jury in Louisville, on November 20, 2013, of robbing the Your Community Bank Branch, brandishing a firearm during the robbery, and of robbing the M & I Smoke Shop, located at 5627 Preston Highway, Louisville, Kentucky on October 26, 2011. Hatton is scheduled for sentencing before Judge Heyburn on February 7, 2014.
This case was prosecuted by Assistant United States Attorneys Thomas W. Dyke, Micah Reyner and Stephanie Zimdahl and was investigated by the Louisville Metro Police Department.