Eastern District of Michigan
Press releases recorded for this federal judicial district.
Oxford Man Pleads Guilty to Filing A FalseTax Return & Role in Conspiracy to File False Tax ReturnsRead the Press Release
Randal Bellestri of Oxford, Michigan, owner of Odyssey, Inc. a Lake Orion, MI corporation, pleaded guilty yesterday to one count each of filing false tax returns and conspiring to file 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.
Bellestri, 57, entered the guilty plea before U.S. District Judge Arthur J. Tarnow.
According to court records, Odyssey, Inc. produces machine tools for the aviation industry. Beginning in 2000 and continuing until about 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. By accepting only cash for the sale of the scrap, Bellestri was able to conceal the receipt of the cash from Odyssey, Inc. as well as the Internal Revenue Service. 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. IRS-Criminal Investigation will continue to direct its efforts at those individuals who willfully and intentionally violate this known legal duty,” said Acting Special Agent in Charge Carolyn Weber.
Bellestri’s sentencing is set for September 16, 2014. The conspiracy charge carries a maximum term of imprisonment of five years and/or a fine of $250,000. The 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.
Detroit Tax Return Preparer Pleads Guilty to Role in Conspiracy to File False Tax ReturnsRead the Press Release
A resident of Detroit, Michigan, pleaded guilty today to her involvement in a conspiracy to file 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.
Tiffiny Coleman, 35, entered the guilty plea before U.S. District Judge John Corbett O’Meara.
According to court records, Coleman was employed as a tax return preparer in Detroit. In 2010, she conspired with others to prepare and electronically file federal income tax returns for the 2009 tax year that were false and fraudulent. The conspiracy involved approximately 100 tax returns that stated that the taxpayers were employed by various businesses and had part of their wages withheld for federal income taxes when, in fact, Coleman and the others knew that the taxpayers were not employed and that the Forms W-2 were completely false. In total, the tax returns caused approximately $482,977 in tax refunds to be paid out.
Coleman’s sentencing was set for October 7, 2014 at 10:15 am. She faces a maximum term of imprisonment of ten years and a fine of $250,000. In addition, she will be required to pay restitution to the IRS in the amount of $482,977.
The case was investigated by special agents of the IRS Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney Stephen Hiyama.
U.S. Attorney’s Office Reaches Settlement with Ann Arbor HotelsTo Improve Accessibility for Disabled GuestsRead the Press Release
The U.S. Attorney’s Office for the Eastern District of Michigan has reached an agreement with an Ann Arbor hotel owner to resolve a complaint filed by a Chicago man who could not attend his law school reunion with his disabled son because of the lack of accessible guest rooms.
The settlement resolves allegations against Campus Inn/Bell Tower Joint Venture, the owner/operator of the Campus Inn and the Bell Tower hotels, both located in Ann Arbor, under the Americans with Disabilities Act (ADA), and will improve physical accessibility for people with disabilities at both hotels.
“This case is an important reminder to owners of older buildings that they are required to make all readily achievable modifications to their properties to improve accessibility for guests with disabilities,” said U.S. Attorney Barbara L. McQuade.
Under the settlement agreement, the Campus Inn and the Bell Tower Hotels agreed to make renovations to guest rooms, public restrooms and elevators, to permit service animals and to change their policies regarding reservations for accessible rooms. They also agreed to improve signage, to provide additional training for employees and to pay $1,500 in compensatory damages to the complainant.
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, which will remain in effect for three years.
For more information on the ADA and today’s agreement with Campus Inn/Bell Tower Joint Venture, visit www.ada.gov or telephone the U.S. Department of Justice’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) 226-9151.Pontiac Woman Pleads Guilty to Making False Claims to the United StatesRead the Press Release
Najeebah Tanzil, of Pontiac, Michigan, pleaded guilty today for her involvement in a scheme to file fraudulent tax returns with the Internal Revenue Service, U.S. 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.
According to court records, from July 2009 through June 2010, Tanzil caused 15 fraudulent tax returns, which she knew to be fraudulent, to be filed with the Internal Revenue Service. These returns, filed in her name and the names of others, contained false W-2 wage and withholding information as well as claims for the First Time Homebuyer and Education credits to which the filers were not entitled to. In total, the tax returns requested refunds of approximately $168,500.
“Falsifying documents to obtain or increase Federal Income Tax refunds is a serious crime that undermines our tax system. Investigating these types of crimes is a priority for IRS-CI” said IRS Criminal Investigation Acting Special Agent in Charge Carolyn Weber.
The defendant faces a maximum term of imprisonment of five years, a fine of $250,000 and will be required to pay restitution to the IRS in the amount of $168,584.
The case was investigated by special agents of the IRS-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Ross MacKenzie.
Former Detroit Chief Administrative Officer Sentenced on Corruption and Tax OffensesRead the Press Release
Derrick Miller, former Chief Administrative Officer of the City of Detroit, was sentenced today to 12 months in a halfway house for corruption and tax offenses, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation, Carolyn Weber, Special Agent in Charge of the Internal Revenue Service, Criminal Investigations, Randall Ashe, Special Agent in Charge of the Environmental Protection Agency, Criminal Investigation Division, and Giovanni Tiano, Special Agent in Charge of the U.S. Department of Homeland Security, Office of Inspector General.
U.S. District Judge Nancy G. Edmunds also ordered that Miller, 44, of Vienna, Virginia, pay restitution and back taxes with penalties to the IRS.
According to court records, from 2005 to 2007, Miller, served as Chief Administrative Officer and Chief Information Officer for the City of Detroit. In these capacities, Miller had authority over the lease and sale of properties owned by the City of Detroit. During that period, Miller accepted $115,000 as corrupt rewards from a real estate broker who received commissions in connection with the lease or sale of city properties.
In October 2008, Miller filed an individual income tax return for the 2007 tax year in which he willfully made statements that he knew were false regarding the amount of income he received from two of his companies, Atrium Financial LLC and Citivest LLC, with the intent of concealing that income from the IRS. Miller intentionally failed to report on his return the $46,725 bribe he received that year from the real estate broker. Miller also intentionally failed to report on his tax return a total of $568,000 he received in 2007 for his assistance to a real estate company that entered into a purchase and leaseback of a portfolio of properties. The total amount of additional tax due and owing for tax year 2007 was $240,858.
The court departed from the advisory guidelines range of 70-87 months in prison because of Miller’s extraordinary assistance in the prosecution of a public corruption case of historic importance to this region. As a member of former Detroit Mayor Kwame Kilpatrick’s inner circle, Miller gave the jury a firsthand perspective of the illicit objectives and motivations of Kilpatrick, contractor Bobby Ferguson, and their associates.
McQuade said, “The court recognized that Miller’s cooperation was extraordinary and essential to bringing to justice other more serious wrongdoers. As a member of the inner circle of Kilpatrick’s criminal enterprise, Miller provided detailed and corroborated testimony about Kilpatrick’s fraud, bribery and extortion. Public officials should take note that early and extraordinary cooperation will yield a substantially lower sentence.”
United States Attorney McQuade thanked the agents of the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigations, the Environmental Protection Agency Criminal Investigations Division, and the U.S. Department of Homeland Security Office of Inspector General for their assistance in the successful investigation of the case.
The case was prosecuted by Assistant U.S. Attorneys Mark Chutkow, R. Michael Bullotta, Jennifer Blackwell and Eric Doeh.
Royal Oak Man Pleads Guilty to Role InScheme to File False Tax Returns UsingStolen IdentitiesRead the Press Release
A resident of Royal Oak, Michigan, pleaded guilty today to 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 Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Shane Bateman, 42, entered the guilty plea before U.S. District Judge Gershwin Drain.
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 approximately $186,000. The entire scheme involved approximately 180 false tax returns, some 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 IRS Criminal Investigation Acting Special Agent in Charge Carolyn Weber. “Investigating refund fraud and identity theft remains a top priority for IRS.”
Bateman’s sentencing was set for October 2. The crime to which he pleaded guilty carries a maximum term of imprisonment of ten years and a fine of $250,000. In addition, Bateman will be required to pay restitution to the IRS in the amount of $185,828.
The case was investigated by special agents of the IRS Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney Stephen Hiyama.
Man Sentenced on Charge of Murder on Isabella Reservation for Saginaw Chippewa Native American TribeRead the Press Release
Anthony Michael Bennett, 21, was sentenced today to 40 years in federal prison on the charge of second degree murder, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division.
Bennett pleaded guilty before U.S. District Judge Thomas L. Ludington in Bay City, Michigan on December 17, 2013. During his guilty plea, Bennett informed the court that on three occasions he had assaulted four-year-old Carnel Chamberlain. The last time, on June 21, 2012, he killed him by punching him in the head. According to the factual basis contained in his plea agreement, Bennett burned the body in an attempt to conceal evidence of his crime.
“This was a horrific crime that is unsettling to anyone who cares about children,” McQuade said. “We are grateful for the diligent work of the investigating agents and prosecutors who were able to obtain this conviction and find some measure of justice for Carnel.”
Special Agent in Charge Abbate stated: “The heinous acts committed by the defendant in this case are simply unspeakable. While today’s sentencing will never fill the void created by Carnel’s death, it does ensure that the family and the many others who loved him will not have to endure the pain associated with a trial and that justice is served through a lengthy term of imprisonment for the defendant. We hope that this can be a step in some measure towards peace and closure.”
The investigation of this case was conducted by officers of the Saginaw Chippewa Tribal Police, Isabella County Sheriff’s Department, Michigan State Police and Special Agents of the Federal Bureau of Investigation. The case was prosecuted by the Bay City branch of the United States Attorney’s Office.Former Detroit Water Director Sentenced in Kilpatrick Corruption CaseRead the Press Release
The former Director of the Detroit Water and Sewerage Department was sentenced to eight months in a halfway house after having pleaded guilty to conspiracy in the case of former Detroit Mayor Kwame Kilpatrick, announced U.S. Attorney Barbara L. McQuade.
Joining on the announcement were Paul M. Abbate, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, Carolyn Weber, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation Division and Randall K. Ashe, Special Agent in Charge, Environmental Protection Agency, Criminal Investigation Division (EPA-CID).
U.S. District Judge Nancy G. Edmunds imposed sentence on Victor Mercado, 62, of Stuart, Florida.
According to the superseding information, from June 2002 to June 2008, Mercado served as Director of the Detroit Water and Sewerage Department (DWSD), reporting directly to Kilpatrick. In this capacity, Mercado was responsible for administering more than $2 billion in contracts with private companies.
The plea documents stated that Mercado, acting at the direction of Kilpatrick, unlawfully steered contracts and payments to Kilpatrick co-conspirator Bobby Ferguson. Mercado influenced the procurement process to Ferguson's advantage, and directed a bidder to include Ferguson on a DWSD contract if the bidder wanted to receive favorable consideration on the bid. Mercado took these steps as a result of regular and consistent pressure from Kilpatrick and his staff to help Ferguson obtain DWSD business regardless of procurement policies, rules and regulations.
“Although Mr. Mercado was acting under pressure from the mayor, he must be held accountable for abusing his position of trust and causing harm to the city,” McQuade said.
“While Director of the Detroit Water and Sewerage Department, Mr. Mercado violated the law by unlawfully steering business contracts at the direction of the former mayor,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “This criminal conduct inflicted economic harm upon the city, and Mr. Mercado must be held accountable for his actions.”
“Illegally influencing the bidding process for managing wastewater and sewage can significantly endanger public health and safety,” said Randall K. Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Michigan. “As a public servant charged with protecting Detroit’s residents, these actions are particularly egregious. Today’s sentence sends a clear message that EPA and its partners will prosecute municipal officials that skirt their responsibility to protect those they serve.”
“Public corruption remains a top priority for IRS-Criminal Investigation and this case represents the value of the collaborate efforts of law enforcement to hold those in positions of public trust accountable,” said IRS Acting Special Agent in Charge Carolyn Weber.
From January 2002 to January 2006, Kilpatrick served as Special Administrator over the DWSD. That designation, arising from a federal consent decree resolving a lawsuit alleging federal environmental violations, gave Kilpatrick authority to award DWSD contracts directly with outside parties, bypassing city procurement procedures, and also gave Kilpatrick responsibility over the operation of DWSD's wastewater treatment plant to ensure compliance with environmental standards.
As stated in the plea documents, Kilpatrick used his position as Mayor of Detroit and Special Administrator of DWSD to pressure city contractors to give subcontracts or payments obtained under those contracts to Ferguson, or risk having the contracts delayed, awarded to competitors, or canceled, resulting in economic harm. Invoking and otherwise exploiting his well-known affiliation with former Mayor Kilpatrick, Ferguson pressured city contractors to hire or pay him for DWSD contracts.
This case was investigation by special agents of the FBI, IRS and EPA-CID and was prosecuted by Assistant United States Attorney Mark Chutkow, Michael Bullotta and Eric Doeh.
Grosse Ile BusinessmanSentenced in Mortgage Fraud CaseRead the Press Release
A Grosse Ile businessman was sentenced today after being convicted at trial of Conspiracy to Commit Wire Fraud and Wire 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.
Sentenced was Richard Dean Woolsey, 42, of Grosse Ile Township, Michigan. Woolsey was sentenced to 90 months by U.S. District Judge Avern Cohn. Judge Cohn also ordered Woolsey to serve 3 years supervised release after his custodial sentence. A separate hearing on restitution will be held within 90 days. Sentencing for co-defendant Ryan Vinco is scheduled for June 5, 2014
The evidence at trial showed that from 2006 to 2008, Richard Dean Woolsey conspired to defraud and defrauded mortgage lenders in numerous mortgage loan transactions in the States of Michigan and Tennessee. In executing the conspiracy and scheme to defraud Woolsey used ReMax Experts a real estate company and The Valuation Group, an appraisal company both owned by him. Woolsey orchestrated and helped to orchestrate millions of dollars of fraudulent mortgage transactions by coordinating and directing the activities of bank employees, buyers, appraisers and closing agents. In doing so he disguised the source of down payments, provided false and inflated appraisals for properties and provided false income information for buyers in order to bolster their creditworthiness and apparent ability to qualify for mortgage loans. Judge Cohn found that losses caused by Woolsey’s fraud were greater than $2.5 million and less than $7 million.
"Mortgage fraud harms real estate markets and property values and also undermines the ability of lending institutions to protect themselves from debilitating losses," McQuade said.
Special Agent in Charge Abbate stated, “As reflected in the investigation of Mr. Woolsey’s criminal activity and his sentence today, the FBI takes mortgage fraud very seriously. These crimes, particularly those as egregious as Mr. Woolsey’s, not only negatively impact real estate markets, banks, and the financial industry, but hurt our entire community. The FBI will continue to aggressively investigate these crimes.”
Leaders of Large-Scale Drug Ring Flee Before Jury Returns Guilty VerdictsRead the Press Release
Three individuals from metro-Detroit were 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 James V. Allen, Drug Enforcement Administration, Detroit Division.
The drug ring, which was one of the largest in metro-Detroit history, also laundered in excess of $21 million in U.S. currency. After the trial was finished but before the verdict was returned by the jury, the three men, Carlos Ellis Powell, age 39, of Washington Township, MI, Eric Jerome Powell, age 36, of Franklin Farms, MI, and Earnest Lee Proge, Jr., age 38, of Detroit, MI, fled. Law enforcement is actively searching for these men. They should be considered armed and dangerous. Anyone with information on their whereabouts should contact that United States Marshals at 313-234-5656.
A fourth defendant, Kenneth Robert Daniels, age 54, of Detroit, MI, a former Michigan State Representative for Detroit Fifth’s District, was also convicted of structuring financial transactions for the leader of the drug ring, Carlos Ellis Powell. Unlike the other three defendants, Mr. Daniels appeared for the jury’s verdict.
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, Earnest Proge, and ten 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.
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.Southfield Tax Preparer Pleads Guilty to Aiding in the Preparation of False ReturnsRead the Press Release
A Southfield, Michigan resident pleaded guilty to willfully making false claims to the United States government by aiding in the preparation of false income tax returns, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge Carolyn Weber, Internal Revenue Service Criminal Investigation.
Claudia Prince, 42, entered the guilty plea before U.S. District Court Judge John Corbett O’Meara.
According to court records, from 2009 to November 2011, Prince, doing business as A&C Tax Services, working out of her residence in Southfield, Michigan prepared forty-two individual tax returns for the years 2008, 2009 and 2010. These tax returns were false. Prince fabricated or inflated W-2 wage and earning statements, withholding information, and education credits (Hope and Lifetime Learning Credits). Prince will be required to pay restitution of $107,846 to the Internal Revenue Service.
A sentencing hearing was set by Judge O’Meara for September 9, 2014 at 10am. The maximum penalty for willfully aiding in the preparation of false tax returns is imprisonment of not more than three years and a $250,000 fine per each count.
The investigation of this case was conducted by the Special Agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie.Ninety-Year Old Drug Courier Sentenced to 3 Years in PrisonRead the Press Release
A ninety-year old man from Indiana was sentenced today to three years in federal prison for his role as a drug courier for a major cocaine trafficking organization with direct ties to the Joquin Guzman Lorea (a/k/a “Chapo” Guzman) Sinaloa cartel, announced United States Attorney Barbara L. McQuade.
The case is being prosecuted by Assistant United States Attorneys Christopher Graveline and Doug Salzenstein.
McQuade was joined in the announcement by James Allen, Acting Special Agent in Charge, Drug Enforcement Administration, Detroit Division.
Receiving the sentence was Leo Sharp, who pleaded guilty on October 8, 2013, to conspiracy to distribute cocaine. In addition to the prison sentence, United States District Judge Nancy G. Edmunds also ordered Sharp to pay $500,000, that includes forfeiture of real estate owned by Sharp in Florida.
United States Attorney Barbara L. McQuade stated, "In this case, it was important to balance the defendant's age with his conduct -- seven separate trips to transport more than 1,200 kilograms of cocaine across the country and into Michigan, for which he was paid more than $1 million by a major Mexican drug cartel. In light of this conduct, the defendant's age should not be a get-out-jail free card."
According to court records, Sharp had been a drug courier for the better part of a decade but it wasn’t until the fall of 2011 when he was stopped by law enforcement on Interstate 94 outside of Ann Arbor, MI, and found to be in possession of 104 kilograms of cocaine, that his extensive involvement with the drug trafficking organization was completely discovered. In fact, that particular seizure was only one such trip that Sharp and other couriers had undertaken to bring hundreds of kilograms of cocaine and marijuana to southeast Michigan from Arizona. Through the lead efforts of the DEA, with assistance from the Department of Homeland Security Investigations, law enforcement were able to identify and indict nineteen individuals from across the country and into Mexico for their roles in this mass narcotics operation. Sixteen of the nineteen indicted individuals have pleaded guilty and have either been sentenced or are awaiting sentencing over the next several months.
To date, the investigation has led to the seizure of over 200 kilograms of cocaine and $3,000,000 in narcotics proceeds.United States Attorneys Barbara L. McquadeAnd Patrick Miles, Jr. Host the Michigan Reentry SummitRead the Press Release
Lansing, Michigan - Reducing crime through prisoner re-entry was the focus of a summit today in Lansing, organized by Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan, and Patrick A. Miles, Jr., U.S. Attorney for the Western District of Michigan.
More than 200 probation and corrections officers, law enforcement officials, service providers and other stakeholders participated in the summit at the Thomas M. Cooley Law School in Lansing.
Re-entry is a key component of U.S. Attorney General Eric H. Holder, Jr.'s Smart on Crime Initiative.
The summit focused on sharing ideas and best practices for improving the success for citizens returning to the community after serving prison sentences. In contrast to the national recidivism rate of 67 percent, in Michigan, only 29 percent of offenders commit new crimes and return to prison.
The summit addressed breaking through the barriers to successful re-entry, such as employment, education and mental health.
Speakers included Ronald Davis, Director of the Office of Community Oriented Policing Services at the U.S. Department of Justice, and Amy Solomon, Senior Advisor at DOJ's Office of Justice Programs.
"Focusing on prisoner re-entry is a smart investment because it reduces crime and saves money," McQuade said. "When we spend $30,000 a year to imprison each offender, we can instead spend a fraction of that money on helping them succeed in the community."
"Reentry failure carries a high cost -- both economically and on society -- because it means more crime, more victims, more broken families as well as more burdens on law enforcement and on the judicial system," Miles stated. "It is a multi-faceted problem that demands a coordinated solution. That is why we convened this summit."
The event also provided an opportunity for the attendees to become aware of some of the effective re-entry programs already underway such as the federal re-entry courts using intensive supervised release programs for some of the highest-risk offenders returning from prison as well as the Eastern District of Michigan’s Face-To-Face initiative. This particular initiative involves meeting with offenders and informing them of the specific consequences of continued criminal activity in light of their criminal records.
The summit was hosted by the U.S. Attorney’s Office for the Eastern and Western District of Michigan, the Michigan Department of Human Services, the Michigan Department of Community Health, the U.S. Department of Justice, Bureau of Prisons, Michigan Department of Corrections, U.S. Probation for both the Eastern and Western District of Michigan, MAGLOCLEN, Prosecuting Attorneys Association of Michigan, Thomas M. Cooley Law School and the Michigan Sheriff’s Association.Former Detroit Public School TeacherSentenced on Fraud and Money Laundering ChargesRead the Press Release
A former Detroit Public Schools teacher was sentenced to three years in prison today for her conviction for defrauding DPS, 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, Carolyn Weber, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation.U.S. District Judge Julian Abele Cook imposed sentence on Domonique Campbell, 39. A jury found Campbell guilty of program fraud conspiracy, money laundering conspiracy and tax charges, following a five-week trial in August 2013.
Campbell's mother, Sandra Campbell, 60, a former DPS contract accountant and School Board candidate was sentenced in December, 2013 to 70 months in federal prison for her role in the scheme.
The evidence presented at trial established that between 2004 and 2008, the defendants obtained more than $530,000 from DPS through a fraudulent scheme in which orders were placed with the Campbells’ sham company for books and educational materials that were never provided to the schools. Sandra Campbell and Domonique Campbell conspired to launder the fraud proceeds and to defraud the Internal Revenue Service by failing to report on their income tax returns the money they fraudulently obtained.McQuade said, "Anyone who considers defrauding our schools should take note that we are scrutinizing records and conduct, and will prosecute those who steal funds intended to educate our children."
FBI Special Agent in Charge Abbate stated, “In this case, the defendants’ criminal actions amounted to stealing the opportunity for a quality education from our children. Such conduct cannot, and will not, be tolerated. The FBI Detroit Field Office, together with our local, state, and federal partners will continue to battle public corruption and hold those responsible accountable for their actions."
The case was investigated by special agents of the FBI, IRS and Department of Education, Office of Inspector General, with the assistance of Detroit Public Schools, Office of Inspector General. The case was investigated and prosecuted by Assistant United States Attorneys J. Michael Buckley and Bruce Judge of the Public Corruption Unit.
IRS Acting Special Agent in Charge Weber stated, “"Those who profit at the expense of our children and steal from our community will be held accountable for their greedy actions".Detroit Woman Pleads Guilty to AidingIn the Preparation of False ReturnsRead the Press Release
A Detroit woman pleaded guilty to willfully making false claims to the United States government by aiding in the preparation of false income tax returns, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Carolyn Weber, Internal Revenue Service Criminal Investigation.
Stacey Mendenhall, 39, entered the guilty plea before U.S. District Court Judge Nancy Edmunds.
According to court records, during 2009, Mendenhall assisted Gerald Hawk, Jr., a resident of Detroit, in preparing and filing false income tax returns claiming the 2008 First Time Homebuyer Credit (FTHBC). The FTHBC was a credit for individuals who purchased a home during 2008 to receive up to $8,000 upon filing their income tax returns. Mendenhall provided Hawk with names and social security numbers of individuals in order that Hawk could prepare false income tax returns claiming the 2008 FTHBC. Hawk offered Mendenhall $200 in cash for the names and social security numbers that she provided. Mendenhall and Hawk solicited clients by promising that they could acquire a tax refund of $8,000 to purchase a home by receiving the FTHBC. Mendenhall and Hawk knew the individuals did not purchase a home and had no intention of later purchasing a home after the credit was received. Mendenhall provided Hawk with information to prepare and file a number of tax returns falsely claiming the FTHBC. Mendenhall will be required to pay restitution of $72,673 to the Internal Revenue Service along with Gerald Hawk.
A sentencing hearing was set by Judge Edmunds for August 21at 2 p.m. The maximum penalty for willfully making false claims to the United States government is imprisonment of not more than five years and a $250,000 fine.
The investigation of this case was conducted by the Special Agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie.
Detroit Tax Preparer Pleads Guilty to Preparing False ReturnsRead the Press Release
A Detroit tax preparer pleaded guilty to willfully making false claims to the United States government by preparing false income tax returns, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Carolyn Weber, Internal Revenue Service Criminal Investigation.Gerald Leslie Hawk, Jr., 29, entered the guilty plea before U.S. District Court Judge Nancy Edmunds.
According to court records, during 2009, Hawk prepared false income tax returns claiming the 2008 First Time Homebuyer Credit (FTHBC). The FTHBC was a credit for individuals who purchased a home during 2008 to receive up to $8,000 upon filing their income tax returns. Hawk solicited clients by promising that he could acquire a tax refund of $8,000 to purchase a home by receiving the FTHBC. Hawk knew the individuals did not purchase a home and had no intention of later purchasing a home after the credit was received. Hawk prepared or assisted in the preparation of approximately 21 false FTHBC tax returns claiming over $147,000 in refunds.
A sentencing hearing was set by Judge Edmunds for Thursday, Aug. 7. at 2 p.m. The maximum penalty for willfully making false claims to the United States government is imprisonment of not more than five years and a $250,000 fine per each count.The investigation of this case was conducted by the Special Agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie.
Detroit Man Sentenced for Wire Fraud and Identity Theft Fraudulent Tax Returns Filed for Deceased IndividualsRead the Press Release
A Detroit man was sentenced to prison for wire fraud and identity theft, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by IRS Criminal Investigation Acting Special Agent in Charge Carolyn Weber.
Willie Watkins, III, was sentenced to 30 months in prison to be followed by a three-year term of supervised release. The sentence was imposed by U.S. District Judge Avern Cohn. In addition, Judge Cohn ordered Watkins to pay restitution to the Internal Revenue Service of $410,949.
In October of 2013, Watkins pleaded guilty to one count of wire fraud and one count of use of false identification. According to court records, Watkins used the names and Social Security numbers of recently deceased individuals who had passed away between September 1 and November 30, 2010 throughout the United States. Watkins participated in the filing of several hundred fraudulent 2010 income tax returns of dead individuals. These income tax returns generated substantial claims for refunds that were deposited into different bank accounts which he controlled. Watkins disbursed the proceeds from the fraudulently obtained refunds.
"Watkins' actions are particularly reprehensible because he used the identities of the recently deceased. The stolen identities could have belonged to loved ones related to any one of us," said Carolyn Weber, Acting Special Agent in Charge for IRS Criminal Investigation. "The IRS has zero tolerance for this type of deplorable behavior."
The investigation of this case was conducted by special agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Ross MacKenzie and Department of Justice Tax Division Trial Attorney Ken Vert.Clarkston Man Pleads Guilty to Tax EvasionRead the Press Release
A 40-year-old Clarkston man pleaded guilty today to income tax evasion in connection with his 2008 federal income tax return, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Acting Special Agent in Charge Carolyn Weber, Internal Revenue Service, Criminal Investigation.
Bradley T. McKouen entered the guilty plea before U.S. District Judge Gershwin A. Drain.
The case was investigated by special agents of the Internal Revenue Service and is being prosecuted by Assistant U.S. Attorney Stephen Hiyama.
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 his plea agreement, McKouen is also being held responsible for filing similar false returns for the years 2004-2007. In all, he evaded $319,000 in federal income taxes for the years 2004-2008.
"Each of us is responsible for filing accurate tax returns," said Acting Special Agent in Charge Carolyn Weber. "IRS Criminal Investigation will pursue those who attempt to dodge their tax obligations."
The sentencing hearing was set by Judge Drain for September 4, 2014 at 2 p.m.. The maximum penalty for tax evasion is imprisonment of five years, a $250,000 fine, and an order of restitution.Detroit One PartnershipAnnounces Anti-Carjacking CampaignRead the Press Release
The Detroit One violence reduction partnership today announced a campaign to raise public awareness about the serious federal penalties for carjacking.
Joining in the announcement were United States Attorney Barbara L. McQuade, Detroit Police Chief James Craig, Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Field Office (FBI), Special Agent in Charge Steven Bogdalek, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Crime Stoppers President John Broad.
The campaign's message, "Carjacking is a ride straight to prison," will be communicated on billboards and in a public service announcement for broadcast media. The billboards are located on northbound I-75 at Holbrook, on westbound I-94 at Schaefer and 7300 N. Saginaw at Taylor in the City of Flint.
The Detroit Police Department, FBI and ATF are working together as part of the Violent Crime Task Force and Comprehensive Violence Reduction Program to combat the problem of carjacking in Detroit. The City has seen 165 reported cases of carjackings in 2014. Violent crimes typically increase during warmer weather, so this campaign is designed to coincide with the approaching summer months.The campaign is designed to raise awareness of the stiff federal sentences that carjackers receive. In 1992, in response to the escalating violence associated with carjacking, Congress passed an armed carjacking law that carries penalties of up to 15 years in prison for each count; 25 years in prison if serious bodily injury results; and life in prison or the federal death penalty if death results. Those who use a firearm during the commission of a carjacking could be sentenced to an additional minimum consecutive sentence of five years in prison for each count, seven years in prison if a firearm was brandished, ten years in prison if a firearm is discharged and a maximum of life in prison. A subsequent conviction for using a firearm in furtherance of a crime of violence carries a minimum consecutive sentence of 25 years. As a result of this structure, serial carjackers face lengthy consecutive sentences.
Case examples include United States v. Tyree Washington. Washington, 22, of Detroit, was sentenced to 57 years in prison for committing three counts of armed carjacking. He used a .45 caliber handgun to commit carjackings and steal cars with custom rims, which he hoped to sell on the street.In the case of United States v. Frank Harper, et al., Frank Harper, 29, of Detroit, Phillip Harper, 25, of Detroit, and Bernard Edmond, 46, of Redford Township, were convicted at trial for conspiring to steal cars to support a chop shop. The defendants conspired with several others to steal high-end vehicles, many by committing armed carjacking, and then to retag the vehicles for sale. One of the men would purchase the stolen vehicles from the two carjackers, alter the vehicle identification numbers, create false documents to file with the Secretary of State and then sell the vehicles to unwitting buyers. The three face sentencing in July. Phillip Harper faces a mandatory minimum sentence of 80 years in federal prison and Frank Harper and Bernard Edmond are facing a mandatory minimum sentence of 55 years in federal prison. Co-defendants Statford Newton, 25, was sentenced to 12 years in federal prison, Justin Bowman, 24, was sentenced to 14 years in federal prison and Darrell Young, 31, was sentenced to five years in federal prison.
"Carjackers create an unacceptable risk of physical harm or death and instill fear in our community," McQuade said. "We hope that if criminals are aware of the very serious penalties for carjacking, then they will think twice before victimizing innocent motorists."
“The most troubling thing can be the violence that is attached with such a heinous crime”, said Chief James Craig. “With the continued support of our local and federal partners and tough sentencing guidelines in place, I am confident we will continue to drive down on this crime and those who seek to prey on our citizens.”“When law abiding citizens face the constant fear of being carjacked during the normal course of their daily lives, it negatively impacts the entire community,” said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “As part of the Detroit One violent crime reduction partnership, the FBI, Detroit Police Department, ATF and our other law enforcement partners are using this public awareness campaign to put would be perpetrators on notice that carjacking is a serious criminal offense that comes with significant federal penalties, and the Violent Crime Task Force is dedicated to combating these crimes.”
“Crime Stoppers is pleased to be a partner in the Detroit One violence reduction initiative,” stated John Broad, President. “We encourage those who witness a carjacking or have information which might lead the arrest of a carjacker to call their local police department or Crime Stoppers at 1-800-SpeakUp.”
Participating agencies in the Detroit One initiative include the Detroit Police Department, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, U.S. Marshal’s Service, Homeland Security Investigations, Michigan State Police, Michigan Department of Corrections, Wayne County Sheriff’s Department, Wayne County Prosecutor’s Office and U.S. Attorney’s Office.
Motorists need to heighten their awareness to protect themselves against becoming victims of a carjacking. For tips on how to avoid becoming a victim go to http://www.state.gov/m/ds/rls/rpt/19782.htmPriest and Parish Administrator Charged with Stealing from Troy ChurchRead the Press Release
A Catholic priest and a parish administrator were indicted for stealing almost $700,000 from St. Thomas More Church in Troy during an eight-year period, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the Federal Bureau of Investigation, Detroit Division.
Charged were Edward Belczak, 69, of Troy, and Janice Verschuren, 67, of Bloomfield Hills.
The five-count indictment alleges that between 2004 and 2012, Belczak and Verschuren stole money and diverted funds from St. Thomas More Church and the Archdiocese of Detroit for their unjust enrichment, then concealed their criminal acts by creating or verifying false financial reports that were submitted to the Archdiocese. Charges in the indictment include mail fraud, wire fraud and conspiracy.
The indictment alleges that Belczak, assisted by Verschuren, used the proceeds of their illegal conduct in a number of ways, including:
• Diverting to their own use nearly $500,000 donated or bequeathed by parishioners to St. Thomas More Church,
• Using almost $110,000 stolen from the church to pay closing costs on the sale of Verschuren’s condominium in Palm Beach, Florida, to Belczak,
• Diverting to their personal bank accounts more than $26,000 in commissions paid to St. Thomas More Travel Group, and
• Diverting to themselves more than $33,000 owed to St. Thomas More Church by Diocesan Publications.
To conceal the theft and diversion of money, Belczak approved false financial reports that were submitted to the Archdiocese of Detroit. The reports underreported the amount of the parish’s operating receipts.
An indictment is only a charge and is not evidence of guilt. The defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
United States Attorney McQuade thanked the agents of the FBI and the Troy Police Department for their investigation of the case. It is being prosecuted by Assistant United States Attorneys Cynthia Oberg, Frances Carlson, and Adriana Dydell.Detroit Man Pleads Guilty to Clean Air Act CrimesRead the Press Release
A 48-year-old Detroit man pleaded guilty today to criminal violations of the Clean Air Act, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Randall Ashe, the Special Agent-in-Charge of the U.S. Environmental Protection Agency’s criminal enforcement program in Michigan.
Terry Williams pleaded guilty before U.S. District Judge Robert H. Cleland. Williams admitted to violating the Clean Air Actin connection with dismantling and scrapping the former AMC headquarters on Plymouth Road in Detroit. In 2012, Williams hired crews to remove salvageable metal from the facility. They disturbed asbestos-containing materials and released ozone-depleting substances. Williams’ crews dismantled at least 50 air conditioning units, including many large rooftop units, releasing 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 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. Today’s guilty plea demonstrates that those who knowingly engage in such conduct will be prosecuted to the fullest extent of the law."
“Prosecutions like this one are important to protect the people of Detroit from contaminants in the air,” McQuade said. “Environmental enforcement is a high priority for our office so that we can preserve Michigan’s best assets – its clean air and water.”
The crimes to which the defendant pleaded guilty are punishable by a maximum sentence of up to 5 years imprisonment, a $250,000 fine, or both.
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.
Dearborn Heights Doctor Convicted of Health Care FraudRead the Press Release
A Dearborn Heights doctor was convicted today in federal court on charges of illegal drug distribution, health care fraud and money laundering, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by James Allen, Acting Special Agent in Charge, Drug Enforcement Administration, Detroit Division, and Lamont Pugh, III, Special Agent in Charge, Department of Health and Human Services Office of Inspector General ("HHS-OIG").
U.S. District Judge Arthur J. Tarnow found Dr. Basil Qandil, 36, guilty on all 34 counts in the indictment.
The evidence presented during the two-week trial showed that between 2011 and 2013, Qandil prescribed more than 3.7 million dosage units of controlled substances outside the course of legitimate medical practice. The prescriptions were issued after either a cursory examination or no examination at all. He wrote unlawful prescriptions for narcotic drugs including Oxycodone and Vicodin, which were resold on the street market or used by addicted patients.
The evidence also showed that Qandil committed health care fraud by submitting all new patients to medical tests, including a medically unnecessary pulmonary function test, which were then billed to Medicare or other health insurance programs. Qandil transferred more than $1.5 million in proceeds from his crimes to an overseas bank account in Amman, Jordan.
United States Attorney Barbara L. McQuade stated, “Diversion of prescription drugs causes significant harm. The number of fatal overdoses from prescription drugs in the United States last year was more than six times the number of fatal overdoses from all other illegal drugs combined.”
The case was prosecuted by Assistant U.S. Attorneys Regina R. McCullough and Wayne F. Pratt.Cell Phone Store Robber Sentenced to 116 YearsRead the Press Release
A 29-year-old Detroit man was sentenced today in federal court to 116 years in prison for his role in six cellular telephone store robberies, U.S. Attorney Barbara L. McQuade announced.
Joining McQuade in the announcement was Paul M. Abbate, Special Agent in Charge, Federal Bureau of Investigation, Detroit Field Office.
U.S. District Judge Sean F. Cox imposed sentence on Timothy Ivory Carpenter, who was convicted after a two-week jury trial in December. The jury found Carpenter guilty of committing six robberies of cellular telephone stores, and of using a gun during five of the robberies. The evidence at trial established that Carpenter and his brother, Timothy Sanders, conspired with others to rob cellular telephone stores in Detroit, Highland Park, Eastpointe, and Warren, Ohio between December 13, 2010, and December 1, 2012.
“Armed robberies at neighborhood stores make citizens fearful to carry out their daily business in our community,” McQuade said. “This lengthy sentence sends a powerful message that using guns to commit crimes will not be tolerated.”
“Aggressively pursuing violent offenders, particularly those associated with organized criminal groups, is among the highest priorities of the FBI,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Today’s sentence, along with others seen recently, sends a strong message to violent perpetrators whose actions wreak havoc upon our community—the FBI, our local, state and federal partners, and the U.S. Attorney’s Office will work tirelessly to combat violent crime and bring justice to bear on these offenders.”
The case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Kenneth ChadwellFormer Detroit Public Library Official Pleads Guilty to BriberyRead the Press Release
A former Detroit Public Library official pleaded guilty to bribery charges today, 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 Carolyn Weber, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation.
Timothy Cromer, 47, of West Bloomfield, the library's Chief Administrative and Technology Officer from 2006 to 2013, pleaded guilty before U.S. District Judge George Caram Steeh to bribery and conspiracy to commit bribery.
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 is 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. A sentencing date will be set by the court. Codefendants Henley and Hearn previously pleaded guilty to conspiracy to commit bribery, and are scheduled to be sentenced on June 3, 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 guilty plea to bribery charges reflects a betrayal to the honest public servants who have dedicated themselves to the Detroit Public Library and the people they serve."
“In cases like this, where a government official takes bribes and abuses a position of trust, it amounts to stealing directly from the community,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Public libraries serve a special purpose in enriching our communities, and government officials are entrusted with a great responsibility toward our citizens. The FBI Detroit Field Office, in concert with our local, state and federal partners, will continue to pursue those who breach the public’s trust, and hold them accountable under the law for their actions.”"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 Carolyn Weber. "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 is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford and Julie Beck.Mortgage Broker Sentenced for Bank FraudRead the Press Release
Firas “Russ” Bachi, 41, of Waterford Township, Michigan, was sentenced to 24 months in prison and 2 years of supervised release for defrauding a bank in connection with 10 mortgage loans, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division, and Jeffrey Frost, Special Agent in Charge of the Detroit office of the U.S. Secret Service
In addition, United States District Judge Bernard A. Friedman ordered Bachi to pay restitution to JPMorgan Chase Bank in the amount of $885,000.
Bachi pleaded guilty to one count of bank fraud in October 2013. According to court records, Bachi was a mortgage broker based in Farmington Hills who did business under the name First Choice Finance. In 2007, he acquired distressed residential properties in the City of Detroit and placed them in the names of straw sellers. Bachi then caused the appraisals of the properties to be inflated and sold the properties to straw buyers. The sales to the straw buyers were funded by mortgage loans made by Washington Mutual Bank (subsequently acquired by JPMorgan Chase Bank) based on loan applications that inflated the incomes and assets of the straw buyers and misrepresented the source of the down payments. The loans went into default and the houses were foreclosed on.
The investigation of this case was conducted by special agents of the FBI and the U.S. Secret Service, and prosecuted by Assistant U.S. Attorney Stephen Hiyama.
Clinton Township Resident Pleads Guilty to Tax ChargeRead the Press Release
Lamarjorie Pharr, 33, formerly of Clinton Township, Michigan, pleaded guilty to one count of 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 Carolyn Weber, Internal Revenue Service Criminal Investigation.
According to court records, from September 2009 to March 2012, Pharr prepared and electronically filed more than 250 federal income tax returns. Pharr filed the returns electronically from, among other places, hotels in Detroit, Miami Beach and Atlanta. The tax returns were filed in the names of individuals, both living and deceased, whose personal information Pharr had obtained without the knowledge of those individuals or their survivors or estates. The tax returns claimed refunds of approximately $1.4 million. The refunds were based on false information in the returns relating to dependents, various tax credits (e.g., earned income credit), and tax withholdings. Pharr received more than $962,000 in refunds, which were deposited into bank accounts that he controlled.
Pharr entered the guilty plea in United States District Court before Chief U.S. District Judge Gerald Rosen.
A sentencing hearing was set by Judge Rosen for July 7 at 2 pm. The maximum penalty for filing false claims against the U.S. is imprisonment of not more than five years and a $250,000 fine.The investigation of this case was conducted by Special Agents of the IRS Criminal Investigation, and prosecuted by Assistant U.S. Attorney Stephen Hiyama.
Detroit Resident Convicted for Assaulting A Federal Law Enforcement OfficerRead the Press Release
Larry O’Neill Walker, II, 31, of Detroit, was convicted today in federal district court of assaulting a federal law enforcement officer, announced United States Attorney Barbara McQuade.
McQuade was joined in the announcement by Special Agent in Charge Paul Abbate, Federal Bureau of Investigation, Detroit Field Office.
The three day trial was conducted before United States District Judge Marianne O. Battani. The jury deliberated for approximately 20 minutes before reaching their verdict.
"This defendant endangered a law enforcement officer and members of the public by using his vehicle as a weapon," McQuade said.
“The use or attempted use of violence against law enforcement officers carrying out their sworn duties is an offense against every brave individual who has ever worn the badge,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “When violent perpetrators direct their actions toward those whose duty is to protect and serve, they will be brought to justice.”
Evidence presented during the trial established that FBI Federal Task Force Officer Scott Herzog was assisting the Detroit Police Department with an investigation in the early morning hours of November 7, 2013. Officer Herzog was conducting surveillance in an undercover car in a parking lot in Rochester Hills, Michigan, when Walker sped into the lot and attempted to hit Officer Herzog’s car with his vehicle.
Officer Herzog left the lot and traveled away from Walker on Rochester Road. Walker chased Officer Herzog north on Rochester Road, at times reaching speeds in excess of 70 miles per hour, attempting to strike the rear bumper and rear quarter panels of the officer’s car. The assault ended just before the two cars entered the City of Rochester when Officer Herzog activated his emergency lights and maneuvered his car to halt Walker’s pursuit.Sentencing is set before Judge Marianne O. Battani on July 8, 2014, at 2:00 p.m.
McQuade praised the work of the Detroit office of the FBI and the Violent Crime Task Force. Assistant U.S. Attorneys John O’Brien and Eaton Brown are handling the prosecution of this case.
Ferndale Doctor Pleads Guilty to Prescription Drug TraffickingRead the Press Release
Dr. Joel Milliner, M.D., age 45, of Ferndale pleaded guilty yesterday to distribution of controlled substances including prescription pain killers, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge, Federal Bureau of Investigation, Detroit Field Division, and Lamont Pugh, III, Special Agent in Charge, Department of Health and Human Services, Office of Inspector General.
Milliner entered his guilty plea during a hearing today before U.S. District Judge Gerald E. Rosen in Detroit.
Milliner pleaded guilty to distribution of controlled substances outside of the course of legitimate medicine. Over the course of several months, Milliner wrote prescriptions for Opana and Oxycondone that he knew would be diverted for illicit purposes
U.S. Attorney stated, “Diversion of prescription drugs causes significant harm. The number of fatal overdoses from prescription drugs in the United States last year was more than six times the number of fatal overdoses from all other illegal drugs combined.”Milliner is facing a maximum penalty of up to 20 years’ imprisonment. A sentencing hearing is scheduled for July 9, 2014.
U.S. Attorney McQuade congratulated the hard work of the FBI and HHS for their efforts in pursuing this case. The case is being prosecuted by Assistant U.S. Attorney Philip A. Ross.Leader of Identity Fraud Ring Sentenced to 22 Years in PrisonRead the Press Release
The leader of an identity fraud ring was sentenced to 22 years in prison today following his conviction for wire fraud and identity theft, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division.
U.S. District Court Judge Sean F. Cox imposed sentence on Gerald Bass, 45, of Detroit.
On August 7, 2012, a jury convicted Bass of conspiracy to commit wire fraud, access device fraud and aggravated identity theft. The evidence at trial established that Bass was the leader of a group of conspirators who stole victims’ identification information and accessed their credit accounts at retail stores such as J.C. Penney, Nordstrom, Lowes and Home Depot. Bass and his co-conspirators used this
information to obtain merchandise worth tens of thousands of dollars.At sentencing, Judge Cox stated that Bass’s lengthy criminal record, including his 13 prior convictions for crimes involving theft and dishonesty, was a significant a factor in his sentencing decision. Judge Cox also stated that although the possibility of a long prison sentence had not deterred this defendant Bass from victimizing the public, perhaps Bass’s sentence might deter others from committing this kind of crime.
“Anyone who has had their identity or credit card stolen knows that identity fraud causes serious harm to victims, who can spend years repairing their credit history. Today’s sentence sends a strong message that identity thieves will pay a steep price.” McQuade said.
The case was investigated by the U.S. Secret Service and the Michigan State Police, and prosecuted by Assistant United States Attorneys Abed Hammoud and Patrick Hurford.
Mortgage Company Owner Convicted of Bank Fraud ConspiracyRead the Press Release
Albert Greer, Sr. of Shelby Township was found guilty on March 20, 2014 of Conspiracy to Commit Bank Fraud, and of Aiding and Abetting Bank Fraud, United States 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.
They jury deliberated for 3 hours before returning the guilty verdicts, concluding a trial that began on March 11, 2014 before United States District Judge Stephen J. Murphy III.
Evidence introduced during the trial established 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 they never intended to repay on homes they never intended to live in. Greer often made the mortgage payments on the loans for several months so the lenders would not immediately realize that the loans had been obtained by fraud, but then the loans went into default and the properties went into foreclosure.
Co-defendant and co-conspirator Carlton Davis (who pleaded guilty in 2013 to conspiring with Greer) would submit fraudulent loan applications to various financial institutions on behalf of the straw buyers. The applications were filled with material false representations which were supported by phony documents Greer created, including W-2s, earnings statements, verifications of deposit, verifications of employment, and so on. Greer attempted to insulate himself from criminal liability by acting through the straw buyers and through shell companies -- including Detroit National Mortgage Associates --he 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.
Greer not only scammed banks out of several million dollars, he also stole the sellers' proceeds on occasion by submitting invoices for "consulting fees" owed to Detroit National Mortgage Associates; if the seller did not realize those fees were included on the HUD-1s, proceeds checks would be issued to the shell company at closing, and Greer would cash the checks. In this way, Greer stole $167,844.31 from the homeowner who sold 18630 Fairway in Detroit in 2005, and $21,948.92 from the homeowner who sold 16872 Huntington in Detroit in 2006.
Each count of conviction, Conspiracy to Commit Bank Fraud and Aiding and Abetting Bank Fraud, carries a maximum prison term of 30 years, a $1,000,000 fine, and 5 years of supervised release following the period of incarceration. No sentencing date has been set at this time.
“Some people rob banks with guns and masks,” McQuade said. “This defendant robbed banks with lies and false documents. White collar criminals deserve to be seen as the robbers that they are.”
The investigation of this case was conducted by special agents of the FBI and prosecuted by Assistant U.S. Attorney Cynthia Oberg.
Former Lake Orion Resident Sentenced for Tax OffenseRead the Press Release
A former resident of Lake Orion was sentenced to a year in prison yesterday for income tax evasion, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division.
U.S. District Judge Denise Page Hood imposed sentence on Brett Loren Kelly, 53, who now lives in Bradenton, Florida.
The case arose from Kelly’s failure to report approximately $1.8 million in income for the 2009 tax year. He earned the funds by performing financial consulting, and deposited the funds into a corporate account called Fidelity Capital Group, LLC. While earning these funds, Kelly lived an affluent lifestyle, but did not file tax returns and paid no taxes.
The court also ordered Kelly to pay restitution to the IRS for tax liabilities in the amount of $181,212 for the years of 2007 through 2009, which he paid before sentence was imposed. His term of imprisonment will be followed by two years of supervised release.
“Kelly thought he had successfully disguised his income by diverting it into an undisclosed account," said Carolyn Weber, Acting Special Agent in Charge of IRS Criminal Investigation. "He should never have underestimated the IRS Criminal Investigators who were able to follow the money and bring him to justice."
U.S. Attorney Barbara McQuade stated that, “With tax season upon us, this case demonstrates that individuals who fail to file tax returns and pay their taxes like the rest of us will face criminal charges.”
The investigation of this case was conducted by special agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie.Town Hall Meeting in Troy on Protecting Seniors from FraudRead the Press Release
The United States Attorney’s Office and the Oakland County Prosecutor’s Office, along with Friends of Troy Seniors, AARP and the Troy Police Department will come together to increase public awareness about crimes targeting seniors in our community and to offer advice on how seniors can protect themselves from financial loss.
Financial exploitation against seniors, also known as Elder Fraud, is a crime which targets older adults in an attempt to deceive them with promises of goods, services or financial benefits that don’t exist. To bring attention to these crimes, a town hall meeting has been planned for Friday, April 11, 2014 from 9:00 am until noon at the Troy Community Center. Highlighted speakers will include U.S. Attorney Barbara L. McQuade, and Oakland County Prosecutor Jessica Cooper.
“We want to empower our seniors to recognize identity fraud and investor fraud,” United States Attorney Barbara L. McQuade said. “We hope that this town hall will arm our seniors with the information they need to protect themselves.”
Oakland County Prosecutor Jessica R. Cooper stated, "Identity theft is a multi-billion dollar crime that impacts all of us. Annually more money is stolen at the point of a pen or the click of a computer key than any other type of crime. We hope that this town hall meeting will help our citizens to learn how to protect themselves against identity theft and other types of fraud."
Chief Gary G. Mayer, Troy Police Department stated, “It is important to the Troy Police Department to make our senior citizens aware of the latest scams so they can protect themselves. We consistently see thieves on-line, on the phone or at the front door attempting to defraud our seniors and we are concerned. This town hall will help to equip the seniors and their families by becoming aware of these thieves.”
Diane Alati, Board Secretary for Friends of Troy Seniors stated, “Troy area residents have been targets of identity theft in recent weeks so it is vitally important that we get the word out on how seniors can protect themselves. If you are a senior, you should attend this town hall meeting to become an informed senior about identity theft and other types of crime that target seniors.”
While many different financial fraud schemes are perpetrated against seniors, the town hall meeting will focus on the most common – investor fraud and identity theft.Making investments, whether in stocks, real estate, commodities or mutual funds, can be financially rewarding, but some investment opportunities are a scam, and can have a devastating effect on personal savings. Examples of fraudulent investment schemes that will be discussed include advance fee schemes, affinity fraud, Ponzi and pyramid schemes and Internet fraud.
- Advance Fee Schemes are schemes designed to obtain money in advance for services the promoter has no intention of providing.
- Affinity Fraud refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The promoters of this type of fraud frequently are - or pretend to be - members of the group.
- Ponzi or Pyramid Schemes are schemes where new investor money is used to make payments to earlier investors to give the illusion that the investment is successful.
- Internet Fraud involves use of tools such as a website, online messages or a social media site to reach a mass audience without spending a lot of time or money. Online messaging is an easy way for promoters to make their messages look real and credible, and it is sometimes difficult for investors to tell the difference between fact and fiction.
Identity theft is the unauthorized use of someone’s personal identifying and financial information for the purpose of stealing money and good credit. Identity theft has become one of the most costly crimes in the United States. Each year thousands of people lose millions of dollars to identity theft. Seniors are often vulnerable targets for identity thieves because many live alone and apart from family members and friends, have equity interests in their homes, receive Social Security checks and have excellent credit. With so many sources of personal information available, it is nearly impossible to completely prevent the theft of one’s identity, however steps can be taken to minimize the risk.
Being a victim of a financial fraud can have serious and long-term consequences, not only financially but emotionally as well. Individuals who experience financial crimes report feeling isolated, hopeless, and betrayed. Some feel embarrassed or blame themselves for what happened. Oftentimes the person committing the fraud has some type of relationship with the victim, making it less likely the victim will report the crime to law enforcement. The town hall will provide the opportunity to hear from victims of financial fraud and learn the steps they took to cope with and adjust to their situations. In addition, law enforcement and community members will be on hand to provide tips on how to protect yourself from becoming the victim of a financial fraud.
The town hall is open to the public and media as well. Registration for this event is required. Please contact Friends of Troy Seniors at (248) 526-2608 by Wednesday, April 9. Space is limited so please register early to secure your spot at this very important event.Dearborn Resident Charged WithAttempting to Support A Foreign Terrorist OrganizationRead the Press Release
A 22-year old Dearborn, Michigan resident was charged today in a criminal complaint with attempting to provide material support to a foreign terrorist organization, specifically Hizballah, announced United States Attorney Barbara L. McQuade.
Joining in the announcement was Paul Abbate, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division.
Mohammad Hassan Hamdan appeared in federal court in Detroit this afternoon before United States Magistrate Judge R. Steven Whalen where he was temporarily detained pending a detention hearing which will take place on Monday, March 24 at 1pm.
The complaint alleges that on March 16, 2014, Hamdan attempted to fly to Lebanon and onto Syria to fight on behalf of Hizballah in the Syrian civil war. Hizballah is a designated terrorist organization under U.S. law, which makes it illegal to provide money, goods or services to a terrorist organization. Hamdan is a Lawful Permanent Resident of the U.S. who immigrated in 2007.
If convicted, Hamdan faces up to 15 years in prison and a $250,000 fine.
A criminal complaint contains merely accusations, and the defendant is presumed innocent unless and until proven guilty.Home Health Care Provider Pleads Guilty to FailingTo Pay Employment TaxesRead the Press Release
A Detroit resident pleaded guilty to willfully failing to pay employment taxes to the Internal Revenue Service, United States Attorney Barbara L. McQuade announced today. Ms. McQuade was joined in the announcement by Detroit Field Office Acting Special Agent in Charge Carolyn Weber, Internal Revenue Service Criminal Investigation.
Joann Braggs entered the guilty plea in United States District Court before Judge David M. Lawson.
According to court records, during April 2003 through January 2006, Braggs was the president and owner of Bethharold Home Health Care, Incorporated (BHHC) and Bethharold Private Duty Care (BPDC). During this time period, BHHS and BPDC withheld employment taxes from the employees’ paychecks, including federal income taxes, Medicare and Social Security taxes. It was Braggs’ responsibility to pay the payroll taxes for both companies. Braggs collected approximately $1,228,832 in employment taxes that she failed to send to the Internal Revenue Service (IRS). Instead, Braggs used this money for personal expenses.
The investigation of this case was conducted by special agents of the Internal Revenue Service, and prosecuted by Assistant U.S. Attorney Christopher Graveline.
"Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service," said Acting Special Agent in Charge Carolyn Weber. "Instead, Braggs decided to spend the funds on herself and now faces serious consequences for her actions."
A sentencing hearing will be set by Judge Lawson where Braggs faces a statutory maximum penalty of not more than five years and a $250,000 fine per each count.Highland Man Sentenced to 17 ½ Years in PrisonFor Receipt Child of PornographyRead the Press Release
A Highland man was sentenced today to 17 ½ years in federal prison after having pleaded guilty to receipt and possession of child pornography, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Special Agent in Charge Marlon Miller, Department of Homeland Security, Detroit Division.
Michael Mazel, 38, was sentenced by U.S. District Judge George Caram Steeh in Detroit.
Evidence established that Mazel used a peer-to-peer file sharing program to download images and videos of children being forced to engage in sexually explicit activities with adults. He also exchanged emails with several individuals who appeared to be pre-teenage girls, asking them to engage in graphic sexual activities with him, and sending them child pornography.
Agents from the Department of Homeland Security identified more than 400 images and videos, some portraying sadistic or masochistic conduct.
Just before his sentencing date, Mazel fled the state and tried to cross the border into Mexico. The U.S. Marshals Fugitive Apprehension Team captured him in Casa Grande, Arizona. Upon arrest, law enforcement discovered that Mazel had survival gear, camping equipment, two loaded firearms, and laptop computer and hard drives that contained child pornography. He is separately indicted on those charges.
In announcing the sentence, McQuade stated, “We appreciate the work of the U.S. Marshals Service to locate and capture this defendant, a child predator who solicited sexual acts from pre-teen girls.”
"Today's sentencing clearly reflects HSI's aggressive efforts to combat child exploitation in all forms," said Miller. "Mazel's capture and ultimate sentencing should send a strong message to child predators that HSI and our law enforcement partners will hunt them down and hold them accountable before the law."
This case was investigated by the Department of Homeland Security. It was prosecuted by Assistant United States Attorney Maggie Smith, of the General Crimes Unit. "
Highland Man Sentenced to 17 ½ Years in PrisonFor Receipt Child of PornographyRead the Press Release
A Highland man was sentenced today to 17 ½ years in federal prison after having pleaded guilty to receipt and possession of child pornography, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Special Agent in Charge Marlon Miller, Department of Homeland Security, Detroit Division.
Michael Mazel, 38, was sentenced by U.S. District Judge George Caram Steeh in Detroit.
Evidence established that Mazel used a peer-to-peer file sharing program to download images and videos of children being forced to engage in sexually explicit activities with adults. He also exchanged emails with several individuals who appeared to be pre-teenage girls, asking them to engage in graphic sexual activities with him, and sending them child pornography.
Agents from the Department of Homeland Security identified more than 400 images and videos, some portraying sadistic or masochistic conduct.
Just before his sentencing date, Mazel fled the state and tried to cross the border into Mexico. The U.S. Marshals Fugitive Apprehension Team captured him in Casa Grande, Arizona. Upon arrest, law enforcement discovered that Mazel had survival gear, camping equipment, two loaded firearms, and laptop computer and hard drives that contained child pornography. He is separately indicted on those charges.
In announcing the sentence, McQuade stated, “We appreciate the work of the U.S. Marshals Service to locate and capture this defendant, a child predator who solicited sexual acts from pre-teen girls.”
"Today's sentencing clearly reflects HSI's aggressive efforts to combat child exploitation in all forms," said Miller. "Mazel's capture and ultimate sentencing should send a strong message to child predators that HSI and our law enforcement partners will hunt them down and hold them accountable before the law."
This case was investigated by the Department of Homeland Security. It was prosecuted by Assistant United States Attorney Maggie Smith, of the General Crimes Unit. "
Jury Convicts Doctor, Pharmacist, Marketer in Health Care Fraud SchemeRead the Press Release
A doctor, a pharmacist and a marketer were convicted today in federal court in Detroit for health care fraud and controlled substance distribution, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge James V. Allen, Drug Enforcement Administration, Detroit Division, Paul R. Abbate, Special Agent in Charge, Federal Bureau of Investigation, and Lamont Pugh, III, Special Agent in Charge, Department of Health and Human Services Office of Inspector General ("HHS-OIG").
The jury returned guilty verdicts against Dr. Carl Fowler, M.D., 61, of West Bloomfield, pharmacist Mukesh Khunt, 34, of Toronto, Ontario, Canada, and Michael Thoran of Detroit. Defendants Fowler and Thoran were convicted on all three of the counts with which they were charged, conspiracies to commit health care fraud, to distribute controlled substances, and to pay or receive health care kickbacks. Defendant Khunt was convicted of six of the seven counts with which he was charged, health care fraud conspiracy, conspiracy to distribute controlled substances, and two counts health care fraud and two counts of controlled substances distribution. The jury was unable to reach a verdict on the seventh count charging a conspiracy to pay or receive health care kickbacks.
McQuade stated, “Law enforcement investigators in metro-Detroit are aggressively investigating health care fraud and detecting abuses by doctors and pharmacists. We hope that prosecutions like this one will deter medical professionals from stealing taxpayer funds intended for health care.”
The evidence presented during the three-week trial demonstrated that, from approximately January 2006 through August 2011, Canton Pharmacist Babubhai Patel owned and controlled 26 pharmacies (termed “the Patel Pharmacies” at trial), which operated in and around Detroit. The evidence also showed that Babubhai Patel’s model for turning a profit at his pharmacies was based upon large-scale health care fraud and the diversion of controlled substances. Babubhai Patel paid cash kickbacks and other things of value to physicians in exchange for those physicians writing prescriptions for expensive medications, without regard to medical necessity, that could be billed to Medicare, Medicaid, or a private insurer through one of the Patel Pharmacies. Physicians affiliated with Babubhai Patel would also write prescriptions for controlled substances for their patients, again regardless of medical necessity, which would then be filled at one of the Patel Pharmacies. These controlled substances were distributed to patients and patient recruiters as a kickback in exchange for the patients using a Patel Pharmacy. Pharmacists at the Patel Pharmacies would increase the pharmacies’ profits by billing insurers for medications never actually distributed to patients.
The evidence presented at trial showed that Fowler was one of the physicians to whom Babubhai Patel paid bribes and kickbacks in exchange for referrals of prescriptions. In exchange, Dr. Fowler wrote numerous prescriptions for expensive medications, without regard to medical necessity, that could be filled at one of the Patel Pharmacies. He also wrote unlawful prescriptions for narcotic drugs in Schedules II-V, including oxycontin and oxycondone, which were resold on the street market.
Evidence also demonstrated that Khunt, a pharmacist in Babubhai Patel’s organization, billed Medicare, Medicaid, and private insurers for expensive medications he never dispensed to patients. He also knowingly filled prescriptions for scheduled controlled substances such as vicodin that were never intended for the patients, but which were resold by marketers on the street market.
The evidence showed that Thoran was a marketer who recruited patients who were seen by cooperating doctors or clinics. After unlawful prescriptions for controlled substances were written and filled at the pharmacies, Thoran would take possession of the controlled drugs in order to sell them on the street market.
These defendants are three of 39 individuals who have been charged with offenses relating to their involvement with Babubhai Patel’s pharmacy network. All but three of the defendants have now been convicted of felonies arising out of their involvement with Babubhai Patel; 24 of those defendants entered guilty pleas, and 12, including the three defendants today, have been convicted after trial. Defendant Babubhai Patel was convicted at a trial in August 2012; he is serving a 17-year prison sentence. One defendant remains a fugitive, while two defendant’s cases remain pending, with a trial date set for July, 2014.
The case was prosecuted by Assistant United States Attorneys John K. Neal and Wayne F. Pratt.
Former Highland Park Police OfficerSentenced to Prison for Taking A $10,000 BribeRead the Press Release
A former Highland Park police officer was sentenced to prison today for taking a $10,000 bribe and for conspiring with three other police officers to protect shipments of cocaine, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by FBI Special Agent in Charge Paul M. Abbate.
During a hearing today before U.S. District Judge Avern Cohn, Price Montgomery, 40, of Detroit, Michigan, was sentenced to 18 months in prison and two years of supervised release based on his plea of guilty to conspiring to accept bribes and to commit extortion. Montgomery, an officer with the Highland Park Police Department for two years, accepted a $10,000 bribe from a man he had arrested on gun charges in return for agreeing not to appear as a witness at the man=s November 2012 criminal trial. Montgomery accepted the bribe with his partner, former police officer Anthony Bynum. Montgomery and Bynum failed to appear at the trial, and the charges were dismissed. Later, Montgomery, Bynum, and two other Highland Park police officers accepted cash from an FBI informant in exchange for protecting a shipment that contained what the officers believed were four kilograms of cocaine. The officers used their police guns and badges to protect the shipment.
The sentencing of Montgomery completes the case against the four former Highland Park police officers. Defendant Craig Clayton was sentenced to 12 months in prison on June 27, 2013. Defendant Shawn Williams was sentenced to 15 months in prison on October 8, 2013. Defendant Bynum was sentenced to 18 months in prison on November 7, 2013.
United States Attorney McQuade said, “The court’s sentence today sends a strong message that public officials who use their positions of trust to personally profit will be punished. Police officers who take bribes and use their badges to make money will go to prison.”"Government officials who breach the public trust for their own selfish purposes - regardless of who they are - will be pursued aggressively and brought to justice," said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. "Today's sentence sends another message that corrupt police officers who accept bribes and use their positions for personal financial gain will be punished."
The case was investigated by agents of the FBI. It is being prosecuted by Assistant United States Attorneys David A. Gardey.
Harper Woods Resident Sentenced for Fraudulent Tax Return SchemeRead the Press Release
A Harper Woods man was sentenced to one year and a day in prison today following his conviction for making false statements in connection with filing 54 false tax returns, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge Carolyn Weber, Internal Revenue Service Criminal Investigation.
U.S. District Judge Avern Cohn also ordered Mishawn Gordon, 25, to pay restitution to the Internal Revenue Service in the amount of $219,265.
In September of 2013, Gordon pleaded guilty to one count of filing a false claim against the United States. According to court records, during the 2008 through 2009 tax years, Gordon prepared and filed 54 tax returns for different individuals resulting in claims of approximately $539,000 and refunds issued totaling $219,265. He failed to provide the individuals with a copy of the returns he filed for them and never reviewed the returns with the individuals. Virtually all of the tax refund monies were directed to bank accounts that he owned or controlled. Some of the individuals received a split of the money deposited in their account, others were paid in cash by Gordon, and some never saw the refund.
“Gordon fabricated W-2s and falsely claimed credits to inflate tax refunds he intended to keep for his own benefit,” said Acting Special Agent in Charge Carolyn Weber. “Gordon’s behavior highlights the importance of carefully choosing the person that prepares your tax return.”
The investigation of this case was conducted by special agents of the Internal Revenue Service, and prosecuted by Assistant U.S. Attorney Wayne F. Pratt.Five Indicted for Conspiracy to File False Tax ReturnsRead the Press Release
Five Detroit-area residents were indicted today on charges of filing false tax returns with the Internal Revenue Service, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation.
Charged were Johnnie Denham, Jr., 55, of Romulus, Anthony Craig Paul, 55, of Southfield, Vernon Lawson, 58, of Westland, Felicia C. Ramsey, 41, of Detroit, and Jacqueline Brown, 58, of Detroit.
The 11-count indictment alleges that the fraudulent claims for refunds totaled more than $6 million. Less than $1 million was actually released to the defendants.
The indictment alleges that between 2009 and 2010, Denham, Paul and Lawson participated in a scheme to receive payment for false claims for refunds from the IRS by filing false income tax returns for the 2008 tax year for themselves and others. They solicited others to falsely claim federal income tax refunds to which they were not entitled.
The indictment alleges that Ramsey and Brown voluntarily joined the conspiracy by filing false claims. Denham, Paul and Lawson received a large portion of the refunds that were released.
“The indictment filed today alleges Denham and four others were involved in a $6 million refund fraud scheme and enriched themselves in the process,” said Carolyn Weber, Acting Special Agent in Charge of IRS-Criminal Investigation. “During filing season, it serves as a timely reminder that filing false claims for income tax refunds is tantamount to stealing from those who pay their taxes and IRS Criminal Investigation will pursue those responsible.”
The defendants face a maximum term of imprisonment of ten years for conspiracy and five years for filing the false claims. The defendants also face fines of up to $250,000 per count. The actual sentence imposed, if convicted, would depend on a number of factors, including the defendant’s criminal record, if any, and advisory sentencing guidelines.
An indictment is only a charge and is not evidence of guilt. The defendants are entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
The case was investigated by Special Agents of the IRS Criminal Investigation.Former Wayne County Chief Information OfficerSentenced to Prison for Taking $70,000 in BribesRead the Press Release
The former Chief Information Officer of the Wayne County government was sentenced to 57 months in prison today for taking $70,000 in bribes from a businessman who had millions of dollars in contracts with Wayne County, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by FBI Special Agent in Charge Paul M. Abbate.
During a hearing today before U.S. District Judge Stephen J. Murphy, III, Tahir Kazmi, 49, of Rochester Hills, Michigan, was sentenced to 57 months in prison, a $15,000 fine, and a term of supervised release based on his plea of guilty to accepting bribes. Kazmi, a political appointee in the Wayne County government, had accepted cash, trips to Hawaii, Turkey, and Florida, and other things of value totaling $70,000 between 2009 and 2011 from a county IT contractor, who was overseen by Kazmi. After Kazmi learned that the FBI was investigating Wayne County corruption, Kazmi engaged in a conspiracy with Wayne County appointee Zayd Allebban in an effort to obstruct justice and to cover up the bribes received by Kazmi.
Thus far in the investigation of corruption in the Wayne County government, five men have been convicted of either corruption or obstructing the investigation. Defendant Zayd Allebban was sentenced to 41 months in prison on September 6, 2013. Defendant David Edwards, Kazmi’s Deputy Chief Information Officer was sentenced to 12 months in prison on September 27, 2013. The other two convicted defendants, Michael Grundy and Keith Griffin have yet to be sentenced.
United States Attorney McQuade said, “The court’s sentence today sends a strong message that public officials who use their positions of trust to personally profit will be punished. Public officials should serve the interests of the people, not their own interests.”
"Government officials who breach the public trust for their own selfish purposes, and in this instance conspire with others in an attempt to cover up their criminal activity, will continue to be pursued aggressively and brought to justice," said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. "Today's sentence sends another message that public servants are entrusted to serve the public, not themselves."The case was investigated by agents of the FBI. It is being prosecuted by Assistant United States Attorneys David A. Gardey and Gjon Juncaj.
Detroit Produce Business Sentenced on A Charge of BriberyRead the Press Release
A Detroit area produce business was sentenced Tuesday for bribing a Teamsters Union business agent, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Cincinnati Regional Director L. Joe Rivers, U.S. Department of Labor Employee Benefit Security Administration, and Special Agent in Charge James Vanderberg, Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
U.S. District Judge Arthur Tarnow sentenced Sam LaGrasso Produce, Inc. to a fine of $500,000, and a special assessment of $400. Additionally, the company will be required to make quarterly donations of $1,500 to a local non-profit food bank for five years. Sam LaGrosso Produce operates in the Eastern Market area of Detroit.
The evidence presented at a plea hearing established that between June 2005 and August 2008, the company made quarterly payments to a business agent of the Teamsters Union in order to ensure that no effort would be made to unionize the employees of Sam LaGrasso Produce, Inc., or any of its’ affiliated companies.
"LaGrasso Produce undercut its employees’ opportunity to organize by bribing a Teamsters official,” McQuade said. “This prosecution and sentence send an important message that the criminal justice system will protect employees’ rights to organize."The case was investigated by special agents of the Department of Labor. The case was investigated and prosecuted by Assistant United States Attorneys Mark Chutkow and David Morris.
Justice Department Settles Disability Claims with Transportation Companies That Discriminated Against Riders with Service AnimalsRead the Press Release
The U.S. Attorney's Office for the Eastern District of Michigan has reached a settlement with LogistiCare Solutions and Michigan Green Cabs to resolve allegations that they violated the Americans with Disabilities Act ("ADA") by denying rides to passengers with service animals, U.S. Attorney Barbara L. McQuade announced today. Service animals provide assistance and perform a wide range of daily tasks for individuals with disabilities, including physical, sensory, psychiatric, intellectual, and other mental disabilities.
LogistiCare is a transportation management company that operates in 42 states and specializes in non-emergency medical transportation. Michigan Green Cabs is a taxi company that operates in the Royal Oak, Michigan, area.
These settlements resolve two investigations prompted by complaints that both companies failed to provide reasonable modifications to their policies prohibiting pets in vehicles. The investigation revealed that transportation providers under LogistiCare’s management in Michigan and Missouri unlawfully denied rides to individuals with disabilities who required service animals, such as those used to guide a person who is blind, to alert a person who is hard of hearing, to remind a person to take medication, or to perform a wide range of other daily tasks.
The U.S. Attorney’s Office determined that one of LogistiCare’s transportation providers in Michigan refused to transport an individual with a service animal because a LogistiCare customer service representative prepared a memo indicating that no animals were permitted in the cab. The investigation also revealed that a second complainant in Missouri was told by a LogistiCare employee that LogistiCare’s transportation providers would accommodate service animals for the blind, but not other service animals.
In its investigation of Michigan Green Cabs, the United States Attorney’s Office found that one of the cab company’s drivers failed to make a reasonable modification for a customer with a service animal seeking transportation from a hospital.
“The promise of the Americans with Disabilities Act is that individuals with disabilities should have full access to public life," McQuade said. "These protections are especially important when it comes to public services necessary to receive medical care, such as transportation. We hope that cases like this one will improve awareness of the duties businesses have under the law."
Under the settlement, both LogistiCare and Michigan Green Cabs have agreed to update their policies and training materials to ensure compliance under the ADA. In addition, LogistiCare must pay each complainant $750 and Michigan Green Cabs must pay the complainant $500.
For more information on the ADA and service animals, visit http://www.ada.gov/qasrvc.htm. Those interested in finding out more about these settlements or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected] or [email protected] or by calling
313-226-9151.Former Priest Sentenced for Distributing and PossessingChild PornographyRead the Press Release
Timothy Murray, 63, of Novi, who pleaded guilty to one count of distributing child pornography and one count of possession child pornography in July, 2013 was sentenced today to 188 months in federal prison, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Special Agent in Charge Marlon Miller of the Department of Homeland Security (DHS) in Detroit.
According to court records, Murray used peer-to-peer software to trade child pornography with others, including an undercover DHS Homeland Security Investigations (HSI) special agent. A search warrant executed at Murray’s home recovered at least seven different computer devices containing videos and images of child pornography. Murray’s collection included over 650 movies and over 450 images of child pornography. Murray had previously served as a Catholic priest within the Archdiocese of Detroit before being removed from public ministry when substantiated allegations of Murray’s prior sexual abuse of a young boy came to light.
United States Attorney McQuade stated, “The hands-on sexual abuse that led to his removal from public ministry by the Catholic church had long-lasting effects on the defendant’s prior victim. Similarly, the victims depicted in his extensive collection of child pornography suffered greatly not only at the hands of their abusers, but by those, like the defendant, who collect and continue to view the permanent depictions of their abuse.”
"For a former priest to engage in the depraved activity for which he is being sentenced is reprehensible,” said Marlon Miller, special agent in charge of HSI Detroit. “Today’s sentencing will hopefully bring a measure of closure to those affected by his actions. Cases like these serve to strengthen HSI’s resolve to aggressively pursue child predators.”
Murray was sentenced by the Honorable Victoria A. Roberts.McQuade praised the work of the HSI agents for their professionalism and dedication in their aggressive and thorough investigation of these cases.
Assistant United States Attorney Kevin M. Mulcahy prosecuted this case for the United States.
Michigan Man Sentenced for Stealing Trade SecretsRead the Press Release
A former employee of Wacker Chemical Corporation, whose American facilities are located in Adrian, Michigan, was sentenced today to 24 months in federal prison after having pleaded guilty to stealing trade secrets from that company and disclosing them to KCC Silicones, a Korean-based chemical company, announced U.S. Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Paul Abbate, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.U.S. District Judge Patrick J. Duggan imposed sentence on Michael Agadoa, 62 of Midland and also ordered that he pay a fine of $7,500.00.
According to the factual basis offered to support the plea, Michael Agadoa worked for Wacker as an engineer for a number of years and left the company’s employment in 1997. Agadoa admitted that he took numerous formulas used in the production of silicone-based and rubber products sold by Wacker when he left. In early 2010, as he was negotiating employment with KCC, Agadoa provided copies of the Wacker formulas to KCC. Later, from March of 2010 to April of 2012, while Agadoa was employed by KCC, he used stolen Wacker formulas to assist KCC in the development of silicone-based products.
"This defendant has admitted to stealing formulas from a chemical company, which invested time, effort and money to develop these trade secrets," McQuade said. "Stealing trade secrets harms Michigan businesses and costs jobs. We are committed to protecting Michigan's technology, and we hope that this prosecution will send a message that stealing proprietary information from an employer or competitor is a serious crime."“Theft of trade secrets and commercial innovations is a serious criminal offense, whether prompted by personal greed or a desire to exploit shortcuts to economic and technological pre-eminence,” stated Mr. Abbate. “These criminal acts negatively impact U.S. industry and the hard-working people and businesses of Michigan. The FBI will continue to work with our partners to bring these criminals to justice and send a message that they will be held accountable for this type of illegal conduct."
U.S. Attorney McQuade thanked the FBI for the successful investigation of the case.
U.S. Attorney’s Office for the Eastern District of Michigan Collects $219,630,095.00 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2013Read the Press Release
Detroit – United States Attorney Barbara L. McQuade announced today that the Eastern District of Michigan collected $219,630,095.00 in criminal and civil actions in Fiscal Year 2013. Of this amount, $204, 334,075.94 was collected in criminal actions and $15,296,019.06 was collected in civil actions
Additionally, the Eastern District of Michigan worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $84,508,264.20 in cases pursued jointly with these offices. Of this amount, $35,054.89 was collected in criminal actions and $84,473,209.40 was collected in civil actions.
Attorney General Eric Holder announced on Thursday that the Justice Department collected $8 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013. The more than $8.1 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“The Department’s enforcement actions help to not only ensure justice is served, but also deliver a valuable return to the taxpayer,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the Department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”
United States Attorney Barbara L. McQuade stated, “Thanks to the hard work of attorneys and support professionals in the U.S. Attorney’s Office, we were able to collect money that will be returned to victims of crime and taxpayers. These numbers are particularly impressive in light of the government shutdown, budget cuts and the hiring freeze that has reduced our personnel. The fact that our office collects far more than it spends demonstrates the illogic of across-the-board budget cuts that reduce our ability to collect funds for taxpayers.”
This past July, the Eastern District of Michigan obtained $4 million in the settlement of a lawsuit brought under the False Claims Act against a cardiology practice and a hospital in Jackson, Michigan. The complaint alleged that cardiologists employed by Jackson Cardiology Associates performed medically inappropriate cardiac procedures, including invasive catheterizations at Allegiance Health in addition to performing a variety of other office-based medically unnecessary test. A portion of the settlement with Allegiance Health also covered medically unnecessary peripheral stents performed on an outpatient basis.
The U.S. Attorneys’ Offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in Eastern District of Michiganworking with partner agencies and divisions, collected a total of $7,967,328.00 in both Department of Justice and Department of Treasury asset forfeiture actions in FY 2013. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Holly Man Sentenced to 25 Years in PrisonFor Production of Child PornographyRead the Press Release
Chad Alan Cole, 45, of Holly, Michigan, was sentenced today to 25 years in federal prison after having pleaded guilty to production of child pornography, U.S. Attorney Barbara L. McQuade announced today. Judge Arthur J. Tarnow imposed the sentence.
Joining McQuade in the announcement was Special Agent in Charge Paul M. Abbate of the Federal Bureau of Investigation (FBI).
Evidence established that Cole, who had previously been convicted of distributing obscene material to children, met a 12 year-old girl from Idaho online. Over the course of several months, Cole befriended the child before eventually convincing her to create sexually explicit pictures and videos of herself. Cole also sent images and videos of himself masturbating to the child, and convinced the child to engage in sexually explicit conduct over Skype. After his arrest, Cole admitted to engaging in similar behavior with 10-20 other minors.
Cole previously worked as a firefighter for the Village of Holly and a 911 dispatcher for the City of Auburn Hills before being terminated as a result of his prior sex offense.
This case was first investigated by and subsequently brought to the attention of the FBI by local authorities in Lewiston, Idaho. It was prosecuted by Assistant United States Attorney Kevin M. Mulcahy of the General Crimes Unit.
Former Teamsters Official Pleads Guilty to Bribery ChargeRead the Press Release
Michael Townsend, age 69, a former business agent and trustee of Teamsters Local 337, pleaded guilty to bribery charges today, 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 Patrick Kawa, District Supervisor, Department of Labor, Employee Benefits Security Administration.
Townsend entered his guilty plea during a hearing today before U.S. District Judge Arthur J. Tarnow in Detroit.
According to court records, from June 2005 through mid-July 2008, Townsend took bribes in the form of cash payments totaling approximately $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.
"This defendant was a union official who was entrusted to help working people organize," McQuade said. "He betrayed the Teamsters and workers for his own profit. We are seeking to hold him accountable for his conduct."
Townsend is facing a maximum of five years in prison and a fine of up to $250,000.
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.
Detroit Man Sentenced to More Than 21 Years in PrisonFor Receipt and Possession of Child PornographyRead the Press Release
A Detroit man was sentenced today to 262 months in federal prison after having pleaded guilty to receipt and possession of child pornography, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Lawrence Flack, 54, of Detroit, Michigan was sentenced by United States District Judge Stephen J. Murphy, III.
Evidence established that Flack, who had previously been convicted of sexual battery against a minor, used a peer-to-peer file sharing program to locate and download images and videos of little girls, mostly ages 9 to 10 years old, being forced to engage in sexually explicit activities with adults. Agents from the Department of Homeland Security identified over 7,500 images and videos, some portraying sadistic or masochistic conduct.
In announcing the sentence, McQuade stated, "This case is not just about bad pictures. Real children suffer so that defendants like this one can look at child pornography. The children are physically abused and then virtually abused again and again forever."
“This significant sentencing against a convicted child predator should serve as a stark warning for those who target and prey on children,” said Marlon Miller, Special Agent in Charge for HSI Detroit. “The aggressive investigation and prosecution of child predators remains among HSI's highest priorities.”
This case was investigated by the Department of Homeland Security. It was prosecuted by Assistant United States Attorney Maggie Smith, of the General Crimes Unit.
Northern Michigan Resident Convicted of Criminal Copyright Infringement and Mail FraudRead the Press Release
Bruce Alan Edward, 49, of Atlanta, Michigan, was convicted Tuesday of criminal copyright infringement and mail fraud, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement, Office of Homeland Security Investigations (HSI).
After a one-week trial, a federal jury returned guilty verdicts finding the defendant guilty of two counts of criminal copyright infringement and one count of mail fraud.
Edward was charged with both criminal copyright infringement and mail fraud after selling more than 2,500 counterfeit copies of copyrighted Microsoft software valued at more than 1 million dollars retail. From about May 11, 2008, until approximately September 16, 2010, Edward purchased counterfeit Microsoft software from various suppliers located primarily in China, Singapore and the United States, and sold them on eBay to unwitting buyers."Online consumers should beware of counterfeit goods and products of inferior quality," McQuade said. "We hope this prosecution will raise awareness and deter these kinds of fraud schemes."
Edward will be sentenced March 20, 2014, before U.S. District Judge Thomas Ludington.
The case was prosecuted by the Bay City and Flint branches of the United States Attorney's Office for the Eastern District of Michigan and the Computer Crime and Intellectual Property Section of the Criminal Division, United States Department of Justice and investigated by Homeland Security Investigations (HSI) branch located in Sault Ste. Marie, Michigan, and HSI Intellectual Property Rights Center located in Arlington, Virginia.