District of Massachusetts

BOSTON – A Dominican national, wanted on murder charges in the Dominican Republic, appeared in federal court in Boston today. 

An arrest warrant charging Daniel Emilio Frias Segura with the 2010 murder of his wife was issued on April 9, 2010, by a Judge in Santo Domingo, Dominican Republic. U.S. Magistrate Judge Marianne B. Bowler issued a warrant for the arrest of Frias Segura yesterday, and he was arrested today in Lynn by U.S. Marshals with the assistance of the Massachusetts State Police and Lynn Police Department. He appeared in federal court in Boston and was ordered detained pending extradition. Today’s hearing involved the extradition of Frias Segura back to the Dominican Republic to face the charges.

According to Dominican authorities, on April 1, 2010, an individual sailing on the Haina River in the Dominican Republic observed the torso of a female floating in the river. The individual informed Dominican law enforcement, and on April 2, 2010, the female’s decapitated head was found inside two black plastic bags. On April 3, 2010, the female’s legs and left arm were found along the Haina River. On April 3, 2010, an autopsy report concluded that the female had been strangled to death and was subsequently decapitated and dismembered.

According to the Dominican investigation, on the late afternoon of March 31, 2010, a merchant and his employee were driving along a freeway when a young woman jumped out of a vehicle stopped in front of them. The woman ran toward the merchant’s vehicle, screaming that someone wanted to kill her. She sought refuge in the back seat of the merchant’s vehicle, but a man came out of the vehicle the woman had been in and violently removed her from the merchant’s vehicle. The man waived a gun and threatened the merchant and his employee. He told them the woman was his wife and they should not get involved. The merchant and employee each identified Frias Segura as the person claiming to be the victim’s husband. The next day, the torso of Frias Segura’s wife was spotted in the river.

Frias Segura left the Dominican Republic for Puerto Rico the day after his wife’s torso had been spotted in the river. A law enforcement investigation revealed that Frias Segura had been living in Lynn.  

United States Attorney Andrew E. Lelling; John Gibbons, U.S. Marshal of the District of Massachusetts; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; and Lynn Police Chief Michael Mageary, made the announcement today. Valuable assistance was provided by the U.S. Department of Justice’s Office of International Affairs. Assistant U.S. Attorney Victor Wild of Lelling’s Criminal Division is handling the matter.

The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.   

BOSTON – A Heath Street gang member was sentenced today in federal court in Boston for distributing drugs in and around the Mildred C. Hailey Apartments in Jamaica Plain.

Javonte Robinson, a/k/a “Biggie,” and “Big Dog,” 21, was sentenced by U.S. District Court Judge William G. Young to one year and one day in prison and six years of supervised release. In May 2018, Robinson pleaded guilty to conspiracy to distribute cocaine base and to distributing cocaine base within 1000 feet of a public housing facility.

Following a two-year investigation, Robinson and eight co-defendants were charged in January 2018 in connection with illegal drug distribution and firearm possession within and near the Mildred C. Hailey Apartments, formerly known as the Bromley Heath Housing Development.

On March 24, 2017, co-defendant Kevin Smith arranged a drug sale for Robinson, who sold crack cocaine to a cooperating witness near the Mildred C. Hailey Apartments. In sum, Smith and Robinson also accepted responsibility for five additional sales that were not charged in the indictment. All of the sales took place either inside or within a 1000 feet of the Mildred C. Hailey Apartments.

The investigation and arrests sought to reduce violence and improve the quality of life for residents in and around the Mildred C. Hailey Apartments by removing individuals who trafficked drugs and who were actively involved in violence and gang disputes.

Smith is scheduled to be sentenced on July 27, 2018.

United States Attorney Andrew E. Lelling; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Boston Police Commissioner William Evans made the announcement today. Assistance was also provided by the Boston Housing Authority’s Department of Police and Public Safety.

The details contained in the charging documents are allegations.  The remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.       

BOSTON – A Maine man was sentenced yesterday in federal court in Boston for his role in an opioid trafficking conspiracy involving the distribution of oxycodone from Florida to Massachusetts and Maine.

Gorky Gonzalez, 26, of Biddeford, Maine, was sentenced by U.S. District Court Judge Denise J. Casper to 54 months in prison and three years of supervised release. In April 2018, Gonzalez pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute oxycodone.

Gonzalez was arrested in March 2017 along with numerous co-defendants for their roles in a widespread conspiracy involving opioid trafficking and money laundering offenses in Massachusetts and Florida. Their arrests were the result of a three-year federal investigation into opioid-trafficking in New England.

Between September 2016 and November 2016, Gonzalez obtained sizeable quantities of oxycodone intended for distribution that were shipped from Miami, Fla., to Massachusetts and then transported to Maine. Payment for the oxycodone pills was then delivered to co-conspirators in Massachusetts, who then forwarded the money to the source of supply in Florida.

United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Delany De Leon-Colon, Acting Inspector in Charge of the U.S. Postal Inspection Service; John Gibbons, U.S. Marshal for the District of Massachusetts; and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division, made the announcement today. Valuable assistance was provided by the Massachusetts State Police and the Biddeford (Maine), Framingham, Haverhill, Lawrence, Manchester (N.H.), Methuen, Millis, Natick, Stoughton, and Waltham Police Departments. Assistant U.S. Attorneys Nadine Pellegrini and Craig Estes of Lelling’s Narcotics and Money Laundering Unit are prosecuting the cases.

BOSTON – The leader of the MS-13 East Coast Program was sentenced today in federal court in Boston for racketeering conspiracy.

Jose Adan Martinez Castro, a/k/a “Chucky,” 29, a Salvadoran national formerly residing in Richmond, Va., was sentenced by U.S. District Court Judge F. Dennis Saylor IV to 235 months in prison, the top of the sentencing range recommended by the U.S. Sentencing Guidelines. Castro will be subject to deportation upon completion of his sentence. In November 2017, Castro pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO or racketeering conspiracy.  

After a multi-year investigation, Castro was one of dozens of leaders, members, and associates of MS-13 named in a superseding indictment unsealed in January 2016 that targeted MS-13’s criminal activities in Massachusetts. According to court documents, MS-13 members engaged in a variety of racketeering acts and crimes of violence, including six different murders committed by MS-13 members in Massachusetts between October 2014 and January 2016. 

Castro was one of 49 defendants to be convicted as part of this case. All nine defendants who went to trial were convicted and 40 others pleaded guilty.

MS-13 is a transnational criminal organization run by leaders in El Salvador, with thousands of members across the United States. In Massachusetts, as in other states, MS-13 is organized in the form of “cliques” or local branches. Groups of cliques are organized into “programs” that act under the larger mantle of MS-13. This creates a hierarchy that expedites communication and orders passed down from the leadership in El Salvador to the gang members on streets in the United States. 

During the investigation, Castro was identified as the leader of MS-13’s East Coast Program. Most of the cliques in Massachusetts fall under the East Coast Program, which also has cliques in Maryland, Virginia, New York, New Jersey, North Carolina, Texas, and Ohio. 

On Dec. 13, 2015, using a cooperating witness, law enforcement recorded a meeting of the East Coast Program leadership at Castro’s home in Richmond. The recorded meeting provided evidence about the organizational structure, leadership structure, and recruitment system of MS-13 as well as the means, methods, objectives, and operating principles of the gang.  Leaders of the East Coast Program cliques from Massachusetts, Ohio, Texas, and Virginia attended the meeting.

During the meeting, Castro and others discussed how there was enough space in the East Coast Program for the all of the assembled MS-13 cliques to work cooperatively. Castro and others also discussed the need for the cliques to be better at planning and coordinating hits (i.e., murders) and Castro confirmed that murders generally had to be approved by MS-13 leaders before the local members could carry them out. The group also discussed sending money to El Salvador to support MS-13, the need to work together to increase the gang’s strength and control, and the need to kill anyone who provided information against the gang. An El Salvadoran-based leader of MS-13 also participated in the meeting via the phone and provided direction to the assembled leaders.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney Daniel F. Conley; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Evans; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; Somerville Police Chief David Fallon; and Wes Adams, State’s Attorney, Anne Arundel County (Maryland), Anne Arundel County State’s Attorney’s Office, made the announcement today.

BOSTON – A former pharmacy buyer at a Boston hospital was charged today in federal court in Boston for making false statements to federal agents in connection with receiving $355,000 from the now defunct New England Compounding Center (NECC) and Ameridose. 

Claudio T. Pontoriero, 40, of Everett, was charged in an information with one count of making false statements.

As alleged in court documents, from at least December 2006 to October 2012, Pontoriero was a pharmacy technician at a Boston hospital and was responsible for purchasing drugs from suppliers for use on hospital patients. During that period, Pontoriero received $5,000 per month from NECC and Ameridose, a drug repackager formerly located in Westboro. In October 2015, during an interview with federal agents, Pontoriero falsely claimed that the $5,000 monthly payments were for consulting services, and not in exchange for Pontoriero’s influence in selecting NECC and Ameridose drugs for purchase by the hospital. 

The charge of making false statements provides for a sentence of no greater than five years in prison, one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Derek Roy, Resident Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, Metro Washington Field Office; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Sean J. Smith, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Leigh-Alistair Barzey, Special Agent in Charge of the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; and Delany De Leon-Colon, Acting Inspector in Charge of the U.S. Postal Inspection Service, Boston Division, made the announcement today. Assistant U.S. Attorneys Amanda P.M. Strachan and George P. Varghese of Lelling’s Criminal Division are prosecuting the case.

The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.  

BOSTON – The former owner of Pinky’s Famous Pizza in Medford was sentenced today in federal court in Boston in connection with filing tax returns which failed to disclose the cash payroll payments he paid to employees. 

Nikita Yanakopulos, 40, of Medford, was sentenced by U.S. District Court Judge Richard G. Stearns to one year and one day in prison, one year of supervised release and a fine of $5,500. In February 2018, Yanakopulos pleaded guilty to two counts of aiding and assisting in filing false Forms 941, Employer’s Quarterly Federal Tax Return, which are used to report income taxes, Social Security taxes, and Medicare taxes withheld from employees’ paychecks.

Yanakopulos owned and operated Pinky’s from approximately 2000 to 2017. During that period, Yanakopulos paid several employees by check and cash and other employees entirely in cash. Yanakopulos caused his payroll service to file Forms 941 that only included the payroll paid by check. During those years, Yanakopulos made cash payroll payments to his employees totaling approximately $675,000, but failed to report those payments to his payroll service or pay the required withholding amounts to the IRS. He thereby avoided paying FICA, Medicare, and withholding taxes totaling approximately $172,000.    

United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. Assistant U.S. Attorney Mark J. Balthazard of Lelling’s Economic Crimes Unit prosecuted the case. 

BOSTON - A Salvadoran national was sentenced yesterday in federal court in Boston for illegally reentering the United States after being deported. 

Jose Antonio Reyes-Ramos, 33, was sentenced by U.S. District Court Judge Leo T. Sorokin to time served (approximately 81 days) and one year of supervised release. Reyes-Ramos will be subject to deportation proceedings. On June 28, 2018, Reyes-Ramos pleaded guilty to one count of illegal reentry of a deported alien.

Reyes-Ramos was deported from the United States to El Salvador in 2011 and then again in 2012. In 2017, after Reyes-Ramos had illegally returned to the United States, he was arrested on Cape Cod for sexual conduct for a fee. On April 19, 2018, Reyes-Ramos was taken into immigration custody.

United States Attorney Andrew E. Lelling and Rebecca J. Adducci, Interim Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, made the announcement. Assistant U.S. Attorney David G. Tobin of Lelling’s Major Crimes Unit prosecuted the case.

BOSTON – The leader of a violent MS-13 clique was sentenced today to life in prison. 

Noe Salvador Perez Vasquez, a/k/a “Crazy,” 27, a Salvadoran national, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to life in prison and five years of supervised release. In April 2018, Perez was convicted by a federal jury of conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy, and of committing or knowingly participating in two murders. Perez also was convicted of conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine and conspiracy to possess with intent to distribute and to distribute marijuana.

Co-defendants Luis Solis Vasquez, a/k/a “Brujo,” 27, a Salvadoran national, and Hector Enamorado, a/k/a “Vida Loca,” 39, a Honduran national, were also convicted of RICO conspiracy and of committing or knowingly participating in murder. Solis is scheduled to be sentenced on Sept. 11, 2018, and Enamorado is scheduled to be sentenced on Oct. 2, 2018.

MS-13 is a violent transnational criminal organization whose branches, or “cliques,” operate throughout the United States, including in Massachusetts. In furtherance of its mission, MS-13 members are required to commit acts of violence, specifically against rival gang members; kill informants; and support and defend fellow MS-13 members in attacks. MS-13 rewards members who commit acts of violence with promotions within the gang and punishes members who break gang rules.

At trial, Perez was identified as a leader of the Everett Locos Salvatrucha (ELS) clique, which was one of the largest, most active, and most violent MS-13 cliques in Massachusetts. Perez was furthermore considered to be a strict leader, demanding that clique members hunt down rival gang members and frequently subjecting younger clique members to harsh punishments.

On Dec. 14, 2014, Perez, Solis, and Enamorado worked together to murder a 29-year-old male victim at an apartment in Chelsea. According to testimony and exhibits introduced at trial, Solis was a full member, or homeboy, with the Eastside Locos Salvatrucha (ESLS) clique and Enamorado was a homeboy with the Chelsea Locos Salvatrucha (CHS) clique. Enamorado and the victim had engaged in a gang-related fight the night before the murder, and when Enamorado encountered the victim again, Enamorado called Perez to ask him for a gun. Perez delivered the murder weapon, a .380 caliber pistol, to Enamorado in Chelsea. Solis armed himself with a gun and went with Enamorado into the apartment to provide backup and necessary support for the attack. Enamorado used Perez’s gun to fatally shoot the victim three times. Enamorado also shot and wounded a second victim who was inside the apartment at the time of the murder. Following the murder, Perez arranged for Enamorado to flee to New Jersey. Federal agents, however, intercepted the car and arrested Enamorado before he could leave Massachusetts.

On July 5, 2015, a 16-year-old mid-level member of the ELS clique was stabbed to death in a park in Lawrence, Mass. by two members of his clique. Perez and other MS-13 members targeted the 16-year-old for murder because they believed, incorrectly, that he was cooperating with law enforcement. Perez planned and encouraged the murder. After the two ELS clique members stabbed the 16-year-old to death, Perez promised to promote them to homeboy status.

Perez was one of 49 defendants to be convicted as part of this case. All nine defendants who went to trial were convicted and 40 others pleaded guilty. In all, 16 defendants, including Perez, were found to have committed or knowingly participated in murders.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney Daniel F. Conley; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Evans; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; Somerville Police Chief David Fallon; and Wes Adams, State’s Attorney, Anne Arundel County (Maryland), Anne Arundel County State’s Attorney’s Office, made the announcement today.

BOSTON – The former Secretary-Treasurer of UNITE HERE Local 26 was sentenced today in federal court in Boston for embezzling over $170,000 from the organization.

Henry Clay Green Sr., 61, of Boston, was sentenced by U.S. District Court Chief Judge Patti B. Saris to six months in prison and one year of supervised release. Restitution and forfeiture will be determined at a hearing scheduled for Sept. 26, 2018. In December 2017, Green pleaded guilty to one count of embezzlement from a labor union.

From May 19, 2011, to July 14, 2016, Green was Secretary-Treasurer of UNITE HERE Local 26, a labor union representing the hospitality industries in Massachusetts and Rhode Island. In that capacity, Green exercised control over various aspects of Local 26’s financial operations and used his position to embezzle $171,455 from the organization for his own use. When confronted by union officials, Green confessed.  

“Henry Green, Sr. used his position as the long-time treasurer of UNITE HERE Local 26 to embezzle over $170,000 of the union’s funds. The Office of Inspector General will continue to investigate union officials who abuse their positions to exploit unions for their own benefit,” stated Michael C. Mikulka, Special Agent in Charge, New York Region, U.S. Department of Labor Office of Inspector General.

“We thank our colleagues the Office of Labor-Management Standards and Office of Inspector General and the U.S. Attorney’s Office. We will continue to work with them to ensure the protection of employee benefit plan participants and that fiduciaries of those plans carry out their duties in compliance with the law,” said Carol S. Hamilton, Acting Regional Director, Employee Benefits Security Administration.

United States Attorney Andrew E. Lelling; DOL OIG SAC Mikulka; DOL EBSA Acting Regional Director Hamilton; and Jonathan Russo, District Director of the U.S. Department of Labor, Office of Labor Management Standards, Boston District Office, made the announcement. Assistant U.S. Attorney Laura J. Kaplan of Lelling’s Organized Crime and Gang Unit prosecuted the case.

BOSTON – An MS-13 member pleaded guilty today in federal court in Boston to RICO conspiracy and unlawful possession of a firearm and ammunition by an illegal alien.  

Manuel Landaverde, a/k/a “Scooby,” 26, a Salvadoran national, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO or racketeering conspiracy, and being an alien in possession of a firearm and ammunition. U.S. District Court Judge William G. Young scheduled sentencing for Oct. 11, 2018.

The investigation revealed that Landaverde was a member of MS-13 and conspired with other MS-13 members to commit acts of violence, including murder and attempted murder, in Massachusetts. Landaverde, who was unlawfully present in the United States, also possessed and sold a firearm and ammunition knowing it would be used in connection with the racketeering conspiracy.     

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney Daniel F. Conley; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Evans; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; and Somerville Police Chief David Fallon made the announcement.

BOSTON – A Captain with the Bristol County Sheriff’s Office was convicted today by a federal jury in connection with helping Carlos Rafael, known as the Codfather in the fishing industry, and the owner of one of the largest commercial fishing businesses in the U.S., smuggle the profits of his illegal overfishing scheme to Portugal.

Jamie Melo, 46, of North Dartmouth, Mass., was convicted of one count of conspiracy to commit offenses against the United States and one count of structuring the export of monetary instruments. U.S. District Court Judge Denise J. Casper scheduled sentencing for Oct. 24, 2018.  The jury acquitted the defendant of one count of bulk cash smuggling.

During the trial, evidence showed that while at Logan International Airport Melo asked his friends and travel companions to carry envelopes of cash for Rafael on a flight to the Azores in Portugal. At the time, Melo was an Administrative Captain with the Bristol County Sheriff’s Office and was traveling to the Azores with Rafael for a charity event sponsored by the Bristol County Sheriff’s Office. Prior to the flight, Melo asked three of travel companions to follow him into the men’s bathroom at Logan Airport before going through the TSA Security Checkpoint and distributed four envelopes of cash, taking one for himself. Two days after arriving in Portugal, bank records demonstrate that Rafael deposited $76,000 in U.S. currency into his Portuguese bank account.

The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. The charge of structuring the export of monetary instruments provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $500,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Mark Tasky, Special Agent in Charge of the Department of Homeland Security, Office of Inspector General, Office of Investigations, Philadelphia Field Office; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Neil Gallagher and Justin O’Connell of Lelling’s Economic Crimes Unit is prosecuting the case.

BOSTON – A Boston woman pleaded guilty today in federal court in Boston to bank fraud in connection with the embezzlement of over $229,000 from a small business that employed her.

Kelly A. Lynch, 40, pleaded guilty to one count of bank fraud. U.S. District Court Judge Indira Talwani scheduled sentencing for Oct. 9, 2018. In February 2018, Lynch was arrested and charged by criminal complaint and subsequently released on conditions.

Lynch was hired in April 2017 as the controller of a small company in a Boston suburb. Her duties included managing incoming invoices, paying bills by check and wire transfer, bookkeeping and financial account maintenance. As a result, Lynch had access to the company’s checkbook, bookkeeping/accounting software (QuickBooks), and online bank accounts.

From April 2017 until her termination in January 2018, Lynch stole funds from the business for her personal use. Specifically, Lynch wrote unauthorized checks to herself using the company checkbook. Some of the checks were pre-signed, blank checks that one of the founders had signed with the intention that Lynch would later use them for business purposes. After she used those checks, Lynch began signing the company checks herself, forging the founder’s signature. At times, Lynch also added an entry to the memo line to indicate that the funds were for “Consulting Fees,” but as a salaried employee, Lynch was not entitled to consulting fees. Lynch then endorsed the checks she wrote to herself and – without authorization and for no business purpose – deposited them in her personal bank account. In total, Lynch stole approximately $141,845 from the company’s bank account in this manner.

During approximately the same time period, Lynch repeatedly logged onto the company’s online bank account and directed that payments be made via transfer to her personal credit cards. As a result, Lynch stole another $87,243 from the company’s bank account. 

The charge of bank fraud provides for a sentence of no greater than 30 years in prison, three years of supervised release, a fine of up to $1 million, restitution and forfeiture. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office, made the announcement today. Assistant U.S. Attorney Amy Harman Burkart, Chief of Lelling’s Cybercrimes Unit, is prosecuting the case.

BOSTON – A Brockton man who was previously convicted of firearms charges was sentenced yesterday in federal court in Boston on a federal firearms charge.

Dennis Afonso, 34, was sentenced by U.S. District Court Senior Judge George A. O’Toole Jr. to 78 months in prison and three years of supervised release after pleading guilty in April 2018 to one count of being a felon in possession of a firearm and ammunition.

On May 3, 2017, law enforcement officers in Brockton found Afonso, a previously convicted felon, illegally in possession of a Cobra .380 caliber pistol with an obliterated serial number and three rounds of .380 caliber ammunition. Afonso was convicted in 2009 of distribution of cocaine base. He was sentenced to 60 months in prison and had recently completed his period of supervised release when he was found in possession of a firearm on May 3, 2017.

The 2009 conviction was the result of a federal investigation into drug trafficking and related gang activity in the Green Street area of Brockton. According to court documents, Afonso was a member of the Green Street gang, which operates on the north side of Brockton and rivals gangs from the south side of the city. During the course of the investigation, an undercover officer made dozens of controlled purchases of cocaine base from dealers, including Afonso.  During that time, Green Street gang members made a verified threat to kill police officers in retaliation for the shooting and death of John Parks by Brockton Police Officers in November 2008. 

United States Attorney Andrew E. Lelling; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Brockton Police Chief John Crowley made the announcement. Assistant U.S. Attorney Glenn A. MacKinlay, Chief of Lelling’s Organized Crime and Gang Unit prosecuted the case.

BOSTON – A Malden man pleaded guilty today in federal court in Boston to his role in a wide-ranging conspiracy to defraud his employer, a large facilities services company with offices in the Greater Boston area.

Vence Pires, 58, pleaded guilty one count of conspiracy to commit wire fraud. U.S. District Court Senior Judge Rya W. Zobel scheduled sentencing for Sept. 25, 2018. Co-defendant Lou Amaral, 52, also of Malden, pleaded guilty on July 9, 2018, to one count of conspiracy to commit honest services mail fraud, one count of conspiracy to commit wire fraud, one count of money laundering, and one count of tax evasion. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Oct. 9, 2018.

Amaral and Pires worked for the same facilities services company in the Greater Boston area. Amaral was the supervisor of the Special Services Department, and as such, he had the ability to hire employees and to contract with third-parties to provide temporary labor. Pires was an account manager who worked for Amaral in Special Services. Amaral first began taking bribes from a temporary labor company in order to steer contracts to that company. In 2014, Amaral opened up his own temporary labor company and, with the help of Pires, awarded himself the temporary labor contracts. Through this scheme, Amaral made approximately $10 million in revenue over a three-year period, resulting in harm to his employer of more than $4 million. 

Pires faces a maximum sentence of five years in prison, up to three years of supervised release, and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Delany De Leon-Colon, Acting Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today.  Assistant U.S. Attorney Eric Rosen of Lelling’s Economic Crimes Unit is prosecuting the case.

BOSTON – A former bank employee was indicted today in federal court in Worcester in connection with embezzling money from client accounts held by the bank by which she was employed.

Jessica Vargas, 34, of Athol, was indicted on one count of bank fraud and two counts of bank embezzlement. Vargas was charged by criminal complaint and arrested in March 2018.

According to the charging documents, Vargas was an employee of a federally-insured bank when she embezzled approximately $108,000 by making unauthorized cash withdrawals from customer accounts. Bank documentation showed that Vargas made unauthorized withdrawals from the accounts of various customers, including more than $53,000 from the account of an 84-year-old bank customer and almost $13,000 from the account of an 88-year-old customer.

For each count, Vargas faces a sentence of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Bill Abely of Lelling’s Worcester Branch Office is prosecuting the case.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON - A Dominican national was sentenced today in federal court in Boston for illegally reentering the United States after being deported.  

Yoel Elieser Romero, 37, was sentenced by U.S. District Court Judge George A. O’Toole, Jr. to 12 months and one day in prison and three years of supervised release. On April 10, 2018, Romero pleaded guilty to one count of illegal reentry of a deported alien.

On Oct. 13, 2017, federal law enforcement officers encountered Romero at the Middlesex County House of Correction, where he was held after having been arrested for possession with intent to distribute fentanyl, and determined him to be unlawfully present in the United States. Romero was previously deported on June 2, 2015.  

United States Attorney Andrew E. Lelling and Rebecca J. Adducci, Interim Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, made the announcement. Assistant U.S. Attorney David G. Tobin of Lelling’s Major Crimes Unit prosecuted the case.

BOSTON - A Dominican national was charged today in federal court in Boston with illegally reentering the United States after being deported. 

Rafael Pascal, 54, was indicted on one count of illegal reentry of a deported alien. Pascal was charged by criminal complaint and arrested in June 2018 and has been in custody since his arrest.

According to court documents, on May 6, 2018, law enforcement in Wakefield arrested Pascal and charged him with possession to distribute a Class B controlled substance; Pascal was subsequently determined to be unlawfully present in the United States, having previously been deported on Jan. 5, 2002, and on June 20, 2013. 

Pascal faces a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000, and will be subject to deportation upon completion of his sentence. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Rebecca J. Adducci, Interim Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, made the announcement today. Assistant U.S. Attorney James E. Arnold of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.

The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Boston – A Dominican national, who recently resided in Mattapan, was indicted today in federal court in Boston on charges including identity theft.

Maissel Avalo-Mejia, 29, was indicted on one count of misuse of a Social Security number and one count of aggravated identity theft. Avalo-Mejia was arrested last month and charged by criminal complaint.

According to court documents, Avalo-Mejia used the name, date of birth, and Social Security number of a Puerto Rican man, who is presently a Specialist in the U.S. Army, to obtain several Massachusetts driver’s licenses, the most recent issued on April 10, 2014. Avalo-Mejia was identified, among other things, from a fingerprint match with a Dominican Republic identification document issued to him and bearing his photo. It is alleged that Avalo-Mejia admitted that he was born in the Dominican Republic.

The charging statute for misuse of a Social Security number provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of up to $250,000.  The charging statute for aggravated identity theft provides for a mandatory sentence of two years in prison to be served consecutive to any other sentence imposed, up to one year of supervised release, and a maximum fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. Assistant U.S. Attorney Sandra S. Bower of Lelling’s Major Crimes Unit is prosecuting the case.

The details contained in charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – A Brazilian national was sentenced today in federal court in Boston for unlawful reentry of a deported alien.  

Willian Lacerda, 32, a Brazilian national formerly residing in Framingham, was sentenced by U.S. District Court Judge Allison D. Burroughs to time-served and one year of supervised release. In May 2018, Lacerda pleaded guilty to one count of unlawful reentry of a deported alien.

On Feb. 20, 2018, Lacerda was encountered by law enforcement and determined to be illegally present in the United States. Lacerda was previously deported on Dec. 16, 2009.

United States Attorney Andrew E. Lelling and Rebecca Adducci, Interim Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Lelling’s Major Crimes Unit prosecuted the case.

BOSTON – A Providence man and a Dominican national have been indicted by a federal grand jury in Boston on charges of fentanyl conspiracy.

Dario Bier Romero, 27, of Providence, R.I., and Luis Cirino, 35, a Dominican national residing in Lawrence, were each indicted on one count of conspiracy to distribute and to possess with intent to distribute 400 grams or more of fentanyl. Romero and Cirino were arrested in June and charged by criminal complaint; both have been in custody since their arrests.

On June 21, 2018, approximately three kilograms of fentanyl were seized from Romero and Cirino during an investigation. During the execution of a search warrant at Romero’s residence in Providence, investigators seized an additional kilogram of fentanyl and drug packaging paraphernalia. 

The charge of conspiracy to distribute and to possess with intent to distribute 400 grams or more of fentanyl carries a minimum sentence of 10 years and up to life in prison, at least five years and up to a lifetime of supervised release, and a fine of $10 million. Cirino will be subject to deportation proceedings upon completion of any sentence imposed. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew Lelling and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration’s New England Division, made the announcement today. Assistance was provided by the Massachusetts State Police and Woburn and Providence (R.I.) Police Departments. Assistant U.S. Attorney Philip C. Cheng of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.

The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON - A Mexican national with nine prior deportations pleaded guilty yesterday in federal court in Boston to illegally reentering the United States after being deported. The defendant, who violated federal pretrial release by testing positive for cocaine and buprenorphine, was released from custody pending sentencing. Defendant also has pending domestic assault and battery charges in state court. Prior convictions include: drug possession and illegal reentry in 2015 and 2016, respectively; escape in 2003; OUI in 2004; OUI in 2006; possession of a controlled substance in 2006; and OUI in 2007.

Bulmaro Enriquez, 32, pleaded guilty yesterday to one count of illegal reentry of a deported alien and is scheduled to be sentenced on Oct. 2, 2018. Following yesterday’s plea, the government moved to have Enriquez’s Order of Release revoked and have him remanded into federal custody while he awaits his sentencing. According to the government, Enriquez, while on release, provided a urinalysis sample that tested positive for cocaine and buprenorphine. Nevertheless, Enriquez was released on conditions, including a curfew, and the matter of detention was remanded to the Magistrate Judge for further proceedings.  

According to court records, Enriquez was arrested in Framingham on Nov. 23, 2017, and charged with domestic assault and battery. On April 30, 2018, immigration officers located Enriquez and determined that he was illegally present in the United States. Enriquez was charged with illegal reentry in federal court and was ordered detained. However, on June 7, 2018, he was released from federal custody after agreeing to post the equity in his girlfriend’s home.

In 2015, Enriquez was arrested in Framingham and charged with distribution of a controlled substance following the execution of a state search warrant, which resulted in the seizure of one and a half pounds of marijuana, electric scales, and other drug distribution paraphernalia. In October 2015, Enriquez was convicted, sentenced, and upon completion of his sentence, transferred into federal custody and charged with illegal reentry of a previously deported alien. Enriquez was convicted and sentenced to time served. On Jan. 19, 2016, he was deported to Mexico.

Enriquez currently faces a sentence of no greater than 10 years in prison, up to three years of supervised release, a fine of $250,000, and will be subject to deportation proceedings. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Rebecca Adducci, Interim Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, made the announcement today. Assistant U.S. Attorney Kenneth G. Shine of Lelling’s Major Crimes Unit is prosecuting this case.

BOSTON – A Lexington man agreed to plead guilty in connection with his role in a long-running interstate prostitution ring. 

Kyung Song, 52, agreed to plead guilty yesterday to one count of conspiracy to engage in money laundering. On March 15, 2018, Kim was charged and arrested with co-defendants Yoon I. Kim, 36, of Haymarket, Va.; Taehee Kim, a/k/a “Hyunsook Kim,” 46, of Haymarket, Va.; Susan Bashir, a/k/a “Susan Redmon,” a/k/a “Susan Redmond,” 41, of Stone Mountain, Ga.; and Jineok Kim, 38, of Watertown, Mass.

According to court documents, from December 2017 to March 2018, Song participated in an interstate prostitution network that maintained multiple brothels in high-end apartments in Cambridge, Mass.; Atlanta, Ga.; and eastern Virginia. They advertised appointments with Asian women primarily on three websites: www.bostonasiandolls.com, www.exoticasiansatlanta.com, and www.redhotflowers69.com. The women advertised on the websites were moved from city to city within the network, working as prostitutes for the organization.

Song transported women working from brothel locations in Cambridge. Song also retrieved cash proceeds from each of the Cambridge brothel locations and allegedly laundered the proceeds according to Taehee Kim’s instructions, which included depositing the money into accounts belonging to Taehee Kim or sending postal money orders to Taehee Kim.

In June 2018, Jineok Kim and Susan Bashir agreed to plead guilty to one count of conspiracy to persuade, induce, entice, or coerce individuals to travel in interstate commerce to engage in prostitution and one count of conspiracy to engage in money laundering.

The charge of conspiracy to engage in money laundering provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $500,000 or twice the value of the laundered funds. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Andrew E. Lelling; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Delany De Leon-Colon, Acting Inspector in Charge of the U.S. Postal Inspection Service; and Cambridge Police Commissioner Branville G. Bard Jr. made the announcement today. Assistant U.S. Attorneys David J. D’Addio and Amy Harman Burkart of Lelling’s Civil Rights Enforcement Team are prosecuting the case. 

The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

BOSTON - A Lowell man was arrested today and charged in federal court in Boston with firearms trafficking related to five separate sales, including selling an illegal sawed-off shotgun.

Rathsomnang Neth, 22, was charged with one count of dealing in firearms without a license and two counts of possessing and transferring an unregistered shotgun with a shortened barrel.

According to the indictment, which was unsealed today, in five separate transactions in Lowell from December 2016 through April 2017, Neth engaged in the unlawful dealing of firearms, selling four handguns and a .20 gauge pump-action shotgun with a barrel that had been sawed-off below 18 inches.

The charge of unlawful dealing in firearms provides for a sentence of no greater than five years in prison, three years of supervised release and a $250,000 fine. Each charge of possession and transfer of an unregistered firearm provides for a sentence of no greater than 10 years in prison, up to three years of supervised release and a $250,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boson Field Office, made the announcement. Assistant U.S. Attorney S. Theodore Merritt of Lelling’s Major Crimes Unit is prosecuting the case.

The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – A Lawrence man and a Dominican national were charged today in federal court in Boston with fentanyl conspiracy. 

Antonio Rivera, 28, of Lawrence, and Deuris Sierra, 24, a Dominican national most recently residing in Lawrence, were each indicted on one count of conspiracy to distribute and possess with intent to distribute 400 grams or more of fentanyl and distribution of fentanyl. Both defendants are currently in state custody.

From at least May 16, 2018, through June 7, 2018, Rivera distributed fentanyl in Lawrence and Methuen. During a law enforcement operation, investigators seized five kilograms of fentanyl from the defendants.    

The charge of conspiracy to distribute and to possess with intent to distribute 400 grams or more of fentanyl carries a minimum mandatory sentence of 10 years and up to life in prison, a minimum of five years of supervised release, and a fine of up to $10 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division; Massachusetts Attorney General Maura Healey; Colonel Kerry Gilpin, Superintendent of the Massachusetts State Police; and Methuen Police Chief Joseph Solomon made the announcement. Assistant U.S. Attorney Philip C. Cheng of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.

The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – A Dominican national was sentenced yesterday in federal court in Boston for his role in a drug trafficking organization that operated in Taunton and Boston.

Yeurys Tejeda, 29, a Dominican national formerly residing in Boston, was sentenced by U.S. District Court Judge Indira Talwani to time served (15 months in prison) and three years of supervised release. Tejeda will be subject to deportation proceedings. In April 2018, Tejeda pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute heroin and fentanyl. In February 2017, Tejeda was arrested and charged along with 22 co-defendants.

From mid-2016 through February 2017, there were investigations into two drug trafficking organizations who were operating in Taunton and Boston, one led by Jose Antonio Lugo-Guerrero, and the other led by Fernando Hernandez. Hernandez’s organization was based in Taunton and sold heroin and fentanyl to customers who re-distributed a portion of the drugs they obtained. It is alleged that Hernandez obtained drugs from a network of suppliers that included Lugo-Guerrero.

According to court documents, Lugo-Guerrero operated a drug trafficking organization in Fall River and Boston that allegedly obtained a significant quantity of illegal drugs by robbing other drug traffickers. Lugo-Guerrero was assisted by a number of co-defendants including Tejeda. In November of 2016, Tejeda helped Lugo-Guerrero plan and attempt to steal heroin and money from another drug dealer operating in New Bedford. The plan was revealed by wiretaps and surveillance and foiled by law enforcement.

Hernandez pleaded guilty and was sentenced in February 2018 to 188 months in prison. Lugo-Guerrero has pleaded not guilty and is awaiting trial.

United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Fall River Police Chief Daniel S. Racine; New Bedford Police Chief Joseph C. Cordeiro; Taunton Police Chief Edward James Walsh; Boston Police Commissioner William B. Evans; and Bristol Country District Attorney Thomas M. Quinn made the announcement today. Assistant U.S. Attorney Ted Heinrich of Lelling’s Narcotics and Money Laundering Unit prosecuted the case.

The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – A corrections officer at the Massachusetts Correctional Institute facility in Norfolk (MCI-Norfolk) pleaded guilty today in federal court in Boston to a conspiracy to smuggle Suboxone strips into the facility for an inmate.

William Holts, 51, of Pawtucket, R.I., pleaded guilty to one count of conspiracy to possess a controlled substance. U.S. District Court Judge Indira Talwani scheduled sentencing for Sept. 17, 2018. Holts, an employee of the Massachusetts Department of Correction, was charged and arrested on May 9, 2018.

Beginning around April 30, 2018, Holts advised an inmate, for whom he had smuggled other contraband, that he was willing to smuggle drugs into MCI-Norfolk in exchange for cash. In a series of recorded calls, Holts arranged to meet with a source outside the correctional facility to get the cash and obtain drugs to be smuggled in. Holts agreed to bring in over 100 Suboxone strips in exchange for $2,000 in cash. 

According to court documents, Suboxone is a Class III controlled substance intended to treat heroin addiction, but some abuse the drug to get high. It is coveted contraband in prisons across the nation and particularly in New England. Suboxone strips, which dissolve under the tongue, may be tucked behind envelope seams and stamps.

The charge of conspiracy to possess a controlled substance provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $500,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Commissioner Thomas A. Turco III of the Massachusetts Department of Correction made the announcement today. Assistant U.S. Attorney Eugenia M. Carris of Lelling’s Public Corruption and Special Prosecutions Unit is prosecuting the case.

As of July 1, 2018, the Commonwealth of Massachusetts legalized the distribution of marijuana for recreational and other non-medical uses and, based on public reports, the Cannabis Control Commission is now reviewing applications for licenses to grow and sell marijuana products. 

Marijuana distribution, however, remains illegal; it is specifically prohibited by federal law.  Because I have a constitutional obligation to enforce the laws passed by Congress, I will not effectively immunize the residents of the Commonwealth from federal marijuana enforcement.  My office’s resources, however, are primarily focused on combatting the opioid epidemic that claims thousands of lives in the Commonwealth each year. 

Having considered these factors, and the experiences of other states that have legalized marijuana distribution for non-medical use, I anticipate focusing my office’s marijuana enforcement efforts in the following areas:

• Overproduction:  Despite regulatory efforts to address this problem, licensed outdoor marijuana cultivation still creates a significant risk of overproduction, which in turn creates the risk of illegal, and lucrative, marijuana sales to users in nearby states where recreational marijuana use remains illegal.  These out-of-state sales are nearly always cash transactions and so often involve federal tax fraud designed to hide the illicit cash or its true source.


• Targeted Sales to Minors:  Advocates for state-level legalization fail to emphasize the risks marijuana use poses for minors.  And, despite state-mandated age requirements, marijuana use among minors will surely now increase.  Study after study confirms that regular marijuana use is dangerous to adolescent brain development, a process that appears to continue into a person’s early 20s.  The targeted sale of marijuana to minors may warrant federal prosecution.


• Organized Crime and Interstate Transportation of Drug Proceeds:  Drug proceeds often finance organized criminal activities.  My office will continue to prosecute organized criminal groups, like MS-13, that distribute drugs in violation of federal law, regardless of whether that distribution is legal under state laws.  To that end, federal investigators will continue to police the Commonwealth for incoming or outgoing shipments of cash as well as use of the federal banking system.

This list is not exclusive, but only intended to clarify which aspects of the state-level marijuana industry are most likely to warrant federal involvement.  My office will continue to review all potential marijuana enforcement matters on a case-by-case basis, guided by the U.S. Department of Justice’s Principles of Federal Prosecution.

BOSTON – A Milford woman pleaded guilty today in federal court in Boston to stealing approximately $2.7 million from her employer, and then using the money to purchase luxury items, many of which she resold to consignment shops.

Debra Mulloy, a/k/a Debra Depaul, 57, pleaded guilty to two counts of wire fraud and one count of aggravated identity theft. U.S. District Court Judge F. Dennis Saylor IV scheduled sentencing for Oct. 9, 2018.

From 2004 through 2016, Mulloy was responsible for most of the financial and organizational duties at the company for which she was employed. On multiple occasions from April 2012 to December 2016, Mulloy used the company’s credit card account in the name of another employee to make hundreds of unauthorized charges totaling nearly $2.4 million. Most of those unauthorized purchases were for clothing, furs, and jewelry at boutique stores in the Boston area. Mulloy then sold many of the luxury items at consignment shops. As part of her scheme, Mulloy also caused company checks to be issued for her personal benefit, primarily to pay her personal credit card bills. In total, Mulloy defrauded her employer of approximately $2.7 million.  

The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and restitution. The charge of aggravated identity theft provides for a mandatory two-year sentence that must run consecutively to any other sentence imposed, one year of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and restitution.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Mark J. Balthazard of Lelling’s Economic Crimes Unit is prosecuting the case.

BOSTON – A Malden man pleaded guilty yesterday in federal court in Boston to his role in a wide-ranging conspiracy to defraud his employer, a large facilities services company with offices in the Greater Boston area.

Lou Amaral, 52, pleaded guilty to one count of conspiracy to commit honest services mail fraud, one count of conspiracy to commit wire fraud, one count of money laundering, and one count of tax evasion. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Oct. 9, 2018. Co-defendant Vence Pires, 58, also of Malden, was charged with one count of conspiracy to commit wire fraud and is scheduled to plead guilty on July 12, 2018.

Amaral and Pires worked for the same facilities services company in the Greater Boston area. Amaral was the supervisor of the Special Services Department, and as such, he had the ability to hire employees and to contract with third-parties to provide temporary labor. Pires was an account manager who worked for Amaral in Special Services. Amaral first began taking bribes from a temporary labor company in order to steer contracts to that company. In 2014, Amaral opened up his own temporary labor company and, with the help of Pires, awarded himself the temporary labor contracts. Through this scheme, Amaral made approximately $10 million in revenue over a three-year period, resulting in harm to his employer of more than $4 million. 

Amaral faces a maximum sentence on the conspiracy and money laundering counts of up to 20 years in prison, three years of supervised release and a fine of $250,000 on each count. The charge of tax evasion provides for a sentence of up to five years in prison, one year of supervised release, and a fine of $100,000. Amaral has agreed to forfeit approximately $2 million that has been seized from him. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Delany De Leon-Colon, Acting Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today.  Assistant U.S. Attorney Eric Rosen of Lelling’s Economic Crimes Unit is prosecuting the case.

BOSTON – An MS-13 member was sentenced today in federal court in Boston on drug trafficking and RICO conspiracy charges.  

Edgar Pleitez, a/k/a “Cadejo,” 28, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to five years in prison and four years of supervised release.  In March 2018, Pleitez pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy, and conspiracy to distribute 100 grams or more of heroin.

Pleitez, who was a “homeboy” or full member of MS-13’s East Boston Loco Salvatrucha clique, conspired with other MS-13 members to distribute heroin and further the criminal activities of MS-13. In 2015, a cooperating witness made three separate purchases of heroin from Pleitez. Pleitez was arrested and charged in January 2016 following a three-year investigation which targeted dozens of leaders, members, and associates of MS-13 in Massachusetts. While numerous defendants committed violent acts on behalf of the gang, other defendants, including Pleitez, engaged in other criminal activity, such as drug trafficking, to help finance the operations of the gang.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney Daniel F. Conley; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Evans; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; and Somerville Police Chief David Fallon made the announcement.

BOSTON - A Guatemalan national was sentenced today in federal court in Boston for illegally reentering the United States after being deported.  

Jose Antonio Alarcon-Mazariegos, 44, a Guatemalan national formerly residing in Cambridge, was sentenced by U.S. Senior District Court Judge Douglas P. Woodlock to 15 months in prison and three years of supervised release. Upon his release, Alarcon-Mazariegos will be subject to deportation proceedings. On April 3, 2018, Alarcon-Mazariegos pleaded guilty to one count of illegal reentry of a deported alien.

According to court documents, law enforcement officers in Cambridge encountered Alarcon-Mazariegos on Oct. 7, 2017, and determined him to be illegally present in the United States. Alarcon-Mazariegos was previously deported on April 2, 2004, Aug. 5, 2004, and May 28, 2005.

United States Attorney Andrew E. Lelling and Rebecca Adducci, Interim Field Office Director, Boston, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, made the announcement today. Assistant U.S. Attorney Nicholas Soivilien of Lelling’s Major Crimes Unit prosecuted the case.

A Cypriot national was sentenced today in federal court in Boston for money laundering.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Andrew E. Lelling for the District of Massachusetts, Special Agent in Charge Brian D. Boyle of the Drug Enforcement Administration (DEA) New England Division, Special Agent in Charge Harold H. Shaw of the FBI Boston Field Division and Special Agent in Charge Kristina O’Connell of IRS’s Criminal Investigation in Boston, made the announcement.

Esam Sakkal, 40, a national of Cyprus, was sentenced by U.S. District Court Judge Rya W. Zobel to 27 months time served and ordered to pay forfeiture of $19, 248.  In April 2018, Sakkal pleaded guilty to one count of money laundering conspiracy and two counts of laundering of monetary instruments.

In June 2017, Sakkal and his brother, Nabeel Sakkal, aka Traycho Marinov Mitchov, Nabil Cieckal and Nabil Imadein Bazul Siggal, a dual national of Cyprus and Jordan, were indicted. Nabeel Sakkal remains a fugitive.

An indictment is merely an allegation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

At the plea hearing, Sakkal admitted that on numerous occasions between 2009 and 2016, the Sakkals met with a U.S. undercover law enforcement agent posing as a member of a drug organization whose role was to launder money from drug sales.  Sakkal admitted that in 2014, he advised his brother Nabeel on methods to transport cash obtained from an undercover agent, which was subsequently laundered by the Sakkals through wire transfers to the United States.  Sakkal also admitted that he attempted to launder approximately €1 million euros he believed to be the proceeds from illegal drug sales when he met with an undercover agent in Warsaw, Poland in April 2016.  Sakkal further admitted that he agreed to obtain money from the undercover agent, and agreed to cause the money to be wired to the United States.

Trial Attorney Randall Warden of the Justice Department’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Linda Ricci of Lelling’s Narcotics and Money Laundering Unit prosecuted the case. 

BOSTON – Two employees of Cambridge-based biopharmaceutical companies were convicted today by a federal jury of engaging in an insider trading scheme. 

Schultz “Jason” Chan, 54, of Newton, the Director of Biostatistics at a Cambridge-based biopharmaceutical company, was convicted of one count of conspiracy to commit securities fraud and three counts of securities fraud. Songjiang Wang, 54, of Westford, the Director of Statistical Programming at a different biopharmaceutical company, was convicted of one count of conspiracy to commit securities fraud and two count of securities fraud. U.S. District Court Judge Indira Talwani scheduled Chan’s and Wang’s sentencings for Oct. 4 and 5, 2018, respectively.

From August 2013 to September 2015, Wang and Chan, who were friends, conspired to commit securities fraud by trading insider information regarding successful clinical drug trials at their respective companies. Specifically, Wang traded on inside information Chan provided regarding a clinical study conducted by Chan’s employer. In addition, over a period of several months, Wang tipped Chan of clinical trial results of a Phase 3 clinical trial being conducted by his employer. Furthermore, Wang gave Chan cash, which Chan used to purchase stock shares of Wang’s employer. Chan subsequently sold those shares and paid back Wang.

The charge of securities fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $5 million. The charge of conspiracy to commit securities fraud provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. 

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities and Exchange Commission. Assistant U.S. Attorney Jordi de Llano Campos, Deputy Chief of Lelling’s Economic Crimes Unit, and Assistant United States Attorney Kriss Basil, also of the Economic Crimes Unit, are prosecuting the case.

BOSTON – The owner of King’s Roast Beef in Salem pleaded guilty today in federal court in Boston to failing to pay approximately $383,000 in taxes.

John Kalantzis, 52, of Lynn, pleaded guilty to two counts of aiding and assisting in filing a false tax return. U.S. District Court Judge William G. Young scheduled sentencing for Oct. 2, 2018.

During tax years 2011 through 2015, Kalantzis underreported the gross receipts and expenses of King’s Roast Beef in order to improperly reduce the federal income taxes owed by the restaurant. Kalantzis did so by diverting some of the restaurant’s cash receipts to himself, paying for some of the restaurant supplies with cash, and paying a portion of his employee’s wages in cash. Kalantzis then failed to report this conduct to his tax preparer. As such, during each of the tax years 2011 through 2015, Kalantzis failed to report cash receipts of approximately $275,000 and cash expenses of approximately $115,000 on King’s Roast Beef’s tax returns. As a result, Kalantzis failed to report a total of $855,000 to the IRS during those years, thereby avoiding paying corporate and personal taxes of $383,000.

The charge of aiding and assisting the filing of false tax returns provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.  

United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. Assistant U.S. Attorney Mark J. Balthazard of Lelling’s Economic Crimes Unit is prosecuting the case. 

BOSTON – A former Massachusetts State Trooper pleaded guilty yesterday in federal court in Boston in connection with the ongoing investigation of overtime abuse at the Massachusetts State Police (MSP). 

Per an agreement unsealed today, Gregory Raftery, 47, of Westwood, pleaded guilty to one count of embezzling funds from a state agency receiving federal funds. U.S. District Court Judge William G. Young scheduled sentencing for Sept. 25, 2018. On June 26, 2018, Raftery was charged by Information which was unsealed today.

At the plea hearing, Raftery admitted that in 2015 and 2016, he was not present and did not work for hundreds of hours of overtime shifts for which he had been paid by the Massachusetts State Police. Raftery admitted that he frequently left overtime shifts early, and, on occasion, did not work overtime shifts at all. To hide this conduct, Raftery submitted bogus motor vehicle citations that were never issued to operators, and then claimed on the citations and internal MSP paperwork that they had been written during overtime shifts that, in reality, Raftery did not work.    

Raftery acknowledged that in 2015 he was paid over $24,000, and in 2016, he was paid over $30,000 for overtime hours that he did not work.  

On Wednesday, June 27, 2018, three members of the MSP – two recently retired and one recently suspended – were arrested and charged in criminal complaints with embezzling funds from a state agency receiving federal funds. Former Lieutenant David Wilson, 57, of Charlton; Trooper Gary Herman, 45, of Chester; and Former Trooper Paul Cesan, 50, of Southwick, pleaded not guilty during an initial appearance in federal court in Boston and are scheduled to appear for a detention/probable cause hearing on Tuesday, July 10, 2018.

The charge of embezzling funds from a state agency receiving federal funds provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Douglas Shoemaker, Special Agent in Charge of the U.S. Department of Transportation’s Office of Inspector General, made the announcement today. Assistant U.S. Attorneys Dustin Chao and Mark Grady of Lelling’s Public Corruption Unit and Neil Gallagher of Lelling’s Economic Crimes Unit are prosecuting the case.

BOSTON – A Pennsylvania woman was sentenced yesterday in federal court in Boston for smuggling drugs into the United States on a commercial flight from the Dominican Republic.

Natalia Alexander Duran, 23, was sentenced by U.S. District Court Judge Rya W. Zobel to one year and one day in prison and three years of supervised release. In March 2018, Duran pleaded guilty to two counts of importation of a controlled substance - heroin and cocaine, and two counts of possession of a controlled substance with the intent to distribute - heroin and cocaine. The U.S. Attorney’s Office sought a sentence of 30 months in prison, followed by three years of supervised release.

“Trafficking drugs is risky enough, but swallowing dozens of pellets full of heroin and cocaine is just reckless,” said United States Attorney Andrew E. Lelling. “Moreover, it didn’t work, because of the diligence and professionalism of the U.S. Customs and Border Protection officers who encountered Ms. Duran when she arrived at Logan. These officers stopped nearly a kilogram of cocaine and over 100 grams of heroin from hitting our streets.”

“This arrest exemplifies the drastic and dangerous means criminals will take to smuggle illicit drugs into our country,” said William A. Ferrara, Director of Field Operations, U.S. Customs and Border Protection. “The experience, training and constant vigilance of the CBP Officers here in Boston prevented these dangerous drugs from reaching our communities and I commend their great work.”

On May 30, 2017, Duran arrived at Logan International Airport on a flight from the Dominican Republic. Upon arrival, Duran, a U.S. citizen, was referred for a secondary baggage examination. Duran stated that she needed to use the restroom and was told that she would have to be “pat frisked” before she could do so. Duran was then pat frisked by a female U.S. Customs and Border Protection officer, who felt an abnormality in Duran’s groin area. Duran subsequently admitted that she had drugs concealed in her clothing. 41 pellets of suspected cocaine were removed from a bodysuit worn by Duran. Concerned that Duran may have ingested additional pellets of drugs, she was transported to a local hospital and given an x-ray, which revealed numerous pellets inside her abdominal area. While at the hospital, Duran excreted an additional 68 pellets. A combined total of 109 pellets were recovered, tested and determined to be approximately 971 grams of cocaine and approximately 109 grams of heroin.

During a subsequent interview, Duran admitted that in April 2017 she smuggled 75 pellets of drugs from the Dominican Republic into the United States in the same way. On the first trip, Duran flew into New York City and spent two days in a hotel passing the pellets through her digestive tract. In total, Duran smuggled approximately 1,720 grams of cocaine and 109.3 grams of heroin into the United States. 

 U.S. Attorney Lelling and CBP Director of Field Operations Ferrara made the announcement. Assistant U.S. Attorney David G. Tobin of Lelling’s Major Crimes Unit prosecuted the case.

BOSTON – A former Quincy man, who had been a fugitive for more than 20 years prior to his arrest in April 2017, pleaded guilty today in federal court in Boston in connection with a $1.7 million real estate investment fraud scheme in Quincy. 

Scott J. Wolas, 69, pleaded guilty to seven counts of wire fraud, one count of aggravated identity theft, misuse of a Social Security number, and tax evasion. U.S. District Court Judge F. Dennis Saylor IV scheduled sentencing for Oct. 2, 2018. Wolas remained a fugitive for more than 20 years until his arrest in Delray Beach, Fla., in April 2017.

From at least 2009 through 2016, Wolas, using the name Eugene Grathwohl, operated a real estate business known as Increasing Fortune Inc. and worked as a licensed real estate agent for Century 21 in Quincy. From 2014 through 2016, he solicited investments for the development of the Beachcomber Bar property on Quincy Shore Drive and for the construction of a single-family home on the adjacent property. He collected more than $1.7 million from at least 20 investors and promised each of them a significant return on their investments. He further promised to pay out at least 125% of the profits related to the single-family home construction.  However, Wolas used the money mostly for personal expenses unrelated to development of the real estate projects.

Wolas was scheduled to close on the Beachcomber property on Sept. 15, 2016. A week before, however, he left Quincy and ceased all contact with his then-girlfriend, his co-workers, and his investors. Law enforcement then discovered that Grathwohl was actually Wolas, a former lawyer who had been a fugitive since 1997 after being charged with fraud and grand larceny in New York. The real Eugene Grathwohl resided in Florida and was known to Wolas.

On Nov. 17, 2016, law enforcement officers interviewed Wolas’ ex-wife, Cecily Sturge, of Delray Beach, Fla., who stated that she had not been in contact with her ex-husband for approximately 15 years. Sturge continued to say that this was so, despite evidence of contact between her cell phone and one known to belong to Wolas that demonstrated more recent communication between the two.

After further investigation, Wolas was arrested on April 7, 2017, at a condominium he was renting in Delray Beach, Fla. Investigators learned that Wolas had first rented the room in the condo from Nov. 12 through Nov. 21, 2016, through an online rental website in the name of Cecily Sturge. Messages exchanged between the condo owner and Sturge depicted a photo of Sturge and messages claiming that Wolas (using the name Cameron Sturge) was Sturge’s brother and a retired paleontologist in need of a place to stay. The owner of the condo told authorities that Sturge and Wolas arrived at the condo together in the same car on Nov. 12, 2016, five days before Sturge’s interview with law enforcement.  

Sturge was divorced from Wolas in 2001 by default judgment in Palm Beach County, Fla. In February 2017, Sturge filed a petition to modify the judgment in order to obtain the contents of Wolas’ retirement account, which had a balance of approximately $647,000, from the New York law firm where he worked prior to being indicted in 1997 by New York authorities. In pleadings filed in February and March 2017 regarding that matter, Sturge swore that Wolas’ whereabouts were unknown to her, despite telephone records showing frequent contact between the two. In addition, copies or drafts of documents filed in the Florida proceeding, along with a thumb drive, were found in the room where Wolas was arrested. The United States previously obtained a court order freezing the retirement account pending the resolution of the criminal proceedings.

Sturge previously pleaded guilty to making a materially false statement to a federal agent and was sentenced in May 2018 to one year of probation.

The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss. The charge of aggravated identity theft provides for a minimum of two years in prison, which must be served consecutively to any other sentence imposed, one year of supervised release and a fine of up to $250,000. The charge of misuse of a Social Security number provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain/loss whichever is greater. Sentences are imposed by a federal district court judge based upon the US sentencing guidelines and other statutory factors.           

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and Quincy Police Chief Paul Keenan made the announcement today. Assistant U.S. Attorneys Sandra S. Bower of Lelling’s Criminal Division and David G. Lazarus of Lelling’s Civil Division are prosecuting the case.

BOSTON – A Canadian national pleaded guilty yesterday in federal court in Springfield to enticing children over the internet to produce child pornography and to send the sexually explicit pictures to him.

Justin Carl Wong, 35, of Ontario, Canada, pleaded guilty to 10 counts of sexual exploitation of a minor. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Oct. 4, 2018. Wong was indicted in August 2014 and has been in custody since his arraignment on Aug. 10, 2017, after being extradited from Canada.

In December 2012, Wong used a Voxer account to communicate with two girls, aged eight and 10, in Hampshire County. Wong first sent text and voice messages to the 10-year-old girl, knowing that she was a minor. Wong offered to be her “pretend boyfriend” and to help her “get a boyfriend in” her “real life.” Wong asked the girl to send him sexually explicit pictures of herself, but the child initially refused. Wong used psychological pressure to persuade and then to bully the girl to send him sexually explicit pictures by threatening to never speak to her again and telling her she would live a “lonely life” and to “have a nice life being alone” without Wong in her life. Wong repeatedly referred to her as a “bitch” and said she was a “loser” because she refused to send the pictures.

On Dec. 19, 2012, the 10-year-old girl succumbed to Wong’s repeated demands and took and sent three sexually explicit pictures of herself, as well as two sexually explicit photographs with the eight-year-old girl. Later that day, Wong engaged in a series of online communications with the eight-year-old girl in which Wong demanded specific kinds of sexually explicit pictures. The girl responded by taking and sending to Wong five such photographs.

Each count of sexual exploitation provides for a mandatory minimum sentence of 15 years and up to 30 years in prison, a minimum of five years and up to a lifetime of supervised release, and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.   

United States Attorney Andrew E. Lelling, Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; and Granby Police Chief Alan Wishart made the announcement. Assistant U.S. Attorney Alex Grant of Lelling’s Springfield Branch Office is prosecuting the case.

BOSTON – A Boston man was sentenced yesterday in federal court in Boston for robbing five banks throughout April and June 2017.

Thomas W. Nee, 47, was sentenced by U.S. District Court Judge George A. O’Toole Jr. to 92 months in prison and three years of supervised release. In September 2017, Nee pleaded guilty to five counts of bank robbery. Nee’s federal sentence will begin after he completes a three-year state sentence he is currently serving.

Between April and June 2017, Nee robbed five Boston banks of over $8,200. The robberies occurred on April 21, at Santander Bank on Commonwealth Avenue; on May 5, at Citizens Bank on Tremont Street; on May 8, at Century Bank on State Street; on May 22, at Randolph Savings Bank on School Street; and on June 8, at Eastern Bank on West Broadway. Nee committed each of the robberies by handing a teller a note demanding money.

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Office, made the announcement. Assistant U.S. Attorney Christine Wichers of Lelling’s Major Crimes Unit prosecuted the case.

BOSTON – Two men were arrested today and charged in federal court in Boston in connection with illegally using the identity of another individual to apply for two business loans. 

Igor Mosieev, 59, of Newton, was indicted on two counts of bank fraud and one count of aggravated identity theft. Alexander Grinis, 47, of Jamaica Plain, was charged in the same indictment with one count of false statements on loan applications. Mosieev and Grinis were arrested this morning and will appear this afternoon in federal court in Boston.  

According to the indictment, Grinis was the manager of Eastern Bank in Auburndale. Among his responsibilities were assisting customers with opening and closing accounts and applying for loans and lines of credit. In approximately February 2015, Grinis assisted Mosieev in opening a checking and savings account at Eastern Bank with the license and Social Security card of another individual, without the knowledge or consent of that person. Later that year, Grinis assisted Mosieev in adding the individual to a business account in the name of TFC Enterprises, LLC. Thereafter, Moiseev forged the individual’s name on applications for two purported business loans. On each loan application, Grinis falsely certified that he had complied with all bank procedures and, as a result, the loans were approved. The proceeds of the two loans were subsequently distributed to the business checking account and Moiseev forged the individual’s name on checks and withdrew money from the account to pay for his own personal expenses. In addition, Moiseev, with Grinis’ assistance, caused proceeds from the business checking account to be wire transferred to Russia, Canada, and elsewhere overseas using the individual’s name. Both loans defaulted and were never paid back to Eastern Bank, resulting in a loss of over $90,000.

The charges of bank fraud and false statements provide for a sentence of no greater than 30 years in prison, five years of supervised release, and up to a $1 million fine. The aggravated identity theft charge provides for a mandatory sentence of two years in prison, to be served consecutive to any other sentence imposed, up to three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  Assistant U.S. Attorney Laura J. Kaplan of Lelling’s Organized Crime and Gang Unit is prosecuting the case.

The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – A Boston-area investment adviser was sentenced today in federal court in Boston for using his clients’ funds to make his own investments and to pay personal expenses.

Cornelius Peterson, 29, of Newton, was senteced by U.S. District Court Judge Nathaniel M. Gorton to 20 months in prison, two years of supervised release and ordered to pay restitution in the amount of $462,000. Peterson previously pleaded guilty to one count of conspiracy and investment adviser fraud and three counts of bank fraud. Co-defendant James Polese, 51, of Wenham, pleaded guilty in April 2018 to one count of conspiracy and investment adviser fraud, eight counts of bank fraud, and one count of aggravated identity theft. He is scheduled to be sentenced on Aug. 2, 2018.

From approximately 2014 to June 2017, Polese and Peterson misappropriated approximately half a million dollars from their clients by transferring funds out of their clients’ accounts without their knowledge or consent. Specifically, on Aug. 20, 2014, Polese and Peterson used $100,000 from a client’s account to invest in a wind farm project despite the fact that it was not an investment opportunity authorized by their company. On May 15, 2015, Polese and Peterson used $400,000 from another client’s account to back a letter of credit in support of the wind farm project. On multiple occasions in 2017, Polese transferred funds from a client’s account to pay personal expenses, including college tuition payments and credit card bills. Polese and Peterson were terminated from the company in June 2017.

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Securities & Exchange Commission also provided valuable assistance with the investigation. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Economic Crimes Unit prosecuted the case.

BOSTON – A Worcester man pleaded guilty yesterday in federal court in Boston to being a felon in possession of a firearm.

Franklin Safo-Agyare, 25, pleaded guilty to being a felon in possession of a firearm and ammunition. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for Sept. 26, 2018.

Following a two-year investigation, Safo-Agyare and eight others were charged in January 2018 in connection with illegal activity within and near the Mildred C. Hailey Apartments in Jamaica Plain, formerly known as the Bromley Heath Housing Development. On June 6, 2018, Safo-Agyare, who was previously convicted of a crime punishable by more than one year in prison, sold a Jennings Model J22 .22 caliber pistol containing five rounds of ammunition to another individual in the vicinity of the housing development.  

The investigation and arrests sought to reduce violence and improve the quality of life in and around the Mildred C. Hailey Apartments for residents by removing individuals who engaged in criminal activity. Safo-Agyare is the fifth defendant to plead guilty in this case.

The charge of being a felon in possession of a firearm and ammunition provides for a sentence of no greater than 10 years in prison, up to three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Boston Police Commissioner William Evans made the announcement. Assistance was also provided by the Boston Housing Authority’s Department of Police and Public Safety.

The details contained in the charging documents are allegations. The remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.       

BOSTON – Three members of the Massachusetts State Police (MSP) were arrested and charged today with theft from an agency receiving government funds, as part of an ongoing investigation.  Two recently retired, one recently suspended.

Former Lieutenant David Wilson, 57, of Charlton; Trooper Gary Herman, 45, of Chester; and Former Trooper Paul Cesan, 50, of Southwick, were charged in three separate criminal complaints unsealed today. All three men were assigned to Troop E, which is responsible for enforcing criminal and traffic regulations along the Massachusetts Turnpike, Interstate I-90.  They will appear in U.S. District Court in Boston later today.

Wilson, who served as the Officer-in-Charge of several overtime shifts, along with Troopers Herman and Cesan are alleged to have received overtime pay for hours they either did not actually work at all, or shifts in which they departed one to seven hours early.   

The alleged conduct involves overtime pay for selective enforcement initiatives, including the Accident and Injury Reduction Effort program (AIRE) and the “X-Team” initiative. Both initiatives are intended to reduce accidents, crashes, and injuries on I-90 through an enhanced presence of MSP Troopers and targeting vehicles traveling at excessive speeds.  Wilson, Herman and Cesan were required to work the entire duration of the shifts – either four or eight hours – and truthfully report the date, time and sector of deployment on the citations issued during the shift. As alleged, they concealed the fraud by submitting citations that were issued previously, altered to create the appearance that the citation was issued during the overtime shift, and/or submitted citations that were never issued and never took place. 

According to court documents, investigators were able to corroborate the alleged conduct through spreadsheets compiled during MSP’s audit of Troop E’s overtime, along with data from MSP cruiser radios and other MSP records, to observe individual Trooper radio activity/inactivity patterns, as well as radio transmission location patterns. 

In 2016, Lt. Wilson earned approximately $230,000, claiming to have worked approximately 170 AIRE overtime shifts – equating to about $68,000 in overtime pay. The investigation revealed that out of those overtime hours worked in 2016, Lt. Wilson earned approximately $12,450 in overtime pay that he in fact, did not work. Trooper Herman earned $227,826 in 2016, which included approximately $63,000 in overtime, of which $12,468 was attributable to AIRE and X-Team shifts for which Herman either left early or did not show up to work. Trooper Cesan earned approximately $163,500, which included approximately $50,866 in overtime pay, $29,000 of which included pay for AIRE and X-Team overtime shifts that Cesan did not work.

In 2015 and 2016, MSP received annual benefits from the U.S. Department of Transportation in excess of $10,000, which were funded pursuant to numerous federal grants. 

The charge of theft of government funds provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Douglas Shoemaker, Special Agent in Charge of the U.S. Department of Transportation’s Office of Inspector General made the announcement today. Assistant U.S. Attorneys Dustin Chao and Mark Grady of Lelling’s Public Corruption Unit and Neil Gallagher of Lelling’s Economic Crimes Unit are prosecuting the case.

BOSTON – A Randolph man pleaded guilty today in federal court in Boston to being a previously convicted felon in possession of a firearm.

Dararong James Heang, 28, pleaded guilty to being a convicted felon in possession of a firearm and ammunition. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for Oct. 3, 2018.

Shortly after midnight on June 16, 2017, law enforcement officers stopped Heang and two other individuals in the area of Shirley Avenue in Revere, which had been the scene of recent gang violence. Heang was known to officers as being previously involved with gang activity. During a subsequent search, Heang was found to be in possession of a semi-automatic firearm and seven rounds of ammunition. At the time, Heang was on state probation and had previously been convicted of multiple felonies in state court, including assault and battery and possession with intent to distribute drugs.

The charge of being a felon in possession of a firearm provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Suffolk County District Attorney Daniel F. Conley; and Revere Police Chief James R. Guido made the announcement today. Assistant U.S. Attorney Kunal Pasricha of Lelling’s Organized Crime & Gang Unit is prosecuting the case.

BOSTON – A businessman, who owned and operated five real estate development companies in Pittsfield, pleaded guilty today in federal court in Springfield to defrauding a credit union.

Jeffrey Pierce, 51, of Pittsfield, pleaded guilty to one count of conspiracy to receive money through transactions of a credit union with intent to defraud the credit union and to make false statements to a federal credit union. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Oct. 3, 2018.

Between 2005 and 2008, a former Vice President of Greylock Federal Credit Union (GFCU) authorized approximately $4 million in various loans and modifications to Pierce and his companies in violation of GFCU’s loan policies. By circumventing GFCU’s policies, the Vice President caused GFCU to provide Pierce and his companies with funds far in excess of what Pierce and his companies could reasonably receive or repay. In exchange for improperly authorizing these loans, Pierce agreed to provide - and did provide - the Vice President with $134,773 in check payments from Pierce’s companies derived from GFCU loans that were paid to a front company created by the employee; the free use of a home constructed by one of Pierce’s companies with a GFCU loan; and the free use of a BMW automobile purchased by one of Pierce’s companies with a GFCU loan. Around March 2010, at the Vice President’s direction and for the purpose of influencing the action of GFCU upon the loans, Pierce falsely stated to GFCU that the money paid by his companies to the front company were payments for design work that the Vice President’s wife provided to Pierce’s construction projects.

The conspiracy charge provides for a sentence of no greater than five years in prison, up to three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.   

United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New England Field Division, made the announcement today. Assistant U.S. Attorney Steven H. Breslow of Lelling’s Springfield Branch Office is prosecuting the case.

BOSTON – A Lawrence man was sentenced in federal court in Boston today for his role in an opioid trafficking conspiracy involving the distribution of fentanyl, heroin, and oxycodone across Massachusetts and Florida.

Juan Reyes, 29, was sentenced by U.S. District Court Judge Denise J. Casper to 55 months in prison and three years of supervised release. In March 2018, Reyes pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute oxycodone and one count of conspiracy to launder monetary instruments.

Reyes and several co-conspirators were arrested in March 2017 for their roles in a widespread conspiracy involving opioid trafficking and money laundering offenses in Massachusetts and Florida. Their arrests were the result of a three-year federal investigation into opioid-trafficking in New England.

From at least 2014, Reyes and co-conspirator Craig Drummond, of Sunny Isles Beach, Fla., transported sizeable quantities of oxycodone from Miami, Fla., to Massachusetts, where it was distributed in the greater Boston area. Proceeds from the illicit oxycodone sales were then transported back to Florida and laundered in various ways.     

Drummond pleaded guilty and is scheduled to be sentenced on Oct. 12, 2018.

United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Delany De Leon-Colon, Acting Inspector in Charge of the U.S. Postal Inspection Service; John Gibbons, U.S. Marshal for the District of Massachusetts; and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division, made the announcement today. Valuable assistance was provided by the Massachusetts State Police and the Biddeford (Maine), Framingham, Haverhill, Lawrence, Manchester (N.H.), Methuen, Millis, Natick, Stoughton, and Waltham Police Departments. Assistant U.S. Attorneys Nadine Pellegrini and Craig Estes of Lelling’s Narcotics and Money Laundering Unit prosecuted the case.

BOSTON – An Illinois man, who previously lived in Massachusetts, was arraigned today in federal court in Worcester on charges associated with a wire fraud scheme whereby victims were told they owed money to the Internal Revenue Service (IRS).

Ashokkumar Patel, a/k/a Andy Patel, 28, of Hoffman Estates, Ill., and formerly of Plainville, Mass., was indicted on June 14, 2018, on one count of conspiracy to commit wire fraud, two counts of wire fraud, and one count of money laundering. In June 2017, Patel was arrested and charged by criminal complaint. He was released from custody on conditions.

According to the charging documents, from December 2013 to October 2014, Patel was part of a conspiracy whereby victims in the United States were contacted by individuals, primarily in India, and falsely told that they owed money to the IRS. The victims were told that in order to avoid imminent arrest, they had to purchase MoneyPak, or other types of prepaid stored value cards, load thousands of dollars onto the cards, and provide the serial numbers to the callers. After doing so, the victims’ money was quickly transferred to a prepaid debit card, such as Green Dot Debit Cards, and then the prepaid debit cards were used to purchase money orders. Patel was responsible for purchasing the prepaid debit cards, using the prepaid debit cards to purchase money orders and depositing the purchased money orders into various bank accounts, including his own.

The charges of conspiracy to commit wire fraud and wire fraud each provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. The charge of money laundering provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000, or twice the value of the property involved in the transaction. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  Assistant U.S. Attorney Michelle L. Dineen Jerrett of Lelling’s Worcester Branch Office is prosecuting the case.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

A former executive vice president of State Street Bank & Trust was convicted today by a federal jury in Boston in connection with engaging in a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades. 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Andrew E. Lelling of the District of Massachusetts and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Field Division made the announcement.

After a three-week trial, Ross McLellan, 47, of Hingham, Massachusetts, was convicted of one count of conspiracy to commit securities fraud and wire fraud, two counts of securities fraud and two counts of wire fraud.  U.S. District Court Judge Leo T. Sorokin of the District of Massachusetts, who presided over the trial, scheduled sentencing for Oct. 10.

“State Street’s clients, including institutional investors managing pensions for retirees, entrusted McLellan and his subordinates to transition billions of dollars in assets,” said Acting Assistant Attorney General John Cronan.  “Rather than living up to the responsibility to act in their clients’ best interests, McLellan and his coconspirators stole from these victims by charging hidden commissions and then lying about the scheme to cover their tracks.  This conviction is a testament to the dedication of the FBI and prosecutors in the Criminal Division and U.S. Attorney’s Office to protecting innocent investors by investigating and prosecuting complex financial crimes.”

“Mr. McLellan defrauded State Street clients, violating his fiduciary duties and abusing his clients’ trust along the way,” said U.S. Attorney Lelling.  “With systematic precision, Mr. McLellan and his conspirators added secret commissions to securities trades and took steps to conceal the scheme.  In doing so, beyond directly defrauding institutional investors, Mr. McLellan chipped away at the savings of thousands of retirees whose pensions he was supposed to safeguard.  After only five hours of deliberations, a jury found Mr. McLellan guilty of five of six counts in the indictment.” 

“Motivated by sheer greed, Mr. McLellan devised an elaborate bait and switch scheme to defraud State Street’s clients out of millions of dollars, and now he’s finally being held accountable for his actions,” said FBI Special Agent in Charge Shaw.  “This case should serve as a warning to others, the FBI and our law enforcement partners will aggressively pursue and bring to justice those who undermine our financial markets.”

In April 2016, McLellan, a former executive vice president of State Street who served as global head of its Portfolio Solutions Group and president of its U.S. broker-dealer, was indicted with Edward Pennings, 47, of Surrey, England, a former senior managing director of State Street and the head of its Portfolio Solutions Group for Europe, the Middle East and Africa.  

As established by the evidence at trial, between February 2010 and September 2011, McLellan, Pennings and Richard Boomgaardt, 44, of Sevenoaks, England, a former managing director of State Street, conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios.  The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions.  McLellan, Pennings and Boomgaardt took steps to hide the commissions from the clients and others within the bank, including by directing that the commissions not be broken out in post-trade reports. 

For example,

• In a telephone call in March 2010, Pennings instructed Boomgaardt not to talk about the plans to charge hidden commissions on one transaction “with anyone . . . because it’s not going to help our story.  Don’t even share it with the rest of the team, to be honest.”
• In June 2010, McLellan and Boomgaardt requested that the bank’s traders provide them with the reported daily high and low prices of securities the bank had traded for the client so that they could determine the amount of the commissions to be applied to each security without attracting the client’s attention.
• In March 2011, McLellan instructed a U.S. fixed income trader to charge a commission of one basis point (0.01 percent) of yield to each trade conducted for another client – notwithstanding that the written trading instructions for the transaction said to charge zero commissions – and subsequently instructed the trader to delete any reference to the commissions from the trading results he sent to the transition manager assigned to the project.

In June 2011, when one of the affected clients inquired about whether it had, in fact, been charged commissions in breach of its agreement with the bank, Pennings initially denied that any commissions had been charged.  Later – at McLellan’s direction – Pennings acknowledged only that “inadvertent commissions” had been applied to securities traded in the United States, but did not disclose that they had, in fact, been intentionally charged in both the United States and in Europe.  McLellan and Pennings sought to mislead the bank’s compliance staff into believing that the commissions had been charged in error and that the amount of the overcharges was limited to the commissions applied on U.S. securities, the evidence showed.

In June 2017, Pennings pleaded guilty and is scheduled to be sentenced on July 18.  Boomgaardt was charged separately and pleaded guilty in July 2017 to one count of conspiracy to commit securities fraud and wire fraud.  Boomgaardt is scheduled to be sentenced on July 31.

The case was investigated by the FBI.  Trial Attorney William Johnston of the Criminal Division’s Fraud Section and Assistant U.S. Attorney/Economic Crimes Chief Stephen E. Frank of the District of Massachusetts are prosecuting the case.  Valuable assistance was provided by the Securities & Exchange Commission and the Justice Department’s Office of International Affairs.

BOSTON – A former executive vice president of State Street Corporation was convicted today by a federal jury in Boston in connection with engaging in a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades. 

Ross McLellan, 47, of Hingham, Mass., was convicted of one count of conspiring to commit securities fraud and wire fraud, two counts of securities fraud and two counts of wire fraud. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Oct. 10, 2018.

“Mr. McLellan defrauded State Street clients, violating his fiduciary duties and abusing his clients’ trust along the way,” said Andrew E. Lelling, United States Attorney for the District of Massachusetts. “With systematic precision, Mr. McLellan and his conspirators added secret commissions to securities trades and took steps to conceal the scheme. In doing so, beyond directly defrauding institutional investors, Mr. McLellan chipped away at the savings of thousands of retirees whose pensions he was supposed to safeguard. After only five hours of deliberations, a jury found Mr. McLellan guilty of five of six counts in the indictment.” 

“State Street’s clients, including institutional investors managing pensions for retirees, entrusted McLellan and his subordinates to transition billions of dollars in assets,” said Acting Assistant Attorney General John Cronan.  “Rather than living up to the responsibility to act in their clients’ best interests, McLellan and his coconspirators stole from these victims by charging hidden commissions and then lying about the scheme to cover their tracks.  This conviction is a testament to the dedication of the FBI and prosecutors in the Criminal Division and U.S. Attorney’s Office to protecting innocent investors by investigating and prosecuting complex financial crimes.”

“Motivated by sheer greed, Mr. McLellan devised an elaborate bait and switch scheme to defraud State Street’s clients out of millions of dollars, and now he’s finally being held accountable for his actions,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office. “This case should serve as a warning to others, the FBI and our law enforcement partners will aggressively pursue and bring to justice those who undermine our financial markets.”

In April 2016, McLellan, a former executive vice president of State Street who served as global head of its Portfolio Solutions Group and president of its U.S. broker-dealer unit, was indicted with Edward Pennings, 47, of Surrey, England, a former senior managing director of State Street and the head of its Portfolio Solutions Group for Europe, the Middle East and Africa. In June 2017, Pennings pleaded guilty and is scheduled to be sentenced on July 18, 2018. Also in June 2017, Richard Boomgaardt, 44, of Sevenoaks, England, a former managing director of State Street, was charged separately and pleaded guilty in July 2017 to one count of conspiracy to commit securities fraud and wire fraud. Boomgaardt is scheduled to be sentenced on July 31, 2018.

Between February 2010 and September 2011, McLellan, Pennings, and Boomgaardt conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. McLellan, Pennings, and Boomgaardt took steps to hide the commissions from the clients and others within the bank, including by directing that the commissions not be broken out in post-trade reports. 

For example,

• In a telephone call in March 2010, Pennings instructed Boomgaardt not to talk about the plans to charge hidden commissions on one transaction “with anyone . . . because it’s not going to help our story. Don’t even share it with the rest of the team, to be honest.”
• In June 2010, McLellan and Boomgaardt requested that the bank’s traders provide them with the reported daily high and low prices of securities the bank had traded for the client so that they could determine the amount of the commissions to be applied to each security without attracting the client’s attention. 
• In March 2011, McLellan instructed a U.S. fixed income trader to charge a commission of one basis point (0.01%) of yield to each trade conducted for another client – notwithstanding that the written trading instructions for the transaction said to charge zero commissions – and subsequently instructed the trader to delete any reference to the commissions from the trading results he sent to the transition manager assigned to the project.

In June 2011, when one of the affected clients inquired about whether it had, in fact, been charged commissions in breach of its agreement with the bank, Pennings initially denied that any commissions had been charged. Later, at McLellan’s direction, Pennings acknowledged only that “inadvertent commissions” had been applied to securities traded in the United States, but did not disclose that they had, in fact, been intentionally charged in both the United States and in Europe. McLellan and Pennings sought to mislead the bank’s compliance staff into believing that the commissions had been charged in error and that the amount of the overcharges was limited to the commissions applied on U.S. securities.

The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss. The charge of wire provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss. The charge of securities fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $ 5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Lelling, Acting Assistant Attorney General Cronan, and FBI SAC Shaw made the announcement today. Valuable assistance was provided by the Securities & Exchange Commission and the Justice Department’s Office of International Affairs. Assistant U.S. Attorney Stephen E. Frank, Chief of Lelling’s Economic Crimes Unit and Trial Attorney William Johnston of the Criminal Division’s Fraud Section are prosecuting the case.

BOSTON – A former Roslindale Post Office employee was arrested today and charged in federal court in Boston in connection with embezzling mail.

Megan Hawes, 28, of Roslindale, was indicted on one count of theft of mail matter by a Postal Service employee. She appeared in federal court in Boston this afternoon and was released on conditions.

According to the indictment, which was unsealed today, the offenses occurred from approximately March 2017 to May 10, 2018, while Hawes was an employee of the Postal Service in Roslindale.    

The charge provides for a sentence of no greater than five years in prison, up to three years of supervised release and a $250,000 fine. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Matthew Modafferi, Special Agent in Charge of the U.S. Postal Service, Office of Inspector General, Northeast Area Field Office; and Weymouth Police Chief Richard C. Grimes made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Lelling’s Major Crimes Unit is prosecuting the case.

The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.