Eastern District of Michigan
Press releases recorded for this federal judicial district.
Inclusion and the Justice System:Why Jury Diversity MattersRead the Press Release
In a continued effort to raise awareness on the importance of jury service, Chief Judge Gerald E. Rosen, U.S. District Court for the Eastern District of Michigan, U.S. Attorney Barbara L. McQuade, Chief Federal Defender Miriam L. Siefer, State Representative Rashida Tlaib and Detroit City Council Member Raquel Castaneda-Lopezannounced today a community forum that will focus on the racial and ethnic diversity of juries and the importance of jury service.
The public forum, titled "Inclusion and the Justice System: Why Jury Diversity Matters" will take place Wednesday, November 12, 2014, from 6:00 to 7:30 p.m. at Community Health and Social Services (“CHASS”), 5635 W. Fort Street, Detroit, Michigan.
The purpose of the forum is to educate citizens about the challenges and strategies in the Eastern District of Michigan to seat juries that represent the broad spectrum of citizens of the district and the importance of jury service. Because racial and ethnic minorities have been historically under-represented as jurors in trials held in federal court in southeast Michigan, Chief Judge Rosen formed a committee, led by Judge Denise Page Hood and Judge Victoria A. Roberts, to explore new ways to increase minority participation. The committee=s work has been memorialized in a report, which includes recommendations to achieve a more diverse pool of jurors.
"We appreciate the work the court has done on this issue,@ McQuade said. ADiverse representation on juries is important to public confidence in the criminal justice system."
The forum panel will be moderated by Council Member Raquel Castaneda-Lopez, and will feature Chief Judge Rosen and Judge Denise Page Hood, as well as U.S. Attorney McQuade, and Deputy Federal Defender Rafael Villarruel. The session will include a period for questions and answers from the public.
For a copy of the committee=s report, please visit www.mied.uscourts.gov.Jury Convicts Rose City Dentist for Refusing to Pay TaxesRead the Press Release
A Rose City dentist was found guilty by a jury in federal court of income tax evasion, mail fraud and making false statements to the Internal Revenue Service, U.S. Attorney Barbara McQuade announced today.
McQuade was joined in the announcement by Jarod Koopman, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Convicted was Carter White Rae, of Rose City, Michigan, after a trial before U.S. District Judge Thomas L. Ludington in Bay City, Michigan.
According to court records and evidence introduced at trial, Rae refused to pay both federal and the state income taxes from 2001 through 2011. Rae utilized many different tactics to avoid paying taxes that he knew he owed, including operating his dental practice using the Employer Identification Number (EIN) of the former owner; opening and using a business bank account in the name and the EIN of the former owner of the practice; closing his personal bank account and using only his business bank account, cash and money orders to pay his personal expenses.
The evidence at trial showed that Rae took many steps to deceive the IRS. He characterized payments to his wife as “payroll” expenses even when his wife, who rarely worked for his dental business, lived in a different state. Rae directed payments from dental insurance companies to be diverted to third parties to avoid an Internal Revenue Service levy, and he also refused to produce records pursuant to a court order directing him to comply with an IRS Summons.
“The jury has sent a strong message that our citizens will not tolerate those who attempt to evade their taxes. IRS-CI will continue to pursue these types of cases reaffirming our message that we do not expect honest taxpayers to foot the bill for those who attempt to break the tax laws,” said Special Agent in Charge Jarod Koopman.
Sentencing currently is scheduled for February 25, 2015, before Judge Ludington. Rae faces a statutory maximum potential sentence of 5 years in prison for the evasion and false statement counts and a maximum term of 20 years imprisonment for the mail fraud charge. All three counts carry a fine of up to $250,000.
The case was investigated by special agents of the IRS-Criminal Investigation and is being prosecuted by the U.S. Attorney’s Office in Bay City.Prosecutor Appointed as District Election OfficerRead the Press Release
United States Attorney Barbara L. McQuade announced today that Assistant United States Attorney (AUSA) Dawn N. Ison will lead the efforts of her Office in connection with monitoring local elections in Detroit and Hamtramck. AUSA Ison has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Michigan, and in that capacity is responsible for overseeing the District=s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney McQuade stated that AUSA/DEO Ison will be on duty in this District while the polls are open. She can be reached by the public at the following telephone number: 313-226-9567.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached at (313) 965-2323.
United States Attorney McQuade said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI or the Civil Rights Division.”
Complaints about ballot access problems or discrimination can also be made directly to the Civil Rights Division=s Voting Section in Washington by phone at 1-800-253-3931, or (202) 307-2767, by fax at (202) 307-395, by email to [email protected].Former Pontiac Tax Preparers Plead Guilty ToConspiracy to Defraud the United StatesRead the Press Release
Tamika and Brandon Lee of Pontiac pleaded guilty to conspiring to defraud the government by submitting false claims for income tax refunds, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Jarod Koopman, Special Agent in Charge of the Internal Revenue Service Criminal Investigation.
The Lees entered the guilty pleas before United States District Judge Sean F. Cox.According to court records, Brandon Lee and Tamika Hawkins Lee, husband and wife, owned and operated Quick Money Tax Loan Center in Pontiac, MI. The two prepared and filed false tax returns for individuals for the 2009 and 2010 tax years. These returns claimed false or inflated expenses on Form 1040 Schedule C – Profit or Loss From Business, as well as false education credits. The falsified items caused the taxpayers’ refunds to be larger than what they were entitled to by increasing the Earned Income Credit and the Hope Education Credit.
During the hearings, the Lees admitted to participating in the conspiracy which involved 26 false income tax returns. The total refunds, approximately $183,664, were directed to a business bank account that was open and controlled by the Lees. Once the refunds were deposited, the Lees would issue a check to the taxpayers for a portion of the refund and keep the remainder for themselves.
"IRS Criminal Investigation focuses on protecting revenue by identifying, investigating and prosecuting abusive return preparers. This case also accentuates the importance of carefully selecting a tax return preparer,” said Special Agent in Charge Koopman.
Tamika Hawkins Lee and Brandon Lee pleaded guilty to conspiring to defraud the government by submitting false claims for income tax refunds on October 22 and 29, 2014 respectively. Sentencing for Tamika Hawkins Lee is scheduled for March 27, 2015. Bandon Lee’s sentencing is scheduled for February 27, 2015 at 2 p.m. The maximum penalty for conspiracy to defraud the United States government is ten years imprisonment; three years supervised release and a $250,000 fine.
The case is being prosecuted by Assistant U.S. Attorney Ross MacKenzie. The case was investigated by Special Agents of the Internal Revenue Service Criminal Investigation.Clarkston Man Sentenced for Tax EvasionRead the Press Release
A 41-year-old Clarkston man was sentenced today to 18 months in prison for income tax evasion, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Special Agent in Charge Jarod Koopman, of the Internal Revenue Service, Criminal Investigation.
Receiving the sentence from U.S. District Judge Gershwin A. Drain was Bradley T. McKouen. Judge Drain also imposed a two-year term of supervised release and ordered McKouen to pay the U.S. Treasury $319,000 in restitution. McKouen pleaded guilty to the charge in April.
According to court records, during the 2008 tax year, McKouen was the president and sole member of Delta Staffing, LLC, an employee leasing company located in Clarkston. Delta was a Schedule C company, meaning its profits were to be reported on Schedule C as a part of McKouen’s personal federal income tax return. In 2008, Delta’s gross receipts were approximately $5.7 million. However, McKouen reported $0 gross receipts on his return. He also reported $0 business income, $0 taxable income, and $0 income tax. In 2008, McKouen’s actual taxable income was approximately $299,000 and his tax due was approximately $110,000. Under the terms of his plea agreement, McKouen is also being held responsible for filing similar zero-income returns for the years 2004-2007. In all, he failed to report $15 million in gross income and evaded $319,000 in federal income taxes for the years 2004-2008.
"The prosecution and sentencing of Mr. McKouen, who intentionally concealed his income and evaded taxes, reinforces the message to the public that the IRS-CI will continue to work to detect and investigate anyone that believes they are above the law,” said Special Agent in Charge Koopman.
The case was investigated by special agents of the Internal Revenue Service and was prosecuted by Assistant U.S. Attorney Stephen Hiyama.Three More Members of Philadelphia Based Armed Robbery Crew Indicted for Jewelry Store RobberiesRead the Press Release
Charges against three more members of a Philadelphia-based armed robbery crew were unsealed Tuesday on charges relating to two Michigan jewelry store robberies, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office, Sheriff Larry Stelma, Kent County Sheriff’s Department and Chief Michael Patton, West Bloomfield Police Department.
David Briley, 45, Shaheed Calhoun, 35, and Orlando Johnson, 40, all of Philadelphia, Pennsylvania, join Nathaniel Pembrook, 42, who was initially charged in September 2014, with charges relating to armed jewelry store robberies here in Michigan on April 22, 2014.
According to the indictment, Briley, Calhoun, Johnson, and Pembrook robbed two jewelry stores. The first robbery took place at Medawar Jewelers located on Plainfield Avenue in Grand Rapids. The second robbery took place at Tapper’s Diamonds and Fine Jewelry located on Orchard Lake in West Bloomfield. In both robberies, the robbers entered the stores during business hours with their faces covered or partially covered and brandished a firearm while ordering employees and customers to the floor. During the robbery at Medawar Jewelers, Pembrook was shot in the arm by one of the store owners. Blood recovered from the scene in Grand Rapids was DNA tested and determined to be that of Nathaniel Pembrook.United States McQuade, stated, "This case is an excellent example of the value of collaboration by federal, state and local law enforcement. We are grateful for the diligence of all of our partners in investigating this case so that these charges could be filed."
“As reflected by the indictments, FBI Detroit—along with our federal, state and local partners—remains dedicated to the pursuit and apprehension of those responsible for these acts of violence,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The continued, multi-jurisdictional collaboration between law enforcement resulted in the indictment of David Briley, Shaheed Calhoun, and Orlando Johnson for their involvement in these violent robberies, and we will maintain our resolve as we continue to thoroughly investigate this case.”
“Investigators in this case have been relentless. It should send a powerful message to the criminals within our community that justice will prevail,” stated Kent County Sheriff Larry Stelma.
"The entire West Bloomfield community is grateful for the great law enforcement partnership that has led to the continuing federal indictments related to these very serious crimes. As the investigation continues, this partnership remains devoted to bringing everyone that played a role in these incidents to justice," said Chief Michael Patton.
All four men have been charged with Interference with Commerce by Robbery, Possession of a Firearm in Furtherance of a Crime of Violence, Conspiracy to Interfere with Commerce by Robbery and being a Felon in Possession of a Firearm. If convicted on all charges, they will all face up to life in federal prison.
All four men were arrested in Pennsylvania. Pembrook is currently detained here in Michigan awaiting trial. Johnson, Briley and Calhoun are currently awaiting removal to Detroit for his arraignment on the charges.
The case was investigated by the West Bloomfield Police Department, the Kent County Sheriff’s Department and the Oakland County Gang and Violent Crimes Task Force, which is comprised of Special Agents with the FBI Oakland County Resident Agency, and state and local law enforcement officers with the Oakland County Sheriff’s Office; the Michigan State Police and the Michigan Department of Corrections, Parole; and the Bloomfield Twp., Auburn Hills, Royal Oak , Southfield, and Waterford Twp. Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Daniel Lemisch and Chris Graveline with the United States Attorney’s Office for the Eastern District of Michigan in Detroit with the assistance of the United States Attorney’s Office for the Western District of Michigan.An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Members of Detroit Carjacking Ring SentencedRead the Press Release
Two Detroit men and a Redford Township man were sentenced yesterday after being convicted at trial in a case involving armed carjacking to support a chop shop, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Chief James Craig, Detroit Police Department, Colonel Kriste Kibbey Etue, Director, Michigan State Police and William Hayes, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
United States District Judge George Caram Steeh sentenced Frank Harper, 30, of Detroit, to 63 years in federal prison, Phillip Harper, 25, of Detroit to 92 years in federal prison and Bernard Edmond, 46, of Redford Township to 75 years in federal prison.
The evidence presented during the three week trial established that the defendants conspired with several others to steal high-end vehicles, many by committing armed carjacking, and then to retag the vehicles for sale. Edmond would purchase the stolen vehicles from the Harper brothers and others after the thefts. He would then alter the vehicle identification number of the stolen vehicles to conceal the fact that the vehicles had been stolen. Edmond would also create false documents to file with the Secretary of State, then sell the vehicles to unwitting buyers in Michigan and other states. Edmond created a market for the stolen vehicles by informing the Harpers and others of his desire to buy these stolen vehicles.
The Harper brothers committed several carjackings and other auto thefts. For example, on October 14, 2010, Phillip Harper and others brandished firearms to steal a Cadillac Escalade, a GMC Yukon, a Chyrsler Aspen, and a Mercury Milan from the Elysium Night Club in downtown Detroit. On January 25, 2011, Frank Harper and others carjacked a Mercedes S550 from a person at the intersection of Atwater and Joseph Campau streets in Detroit. On January 31, 2011, the Harper brothers and another used a firearm to carjack three vehicles from a person on Joseph Campau Street in Detroit. On February 22, 2011, the Harper brothers and others carjacked three high-end vehicles from the valet at Opus One restaurant in Detroit. On March 20, 2011, Philip Harper and others carjacked a Lexus 460 near Club Vain in Detroit. Many of these and other vehicles were intended for Bernard Edmund to retag and sell.
Co-defendants Justin Bowman was sentenced to 168 months, Stratford Newton received a sentence of 144 months and Darrell Young received a sentence of 60 months for their roles in the conspiracy.
U.S. Attorney McQuade said, "This case is an example of the kinds of cases we are bringing under our federal campaign to crack down on carjacking. Armed carjacking poses an unacceptable danger to public safety and creates a climate of fear for residents in our community. Although these convictions bring with them severe sentences, we think they are appropriate for such serious and pervasive crimes. We hope that these convictions will deter others from committing similar crimes that wreak havoc in our neighborhoods."“This case serves as an example of the collaboration between federal, state and local law enforcement to bring justice to bear upon perpetrators who, for years, victimized our neighborhoods with violence,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, along with Homeland Security Investigations, the Michigan State Police, the Detroit Police Department, and the United States Attorney’s Office, remains dedicated to rooting out those who would prey on our society.”
The case was investigated by Special Agents of the FBI, officers of the Detroit Police Department, Michigan State Police and Homeland Security Investigations
Chief Craig stated, “Thank you to all involved who dismantled this Detroit carjacking ring. This is another opportunity for the Detroit Police Department to work with our partners to help reduce carjacking crimes, which is one of the department’s top priorities.”Detroit Man Sentenced for Clean Air Act CrimesRead the Press Release
A Detroit man was sentenced to 27 months in federal prison on October 24, 2014, for criminal violations of the Clean Air Act, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Randall Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency’s criminal enforcement program in Michigan.
U.S. District Judge Robert H. Cleland imposed sentence on Terry Williams, 49, following Williams’ guilty plea to violating the Clean Air Act in connection with the dismantling and scrapping of the former AMC headquarters on Plymouth Road in Detroit. The work disturbed asbestos-containing materials and released ozone depleting substances.
In 2012, Williams hired crews to remove salvageable metal from the facility, which included the dismantling of air conditioning units charged with R-22 refrigerant, an ozone-depleting substance. Williams’ crews dismantled 50 to 70 of these air conditioning units, including many large rooftop units, causing releases of R-22 refrigerant into the environment.
Williams also arranged for other fixtures on the property to be scrapped, ordering crews to cut and remove pipes he knew to be insulated with regulated asbestos- containing insulation. These insulated pipes were removed without following the work practice requirements under the federal asbestos regulations, including failing to properly wet the asbestos-containing materials to prevent asbestos fibers from becoming airborne and failing to secure the materials for proper disposal.
“Exposure to asbestos can lead to serious diseases, and the defendant’s unsafe asbestos removal practices put the health of his workers and the public at risk,” said Ashe. “This defendant also chose to ignore the hazards of releasing ozone depleting substances, potentially causing harm to both human health and the
environment. This sentence demonstrates that those who knowingly engage in such conduct will be prosecuted to the fullest extent of the law."“Individuals who disregard environmental laws create real harm by polluting the air we all breathe,” McQuade said. “Their conduct not only risks the health of people living near the facility, but jeopardizes air quality in Michigan for future generations. We hope that prosecutions like this one will deter others from engaging in similar violations.”
The case was prosecuted by the U.S. Attorney’s Office in the Eastern District of Michigan by Assistant U.S. Attorney Jennifer Gorland and Special Assistant United States Attorney David Mucha. The case was investigated by agents of the Environmental Protection Agency’s Criminal Investigation Division.Leaders of Large-Scale Drug Ring Sentenced to Life in PrisonRead the Press Release
Two individuals from metro-Detroit were sentenced today to life in prison after having been convicted of violating various federal drug laws in a massive drug ring that trafficked hundreds of kilograms of heroin and cocaine, and thousands of pounds of marijuana in metro-Detroit, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Acting Special Agent in Charge Durell Hope, Drug Enforcement Administration, Detroit Division.
Carlos Ellis Powell, age 39, of Washington Township, MI, and Eric Jerome Powell, age 36, of Franklin Farms, MI were sentenced today by United States District Judge Stephen J. Murphy.
The Drug Enforcement Administration’s investigation of the drug ring uncovered a massive operation that began in 2006 and continued until late 2010. Carlos Powell, Eric Powell, and eleven others operated a drug organization which dealt in multi-kilogram quantities of marijuana, heroin and cocaine in the Detroit metropolitan area. The members of the organization would arrange for large amounts of money derived from the sale of drugs to be transported to Phoenix, Arizona, Mexico and elsewhere for the purpose of purchasing more controlled substances. As part of the conspiracy, the members of the organization would use semi-trucks and vehicles equipped with traps and hidden compartments to transport marijuana, cocaine and heroin, as well as cash generated from the sale of these drugs. The drug ring, which was one of the largest in metro-Detroit history, also laundered in excess of $21 million in U.S. currency.
Since 2006, law enforcement officers from across the country have seized over 12 kilograms of cocaine, 30 kilograms of heroin and 1000 pounds of marijuana destined for distribution by this organization. More than $21 million in cash was seized by law enforcement officers between June 2010 and November 2010 alone. Law enforcement also seized jewelry appraised at over $800,000, 8 pieces of real property in Michigan and Georgia valued in excess of $750,000, 10 vehicles, including a 2004 Rolls Royce, 2006 and 2008 Bentley, a 2006 Ferrari, 4 Mercedes, a Ranger Rover and two boats.
The members of this organization, using the illegal proceeds of their narcotic sales, purchased and leased numerous luxury vehicles, acquired and sold real property and purchased jewelry while concealing the true source and nature of the funds involved in the transaction through false names and nominee purchasers.
The members of the organization would deposit large amounts of cash derived from the sale of drugs into various bank accounts; purchase cashier's checks and money orders; and wire transfer these funds. These funds would then be used to purchase assets and pay personal expenses with the goal of concealing the true source, nature and ownership of the funds which had been derived from the organization's drug sales.
This case was investigated by special agents of the Drug Enforcement Administration, Internal Revenue Service, Criminal Investigation, U.S. Immigration and Customs Enforcement, Office of Homeland Security Investigations with the assistance of officers from Northville Township Police Department, Plymouth Township Police Department, Warren Police Department, Redford Police Department, Macomb County Sheriff’s Office, Detroit Police Department and the Michigan State Police.Metal Dynamics Agrees to Settlement WithUnited States to Reduce PollutionRead the Press Release
A Detroit scrap metal and iron recycling company has agreed to pay a $110,000 penalty and invest $400,000 to resolve allegations that it violated the Clean Air Act, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Environmental Protection Agency, Region 5 Administrator, Susan Hedman.
The settlement resolves a lawsuit brought by the U.S. Attorney’s Office and the Environmental Protection Agency against Metal Dynamics alleging that its facility on Lonyo Avenue in Detroit was releasing harmful chlorofluorocarbons (CFCs) into the environment. CFCs cause ozone depletion and have harmful effects on human health.
Under the settlement, Metal Dynamics agreed to implement a Clean Air Act compliance program at its facility to eliminate the harmful release of CFCs. Metal Dynamics also agreed to modify its torch cutting of metals to keep harmful particulate emissions at or below legal limits.
The settlement requires Metal Dynamics to pay a civil penalty of $110,000 and spend at least $400,000 on two environmental projects to help mitigate the harmful effects of air pollution. First, the company will provide education and economic incentives to scrap metal suppliers to prevent unlawful venting of harmful gases. Second, the company will purchase a portable control device to recapture particulate matter during torch cutting operations.
“This settlement will protect the health of Detroit residents and ensure cleaner air for future generations,” McQuade said. “We applaud Metal Dynamics for agreeing to invest in programs that will improve air quality in Detroit.”
“This settlement will help to preserve the ozone layer, which protects us from harmful radiation,” EPA Region 5 Administrator Susan Hedman said. “Metal Dynamics will also take steps to improve air quality in a community that has been disproportionately impacted by environmental contamination.”
Metal Dynamics did not admit any of the violations alleged by the government, but agreed to the compliance provisions, and to invest in the two innovative environmental projects.
The settlement was lodged with the U.S. District Court for the Eastern District of Michigan and will be subject to a 30-day public comment period and final court approval. It can be viewed at: http://www.usdoj.gov/enrd/Consent_Decrees.html and will appear in the Federal Register. Comments can be directed to Assistant Attorney General, Environment and Natural Resources Division, with reference to United States v. Metal Dynamics Detroit, LLC, D. J. Ref. No. 90-5-2-1-10192.Jacksonville Florida Man Pleads Guilty to Extortion and Possession of Child PornographyRead the Press Release
A Jacksonville, Florida man, pleaded guilty today to extortion and possession of child pornography, United States Attorney Barbara McQuade announced.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office.”
Syed Ibrahim Hussain, 34, entered his guilty plea before United States District Judge Victoria A. Roberts.
Information provided to the court at the guilty plea proceeding showed that from December, 2012, to April, 2013, Hussain was residing at various hotels near Detroit. During this time, Hussain sent text messages to a woman demanding that she marry him or he would kidnap, rape, strangle and burn her. When Hussain was arrested in April, 2013, it was discovered that he was electronically tracking the woman using global positioning system trackers he had secretly placed on her car. Hussain was also in possession of multiple sets of hand-cuffs and leg irons, duct tape, a bullet proof vest, a shotgun, and a taser, among other items. A search of Hussain’s lap top computer also revealed that he was in possession of multiple videos and images of child pornography.
"With today's technology, determined stalkers have the ability to constantly communicate with and locate their victims." McQuade said. "We are grateful for the diligence of the law enforcement officers who intervened before the defendant could act on his threats."
“This case serves as an example of highly effective, proactive collaboration between federal, state, local and foreign law enforcement,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The collective efforts in this investigation halted Mr. Hussain’s criminal threats and disrupted his planned violent actions.”
Under the terms of the plea agreement, Hussain will serve 63 to 78 months in prison, register as a sex offender, and be fined up to $250,000. Sentencing is scheduled for February 24, 2015 at 10 a.m..
Detroit Residents Plead Guilty to Defrauding IRS with Identities of Deceased IndividualsRead the Press Release
Two Detroit residents pleaded guilty to charges of wire fraud and aiding and abetting in the use of false identification, U.S. Attorney Barbara L. McQuade announced today.
United States Attorney McQuade was joined in the announcement by Acting Special Agent in Charge Jarod Koopman, IRS Criminal Investigation.
Renita Adams and McAllen Jackson Knight, both of Detroit, entered their guilty pleas before U.S. District Court Judge Avern Cohn.
According to court records, Adams and Knight participated in a scheme with others to defraud the United States by using the names and Social Security numbers of recently deceased individuals to prepare fraudulent tax returns. Hundreds of fraudulent 2010 tax returns were filed. The returns sought refunds by making false claims for the Earned Income Credit, Education Credits and the Making America Work Credit. The returns were transmitted electronically, utilizing public access internet connections from local hotels and coffee shops. Three hundred and six fraudulent returns were transmitted using an internet account registered to Adams. The refunds were directed to bank accounts that were established for the sole purpose of receiving the fraudulent refunds. Knight caused some of these bank accounts to be opened by others to receive the deposits of the false tax refunds. Adams helped distribute the proceeds of the fraudulently obtained tax refunds at the direction of her fellow participants and retained a portion of the proceeds for her own benefit.
“Due to the serious harm that is caused to anyone whose identity is stolen; identity theft is a top priority for the IRS-Criminal Investigation. We will continue to detect and investigate these types of cases in order to protect taxpayers from being victimized," said Acting Special Agent in Charge Jarod Koopman,.
A sentencing hearing for Adams and Knight will be set by the court. Wire fraud carries a maximum penalty of 20 years imprisonment and/or a fine of $250,000. Use of false identification with the intent to commit a violation of federal law carries a maximum penalty of 15 years and/or a fine of $250,000.
The investigation of this case was conducted by special agents of the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie and Kenneth Vert, Trial Attorney, Department of Justice, Tax Division.Brownstown Township Man Sentenced for Role in Scheme to File False Tax Returns Using Stolen IdentitiesRead the Press Release
A resident of Brownstown Township, Michigan, was sentenced today for his involvement in a scheme to file fraudulent tax returns with the Internal Revenue Service, United States Attorney Barbara McQuade announced today.
McQuade was joined in the announcement by Jarod Koopman, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Receiving the sentence from U.S. District Judge Gershwin Drain was Shane Bateman, 42. Bateman pleaded guilty before Judge Drain in May 2014. Judge Drain sentenced Bateman to one year and one day in prison and two years of supervised release, and he ordered Bateman to pay restitution to the IRS in the amount of $185,828.
According to court records, from September 2011 through April 2012, Bateman obtained mailing addresses and personally identifiable information of numerous individuals and provided the information to others, who used the information to prepare and file false tax returns with the Internal Revenue Service. The returns requested tax refunds, and the refunds were loaded onto Turbo Tax Visa debit cards. Bateman and others used the cards at ATMs in the Detroit area to collect cash via ATM withdrawals. Bateman’s cash withdrawals totaled $185,828. The entire scheme involved approximately 180 false tax returns, many using stolen identities. The returns requested a total of approximately $1.7 million in refunds.
“Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers,” said Acting Special Agent in Charge Jarod Koopman. “IRS-CI will continue to aggressively investigate refund fraud and identity theft.”
The case was investigated by special agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Stephen Hiyama.
Saginaw Resident Found GuiltyOf Armed Drug TraffickingRead the Press Release
A Saginaw man was convicted Friday of armed drug trafficking after a federal jury trial in Bay City, Michigan, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Steven Bogdalek, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The jury found Deondrai Allon Tippins, 41, guilty after a four-day trial before U.S. District Judge Thomas L. Ludington. Tippins was convicted of distribution of cocaine base, possession with intent to distribute cocaine base and heroin, carrying a firearm during a drug trafficking crime and felon in possession of a firearm.
The convictions follow an investigation conducted by the Bay Area Narcotics Enforcement Team "BAYANET") and the Alcohol, Tobacco and Firearms (ATF). According to evidence presented at trial, Tippins distributed drugs out of his residence while carrying a firearm. After his arrest, Tippins threatened to injure a confidential informant.
"We are using federal resources to make our neighborhoods safer by removing armed drug dealers," McQuade said.
The case was prosecuted by the Bay City branch of the U.S. Attorney's Office for the Eastern District of Michigan.
Priest Charged with Production, Transportation,And Possession of Child PornographyRead the Press Release
Richard James Kurtz, 69, formerly of Clarkston, Michigan, was charged in a criminal complaint with production, transportation, and possession of child pornography, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division.
According to court records, Kurtz, a Jesuit priest and former teacher at the University of Detroit Jesuit High School, was arrested in November 2011—while he was residing in Chicago—for “sexual assault on a child by one in a position of trust.” That arrest was based on an arrest warrant issued out of Douglas County, Colorado, for conduct that occurred in 2001. After Kurtz’s arrest in Chicago, two Jesuit priests discovered evidence of possible child pornography crimes among Kurtz’s belongings in Chicago, as well at Kurtz’s former residence in Clarkston, Michigan. The Jesuits provided that evidence to the FBI.
According to court records, the FBI’s investigation revealed that Kurtz surreptitiously videotaped UDJHS hockey players changing in the locker room after games during the 1998-1999 hockey season. Beyond this production of child pornography, the FBI also discovered that Kurtz transferred other child pornographic material from Clarkston to Chicago, and possessed still other child pornography in Clarkston.
Kurtz was arrested today in Missouri where he will face a magistrate judge for removal to the Eastern District of Michigan. If convicted of these offenses, Kurtz faces a term of 15-30 years in custody for the production of child pornography charge, 5-20 years in custody for the transportation of child pornography charge, and up to 10 years in custody for the possession of child pornography charge.Kurtz was a teacher of chemistry at the UDJHS from 1970-1973, 1978-1983, and from September 1984-May 2001.
McQuade praised the work of the FBI agents for their professionalism and dedication in their aggressive and thorough investigation of these cases.
Assistant United States Attorneys Kevin M. Mulcahy is prosecuting this case for the United States.Law Enforcement Crackdown on Food Stamp FraudRead the Press Release
Eleven individuals were charged and arrested in metro-Detroit today on criminal food stamp fraud, announced U.S. Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Michigan Attorney General Bill Schuette, Special Agent in Charge Anthony Mohatt, U.S. Department of Agriculture, Office of Inspector General; Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation; Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI); and Col. Kriste Kibbey Etue, Michigan State Police. The agencies are working together to combat fraud against the U.S. Department of Agriculture’s Supplemental Nutrition and Assistance Program (SNAP) food stamp program) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
Today’s announcement comes at the conclusion of a joint federal and state search and arrest warrant operation that investigated retailers in Hamtramck, Warren, and Detroit who were illegally trafficking in food stamps. The charges allege that store owners and employees allowed SNAP and WIC benefit recipients to use their Electronic Benefit Transfer (EBT) cards to exchange their SNAP or WIC benefits for cash. In return, the stores added a surcharge to the recipients’ withdrawal of SNAP and WIC benefits, sometimes in an amount equal to that of the amount of cash benefit received by the recipient. SNAP and WIC benefit funds are transferred electronically directly to bank accounts managed by the retailers. These transactions totaled an estimated $12.5 milliondollars during the investigation.
The following individuals were arrested today and will be appearing in federal court this afternoon:
- Al Amin Supermarket, 11920 Conant, Hamtramck, owner Moklasur Mukul, age 36, of Hamtramck;
- Bengal American Grocery, 9800 Joseph Campau Avenue, Hamtramck, manager Mohamed Ali, age 38, resident of Detroit;
- Deshi Bazar, 12045 Conant Street, Hamtramck, owners Ali Ahmed, age 31, and Nazir Ahmed, age 32, and employee Mustak Ahmed, age 34, all residents of Detroit;
- Maloncho Greens House, 12133 Conant Street, Hamtramck, owner Azizur Ullah, age 37, of Hamtramck, and employees Mohammed Chadek, age 44, Mohammed Miah, age 38, and Mohammed Amin, age 38, residents of Hamtramck;
- New Al-Madeena Grocery, 2220-2222 Caniff Street, Hamtramck, owner Dilshad Chowdhury, age 34, resident of Hamtramck.
- Pay-Less Foods, 11350 Joseph Campau Avenue, Hamtramck, owner Mohamed Ahmed, age 58, resident of Hamtramck;
- Other locations in metro-Detroit were also searched as part of the investigation.
“Taxpayers in Michigan fund food stamp programs to provide food for the needy, not to create a commodity to be traded for profit," McQuade said. "We hope today’s charges will deter other merchants to ensure that food assistance programs are not abused."
"Michigan families are working harder than ever for every tax dollar," said Schuette. "Today's charges should send the message that we will not stand by while tax dollars are being stolen. Enriching yourself at public expense is not only shameful, but compromises the integrity of government and violates the public trust. I would like to thank our state and federal partners for their cooperative efforts to secure justice and fight fraud wherever it is found."
“This investigation and prosecution should send a strong zero-tolerance message to those individuals engaged in the practice of defrauding taxpayer funded WIC and SNAP programs,” said Anthony Mohatt, Special Agent-in-Charge, USDA-Office of Inspector General. “It should also serve as a warning to all stores, that participate in the WIC and SNAP programs as vendors, that fraud and trafficking (purchasing those benefits for cash) will be vigorously investigated and prosecuted by the USDA-OIG, the U.S. Attorney's Office, and all its federal, state, and local partners that have a stake in ensuring that fraud is eliminated from taxpayer funded programs.”
“Far from being a victimless crime, the offenders in this investigation brazenly defrauded a combined amount of approximately $12.5 million from taxpayer funded programs,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The SNAP and WIC programs are intended to provide assistance for those in need—not a means of abuse or selfish enrichment. The FBI, along with its federal, state and local partners, remains steadfast in its commitment to root out those who steal from taxpayers and defraud our government programs.”
“The Michigan State Police recognize how important the coordination of law enforcement resources are when working with our federal law enforcement partners,” stated Col. Kriste Kibbey Etue, director of the Michigan State Police. “Bridge Card fraud harms those less fortunate so we are thankful for the support of the USDA and U.S. Attorney’s Office in bringing these cases to justice.”
“Taxpayers fund food stamps as a benefit to those who need assistance,” said Marlon Miller, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Detroit. “When unscrupulous business owners take advantage of these benefits for their own profit, the taxpayer is cheated and the individuals who really need the help also suffer.”
Prosecutions are being coordinated by Assistant United States Attorneys Frances Carlson, Abed Hammoud, Stephen Hiyama, Lee Janice, Karen Reynolds, Erin Shaw, Graham Teall, and Timothy Wyse, and by Denise Hart from the Michigan Attorney General’s Office- Al Amin Supermarket, 11920 Conant, Hamtramck, owner Moklasur Mukul, age 36, of Hamtramck;
Former State Lawmaker SentencedRead the Press Release
A former State Representative from Detroit was sentenced yesterday to a year in prison after having been found guilty of structuring financial transactions, announced U.S. Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Acting Special Agent in Charge Jarod Koopman, Internal Revenue Service – Criminal Investigation.
Kenneth Daniels, 56, was convicted earlier this year of structuring financial transactions following a jury trial with co-defendants Carlos Powell, Eric Powell and Earnest Proge before U.S. District Judge Stephen J. Murphy, III in U.S. District Court in May 2014.Evidence presented at trial showed that Daniels, who had served as the Vice Chairman of the Insurance and Financial Services Committee while a member of Michigan’s State Legislature, supported Powell’s large-scale drug operation by making multiple financial transactions to conceal Powell’s illegal activities from law enforcement. Daniels received $19,000 from Carlos Powell, broke those funds into two smaller amounts, and went to two separate banks to obtain cashier checks in an attempt to evade legal requirements to report transactions exceeding $10,000. Daniels returned the checks to Powell, who used the funds to purchase a Mercedes. The jury found that Daniels structured these financial transactions for Powell so that Powell’s finances would not be scrutinized.
The investigation of the Carlos Powell drug trafficking organization was a multi-year investigation and included agents from the Drug Enforcement Agency, Internal Revenue System, Immigration and Customs, Homeland Security and local officers in Northville, Plymouth, Warren, Redford, Detroit, Macomb County and the Michigan State Police.
Oxford Business Owner Sentenced to AYear in Prison for Role in Conspiracy ToFile False Tax ReturnsRead the Press Release
A business owner from Oxford was sentenced to a year in prison for filing false tax returns and conspiring to file false tax returns with the Internal Revenue Service, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Jarod Koopman, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
U.S. District Judge Arthur J. Tarnow imposed the sentence on Randal Bellestri, 57. Judge Tarnow also ordered Bellestri to pay a fine of $500,000.00.
Bellestri pleaded guilty in June to filing false tax returns and conspiracy to file false tax returns with the IRS. According to court records, his company, Odyssey, Inc. of Lake Orion, produces machine tools for the aviation industry. Between 2000 and 2009, Bellestri had an agreement with an employee at Odyssey regarding the sale of scrap metal left over from Odyssey’s manufacturing operations. Bellestri authorized the employee to serve as a contact with the scrap metal buyer and to collect the proceeds from the sales in cash. The proceeds were then divided between Bellestri and the employee. Bellestri did not claim the cash proceeds from these scrap metal sales as income on his federal income tax returns. Bellestri’s failure to report these cash proceeds for the 2005 through 2008 tax years caused his income to be understated by approximately $2,155,000.
“Every American has a duty to pay their fair share of taxes. The prosecution of Mr. Bellestri, who intentionally concealed income and filed false tax returns, is vital to maintaining public confidence in our tax system,” said Acting Special Agent in Charge Jarod Koopman.
The case was investigated by special agents of the IRS-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Christopher L. Varner.Former Detroit Public Library Official Sentenced for BriberRead the Press Release
Timothy Cromer, a former Detroit Public Library official, was sentenced today to 10 years in prison for bribery and conspiracy to commit bribery, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement were Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Field Office, and Jarod Koopman, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation.
Cromer, 47, of West Bloomfield, the library's Chief Administrative and Technology Officer from 2006 to 2013, was sentenced by U.S. District Judge George Caram Steeh.
Cromer was charged with taking more than $1.4 million in bribes and kickbacks from contractors of the library. According to the indictment, Cromer helped co-defendant James Henley create a business in 2007 called Core Consulting & Professional Services, and then arranged for Core to win a bid to provide information technology services to the library. The contract, along with various change orders and extensions that Cromer approved, caused the library to pay Core $1.8 million.Cromer was also charged with receiving kickbacks from Ricardo Hearn, who is also charged in the indictment. Cromer was charged with approving no-bid professional services contracts for Hearn’s company, Cubemation, LLC, to perform information technology services for the library from 2008 until 2010. According to the indictment, Cubemation received about $2.8 million in payments from the Detroit Public Library. In total, Cromer is alleged to have accepted more than $1.4 million in kickbacks from Henley and Hearn.
Through his plea, Cromer admitted that he received a bribe from Henley, and that he conspired with Hearn to commit bribery. Codefendants Henley and Hearn previously pleaded guilty to conspiracy to commit bribery, and will be sentenced on October 28, 2014.
United States Attorney McQuade said, "Our public libraries exist to enrich our citizens, not to generate profits for the officials who work there. Today's sentence protects the important interests of taxpayers, library patrons and the honest public servants who have dedicated themselves to the Detroit Public Library."
“As a government official, Mr. Cromer abused his position of trust and stole from the community,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Today’s sentencing reflects the resolve of law enforcement to continue the fight on behalf of our citizens, and bring those who violate their public oath to justice.”
"The sizeable amount of the kickbacks Cromer received represents the degree to which he was cheating the public," said IRS Acting Special Agent in Charge Jarod Koopman. "It is unacceptable to help yourself to public funds, but if you do IRS-Criminal Investigation will be there to seek justice on behalf of the citizens of Detroit."
The case was investigated by agents of the FBI and the IRS. This case was prosecuted by Assistant United States Attorneys Elizabeth A. Stafford and Julie Beck.Detroit-Area Doctor Admits to Providing Medically Unnecessary Chemotherapy to PatientsRead the Press Release
WASHINGTON — A Detroit-area hematologist-oncologist pleaded guilty today for his role in a health care fraud scheme, admitting that he administered unnecessary chemotherapy to fraudulently bill the Medicare program and private insurance companies. According to court records, the scheme enabled the doctor to submit approximately $225 million in claims to Medicare over six years.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.
Farid Fata, M.D., 49, of Oakland Township, Michigan, pleaded guilty today before U.S. District Judge Paul D. Borman of the Eastern District of Michigan to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering. At his sentencing, scheduled for Feb. 23, 2014, Fata faces a statutory maximum of 175 years in prison.
“At a time when they are most vulnerable and fearful, cancer patients put their lives in the hands of doctors and endure risky treatments at their recommendation,” said Assistant Attorney General Caldwell. “Dr. Fata today admitted he put greed before the health and safety of his patients, putting them through unnecessary chemotherapy and other treatments just so that he could collect additional millions from Medicare. The mere thought of what he did is chilling. Thanks to the quick action of our partners, he was arrested and has now admitted his guilt.”
“This defendant not only stole funds from taxpayer funded insurance programs, but he also deliberately administered unnecessary chemotherapy so that he could bill insurers for expensive chemotherapy treatments,” said U.S. Attorney McQuade. “His exploitation of patients for his own profit caused victims to suffer physically and emotionally.”
“A little more than a year ago, the FBI and its law enforcement partners acted swiftly to arrest Dr. Farid Fata and shield his patients from further harm,” said FBI Special Agent in Charge Abbate. “Today’s plea is the culmination of the diligent investigative work jointly conducted by the FBI, IRS, the Department of Health and Human Services, and prosecutors to protect the public and ensure that justice is served. Our hope is that this outcome offers some measure of solace to the victims and reassures the community of our collective resolve to prevent similar violations of patients’ trust.”
“Dr. Fata’s utter disregard for his patients’ welfare was quite simply deplorable,” said HHS-OIG Special Agent in Charge Pugh. “The OIG will ceaselessly work to bring such criminals to the justice they deserve.”
“It’s exceptionally distressing to see this kind of fraud committed by individuals in occupations that profess high ethical standards," said IRS-CI Chief Weber. “When doctors commit fraud through their profession, it is not only a violation of the public trust but also a complete renunciation of their Hippocratic oath. Those who commit Medicare fraud are pick-pocketing from every American taxpayer.”
Fata admitted that he is a licensed medical doctor who owned and operated a cancer treatment clinic, Michigan Hematology Oncology, P.C. (MHO), which had locations in Rochester Hills, Clarkston, Bloomfield Hills, Lapeer, Sterling Heights, Troy and Oak Park, Michigan. He also owned a diagnostic testing facility, United Diagnostics PLLC, located in Rochester Hills, Michigan.
In his guilty plea today, Fata admitted to prescribing and administering aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to patients who did not need them in order to increase his billings to the Medicare program and other insurance companies. Fata then submitted fraudulent claims to Medicare and other insurers for these unnecessary treatments.
Fata submitted approximately $225 million in claims to Medicare between August 2007 and July 2013, of which approximately $109 million was for chemotherapy and other cancer treatments. Medicare paid over $91 million to Fata, of which over $48 million was for chemotherapy and other cancer treatments.
Fata also admitted to soliciting kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care in exchange for his referral of patients to those facilities.
Fata further admitted to using the proceeds of the health care fraud at his medical practice, MHO, to promote the carrying on of additional health care fraud at United Diagnostics, where he administered unnecessary and expensive PET (positron emission tomography) scans for which he billed a private insurer.
This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Deputy Chief Gejaa T. Gobena, Assistant Chief Catherine K. Dick and Trial Attorney Matthew C. Thuesen of the Fraud Section, and by Health Care Fraud Unit Chief Wayne F. Pratt, Deputy Chief Sarah Resnick Cohen and White Collar Crime Unit Chief John K. Neal of the U.S. Attorney’s Office for the Eastern District of Michigan.Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
For further information about this case, visit: http://www.justice.gov/usao/mie/news/2013/2013_9_18_2013_dr_fata.htmlDetroit Residents Plead Guilty to Defrauding Irs with Identities of Deceased IndividualsRead the Press Release
Two Detroit residents pleaded guilty today to charges of wire fraud and aiding and abetting in the use of false identification, U.S. Attorney Barbara L. McQuade announced today.
United States Attorney McQuade was joined in the announcement by Acting Special Agent in Charge Jarod Koopman, IRS Criminal Investigation.
Brenda Knight and Adreann Turnage, both of Detroit, entered their guilty pleas before U.S. District Court Judge Avern Cohn.
According to court records, Knight and Turnage participated in a scheme with co-defendant Willie Watkins, Knight’s husband, and others, to defraud the United States by using the names and Social Security numbers of recently deceased individuals to prepare fraudulent tax returns. Hundreds of fraudulent 2010 tax returns were filed, claiming refunds of more than $1 million dollars. The returns sought refunds by making false claims for the Earned Income Credit, Education Credits and the Making America Work Credit. The returns were transmitted electronically, utilizing public access internet connections from local hotels and coffee shops. Forty-six fraudulent returns were transmitted using an internet account registered to Turnage. The refunds were directed to bank accounts that were established for the sole purpose of receiving the fraudulent refunds. Willie Watkins had control over a number of the accounts. Knight helped recruit individuals to whom Watkins would issue checks written on the accounts. The recruits would cash the checks and bring the proceeds to Watkins for distribution to participants in the scheme, including Knight and Turnage.
"Using the identities of deceased individuals to commit crimes for financial gain is particularly egregious. Identity theft is a top priority for the IRS-Criminal Investigation and we will continue to detect and investigate these types of cases in order to protect taxpayers from being victimized," Jarod Koopman, Acting Special Agent in Charge IRS-Criminal Investigation.
“This case is a sobering reminder that criminals use the identities of recently deceased individuals to steal their tax refunds,” McQuade said. “We applaud the IRS for their aggressive enforcement of this deplorable crime, and we encourage family members to be vigilant in safeguarding the taxpayer information of their loved ones.”
A sentencing hearing for Knight and Turnage will be set by the court. Wire fraud carries a maximum penalty of 20 years imprisonment and/or a fine of $250,000. Use of false identification with the intent to commit a violation of federal law carries a maximum penalty of 15 years and/or a fine of $250,000.
The investigation of this case was conducted by special agents of the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie and Kenneth Vert, Trial Attorney, Department of Justice, Tax Division.
Attorney General Eric Holder Recognizes Michigan ProsecutorsRead the Press Release
J. Michael Buckley and Roy Kranz, Assistant United States Attorneys for the Eastern District of Michigan, were two of 243 members of the U.S. Department of Justice recognized by Attorney General Eric Holder and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 30th annual Director’s Awards Ceremony today in Washington D.C.
U.S. Attorney Barbara L. McQuade joined Holder at the ceremony to recognize employees of the Eastern District of Michigan, one of 44 districts represented at the Great Hall in the Robert F. Kennedy Department of Justice Building.
In his prepared remarks, Attorney General Holder told the awardees, “Locally, nationally, and internationally, you represent the very best that this Department has to offer. Your work embodies our ongoing commitment – not merely to win cases, but to do justice; to protect our fellow citizens from crime, violence, and terrorism; to empower the most vulnerable among us; and to uphold the rule of law.”
EOUSA Director Monty Wilkinson echoed those sentiments, saying to the recipients, “You have persevered, and remained focused and motivated – achieving remarkable results in work that makes a difference in the lives of citizens across our great country. The vast scope of your collective accomplishments is nothing short of exceptional.”
J. Michael Buckley was recognized for his outstanding investigation and prosecution of a sophisticated conspiracy to defraud the cash-strapped and financially vulnerable Detroit Public Schools System out of more than $3 million. Eight individuals were convicted in the fraud and kickback scheme which centered around a sham health and wellness program for school employees. Sherry Washington, a prominent local art dealer who was the driving force behind the scheme, was convicted after a jury trial and sentenced to seven years in prison, one of the longest prison sentences in the Eastern District of Michigan for a non-public official in a federal corruption case. Washington’s conviction and sentence were affirmed by the U.S. Court of Appeals for the Sixth Circuit in a published opinion that established new precedent favorable to enforcing corruption cases.
Roy R. Kranz was recognized for his prosecution of violent crime in Indian Country. For the past five years, Kranz has handled almost all of the Indian Country cases in the Eastern District of Michigan. During that period, he has dramatically increased the number of prosecutions in this district. He has developed innovative methods for using the grand jury process and monitoring jailhouse calls to develop evidence, securing convictions in cases that would otherwise have been declined for insufficient evidence. Kranz also has provided training to Indian Country law enforcement officers, and meets regularly with leaders of the Saginaw Chippewa Tribe to determine how best to serve the tribe.
“We are very proud of the outstanding service performed by AUSAs Buckley and Kranz on behalf of the people of the Eastern District of Michigan,” McQuade said. “Both are skilled trial attorneys who dedicate extra hours of time to finding innovative ways to protect victims of crime through prosecution. They work nights, weekends and holidays with no overtime pay because they care deeply about delivering justice to the people they serve.”
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
Macomb Township Woman Pleads Guilty to Aiding the Filing of A False Tax ReturnRead the Press Release
A Macomb Township woman pleaded guilty today to one count of willfully aiding the preparation and filing of a false and fraudulent tax return, United States Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Jarod Koopman, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation.
Entering the guilty plea before United States District Judge Paul D. Borman was Jennifer Lee Moriarty, 44. According to court records, Moriarty owned and operated Gold Party’s 101, LLC. Gold Party’s 101 purchased gold and other metals from individuals attending gold parties and then resold the purchased metals to a refinery. The information presented to the court at the time of the plea showed that Moriarty failed to provide her return preparer with a truthful accounting of the income earned by Gold Party’s 101 in 2008, some $425,000, causing her business income to be substantially understated.
Under her plea agreement, Moriarty is being held responsible for failing to report $1.8 million in income received by her business in 2008, 2009, and 2010. The tax loss to the federal government was $122,000
“Moriarty’s attempt to reduce her tax liability by intentionally hiding income from her return preparer and causing the filing of false returns is a criminal act and is unfair to honest taxpayers who file correct returns each year. Filing a false tax return is a felony offense that carries severe consequences,” said Acting Special Agent in Charge Jarod Koopman.
Aiding in the filing of false tax returns carries a maximum penalty of three years’ imprisonment, a fine of $100,000, and an order of restitution. Sentencing is scheduled for December 1, 2014 before Judge Borman.
The case was investigated by special agents of the IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Stephen HiyamaFenton Man Accused of Filing False ReturnsRead the Press Release
Kleppe Houston, of Fenton, Michigan, was arraigned today on an indictment charging him with five counts of filing false tax returns, United States Attorney Barbara L. McQuade announced today.
United States Attorney McQuade was joined in the announcement by Jarod Koopman Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division.
According to the indictment, Houston owner of Co-HR, LLC, a human resource management firm that was based in Pontiac, Michigan, prepared and filed false tax returns for businesses. Co-HR, LLC provided payroll services to Health Management Systems of America, Binson’s Hearing Aid Services and Northwood Provider Network Services. Houston prepared and filed five Employers’ Quarterly Federal Tax Returns, for these employers, falsely reporting that more than $393,381 in payroll taxes had been remitted with the returns. Houston knew, but his clients did not, that the amount remitted with each return was substantially less than reported.
“Our tax system depends on the honest cooperation and integrity of every citizen and business owner, said Koopman. “Employers that engage payroll service companies, and their employees whose wages have amounts withheld for payroll tax purposes, have every right to expect that those funds will be used for the payment of their taxes. The government has the same expectation.”
The case was investigated by special agents of the IRS Criminal Investigation.
Philadelphia Man Indicted in Jewelry Store RobberiesRead the Press Release
A Philadelphia man was indicted yesterday on charges relating to two Michigan jewelry store robberies, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office, Sheriff Larry Stelma, Kent County Sheriff’s Department and Chief Michael Patton, West Bloomfield Police Department.
Indicted was Nathaniel Pembrook, 42, of Philadelphia, Pennsylvania.
According to the indictment, on April 22, 2014, Pembrook, along with three other individuals, robbed two jewelry stores. The first robbery took place at Medawar Jewelers located on Plainfield Avenue in Grand Rapids. The second robbery took place at Tapper’s Diamonds and Fine Jewelry located on Orchard Lake in West Bloomfield. In both robberies, the robbers entered the stores during business hours with their faces covered or partially covered and brandished a firearm while ordering employees and customers to the floor. During the robbery at Medawar Jewelers, Pembrook was shot in the arm by one of the store owners. Blood recovered from the scene in Grand Rapids was DNA tested and determined to be that of Nathaniel Pembrook."We are using federal resources to address serious incidents of violent crime, such as these armed robberies, because of the high risk of harm they pose to public safety," McQuade said.
“The arrest and indictment of Mr. Pembrook for his involvement in these acts of violence reflects the dedication, cooperation, and persistence of law enforcement at every level,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “It is this collaboration—between federal, state and local authorities—that has brought justice to bear upon Mr. Pembrook, and we will continue those efforts as we move forward in the investigation.”
“This is another great example of local and federal authorities working together to keep our communities safe,” stated Kent County Sheriff Larry Stelma.
“I am very pleased that through an ongoing joint collaborative effort of the Federal Bureau of Investigation, the Kent County Sheriff’s Department and the West Bloomfield Police Department, a federal indictment has been obtained charging one of the alleged suspects in the robberies,” said Chief Michael Patton.
Pembrook has been charged with Interference with Commerce by Robbery, Possession of a Firearm in Furtherance of a Crime of Violence, Conspiracy to Interfere with Commerce by Robbery and being a Felon in Possession of a Firearm. If convicted on all charges, Pembrook faces up to life in federal prison.Pembrook was arrested in Philadelphia and is currently awaiting removal to Detroit for his arraignment on the charges.
The case was investigated by the FBI Oakland County Gang and Violent Crimes Task Force, the Michigan State Police, Oakland County Sheriff’s Office, Kent County Sheriff’s Department and the West Bloomfield Police Department. The case is being prosecuted by Assistant U.S. Attorney Daniel Lemisch with the United States Attorney’s Office for the Eastern District of Michigan in Detroit with the assistance of the United States Attorney’s Office for the Western District of Michigan.An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Clinton Township Resident Sentenced for Filing False Claims Against the United StatesRead the Press Release
A former Clinton Township resident was sentenced yesterday to 37 months in prison for filing false claims against the United States, U.S. Attorney Barbara L. McQuade announced today.
Ms. McQuade was joined in the announcement by Acting Special Agent in Charge Jarod Koopman, Internal Revenue Service Criminal Investigation.
United States District Judge Gerald Rosen also imposed a three-year term of supervised release on Lamarjoire Pharr and ordered him to pay $962,952 in restitution to the Internal Revenue Service.
According to court records, from September 2009 to March 2012, Pharr prepared and electronically filed 363 fraudulent federal income tax returns. Virtually all of the tax returns were filed in the names of deceased individuals whose personal information Pharr had obtained online at the Ancestry.com website without the knowledge of those individuals or their survivors or estates. The tax returns claimed refunds of more than $1.5 million based on false information relating to dependents, various tax credits (e.g., earned income credit), and tax withholdings. Pharr filed the returns electronically from, among other places, hotels in Detroit, Miami Beach, and Atlanta. Pharr received $962,952 in refunds, which he used to further his career as a musician and music producer. Evidence gathered in the investigation shows that the refunds were also used to pay hotels, casinos, department stores, bars and adult entertainment establishments.
United States Attorney McQuade stated, "We hope that this prosecution will raise public awareness about tax fraud schemes involving returns filed on behalf of unwitting victims, who are often deceased. Criminals troll websites and death notices to find potential victims. Family members should be vigilant in safeguarding the taxpayer information of their loved ones."
“Pharr went to elaborate lengths to not only steal money from the government but also to steal the identity of innocent, and in many cases deceased, individuals. His actions caused serious harm to those individuals or their survivors, as well as the American taxpayer, who ultimately becomes the victim in these illegal activities. This sentence should serve as a warning to others that are considering similar schemes, that the IRS-CI will be very aggressive in investigating identity theft,” said Jarod Koopman, Acting Special Agent in Charge.
The investigation of this case was conducted by Special Agents of the IRS Criminal Investigation, and prosecuted by Assistant U.S. Attorney Stephen Hiyama.Former Grosse Pointe Attorney Sentenced for Bank Fraud and Money LaunderingRead the Press Release
A former Grosse Pointe attorney was sentenced to prison for bank fraud and money laundering, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office.
Kenneth Flaska was sentenced to 64 months in prison by U.S. District Judge Paul Borman in a case involving a loss to victims in the amount of $2,756,786.63.
Flaska pleaded guilty to one count of bank fraud and one count of money laundering in April 2014. According to court records, over several years Flaska executed a scheme to defraud his clients and the law firm at which he was employed. Flaska used false and fraudulent pretenses and representations to obtain funds payable to his clients, which Flaska then diverted for his own personal use. Flaska used the fraudulently obtained proceeds to purchase items such as a 31-foot yacht, which Flaska then sailed in the July 2013 Detroit to Mackinac race.
"Attorneys are paid to serve their clients, not to enrich themselves," McQuade said. "The defendant in this case went beyond committing criminal conduct by breaching professional duties to clients and colleagues."
“Over several years, and under the false pretenses of offering professional legal services, Mr. Flaska defrauded his clients and employer of over $2.75 million, living an extravagant lifestyle at their expense,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Today’s sentencing demonstrates the FBI’s resolve in bringing to justice those who steal from others to further their own selfish purposes.”
The investigation of this case was conducted by special agents of the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Cynthia Oberg and Gjon Juncaj.
Highland Park School Board MemberPleads Guilty to Conversion of School FundsAnd Filing False Income Tax ReturnRead the Press Release
Robert Davis, 34, of Highland Park, Michigan, a member and former President of the Highland Park School Board, pleaded guilty today to unlawful conversion of funds belonging to the Highland Park School District and to filing a false federal income tax return, United States Attorney Barbara McQuade announced.
The guilty plea was entered before Senior United States District Judge Arthur J. Tarnow.
McQuade was joined in the announcement by Paul Abbate, Special Agent in Charge of the Federal Bureau of Investigation, and Jarod Koopman, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Information provided to the court at the guilty plea proceeding showed that from 2007 through 2010 Davis used his authority as a member of the school board to cause the school district to issue checks to companies controlled by associates of Davis – Company Z and Company D. Those companies then, at Davis’s direction, issued checks totaling almost $200,000 to another entity, controlled by Davis himself: Citizens United to Save Highland Park Schools. Davis then used those funds for his own personal purposes. Thus, through this scheme, he unlawfully converted the funds. In addition, Davis knowingly and intentionally failed to report the income he received on his federal income tax returns.
United States Attorney McQuade stated, “"Any betrayal of the public trust is deplorable, but stealing from schools is the most reprehensible kind of corruption because it robs children of their education."
“As a public official, Mr. Davis used Highland Park school funds for his personal enrichment. He not only violated the law, he betrayed the public trust. This case sends a clear message that the Internal Revenue Service – Criminal Investigation will continue to work with its law enforcement partners to investigate those who destroy that confidence and hold them accountable for their actions,” said Acting Special Agent in Charge Jarod Koopman.
Under the terms of a plea agreement, Davis is subject to up to 24 months imprisonment, as well as up to a $500,000 fine and full restitution as determined by the court. Sentencing is scheduled for December 9, 2014, at 2:00 p.m.
The case was investigated by the FBI and IRS CI. The case was prosecuted by Assistant United States Attorneys Sheldon N. Light and Dawn N. Ison, and former AUSA Pamela Thompson.Detroit Gang Leader Convicted for Planning Armed Robbery by Gang MembersRead the Press Release
A leader of a street gang that operated on the east side of Detroit was found guilty today of aiding and abetting an armed robbery, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Leslie R. Caldwell, Assistant Attorney General for the Justice Department’s Criminal Division, and Steven Bogdalek, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives in Detroit.
Christopher LaJuan Tibbs, 39, was convicted after a three-day trial before U.S. District Judge Bernard A. Friedman.The evidence at trial established that Tibbs, also known as Chief Fatah, was the leader of the Michigan branch of the Mafia Insane Vice Lords -- a violent street gang that operated primarily on the east side of Detroit. The Mafia Insane Vice Lords was a local faction of the national Vice Lord gang that originated in Chicago. Tibbs helped plan an armed robbery of a Little Caesars restaurant in Redford, Michigan, in September 2013. Tibbs sent subordinate members of the gang to commit the crime, and took a majority of the proceeds from the robbery.
The trial marked the first time that the criminal street gang enhancement has been charged in the Eastern District of Michigan. Because the jury found that Tibbs committed the crime to advance the criminal activities of his gang, the maximum penalty for aiding and abetting the robbery increased from 20 to 30 years in prison. Tibbs faces an additional mandatory minimum sentence of seven years for his conviction for aiding and abetting the use of a firearm during the robbery. The seven-year sentence must be served consecutively to the sentence that Tibbs receives for aiding and abetting the robbery.
“This conviction, utilizing a novel legal theory, is an example of the way we are using all available resources to tackle gang violence in our neighborhoods,” McQuade said. “We are working diligently to prevent violent crime, but when a serious crime like this one occurs, we will prosecute the defendants with the full force of the law.”
The case was investigated by ATF, with assistance from the Redford Police Department, Detroit Police Department, and Chicago Police Department. The case was prosecuted by Assistant United States Attorney Louis Gabel and Trial Attorney Joseph Wheatley for the Criminal Division’s Organized Crime and Gang Section.
Detroit Man Sentenced to More Than 12 Years in Prison for Armed CarjackingRead the Press Release
A Detroit man was sentenced to 12 years and 11 months in prison following his guilty plea to armed carjacking, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation.
U.S. District Judge David M. Lawson also ordered that Vantanez Trotter serve five years of supervised release following his release from custody. Trotter’s sentence will begin after he completes a state sentence for assault to commit great bodily harm that he is currently serving.
The evidence in the case showed that on December 8, 2012, the owner of a 2013 Mercedes and his cousin sat in the car outside of a house on Evergreen in Detroit. As the two spoke, a Ford Focus parked in front of them. Two men, each armed with an AK-47 type rifle and wearing masks, emerged from the Focus and ordered the victims out of the car and to the ground. Trotter drove away in the Mercedes and the other man drove away in the Focus.
Detroit Police officers responded and located the Mercedes using location software. Trotter fled and stopped the car in Ecorse, where he fled on foot and was apprehended after short chase. Along his path, police recovered an AK-47 type rifle that was loaded with 30 rounds of ammunition.
United States Attorney Barbara McQuade stated: “Armed carjacking is a priority for federal prosecution because of the danger and fear that it creates for motorists. Federal convictions for carjacking bring long prison sentences that we hope will deter criminals from committing this crime.”
The cooperative efforts of the Detroit Police Department and the Federal Bureau of Investigation's Violent Crime task Force were recognized and applauded by U.S. Attorney McQuade. Assistant United States Attorneys John O=Brien and Jeanine Brunson of the office=s Violent and Organized Crime Unit prosecuted the case for the United States.Detroit One Collaboration Leads to Indictment of TwoAdditional Latin Count Gang Members on Racketeering ChargesRead the Press Release
A superseding indictment was unsealed yesterday charging Devin Dantzler, 23, of Ecorse, with using and carrying a firearm in furtherance of a crime of violence causing death and murder in aid of racketeering. Christopher Pierce, 20, of Detroit, was also charged with assault resulting in serious bodily injury in aid of racketeering announced Barbara L. McQuade.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office.
Specifically, the indictment alleges that several Latin Counts assaulted Mustafa Al-Yasiry, and Dantzler, in fact, shot and killed him at the Big Apple Market in southwest Detroit on April 18, 2014. According to the indictment, the Latin Counts gang operates in southwest Detroit and the downriver communities of Lincoln Park and Ecorse. The indictment alleges that seven defendants committed assaults, murder, selling illegal narcotics and stolen firearms, breaking and entering homes and businesses and robbery. The indictment alleges that the gang uses violence to stake out its “turf” and intimidate both rival gang members and the citizens of southwest Detroit.
Under the Detroit One Initiative, and through the lead efforts of the Detroit Police Department and the FBI Violent Crime Task Force, investigators were able to merge separate probes of various members of this organization and its activities into one encompassing investigation.
Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working collaboratively, local, state, and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit.
Defendants Arraigned on Charges of Conspiracy, Filing False Tax Returns, and Filing False Claims with the I.R.S.Read the Press Release
Damian Jackson and Holly Jackson, of Sterling Heights, Michigan, were arraigned today on charges of conspiracy, filing false tax returns, and filing false claims with the Internal Revenue Service, announced United States Attorney Barbara McQuade.
McQuade was joined in the announcement by Jarod Koopman, Acting Special Agent of the Detroit Field Office of the Internal Revenue Service Criminal Investigation.
According to court documents, Damian Jackson owns Diamond & Associates Enterprises, Inc. and he and Holly Jackson did business as Diamond Tax Services, offering tax preparation services to their clients. Beginning in approximately April 2009 and continuing through April 2010, the Jacksons conspired with one another to defraud the United States by filing false claims for federal income tax refunds for their clients. The Jacksons are also accused of filing false federal income tax returns for themselves.
The Jacksons helped others to obtain payment of false claims for refunds from the Internal Revenue Service (IRS) by preparing and submitting U.S. Income Tax Returns (Forms 1040), falsely claiming substantial 1099-OID income and withholding taxes and claiming refunds. The Jacksons caused more than $1,076,969 in false and fraudulent income tax refund claims to be filed with the IRS. The Jacksons received fees from their clients for preparing the false returns as well as receiving a percentage of the false refunds they caused.
The court documents also allege that the Jacksons filed false Individual Income Tax returns for themselves for the 2007 and 2008 tax years claiming false income tax withholding and requesting refunds of more than $1,045,625 which they knew they were not entitled to. Additionally, Holly Jackson filed a false income tax return for the 2009 tax year, claiming a refund of $141,795, knowing that the claim was false.
“The Jacksons went to elaborate lengths to steal money from the American taxpayers, who are the ultimate victim when anyone commits a tax crime. IRS Criminal Investigation focuses on identifying, investigating and prosecuting abusive return preparers. Every taxpayer should be reminded to exercise caution when selecting a return preparer since it is the taxpayer that is ultimately responsible for the content of their return and the repayment of a fraudulent refund, along with any penalties and interest,” said Acting Special Agent in Charge Jarod Koopman.
This case was investigated by special agents of the Internal Revenue Service Criminal Investigation and is assigned to the White Collar Crime Unit of the United States Attorney’s Office.
Dearborn Heights Woman Pleads Guilty to Filing A False Tax ReturnRead the Press Release
Janey Golani, 54, of Dearborn Heights, Michigan pleaded guilty on August 14, 2014 to willfully filing false tax returns, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Jarod Koopman, Acting Special Agent of the Detroit Field Office of the Internal Revenue Service Criminal Investigation.
Golani entered the guilty plea in United States District Court before Judge Stephen J. Murphy, III. According to the court records, Golani was employed by Hind Oram as the office manager of several companies she owned. The information presented to the court at the time of the plea showed that from 2006 through 2009, Golani began embezzling money from her employer which she used for her personal benefit.
Golani knew that the income from the monies she embezzled was reportable as taxable income on her federal income tax returns. However, she intentionally failed to report this income. Golani filed a 2008 Individual Income Tax Return, Form 1040, knowing that the return was not true and correct and that the amount of income reported on the return was understated by approximately $234,641. By failing to report the embezzlement income, Golani reduced her tax liability by $77,072. Overall, Golani failed to report the embezzled funds on her 2006, 2007, 2008 and 2009 federal income tax returns causing a tax loss of more than $225,000.
“The Internal Revenue Tax Code is clear; income that is derived from illegal sources is subject to income tax. Ms. Golani stole from her employer and filed false tax returns, both serious crimes for which she is being held accountable,” said Acting Special Agent in Charge Koopman.
Sentencing is scheduled for January 9, 2015 at 10 a.m. in front of the Hon. Stephen J. Murphy, III
The case is being prosecuted by Assistant U.S. Attorney Ross MacKenzie. The case was investigated by Special Agents of the Internal Revenue Service Criminal Investigation.
Tax Preparer Sentenced for Filing False ReturnsRead the Press Release
A Detroit tax preparer was sentenced yesterday to 30 days in prison for filing a false federal income tax return, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge Jarod Koopman, Internal Revenue Service Criminal Investigation.
U.S. District Judge Paul D. Borman also ordered that Monique Gray pay restitution of $102,899.
According to court records, Gray owned and operated MO Tax Services, a tax return preparation business and U&M X Spress Inc. a trucking company. In 2008 Gray’s businesses earned combined gross receipts of approximately $167,232 which Gray knew she had a duty to report. Instead, Gray chose to underreport her gross business income by more than $155,774, in a deliberate attempt to reduce her tax liability. Grays actions caused a tax loss to the government of approximately $14,833 for the 2008 tax year. Overall, Gray caused a tax loss of $102,899 for the years 2006 through 2009.“Gray’s deliberate attempt to file a false tax return undermines the tax system and is an affront to other business owners and taxpayers that remain honest. We will continue to pursue and investigate those individuals that believe they can get away with committing these types of crimes,” said Acting Special Agent in Charge Koopman.
The investigation of this case was conducted by Special Agents of the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie.U.S. Attorney’s Office Reaches Settlement with Olympia Entertainment to Improve Access for People with Disabilities at Joe Louis Arena and Ensure Full Compliance with the Americans with Disabilities Act at Olympia’s Planned New Events CenterRead the Press Release
The U.S. Attorney’s Office for the Eastern District of Michigan has reached an agreement with Olympia Entertainment, Inc. under the Americans with Disabilities Act (ADA) for extensive changes to improve physical accessibility and opportunities for people with disabilities at Joe Louis Arena, a large entertainment complex, and home of the NHL team the Detroit Red Wings, located in Detroit, Michigan. The settlement agreement also requires Olympia to work closely with an Independent Licensed Architect, as well as the U.S. Attorney’s Office, to ensure that Olympia’s planned new Events Center will be designed, constructed, and operated in full compliance with the ADA. The settlement agreement resolves an investigation following a complaint filed by a patron with a disability who was unable to attend Red Wing games at Joe Louis Arena.
“This agreement provides people with disabilities with much improved access to enjoy events at Joe Louis Arena, and perhaps even more importantly, ensures full and equal opportunity at Olympia’s new Events Center for generations of hockey fans to come” said U.S. Attorney Barbara L. McQuade. “The Department of Justice is committed to knocking down these types of barriers, and we commend Olympia for its cooperation and efforts to do the same.”
Under the settlement agreement, Olympia will provide 45 wheelchair accessible seats, and an equal number of companion seats at Joe Louis Arena, with substantial improvements in the lines of sight over standing spectators. Tickets for the accessible and companion seats will be offered at prices proportionate to the number of general seats in each price category, and will be able to be purchased in the same manner as general seats, including online through Ticketmaster. Olympia has also agreed to improve accessibility in restrooms, concession stands, restaurants, and clubs; improve signage throughout Joe Louis Arena; provide additional Assistive Listening Devices; and annually train its employees on the ADA.
The settlement agreement also requires Olympia to submit to inspections by an Independent Licensed Architect to allow the U.S. Attorney’s Office to monitor all stages of the design and construction process for Olympia’s new Events Center which is planned to house Olympia’s future entertainment operations, including Red Wings games, to ensure full ADA compliance. Under the agreement, all operating policies and procedures for the new Events Center concerning the ADA also will have to be approved by the U.S. Attorney’s Office.
Today’s agreement was reached under Title III of the ADA, which prohibits discrimination against individuals with disabilities by public accommodations. The U.S. Attorney’s Office will actively monitor compliance with the agreement.
For more information on the ADA and today’s agreement with Olympia Entertainment, Inc., visit www.ada.gov or call the United States Justice Department’s toll-free ADA Information line at (800) 514-0301 or (800) 514-0383 (TTY) or the U.S. Attorney’s Civil Rights hotline at (313) 226-9151Shelby Township Man Sentenced to 14 YearsIn Prison for Mortgage FraudRead the Press Release
A Shelby Township was sentenced 14 years in prison following his conviction for mortgage fraud, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the Detroit Division of the Federal Bureau of Investigation.
U.S. District Judge Stephen J. Murphy, III, also ordered Albert Greer, Sr., to pay restitution to the financial institutions and the individuals he defrauded. The sentence was imposed on July 26, 2014.
Greer was convicted at trial of conspiracy to commit bank fraud and aiding and abetting bank fraud. Evidence at the trial showed that from 2004 through 2007, Greer devised and executed a scheme to commit bank fraud by locating residential properties in the Detroit metropolitan area, then recruiting and paying “straw buyers” to sign for mortgage loans. The straw buyers never intended to repay the loans or live in the homes. Greer often made the mortgage payments on the loans for several months so that the lenders would not immediately realize that the loans had been obtained by fraud. He then defaulted on the loans and allowed the properties to go into foreclosure.Greer’s co-conspirator submitted fraudulent loan applications to various financial institutions on behalf of the straw buyers. The applications were filled with material false representations, and supported by false documents that Greer created, including W-2s, earnings statements and verifications of deposit. Greer attempted to insulate himself from criminal liability by acting through the straw buyers and through shell companies, including Detroit National Mortgage Associates, that established in the names of his family members. Greer also had his family members open bank accounts in their names, which he used to launder the proceeds of his crimes.
Judge Murphy explained that one of the factors he considered in sentencing was that in addition to his fraud, Greer also stole proceeds by submitting bogus invoices for "consulting fees" that he claimed were owed to Detroit National Mortgage Associates. Greer used this scheme to steal $167,844 from a 90-year-old homeowner who sold a home in Detroit in 2005 and to steal from other victims.
“Albert Greer’s conduct was the equivalent of bank robbery, but he used lies and false statements rather than a gun or a mask,” McQuade said. “White collar criminals deserve to be seen as the robbers that they are. This lengthy sentence may deter others from thinking that mortgage fraud is an easy way to make money.”
The investigation of this case was conducted by special agents of the FBI and prosecuted by Assistant U.S. Attorney Cynthia Oberg.Rochester Hills Man Sentenced to Federal Prison for Jury TamperingRead the Press Release
A Rochester Hills man was yesterday sentenced yesterday to 34 months in federal prison for jury tampering, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office.
Marcus Little, 51, who was convicted in September 2013 of Endeavoring to Influence a Juror and Making a False Statement to a Federal Agent, was sentenced by United States District Judge Patrick Duggan.
The evidence presented during the trial showed that Little was present at a fraud trial in May 2011 as an observer. The trial which was held in Ann Arbor, Michigan involved three defendants who were charged with defrauding financial institutions by obtaining fraudulent mortgages on houses in Birmingham. The alleged fraud amount was more than $7 million. Little was able to learn where one of the jurors in that trial resided. During a long break in the trial, he drove to the home of the juror and tried to influence the juror on behalf of the defendants on trial. The juror immediately reported this to the police and the court.
During the course of the jury tampering investigation, the agents questioned Little. In an attempt to divert attention from himself as a suspect, Little lied to the agents. Because of the lies and other information gathered by the agents, they were able to determine that he was the person who attempted to influence the juror.
The case was investigated by the Federal Bureau of Investigation and the United States Marshals Service.
Detroit One Collaboration Leads to 33 Arrests and Indictments in Southwest DetroitRead the Press Release
The Detroit One collaboration of local, state and federal law enforcement has led to the arrests and indictments of 33 defendants in southwest Detroit, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by the other members of the Detroit One initiative.
Five individuals were named in a racketeering indictment, unsealed today, alleging violent acts by members of Latin Counts street gang.
In addition to the racketeering defendants, two other defendants were arrested today in a separate indictment on charges of being felons in possession of firearms in southwest Detroit.
In addition, 26 other defendants were recently charged in an indictment with heroin and cocaine distribution and related firearms offenses. These defendants also operated in southwest Detroit.
The racketeering indictment unsealed today charged the following individuals:
- Victor Vasquez, 23, of Detroit, was charged with using and carrying a firearm in furtherance of a crime of violence causing death, assault resulting in serious bodily injury in aid of racketeering and assault with a dangerous weapon in aid of racketeering;
- Avery Denardis, 20, of Dearborn, was charged with assault resulting in serious bodily injury in aid of racketeering;
- Jeffrey Lunsford, 34, of Ecorse, was charged with assault resulting in serious bodily injury in aid of racketeering;
- Kyle Voltz, 24, of Lincoln Park, was charged with assault resulting in serious bodily injury in aid of racketeering;
- Jacob Hixson, 20, of Detroit, was charged with assault resulting in serious bodily injury in aid of racketeering.
The felon in possession indictment unsealed today charged two additional individuals:
- Tim Galvan, 32, of Detroit, was charged with being a felon in possession of a firearm; and
- Luke Reardon, 23, of Detroit, was charged with being a felon in possession of a firearm.
According to the racketeering indictment, the Latin Counts gang operates in southwest Detroit and the downriver communities of Lincoln Park and Ecorse. The indictment alleges that five defendants committed assaults, murder, selling illegal narcotics and stolen firearms, breaking and entering homes and businesses and robbery. The indictment alleges that the gang uses violence to stake out its “turf” and intimidate both rival gang members and the citizens of southwest Detroit.
The indictment alleges that defendant Victor Vasquez aided and abetted in the use of a firearm during a crime of violence, causing the death of Mustafa Al-Yasiry at the Big Apple Market in southwest Detroit on April 18, 2014. According to the indictment, several Latin Count assaulted Al-Yasiry, and one member shot and killed him.
Under the Detroit One Initiative, and through the lead efforts of the Detroit Police Department and the FBI Violent Crime Task Force, which consists of representatives of Homeland Security Investigations, Detroit Police Department, Lincoln Park Police Department, Michigan Department of Corrections, and Michigan State Police, investigators were able to merge separate probes of various members of this organization and its activities into one encompassing investigation.
"The Detroit One partnership is working to reduce violent crime though enforcement and prevention,” McQuade said. “Today's enforcement action is a great example of the impact we can have when federal, state and local law enforcement agencies work together with a united strategy. By arresting and charging individuals who commit violent crimes, we hope to restore peace to our neighborhoods."“As part of the Detroit One initiative, this collaborative investigation targeted some of the most violent criminal offenders in the Detroit metropolitan area,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Combating violent crime remains among the highest priorities for the FBI. There is nothing more important than protecting our communities and keeping law abiding citizens safe. That effort is being waged each and every day by all of our Detroit One partners. It is tremendously important work, and the officers, agents and prosecutors engaged in this effort will continue to fight on behalf of the citizens we serve."
Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working collaboratively, local, state, and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit.- Victor Vasquez, 23, of Detroit, was charged with using and carrying a firearm in furtherance of a crime of violence causing death, assault resulting in serious bodily injury in aid of racketeering and assault with a dangerous weapon in aid of racketeering;
Members of Howard Boys Gang Convicted of Rico ConspiracyRead the Press Release
Five Flint men were convicted of RICO conspiracy yesterday afternoon in the United States District Court in Flint, Michigan, United States Attorney Barbara L. McQuade announced. The convictions followed a seven week trial in front of the U.S. District Judge Mark A. Goldsmith.
McQuade was joined in the announcement by Genesee County Prosecutor David Leyton and Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office.
The five men were convicted of participating in the Howard Boys criminal enterprise which operated from 2002 to 2012. The Howard Boys enterprise was described during the trial as a street gang whose activities included murders, attempted murders and drug dealing on the south side of Flint.
“These convictions – both state and federal - should send an important message to this community that violence will not be tolerated. It will not be tolerated by the United States Attorney’s Office, the Genesee County Prosecutor’s Office and it will not be tolerated by the people of Flint. Despite immense pressure not to testify, many from this community assisted these cases by providing information and testifying. The jury’s verdict shows that their voices were heard,” McQuade said.
“For years, the violence committed by the defendants in this case was perpetrated on the city of Flint and surrounding areas in epidemic proportions,” said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Ultimately, the arrest, conviction and punishment of these individuals were due, in large degree, to the assistance provided by members of the community, demonstrating that it takes a collective effort—between federal, state and local law enforcement, along with a concerned citizenry—to take back our communities from violent offenders, one neighborhood at a time. The FBI will continue to work with its law enforcement partners and the community as a whole to aggressively combat violent crime.”
These convictions follow convictions which were obtained by the Genesee County Prosecutor’s Office in state court for additional members and associates of the Howard Boys.
“For the better part of a decade, the members of this gang reigned terror on the streets of Flint with their criminal enterprise," said Genesee County Prosecutor David Leyton. "But justice has prevailed and these defendants will now pay their debt to society behind closed walls, steel bars, and barbed wire fences," he said.
“We will continue to work together to punish those who have committed these crimes. Ultimately, however, we will not be successful unless we can prevent these crimes from happening in the first place,” McQuade added.
The case included crimes and investigations from as early as 2002. The federal case was investigated by the Genesee County Safe Streets Task Force, which is comprised of agents from the FBI and officers from the Flint Police Department and the Michigan State Police. Agents from the Bureau of Alcohol, Tobacco and Firearms (ATF) and the Drug Enforcement Administration (DEA) as well as officers from the Genesee County Sheriff’s Department participated in the investigation and trial as well.
In addition to the convictions for RICO conspiracy, the jury convicted the five defendants of the following crimes:
Alexandra Norwood
- Murder in aid of racketeering
Jatimothy Walker
- Murder in aid of racketeering
Jonathan Walker
- Murder in aid of racketeering
- Attempted murder in aid of racketeering
- Use and discharge of a firearm during and in relation to a crime of violence
Johnathan Oldham
- Murder in aid of racketeering
- Attempted murder in aid of racketeering – two counts
- Use and discharge of a firearm during and in relation to a crime of violence – three counts
- Distribution of cocaine base – six counts
- Possession of a short barreled firearm
- Possession of a firearm with an obliterated serial number
- Dealing in firearms without a license
Leon Gills
- Attempted murder in aid of racketeering – two counts
- Use and discharge of a firearm during and in relation to a crime of violence
The five men are facing up to life in prison for their convictions on the RICO conspiracy charge. Norwood, Oldham, and Jatimothy and Jonathan Walker face mandatory life in prison for their respective murder in aid of racketeering convictions.
In addition to those convicted at trial six men had previously pleaded guilty to RICO conspiracy in federal court. Those six were:
Declyde Brewton
Willie Chambers
Sean Cunningham
Markus Evans
Malcom Evans
Carvell GordonAmong those convicted in the Genesee County Circuit Court were:
Paki Bonner
- Felonious assault
- Felony firearm
Taron Brown
- Possession of a short barreled rifle
- Carrying a concealed weapon
- Possession of cocaine
Jamel Cheeks
- Second degree murder
- Felony firearm
Roderick Dudley
- Manslaughter
- Felon in possession of a firearm
James Elbert
- Delivery of cocaine
- Carrying a concealed weapon
Carvell Gordon
- Second degree murder
- Felony firearm
Shawn Gardner
- Second degree murder
Ricco Holmes
- Second degree murder – two counts
- Felony firearm – two counts
Rodrick Jackson
- Assault with intent to do great bodily harm
- Felony firearm
Charles Orr
- Delivery of marijuana
Terrell Roche
- First degree murder
- Felony firearm
- Second degree arson
Darryl Scott
- Second degree murder
Eddie Williams
- Manslaughter
The federal case was prosecuted by the Flint Branch of the United States Attorney’s Office.
Businessman Sentenced in Mortgage Fraud CaseRead the Press Release
Sebastian Restum, a Detroit Area businessman, was sentenced to 51 months in prison today and ordered to pay restitution in the amount of $4,992,082 by federal judge Marianne Battani for the role he played in a conspiracy to commit mortgage fraud, announced United States Attorney Barbara L. McQuade.
U.S. Attorney McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.
The evidence in the case demonstrated that Restum recruited straw buyers to purchase high dollar properties, then facilitated the falsification of material information on mortgage loan applications with aggregate value in excess of $8 million, beginning in 2006. The falsified information included inflated statements of assets, fraudulent income documentation, false verification of employment and false verification of bank account balances.
Restum earlier pleaded guilty of conspiracy to commit bank fraud in a plea agreement with the government.
The case was investigated by the FBI, and prosecuted by Assistant U.S. Attorney Graham Teall.
Serial Bank Robber Sentenced to over 60 Years in PrisonRead the Press Release
Michael Jerome Henry, 24, formerly of Ann Arbor was sentenced today to 730 months in federal prison, following his conviction on October 18, 2013 by a federal jury in Detroit on charges of bank robbery and using a firearm during a federal crime of violence, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Paul Abbate Special Agent in Charge of the Federal Bureau of Investigation, Detroit.
The sentence was handed down by United States District Judge Robert H. Cleland.
The evidence presented at trial established that Michael Henry and other unidentified individuals robbed a Chase Bank branch in Ypsilanti on September 22, 2009, a Bank of America branch in Ann Arbor, on two separate occasions of November 5, 2009 and October 21, 2010. Henry’s role in each robbery was to jump over the teller counter and retrieve money while his partner stood guard by the door brandishing, and sometimes discharging, a firearm. Henry and his accomplice would typically first steal a vehicle which they used to transport them to the bank, and then flee on foot to another waiting vehicle with the stolen money. The robbery proceeds amounted to $4,385, $23,179 and $11,966 respectively. Henry was caught and convicted partly due to his DNA being recovered from masks used during the robberies. Henry’s accomplice remains at large.
The case was investigated by Special Agents of the FBI, the Ann Arbor Police Department, and the Washtenaw County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Kenneth Chadwell.
Detroit Man Charged with Armed Robbery of Radio Shack StoresRead the Press Release
A federal grand jury in Detroit indicted a Detroit man on charges of robbing two Radio Shack stores at gun point, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation (FBI).
Walter Smith, 19, was charged in an indictment with two counts of Robbery Affecting Interstate Commerce and two counts of Using or Carrying a Firearm During and in Relation to a Federal Crime of Violence. The charges stem from armed robberies of a Radio Shack store in Royal Oak on June 4 and in Royal Oak Township on June 30.
According to court documents, on June 4, 2014, Smith, while armed, entered the Radio Shack located at 29160 Woodward Avenue in Royal Oak, with two other men with pantyhose pulled over their faces, wearing hats and black hooded sweatshirts. The men duct taped the hands and eyes of two victim clerks and a store customer then departed the store with cell phones and cash from the register. On June 30, 2014, Smith, along with another male, entered the Radio Shack located at 8896 West 8 Mile Road in Royal Oak Township, lured an employee to the back of the store, placed a gun to the back of the employee and tied the employee’s hands while the other male suspects stole cell phones from the backroom.
If convicted of all charges, Smith faces a statutory mandatory minimum of thirty- two years in federal prison.
An indictment is only a charge and is not evidence of guilt. It will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being worked jointly by members of the FBI Oakland County Gang and Violent Crimes Task Force; the ATF, Michigan State Police and the Roseville, Sterling Heights, Madison Heights, and Royal Oak Police Departments. It is being prosecuted by Assistant United States Attorney Jeanine Brunson.
Former Wayne County Assistant County ExecutiveSentenced for Conspiracy to Commit Honest Services FraudRead the Press Release
Former Wayne County Assistant County Executive Michael Grundy was sentenced today to 90 months in prison for conspiracy to commit honest services fraud in connection with his position as executive director of HealthChoice of Michigan, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, and Acting Special Agent in Charge Jarod Koopman, Internal Revenue Service - Criminal Investigation.
In his guilty plea, Grundy, 42, of Detroit, admitted that he had caused the accountant of HealthChoice to wire transfer $400,000 to a company called Medtrix, Grundy falsely represented that the payment was made pursuant to an existing contract to develop and implement an electronic medical records (“EMR”) system for HealthChoice medical providers. In fact, however, the contract was not executed until the day the wire transfer was made, and was not approved by the HealthChoice Board of Directors. Further, Medtrix never created or obtained any EMR programming, and an EMR system that was developed by another company was already being offered to HealthChoice networks and medical providers.
Medtrix owner and co-conspirator Keith Griffin of Camel, Indiana, pleaded guilty to the wire fraud scheme and testified during Grundy’s nine-day sentencing hearing. Griffin admitted that Grundy used his position as Executive Director of HealthChoice to authorize fraudulent payments to Medtrix and Advertise Me, also owned by Griffin. Griffin admitted that he kicked back substantial portions of those payments to Grundy.
The court also considered evidence that Grundy extorted a contractor, causing that contractor to send payments to Advertise Me and Medtrix, and that portions of those payments were kicked back to Grundy.
In addition to his custodial sentence, Grundy will forfeit real property located at 19604 Shrewsbury Road, Detroit, a 2011 Jeep Wrangler, and $7,755 in currency, assets that were derived from proceeds traceable to the fraud.
United States Attorney McQuade said, "The citizens of Wayne County deserve honest services from their public officials. It is particularly offensive when corruption comes from officials entrusted to promote health and welfare. We will continue to prosecute public officials who enrich themselves instead of serve the people.”
"IRS-CI is committed to investigating those public officials that choose to steal funds earmarked for public programs in order to enrich themselves," said IRS-CI Special Agent in Charge Jarod J. Koopman.
The case was investigated by agents of the FBI and IRS. This case is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford and Gjon JuncajFormer Detroit Police Officer Sentenced to Prison for Leaking Information to A Drug TraffickerRead the Press Release
A former City of Detroit police officer was sentenced to prison today for leaking sensitive and confidential law enforcement information to a drug trafficker, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by FBI Special Agent in Charge Paul M. Abbate and DEA Special Agent in Charge James Allen.
During a hearing before U.S. District Judge John Corbett O’Meara, Lamar Coody, 35, of Detroit, Michigan, was sentenced to twelve months in prison and one year of supervised release on his plea of guilty to misprision of a felony. During an FBI and DEA investigation, Coody was captured over a court-authorized wiretap leaking confidential information to a Detroit-based multi-kilogram cocaine-trafficker. Coody leaked the information while he was a sworn City of Detroit police officer. Included among the information leaked by Coody to the cocaine dealer was the fact that a Detroit police narcotics squad was investigating the dealer, and that the police had an informant deep within the dealer’s organization. In addition, Coody fixed six traffic tickets for the drug dealer, helped identify police surveillance vehicles, and provided advice to the dealer about how to explain away cash proceeds from drug sales. In return, Coody borrowed the drug trafficker’s Corvette, Range Rover, and Cadillac Escalade, borrowed money, and was wined and dined by the dealer. Coody was not directly involved in transporting or dealing drugs or drug proceeds.
Deshon Catchings, the drug trafficker who received the leaked information from Coody, was previously sentenced by Judge O’Meara to 151 months in prison for his cocaine trafficking. Six other defendants who participated in Catchings’ drug trafficking organization also have pleaded guilty and been sentenced to prison.
“By leaking information to a drug dealer under investigation, this officer jeopardized the investigation and the safety of the investigators," McQuade said. "Officers who breach their duty to serve the public will be held accountable."
The case was investigated by agents of the FBI and the DEA. It is being prosecuted by Assistant United States Attorneys David A. Gardey, Steven Cares, and B. Michael Ortwein.
Lake Orion Man Sentenced for Filing False Tax ReturnsRead the Press Release
Edward Weglarz of Lake Orion, Michigan has been sentenced for willfully filing a false Federal Income Tax return, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Acting Special Agent in Charge Carolyn Weber, of the Internal Revenue Service, Criminal Investigations.
Weglarz pleaded guilty on Tuesday, December 17, 2013. On June 23, 2014, U.S. District Judge Gerald E. Rosen, sentenced Weglarz to six months confinement at a community corrections center. Weglarz will also be required to serve a term of three years of supervised release following completion of the prison term and perform 120 hours of community service as a volunteer at Focus Hope.
Weglarz stipulated that the tax loss to the government is $ 86,581, and has agreed to pay that amount in restitution to the United States.
According to court documents, Weglarz operated Eastern Market Tanker Leasing (EMT) of Dearborn, Michigan. EMT was engaged in interstate trucking and Weglarz, as the president, controlled its operations and finances. For the tax years 2006, 2007 and 2008, Weglarz caused EMT to pay more than $600,000 in personal expenses for himself and disguised the payments in EMT’s books and records as legitimate business expenses. Weglarz also diverted EMT’s funds to Multivest Properties, another company that he controlled and falsely classified these payments as legitimate EMT business expenses. These deliberate actions by Weglarz caused EMT’s corporate net income and tax liability to be understated. Because Weglarz and EMT did not report the payments on the behalf of Weglarz, his personal income was also understated, falsely reducing his gross income and individual tax liability.
“The prosecution and sentencing of Mr. Weglarz, who diverted corporate funds for his benefit and then intentionally filed false corporate and individual income tax returns, is a fundamental element in maintaining public confidence in our tax system,” said Acting Special Agent in Charge Carolyn Weber.
Weglarz was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated by special agents of the IRS-Criminal Investigation and was prosecuted by Assistant U.S. Attorney Christopher Varner.
Former Teamsters Official Sentenced on Bribery ChargeRead the Press Release
Michael Townsend, age 69, of Dearborn Heights, Michigan, a former business agent and trustee of Teamsters Local 337, was ordered to pay a fine of $18,000 as a result of his felony conviction on union bribery charges, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Special Agent in Charge James Vanderberg, Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and L. Joe Rivers, Regional Director, Department of Labor, Employee Benefits Security Administration.
Townsend was also ordered to serve two years supervised release during his sentencing hearing today before U.S. District Judge Arthur J. Tarnow in Detroit.
According to court records, from 2005 through 2008, Townsend took quarterly cash bribes totaling $18,000 from an officer of LaGrasso Brothers Produce, Inc. in Detroit in exchange for protecting the company from unionizing efforts by Teamsters Local 337.
In February 2014, Judge Tarnow sentenced Sam LaGrasso Produce, Inc. to a fine of $500,000. The court also required the company to make quarterly donations of $1,500 to a local non-profit food bank for five years – an amount equivalent to the bribe payments made by the company. Sam LaGrosso Produce operates in the Eastern Market area of Detroit.
The case was investigated by agents and officers of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations and the Department of Labor, Employee Benefits Security Administration. It is being prosecuted by Assistant United States Attorneys David Morris and Mark Chutkow.
Former Employee at the Wayne County Clerk’s Office Pleads Guilty to BriberyRead the Press Release
A former clerk in the Vital Records Division of the Wayne County Clerk’s Office pleaded guilty to bribery charges, U.S. Attorney Barbara L. McQuade announced.
Joining McQuade in the announcement were Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Field Office, and Marlon Miller, Special Agent in Charge, Immigration and Customs Enforcement, Homeland Security Investigations.
Lorris Upshaw, III, 30, of Detroit, a clerk in the Wayne County Clerk’s Office during 2009 and 2010, pleaded guilty before U.S. District Judge Robert H. Cleland to accepting bribes in exchange for issuing Concealed Pistol Licenses to individuals who were not otherwise eligible to receive such licenses. Upshaw accepted money from convicted felons and performed acts within his official duties as a clerk with the Wayne County Clerk’s Office in exchange for issuing Concealed Pistol Licenses to felons who were not eligible to obtain such licenses lawfully.
A sentencing date has been set for October 23, 2014.
United States Attorney McQuade said, “This defendant breached his duties and risked public safety for his own profit. Government employees who violate the public trust will be held accountable.”
The case was investigated by agents of the FBI and the DHS. This case is being prosecuted by Assistant United States Attorney Hala Jarbou.Bay County Man Sentenced for PerjuryRead the Press Release
A Bay County man was sentenced on June 17, 2014, to 21 months in prison for committing perjury before a federal grand jury, announced U.S. Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Randall Ashe, Special Agent in Charge, U.S. Environmental Protection Agency Criminal Investigation Division in Michigan.
U.S. District Judge Thomas Ludington imposed sentence on Rodolfo Rodriguez, 57.
According to court records, Rodriguez was called to testify before a grand jury investigating asbestos-related crimes and knowingly provided false testimony regarding the illegal removal of asbestos from a church, which was being converted to a school used by the Bay City Academy.
Co-defendants Roy Bradley and Gerald Essex have been charged with illegally disturbing and handling asbestos while performing the demolition work on the church. They are currently scheduled for trial on August 19, 2014, in Bay City, Michigan.
“Our criminal justice system depends upon witnesses to provide truthful information,” McQuade said. “Witnesses who lie to a grand jury commit a serious crime that will be prosecuted.”
“As with any criminal case, the prosecution of environmental crimes depends on honest answers and testimony,” said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Michigan. “Lying under oath is criminal conduct, and when it’s about removing asbestos illegally, potentially endangering vulnerable children, it’s especially egregious. Today’s sentencing demonstrates that companies and individuals who callously place the American people at risk, then lie about it under oath, will be held accountable.”
The case was investigated by special agents of the U.S. Environmental Protection Agency and the Internal Revenue Service. The prosecution is being handled by the U.S. Attorney’s Office in Bay City, Michigan.
Leonard Man Pleads Guilty to Filing A False Tax ReturnRead the Press Release
Paul Michajlyszyn, of Leonard, Michigan, former Vice President of Odyssey, Inc. a Lake Orion, MI corporation, pleaded guilty yesterday to one count of filing false tax returns with the Internal Revenue Service, United States Attorney Barbara McQuade announced today.
McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Michajlyszyn, entered the guilty plea before U.S. District Judge Arthur J. Tarnow.
Michajlyszyn entered his plea two days after Randal Bellestri, owner of Odyssey, Inc, plead guilty to filing false tax returns and conspiracy to file false tax returns.
According to court records, Odyssey, Inc. produces machine tools for the aviation industry. Beginning before 2004 and continuing until July 2009, Michajlyszyn had an agreement with Randll Bellestri, owner of Odyssey, Inc. regarding the sale of scrap metal left over from Odyssey’s manufacturing operations. Michajlyszyn was authorized by Bellestri to serve as a contact with the scrap metal buyer and to collect the proceeds from the sales in cash. The proceeds were then divided between Michajlyszyn and Bellestri. By accepting only cash for the sale of the scrap, Michajlyszyn was able to conceal the receipt of the cash from Odyssey, Inc. as well as the Internal Revenue Service. Michajlyszyn did not claim the cash proceeds from these scrap metal sales as income on his federal income tax returns. Michajlyszyn’s failure to report these cash proceeds for the 2004 through 2008 tax years caused his income to be understated by approximately $270,483.
Michajlyszyn’s sentencing is set for September 18, 2014 at 2 pm. Filing a false tax return charge carries a maximum term of imprisonment of three years and/or a fine of $250,000.
The case was investigated by special agents of the IRS-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Christopher L. Varner.
Flint Tax Return Preparer Pleads Guilty to Aiding and Assisting in Presenting False Tax ReturnsRead the Press Release
A resident of Flint, Michigan, pleaded guilty on June 5, 2014, to aiding and assisting in the preparation and filing of fraudulent tax returns with the Internal Revenue Service, United States Attorney Barbara McQuade announced today. McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Charles Sander, III, pleaded guilty before U.S. District Judge Terrence G. Berg.
According to court records, Sanders owned and operated SBC Tax Service Corporation, a return preparation business in Flint, Michigan. Sanders falsely held himself out to be a Certified Public Accountant. For the tax years 2008 and 2009, Sanders prepared over 200 individual income tax returns, along with their accompanying schedules that were then submitted to the Internal Revenue Service. An audit of at least 36 of the returns he filed for 2008 and 2009 contained false and fraudulent information such as federal fuel tax payments, medical deductions, personal and real property tax deductions, mortgage interest, charitable contributions and unreimbursed employee expenses. These false items resulted in higher refund payments to Sanders’ clients. Sanders kept a fee of between $900 and $4,000 per tax return.
Sanders’ sentencing was set for October 9, 2014 at 2:30 pm. He faces a maximum term of imprisonment of three years and a maximum fine of $250,000. In addition, he will be required to pay restitution to the IRS.
The case was investigated by special agents of the IRS Criminal Investigation Division.