District of Massachusetts

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.

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.

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.

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.

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.

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.

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.

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.

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.

BOSTON – Former Peabody man found guilty of purchasing false identity documents and receiving unemployment benefits.

Following a three-day trial, Renato de la Cruz, 40, was convicted of theft of public money, use of a falsely obtained Social Security Number, and aggravated identity theft. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Oct. 14, 2014.

De la Cruz, an illegal alien, entered the United States using a false name and purchased identity documents in the name of yet another person. De la Cruz then used the purchased identifying information to obtain a Social Security Number and used the Social Security Number for multiple purposes, including to obtain thousands of dollars of unemployment benefits to which he was not entitled.

De la Cruz faces a maximum sentence of 10 years and a $250,000 fine.

United States Attorney Carmen M. Ortiz; Cheryl Garcia, Acting Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, NY Regional Office; Scott Antolik, Special Agent in Charge of the U.S. Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; Bruce M. Foucart, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Sean Gallagher, Field Office Director of U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations, New England Field Office; made the announcement today. The case was investigated by the Homeland Security Investigations Document and Benefit Fraud Task Force. The case is being prosecuted by Robert E. Richardson and Brian A. Pérez-Daple of Ortiz’s Major Crimes Unit.

BOSTON – A Mashpee man, who is a semi-retired pediatrician, was arrested this morning, charged with possessing and distributing child pornography.

Dr. Daniel J. O’Hern, 64, was charged by complaint of possession of child pornography and distribution and attempted distribution of child pornography.

According to the affidavit, a search was conducted at O’Hern’s home this morning following an investigation into the use of peer-to-peer (P2P) file sharing programs. During the search, numerous digital devices were seized including computers, hard drives and other media storage devices. According to the affidavit, the preliminary review uncovered numerous images of children being sexually exploited, including pubescent minor females.

O’Hern appeared before Magistrate Judge Robert B. Collings in Boston today for an initial appearance. He will remain in custody pending his detention hearing on Friday, June 27 at 1:45 p.m.

Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.

If convicted, O’Hern faces up to 20 years on the distribution counts with a minimum mandatory of five years in prison and a lifetime of supervised release and up to 10 years in prison on the possession charge with a lifetime of supervised release.

United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Chief Rodney Collins of the Mashpee Police Department; and Chief Paul MacDonald of the Barnstable Police Department made the announcement today. The case is being prosecuted by Kenneth G. Shine 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 Divisions 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/.

BOSTON – Twenty-two Springfield men were charged today in federal and state court with either distributing a controlled substance or unlawfully possessing a firearm and ammunition.

Separate federal indictments alleging the distribution of crack cocaine were returned against Alberto Correa-Martinez, 27, and Stephen Tavernier, 28; Sherad Therrien, 24; David Faust, 26; Richard Freedman, 29; Jayson Green, 35; Aaron Smith, 30; Theo Waldron, 39; Dimitri Major, 36; and one other individual known to law-enforcement. Therrien was also charged for being a felon in possession of a firearm and ammunition.

Luis Oppenheimer, 25, and Jose Vargas, 27, were charged with distributing and possessing with intent to distribute heroin.

If convicted on these charges, all of the above-listed individuals face a maximum of 20 years in prison, six years of supervised release and a $250,000 fine.

Nagee Jones, 22 and Jason Patterson, 30, were charged in separate indictments for being felons in possession of firearms and ammunition. If convicted on these charges, Jones and Patterson face a maximum of a lifetime in prison, a lifetime of supervised release, and a $1 million fine.

Separate Hampden County Superior Court indictments were returned against Christian Paret, 20, and Ricarte Burgos, 35, who were indicted on drug trafficking charges; Paret was also indicted for unlawful possession and sale of firearms and ammunition. Christopher McCollough, 33, and one other individual known to law-enforcement who is a fugitive, were indicted for distributing narcotics. The fugitive is additionally charged with being a subsequent offender and habitual offender, which, if convicted, carries a potential penalty of 15 years in state prison.

Luis Reyes, Steve Hollowman, Jermain Davis, and Tarryl Green were all charged in Springfield District Court with distributing illegal narcotics, which, if convicted, carries a potential penalty of 10 years in state prison.

“Today’s arrests are the result of our close collaborations with the Springfield Police, the Massachusetts State Police, and the Hampden County Sheriff’s Office,” said United States Attorney Carmen M. Ortiz. “We stand united with our local and state partners in this and future public-safety initiatives to ensure Springfield is the safe and vibrant community its citizens deserve.”

United States Attorney Ortiz; Hampden County District Attorney James Orenstein; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division; Michael Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Springfield Police Commissioner John Barbieri; Massachusetts State Police Superintendent Colonel Timothy P. Alben; Hampden County Sheriff Michael Ashe; and United States Marshal John Gibbons; made the announcement today.

The cases were investigated by the Federal Bureau of Investigation=s Western Massachusetts Gang Task Force; Bureau of Alcohol, Tobacco, Firearms and Explosives Task Force; Drug Enforcement Administration; Massachusetts State Police; Springfield Police Department; and Hampden County Sheriff’s Office; in a concerted effort to combat the illegal drug trafficking and violence in Springfield.

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

BOSTON – An Idaho business executive pleaded guilty to wire fraud conspiracy in connection with a scheme to steal deposits from individuals seeking financing.

Lucas Ford, 37 of Post Falls, Idaho, pleaded guilty before U.S. District Court Chief Judge Patti B. Saris. Ford is scheduled to be sentenced on Nov.10, 2014.

Ford was chief operating officer of an entity known as Quest Capital Finance which falsely represented to be a financing company that could provide hundreds of millions of dollars in loans. From 2008 through 2012, Ford and his co-conspirator, another Quest executive, told prospective borrowers that they needed to make up-front payments of several hundred thousand dollars into a refundable escrow account as deposits towards future loans. The escrow agreements falsely represented that the funds would not be moved out of escrow unless and until all contingencies for the loans had been met and the loans were being funded. In fact, shortly after the prospective borrowers deposited the money, the conspirators routinely took all or most of the escrowed money and transferred it to Quest. They then transferred the funds to other business and personal accounts, without ever arranging the promised financing for the borrowers. The conspirators, and others, continued to promise the prospective borrowers that Quest would soon be providing millions of dollars of financing; however, Quest did not provide the financing nor did it refund any of the deposits.

Ford faces a maximum statutory sentence of five years in prison, three years of supervised release and a fine of $250,000 or twice the gross loss or gross gain from the scheme, whichever is greater.

United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case is being prosecuted by Sara Miron Bloom of Ortiz’s Economic Crimes Unit.

BOSTON – The former Executive Director of the Chelsea Housing Authority (CHA) was sentenced in federal court today for his role in rigging the inspection process for federally-funded housing units.

Michael E. McLaughlin, 68, of Dracut, who is already serving a three-year prison term for falsifying records to conceal his $360,000 salary as Executive Director, was ordered by U.S. District Judge Douglas P. Woodlock to serve an additional 12 months in prison and pay a $3,000 fine for his conviction for conspiring to defraud the United States and the U.S. Department of Housing and Urban Development (HUD) by impairing, impeding, and defeating the proper operation of HUD’s physical condition assessment.

Pursuant to federal regulations, to determine whether a public housing authority is meeting the standard for its residents of conditions that are “decent, safe, sanitary, and in good repair,” HUD’s Real Estate Assessment Center (REAC) is required to “provide for an independent physical inspection of a public housing authority’s property or properties that includes, at a minimum, a statistically valid sample of the units in the CHA’s public housing portfolio to determine the extent of compliance with the standard.” REAC inspections are conducted by independent contractors who have received training from REAC on the inspection protocol and regulations, and have been certified. Once certified, an inspector is given an inspector number and with a password can access the secure REAC server which contains data on all public housing authorities and also later enables the inspector to generate a random sample of units at the scheduled date of the inspection.

From 2006 through November 2011, McLaughlin conspired with his Assistant Director, James Fitzpatrick, and Bernard Morosco, whom they hired as a consultant for the REAC inspection process in those years. Morosco, himself a certified REAC inspector who had access to the secure REAC database, identified in advance the units of the CHA that would be randomly selected to be inspected by the assigned HUD REAC inspector on the day of the inspection. Morosco then provided to McLaughlin and Fitzpatrick a list of those units to be inspected sufficiently in advance of the inspection so that they could organize and direct REAC “SWAT” Teams of CHA employees to concentrate on ensuring that any needed repairs would be made to those identified units. When the REAC inspectors conducted the inspections in 2007, 2009 and 2011, the units that were randomly selected were the same as the ones provided in advance by Morosco.

The trial of Fitzpatrick and Morosco has yet to be scheduled.

United States Attorney Carmen M. Ortiz and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, made the announcement today.

The case is being prosecuted by Assistant U.S. Attorneys S. Theodore Merritt of Ortiz’s Public Corruption and Special Prosecutions Unit and Brian Perez-Daple of Ortiz’s Major Crimes Unit.

BOSTON – A Malden man pleaded guilty today to a number of tax crimes involving the filing of tax returns which failed to report income he had received in the name of a deceased relative.

Mark R. Fisette, 54, pleaded guilty to tax evasion and four counts of filing false tax documents. U.S. District Judge Denise J. Casper scheduled sentencing for Oct. 2, 2014 at 2:00 pm.

Fisette worked as a freelance photographer for various weekly and daily newspapers, and had not timely filed or paid his income taxes. When state and federal taxing authorities began collection efforts, including seizing a paycheck, Fisette provided the newspaper distributor with the name and Social Security number of a deceased relative for future payments for Fisette’s photography services. Fisette filed false income tax returns and a false financial statement which did not report the income he received in the dead relative’s name.

Fisette faces a maximum sentence of five years in prison and three years of supervised release on the charge of tax evasion, and three years in prison and one year of supervised release for the charge of filing false tax documents. Both carry a maximum fine of $250,000 or twice the gain or loss, whichever is greater.

United States Attorney Carmen M. Ortiz 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 Sandra S. Bower of Ortiz’s Economic Crimes Unit.

BOSTON – A Boston man pleaded guilty yesterday to armed bank robbery.

Anthony Hamilton, 28, pleaded guilty to armed bank robbery and being a previously convicted felon in possession of a firearm. U.S. District Court Judge Rya W. Zobel scheduled sentencing for Sept. 24, 2014.

In December of 2010, after entering the Citizen’s Bank in Malden, Hamilton approached a teller and handed her a demand note which stated he would shoot her if she did not give him money. After the teller complied Hamilton fled, but became trapped in the bank’s vestibule. Hamilton pulled out a semi-automatic firearm and fired into the vestibule’s door. The door released and he fled. A few weeks later, he was located and arrested at his home in Dorchester where he was in possession of a semi-automatic firearm with an obliterated serial number and multiple rounds of ammunition.

Hamilton, a previously convicted felon, faces a maximum sentence of a lifetime in prison, five years of supervised release, and a $250,000 fine on the gun possession charge; and a maximum sentence of 25 years in prison, five years of supervised release, a $250,000 fine, and $4,700 in restitution on the armed bank robbery charge.

United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Boston Police Commissioner William Evans, made the announcement today. The case is being prosecuted by Kenneth G. Shine of Ortiz’s Major Crimes Unit.

Boston - A federal grand jury indicted four men yesterday on one count of conspiracy to distribute heroin and three counts of distribution of heroin.

Fernando Lnu, a/k/a Cesar Gonzalez, 43, of the Dominican Republic, Osvaldo Ortiz-Ventara, 23, of Dorchester, and Kevin Sanderson, 28, of Quincy, were indicted today. A fourth indicted defendant, Weslley Hernandez, 25, of Dorchester, remains a fugitive.

According to affidavits previously filed with the court, the investigation into Gonzalez started in January 2014 after Steven Radeos, a former Braintree Police Department informant, died from an apparent heroin overdose. A laboratory test of an empty heroin bag found next to Radeos’ body was positive for Fentanyl and Dipryone, an animal painkiller. Radeos’ family cooperated in the investigation into his death and provided Braintree detectives with Radeos’ cell phone. Officers discovered that Radeos’ phone contained a number of text message exchanges with Sanderson, a number of which indicated that Sanderson was purchasing heroin for Radeos from Sanderson’s drug supplier. It is further alleged that the text messages described the heroin as “fire” and Radeos was cautioned to be careful when using it. Federal agents approached Sanderson, who allegedly admitted to purchasing heroin from Gonzalez and selling it to Radeos. Sanderson agreed to cooperate in the investigation.

According to court documents, between February and May 2014, cooperating witnesses were used to make recorded calls and controlled heroin purchases from Gonzalez’s organization. It was also learned that Gonzalez used an apartment located at 1455 River Street, Hyde Park, to store heroin and that Gonzalez employed Hernandez and Ortiz-Ventara to pick up heroin from the River Street apartment on a near daily basis and then distribute the heroin around the Boston area.

On June 10, 2014, Gonzalez and Ortiz-Ventara were arrested on federal warrants and 1455 River Street was searched. At the time of the search, agents found Steven Juarbettores, Josue Torres Gonzalez, Lorenzo Antonio Nunez and Raul Romero, all of whom are believed to be from the Dominican Republic, in the apartment along with heroin, cocaine, drug packaging materials and a loaded semi-automatic handgun. Juarbettores, Josue Torres Gonzalez, Nunez, and Romero were charged in a separate federal complaint with possession with intent to distribute heroin and cocaine.

United States Attorney Carmen M. Ortiz; Special Agent in Charge Vincent B. Lisi of the Federal Bureau of Investigation’s Boston Field Division; Norfolk County District Attorney Michael W. Morrissey; and Chief Russell Jenkins of the Braintree Police Department made the announcement.

The case was investigated by members of the Boston FBI OCDETF Strike Force unit which includes the FBI; Braintree, Boston, Woburn and Watertown Police Departments; Department of Corrections, Customs and Border Protection; and the Massachusetts State Police Detective Unit assigned to the Norfolk County District Attorney’s Office.

The case is being prosecuted by Assistant U.S. Attorney Leah Foley of Ortiz’s Drug Trafficking Unit and Director of the OCDETF Strike Force.

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

BOSTON - A Pennsylvania woman affiliated with a Massachusetts-based broker dealer was arrested today on charges that she orchestrated a massive Ponzi scheme.

Patricia S. Miller, 67, was charged in a complaint with wire fraud and arrested in Pennsylvania today.

The complaint alleges that Miller used her position as a trusted financial adviser, as well as her association with a Massachusetts-based broker dealer, to obtain money from clients for purported investments that Miller never made on their behalf. 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. Instead of investing money as promised, Miller misappropriated client funds for her own personal use.

If convicted, Miller faces a maximum sentence under the statute 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. The case is being prosecuted by Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.

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.

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.

 

BOSTON – In a 91-count superseding indictment unsealed yesterday, five Worcester residents were charged with participating in a marijuana trafficking and money laundering scheme.

Huy Anh Lam, a/k/a Henry; Nhi Ai Thi Lam, a/k/a Cindy, Cindy Nguyen, and Lien Mach; An Bao Lam, a/k/a Bao; Diemphuc Thi Lam, a/k/a Diem Lam and Deedee; and Dan Pham, all of Worcester, were charged with multiple crimes relating to the scheme, including conspiracy to possess with intent to distribute 100 kilograms or more of marijuana, money laundering conspiracy, structuring conspiracy, structuring transactions to evade reporting requirements, money laundering, unlawful monetary transactions, perjury, and aiding and abetting.

The first three defendants, Huy Lam, Nhi Lam, and An Bao Lam, were arrested yesterday in Worcester and appeared in U.S. District Court in Boston. All have been detained in custody pending a detention hearing which is scheduled for the afternoon of, June 10, 2014, in Boston.

Among other offenses, the superseding indictment alleges from April 2009 until the present, four of the defendants, Huy Lam, Nhi Lam, An Bao Lam, and Diemphuc Lam, conspired to traffic at least 100 kilograms of marijuana and that the conspiracy involved criminal activity in Massachusetts, Connecticut, New Hampshire, Rhode Island, California, and Washington State.

The superseding indictment alleges that all five defendants conspired to launder hundreds of thousands of dollars in drug proceeds in the course of renting vacation homes in Connecticut, Rhode Island, and New Hampshire. The defendants conspired by receiving shipped packages of marijuana at the vacation homes, and exchanging cash drug proceeds in small denomination bills for apparently “clean” money by stuffing “huge amounts” of cash into casino slot machines in Connecticut and Rhode Island and then withdrawing it from the casinos in $100 bills. Furthermore, the defendants shipped large amounts of currency from New England to California and Washington via the U.S. Postal Service, Federal Express, and United Parcel Service. The defendants used drug proceeds in Massachusetts to purchase real property and luxury vehicles, including a 2012 Range Rover Sport SUV, a 2013 Cadillac Escalade, and a 2013 Nissan GT-R custom-built sports car. The vehicles have been seized by law enforcement for possible forfeiture in the criminal case.

The charge of marijuana conspiracy carries a mandatory minimum sentence of five years and maximum sentence of 40 years in prison, a minimum of four years of supervised release and a $5 million fine. Each count of money laundering carries a maximum sentence of 20 years in prison, three years of supervised release and a fine of $500,000 or twice the value of the laundered property. Each unlawful monetary transaction charge carries a maximum sentence of 10 years in prison, three years of supervised release and a fine of $250,000 or twice the value of the property involved. Each count of structuring carries a maximum sentence of 10 years in prison, three years of supervised release and a fine of $250,000. Perjury carries a maximum sentence of five years in prison, three years of supervised release and a fine of $250,000.

United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Michael Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today. The case is being prosecuted by Richard L. Hoffman and Timothy E. Moran of Ortiz’s Strike Force Unit, Cory Flashner of Ortiz’s Worcester Branch Office and Doreen Rachal of Ortiz’s Asset Forfeiture Unit.

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

BOSTON – A Roxbury man was sentenced today for stealing iPhones from the mail and making false statements.

Mark Dozier, 58, was sentenced by Senior U.S. District Judge Mark L. Wolf to two years in prison, three years of supervised release and $595 in restitution. In March of this year, he pleaded guilty to theft of mail by an employee of the postal service and making false statements. Dozier has been in custody since his arrest in 2012.

While working as an employee at the U.S. Postal Service, Dozier was caught stealing iPhones from the mail sorting machine. He confessed to stealing 12 iPhones over the course of several weeks and reselling them at a local barbershop. Dozier also lied about his identity on his application to become a Postal worker, using his brother’s name and date of birth rather than his own.

United States Attorney Carmen M. Ortiz and Rafael Medina, Special Agent in Charge of the U.S. Postal Service, Office of the Inspector General, Northeast Area Office, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz's Public Corruption and Special Prosecutions Unit.

BOSTON – Following his conviction on drug and weapons charges, an armed career criminal affiliated with the Bloods street gang was sentenced today to 22 years in federal prison.

U.S. District Judge F. Dennis Saylor IV sentenced Ernesto Monell, 35, of Fall River, to 262 months in prison and three years of supervised release. In December 2013, a jury convicted Monell of possessing a firearm and ammunition and possessing crack cocaine with intent to distribute. In 2012, Monell was arrested after officers executed a search warrant at his apartment where they found him barricaded alone holding a pistol. Officers subsequently found ammunition, as well as 37 rocks of crack cocaine, drug scales, and other drug paraphernalia.

Monell, a lifelong violent criminal, has 11 felony convictions, including five involving violence or firearms. Monell, who is affiliated with the Bloods, obstructed justice on two occasions during the trial. First, he was caught on tape attempting to convince his former girlfriend to falsely testify that the drugs and guns found at the apartment belonged to her, telling her “you gotta do you now because if you don’t do it, I’m done.” When she refused to take the rap for him, Monell moved on to what he called “Plan B”: convincing a fellow gang disciple, who is serving 9-10 years in state prison for attempted murder, to falsely testify on Monell’s behalf.

Explaining the imposed sentence, Judge Saylor noted that society needs to be protected from violent criminals and gang members such as Monell. Judge Saylor also noted that, since he has been detained in connection with this case, Monell has been involved with additional violent incidents in prison, including a gang-related prison riot in Rhode Island which has resulted in a separate federal conviction. Judge Saylor also found that Monell’s obstruction of justice warranted a serious prison sentence.

“This sentence mirrors the Justice Department’s commitment to removing dangerous, violent criminals from the streets,” said United States Attorney Carmen M. Ortiz. “Individuals who possess firearms, sell illegal drugs and threaten community safety will be held responsible for their criminal activity.”

“Dangerous criminal offenders instill fear through intimidation and the use of violence,” said Special Agent in Charge Daniel J. Kumor of the Bureau of Alcohol, Tobacco, Firearms and Explosive’s Boston Field Division. “ATF’s priority is combating violent crime and removing those dangerous offenders from the communities on which they prey.”

U.S. Attorney Ortiz and SAC Kumor made the announcement today. The case was prosecuted by Assistant U.S. Attorneys David S. Schumacher of Ortiz’s Health Care Fraud Unit and Glenn A. MacKinlay of Ortiz’s Strike Force Unit.

BOSTON – A New Bedford man was charged today with hacking into computer networks around the country – including networks belonging to law enforcement agencies, a local police department and a local college – and obtaining highly sensitive law enforcement data and altering academic records. He also obtained stolen credit, debit and payment card numbers.

Cameron Lacroix, 25, was charged with two counts of computer intrusion and one count of access device fraud. Lacroix has agreed to plead guilty. If the plea agreement is accepted by the court, Lacroix will be sentenced to four years in prison to be followed by three years of supervised release.

It is alleged that, between September 2012 and November 2013, Lacroix who was enrolled as a student at Bristol Community College (BCC), repeatedly hacked into BCC’s computer servers and used stolen log-in credentials belonging to three instructors, to log into the web-based grade recording system, where he changed course grades for himself and two other BCC students.

In addition, in September 2012, Lacroix allegedly hacked into a computer server operated by a local Massachusetts police department and accessed an e-mail account belonging to the chief of police. From August 2012 through November 2013, Lacroix is accused of repeatedly hacking into law enforcement computer servers containing sensitive information including police reports, intelligence reports, arrest warrants, and sex offender information.

It is further alleged that between May 2011 and May 2013, Lacroix obtained and possessed payment card data for more than 14,000 unique account holders. For some of these account holders, Lacroix also obtained other personally identifiable information, such as the account holders’ full names, addresses, dates of births, social security account numbers, email addresses, bank account and routing numbers, as well as listings of merchandise the account holders had ordered.

United States Attorney Carmen M. Ortiz; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Division; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police made the announcement.

The case was investigated by the FBI Boston Division Cyber Task Force. The U.S. Attorney’s Office would also like to acknowledge the cooperation and assistance of Bristol Community College.

The case is being prosecuted by Assistant U.S. Attorney Adam Bookbinder, Chief of Ortiz’s Cyber Crime’s Unit and Senior Trial Attorney Mona Sedky from the Criminal Division’s Computer Crime and Intellectual Property Section.

BOSTON - A Quincy man has been charged with obstructing the investigation of the Boston Marathon bombings.

Khairullozhon Matanov, 23, of Quincy, is charged in an indictment that was unsealed today, with one count of destroying, altering, and falsifying records, documents, and tangible objects in a federal investigation, specifically information on his computer, and three counts of making materially false, fictitious, and fraudulent statements in a federal terrorism investigation.

It is alleged that, after the release of the photos of the suspected bombers in the late afternoon of Thursday, April 18, 2013, and again early in the morning of Friday, April 19, 2013, Matanov realized that the FBI would likely want to talk with him because of his ties to the bombers, especially in the week following the bombings. Matanov allegedly then took a series of steps to impede the FBI’s investigation into the extent of his friendship, contact, and communication with the suspected bombers, and the fact that he shared the suspected bombers’ philosophical justification for violence. In addition to deleting information from his computer, Matanov made a number of false statements to federal investigators. The indictment does not charge Matanov with participating in the Marathon bombings or knowing about them ahead of time.

The maximum sentence for the count of destruction of evidence is 20 years in prison and eight years for each false statement count. All four counts also carry a maximum of three years of supervised release and a fine of $250,000.

United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division; and Superintendent William Taylor of the Lowell Police Department, made the announcement today. This investigation was conducted by members of the Joint Terrorism Task Force, which is composed of officers from other federal, state and local law enforcement agencies. Assistance in the investigation was also provided by the Boston Police, Braintree Police, Waltham Police and Quincy Police Departments; the Massachusetts State Police; Customs Border Protection; and Naval Criminal Investigative Service.

The case is being prosecuted by Scott L. Garland and Aloke S. Chakravarty of Ortiz’s Anti-Terrorism and National Security 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.

(Download Indictment )

BOSTON – A Western Massachusetts businessman, who used more than $2 million of company funds for his own purposes, was sentenced today in U.S. District Court in Springfield for bank fraud and tax evasion.

George J. Rosa, III, 54, of Conway, Mass., the former owner and president of the Hallmark Institute of Photography (HIP) in Greenfield, Mass., was sentenced by U.S. District Judge Michael A. Ponsor to nine months of confinement in a community correctional center, nine months home confinement, 42 months of supervised release, and $3.4 million in restitution. In March 2013, Rosa pleaded guilty to bank fraud and tax evasion.

Rosa used approximately $2.6 million of company funds for his own purposes, such as construction expenses at his residence, cash for gambling, and approximately $55,000 of clothing, footwear, and accessories. Rosa then disguised these expenses by reconfiguring them on the company’s books as proper business expenses. Having concealed his personal use of company funds, Rosa defrauded the People’s United Bank in connection with a series of corporate loans, two of which were guaranteed by the Small Business Administration, by submitting the altered books to the bank. Rosa also used the company’s altered books as a basis to file false income tax returns for himself and the company.

United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office.

BOSTON – A Dominican national living in Medway was sentenced today for fraudulently receiving more than $120,000 in federal housing funds and identity fraud.

Samuel Stalin Lebreault Feliz, a/k/a Antonio Jose Rodriguez Rodriguez, was sentenced by U.S. District Court Judge Denise J. Casper to 33 months in prison, three years of supervised release, and $121,077 in restitution. In February 2014, Feliz was convicted following a four-day jury trial of two counts of passport fraud, false representations to the Social Security Administration, and theft of public money.

During a ten year period, Feliz used numerous false identities and made repeated false representations including: pretending to be a US citizen; claiming to be a Venezuelan seeking political asylum in the United States; petitioning to be allowed to stay in the United States because he supposedly was a victim of domestic violence; applying for, and receiving, over $120,000 in Section 8 housing benefits to which he was not entitled.

Throughout this period, Feliz was actually a citizen of the Dominican Republic with no legal status in the United States.

United States Attorney Carmen M. Ortiz; David W. Hall, Special Agent in Charge of the U.S. Bureau of Diplomatic Security, Boston Field Office; Scott Antolik, Special Agent in Charge of the U.S. Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Office; and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement. The case was prosecuted by Assistant U.S. Attorneys Carlos A. López and David G. Tobin of Ortiz’s Major Crimes Unit.

BOSTON – A Haverhill woman was charged yesterday with using PayPal as part of a scheme to embezzle close to $1 million from her employer, a privately-held information technology staffing company based in Massachusetts.

Anita Allen, 34, was indicted on wire fraud charges. Allen was previously arrested on a criminal complaint at the airport in Charleston, S.C., and has remained in custody since that time.

According to the indictment, Allen, who worked as an accounts payable specialist, defrauded the company over a period of more than five years by directing dozens of transfers of money from a dormant company PayPal account to a PayPal account in her own name. Allen then forwarded the money from her PayPal account to her personal bank account, and spent it on day-to-day living expenses, travel, and the purchase of several vintage automobiles.

In addition, Allen charged numerous personal purchases to a company credit card, including multiple cruises on Norwegian Caribbean Lines, and purchases at retailers including Amazon.com and The Disney Store. Allen succeeded in hiding the fraud scheme by doctoring monthly credit card statements and falsifying entries in the very accounting journals it was her responsibility to maintain. In total, the fraud resulted in a loss to the company approaching $1 million.

If convicted, Allen faces a maximum sentence under the statute of 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim. The government is also seeking forfeiture of classic cars purchased by the defendant with proceeds of the fraud, including a 1951 Chevrolet Fleetline sedan, a 1965 Factory Replica Cobra roadster, a 1967 Ford Mustang coupe, and a 1970 Dodge Challenger.

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. The case is being prosecuted by Stephen E. Frank 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.

BOSTON - An East Boston man was sentenced today for robbing three Citizens Bank locations.

Thomas Briand, 34, of East Boston, was sentenced by U.S. District Court Judge William G. Young to 10 years in prison, three years of supervised release, and ordered to pay $7,201 in restitution to the three banks he robbed. In February 2014, Briand pleaded guilty to a three-count indictment charging him with robbing three different Citizens Bank branch locations, located in Boston and Cambridge.

United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Boston Police Commissioner William Evans; and Cambridge Police Commissioner Robert C. Haas, made the announcement today. The case was prosecuted by David G. Tobin and Maxim Grinberg of Ortiz’s Major Crimes Unit.

BOSTON – George Shipps, 32, of Chelsea, pleaded guilty today to federal charges of transportation and possession of child pornography. Shipps, a Level II registered sexual offender based upon a 2006 state conviction for child pornography and enticement offenses, was on state court probation when he committed the federal offenses.

In connection with the plea, Shipps admitted that he was sending and receiving child pornography from his residence in Chelsea at the time that his conduct was discovered as part of an international federal investigation. Among other things, Shipps admitted that he took sexually explicit photographs of three children, ages six, four, and two, on separate occasions.

Under the terms of the plea agreement, Shipps will be sentenced to a period of incarceration between 19 and 23 years, plus restitution and forfeiture. Shipps will also be required to plead guilty to aggravated child rape in Middlesex Superior Court and will not contest his pending state court probation violation.

United States Attorney Carmen M. Ortiz, Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division and Middlesex District Attorney Marian T. Ryan made the announcement today. The federal case is being prosecuted by Assistant U.S. Attorney Stacy Dawson Belf of Ortiz’s Major Crimes Unit and the Middlesex case is being prosecuted by Assistant District Attorney Katharine Folger.

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/.

BOSTON – Five commercial airline employees were arrested today and charged after an undercover operation revealed that they used their airport security clearances to secretly smuggle thousands of dollars in cash, past security checkpoints.

According to the complaint affidavit, they transported cash, which was represented to be drug proceeds, past Transportation Security Administration (TSA) officials and security check points and, in some instances, aboard commercial airline flights at Logan International Airport.

It is alleged that nine money laundering transactions were completed, which involved approximately $417,000 in cash the defendants believed to be drug proceeds.

Rupert Crossley, 25, of Lynn, Mass.; Alvin Leacock, 27, of Hollywood, Fla.; Eric Vick, 24, of Mattapan, Mass.; Anthony Trotman, 24, of Boston, Mass., all JetBlue Airways ground operations crew members and Dino Dunkley, 31, of Boston, Mass., a Delta Air Lines customer service ramp agent, were each charged in a criminal complaint with money laundering and of conspiracy to defraud the United States, namely, the TSA, by entering Boston’s Logan International Airport with the intent to evade security procedures, and with the intent to commit a felony, in a secure airport area.

According to the affidavit, each of the defendants used his individual airport security clearance to circumvent TSA security checkpoints and smuggle large amounts of cash from non-secure airport areas, such as curbside passenger drop-off/pick-up or public restrooms near baggage claim, to secure areas of the airport, such as passenger departure gates. In return, each defendant received a cash payment from a cooperating witness involved in the investigation. Defendants Vick and Dunkley each transported the smuggled cash aboard commercial airline flights from Boston to Florida.

U.S. Attorney Ortiz said, “Security at our nation’s airports is paramount and the conduct alleged today is alarming. Thanks to the hard work and commitment of the federal and state investigators and airline security personnel, a potentially dangerous breach in security was identified.”

“Today marks the culmination of a very detailed investigation,” said Bruce Foucart, Special Agent in Charge of HSI. “I want to thank all of the security officials within Massport, TSA, Mass. State Police, and the affected airlines. Their due diligence throughout this investigation, combined with the tireless work of my special agents made today’s arrests possible.”

If convicted, each defendant faces up to 20 years in prison.

U.S. Attorney Ortiz and SAC Foucart made the announcement today. The case was investigated with the assistance of Bob Allison, Federal Security Director, Transportation Security Administration; Special Agent in Charge Dwain Troutt of the Federal Air Marshal Service; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police. The U.S. Attorney’s Office would also like to acknowledge the assistance and cooperation of Jet Blue Corporate Security and Delta Airlines. The case is being prosecuted by Assistant U.S. Attorneys Carlos A. Lopez of Ortiz’s Major Crimes Unit and Dustin Chao of Ortiz’s Public Corruption Unit.

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

BOSTON - A Shrewsbury man pleaded guilty in U.S. District Court in Worcester today to taking $57,948 in Social Security payments to which he was not entitled.

George Bergstrom, 60, pleaded guilty to theft of public money. Earlier this month, Bergstrom was charged in a felony information. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for August 20, 2014.

In 2009, Bergstrom’s mother died, but her Social Security payments continued to be directly deposited into a joint bank account in her name and Bergstrom’s name. 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 U.S. Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.

BOSTON – A Malden man pleaded guilty yesterday to sex trafficking a 15-year-old girl.

David Minasian, 25, pleaded guilty to causing a minor to engage in prostitution. In April 2013 he was indicted and is scheduled to be sentenced by U.S. District Court Judge William G. Young on October 9, 2014.

In 2012, officers executed a search warrant at Minasian’s home and recovered a computer that contained advertisements offering sex for a fee with a young girl whose pictures were also displayed. After analyzing the advertisements, which Minasian posted on the Internet site Backpage.com, agents identified the 15-year-old victim.

After Minasian and accomplices took pictures of the minor victim, which were used in advertisements posted on various Internet sites offering sex for a fee, they prostituted her in area hotels and a residence in Malden.

Pursuant to the plea agreement, Minasian faces a sentence between 13 and 15 years in prison, five years of supervised release, a $250,000 fine, and $4,000 in restitution.

U.S. Attorney Ortiz, Special Agent in Charge Vincent B. Lisi of the Federal Bureau of Investigation’s Boston Field Division and Malden Police Chief Kevin Molis, made the announcement. The case was prosecuted by Assistant U.S. Attorney Leah Foley who is a member of Ortiz’s Civil Rights Enforcement Team.

Since United States Attorney Carmen M. Ortiz created the Civil Rights Enforcement Team in 2010, the U.S. Attorney’s Office has handled numerous human trafficking investigations and prosecutions. Within the last week, Michael Gemma was convicted by a federal jury of sex trafficking and five individuals from Massachusetts and Maine were indicted for operating a sex trafficking ring.

BOSTON – A Cape Cod man was sentenced yesterday for trafficking counterfeit Viagra on Craigslist.

David Nailen, 45, of East Falmouth, was sentenced by U.S. District Judge Douglas P. Woodlock to 18 months in prison, to be served intermittently, with nine months in the custody of the Bureau of Prisons and nine months in home confinement, followed by two years of supervised release. Nailen was also ordered to pay $48,902 in restitution to Pfizer, Inc. and a money judgment of $2,280 to the United States Customs and Border Protection. In February 2014, Nailen pleaded guilty to trafficking in counterfeit drugs.

Between March and October 2012, Nailen sold counterfeit tablets that were similar or indistinguishable from Pfizer, Inc.’s pharmaceutical drug Viagra, via the Internet, on Craigslist, and in person. In October 2012, investigators executed a search warrant on his East Falmouth home and seized over 3,000 counterfeit Viagra tablets.

United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Custom’s Enforcement’s Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Amy Harman Burkart of Ortiz’s Cybercrime Unit.

BOSTON - A Lawrence man pleaded guilty today to theft of more than $230,000 in U.S. Treasury tax refunds.

Wilson Santana, 40, pleaded guilty to 34 counts of theft of public money. He was indicted in January of 2013 and is scheduled to be sentenced by U.S. District Judge George A. O’Toole on Sept. 4, 2014.

Between November 2011 and March 2012, Santana provided Robert Montero, a bank teller at Metro Credit Union in Lawrence, with 30 U.S. Treasury checks containing fraudulently obtained tax refunds to be negotiated through various bank accounts controlled by or associated with Santana. The U.S. Department of Treasury had issued the checks based on tax returns that later were determined to contain false information. For example, although the tax returns contained biographical information of real people in Puerto Rico, their addresses were falsely listed in New York and Massachusetts. The tax returns also contained false employment information. Santana, knowing that the tax return checks had been issued based on false information, negotiated them with Montero’s help at Metro West Credit Union in return for a fee. The 30 tax refund U.S. Treasury checks were worth $211,214.

Between March and April 2012, Santana sold four more U.S. Treasury checks containing fraudulently obtained tax refunds to Montero. Unbeknownst to Santana, those transactions were monitored by federal agents. The four U.S. Treasury checks contained $26,227 in tax refunds. In total, Santana stole or attempted to steal $237,227 of fraudulently obtained tax refunds. Montero pleaded guilty to theft of public money last September.

The maximum sentence under the statute is 10 years in prison, three years of supervised release and a $250,000 fine.

United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Stephen Marks, Acting Special Agent in Charge of the U.S. Secret Service, made the announcement today. The case is being prosecuted by Maxim Grinberg of Ortiz’s Health Care Fraud Unit.

BOSTON – A federal jury today convicted a Boston area man of sex trafficking a 16-year-old girl.

Following a five-day trial, Michael Gemma, 30, of Dorchester was convicted of using force, fraud and coercion to cause a minor to engage in prostitution and transporting a minor across state lines for the purpose of prostitution. He was indicted in May 2012. Sentencing is scheduled for September 9, 2014.

The investigation into the defendant’s sex trafficking activities began in 2011 when a Trooper with the Massachusetts State Police stopped Gemma for speeding. During the stop, the Trooper recovered the 16-year-old female victim who reported that the defendant had driven her to New York and New Jersey for purposes of prostitution.

During the trial, the jury heard testimony from the trafficking victim who testified about how the defendant and another pimp took suggestive pictures of her which they used in advertisements that offered sex with her for a fee. Gemma posted those advertisements on various Internet sites including Backpage.com. Gemma and another pimp drove the minor victim and other young women to motels in Massachusetts, New York and New Jersey, where they were prostituted. The victim testified how Gemma and the other pimps would control the prostitutes by threatening them and, at times, beating them.

Gemma faces a minimum sentence of 15 years in prison and a maximum of a lifetime, five years of supervised release, a $250,000 fine, and restitution.

United States Attorney Carmen M. Ortiz, Special Agent in Charge Vincent B. Lisi of the Federal Bureau of Investigation’s Boston Field Division and Colonel Timothy Alben, Superintendent of the Massachusetts State Police, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Leah Foley and Miranda Hooker who are members of Ortiz’s Civil Rights Enforcement Team.

BOSTON – A Westminster man was sentenced today in U.S. District Court in Worcester for bank fraud.

Lance N. Korich, 53, was sentenced by U.S. District Judge Timothy S. Hillman to one year and one day in prison, two years of supervised release, and ordered to pay $593,617 in restitution. In December 2013, Korich pleaded guilty to four counts of bank fraud.

From 2008 to 2010, Korich applied for and obtained four construction loans at Colonial Cooperative Bank in Gardner, Mass. In support of those loans, Korich submitted false and fraudulent purchase and sale agreements. In particular, Korich fabricated the names of the purported home buyers and forged their signatures on the purchase and sale agreements.

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. Attorneys Karin M. Bell and Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.

BOSTON - A Ludlow man pleaded guilty in U.S. District Court in Springfield today to child exploitation charges.

James Pease, 35, pleaded guilty to four counts of sexual exploitation of a child, receipt of child pornography, and possession of child pornography. In March 2013, Pease was indicted. Sentencing is scheduled for Sept. 5, 2014.

During 2010 and 2012, Pease surreptitiously recorded minor females while they showered. From 2006 to 2012, Pease also received and possessed child pornography which he obtained from the Internet.

Pease faces a statutory mandatory minimum of 15 years and a maximum of 30 years in prison on the charge of sexual exploitation of a child; a statutory mandatory minimum of five years and a maximum of 20 years in prison on the charge of receipt of child pornography; and a statutory maximum of 10 years on the charge of possession of child pornography. Additionally, Pease faces a minimum of five years and up to a lifetime of supervised release and a $250,000 fine.

United States Attorney Carmen M. Ortiz and Leigh Alistair Barzey, Resident Agent in Charge of the Department of Defense’s Office of Inspector General, Defense Criminal Investigative Service, made the announcement. The case is being prosecuted by Alex Grant of Ortiz’s Springfield Branch 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/.

BOSTON – Five individuals were charged in an indictment unsealed today for operating a multistate sex trafficking ring centered in Massachusetts and Maine involving minors and adult women.

Raymond Jeffries, a/k/a Skame Dollarz, Skame, Frenchy, 26, of Boston and Portland, Maine; Corey Norris, a/k/a Case, 23, of Boston; Jacqueline Lungelow, a/k/a Baby J., 26, of Boston; Kairis Sanchez, a/k/a Lola, 19, of Boston; and John Kanda, a/k/a J., 21, of Portland, Maine, were charged in a 17-count superseding indictment unsealed today involving the trafficking of six victims, three of whom were under the age of 18, for the purposes of prostitution in Massachusetts, Maine, Rhode Island, Connecticut, New Jersey, Maryland, Nevada, and California.

The indictment alleges that, at various times from 2006 through January 2014, different combinations of these defendants trafficked the victims for prostitution by force, fraud or coercion and, in the cases of the minor girls, knowing or in reckless disregard that they were under the age of 18.

Norris was previously charged in U.S. District Court in Massachusetts for sex trafficking of a minor from Massachusetts to Rhode Island, and this indictment expands on those charges.

If convicted on the charges of sex trafficking by force, fraud or coercion, the defendant faces a minimum sentence of 15 years in prison and a maximum of a lifetime, five years of supervised release, a $250,000 fine, and restitution. If convicted on sex trafficking of a minor, the defendant faces a minimum sentence of 10 years in prison and a maximum of a lifetime, five years of supervised release, a $250,000 fine, and restitution.

United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; Shawn Meehan, Resident Agent in Charge of the HSI Portland Office; Boston Police Commissioner William Evans; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Aaron Steps, Supervisory Senior Resident Agent in Charge of the Maine Office, made the announcement today. The U.S. Attorney’s Office wishes to thank the Suffolk County District Attorney’s Office, Cumberland County (Maine) District Attorney’s Office, United States Attorney’s Office for the District of Maine, Massachusetts State Police, Portland (Maine) Police Department, Old Town (Maine) Police Department, Braintree Police Department, South Portland (Maine) Police Department, Maine Drug Enforcement Agency, and the Cumberland County Sheriff’s Office. This case is being prosecuted by Assistant United States Attorneys Amy Harman Burkart and Cory S. Flashner of Ortiz’s Civil Rights Enforcement Team and Special Assistant United States Attorney and Suffolk County Assistant District Attorney David S. Bradley.

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

BOSTON – A Taunton man was sentenced today for producing and transporting child pornography.

David McLellan, 31, of Taunton, was sentenced by U.S. District Judge Rya Zobel to 17 years in prison and 15 years of supervised release. In February 2014, McLellan pleaded guilty to sexual exploitation of children and transportation of child pornography.

After an undercover agent downloaded child pornography on a peer-to-peer file sharing network from McLellan, federal agents obtained a search warrant for McLellan’s residence and seized multiple items of computer media. Computer forensic examination revealed McLellan possessed six million images of child pornography and child erotica of prepubescent children and infants.

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 Eve A. Piemonte Stacey 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 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/.

BOSTON – A Peabody investment advisor pleaded guilty today to defrauding several Boston-area residents out of their retirement savings.

John Michael Babiarz, 40, of Peabody, pleaded guilty before U.S. District Judge F. Dennis Saylor, IV to wire fraud and aggravated identity theft. In December 2013, Babiarz was arrested and charged. He is scheduled to be sentenced on August 1, 2014.

Following his termination in September 2011from Bishop, Rosen & Co., a retail brokerage firm headquartered in New York, Babiarz falsely told some of his former clients that he had taken a job at Fidelity Investments, the Boston-based asset management firm. Babiarz told other clients that he was working as an independent financial advisor. Babiarz told his clients that he could continue to manage their money if they opened online brokerage accounts at Fidelity. Babiarz assisted the individuals in opening such accounts online, and in so doing, set up the user names and passwords for those accounts. Unbeknownst to his clients, Babiarz then caused their funds – or money he borrowed in their names on margin – to be diverted to accounts that he controlled at several other banks and brokerage firms. Babiarz used the money to buy a new home and a car, and to pay other personal expenses.

Babiarz was previously charged in an administrative complaint brought by the Massachusetts Securities Division with engaging in unregistered and fraudulent activities in violation of the Massachusetts Uniform Securities Act and applicable regulations.

Babiarz faces a maximum sentence of 20 years in prison, three years of supervised release and a $250,000 fine, or twice the gross gain or loss from the offense on the wire fraud charge and a mandatory consecutive term of two years in prison, one year of supervised release, and a fine of $250,000 on the charge of aggravated identity theft.

United States Attorney Carmen M. Ortiz and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case is being prosecuted by Assistant United States Attorney Stephen E. Frank of Ortiz’s Economic Crimes Unit.

BOSTON – A Greek man was convicted in U.S. District Court in Boston yesterday for his role in perpetrating a multi-million scheme which defrauded developers of $7.9 million.

Following a three-week jury trial, Evripides Georgiadis, 49, of Larisa, Greece, was convicted of conspiracy to commit wire fraud, 11 counts of wire fraud, and conspiracy to commit money laundering. He was indicted in June of 2011. Sentencing is scheduled for August 18, 2014.

Between 2007 and 2011, Georgiadis 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. Georgiadis and his co-conspirators convinced developers to give deposits between $300,000 and $1 million to this fake fund with the promise that the deposit would be fully refundable. Georgiadis and his co-conspirators spent and transferred the developers' deposit money out of the country, and the fake fund never financed any projects. In perpetrating this scheme, Georgiadis helped create fake letters of credit and a fake New Zealand bank, all to reassure developers about the safety of their deposits.

Georgiadis’ co-defendants, John Condo, Michael Zanetti and Frank Barecich, have all pleaded guilty 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 is being prosecuted by Alex Grant and Karen L. Goodwin of Ortiz’s Springfield Branch Unit.

BOSTON – A Cambridge elementary school teacher was indicted today on multiple counts of child pornography.

Josh Wairi, 27, of Somerville, was charged with transportation of child pornography and three counts of production of child pornography. He is currently being held without bail. On April 17, 2014, Wairi was initially charged via criminal complaint.

The criminal complaint alleges, among other things, that Wairi, a fifth grade teacher, used his email account to trade and receive images of child pornography and also uploaded images and videos of children being sexually exploited. The complaint further alleges that Wairi transferred the images and videos of child pornography to other users.

If convicted, Wairi faces a mandatory minimum sentence of 15 years and a maximum of 30 years in prison on each count of production of child pornography and a mandatory minimum of five years and maximum of 20 years in prison on the count of transportation of pornography, as well as a mandatory minimum of five years and a maximum of a lifetime of supervised release and a $250,000 fine.

United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Acting Somerville Chief of Police Charles Semino, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus 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 details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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/.

BOSTON – A West Hartford man was charged in U.S. District Court in Worcester yesterday with sending obscene images to a 14-year-old boy over the Internet.

Herbert Lawrence Jenkins, 45, was indicted for transferring obscene materials to a minor. An affidavit in support of Jenkins’ arrest, previously unsealed, alleges that in July 2013, after chatting with the victim for several months, Jenkins sent four photographs of his genitals to a 14-year-old boy in Bolton, Mass. while graphically describing sexual acts that he wished to perform with the boy. The affidavit further alleges that approximately one week before this occurred Jenkins had traveled from his home in West Hartford to the boy’s residence in Bolton.

Jenkins’ communications were discovered when a sibling of the victim discovered the chats on the victim’s iPhone and brought them to the attention of the victim’s parents.

If convicted, Jenkins faces a statutory maximum term of 10 years in prison and three years of supervised release.

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. The case is being prosecuted by Mark J. Grady of Ortiz’s Worcester Branch Office.

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.

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/.

WASHINGTON – A California man pleaded guilty today in the District of Massachusetts for his role in a conspiracy to hack into the computerized cash registers of a number of Subway restaurants to fraudulently obtain more than $40,000 in gift cards.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service in Manchester, New Hampshire, made the announcement.

Shahin Abdollahi, aka Sean Holdt, 46, of Lake Elsinore, California, pleaded guilty before U.S. District Judge Richard G. Stearns to one count of conspiracy to commit computer intrusion and wire fraud and one count of wire fraud. Sentencing is scheduled for Aug. 6, 2014. Abdollahi, along with his co-conspirator, Jeffrey Wilkinson, 37, of Rialto, California, was indicted on March 6, 2013. Wilkinson pleaded guilty on Feb. 27, 2014, and is scheduled for sentencing on May 28, 2014.

Prosecutors informed the court that had the case proceeded to trial, the government would have proven that Abdollahi owned Subway franchises in Southern California from 2005 to 2008 and later operated a California company called “POS Doctor,” which sold and installed point-of-sale (POS) computer systems to Subway restaurant franchises around the country. POS systems are a type of computerized checkout register that allows merchants to manage customer purchases made by credit, debit and gift cards.

Beginning in approximately 2011, Abdollahi and Wilkinson conspired to remotely hack into POS systems in Subway restaurant franchises around the country. Members of the conspiracy hacked into at least 13 Subway POS systems that Abdollahi sold through POS Doctor and fraudulently added at least $40,000 in value to Subway gift cards. Abdollahi and Wilkinson used the fraudulent gift cards to make purchases at Subway, and Wilkinson also sold fraudulent gift cards to others using eBay and Craigslist.

The case is being investigated by the U.S. Secret Service. The case is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam J. Bookbinder of the District of Massachusetts.

BOSTON – A former West Harwich man was sentenced today for attempting to recruit two homeless men to burn a West Harwich residence and then attempting to tamper with the witnesses of the criminal case.

Benjamin Parker, 29, was sentenced by U.S. District Judge George A. O’Toole to six years in prison and three years of supervised release. In March, Parker pleaded guilty to attempted arson, attempted kidnaping, and attempted witness tampering.

In September 2011, Parker solicited two homeless Boston men to burn residential rental property in West Harwich. The men immediately notified the authorities and then assisted in the ensuing investigation. Parker provided the men with materials to set the fire and explained when and how he wanted it started. Parker was arrested later that weekend.

In March 2012, Parker was charged with the attempted arson in federal court. He was released on conditions and was scheduled to plead guilty in July 2013. However, in June 2013 he traveled to Hartford, Conn. in violation of his conditions of release and attempted to hire a member of the Latin Kings street gang to kidnap and hold the men he had solicited to commit the arson. The individual Parker approached reported Parker’s activities to authorities and, like the two Boston men, assisted with the investigation. Parker was arrested on June 24, 2013 in upstate New York, where he was living with his family as part of his conditions of release.

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division; Chief Paul MacMillan of the MBTA Police Department; Boston Police Commissioner William Evans; Stephen D. Coan, State Fire Marshal; Harwich Police Chief William Mason; and Hartford Police Chief David A. Groves, made the announcement today.

BOSTON – The former Executive Director of Chelsea Housing Authority (CHA) pleaded guilty today for rigging the inspection process for federally-funded housing units at the CHA.

Michael McLaughlin, 68, pleaded guilty today before U.S. District Court Judge Douglas P. Woodlock to conspiring to defraud the United States. In October 2013, McLaughlin was indicted along with two co-defendants who are pending trial. Sentencing is scheduled for June 20, 2014 at 2:30 p.m.

From 2000 until November 2011, McLaughlin was the Executive Director of the Chelsea Housing Authority, which managed three federal housing developments funded by the Department of Housing and Urban Development (HUD) and contained approximately 350 units. Between 2007 and 2011, McLaughlin conspired with his co-defendants to defeat the purpose and efficacy of HUD inspections of the Chelsea Housing Authority's living spaces. They did this by obtaining in advance the list of units that HUD was going to inspect, enabling the housing authority to focus on repairing those units and to deceive the HUD inspectors about the integrity of the unit inspection.

In July 2013, McLaughlin was sentenced to 36 months in prison for falsely reporting his salary in annual budgets required by HUD.

McLaughlin pleaded guilty pursuant to a plea agreement with the United States. If the Court accepts McLaughlin’s guilty plea, he will be sentenced to one year in prison, to be served consecutively with the prison term he is currently serving, and a $3,000 fine.

United States Attorney Carmen M. Ortiz and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement today. The case is being prosecuted by S. Theodore Merritt of Ortiz’s Public Corruption Unit and Brian Pérez-Daple of Ortiz’s Major Crimes Unit.

BOSTON – Two California men were charged yesterday for their involvement in a microcap stock kickback scheme.

Sandip Shah, 40, was charged in an indictment with nine counts of wire fraud and Shailesh Shah, 47, was charged in an Information with two counts of mail fraud and two counts of wire fraud. Both are from Chino, Calif. And were previously arrested on February 27, 2014.

According to the charging documents, Sandip Shah was in the business of promoting penny stocks and assisting public companies in finding sources of funding. Shailesh Shah was the President and Chief Executive Officer of two publicly-traded companies, SOHM, Inc. and Costas, Inc. Shailesh Shah agreed to pay secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in his two publicly-traded companies. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents.

According to the charging documents, Sandip Shah agreed to introduce the investment fund representative to executives of publicly-traded companies so that those executives could enter into the kickback arrangement. In exchange for the introductions and for facilitating the kickback arrangements as they continued, Sandip Shah accepted a portion of the kickbacks paid by the executives. What the defendants did not know was that the purported investment fund representative was actually an undercover agent.

The charges follow 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.

If convicted, each defendant faces a statutory maximum penalty of 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss on each count.

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. U.S. Attorney Ortiz expressed appreciation for the significant assistance her office received from the U.S. Securities and Exchange Commission. These cases are being prosecuted by Trial Attorney Alexander H. Berlin.

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

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.

 

BOSTON – A Florida woman and a man who previously resided in Beverly were charged in an indictment unsealed today in connection with an advance fee scheme involving approximately 100 victims throughout the United States, including many in Massachusetts.

Ann Elizabeth Ursiny, a/k/a Ann Stone, 50, and Robert E. O’Connor, 63, were indicted on 19 counts of mail fraud and 17 counts of wire fraud.

The indictment alleges that between early 2010 and 2011, Ursiny recruited agents, including O’Connor, in several states to solicit individuals to apply for loans through her entity Trace Financial Group, Inc. (Trace) and to pay the advance fees. The agents, including O’Connor, were paid a portion of those advance fees. O’Connor and Ursiny told prospective applicants that Trace had successfully processed and disbursed many loans, when in fact none were ever disbursed. Ursiny and O’Connor focused their scheme on prospective applicants who had poor credit or whose homes were underwater, and represented that Trace could replace their mortgage with a new, smaller mortgage with lower mortgage interest payments. The indictment alleges that Trace never funded any of the loans, and failed to pay refunds as promised. Victims’ funds were used primarily for Ursiny’s personal and family expenses, as well as to pay “commissions” to agents.

If convicted, Ursiny and O’Connor each face a statutory maximum sentence of 20 years in prison, three years of supervised release, and a $250,000 fine on each count.

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 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.

BOSTON – James M. Merrill and Carlos N. Wanzeler, principals of TelexFree, Incorporated and related entities, were charged today in a federal criminal complaint, charging them with conspiracy to commit wire fraud.

Merrill, 53, of Ashland, Mass. and Wanzeler, 45, of Northborough, Mass., were charged in a one count criminal complaint filed in U.S. District Court in Worcester, Mass. If convicted, each face up to 20 years in prison. Merrill was arrested today by federal authorities and made an initial appearance in U.S. District Court in Worcester. A federal arrest warrant was issued for Wanzeler who is a fugitive.

United States Attorney Carmen Ortiz said, “The scope of this alleged fraud is breathtaking. As alleged, these defendants devised a scheme which reaped hundreds of millions of dollars from hard working people around the globe.”

“I am very proud of the tireless efforts of my special agents. Investigating the flow of illicit money across U.S. borders and the criminal enterprises behind that money is one of our top priorities,” said Bruce Foucart, Special Agent in Charge of Homeland Security Investigations. “While pyramid schemes are nothing new, the potential scope of this case will hopefully serve as an educational lesson for all. The main point is clear; if it sounds too good to be true, it probably is.”

According to the complaint affidavit, TelexFree, Inc., and TelexFree LLC (collectively, “TelexFree”) provided “voice-over-internet-protocol” (“VOIP”) telephone services, for which customers can sign up via a web site maintained by TelexFree. It is alleged that TelexFree was actually a pyramid scheme and that between January 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 on the Internet.

It is alleged that the ad-posting requirements were a meaningless exercise, in which promoters cut and pasted ads into various classified ad sites provided by TelexFree which were already saturated with ads posted by earlier participants. According to the affidavit, TelexFree derived only a fraction of its revenue from sales of VOIP service – less than 1% of TelexFree’s hundreds of millions of dollars in revenue over the last two years. The overwhelming majority of its revenue – the other roughly 99% – came from new people buying into the scheme. TelexFree was allegedly only able to pay the returns it had promised to its existing promoters by bringing in money from newly-recruited promoters.

On or about March 8, 2014, TelexFree announced changes to its compensation system. On April 14, 2014, Telexfree filed for bankruptcy. In its filings with the bankruptcy court, Telexfree stated, among other things, that it changed its compensation plan “because questions were raised” about the prior plan and that, after changing the plan, the “discretionary payments ... quickly became a substantial drain on the Company’s liquidity.”

On April 16, 2014, the Securities and Exchange Commission obtained a restraining order to freeze assets of Telexfree and eight related individuals. Since then, the U.S. Attorney’s Office has executed 37 seizure warrants for assets in the tens of millions of dollars.

It is further alleged that in 2013, TelexFree reported sales of $1.016 billion, while known sales of the TelexFree VOIP product represented less than 0.1% percent of TelexFree’s total revenues.

United States Attorney Ortiz, SAC Foucart 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.

If you believe that you are a victim of the alleged TelexFree, Inc. scheme, please send your contact information to the following address: [email protected]

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

BOSTON – An illegal alien pleaded guilty today in U.S. District Court in Worcester in connection with a conspiracy to produce false identification documents.

Leonardo Burgos Espinal, 42, pleaded guilty before U.S. District Judge Timothy S. Hillman to conspiracy to commit fraud in connection with identification documents. In March 2013, Burgos Espinal was charged by information 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 plea is the most recent development in investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.

Burgos Espinal faces a statutory maximum penalty of five years in prison, three years of supervised release, restitution, and a $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; and Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; made the announcement today. The case is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.

BOSTON – A Quincy man was charged yesterday in connection with a scheme to steal valuable intellectual property from his former employer, Daedalus Software, Inc., of Cambridge.

Nabeel Memon, 29, of Quincy, was indicted today on wire fraud.

According to the indictment, in 2011, Memon worked for Daedalus as a software developer while living in Pakistan, and again in 2013 at Daedalus’s Cambridge office. Daedalus provides the health care industry with software that manages the storage and analysis of biological samples. In December 2013, Memon copied the source code for Daedalus’s product, called “BTM Research,” onto a personally-owned hard drive. When asked by Daedalus’s CEO if he was copying any company information, he lied and said that he was not.

The indictment alleges that the next day, Memon quit his job at Daedalus and went to work for a company, identified in the indictment only as Company A, that is not a competitor of Daedalus’s but also designs software for analysis of large volumes of data. Daedalus’s source code could allegedly be extremely valuable to a software designer at Company A. When an attorney for Daedalus sent Memon a letter demanding that he return all Daedalus information in his possession, he responded by falsely stating, in an e-mail, that he no longer had any Daedalus information. In fact, he continued to possess the entire BTM Research source code months after he quit his job at Daedalus.

If convicted, Memon faces a statutory maximum penalty of 20 years in prison and three years of supervised release.

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. The case is being prosecuted by Assistant United States Attorney Adam J. Bookbinder of Ortiz’s Cybercrime Unit. The U.S. Attorney’s office thanks Daedalus for cooperating with the investigation.

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.