District of Massachusetts
Press releases recorded for this federal judicial district.
Owner of Financial Services Company Pleads Guilty to Securities and Tax FraudRead the Press Release
BOSTON – The former owner of a Lawrence-based financial services company pleaded guilty today to charges that he defrauded investors, filed false tax returns on behalf of certain clients, and then filed his own false tax returns.
Robert Burton, 37, the former Managing Director of Pinnacle Financial Consulting LLC, Pinnacle Strategic Investments LLC, and the Pinnacle Asset and Capital Management Group LLC, pleaded guilty before U.S. District Court Judge Mark L. Wolf to securities fraud and tax fraud. Sentencing is scheduled for Nov.13, 2014 at 3:00 pm.
Burton acted as an investment advisor and promised to invest some clients’ money in various securities, including stocks, mutual funds, and in a debt portfolio allegedly managed by Pinnacle. In some instances, he promised to return the principal invested within approximately 30 days, along with an interest payment equal to 100% of the amount invested. Burton did not invest the money as promised, did not make the promised payments and, in some instances, provided investors with checks that ultimately bounced.
Through Pinnacle, Burton also provided tax preparation services and, in at least two instances, prepared and filed false tax returns on behalf of his clients. Finally, although Burton derived substantial income through the operation of Pinnacle, he failed to identify that income on his own tax returns and admitted to filing false tax returns for the 2008, 2009, 2010 and 2011 tax years.
If the plea agreement is accepted by the Court, Burton will be sentenced to no more than two years in prison and not less than 12 months confinement, three years of supervised release, and restitution to the victims.United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the U.S. Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The Massachusetts Attorney General’s Office, which has a civil case pending against Burton, cooperated with the investigation. The case is being prosecuted by Assistant U.S. Attorney Sarah E. Walters of Ortiz’s Economic Crimes Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
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Dias Kadyrbayev Pleads Guilty to Impeding Boston Marathon Bombing InvestigationRead the Press Release
BOSTON – Dias Kadyrbayev, 20, a close friend of alleged Boston Marathon bomber, Dzhokhar Tsarnaev, pleaded guilty today in federal court in Boston, to impeding the bombing investigation. Kadyrbayev pleaded guilty to conspiring to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation.
The terms of the plea agreement provide that the U.S. Attorney will recommend a sentence of seven years in prison. Kadyrbayev has agreed to be deported from the United States after serving his sentence. U.S. District Judge Douglas P. Woodlock scheduled sentencing for Nov. 18, 2014.
In August 2013, Kadyrbayev was indicted with Azamat Tazhayakov for obstructing the investigation of the Marathon bombings. Kadyrbayev and Tazhayakov are both nationals of Kazakhstan who were temporarily living in the United States on student visas while attending the University of Massachusetts Dartmouth (UMass). However, at the time of their arrests on May 1, 2013, their visas had been revoked.
At today’s hearing, Kadyrbayev admitted that on the evening of April 18, 2013, after he viewed images of the suspected Boston Marathon bombers released by the FBI, he exchanged text messages with Dzhokhar Tsarnaev. He then went with Azamat Tazhayakov to the University of Massachusetts at Dartmouth campus. At approximately 10:00 pm, Kadrybayev, Tazhaykaov and a third individual entered Dzhokhar Tsarnaev’s dormitory room at UMass.
While inside Tsarnaev’s dormitory room, Kadyrbayev searched it and found a backpack containing fireworks and a jar of Vaseline. The fireworks appeared to have been opened, manipulated, and some of the explosive powder appeared to have been removed. After finding this backpack and the fireworks, Kadyrbayev showed them to Tazhayakov and they both agreed to remove the backpack from Tsarnaev’s dormitory room. Kadyrbayev also found Tsarnaev’s laptop computer. At approximately 10:30 p.m., Kadrybayev, Tazhayakov and a third individual left Tsarnaev’s dormitory room. When they left, Kadyrbayev removed several items from Tsarnaev’s room, including Tsarnaev’s laptop computer and his backpack and its contents. Kadyrbayev, accompanied by Tazhayakov and the third individual, then brought the items back to the apartment he shared with Tazhayakov in New Bedford.
Kadyrbayev also admitted that, after returning to their apartment, on the evening of April 18, 2013 and the morning of April 19, 2013, he and Tazhayakov watched television news reports and read Internet news articles about the bombing investigation and the manhunt for the two suspected Boston Marathon bombers whom they believed were Dzhokhar and Tamerlan Tsarnaev. During the early morning hours of April 19, 2013, Kadrybayev and Tazhayakov discussed getting rid of Tsarnaev’s backpack and the fireworks. They both agreed that they should get rid of Tsarnaev’s backpack and as a result of their agreement, Kadyrbayev placed the backpack and its contents, including the fireworks, into a large black trash bag and threw the entire bag into the garbage dumpster in his apartment complex. After discarding the backpack in the garbage, Kadyrbayev decided to keep Tsarnaev’s laptop computer and continue to conceal it. He did not attempt to return it to Tsarnaev’s dormitory room, nor did he notify law enforcement that he had Tsarnaev’s computer.
On April 26, 2013, after 25 federal agents searched a landfill in New Bedford for two days, Tsarnaev’s backpack, containing fireworks, a jar of Vaseline, and a thumb drive, was found. Although these items were found, the condition of the backpack and its contents had been altered by the actions of Kadyrbayev and Tazhayakov.If the plea agreement is accepted by the Court, Kadyrbayev will be sentenced to no more than seven years in jail and three years of supervised release. Kadrybayev will also be deported after serving any sentence that the Court imposes.
In July 2014, Azamat Tazhayakov was found guilty by a federal jury in Boston of conspiring to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation. Sentencing is set for sentencing for Oct. 16, 2014.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division, made the announcement today. This investigation was conducted by the FBI’s Boston Division and member agencies of the Boston Joint Terrorism Task Force (JTTF) which is comprised of more than 30 federal, state and local enforcement agencies. Homeland Security Investigations in Boston, Massachusetts State Police, University of Massachusetts Dartmouth Department of Public Safety, New Bedford Police Department, Dartmouth Police Department, U.S. Department of Transportation – Office of Inspector General, U.S. Treasury Inspector General for Tax Administration (TIGTA), Essex County Sheriff’s Office, and Internal Revenue Service’s Criminal Investigations in Boston, provided assistance to this investigation.
The case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John A. Capin of Ortiz’s Anti-Terrorism and National Security Unit.Shrewsbury Man Sentenced for Social Security FraudRead the Press Release
BOSTON - A Shrewsbury man was sentenced in U.S. District Court in Worcester today for taking $57,948 in Social Security payments to which he was not entitled.
George Bergstrom, 60, was sentenced by U.S. District Court Judge Timothy S. Hillman to one year of probation and was ordered to pay $57,948 in restitution to the Social Security Administration, all of which he paid today. In May 2014, Bergstrom pleaded guilty to theft of public money.
In 2009, Bergstrom’s mother died, but her Social Security payments continued to be directly deposited into a joint bank account she held with Bergstrom. From 2009 to 2013, Bergstrom continued to receive and spend his deceased mother’s benefits of more than $1,100 per month. The payments should have ceased upon the death of Bergstrom’s mother and he was not entitled to receive this money.
United States Attorney Carmen M. Ortiz 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. The case was prosecuted by Timothy Landry of Ortiz’s Major Crimes Unit.
Man Charged with Three Bank RobberiesRead the Press Release
BOSTON – Edward Stone, 25, made his initial appearance in U.S. District Court today where he is charged with three bank robberies. The indictment, which was returned July 31, 2014, alleges that during a three-week period in June 2014, Stone robbed two TD Bank branches in Braintree, and one in Hingham.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000, and restitution in the approximate amount of $18,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Chief Russell Jenkins of the Braintree Police Department; and Chief Michael Peraino of the Hingham Police Department, made the announcement today. The investigation was also assisted by the Massachusetts State Police and the Boston FBI Violent Crimes Task Force. The case is being prosecuted by Brian A. Pérez-Daple of Ortiz’s Major Crimes Unit.
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.
Bank Executive Arrested for Insider TradingAllegedly Tipped Off Friend at Country Club About Bank AcquisitionRead the Press Release
BOSTON - A former executive of Boston-based Eastern Bank Corp. was arrested and charged today with participating in an insider trading conspiracy.
It is alleged that John Patrick O’Neill, 64, of Belmont, secretly tipped off a friend about the sale of Wainwright Bank & Trust Company, which was acquired by Eastern Bank in 2010. Prior to the acquisition, shares of Wainwright traded on the Nasdaq Stock Market.
O’Neill, who was a Senior Vice President and Senior Credit Officer at Eastern Bank, is charged with conspiracy to commit securities fraud. He was a member of Eastern Bank’s due diligence team that evaluated the Wainwright acquisition in the weeks leading up to the deal.
It is alleged that O’Neill tipped his friend (“CC-1”) to Wainwright’s sale over the weekend of June 11, 2010, more than two weeks before the acquisition was publicly announced, during a face-to-face encounter at the Watertown country club where both men are members. On the next trading day, O’Neill’s friend called his broker to ask how he could buy 25,000 shares of Wainwright stock, which he acknowledged “kinda sounds crazy,” given how thinly the stock traded. CC-1 ultimately purchased a total of 31,000 Wainwright shares over the next two weeks, at prices between $8.85 and $9.90 per share, single-handedly accounting for some 56% of the total trading volume in Wainwright shares during that period. On June 29, 2010, Eastern Bank announced its agreement to acquire Wainwright for $19 per share in cash, a premium of nearly 100% over the stock’s prior closing price. CC-1 ultimately sold his shares for a profit of more than $300,000.
United States Attorney Carmen M. Ortiz said, “Insider trading is a serious crime that undermines the integrity of our financial markets. Corporate executives who misuse their access to confidential information to benefit themselves or their friends are simply stealing from thousands of Americans who invest their savings in the stock market without that inside knowledge. We will continue to aggressively investigate and prosecute this kind of behavior, whether it happens in the boardroom, on the golf course, or over drinks at a bar.”
Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation in Boston said, “Let me be clear, there are many tripwires in place to detect suspiciously timed trades and as a result of those tripwires numerous people in the Boston area have been charged with insider trading based on parallel FBI and SEC investigations. The risk versus reward calculation for insider trading should be clear based on the increasing number of those recently charged.”
The maximum sentence under the statute is five years in prison, followed by three years of supervised release and a fine of the greater of $250,00 or twice the gross gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission, which today filed a separate civil action in federal court. The case is being prosecuted by Stephen E. Frank and Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Woman Indicted for Drug Smuggling at Logan AirportRead the Press Release
BOSTON - A Massachusetts woman has been charged with smuggling cocaine through Logan Airport.
On June 16, 2014, Laura Santana, 26, of East Boston, was stopped at Logan International Airport as she returned from the Dominican Republic with two empty purses, one in her suitcase and another in a handbag. It is alleged that each purse was heavier than an empty purse should have been, and the Customs and Border Protection Officers felt something sewn into the lining of the purses.
According to documents filed with the court, when the linings were cut open, six packets of a powdery substance, wrapped in dark blue mimeograph paper and clear tape, were found. Preliminary testing revealed that the substance was cocaine. The indictment charges Santana with unlawful import of a controlled substance.
The maximum sentence under the statute is 20 years in prison, followed by three years of supervised release and a $1 million fine. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Thomas E. Kanwit of Ortiz’s Major Crimes Unit.
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.
Two Chinese Citizens Charged with Trafficking Counterfeit Cell Phone CasesRead the Press Release
Boston – Two Chinese citizens, living in Massachusetts, were charged today with importing and reselling counterfeit cases for cell phones.
Zexiong Chen, 28, and Haotian Chen, 26, who are unrelated, were charged today with trafficking in counterfeit goods. It is alleged that in February 2013, the defendants incorporated Max Wireless Group, Inc. as a vehicle for importing and reselling cell phone cases, many of which were counterfeit. Through Max Wireless, Zexiong Chen and Haotian Chen allegedly imported counterfeit cell phone cases from China, sold a small percentage of them through their Wakefield store, and sold the vast majority of them to individuals and companies who resold them at retail locations. Many of these retail locations were kiosks in shopping malls, some of which were in Massachusetts.
In February 2014 Zexiong Chen was arrested at JFK International Airport as he prepared to board a plane to China. He has been in custody since that time. Haotian Chen was also arrested in February 2014 and was released by the Court on conditions.
It is alleged that on 12 occasions from November 2012 through August 2013, U.S. Customs and Border Patrol officials inspected shipments the defendants imported from China to the United States and determined that these shipments contained counterfeit items. These 12 seizures included more than 10,000 counterfeit cell phone cases, bearing marks of manufacturers including: OtterBox, Speck, Kate Spade, Hello Kitty, Ferrari and LifeProof. On Sept. 4, 2013, federal agents searched the Max Wireless store and found more than 2,500 counterfeit cell phone cases and accessories.
The total of the manufacturers’ suggested retail price (MSRP) for the authentic versions of all of the cell phone cases that were seized during the course of this investigation totaled more than $350,000, but the defendants paid far less for the cases and typically resold the cases for far less than MSRP.
The maximum sentence under the statute is 10 years in prison, followed by three years of supervised release and a fine of $2 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. The case was investigated by Homeland Security Investigations and is being prosecuted by Assistant U.S. Attorney Adam Bookbinder, Chief of Ortiz’s Cyber Crime’s Unit.
Rhode Island Man Sentenced for Failing to Register as A Sex OffenderRead the Press Release
BOSTON - A Rhode Island man was sentenced today for failing to register as a sex offender.
Ryan Hathaway, 32, was sentenced by U.S. District Court Judge Rya W. Zobel to 24 months in prison and five years of supervised release. In April 2014, Hathaway pleaded guilty to failure to register as a sex offender.
This is Hathaway’s third conviction for failure to register as a sex offender. He is required to register because of his 2004 Massachusetts state court conviction for indecent assault and battery on a child under age 14. He was previously convicted in 2011 for failing to register. In 2012, he was convicted again for failing to register, and received a jail term. He was released to Massachusetts in October 2013 and within a month cut his GPS tracking bracelet and absconded to Rhode Island, without registering as a sex offender as required. In December 2013, Hathaway was arrested in Pawtucket.
United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal of the U.S. Marshals Service, District of Massachusetts, made the announcement today. The case was prosecuted by Timothy Landry of Ortiz’s Major Crimes Unit.
Former Tufts Health Plan Employee Convicted of Disclosing Personal Patient InformationRead the Press Release
BOSTON – A former employee of Tufts Health Plan pleaded guilty today to stealing personal identifying information belonging to hundreds of customers. The stolen data included names, dates of birth, and Social Security numbers, primarily of customers over the age of 65.
Emeline Lubin, 27, pleaded guilty to the unlawful disclosure of Social Security numbers. U.S. District Judge George A. O’Toole, Jr., scheduled sentencing for Nov. 13, 2014.
In 2010, Lubin began working at Tufts Health Plan in Watertown. During her employment, Lubin gave lists of customers’ personal identification information to a Florida man who was involved with her brother in a scheme to steal Social Security benefits and to collect fraudulent income tax refunds by using stolen identities to file false income tax returns. At today’s plea hearing, the prosecutor stated that Lubin stole and disclosed the personal data of over 8,700 customers. Earlier this year, Sniders Jean-Jacques and Melvin Lubin pleaded guilty to the theft of public money in U.S. District Court in Worcester.
The charging statute provides a sentence of no greater than five 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. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the U.S. Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Timothy Landry of Ortiz’s Major Crimes Unit.
Members of the public who have questions, concerns or information regarding this case should email [email protected]Raytheon to Resolve Allegation That It Improperly Charged Department of Defense for ReimbursementRead the Press Release
BOSTON – Raytheon Company, a Waltham-based defense contractor, has agreed to pay $350,000 to resolve allegations that it charged the Department of Defense for meal expenses that were ineligible for reimbursement. Specifically, the government alleged that, from 2007 to 2009, Raytheon submitted overhead expenses for group meals, business group meals, and group meals at conference events that were ineligible for reimbursement under the Federal Acquisition Regulation.
This matter was investigated by Leo Lamont, Special Agent in Charge of the Naval Criminal Investigative Service, Northeast Field Office, and Michael Conner, Resident Agent in Charge of the U.S. Army Criminal Investigation Division, Hartford Fraud Resident Agency, with the assistance of the Defense Contract Audit Agency’s Investigative Support Division and the Defense Contract Management Agency. The matter was handled by Assistant United States Attorney Jennifer Cardello or Ortiz’s Civil Division.
Former Associate Dean of MIT Sloan School and His Harvard MBA Son Agree to Plead Guilty in Hedge Fund ScamRead the Press Release
BOSTON – Two Boston-area hedge fund managers were charged today with conspiracy to commit securities fraud, wire fraud and obstruction of justice.
Gabriel Bitran, 69, of Newton, a former professor and associate dean of the Massachusetts Institute of Technology ("MIT") Sloan School of Business, and his son Marco Bitran, 39, of Brookline, a Harvard Business School graduate and money manager, were charged with conspiracy to commit securities fraud, wire fraud and obstruction of justice in connection with their hedge fund businesses, GMB Capital Management and GMB Capital Partners. Both Gabriel and Marco Bitran have agreed to plead guilty to the charge.
It is alleged that from 2005 through 2011, Gabriel and Marco Bitran solicited and maintained investors in their hedge fund and investment advisory businesses with false claims that, for eight or more years, they had managed friends and family funds, delivering average annual returns between 16 and 23%, with no down years. The Bitrans falsely told investors that the money in GMB hedge funds would be invested according to a complex mathematical trading model developed by Gabriel Bitran and based upon his MIT research on optimal pricing theory. The Bitrans also routinely concealed from investors that certain of their hedge funds were simply “funds of funds,” that is, hedge funds in which values of investments are determined by the value of investments in other independently managed hedge funds, some of which were themselves broad-based funds of funds.
By means of their fraudulent representations, the Bitrans induced investors to entrust over $500 million to their businesses. From this money, the Bitrans paid themselves millions of dollars in management fees for managing the funds in which they had fraudulently induced people to invest.
In the fall of 2008, several of the Bitrans’ hedge funds had disastrous losses, resulting in investors losing 50–75% of their principal in many instances. Nonetheless, in the fall of 2008, as their funds were experiencing these losses, Gabriel and Marco Bitran redeemed approximately $12 million of their own money from these hedge funds, while deferring other investors’ requests for redemption. The Bitrans thereby extracted much of the value of their own investments while leaving other investors to suffer more losses as the funds’ values declined precipitously.
In January 2009, while investigating potential victims of the Madoff fraud, the United States Securities and Exchange Commission (“SEC”) examiners learned of the Bitrans’ performance claims and asked for supporting documentation. In response, the Bitrans allegedly made false statements to the SEC examiners and provided fabricated records purporting to support their claimed actual trading performance.
As they did so, Gabriel and Marco Bitran acknowledged to each other that they had made false statements to investors and owed them restitution. In July 2009, Gabriel Bitran emailed Marco Bitran and discussed the fact that they had misled investors:
“We have mislead [sic] a lot of people with a range of statements that were incorrect simply to increase our income. . . . A person with the experience and knowledge of the financial sector and a veteran professor of MIT should not have engaged in this type of behavior. . . . I certainly do not blame you for everything that happened; we both share responsibility. . . . With [several named individuals] and probably a few others . . . we told them a story that was not true! . . . In my view you are discarding their anger as bad losers. This is not the whole story. They are not idiots, they know that they were mislead [sic]. The penalty for this type of action is Full [sic] restitution, which obviously we cannot afford.”
Similarly, in a September 1, 2009 email, Marco Bitran acknowledged to his father that he had not acted honestly. He stated:
“We are certainly sharing equally in this dad. . . . Lots of our problems were caused by my good intentions but very poor actions when it came to true honesty.”
Still, from early 2009 through 2010, the Bitrans took steps to shield their assets by transferring them out of GMB businesses and into entities with less obvious affiliations to Gabriel and Marco Bitran. To effect some of these transfers, they used the identity of a family member without that person’s knowledge, obtaining falsely notarized signatures in that person’s name, to shield millions of dollars that they had preferentially transferred out of the GMB hedge funds.
In total, the Bitrans lost more than $140 million of GMB investors’ principal.
If the plea agreements are accepted by the Court, the Bitrans will be sentenced to no more than five years in jail but no less than two years, as well as a period of up to three years of supervised release and more than $10 million in forfeiture.
If you believe that you are a victim or have any information regarding this case you may contact us at [email protected].
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission in the course of investigating this case.
The case is being prosecuted by Sara Miron Bloom of Ortiz’s Economic Crimes Unit, Brian Pérez-Daple of the Major Crimes Unit and Mary Murrane, Chief of the Asset Forfeiture Unit.
The details contained in the Information are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Boston, Baltimore Men Plead Guilty to Charges of Sex Trafficking A MinorRead the Press Release
BOSTON – Two men, one from Boston and one from Baltimore, pleaded guilty today in connection with the sex trafficking of a 15-year-old girl.
Mark Pinnock, 23, of Boston, pleaded guilty to recruiting and transporting a minor to engage in prostitution. Martin Pinkney, 23, of Baltimore, pleaded guilty to conspiracy to sex traffic a minor victim. In March 2014, Pinnock, Pinkney, and their co-defendant, Justin Richardson, were originally charged. Richardson pleaded guilty to a sex trafficking charge yesterday. All three men are scheduled to be sentenced by U.S. District Court Judge Nathaniel M. Gorton in November 2014.
In late December 2013, officers responded to a 9-1-1 call from a Cambridge hotel, where they found the 15-year old victim and Pinnock. The minor victim stated that Richardson and Pinkey had arranged for her to travel by bus from Baltimore to Boston. Pictures were taken of the minor victim in both Baltimore and Boston and used to post ads soliciting prostitution on the websites Backpage and Craigslist. While in Boston, the minor victim completed commercial sex acts at the direction of Pinnock at two area hotels.
Pinnock’s conviction carries a mandatory minimum sentence of 10 years to life in prison, a minimum term of five years and up to a lifetime of supervised release, a fine of $250,000, and restitution. Pinkney’s conviction carries a maximum sentence of a lifetime in prison, up to five years supervised release, a fine of $250,000, and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement, Homeland Security Investigations in Boston; and Cambridge Police Commissioner Robert C. Haas, made the announcement today. The U.S. Attorney’s Office also wishes to thank Middlesex County District Attorney Marian C. Ryan’s office for its participation in the investigation that led to today’s plea. The case is being prosecuted by Assistant U.S. Attorneys Seth Kosto and Carlos López of Ortiz’s Civil Rights Enforcement Team.The aggressive enforcement of federal civil rights laws is a top priority of the U.S. Attorney’s Office for the District of Massachusetts. Since U.S. Attorney Ortiz created the Civil Rights Enforcement Team in 2010, the Office has substantially increased its focus on civil and criminal civil rights enforcement. In the last four years, the office has charged multiple defendants with sex trafficking and other criminal civil rights violations.
Baltimore Man Pleads Guilty to Sex Trafficking of A MinorRead the Press Release
BOSTON – A Baltimore man pleaded guilty today to the sexual trafficking of a 15-year-old girl.
Justin Richardson, a/k/a "Jay," a/k/a "Jay Loyal Richardson," 21, pleaded guilty to recruiting and transporting a minor to engage in prostitution. Richardson and his codefendants, Mark Pinnock and Martin Pinkey, were originally charged in March 2014. Richardson is scheduled to be sentenced by U.S. District Court Judge Nathaniel M. Gorton on November 14, 2014.
In late December 2013, officers responded to a 9-1-1 call from a Cambridge hotel, where they found the 15-year-old victim and Pinnock. The minor victim stated that Richardson and Pinkney had arranged for her to travel by bus from Baltimore to Boston. Pictures were taken of the minor victim in both Baltimore and Boston and used to post ads soliciting prostitution on the Internet websites Backpage and Craiglist. While in Boston, the minor victim completed commercial sex acts at the direction of Pinnock at two Boston area hotels.
Pursuant to the plea agreement, Richardson faces a sentence of at least 10 years in prison, at least five years of supervised release, and a $250,000 fine. Pinnock and Pinkey are scheduled to enter guilty pleas on August 12, 2014.
U.S. Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement, Homeland Security Investigations in Boston; and Cambridge Police Commissioner Robert C. Haas made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Seth Kosto and Carlos Lopez, both members of Ortiz’s Civil Rights Enforcement Team. Ortiz also thanked the office of Middlesex County District Attorney Marian C. Ryan for its participation in the investigation that led to today’s plea.The aggressive enforcement of federal civil rights laws is a top priority of the U.S. Attorney’s Office for the District of Massachusetts. Since U.S. Attorney Ortiz created the Civil Rights Enforcement Team in 2010, the Office has substantially increased its focus on civil and criminal civil rights enforcement. In the last four years, the office has charged multiple defendants with sex trafficking and other criminal civil rights violations.
Holden Woman Convicted in Scheme to Steal Close to $1 Million from Elderly In-LawsRead the Press Release
WORCESTER - A Holden woman was convicted of wire fraud today after pleading guilty to charges that she stole close to $1 million from her elderly in-laws.
Chiao Fang Ku, 45, pleaded guilty before United States District Court Judge Timothy S. Hillman to an Information charging her with wire fraud. Sentencing is scheduled for November 3.
After Ku’s father-in-law became ill in 2008, Ku offered to help her mother-in-law manage the couple’s finances. Ku was given access to her in-laws’ savings and investment accounts. She thereafter began siphoning funds from those accounts through online transfers, forged checks, and cash withdrawals, and used the money for on-line gambling activities and other personal uses. She also applied for — and received — credit cards in her mother-in-law’s name without authorization, and then used those cards for personal expenses. In total, Ku stole over $950,000 from her in-laws over a five-year period.
The maximum statutory sentence for wire fraud is 20 years in prison to be followed by three years of supervised release and a fine of the greater of $250,00 or twice the gross gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
Former Cape Cod Pediatrician Indicted on Child Pornography ChargesRead the Press Release
BOSTON – A former pediatrician was indicted today with charges relating to child pornography.
Daniel J. O’Hern, 64, of Mashpee, was charged with distribution and possession of child pornography. In June 2014, O’Hern was charged by criminal complaint and is currently being held in federal custody.
According to the affidavit, in May 2014, law enforcement discovered that O’Hern was utilizing a public file sharing program to post what appeared to be child pornography. Federal agents subsequently accessed the files and determined that they contained pictures and videos of minors engaged in sexually explicit conduct. In June 2014, federal agents executed a search warrant at O’Hern’s Mashpee residence and seized multiple computers, external hard drives, hundreds of DVDs, and other media storage devices. O’Hern, a semi-retired pediatrician at the time, was arrested following the execution of the search warrant.
The charge of distribution of child pornography provides a mandatory minimum term of five years in prison and a maximum penalty of 20 years in prison, and a lifetime of supervised release. The possession charge carries a maximum penalty of 10 years in prison and a lifetime of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the US Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Mashpee Police Chief Rodney Collins; and Barnstable Police Chief Paul MacDonald, made the announcement today. The case is being prosecuted by Kenneth G. Shine of Ortiz’s Major Crime Unit.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Construction Company Owner Sentenced for Fraud Conspiracy in Connection with Renovation of McCormack Federal BuildingRead the Press Release
BOSTON - Two men pleaded guilty yesterday to conspiring to defraud the government in connection with the renovation of the John W. McCormack Post Office and Courthouse in Boston.
Wael Isreb, 55, of Wrentham, was sentenced by U.S. District Court Judge George A. O’Toole, Jr., to four years of probation, including 18 months of home confinement, and ordered to pay $164,627 in restitution. In March 2014, Isreb and his co-defendant, Aluisio Dasilva, 67, of Hudson, Mass., each pleaded guilty to conspiracy to commit mail fraud and false statements.
Isreb was the owner of Taunton Forms, a now-defunct concrete construction company based in Lakeville, Mass. In September 2006, the General Services Administration retained Suffolk Construction Company as the general contractor to renovate the McCormack Building. Suffolk Construction, in turn, retained Taunton Forms as a subcontractor to perform certain concrete work on that project. Suffolk Construction ultimately paid Taunton Forms in excess of $1 million for its work.
Federal law requires that contractors on federal projects over $2,000 pay workers a prevailing wage, and that they submit weekly reports certifying the wages they paid their employees. Beginning in about December 2007, however, Isreb conspired with Dasilva and others to pay Taunton Forms workers less than the prevailing wage while certifying to Suffolk Construction, the GSA, and the United States Department of Labor (DOL) that Taunton Forms was, in fact, paying the prevailing wage.
As part of the conspiracy, the defendants agreed to report, falsely, to the Massachusetts Department of Unemployment Assistance (DUA) that the Taunton Forms workers had been laid off. That permitted the workers to offset their lower wages with unemployment benefits while they worked on the McCormack Building and other projects. The conspiracy also permitted Isreb to avoid making fringe benefit payments to certain labor union benefit plans that Taunton Forms was required to pay pursuant to its applicable collective bargaining agreements. Isreb also failed to withhold applicable payroll taxes.
United States Attorney Carmen M. Ortiz; Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering & Fraud Investigations, New York Regional Office; Luis A. Hernandez, Special Agent in Charge of the U.S. General Services Administration, Office of Inspector General, Office of Investigations; Susan A. Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston. The case is being prosecuted by Assistant United States Attorney Stephen E. Frank of Ortiz’s Economic Crimes Unit.
North Dartmouth Man Charged with EmbezzlementRead the Press Release
Boston – A North Dartmouth man was arrested today and charged with conspiring to commit an offense against the United States and embezzlement from an organization that received federal funds.
John George, Jr., 68, owned Union Street Bus Company (USBC), a New Bedford-based company that operated public buses. During the same period, George operated John George Farms (JG Farm), a large produce farm based in Dartmouth. From approximately 1994 to 2011, USBC was awarded the Southeastern Regional Transit Authority (SRTA) contract to operate the SRTA public bus system that served a region that included New Bedford, Fall River, and several other neighboring towns.
The indictment alleges that, while USBC had the SRTA contract, George conspired with certain individuals to have various USBC employees work at JG Farm during their assigned USBC work hours. Such farm work included plowing, loading produce, and operating a produce stand at JG Farm, all during USBC business hours. As part of the conspiracy to commit an offense against the United States, George allegedly deployed USBC workers to JG Farm to repair George’s farm equipment, used USBC equipment and labor to provide personal out-of-state roadside assistance, and inflated his final yearly salary from $75,000 to $275,000 in an attempt to fraudulently boost his SRTA pension.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 on the charge of embezzlement from an organization that received federal funds, and on the charge of conspiracy to defraud the United States, a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Theodore L. Doherty, III, Special Agent in Charge of the Department of Transportation Office of the Inspector General in Boston made the announcement today. The case is being prosecuted by Dustin Chao of Ortiz’s Public Corruption Unit.
Illegal Alien Sentenced for Conspiring to Produce False IDRead the Press Release
BOSTON – An illegal alien was sentenced today in U.S. District Court in Worcester in connection with a conspiracy to produce false identification documents.
Leonardo Burgos Espinal, 42, most recently residing in Springfield, was sentenced by U.S. District Judge Timothy S. Hillman to time served of 14 months. Burgos Espinal was remanded into the custody of U.S. Immigration and Customs Enforcement for deportation. In March 2013, Burgos Espinal was charged with bribing an employee of the Massachusetts Registry of Motor Vehicles.
From January 2011 through June 2012, Burgos would direct his “clients” to present fraudulently obtained, but valid, Puerto Rican identification documents to his co-conspirator at the RMV, who would then issue a valid Massachusetts driver’s license or ID knowing that the Puerto Rican documents belonged to other real people. This sentencing is the most recent development in investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; and Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Foxboro Man Pleads Guilty to Mortgage FraudRead the Press Release
BOSTON – Christopher Chasse, formerly of Foxboro, was convicted today in federal court of mortgage fraud in connection with the purchases of residential properties.
From June to September of 2006, Chasse fraudulently caused mortgage financing of more than $4 million for the purchase of residential properties in greater Boston. Chasse submitted false loan applications to lenders containing bogus information about his employment, income, assets, closing costs and related matters. The documentary evidence included phony income tax returns and other IRS forms, all to cause lenders to wire loan proceeds to attorneys closing the loans. Chasse also recruited other buyers for fraudulent mortgage loans.
Chasse, who pleaded guilty to 10 counts of wire fraud, will be sentenced by U.S. District Judge George A. O’Toole on Nov. 20, 2014. The charging statute provides a sentence of no greater than 30 years in prison, five years of supervised release and a fine of $250,000, or twice the gain or loss on each count. Actual sentences for federal crimes are typically less than the maximum penalties. The U.S. Attorney and the defendant will jointly recommend a sentence of 96 months in prison, to be followed by five years of supervised release. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.United States Attorney Carmen M. Ortiz; Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations Boston Field Office; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit and Assistant U.S. Attorney Carlos Lopez of Ortiz’s Major Crimes Unit.
Melrose Man Arrested for Impersonating Federal AgentRead the Press Release
BOSTON - A Melrose man was arrested and charged today in federal court with two counts of impersonating a federal agent.
Gjerji Pelushi, a/k/a "Gjergi Pelushi," a/k/a "George Pelushi," 28, was charged by criminal complaint and faces the maximum sentence under the statute of three years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
According to the affidavit, earlier this year agents with the Federal Bureau of Investigation interviewed two victims who, like Pelushi, are originally from Albania and met Pelushi through common acquaintances. In separate interviews, both victims told agents that they had each paid thousands of dollars to Pelushi to assist them in obtaining a law enforcement job or in dealing with a law enforcement-related problem. For instance, one of the victims had a pending state court case which Pelushi promised to get dismissed. The victims paid for Pelushi’s help because he repeatedly told them he worked for the FBI or the Central Intelligence Agency.
During a four-month undercover operation agents recorded several telephone calls and meetings between Pelushi and the victims. According to the affidavit, on the recordings Pelushi repeatedly referred to himself as an FBI agent, confirmed he had taken thousands of dollars from both victims, and promised to use his connections as an agent to help them. In one meeting, Pelushi allegedly claimed to have patrolled this year’s Boston Marathon in plain clothes while armed and that “the Director” had told him and his fellow agents that if they “tell someone to stop and they reach for the bag, shoot them in the head!”
United States Attorney Carmen M. Ortiz and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation – Boston Field Division made the announcement today. The case is being prosecuted by prosecutors in Ortiz’s Organized Crime Strike Force Unit.
Substitute Teacher and Camp Counselor Sentenced for Distributing Child PornographyRead the Press Release
BOSTON – A former substitute teacher and camp counselor was sentenced today for the distribution and possession of child pornography.
Bryce Garner, 23, of East Sandwich, was sentenced by U.S. District Judge Patti B. Saris to seven years in prison to be followed by eight years of supervised release. Upon release, Garner must register as a sex offender.
Garner, who was previously employed as a substitute teacher, camp counselor and overnight babysitter/nanny, pleaded guilty in April 2014 to seven counts of distribution of child pornography and to possession of child pornography.
On Feb. 27, 2013, a federal agent in Oklahoma City conducting an on-line undercover investigation, observed Garner sharing 37 files with names consistent with child pornography. The images in the files depicted the sexual abuse of minor boys.
Agents later discovered that Garner was in possession of more than 2,300 images and more than 1,100 videos depicting the sexual abuse of children, as well as a substantial collection of child erotica. Garner used various on-line programs to find, download and share these images and videos. He was a prolific trader on these platforms, often sending child pornography unsolicited, being insistent about trading, and explicitly sending these images and videos in order to gain child pornography in return. The images and videos depict minors engaged in sexually explicit conduct and were labeled with explicit names reflecting their content.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in
Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. The case was prosecuted by Assistant U.S. Attorney Stacy Dawson Belf of Ortiz’s Major Crimes Unit.Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the Criminal Division’s CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
El Salvadorian National Charged with Fraudulently Receiving Unemployment Insurance BenefitsRead the Press Release
BOSTON - A Chelsea man was charged today with mail fraud for fraudulently accepting over $46,000 in unemployment insurance benefits.
Oscar P. Valles-Lopez, a/k/a Oscar Valle, 44, was charged in a criminal complaint with mail fraud.
Valles-Lopez is an El Salvadorian national who illegally reentered the United States in or around July 2003 after previously living in this country between 1996 and 2001. After working for several years based upon fraudulently obtained immigration papers, he lost his job sometime in 2009. It is alleged that, although though he knew he was not entitled to unemployment insurance benefits without a valid work permit, Valles-Lopez paid $400 for a false permit and made three claims for benefits in 2009, 2010, and 2012. Over the course of several years, Valles-Lopez allegedly cashed 111 unemployment checks totaling $46,218, all of which were mailed by the United States Postal Service.
The maximum sentence under the statute is 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Regional Office; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police made the announcement today. The case is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Pittsfield Man Pleads Guilty to Producing, Possessing Child PornographyDefendant Agrees to 40-50 Years in PrisonRead the Press Release
BOSTON - A Pittsfield man pleaded guilty today in federal court to producing and possessing child pornography.
Jason Gendron, 34, pleaded guilty to 16 counts of sexual exploitation of minors by producing child pornography and possessing child pornography.
Between May 13, 2011 and August 24, 2012, Gendron produced 16 files of child pornography, most of which were video files that depicted Gendron engaged in sexually explicit conduct with minor females, aged approximately two, three, eight, and 13-years-old. In addition, on July 16, 2013, Gendron possessed other files of child pornography.
Pursuant to a plea agreement, Gendron will be sentenced to between 40 to 50 years in prison, to be followed by 10 years of supervised release. Gendron has also agreed to pay restitution to the minor females depicted in the child pornography collection, and to forfeit his computer media. Gendron also faces a maximum $250,000 fine on each count.
United States Attorney Carmen M. Ortiz; Colonel Timothy Alben, Superintendent of the Massachusetts State Police; Bruce M. Foucart, Special Agent in Charge of the Department of Homeland Security Investigations in Boston; and Michael Wynn, Chief of the Pittsfield Police Department made the announcement today. The case was investigated by the Massachusetts State Police, with assistance from Homeland Security Investigations and the Pittsfield Police Department. It is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office.
If You Believe You Are A Victim of the Alleged Fraud Scheme Involving TelexFree, Please Fill Outthe Questionnaire at the Link Below, so Your Claim Can Be ReviewedRead the Press Release
Telexfree Founders Indicted on Charges of Running a Massive Pyramid SchemeBoston - James M. Merrill and Carlos N. Wanzeler, principals of TelexFree, Incorporated, and related entities, were indicted today for wire fraud and conspiracy to commit wire fraud.
Merrill, 53, of Ashland, Mass., and Wanzeler, 45, of Northborough, Mass., were charged by a federal grand jury in a nine-count indictment filed in U.S. District Court in Worcester, Mass.
According to the indictment, TelexFree, Inc., and TelexFree LLC (collectively, “TelexFree”) provided “voice-over-internet-protocol” (“VOIP”) telephone services that allowed customers to use the Internet to make phone calls. The indictment alleges, however, that TelexFree actually operated as a pyramid scheme, in which its ongoing operations were supported, not by actually selling TelexFree’s VOIP product, but by bringing in a constant stream of new investor dollars. Between early 2012 and March 2014, TelexFree purported to aggressively market its VOIP service by recruiting thousands of “promoters” to post ads for the product on the Internet. Each promoter was required to “buy in” to TelexFree at a certain price, after which they were compensated by TelexFree, under a complex compensation structure, on a weekly basis so long as they posted ads for TelexFree’s VOIP service.
It is further alleged that over the course of the fraud TelexFree derived only a fraction of its revenue from sales of VOIP service and the vast majority of it from new people buying into the scheme, and so TelexFree was able to pay the returns it had promised to its existing promoters only by bringing in money from newly-recruited promoters.
The indictment includes eight charges of wire fraud, based on Merrill, in December 2013, wiring about $10,000,000 in TelexFree funds to personal accounts belonging to him and Wanzeler. The indictment also specifies approximately 70 assets to be forfeited as proceeds of the alleged fraud scheme, or assets traceable to such proceeds, including approximately $140,000,000 seized from TelexFree’s accounts and various real assets, such as homes, condominiums, cars and two boats.
The charging statute provides a sentence of no greater than 20 years in prison on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. Merrill was previously arrested on similar charges on May 9, 2014, and remains released on bail. A federal arrest warrant was issued today for Wanzeler, who is a fugitive.
United States Attorney Carmen M. Ortiz, Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Cory Flashner and Andrew Lelling of Ortiz’s Worcester Branch Office and Economic Crimes Unit, respectively. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission in the course of investigating this case.
http://www.fbi.gov/stats-services/victim_assistance/seeking-victim-information/telexfree-inc.-case
The details contained in indictment are allegations. The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Go here for Indictment information
Former Waltham Police Officer Sentenced for Child Pornography ChargesRead the Press Release
BOSTON – A former Waltham Police Department police officer was sentenced today on child pornography charges.
Paul Manganelli, 48, of Waltham, was sentenced by U.S. District Judge F. Dennis Saylor IV to 60 months in prison to be followed by five years of supervised release. Upon release, Manganelli must register as a sex offender. In May 2014, Manganelli pleaded guilty to possession of child pornography. Manganelli was a police officer at Waltham Police Department until after his arrest in March 2013.
Manganelli possessed visual depictions of minors engaged in sexually explicit conduct, including females between the ages of approximately six to 10-years-old. Manganelli engaged in substantial trading activity via email. In March 2013, federal agents discovered Manganelli in possession of more than 850 images and 40 videos containing child pornography, including the lewd and lascivious posing, sexual penetration, and bondage of minor girls, as well as a substantial collection of child erotica. During exchanges with at least 53 email accounts, Manganelli and others discussed their mutual sexual interest in children. In other email exchanges, Manganelli claimed that he sexually molested a prepubescent girl and also asked others how to groom a child to engage in sexual activity with him.
On March 25, 2013, FBI agents interviewed Manganelli when he admitted that he possessed, received and distributed child pornography. He falsely claimed that during the two to three years he collected and shared child pornography, he was doing research in an attempt to identify sexual predators online. Manganelli was never assigned or authorized by the Waltham Police Department to conduct an online investigation, nor did he ever report any criminal conduct he observed.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in
Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Stacy Dawson Belf of Ortiz’s Major Crimes Unit.The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys= Offices and the Criminal Division=s CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/
Former Merrimack College Director of Financial Aid Charged with FraudRead the Press Release
BOSTON - The former Director of Financial Aid for Merrimack College was charged yesterday with fraudulently obtaining funding for the North Andover school’s students.
Christine Mordach, 62, of Methuen, was charged with two counts of mail fraud and two counts of wire fraud.
As the Director of Financial Aid for Merrimack College, Mordach was responsible for administering the Perkins Loan program. The Federal Perkins Loan Program provides low-interest loans to help needy students finance the costs of post-secondary education. The United States Department of Education provides Perkins Loan funding to each participating school, and the school determines which students have the greatest need and disburses the funds accordingly. Each school’s revolving Perkins Loan fund is replenished by ongoing activities, such as collections by the school on outstanding Perkins Loans the school amkes. If awarded a Perkins Loan, a student must complete and sign a Perkins Loan promissory note in order to receive the loan funds.
It is alleged that from 1998 to 2007, Mordach had Perkins Loan funds fraudulently disbursed to Merrimack College students. In some instances, Mordach asked students, to whom Merrimack College had offered grants, to take out Perkins Loans instead, falsely telling the students that Merrimack College was in danger of losing its unused Perkins Loan funds. Mordach falsely promised that the students would receive grants for the next academic year in the amount borrowed from the Perkins Loan program which enabled them to pay off their Perkins Loans.
In other instances, Mordach allegedly disbursed Perkins Loan funds to Merrimack College students without a signed promissory note and without the students’ knowledge or approval. Through at least September 2011, Mordach took actions to conceal the fraudulent Perkins Loans from the students and their parents, and from Merrimack College.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Brian Hickey, Special Agent in Charge, Department of Education, Office of Inspector General in Boston; and Scott Antolik, Special Agent in Charge of the Office of Inspector General, Social Security Administration, Office of Investigations – Boston Field Division, made the announcement today. The case is being prosecuted by Kristina E. Barclay of Ortiz’s Public Corruption Unit.
Those who believe that they are a victim of the crimes alleged against Christine Mordach should contact the U.S. Attorney’s Office for the District of Massachusetts at [email protected].
Identified victims will receive notification through an automated victim notification system. Those who have not received notification and believe they should be included as a victim, should contact the U.S. Attorney’s Office at [email protected].
The details contained in the Information are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.Dorchester Woman Pleads Guilty to Theft of Government BenefitsRead the Press Release
BOSTON - A Dorchester woman pleaded guilty today to stealing almost $350,000 in government benefits to which she was not entitled.
Mary Murphy, 62, pleaded guilty to theft of public money. In April 2014, Murphy was charged in a felony information. Sentencing is scheduled for Oct. 22, 2014.
Murphy’s mother died in 1977, but her monthly Social Security payments and Civil Service Retirement System annuity payments continued to be directly deposited into a joint bank account in her name and Murphy’s name. From 1977 to 2013, Murphy continued to receive her deceased mother’s benefits, including $206,679 in Social Security benefits and $143,098 in Civil Service Retirement System annuity payments.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Office of Inspector General, Social Security Administration, Office of Investigations – Boston Field Division; and Scott Rezendes, Special Agent in Charge of the Office of Inspector General, Office of Personnel Management, Field Operations made the announcement today. The case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.Jury Convicts Man of Impeding Boston Marathon Bombing InvestigationRead the Press Release
BOSTON – A federal jury in Boston has convicted a friend of alleged Boston Marathon bomber, Dzhokhar Tsarnaev, for impeding the bombing investigation.
The jury found Azamat Tazhayakov, 20, guilty of conspiring to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation. U.S. District Judge Douglas P. Woodlock scheduled sentencing for October 16, 2014.
In August 2013, Tazhayakov was indicted for obstructing a terrorism investigation. Tazhayakov is a national of Kazakhstan who was temporarily living in the United States on a student visa while attending the University of Massachusetts Dartmouth, but at the time of his arrest his visa had been revoked.
The evidence at trial proved that on April 18, 2013, after the release of photographs of the two men suspected of carrying out the Marathon bombings (who were later identified as Tamerlan Tsarnaev and Dzhokhar Tsarnaev), Tazhayakov and others went to Tsarnaev’s dormitory room and found items that linked Tsarnaev to the bombing, including fireworks from which “gunpowder” appeared to have been removed and a jar of Vaseline that they believed could be used to make bombs. A forensic examiner testified that Vaseline can be used to make improvised explosive devices. A month before the bombing, Tsarnaev had told Tazhayakov that it would be good to die as shaheed (martyr) and that he knew how to build a bomb. Tsarnaev also identified specific ingredients one could use to make a bomb, including “gunpowder.”
After searching Tsarnaev’s dormitory room on the evening of April 18, 2013, Tazhayakov helped remove Tsarnaev’s laptop and a backpack containing fireworks, a jar of Vaseline, and a thumb drive. Later that night while Tazhayakov was monitoring the manhunt for the Tsarnaev brothers, he discussed getting rid of the backpack containing the fireworks and agreed to get rid of it. The backpack was then placed in a garbage bag and then thrown into a dumpster outside Tazhayakov’s New Bedford apartment. The FBI recovered this backpack a week later, after 25 agents spent two days searching a landfill in New Bedford.
The charging statute provides a sentence of no greater than 20 years in prison on the obstruction of justice count and five years on the conspiracy count, three years of supervised release, and a fine of $250,000 for each charge. Tazhayakov will also be deported at the conclusion of this prosecution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz, Assistant Attorney General for National Security John Carlin and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division, made the announcement today. This investigation was conducted by the FBI's Boston Division and member agencies of the Boston Joint Terrorism Task Force (JTTF) which is comprised of more than 30 federal, state and local enforcement agencies. U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Massachusetts State Police, University of Massachusetts Dartmouth Department of Public Safety, New Bedford Police Department, Dartmouth Police Department, U.S. Department of Transportation – Office of Inspector General, U.S. Treasury Inspector General for Tax Administration (TIGTA), Essex County Sheriff’s Office, and Internal Revenue Service, Criminal Investigations, provided assistance to this investigation.
The case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John A. Capin of Ortiz’s Anti-Terrorism and National Security Unit with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.
CEO Pleads Guilty to Securities Kickback SchemeRead the Press Release
BOSTON – The CEO of two publicly-traded companies was convicted today on charges that he paid kickbacks in return for purchases of his companies’ stock.
Shailesh Shah, 48, of Chino, Calif., pleaded guilty before U.S. District Judge Richard G. Stearns to two counts of mail fraud and two counts of wire fraud. Sentencing is scheduled for Oct. 23, 2014.
Shah was the President and Chief Executive Officer of two publicly-traded companies, SOHM, Inc. and Costas, Inc. Shah agreed to pay secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in these two companies. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents. In actuality, however, and unbeknownst to Shah, the purported investment fund representative was an undercover FBI agent.
The plea follows a lengthy investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small publicly-traded companies whose stock often trades at pennies per share.
The charging statutes provide a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gain or loss on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. U.S. Attorney Ortiz expressed appreciation for the significant assistance her office received from the U.S. Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorney Alexander H. Berlin.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Two Georgetown Men Sentenced for Social Security FraudRead the Press Release
BOSTON – Two Georgetown men were sentenced today for defrauding the Social Security Administration of $105,158.
Charles Flynn, 36, and Steven Grondell, 45, were sentenced by U.S. District Court Judge George A. O’Toole, Jr. to three years of probation, including six months of home confinement, 105 hours of community service, and ordered to pay $105,158 in restitution to the Social Security Administration, $40,000 of which was paid today. In December 2013, Flynn and Grondell pleaded guilty to theft of public money.
Flynn began receiving Social Security disability benefits in 2004. In 2008, however, while still collecting disability benefits, Flynn began working at the iParty store in Peabody under the identity of his partner, Steven Grondell. Flynn did not report this work to Social Security. In fact, in a benefits review in November 2012, he falsely stated that he had not worked since about 2003. Flynn’s income from iParty, which totaled about $30,000 to $40,000 per year, would have made him ineligible to receive disability benefits. Grondell aided and abetted this scheme by allowing Flynn to use his identity to work at iParty and by helping to cover up the fraud by claiming the iParty income on his own tax returns.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Office of Inspector General, Social Security Administration, Office of Investigations; Boston Field Division; and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston, made the announcement today. The case was prosecuted by Timothy Landry of Ortiz’s Major Crimes Unit.
Former Florida Resident Sentenced on Fraud ChargesRead the Press Release
Boston – A former Florida resident who defrauded victims across the country, including in Massachusetts, was sentenced in U.S. District Court in Boston yesterday for his role in an advance-fee scheme.
John Condo, 62 of formerly of Clearwater, Fla., was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 90 months in prison and three years of supervised release. In March 2014, following his extradition from Italy, Condo pleaded guilty to conspiracy to commit wire fraud and 14 counts of wire fraud.
Between 2007 and 2011, Condo participated in a conspiracy to defraud developers who were seeking financing for large-scale alternative energy and commercial projects by pretending to be a representative of a multi-billion dollar fund located in Luxembourg. Condo and his co-conspirators convinced developers to give deposits in amounts between $300,000 and $1 million to this fake fund with the promise that the deposit would be fully refundable. Condo and his co-conspirators spent the developers' deposit money, and the fake fund never financed any projects. In perpetrating this scheme, the defendant continually reassured developers about safety of their deposits even as the deposits were being spent.
Over $7 million was stolen from victims, including $600,000 which had originally been provided by the West Springfield financial adviser Sean Mansfield. Mansfield had stolen the funds from his clients. In 2011, Mansfield was sentenced to 60 months in prison for defrauding his clients.
Condo’s co-defendants, Evripides Georgiadis, Frank Barecich, and Michael Zanetti, have all been convicted. In June 2014, Zanetti was sentenced to 37 months in prison. Earlier this month, Barecich was sentenced to 12 months in prison. Georgiadis is awaiting sentencing.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Susan Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The case was prosecuted by Alex J. Grant and Karen L. Goodwin of Ortiz’s Springfield Branch Unit.
Dedham Man Charged in Three Bank RobberiesRead the Press Release
BOSTON – A Dedham man was indicted today for robbing three Boston area banks.
According to the indictment, in January of this year, Joseph Wilcox, 46, robbed three banks, stealing over $8,000. The indictment alleges that on Jan. 15, Wilcox stole $1,318 from the Blue Hills Bank in Brookline; on Jan. 22, he stole $839 from the Eastern Bank in Cambridge; and on Jan. 25, he stole $6,260 from the TD Bank in Brookline.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Brookline Police Chief Daniel C. O’Leary; and Cambridge Police Commissioner Robert C. Haas, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Carlos A. López of Ortiz’s Major Crimes Unit.
Two Lawrence Men Sentenced to Lengthy Prison Terms for Firearm OffensesRead the Press Release
BOSTON - Two men, who pleaded guilty to illegally possessing firearms on Saratoga Street in Lawrence, were recently sentenced to lengthy prison terms in United States District Court in Boston.
Christopher Morales, 29, and Melvin Rivera, 26, pleaded guilty earlier this year to being felons in possession of a firearm and ammunition. On July 15, 2014, U.S. District Court Judge Denise J. Casper sentenced Morales to 180 months in prison, to be followed by five years of supervised release. On July 8, 2014, Judge Casper sentenced Rivera to 96 months in prison, to be followed by three years of supervised release.
The Federal Bureau of Investigation; the Drug Enforcement Administration; ICE - Homeland Security Investigations (HSI); Bureau of Alcohol, Tobacco, Firearms and Explosives; the Massachusetts State Police; the Lawrence Police Department and the Middlesex County Sheriff’s Department have been conducting a long-term investigation of violent kidnapping crews operating in Lawrence. This investigation revealed that these crews – commonly referred to as “Joloperros,” Spanish for “stick-up men” – targeted drug dealers for kidnapping.
On May 9, 2012, federal agents and detectives responded to Saratoga Street in Lawrence to investigate a possible kidnapping in progress. When they arrived, agents saw a van with two men inside. Agents observed and recovered duct tape and zip ties (or plastic handcuffs) from the van. Rivera and Morales were in a parked gray Acura behind the van, and were ordered out of the car. Agents recovered a loaded firearm from under Morales’s seat and a second loaded firearm from behind Morales’s seat (near Rivera). Both men were arrested and charged with firearm offenses in state court.
As agents sought to arrest Rivera on a federal arrest warrant at his home on Bennington Street in Lawrence, Rivera threw two loaded firearms from his bedroom window into a basement stairwell. Because of Morales’s criminal history, he was determined to be an armed career criminal and was subject to a 180-month mandatory minimum sentence.
United States Attorney Carmen M. Ortiz; Essex County District Attorney Jonathan Blodgett; Vince B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Lawrence Police Chief James X. Fitzpatrick, made the announcement today. The case was prosecuted by Peter K. Levitt and Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.
Tokutek Resolves Allegations Involving National Science Foundation Award MoneyRead the Press Release
BOSTON – Tokutek, Inc., a Lexington-based software development company, has agreed to pay $120,000 to resolve allegations that it failed to create and maintain accurate time records reflecting work allegedly performed by its employees related to a National Science Foundation (NSF) award.
In January 2011, NSF awarded Tokutek a Small Business Innovation Research grant to support the development and commercialization of Tokutek’s software technology for use with large databases. The United States alleged that Tokutek provided NSF with interim and final progress reports to document work pursuant to the award, and these reports caused NSF to release incremental award payments to Tokutek. According to the government’s allegations, the progress reports claimed certain labor costs expended in performance of the award that Tokutek could not have substantiated at the time the claims were made, because it failed during that time to maintain complete timekeeping records for its employees.
“It is critical that government grant funds are being used in accordance with the purposes for which they were intended,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts. “In this instance, we credit Tokutek for promptly stepping forward to resolve this matter after the government brought its concerns to the company’s attention.”
NSF Inspector General Allison Lerner said, “Every year, billions of dollars in Federal funds are used to cover salary costs of individuals who work on Federal grants. This settlement agreement reflects my office’s robust oversight to ensure that such funds are not misused. I commend the U.S. Attorneys’ Office for its strong support in this case.”
This matter was investigated by the National Science Foundation, Office of the Inspector General, and was handled by District of Massachusetts Assistant United States Attorney Gregg Shapiro.
Sex Offender Sentenced for Failure to RegisterRead the Press Release
BOSTON – A former Jamaica Plain man was sentenced yesterday for failing to register as a sex offender.
Gary Dixon, 49, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 33 months in prison, and five years of supervised release. In February 2014, Dixon pleaded guilty to failing to register as a sex offender.
In 1998 and 2003, Dixon was convicted in Massachusetts state courts for indecent assault and battery on a child, and in 2003 for open and gross lewd and lascivious behavior. He was required to register as a sex offender in Massachusetts and was designated a level three offender, the highest level. As such, Dixon was required to promptly inform law enforcement authorities of any change in his residence or employment. If he moved to another state, he was also required to appear in person within three days to inform local law enforcement authorities of his residency. During the summer of 2012, Dixon moved from his registered address in Jamaica Plain without informing Massachusetts authorities. Beginning as early as January 2013, Dixon resided in Maine where he was attempting to start a landscaping business without informing either Massachusetts or Maine law enforcement authorities of his move. In July 2013, he was located in Brunswick, Maine.United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal of the U.S. Marshals Service, District of Massachusetts, made the announcement today. The case was prosecuted by Victor A. Wild of Ortiz’s Economic Crimes Unit.
Dalton Man Pleads Guilty to Possessing Child PornographyRead the Press Release
BOSTON – A Dalton man pleaded guilty yesterday in U.S. District Court in Springfield to possessing child pornography.
Jared Sprague, 25, pleaded guilty before U.S. District Judge Mark G. Mastroianni to possessing child pornography. Sprague is being held in custody pending sentencing which is scheduled for Oct. 7, 2014.
In 2012, agents executed a search warrant at Sprague’s residence and seized a computer that contained approximately 100 files of child pornography, including files that involved prepubescent minors subjected to sadistic or violent sexual conduct.
Pursuant to a plea agreement, Sprague has agreed to be sentenced to between 48 and 78 months in prison, 10 years of supervised release, to pay restitution to the minor females depicted in the child pornography collection, and to forfeit his computer media. Sprague also faces a maximum $250,000 fine.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Dalton Police Chief Jeffrey E. Coe, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Hudson Man Sentenced for Fraud Conspiracy in Connection with Renovation of McCormack Federal BuildingRead the Press Release
Boston – A Hudson man was sentenced today for conspiring to defraud the government in connection with the renovation of the John W. McCormack Post Office and Courthouse in Boston.
Aluisio Dasilva, 67, was sentenced by U.S. District Court Judge George A. O’Toole, Jr., to one year of probation, including six months of home confinement, and ordered to pay $10,800 in restitution. In March 2014, Dasilva and his co-defendant, Wael Isreb, 55, of Wrentham, each pleaded guilty to conspiracy to commit mail fraud and false statements. Isreb is scheduled to be sentenced on Aug.7, 2014.
DaSilva was employed as a cement mason by Taunton Forms, a now-defunct concrete construction company based in Lakeville, Mass., that was owned and operated by Isreb. In 2006, the Government Services Administration (GSA) retained Suffolk Construction Company as the general contractor to renovate the McCormack Building. Suffolk Construction, in turn, retained Taunton Forms as a subcontractor to perform certain concrete work on that project. Suffolk Construction ultimately paid Taunton Forms in excess of $1 million for its work.
Federal law requires that contractors on federal projects over $2,000 pay workers a prevailing wage, and that they submit weekly reports certifying the wages they paid their employees. Beginning in December 2007, however, Isreb, DaSilva and others conspired to pay Taunton Forms workers less than the prevailing wage while certifying to Suffolk Construction, the GSA, and the Department of Labor (DOL) that Taunton Forms was, in fact, paying the prevailing wage.
As part of the conspiracy, the defendants agreed to report, falsely, to the Massachusetts Department of Unemployment Assistance (DUA) that DaSilva and other workers had been laid off. That permitted the workers to offset their lower wages with unemployment benefits while they worked on the McCormack Building project and other projects. The conspiracy also permitted Taunton Forms to avoid making fringe benefit payments to certain labor union benefit plans that it was required to pay pursuant to its applicable collective bargaining agreements. Taunton Forms also failed to withhold applicable payroll taxes.
United States Attorney Carmen M. Ortiz; Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office; Luis A. Hernandez, Special Agent in Charge of the U.S. General Services Administration, Office of Inspector General, Office of Investigations; Susan A. Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston. The case is being prosecuted by Assistant United States Attorney Stephen E. Frank of Ortiz’s Economic Crimes Unit.
Quincy Man Charged with $3.4 Million Forex Investment SchemeRead the Press Release
Boston – A Quincy man was charged today with engaging in a scheme to defraud persons seeking to invest in the foreign currency exchange (“forex”) market.
Marcellus Lopes Lee, 46, was charged in an indictment unsealed today with 16 counts of wire fraud and six counts of monetary transactions in property derived from specified unlawful activity.
According to the Indictment, Lee was the owner and operator of Taurus Global Markets, Ltd. (TGM), an entity which he held out as being a company that executed transactions in the forex market on behalf of investors. The indictment alleges that Lee induced prospective investors to wire funds to TGM's Belize bank account for the purpose of trading in the highly-risky forex market when, in fact, Lee never intended to use the funds for that purpose, but instead converted investors’ funds to Lee 's own personal and other uses. It is alleged that Lee held out TGM as having staff, management and its computer network "distributed all across the world," when in fact TGM had no employees and Lee operated it primarily from his residence in Massachusetts. According to the indictment, Lee caused investors to be sent documents reflecting that their money was invested in the forex market, and that all or most of the investors' funds were lost in forex trading when, in fact, no actual forex transactions had occurred on behalf of investors, and Lee instead converted the money to his own use. The indictment alleges that Lee defrauded at least 65 individuals of more than $3.4 million through this scheme.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 on the charge of wire fraud, and on the charge of illegal monetary transactions, a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
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.
Former Plymouth Police Officer Sentenced for Using Excessive Force and LyingRead the Press Release
BOSTON – A former Plymouth police sergeant was sentenced today for using excessive force on an arrestee and covering up his actions by falsifying police reports related to the incident.
Shawn Couglin, 47, was sentenced to one year and one day in prison, one year of supervised release, and a fine of $7,500. In February 2014, Coughlin was convicted following a jury trial of deprivation of constitutional rights under color of law and falsifying a record to impede a federal investigation.
On November 19, 2011, at the Plymouth police station, Coughlin assaulted an arrestee who was in a holding cell and handcuffed behind his back. Coughlin struck the arrestee in the head and kneed him in the body, resulting in bodily injury. Evidence at trial also established that Coughlin falsified the official police incident reports regarding the incident.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by S. Theodore Merritt and Kristina E. Barclay of Ortiz’s Civil Rights Enforcement Team.
Two Men Charged with Insider Trading of Stock in American Superconductor CorporationRead the Press Release
BOSTON – Two men were charged today with conspiring to use inside information about business activities of American Superconductor Corporation (AMSC) to profit from trading AMSC stock.
Eric McPhail, 41, of Waltham and Douglas Parigian, 56, of Lowell, were indicted on charges of conspiracy and securities fraud. Parigian was also charged with making false statements to a federal agent in the course of the investigation.
U.S. Attorney Carmen M. Ortiz said, “Those who engage in insider trading are rigging the system and victimizing the law-abiding citizens who choose to invest our public companies. We will aggressively police the markets to deter this kind of behavior.”
Vincent Lisi, Special Agent in Charge of the Boston Division said, “For those that think they can get away with insider trading, they should know the government has a variety of safeguards in place to detect possible insider trading through the review of suspiciously timed trades. Once someone gets on the radar screen, no matter how inside information is shared or acted on, whether person to person at a country club with golfing buddies, over the phone to trusted allies, or by oneself, the FBI has the tools to investigate and prove the criminal activity. Knowing that we can detect such trading and have the capability to uncover the schemes, those who want to harm the investing public should think twice.”
According to the indictment, starting in or about July 2009, McPhail began giving several of his friends, including Parigian, inside information about AMSC’s business activities and upcoming earnings announcements. McPhail obtained this information during golf outings and other social activities with a close friend who was a senior executive at AMSC. The executive, however, trusted McPhail to keep the information to himself and was unaware that McPhail was using it to tip his friends.
Between July 2009 and April 2011, several of McPhail’s friends, including Parigian, repeatedly traded on the inside information. Over that time, Parigian allegedly made over $300,000 in illicit gains. It is further alleged that during an interview with federal agents in May 2012, Parigian lied about his trading activities and his knowledge of others who traded in AMSC shares.
The statute for the criminal charges provides a maximum sentence of 20 years in prison on the securities fraud charge to be followed by three years of supervised release and a $5 million fine. The conspiracy and false statements charges carry a maximum sentence of five years in prison, three years of supervised release and a fine of $250,000 per count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz and SAC Lisi made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission in the course of investigating this case. The case is being prosecuted by Andrew E. Lelling of Ortiz’s Economic Crimes Unit.
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.
Middleboro Man Pleads Guilty in Enticement ChargeRead the Press Release
BOSTON – A Middleboro man pleaded guilty today two counts of coercion and enticement of a minor.
Keith Gage, 43, pleaded guilty to coercion and enticement of a minor and attempted coercion and enticement of a minor. Gage admitted that he persuaded a 14-year-old girl he met on the Internet to meet with him in person and engage in sexual intercourse. On more than one occasion, Gage traveled to the girl’s town in Massachusetts, and engaged in sexual intercourse with her. Thereafter, Gage attempted to arrange another meeting with the minor for the purpose of engaging in sexual intercourse with her. However, at this point Gage was communicating with an undercover federal agent.
Under the plea agreement, should the Court accept the plea, Gage will be sentenced to 13 to 15 years in prison, five years of supervised release, a fine and restitution to be determined by the Court, forfeiture, and an order that Gage have no contact directly or indirectly with the victim during the period of the incarceration and supervised release. With this conviction, Gage would also be required to register as a sex offender.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Boston Undercover Operation Results in SEC and Criminal Securities Fraud ChargesRead the Press Release
BOSTON – The Securities and Exchange Commission (SEC) filed suit today charging five individuals who were previously criminally charged and arrested for attempting to manipulate the securities of Massachusetts-based company, Amogear Inc.
The criminal cases charged the following individuals with conspiracy to commit securities fraud: Andrew J. Affa, 30, of Huntington Station, N.Y.; Michael A. Affa, 34, of Toms River, N.J.; Mitchell H. Brown, 48, of Long Branch, N.J.; Christopher R. Putnam, 37, of Charleston, S.C.; and Christopher G. Nix, 34, of Charleston, S.C. Andrew Affa, Michael Affa and Brown were also charged with conspiracy to commit wire fraud. The SEC suit, likewise, charges all five individuals with securities fraud.
Andrew Affa, Michael Affa, and Brown are scheduled to appear in federal court in Boston on July 15 and Putnam and Nix are scheduled to appear on July 31.
It is alleged that in January and February 2014, the defendants attempted manipulation of Amogear’s stock was caught in real-time by a federal undercover operation. The SEC suspended trading in the securities of Amogear on Feb. 10, 2014, as the attempted manipulation of its stock was underway. According to the criminal and SEC charges, prior to the suspension of trading in the stock, the defendants planned and implemented a scheme to create a false appearance of an active market in the stock, followed by a false media campaign designed to increase the price of the stock, knowing that Amogear was a shell company without any real operations. The defendants allegedly planned to sell the stock into the market at artificially inflated prices from which they would profit. What the parties did not know was that Amogear was controlled by the FBI and used by the FBI as a vehicle to obtain evidence of their attempt to manipulate the market.
The charges follow a multi-year investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies per share. Fraud in the microcap stock markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.
These latest charges follow a series of cases filed by the SEC and the U.S. Attorney since December 2011 in which 22 individuals have been criminally charged and 18 convicted, for using kickbacks and other schemes to trigger investments in various thinly-traded stocks, and the SEC suspended trading in seven companies.
“As is clear from the combined efforts of the U.S. Attorney’s Office, the FBI, and the SEC, market manipulation will not be tolerated,” said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “The prosecution of corporate and securities fraud is a top priority of the Department of Justice and a top priority for this Office. As is demonstrated by the recent charges, we will continue to develop new techniques to detect and prosecute those engaged in market abuse.”
“Fund representatives, CEOs, traders, fund managers, equities analysts, lawyers and publicists should take note that Boston FBI agents purposefully designed multiple undercover operations aimed directly at rooting out market manipulation and insider trading. As the scope and design of our undercover operations become well-known, no one should think that future undercover operations will be the same as prior ones because in this instance the FBI took control of a publicly traded company making it nearly impossible to discover,” said Vince Lisi, Special Agent in Charge of the FBI’s Boston Division.
Andrew Ceresney, Director of the SEC’s Enforcement Division, said, “The SEC will hold accountable parties who disrupt the fair and efficient functioning of the markets. We are committed to working with our law enforcement partners in Massachusetts and around the country to stop abuses in the microcap sector and hold the perpetrators responsible.”
“These defendants brazenly attempted to manipulate Amogear’s stock,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office. “It didn’t occur to them that the FBI and SEC were a step ahead of them.”
The statute for the criminal charges provides a maximum sentence of five years in prison and a $250,000 fine. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The SEC is seeking permanent injunctions against further violations of the securities laws, disgorgement of ill-gotten gains plus prejudgment interest, civil monetary penalties, and bars from being involved in offerings of penny stocks.
U.S. Attorney Ortiz, FBI SAC Lisi, and SEC Boston Regional Office Director Levenson made the announcement today. The criminal case is being prosecuted by Assistant U.S. Attorney Vassili Thomadakis of Ortiz’s Economic Crimes Unit, and SEC attorneys Eric Forni and Andrew Palid, who were appointed Special Assistant U.S. Attorneys. The SEC investigation was led by Michele T. Perillo and the SEC litigation will be handled by Martin F. Healey.
Florida Man Sentenced on Fraud ChargesRead the Press Release
Boston – A Florida man was sentenced in U.S. District Court in Boston today for his role in an advance-fee scheme.
Frank Barecich, 35, of Hollywood, Fla., was sentenced by U.S. District Court Judge Nathaniel M. Gorton to one year in prison and three years of supervised release. In April 2014, Barecich pleaded guilty to conspiracy to commit wire fraud, 14 counts of wire fraud, and conspiracy to commit money laundering.
Between 2007 and 2011, Barecich participated in a conspiracy to defraud developers who were seeking financing for large-scale alternative energy and commercial projects by pretending to be a representative of a multi-billion dollar fund located in Luxembourg. Barecich and his co-conspirators convinced developers to give deposits in amounts between $300,000 and $1 million to this fake fund with the promise that the deposit would be fully refundable. Barecich and his co-conspirators spent the developers' deposit money, and the fake fund never financed any projects. In perpetrating this scheme, the defendant continually reassured developers about the safety of their deposits even as the deposits were being spent.
Barecich’s co-defendants, Evripides Georgiadis, John Condo, and Michael Zanetti, have all been convicted. In May 2014, Zanetti was sentenced to 37 months in prison. Georgiadis and Condo are awaiting sentencing.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Susan Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Alex J. Grant and Karen L. Goodwin of Ortiz’s Springfield Branch Unit.
Florida Man Pleads Guilty to Stealing Government MoneyRead the Press Release
Boston – A Florida man pleaded guilty in U.S. District Court in Worcester today to participating in a scheme to steal more than $110,000 from the federal government.
Sniders Jean-Jacques, 26, of Sunny Isles Beach, Fla., pleaded guilty to theft of public money. In June 2014, Jean-Jacques was charged in a felony information. Sentencing is scheduled for Thursday, Oct. 9, 2014 at 2:30 pm.
In early 2013, Jean-Jacques and a co-conspirator, Marvin Lubin, recruited several individuals in Worcester to work as couriers in a scheme to steal and launder Social Security and IRS tax refund payments. At the direction of Jean-Jacques or Lubin, the couriers opened bank accounts in Massachusetts in the names of fake businesses. On various dates in 2013, illegally obtained Social Security benefits and IRS refunds were directly deposited into the accounts. At the direction of Jean-Jacques or Lubin, the couriers immediately withdrew the money in cash, and then delivered the cash. Jean-Jacques or Lubin would typically authorize the couriers to retain a portion of the stolen money as payment for their courier services. In recorded phone calls in late 2013, Jean-Jacques instructed one of the couriers not to withdraw more than $10,000 per day to avoid having to fill out forms at the bank. He also told the courier, “we move money for people . . . and we get a percentage.”
The investigation so far has determined that as part of this scheme, Social Security payments totaling $11,689 were illegally obtained under the identities of 14 victims, and IRS payments totaling $98,610 were illegally obtained under the identities of 20 victims. In April 2014, Lubin pleaded guilty for his role in this scheme.
The charging statute provides a sentence of no greater than 10 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. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge U.S. Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Lisa Quinn, Special Agent in Charge of the U.S. Secret Service; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; and Worcester Police Chief Gary J. Gemme, made the announcement today. The case is being prosecuted by Timothy Landry of Ortiz’s Major Crimes Unit.
Former State Secretary of Transportation Charged with Filing False Tax ReturnsRead the Press Release
BOSTON – The former Massachusetts Secretary of Transportation was charged today with filing false tax returns.
James J. Kerasiotes, 60, of Wrentham, was charged in an information with filing false personal income tax returns for the years 2010 and 2011.
The information alleges that Kerasiotes was a self-employed consultant providing strategy and business origination services to clients in the transportation and construction industries. For the calendar years 2010 and 2011, Kerasiotes filed Forms 1040, U.S. Individual Income Tax Returns, with the IRS reflecting only a portion of the income he earned from his consulting business during those years. By underreporting his total business income for 2010 and 2011, Kerasiotes evaded the payment of income taxes to the IRS.
The charging statute provides a sentence of no greater than three years in prison, one year of supervised release, and a fine of $100,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the Federal Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office, made the announcement today. The case is being prosecuted by Kristina E. Barclay of Ortiz’s Public Corruption Unit.
The details contained in the information are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Brighton Resident Pleads Guilty to Child Enticement ChargeRead the Press Release
BOSTON - A Brighton man pleaded guilty late yesterday in federal court to a charge of coercion and enticement of a minor.
Zachary Stoloff, 29, admitted to meeting a 14-year-old victim, on the Internet, whom he persuaded to meet for the purpose of having sex. Stoloff traveled to the minor victim’s town in Massachusetts, and drove her to his Brighton residence where he engaged in sexual intercourse with her.
The statute provides a maximum sentence of life imprisonment with a 10-year-mandatory minimum sentence, a $250,000 fine, and supervised release for five years up to life. Should the Court accept the parties’ plea agreement, the following sentence will be imposed: incarceration for 120 months; a fine in the amount to be determined by the Court; five years of supervised release; restitution as ordered by the Court; forfeiture; $100 special assessment; and an order that the defendant have no contact directly or indirectly with the minor victim during the period of the defendant’s incarceration and supervised release. With this conviction, Stoloff will also be required to register as a sex offender.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the United States Postal Inspection Services, Boston Division; and Colonel Timothy Alben, Superintendent of the Massachusetts State Police, made the announcement today.
The case was investigated by the United States Postal Inspection Services, as well as the Massachusetts State Police. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Dedham Man Arrested on Armed RobberyRead the Press Release
BOSTON – A Dedham man previously convicted of armed bank robbery was arrested Friday for allegedly robbing an Attleboro bank in May.
Lawrence J. Costello, 54, was charged in U.S. District Court in Boston by criminal complaint for armed bank robbery.
According to an affidavit filed with the complaint, Costello and another individual allegedly entered the Bank of America in Attleboro on May 12, armed with a semi-automatic weapon. Once inside the bank, Costello climbed over the teller’s counter and took $17,687. The robbers were observed fleeing the area in a green Ford pickup truck which had been reported stolen earlier in the day from a garage in Canton. Costello was determined to be one the individuals who participated in the robbery based on DNA matches and witness identification.
Costello appeared before Magistrate Judge David H. Hennessy in Boston on June 27 for an initial appearance. He will remain in custody pending his detention hearing on July 15.
The charging statute provides a sentence of no greater than 25 years in prison, five years of supervised release, a fine of $250,000 and restitution to Bank of America in the amount of $17,687. Actual sentences for federal crimes are typically substantially less than the maximum penalties, as they are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation; Colonel Timothy Alben, Superintendent of the Massachusetts State Police; Attleboro Police Chief Kyle Heagney; and Bourne Police Chief Dennis Woodside made the announcement today. The case is being prosecuted by Kenneth G. Shine of Ortiz’s Major Crimes Unit.The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Florida Man Sentenced on Fraud ChargesRead the Press Release
Boston – A Florida man was sentenced today for his role in perpetrating an investment fraud scheme.
Michael Zanetti, 36, of Pompano Beach, Fla. was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 37 months in prison and three years of supervised release. In March 2014, Zanetti pleaded guilty to conspiracy to commit wire fraud, 14 counts of wire fraud, and conspiracy to commit money laundering.
Between 2007 and 2011, Zanetti participated in a conspiracy to defraud developers who were seeking financing for large-scale alternative energy and commercial projects by pretending to be a representative of a multi-billion dollar fund located in Luxembourg. Zanetti and his co-conspirators convinced developers to give deposits between $300,000 and $1 million to the fake fund with the promise that the deposit would be fully refundable. Zanetti and his co-conspirators spent the developers' deposit money, and the fake fund never financed any projects. In perpetrating this scheme, Zanetti continually reassured developers about the safety of their deposits even as the deposits were being spent.Zanetti’s co-defendants, John Condo, Evripides Georgiadis, and Frank Barecich have all been convicted and are awaiting sentencing.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Susan Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Alex J. Grant and Karen L. Goodwin of Ortiz’s Springfield Branch Unit.
Investment Adviser Charged with Stealing Client FundsRead the Press Release
Boston – A Pennsylvania woman affiliated with a Massachusetts-based broker dealer was indicted today in U.S. District Court in Boston on charges that she orchestrated a multi-million dollar investment fraud scheme.
Patricia S. Miller, 67, was charged with five counts of wire fraud.
The indictment alleges that Miller used her position as a trusted financial adviser, as well as her association with the Massachusetts broker dealer, to obtain money from clients for purported investments never made on the behalf of clients. Specifically, Miller promised high returns if clients put their money into “investment clubs” called, among other things, “KS Investments” and “Buckharbor.” Miller represented, among other things, that funds put into her investment clubs would be placed in fixed-income notes and other investments. Miller was able to obtain over $2.5 million from more than 20 clients for these purported investment clubs. Instead of investing the money as promised, however, she misappropriated client funds for her own use.
If convicted, Miller faces a maximum sentence under the statute for each count of wire fraud of 20 years in prison, three years of supervised release, and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. U.S. Attorney Ortiz also expressed appreciation for the help and cooperation her office received from the United States Attorney’s Office for the Western District of Pennsylvania and the Federal Bureau of Investigation, Pittsburgh Field Division. The case is being prosecuted by Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.
Those who believe that they are a victim of the crimes alleged against Patricia S. Miller should contact the U.S. Attorney’s Office for the District of Massachusetts at [email protected]. Identified victims will receive notification through an automated victim notification system. Those who have not received notification, and believe they should be included as a victim, should contact the Massachusetts U.S. Attorney’s Office at [email protected].
Pittsburgh-Area Victims:
Residents of the Pittsburgh, Pa. area, who believe they are a victim, should contact the victim witness unit at 412-644-3500. Pittsburgh victims may also find information at http://www.justice.gov/usao/paw/.
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.Today’s announcement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s Securities and Commodities Fraud Working Group. The interagency FFETF was created to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.
Mattapoisett Woman Sentenced for Embezzling from Middleboro BusinessesRead the Press Release
BOSTON – A Mattapoisett woman was sentenced today to a year in prison for stealing nearly $320,000 from two Middleboro businesses.
Marie Greany, 43, was sentenced by U.S. District Judge Rya W. Zobel to one year and one day in prison, three years of supervised release, and ordered to pay $74,000 in restitution which is the balance of the stolen funds that Greany has yet to repay. In March 2014, Greany pleaded guilty to wire fraud.
Greany worked as a bookkeeper for two computer systems design and consulting businesses in Middleboro. Between 2006 and 2012, she stole nearly $320,000 from the two companies. Among other things, Greany used a company credit card to make unauthorized charges for personal expenses, including travel, tickets to sporting events and theater productions, restaurant meals and tuition, as well as the costs of operating her photography business. She then paid those charges with corporate funds from both companies. Greany also transferred money from the businesses’ bank accounts to pay her personal credit card bills. Additionally, Greany had the payroll processing company for the victim companies issue payments to her as reimbursement for expenses, which had actually been incurred by other employees, as well as increased salary payments for herself. She also wrote two unauthorized checks on a company account which she used for her own purposes.
United States Attorney Carmen M. Ortiz and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Sandra S. Bower of Ortiz’s Economic Crimes Unit.