Western District of Michigan
Press releases recorded for this federal judicial district.
Union City Man Sentenced to 30 Years for Production of Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN —Erin Mal Killey, age 30, of Union City, Michigan, was sentenced today to thirty years in federal prison for producing child pornography, announced Acting U.S. Attorney Andrew Birge. "It is crucial that we protect society’s most vulnerable members from sexual exploitation and ensure swift and certain punishment for those predators who would exploit children," Birge commented.
In announcing the sentence, U.S. District Judge Paul L. Maloney commented on the victim impact statements received in the case, noting that they were "compelling and represent devastation" suffered by victims of child exploitation. Following his term of incarceration, Killey will serve ten years on supervised release. He will also be required to register as a sexual offender.
Killey took sexually explicit photographs of a seven year-old girl he was babysitting and emailed them to an undercover law enforcement agent. He also sent the agent other images from a child pornography collection Killey had amassed. As a result of this conduct, Killey was charged with production of child pornography, distribution of child pornography, and possession of child pornography. Killey pleaded guilty to production of child pornography in October of 2016. At sentencing, the U.S. Attorney’s Office emphasized that Killey had also admitted molesting the child he photographed.
"As demonstrated in this investigation, the sexual exploitation of children is sadly often perpetrated by those considered to be responsible adults in their lives. The FBI will continue to dedicate resources to the investigation and prosecution of sexual predators who commit crimes against children, the most vulnerable and innocent victims of crimes," said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
This particular case is the result of an investigation by the FBI and Union City Police Department. The Branch County Prosecutor’s Office referred the case for federal prosecution. Assistant U.S. Attorney Alexis M. Sanford prosecuted it.
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Grand Rapids Man Sentenced to More Than Three Years in Prison for Tax Fraud and Conspiracy to Commit Financial Institution FraudRead the Press Release
GRAND RAPIDS, MICHIGAN — Acting U.S. Attorney Andrew Birge announced today that Andrew Helsel, of Grand Rapids, was sentenced to 37 months’ incarceration and $612,431 in restitution. Helsel had previously pled guilty to one count of conspiracy to commit financial institution fraud and one count of filing a false and fraudulent tax return.
Helsel engaged in a scheme to defraud federally-insured financial institutions by making false statements on loan application documents in order to obtain loans from those institutions. He also filed fraudulent tax returns with the IRS on behalf of himself, a company he controlled, and other taxpayers. He used those ill-gotten gains to fund his lifestyle.
"Our financial system relies on honest compliance, and the U.S. Attorney’s Office will aggressively pursue individuals who seek to take advantage of our nation and its financial institutions," said Acting U.S. Attorney Birge. "During tax filing season, as always, it is important for people to have confidence that when they pay their taxes, they know their neighbors, co-workers, and tax return preparers are doing the same."
Special Agent in Charge Manny Muriel, IRS - Criminal Investigation stated, "This sentencing again emphasizes that the Internal Revenue Service, the United States Attorney’s office, and our law enforcement partners will continue to aggressively pursue those who attempt to corrupt our nation’s tax system. Honest taxpayers have been reassured that no one is above the law—especially when the integrity of tax administration is at stake."
"It is the mission of the Treasury Inspector General for Tax Administration (TIGTA) to protect the integrity of the IRS and promote the fair administration of our federal tax system, said TIGTA Special Agent in Charge Ruben Florez. "TIGTA continues to work closely with the United States Attorney’s Office and its law enforcement partners to hold individuals responsible for their attempts to interfere with our nation’s tax system for personal gain."
This case was investigated by Special Agents from IRS - Criminal Investigation and Treasury Inspector General for Tax Administration (TIGTA). Assistant U.S. Attorneys Christopher M. O’Connor and Sally J. Berens handled the prosecution.
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Federal Jury Convicts Three Florida Residents in Staged Automobile Accident Fraud Conspiracy in MichiganRead the Press Release
The Fraud Ring Operated Three Therapy Clinics in Michigan from 2012 to 2015
GRAND RAPIDS, MICHIGAN —Belkis Soca-Fernandez, 47, and David Sosa-Baladron, 41, of Tampa, Florida, and Antonio Ramon Martinez-Lopez, 35, of Port Richey, Florida, were convicted in federal court after a seven-day jury trial of conspiracy to commit mail fraud related to a staged automobile accident ring that operated in West Michigan from 2012 to 2015. The defendants face up to 20 years’ imprisonment and will be ordered to pay restitution to the automobile insurance companies that were defrauded. These defendants are the latest of eight individuals convicted related to the conspiracy. Previously convicted were: Gustavo Acuna-Rosa, 29, and, Eduardo Pardo-Oiz, 34, formerly from Lansing; Dolis Rojas-Lopez, 31, of Wyoming; Yosvany Gonzalez-Duran, 41, of Lansing and Yoisler Herrera-Enriquez, age 31, a massage therapist from Wyoming, Michigan.
"This staged automobile accident ring operated a sophisticated fraud over several years in our community," stated Acting U.S. Attorney Andrew Birge. "The evidence at trial established that Soca-Fernandez and Sosa-Baladron led the conspiracy from Florida using Martinez-Lopez and others as their managers here in Michigan. Martinez-Lopez used others to recruit individuals to stage accidents and falsely claim that they were receiving therapy treatment. Soca-Fernandez and Sosa-Baladron made frequent trips to Michigan form Florida to make sure that fraudulent insurance claims were prepared and sent to the automobile insurance companies, to deposit insurance checks, and to withdraw in cash the proceeds from the fraud. Fortunately, West Michigan is not a safe haven for scam artists. My office vigorously pursues and prosecutes those who cheat our financial and insurance programs."
The staged automobile accident ring operated three therapy clinics, Revive Therapy Center and HH Rehab Center, in Wyoming, Michigan, and Renue Therapy Center in Lansing, Michigan, from April 2012 to May 2015. The ring recruited and paid cash to individuals to stage automobile accidents and obtain police reports so that insurance claims could be made with their automobile insurance companies. The managers of the clinics and others working with them then told the accident participants what symptoms to present to a physician affiliated with the ring so that she would sign a prescription for physical therapy. The accident participants would then seek unnecessary therapy treatment at the clinics. Typically, after a few therapy sessions, the accident participants would sign blank therapy treatment forms that would be signed by massage therapists to make it appear as if the accident participants were obtaining treatment when they truly were not. The therapy clinics then used the treatment forms to send false insurance claims through the United States mail to automobile insurance companies for therapy treatment that was either not necessary or not actually provided.
"Criminal groups often believe they are employing ingenious techniques to cheat the system," explained Steve Francis, Acting Special Agent in Charge of Homeland Security Investigations, Detroit Field Office. "Sadly, we all suffer the consequences when higher rates get passed on to the consumers due to the increased costs of business. HSI will continue to aggressively target these schemes."
"Health care fraud results in economic consequences that impact every American", said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "These convictions reinforce the resolve of the FBI, the U.S. Department of Homeland Security-HIS Investigations, and the U.S. Attorney’s Office, Western District of Michigan to bring criminals, like those convicted in this case, to justice for their crimes."
Belkis Soca-Fernandez, David Sosa-Baladron, and Antonio Ramon Martinez-Lopez, will be sentenced by U.S. District Court Judge Paul L. Maloney at a sentencing hearing yet to be scheduled. The investigation of the case was handled by the Department of Homeland Security, Homeland Security Investigations, and the Federal Bureau of Investigation, in Grand Rapids, Michigan. Assistant U.S. Attorneys Ronald M. Stella and Timothy VerHey handled the trial of this case.
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Norton Shores "Dark Web" Drug Dealer Sentenced to 30 Months in PrisonRead the Press Release
GRAND RAPIDS, MICHIGAN - Acting U.S. Attorney Andrew Birge announced today that Michael Carlton Paiva, 30, of Norton Shores, was sentenced to 30 months’ imprisonment by Chief U.S. District Judge Robert J. Jonker for his role in a conspiracy to distribute controlled substances.
After an international law enforcement operation took down the dark web marketplace Silk Road 2.0, Paiva was identified as a purchaser of a significant quantity of various amphetamines and psychedelic compounds for distribution in the Western District of Michigan, including 3,4-methylenedioxymethamphetamine ("MDMA"), 2-(4-iodo-2,5-dimethoxyphenyl)-N-(2-methoxybenzyl) ethanamine hydrochloride ("25i-NBOMe"), 4-methyl-2,5-dimethoxyamphetamine ("DOM (STP)"), N,N-dimethyltryptamine ("DMT"), lysergic acid diethylamide ("LSD"), AL-LAD, mescaline, and liquid mushrooms. The subsequent investigation revealed Paiva was ordering and importing drugs from different sources from at least 2013 until 2016. He converted cash into bitcoin in order to make purchases on the dark web. Paiva also distributed more common controlled substances, including heroin, cocaine, and methamphetamine.
"Drug traffickers who believe that the dark web and cryptocurrency will provide anonymity and shield them from the rule of law are sorely mistaken," said Acting U.S. Attorney Birge. "The federal government has the tools, resources, and commitment to identify and prosecute criminals on the dark web and will continue to do so."
"Homeland Security Investigations and our partners are at the tip of the spear in the effort against illicit activities and financial crimes associated with virtual currency systems," said Steve Francis, Acting Special Agent in Charge of HSI Detroit. "Criminals have the false impression that their black markets activity using digital currency like Bitcoin are avoiding scrutiny. The reality is that these activities do not escape the reach of law enforcement."
"The West Michigan Enforcement Team, HSI Grand Rapids, and the U.S. Attorney’s Office have a long history of collaboration and this case is another great example of that relationship," said Detective First Lieutenant Andy Fias, WEMET Section Commander. "We value this partnership and it was successful in this investigation and others in the past. The disruption of this drug trafficking organization will have a deep impact on several West Michigan communities."
HSI led the investigation in the district, in cooperation with WEMET. Assistant U.S. Attorney Justin M. Presant prosecuted the case.
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Former Lansing Community College Professor and Wife Plead Guilty to Federal Tax FraudRead the Press Release
Couple and their business illegally received over $3,600,000 in federal tax refunds in a single year.
GRAND RAPIDS, MICHIGAN — Tapera Albert Chiwocha, Sr., Callista Suzena Chiwocha, and Human Services Associates, LLC pled guilty yesterday in U.S. District Court to conspiring to defraud the government by filing false tax returns, announced Acting U.S. Attorney Andrew Birge. Tapera and Callista Chiwocha each face up to ten years in prison. As part of their plea agreements, the Chiwochas and Human Services Associates will forfeit over $1.4 million dollars in federal tax refund money, which was seized pursuant to federal seizure warrants in 2011 and is the subject of two pending federal civil forfeiture actions.
During 2011, Tapera Albert Chiwocha, Sr., age 75, a former Lansing Community College professor, and his wife, Callista Suzena Chiwocha, age 63, requested over $4.5 million in federal tax refunds from the United States Treasury by causing false tax returns to be filed on behalf of others with the Internal Revenue Service. Citizens were tricked into providing their personal identification information after being promised "free stimulus money" by the Chiwochas and those who worked for them. The tax returns typically contained false reporting of undocumented income and abusive use of the earned income credit. The Chiwocha tax scam primarily exploited the poorest and most vulnerable citizens of the district. The Chiwochas created the Michigan-based limited liability company Human Services Associates, LLC to facilitate and conceal their criminal activities.
Acting U.S. Attorney Birge advised that "Our tax system relies on honest compliance. The Chiwochas and Human Services Associates took advantage of that system of honest compliance and committed a costly crime against the tax paying public." Birge encouraged tax filers to exercise caution when providing their personal information to others, especially to tax preparers who promise guaranteed tax refunds and make other questionable promises.
Complaints by local citizens prompted the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation to open an investigation, which included executing multiple search warrants to seize evidence of the tax fraud scheme. During the multi-year investigation, over one hundred subpoenas were issued to track down the tax refunds, which had been paid into multiple bank accounts owned by Human Services Associates and controlled by the Chiwochas.
Tapera A. Chiwocha, Sr., obtained his doctoral degree in philosophy from Michigan State University in 1977. Callista Suzena Chiwocha obtained an undergraduate business degree in accounting from the University of Michigan in 1978 and received training in preparing federal tax returns from a national tax preparation company in 2009. Investigative records show that shortly before starting the tax fraud scheme, the Chiwochas were delinquent on their home mortgage payments. In earlier prosecutions, other Chiwocha-related family members pled guilty to similar tax offenses: daughter Taka Chiwocha-Crowell pled guilty to filing false tax returns and was sentenced to forty-two months’ incarceration; daughter Tsiidzoyedu Callista Chiwocha pled guilty to filing false tax returns and was sentenced to one year and one day of incarceration; grandson Qasim Ibn-Ishaq Verser pled guilty to filing false tax returns and was sentenced to thirty-six months’ incarceration; grandson Imran Dawood Ibn-Abdurrahim pled guilty to filing false tax returns and was sentenced to fifty-four months’ incarceration; and, granddaughter Ruqayya Aida Abdul-Hakim pled guilty to filing false tax returns and was sentenced to seventy-two months’ incarceration. Sentencing of Tapera and Callista Chiwocha will take place on July 31, 2017.
"Defendants Tapera and Callista Chiwocha, who operated this large tax fraud scheme, were motivated by greed, resulting in the theft of millions of taxpayer dollars," said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "Today’s plea agreement is the result of our strong investigative partnerships which leveraged resources and expertise to dismantle this complex tax fraud criminal enterprise."
Special Agent in Charge Manny Muriel, IRS-Criminal Investigation stated, "The Chiwochas have demonstrated a blatant disregard of the integrity of the United States tax system. They stole from the system that is designed to provide vital government services including services to the poorest and most vulnerable citizens; the same group the Chiwochas exploited. Individuals who commit refund fraud of this magnitude deserve to be punished to the fullest extent of the law."
The prosecution of this case was handled by Assistant U.S. Attorneys Joel S. Fauson and Michael A. MacDonald.
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Repeat Bank Robber Sentenced to over 12 Years in PrisonRead the Press Release
GRAND RAPIDS, MICHIGAN — Acting U.S. Attorney Andrew Birge announced today that Anthony Oby Loose, age 33, of Grand Rapids, Michigan was sentenced to twelve and a half years in prison for bank robbery. U.S. District Judge Paul L. Maloney also ordered Loose to pay $20,458.73 in restitution.
A federal grand jury indicted Loose for robbing the Fifth Third Bank in Big Rapids, MI, on July 20, 2016, the Four Flags Credit Union in Niles on July 13, 2016, and a Comerica Bank in Lansing on June 3, 2016. Loose was on parole for yet another bank robbery at the time all of these offenses were committed. Loose committed his robberies by telling the bank tellers he had a gun. Often he commanded more than one teller to give him money. And several times he demanded more money after the tellers had emptied their cash drawers. Two days after the robbery in Big Rapids, Loose was arrested at the Budgetel Inn in Grand Rapids after a brief standoff with law enforcement. FBI agents later received a letter Loose had written to his girlfriend indicating he had hidden money after the robbery. Following up on his letter and a diagram he had drawn, the FBI agents discovered $4,700 hidden behind the drywall in the bathroom of his hotel room.
Loose pled guilty in October to the Big Rapids robbery. The remaining charges for the other robberies were dismissed as part of a plea agreement, but Judge Maloney was allowed to consider evidence that he committed them in selecting a sentence for the Big Rapids robbery.
"The magnitude of the sentence imposed on Anthony Loose validates the collective and effective investigative efforts of the FBI and our local law enforcement partners to identify and arrest this serial bank robber," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "These investigative partnerships, enthusiastically supported by the U.S. Attorney’s Office, are essential to our efforts to keep Western Michigan communities safe".
This case was investigated by the Federal Bureau of Investigation in conjunction with the Big Rapids Police Department, the Lansing Police Department, and the Niles Police Department. The case was prosecuted by Assistant U.S. Attorney Alexis M. Sanford.
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Northern Michigan Woman Sentenced to 70 Months in Prison in Multi-Million Dollar Investment SchemeRead the Press Release
Sarah Bolhuis Ordered to Repay $5,225,854.41 to 53 Victims
GRAND RAPIDS, MICHIGAN — Acting U.S. Attorney Andrew Birge announced today that Sarah Frances Bolhuis, 70, of Ellsworth, in Antrim County, Michigan, was sentenced to nearly six years in federal prison and ordered to repay $5.2 million to 53 victims of her investment fraud scheme. The Honorable Paul L. Maloney, U.S. District Judge, imposed the sentence, and further ordered her to serve three years of court supervision upon her release from prison.
Bolhuis pled guilty in September 2016 to wire fraud and money laundering charges, and admitted making numerous false and fraudulent misrepresentations and promises concerning financial services she claimed to provide for many years under the name American Financial ("AMFI") and Tri-Logic. Bolhuis admitted that she did not use the victims’ money as promised. Instead, Bolhuis made payments to a business partner, made return-of-principal and other payments to "investors," and paid "finder fees" to individuals who successfully recruited new "investors." In truth, there were no real investments made, as she had promised. Additionally, Bolhuis admitted laundering proceeds of the fraud. In one instance, she admitted depositing into a bank account money that she obtained from one victim and withdrawing $27,500 from the same account to make a payment to another victim in what amounted to a Ponzi-style scheme.
The U.S. Attorney’s Office noted in its sentencing memorandum that several of the victims suffered substantial financial hardship as a result of their losses. Although the scheme netted more than $7.5 million, only $2.3 million in repayments were traced due in large part to the extensive use of U.S. currency in the scheme. Bolhuis went to extraordinary lengths to hide the scheme, including having one of her victims pretend to be another person to (unbeknownst to that victim) corroborate one of the many lies she told others to convince them that she was using their money as promised. The government also outlined a new "real estate rescue" fraud Bolhuis perpetrated on one of her victims even after her Ponzi-style scheme had unraveled and she knew she was under investigation by state and federal law enforcement.
Acting U.S. Attorney Birge stated, "Fraudulent investment schemes that cause significant financial harm to individual investors will always be a priority for the U.S. Attorney’s Office. And we will work as hard as we can to get money back for the victims and to make sure the net return for those who spin the web of lies will be prison time, as Ms. Bolhuis has learned."
Special Agent in Charge Manny Muriel, IRS - Criminal Investigation, stated: "Ponzi schemes can thrive for a time on false claims about how the money is being invested and where the returns are coming from. But as demonstrated by today’s sentencing, that time has gone in this case and one who preyed on investors for their personal gain has been held accountable. It is always important to keep in mind that investment schemes that seem too good to be true should be a signal to investors to stay clear."
David P. Gelios, Special Agent in Charge, Detroit Division of the FBI, stated: "The defendant in this investment scheme stole millions of dollars from over 50 investors causing life altering and damaging financial harm. Today’s sentence demonstrates that those responsible for predatory investment fraud schemes like the one orchestrated by Bolhuis will be held to account for their crimes."
IRS Criminal Investigation and the Federal Bureau of Investigation continue to investigate this matter. Assistant U.S. Attorney Christopher O’Connor prosecuted the case.
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Grand Jury Returns Indictment in International Identify Theft and Tax Refund Fraud SchemeRead the Press Release
GRAND RAPIDS, MICHIGAN — Acting U.S. Attorney Andrew Birge announced today that a grand jury in the Western District of Michigan has returned a 22-count indictment charging Oghenevwakpo Igboba and Charles Aghogho Ejinyere with using hundreds of other people’s personally identifying information to access their tax information using an IRS website. Igboba and Ejinyere are alleged to have used that sensitive personal and tax information to file false federal income tax returns directing the IRS to pay fraudulent refunds to bank accounts they controlled.
Igboba was arrested in Lansing, Michigan on February 9, 2017. Ejinyere was arrested earlier today in London, England, and the United States will seek his extradition. The men are charged with conspiracy to defraud the United States, wire fraud, making false and fraudulent claims to the government, and aggravated identity theft.
The case is being investigated by the Treasury Inspector General for Tax Administration and IRS - Criminal Investigation. "It is the mission of the Treasury Inspector General for Tax Administration (TIGTA) to protect the integrity of the Internal Revenue Service (IRS) and promote the fair administration of our federal tax system," said J. Russell George, Treasury Inspector General for Tax Administration. "TIGTA continues to work closely with the United States Attorney’s Office and its law enforcement partners to hold individuals responsible for their illegal use of legitimate information provided to the IRS by taxpayers."
Special Agent in Charge Manny Muriel, IRS - Criminal Investigation, stated, "Tax-related identity theft remains a high priority for the IRS. The IRS is combatting tax-related identity theft with an aggressive strategy of prevention, detection and victim assistance. We are committed to assisting victims in resolving their tax-related issues as quickly as possible. Victims can obtain more information at www.IRS.gov."
The charges in an indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
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Foreign National Charged with Illegal Possession of A Firearm and Ammunition and Falsely Claiming to Be A Lawful Permanent ResidentRead the Press Release
Indictment also alleges misuse of social security number and possession of multiple fraudulent documents.
GRAND RAPIDS, MICHIGAN - Diego Hernandez-Cortes, a/k/a "Javier De La Cruz" 33, a citizen and national of Mexico who overstayed his work visa, was arrested on February 15, 2017, by U.S. Immigration and Customs Enforcement (ICE) and Bureau of Alcohol Tobacco Firearms and Explosives (ATF), after being indicted on felony charges of being an illegal alien in possession of a firearm and ammunition, falsely claiming lawful Permanent Resident status, misusing a Social Security number and possession of false identification documents.
The indictment, which was returned by a grand jury for the Western District of Michigan, alleges that Hernandez-Cortes knowingly possessed a DPMS Inc., Panther .223 caliber semiautomatic rifle, and 15 rounds of Remington .223 caliber ammunition, contained within a magazine. The indictment further alleges that Hernandez-Cortes possessed two Social Security cards and three Permanent Resident cards knowing them to be forged counterfeited, altered, falsely made, procured by means of any false claim or statement, or to have been otherwise procured by fraud or unlawfully obtained.
In addition, the indictment alleges that on two occasions, in Kent County and Oceana County, Hernandez-Cortes falsely claimed to two separate employers to be a lawful permanent resident of the United States with a duly-assigned alien registration number when he knew this was not true. Furthermore, the grand jury charged that with respect to one of those employers, Hernandez-Cortes falsely represented a Social Security account number as his own that had not been assigned to him.
The matter was a joint investigation by the U.S. Immigration and Customs Enforcement (ICE) Enforcement and Removal Operations, Bureau of Alcohol Tobacco Firearms and Explosives (ATF) and the Sparta Police Department.
If convicted, Hernandez-Cortes faces up to 10 years in federal prison. Conviction would also result in deportation back to Mexico. The charges in an indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
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Marquette Woman Nets Prison Time for Check-Kiting SchemeRead the Press Release
MARQUETTE, MICHIGAN —Acting U.S. Attorney Andrew Birge announced today that Brooke Ferns (formerly Brooke Vernier), age 30, of Marquette, was sentenced to 18 months in prison followed by two years of supervised for conspiring to commit bank fraud. Chief U.S. District Judge Robert Jonker also ordered Vernier to pay $1,780,232.10 in restitution.
The conviction and sentence stemmed from an investigation by the FBI that revealed Vernier had engaged in an extensive check-kiting scheme targeting three Upper Peninsula financial institutions: the Ishpeming Community Federal Credit Union (now known as the TruNorth Federal Credit Union), the Peninsula Bank and the River Valley Bank. Check-kiting is a form of bank fraud in which a person writes a series of checks transferring funds among several bank accounts in order to create artificially inflated balances in one or more bank accounts.
The investigation revealed that Vernier became the president and sole owner of Oasis Operating, Inc., Oasis Fuels, Inc. and Refresh and Refuel, Inc. in 2010. These corporations supplied gasoline to gas stations in the Upper Peninsula and also owned several gas stations. Vernier also opened seven corporate bank accounts for these businesses at the Ishpeming Community Federal Credit Union, the Peninsula Bank and the River Valley Bank. When her businesses encountered financial difficulty, Vernier began what the FBI refers to as a "circular check-kiting" scheme. From January 2012 through September 2012, Vernier wrote thousands of checks transferring and attempting to transfer a total of approximately $145,000,000 amongst the seven corporate bank accounts. The vast majority of these inter-account transfers were executed in order to further the circular kiting scheme. During this same time period, the total business activity of Oasis Fuels, Inc., Oasis Operating, Inc., and Refresh & Refuel, Inc. was approximately $15,000,000.
In September 2012, the three financial institution discovered the circular check-kiting scheme. At that time, Vernier had 124 bad checks totaling approximately $5,200,000 in circulation. When the three financial institutions finally settled and closed all of Vernier’s corporate bank accounts, they discovered that they had suffered a loss of about $1,800,000. During the sentencing hearing, the government noted that the checks written by Vernier in furtherance of this scheme were typically for about $40,000. To keep the scheme running, Vernier had to write about 15 checks per day, every single day, for a total of more than 3,000 checks.
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Maarten Vermaat.
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Wyoming Man Fifth Person to Plead Guilty to Staged Automobile Accident FraudRead the Press Release
The Fraud Ring Operated Three Therapy Clinics in Michigan from 2012 to 2015
GRAND RAPIDS, MICHIGAN — Yoisler Herrera-Enriquez, age 31, a massage therapist from Wyoming, Michigan, pled guilty in federal court yesterday to conspiracy to commit mail fraud related to a staged automobile accident ring that operated in West Michigan from 2012 to 2015. Herrera-Enriquez faces up to 20 years’ imprisonment and will be ordered to pay restitution to the automobile insurance companies that were defrauded. Herrera-Enriquez is the fifth individual to plead guilty. Previously convicted were: Gustavo Acuna-Rosa, 29, and, Eduardo Pardo-Oiz, 34, formerly from Lansing; Dolis Rojas-Lopez, 31, of Wyoming; and Yosvany Gonzalez-Duran, 41, of Lansing.
"This staged automobile accident ring operated a sophisticated fraud over several years in our community," stated Acting U.S. Attorney Andrew Birge. "The ring caused significant losses to numerous Michigan no-fault automobile insurance carriers and diverted limited local law enforcement resources from legitimate police work, simply so that an automobile accident report could be completed for a fraudulent automobile accident. Vigorous prosecution of those that take advantage of our community remains a priority of my office."
The staged automobile accident ring operated three therapy clinics, Revive Therapy Center and HH Rehab Center, in Wyoming, Michigan, and Renue Therapy Center in Lansing, Michigan, from April 2012 to May 2015. The ring recruited and paid cash to individuals to stage automobile accidents and obtain police reports so that automobile insurance claims could be opened with their insurance companies. Herrera-Enriquez, and others, then told the accident participants what symptoms to present to a physician affiliated with the ring so that she would sign a prescription for physical therapy. The accident participants would then seek unnecessary physical therapy treatment with Herrera-Enriquez and others at the clinics. Typically, after a few therapy sessions, the accident participants would sign blank therapy treatment forms that would be signed by Herrera-Enriquez or other massage therapists to make it appear as if the accident participants were obtaining treatment when they truly were not. The therapy clinics then used the treatment forms to send false insurance claims through the United States mail to automobile insurance companies for therapy treatment that was either not necessary or not actually provided.
"Criminal groups often believe they are employing ingenious techniques to cheat the system," explained Steve Francis, Acting Special Agent in Charge of Homeland Security Investigations, Detroit Field Office. "Sadly, we all suffer the consequences when higher rates get passed on to the consumers due to the increased costs of business. HSI will continue to aggressively target these schemes."
"Today’s guilty plea should serve notice once again that the FBI will not stand by idly while criminals engage in financial fraud schemes which negatively impact insurance companies and policy holders", added David P. Gelios, Special Agent in Charge, FBI Detroit Division.
Three others are facing similar charges in a third superseding indictment that will proceed to trial on March 7, 2017: Belkis Soca-Fernandez and David Sosa-Baladron, of Tampa, Florida, and Antonio Ramon Martinez-Lopez, of Port Richey, Florida. The charges in the third superseding indictment are merely accusations, and these defendants are presumed innocent until and unless proven guilty in a court of law.
The Grand Rapids Offices of the Department of Homeland Security, Homeland Security Investigations, and the Federal Bureau of Investigation, are handling the investigation. Assistant U.S. Attorney Ronald M. Stella is handling the prosecution.
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Grand Jury Returns Indictment of Co-Conspirator in Scheme to Defraud Herman Miller IncRead the Press Release
Kevin Grimm of Coopersville Charged with Conspiracy and Money Laundering
GRAND RAPIDS, MICHIGAN — Acting U.S. Attorney Andrew Birge announced today that a federal grand jury handed down a two-count indictment against Coopersville, Michigan, resident Kevin John Grimm alleging that he conspired with Jerry Akers to defraud furniture manufacturer Herman Miller Inc. in a vendor invoicing scheme. Grimm also was charged with laundering proceeds of the fraud by making a $155,000 payment to a Florida yacht dealer toward the purchase of a 49-foot sailboat in 2015.
The indictment alleges that Grimm and Akers conspired with each other to devise and execute a scheme to defraud Herman Miller involving Grimm’s creation of a company, KJ Gas Transportation, LLC, to submit false and fraudulent invoices for payment. The indictment further alleges that Grimm’s company never provided any natural gas ordering or transportation services to Herman Miller as falsely represented in invoices that Grimm e-mailed to Herman Miller personnel. The indictment alleges that, between June 2010 and July 2015, the fraud scheme generated approximately $1,772,726 in payments to Grimm’s company, KJ Gas Transportation, LLC.
Akers pled guilty in December 2016 to a federal charge of conspiracy to commit mail fraud and wire fraud against Herman Miller for his role in the scheme. When Akers was charged, his alleged co-conspirator was known to the U.S. Attorney’s office but not identified in publicly-filed court documents. Akers has admitted to conspiring with Grimm to fraudulently invoice Herman Miller for natural gas transportation services never provided by Grimm’s company. United States District Judge Paul L. Maloney will sentence Akers on May 1, 2017, in Kalamazoo.
This matter is being investigated by the Grand Rapids office of the Federal Bureau of Investigation.
The charges in an indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
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Howell School Teacher Sentenced to Seven Years for Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN — Duane William Millar, age 60, of East Lansing, Michigan, was sentenced today to seven years in federal prison, announced Acting U.S. Attorney Andrew Birge. Millar, a former teacher with the Howell Public School District, pleaded guilty to receipt of child pornography last year.
In announcing the sentence, Chief U.S. District Judge Robert J. Jonker commented on Millar’s large collection of 40,000 images of child pornography, which dated back to 2004 and included depictions of sadomasochistic conduct. Judge Jonker expressed his concern that Millar exploited his position of trust with his students. Following his term of incarceration, Millar will serve seven years on supervised release and was ordered to contribute $5,000 to the Justice for Victims of Trafficking Act Fund. The Fund provides financial support for victims of child pornography, sex trafficking, and child sexual abuse. He must also register as a sexual offender.
Acting U.S. Attorney Birge noted that "a case that involves a teacher with an interest in child pornography is exceptionally troubling, because teachers have access to children and are in a special position of the trust with students, parents, and the public." At sentencing, the U.S. Attorney’s Office emphasized that while the investigation revealed no evidence of inappropriate sexual contact with his students, investigators were nonetheless concerned by the fact the otherwise innocuous images of his students had been digitally manipulated to include sexual imagery. "Every time a sexually explicit image of a minor is produced, transmitted, or viewed, a child is re-victimized," said Steve Francis, acting special agent in charge of HSI Detroit. "The fact that this defendant was in a position of trust is particularly disturbing and heightens our resolve to hold predators accountable."
This case is the result of an investigation by the Michigan State Police Internet Crimes Against Children Task Force (MSP ICAC), working in conjunction with HSI. The Ingham County Prosecutor’s Office initiated Millar’s prosecution and then referred the case for federal prosecution. The case was prosecuted by Assistant U.S. Attorney Alexis M. Sanford.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
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Battle Creek Hotel Owner Pleads Guilty to Lying to the US Department of Labor About Minimum Wage PaymentsRead the Press Release
GRAND RAPIDS, MICHIGAN — Acting U.S. Attorney Andrew Birge announced today that Mehul Chandubhai Patel, a/k/a “Mike Patel,” 31, of Battle Creek, Michigan, pled guilty today to lying to Labor Department investigators about the wages paid to his staff. The charges stem from Patel’s violation of minimum wage rules in connection with two hotels operated by him, in Battle Creek and Coldwater, Michigan.
Patel appeared in federal court today before Magistrate Judge Ellen Carmody and pled guilty to the crime of concealing a material fact from the federal government when obligated to disclose it. Patel admitted that during 2014, the Department of Labor (“DOL”) had found him to be in violation of minimum wage laws by underpaying his hotel employees. He thereafter signed an agreement promising to repay his employees. When requested to provide proof that he had done so, Patel sent DOL checks indicating that back wages had been repaid. However, he concealed the fact that he required his employees to return the money to him.
Patel faces up to five years in prison, restitution and other penalties. U.S. District Judge Paul Maloney will impose sentence on Patel.
Prosecution of the matter has been assigned to Timothy VerHey, Assistant U.S. Attorney. The matter was investigated by the U.S. Department of Labor, Office of Inspector General, Homeland Security Investigations, and the Battle Creek Police Department.
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Ringleader of Texas-Based Gas-Pump Skimming and Identity Theft Scheme Convicted on All ChargesRead the Press Release
Jury Convicts Last of Seven Defendants in Scheme that Stretched from Texas to Colorado, Indiana, Wisconsin, Ohio and Michigan
GRAND RAPIDS, MICHIGAN — Antonio DeJesus Perez-Martinez, 44, of Austin, Texas, was convicted on 30 January 2017 of conspiracy to commit wire-fraud, credit account fraud, and aggravated identity theft after a four-day jury trial. Perez-Martinez, the last of eight defendants charged in the case and the overall leader of a conspiracy that at times involved over a dozen participants, remains in the custody of the U.S. Marshals Service pending sentencing on 15 May 2017 before Chief Judge Robert J. Jonker, who presided over the trial.
The evidence at trial established that Perez-Martinez, a Cuban citizen and lawful permanent resident of the United States ("green-card" holder), recruited numerous other recently-arrived Cuban citizens – all of whom had entered the United States in 2014 under a special "parole" program that admits Cuban citizens who present themselves to immigration authorities at the border – into a fraud scheme that initially involved obtaining compromised credit-account data from illicit websites, encoding that data onto cards, and using the "cloned" cards to bulk-buy gift cards and stored-value cards. During the Summer of 2015, Perez-Martinez switched from acquiring account data online to using "skimming" devices that his accomplices secretly installed inside gas-pumps, and also extended his group’s operation into West Michigan. Skimming devices capture the account data of any card used to purchase gas without interfering with the purchase, leaving the account holder unaware that the data has been compromised until it has been re-encoded onto cloned cards and used to make unauthorized purchases. Because skimming devices acquire account data firsthand, the numbers are more recent and more reliable than those acquired secondhand from online hackers, and the illegal profits are greater.
Perez-Martinez’ conviction brings the total number of convictions from the case to seven: Raul Gonzalez Falcon (29), Yunier Carballo-Pupo (34), Manuel Perez-Cabrera (38), and Michel Velazquez-Gregori (30), none of whom had prior criminal records and all of whom agreed to plead guilty and to cooperate with the investigation, all received sentences of 21 months in prison. Pedro Sanchez-Pupo (32) received a sentence of 37 months. A seventh defendant, Juan Estrada-Galvez, was allowed to plead guilty to a state misdemeanor in Kent County when the investigation determined that his involvement in the scheme was minimal. Perez-Martinez faces maximum penalties of 30 years in federal prison for the conspiracy and ten years for the credit account fraud, as well as a mandatory two-year prison sentence for the aggravated identity theft charge that must be served after the sentences on the first two counts are complete.
"Identity-theft is a continually expanding and especially pernicious form of property crime," stated Acting U.S. Attorney Andrew Birge, "and the pump-skimmer scheme is an aggravated form of identity theft because it targets every citizen of West Michigan doing one of the most basic and necessary things we all have to do: putting gas in our tanks. Any person who comes to West Michigan on a skimmer crew had better understand that the odds of getting caught are good, and that if they are caught, they will be prosecuted in Federal court."
"As demonstrated by Monday’s guilty verdict, the defendant orchestrated a fraudulent scheme in order to steal proprietary financial information from their victims through the use of credit card skimmers at local gas stations," added David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "Criminals who engage in these types of plots exploit and manipulate the very technology that we depend on to conduct secure financial transactions in the retail marketplace. Furthermore, such high-tech criminal activity causes significant losses for both merchants and banking institutions. The FBI and its local, state and federal law enforcement partners remain committed to protecting consumers, businesses, and financial institutions from the fraud schemes of criminal enterprises like the one this defendant led."
The case was investigated primarily by the FBI’s Lansing office, with assistance from the U.S. Postal Inspection Service, the Grand Rapids Metro Fraud and Identity-Theft Team, the Grand Ledge Police Department, and the McAllen Police Department, McAllen, Texas. It is being prosecuted by Assistant U.S. Attorney Hagen W. Frank.
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Final Defendant Pleads Guilty in Massive Conspiracy to Commit Tax Fraud in Battle CreekRead the Press Release
GRAND RAPIDS, MICHIGAN —Today, Acting United States Attorney Andrew Birge announced that Diallo Dotson, formerly of Battle Creek, Michigan, entered a plea of guilty in federal district court to conspiring with Derrick J. Gibson to file false and fraudulent federal income tax returns with the Internal Revenue Service.
In February 2016, a federal grand jury returned an Indictment charging 34 defendants with federal conspiracy for their roles in a conspiracy to defraud the Internal Revenue Service through the filing of false federal income tax returns claiming more than $22 million in false and fraudulent federal income tax refunds. A multi-year joint investigation led by the Internal Revenue Service, Veterans Affairs – Office of the Inspector General, United States Postal Inspection Service, the Bureau of Alcohol Tobacco and Firearms, Department of Homeland Security, Battle Creek Police Department, Albion Police Department, Calhoun County Sheriff’s Department, and Michigan State Police resulted in the federal charges.
The Indictment alleged that the defendants utilized other individuals’ personal identification information -- obtained in part from patients and employees of the Battle Creek Veterans Affairs Medical Center and from inmates of the Michigan Department of Corrections -- to file false tax returns. To date, 33 of the 34 defendants charged with connspiring to defraud the Internal Revenue Service have entered pleas of guilty. One defendant, Romell Bolden, was dismissed from the indictment when his mother, co-defendant Simone Watkins, admitted that she and Derrick Gibson filed the false federal income tax returns in his name.
DERRICK J. GIBSON
Plea of Guilty on August 16, 2016
Sentenced on January 6, 2017 to 120 months in prison and restitution of $16,000,000CHARMICA GRIFFIN
Plea of Guilty on October 4, 2016
Scheduled for sentencing on February 8, 2017STEPHANIE T. BAKER
Plea of Guilty on October 7, 2016
Scheduled for sentencing on February 16, 2017LATIA M. WILLIAMS, former employee of Battle Creek Veterans Affairs Medical Center
Plea of Guilty on November 18, 2016
Scheduled for sentencing on April 13, 2017ALVIN E. STEPHENSON II, former employee of Battle Creek Veterans Affairs Medical Center
Plea of Guilty on November 21, 2016
Scheduled for sentencing on April 13, 2017SANDRIA M. BLAKLEY, former employee of Battle Creek Veterans Affairs Medical Center
Plea of Guilty on November 29, 2016
Scheduled for sentencing on April 20, 2017EDWARD WARDEN, JR.
Plea of Guilty on May 4, 2016
Sentenced on October 31, 2016, to 30 months in prison and restitution of $110,004CHANEL MCLENNEY
Plea of Guilty on December 7, 2016
Scheduled for sentencing on April 27, 2017DARWIN GIBSON
Plea of Guilty on November 4, 2016
Scheduled for sentencing on April 3, 2017BOBBY CRABTREE , Michigan Department of Corrections inmate
Plea of Guilty on May 17, 2016
Sentenced on October 11, 2016, to 30 months in prison consecutive to State sentences already being served and restitution of $24,205DEQYNN GIBSON
Plea of Guilty on October 26, 2016
Scheduled for sentencing on March 7, 2017DARRIEN GIBSON
Plea of Guilty on October 24, 2016
Scheduled for sentencing on March 7, 2017ROCHELLE R. VELASQUEZ
Plea of Guilty on July 11, 2016
Sentenced on November 16, 2016, to 2 years of probation and restitution of $69,156SCHERRIE P. MCNUTT
Plea of Guilty on April 26, 2016
Sentenced on October 11, 2016, to 18 months in prison and restitution of $188,398DEVOINE GIBSON
Plea of Guilty on November 14, 2016
Scheduled for sentencing on April 10, 2017PRENTIS H. GIBSON
Plea of Guilty on October 11, 2016
Scheduled for sentencing on February 16, 2017LAMONT JOYNER
Plea of Guilty on November 28, 2016
Scheduled for sentencing on April 27, 2017SHAMEIKA N. CARR
Plea of Guilty on November 29, 2016
Scheduled for sentencing on May 3, 2017CHARLEETA CORK
Plea of Guilty on December 8, 2016
Scheduled for sentencing on May 15, 2017KEITH CORK
Plea of Guilty on November 29, 2016
Scheduled for sentencing on May 3, 2017MAIYA R. JACKSON
Plea of Guilty on July 22, 2016
Sentenced on October 19, 2016, to time served (4 months and 3 days)SHAWN MCKNIGHT, Michigan Department of Corrections inmate
Plea of Guilty on May 13, 2016
Sentenced on October 5, 2016, to 12 months in prison consecutive to State sentences already being servedDAVID HAYMER, Michigan Department of Corrections inmate
Plea of Guilty on March 25, 2016
Sentenced on October 5, 2016, to 18 months in prison consecutive to State sentences already being served and restitution of $34,684DIALLO DOTSON
Plea of Guilty on January 27, 2017
Scheduled for sentencing on May 22, 2017ROMELL BOLDEN
Dismissed from indictmentLABRISHA PORTER
Plea of Guilty on November 1, 2016
Scheduled for sentencing on March 16, 2017KYPREE TAYLOR
Plea of Guilty on November 10, 2016
Scheduled for sentencing on April 3, 2017ROSEMARY BOYD
Plea of Guilty on October 5, 2016
Scheduled for sentencing on February 9, 2017PATRICIA RIDDLE-MCCLINTON
Plea of Guilty on December 7, 2016
Scheduled for sentencing on May 1, 2017JOSEPH JEREMY JOHNSON, Michigan Department of Corrections inmate
Plea of Guilty on June 2, 2016
Sentenced on October 31, 2016, to 24 months in prison consecutive to State sentences already being served and restitution of $34,644KISHA N. EVANS
Plea of Guilty on November 14, 2016
Scheduled for sentencing on April 10, 2017RASHALL FORD
Plea of Guilty on November 2, 2016
Scheduled for sentencing on March 16, 2017SIMONE WATKINS
Plea of Guilty on January 26, 2017
Scheduled for sentencing on May 25, 2017ROMARO CARSWELL
Plea of Guilty on November 30, 2016
Scheduled for sentencing on April 20, 2017Acting United States Attorney Birge stated, “This conspiracy involved a wide array of individuals, including three federal employees, who believed that they could steal money from the Internal Revenue Service over a period of years with impunity. But they found out that the Internal Revenue Service is very good at finding those who use the tax system to steal from the government and that my office will hold them responsible.”
This case was prosecuted by Assistant United States Attorney B. Rene Shekmer.
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Grand Rapids Man to Spend Five Years in Prison for Trafficking FirearmsRead the Press Release
GRAND RAPIDS, MICHIGAN - Donte Timothy Bacon, 31, of Grand Rapids, was sentenced to 60 months’ imprisonment, Acting U.S. Attorney Andrew Birge announced today. In August, Bacon pled guilty to selling a firearm to a prohibited person and possession of a firearm with an obliterated serial number. Charles Lee Samuels, 28, earlier was sentenced to 18 months in prison for his lesser role in the crimes.
On five different occasions in August and September 2014, Bacon sold a firearm to a person who was not permitted to possess it under federal law. One of the firearms was sold with a high-capacity magazine. Two of those firearms had been purchased by Bacon and Samuels and were sold after Bacon removed the serial numbers. During the final transaction, Bacon and Samuels used a hand-grinder to remove the serial number at the time of sale.
In his final sentencing before retiring from the bench, U.S. District Judge Robert Holmes Bell observed the seriousness of trafficking firearms. Judge Bell ordered Bacon to serve three years of supervised release following his term of custody and expressed his hope that Bacon will return as a productive member to his community.
"The diversion of firearms for unlawful purposes or to those who cannot legally possess them endangers each and every member of our society," said Acting U.S. Attorney Birge. "The U.S. Attorney’s Office will prosecute those who willfully circumvent federal firearms laws designed to protect the public."
"Selling firearms to prohibited individuals contributes to the cycle of gun violence plaguing our neighborhoods," said Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. "ATF will continue to use all available resources to put a stop to illegal gun sales. Let this conviction stand as a warning to others willing to put profit before public safety."
The ATF conducted the investigation, with assistance from the Grand Rapids Police Department. Assistant U.S. Attorneys Justin M. Presant and Alexis M. Sanford prosecuted the case.
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Lansing Pimp Pleads Guilty to Sex Trafficking A Minor, Becoming the Tenth Person Convicted Federally of Sex Trafficking in West MichiganRead the Press Release
GRAND RAPIDS, MICHIGAN – Nicko Ray Rush II, 26, of Lansing, Michigan, pled guilty on January 24, 2017, to sex trafficking a minor by force, threats of force, fraud, or coercion. A grand jury charged Rush in November 2016 with sex trafficking two girls, ages 15 and 16, and one adult in Ingham County and elsewhere. Rush admitted at the plea hearing that he took both teens from Lansing to Detroit to "walk the streets" when they were 15 and that he kept the proceeds from their commercial sex acts. He admitted to giving the girls drugs and cigarettes and instructing them on how to walk to attract johns in passing cars. He also admitted to posting ads online for commercial sex for one of the girls and being violent and threatening towards both her and the adult victim.
Rush faces a minimum of 15 years and up to 25 years in federal prison. The Honorable Robert J. Jonker, Chief U.S. District Judge, will sentence Rush on June 5, 2017. Rush has been held in custody since his arrest on December 8, 2016, and he will remain detained pending sentencing. The sentence could also include a fine of up to $250,000 and an order that he pay restitution to any of his sex trafficking victims, which can cover victims’ costs such as counseling and medical treatment related to the crime.
Rush is the tenth defendant to be convicted federally of sex trafficking in the Western District of Michigan, starting with Eddie Allen Jackson in 2014, who was convicted at trial of recruiting three Muskegon girls ages 14, 15, and 16 into commercial sex in Grand Rapids. (See https://www.justice.gov/usao-wdmi/pr/2014_0916_EJackson.html.) Since that case, the U.S. Attorney’s Office for the Western District of Michigan has successfully prosecuted nine additional sex trafficking defendants, including Rush. Together, these cases involved 13 victims under the age of 18 and five adult victims, all of whom were local West Michigan residents from cities including Grand Rapids, Lansing, Muskegon, and Battle Creek. The defendants – nine males and one female – ranged in age from 22 to 45 years old and were also all local to West Michigan. Some of the defendants had histories of significant drug and violent criminal offenses. These ten sex trafficking convictions resulted from collaborative investigations by multiple agencies in each case, including the FBI in Grand Rapids and Lansing; the FBI’s West Michigan Based Child Exploitation Task Force (WEBCHEX); the Department of Homeland Security; the Ingham County Sheriff’s Office; the Battle Creek Police Department; the Grand Rapids Police Department; the Muskegon Police Department; the Lansing Police Department; and various juvenile detention, probation, and rehabilitation facilities. Assistant U.S. Attorney Tessa K. Hessmiller is the Coordinator for Human Trafficking prosecutions at the U.S. Attorney’s Office for the Western District of Michigan and was the lead prosecutor for each of these ten cases.
"Sex trafficking isn’t something that only happens elsewhere to some other community’s minors and vulnerable adults," stated Acting U.S. Attorney Andrew Birge. "These are West Michigan defendants targeting West Michigan victims. We rely on the many good people in our community and the skilled law enforcement agencies we have in this District to notice and intervene in suspicious situations."
"The investigation and conviction of Nicko Rush II are a model of collaboration between investigators from the Lansing Police Department (LPD) and our federal, state, and local law enforcement partners," stated Lansing Police Chief Mike Yankowski. "LPD will continue to work with our law enforcement partners to ensure that those who are responsible for human trafficking crimes will be held accountable for their actions."
Community members can learn more about how to recognize and stop sex trafficking in West Michigan by contacting their local human trafficking task force, including the task forces in Kent County, Kalamazoo, and the Michigan Human Trafficking Task Force. Additionally, the U.S. Attorney’s Office offers human trafficking training upon request.
The first step to stopping sex trafficking in our community is recognizing the warning signs and reporting suspicious activity to police. Some of the warning signs that make children and teens vulnerable to potential recruitment include being unhappy in school, absent from school or home, suicidal or suffering from low self-esteem, defiant towards authority, drug use or curiosity, seeking quick sources of income, and craving independence. Warning signs of child sex trafficking include seeing an adult man with multiple teenagers – particularly girls – buying condoms, alcohol, cigarettes, clothing, hair/nail supplies, or prepaid gift or debit cards that can be used to make untraceable purchases such as online prostitution advertisements. Community members may encounter these suspicious situations anywhere, including supermarkets, parking lots, pharmacies, convenience stores, gas stations, bus depots, fast food restaurants, hotels, and casinos. Sometimes the pimp, who may be male or female, recruits victims through the promise of having someone to meet the victim’s basic needs for housing, food, cash, and "love" or "friendship"; the promise of drugs and alcohol; use of threats and violence; or any combination of these means. Pimps often use an intermediary – such as a young woman or teenage girl – to recruit victims into a "money-making opportunity" that turns out to be commercial sex.
"The sexual exploitation of minors and adults is a reoccurring menace to Michigan communities and has lasting damaging impacts on its victims," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "Drugs and physical violence were just some of the tools Mr. Rush utilized to coerce the victims in this investigation. Through the continuing efforts of the FBI and our law enforcement partners, we want victims of any form of trafficking to know there is hope, and we encourage you to contact the FBI or your local police department if you have information about any human trafficking activity."
If you suspect illegal activity involving child exploitation or sex trafficking, contact law enforcement immediately. If a person may be in imminent danger, call 911. To report suspicious activity involving possible sex trafficking, call: West Michigan Based Child Exploitation Task Force (WEBCHEX) at 616-456-5489; Homeland Security Investigations, Grand Rapids, at 616-235-3936 (x. 2215); 1-800-THE-LOST® (National Center for Missing and Exploited Children); or report tips anonymously to Silent Observer at 616-774-2345.
The Nicko Rush case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
Veteran Leader Takes the Helm of U.S. Attorney's OfficeRead the Press Release
GRAND RAPIDS, MICHIGAN — Andrew Byerly Birge assumed the duties of Acting U.S. Attorney by operation of law following U.S. Attorney Patrick Miles, Jr.’s resignation last Friday at noon.
Birge was serving until then as the First Assistant, the senior-most management position in the office. Birge held the First Assistant position for the last nine and a half years. U.S. Attorney Charles Gross first tapped him for the role in May of 2007, under then-President George W. Bush’s administration. U.S. Attorneys Donald A. Davis and Patrick Miles each subsequently asked him to continue serving in that capacity. A First Assistant functions as the chief advisor to the U.S. Attorney and oversees the office’s civil and criminal litigation as well as its administrative operations. Miles said of Birge: “I know I am leaving the office in good hands.” Miles described Birge as “extremely knowledgeable” and a person of “impeccable integrity.”
Birge has been with the U.S. Attorney’s Office for over sixteen years. Prior to assuming senior management responsibilities, he oversaw the office’s appellate practice and handled all manner of criminal cases. He began his legal career as a law clerk to the late Chief U.S. District Court Judge Richard A. Enslen, in Kalamazoo, Michigan. Prior to joining the U.S. Attorney’s Office, he was an Associate for several years with the law firm of Jenner & Block in Chicago, Illinois.
Birge expects to serve as the Acting U.S. Attorney until President Donald Trump nominates and the U.S. Senate confirms a successor U.S. Attorney. “I take great pride in undertaking this opportunity. This office has remarkably dedicated and talented attorneys and staff with an outstanding record of holding wrongdoers accountable and vindicating the interests of the United States. I plan to continue that tradition of excellence in the pursuit of justice.”
Birge obtained his law degree from the Columbia University School of Law, where he was a Harlan Fiske Stone Scholar. He obtained his Bachelor of Arts degree from Carleton College, where he graduated cum laude and with Distinction as a history major.
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Remaining Two "Snap" Fraud Conspirators Sentenced to Prison and Ordered to Pay over $700k in RestitutionRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced that Cruz Gonzalez, of Shelby, Michigan, was sentenced to 33 months in prison and ordered to pay restitution of $722,149 to the Department of Agriculture by U.S. District Court Judge Gordon J. Quist. Her daughter, Fabiola Garcia, was sentenced the same day to 20 months in prison and also ordered to pay $722,149 in restitution. The two conspired to defraud the Supplemental Nutrition Assistance Program (SNAP), formerly known as the food stamp program, by illegally exchanging SNAP benefits for cash, cell phones, and other ineligible items at La Fortuna Carniceria in Shelby, Michigan. The total amount of fraud was determined to be $722,149, covering the period of February 2008 through January 2014.
U.S. Attorney Miles stated, "The federal government cannot tolerate the theft of federal program benefits meant to aid low income individuals meet daily nutritional needs. Such theft undermines the public’s confidence in the SNAP program and diminishes the government’s ability to provide food assistance to those citizens most in need."
Gonzalez and Garcia were two of three conspirators charged and convicted in the conspiracy. The third, Gisela Mendoza, also a daughter of Gonzalez, was sentenced in November to six months in prison, two months of home detention, and restitution of $722,149.
A joint investigation led by the U.S. Department of Agriculture Office of Inspector General and the Michigan State Police SSCENT team resulted in the federal charges.
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Four-Time Felon Sentenced to 68 Months for Possessing 26 FirearmsRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced that 43-year-old Khamdeng Sam Phanthourath, of Holland, was sentenced recently to 68 months in prison, following his conviction for possessing firearms and ammunition as a felon. He also received a $1,500 fine. A three-year term of supervised release will follow Phanthourath’s prison term.
The U.S. Attorney brought charges against Phanthourath after the West Michigan Enforcement Team (WEMET) executed a search warrant at his home on June 15, 2016. At the sentencing hearing before Chief U.S. District Judge Robert Jonker, the U.S. Attorney’s Office introduced evidence that investigating officers found 26 firearms, muzzle loader guns, thousands of rounds of ammunition, a homemade silencer, body armor, marijuana, more than 800 pills (including narcotics, suboxone, and methylphenidate), more than $9,000 cash, and a police scanner set to the Ottawa County Sheriff’s Frequency. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) determined that at least one of the firearms was stolen. Phanthourath had previously been convicted of, among other things, breaking and entering a building with intent and being a felon in possession of a firearm.
"The U.S. Attorney’s Office is dedicated to the mission of keeping firearms out of the hands of dangerous felons and drug dealers," said U.S. Attorney Patrick Miles. "The U.S. Attorney’s Office and ATF work closely with local law enforcement to investigate, identify, and prosecute individuals who pose a threat to our community."
"Holland Township residents can sleep better tonight knowing another dangerous criminal is behind bars," said Special Agent in Charge Robin Shoemaker. "ATF will continue to partner with local and state law enforcement agencies to bring criminals to justice and restore peace in our neighborhoods."
"The West Michigan Enforcement Team has shared a great relationship with the U.S. Attorney’s Office for the Western District of Michigan for several years," said Detective First Lieutenant Andrew Fias, Section Commander of WEMET. "It is a partnership that has led to successful prosecutions at the federal level. We are also very fortunate to have excellent relationships with ATF and our other federal law enforcement partners. WEMET has investigated numerous cases in the Holland area with ATF, curbing violent crime that has plagued this community. This case is a great example of many."
The case was investigated by WEMET and ATF. Assistant U.S. Attorney Sally Berens prosecuted the case.
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U.S. Attorney Patrick Miles Announces Departure at End of Obama AdministrationRead the Press Release
GRAND RAPIDS — Patrick A. Miles, Jr., U.S. Attorney for the Western District of Michigan, today announced his resignation effective noon on January 20, 2017. He informed President Barack Obama and Attorney General Loretta E. Lynch of his decision yesterday Wednesday, January 4. “I am extremely blessed and grateful for the opportunity to serve the public in this capacity over the past four and a half years,” Miles, 49, said in a statement. “It’s been an honor and a privilege to lead such an outstanding team of crime-fighters and people who work hard every day to protect the interests of America and its citizens.”
“Since 2012, Patrick A. Miles, Jr. has served the Western District of Michigan -- and the American people -- with distinction and honor,” said Attorney General Loretta E. Lynch. “Under his leadership, the district successfully stepped up its efforts to prosecute those who exploit the most vulnerable members of our society, commit violent crimes, or defraud taxpayers. Patrick also asserted leadership in reducing recidivism through programs that help returning citizens find jobs and obtain social services. During his term, Patrick's office hosted the first-ever job fair for returning citizens. And Patrick worked hard to strengthen his community -- from forging strong channels of communication between community members and law enforcement officers, to educating local parents and physicians about prescription drug and opioid abuse. I want to thank Patrick for his tireless devotion to the cause of justice, and I wish him the very best in the next chapter of his career.”
Miles became U.S. Attorney for the Western District of Michigan on July 9, 2012 after 21 years in private law practice in Grand Rapids as a business attorney. He assessed the strengths and potential of the office through individual meetings with each of the 37 assistant U.S. attorneys and federal judges in Michigan’s Western District as well as meetings with the U.S. Attorney’s Office’s 45 staff members. After those meetings, Miles took the following first-ever actions for the Office:
- Reorganized the Office’s Criminal Division into four sections -- Organized Drug Crimes, Violent Crimes, Financial Crimes, and National Security -- to streamline management and prosecutorial decisions;
- Created several new task forces for his federal prosecutors to team with law enforcement agents and officers to develop cases proactively;
- Placed each Assistant U.S. Attorney in at least one proactive task force or unit handling reactive cases; and
- Implemented an annual strategic planning process at each level in the office that established specific goals and accountability.
“We get tremendous results in this Office and every day it feels like we make a positive difference,” Miles stated. “From the start of my tenure as U.S. Attorney I focused on protecting the vulnerable and taxpayers. That is why we put more emphasis on preventing and prosecuting cases of children being exploited through pornography or sex trafficking, seniors being targeted by financial scammers, and those who commit fraud against the government and our health care system.” Some criminal prosecution highlights during his tenure include the following:- The Western District’s first-ever child sex trafficking federal prosecution occurred in 2014 against Eddie Jackson. Jackson was convicted of sex trafficking three teenage girls and received a 30-year federal sentence. Since then, Miles’s office has prosecuted 11 defendants for sex trafficking minors.
- Over the past four years Miles’s child exploitation prosecution team obtained 106 convictions involving the sexual exploitation of children using the internet, resulting in over 1,700 aggregate years of federal sentences.
- Evan Knoll received a 17-year federal sentence in 2012 for defrauding over $82 million from the U.S. government and banks.
- Kim Mulder, the former CEO of Kentwood Pharmacy, conspired to commit a $79 million healthcare fraud based on billing Medicare Part D plans, Medicaid and private insurance plans for misbranded and adulterated drugs and received a 10-year federal prison sentence in 2015.
Combating Gang and Group Violence
Miles also said he prioritized addressing violent crime with locally-tailored strategies. “We changed our approach to reducing violent crime in our seven urban cities of Battle Creek, Benton Harbor, Holland, Grand Rapids, Kalamazoo, Lansing, and Muskegon Heights by forming violent crime reduction task forces in 2013 to work with federal, state and local law enforcement to continuously identify and prioritize for federal prosecution the people, groups, and gangs causing the most neighborhood shootings and disruptions,” Miles stated.
Miles said he was particularly satisfied by the 2013 federal indictment against 31 members and associates of the Holland Latin Kings gang wiping out the criminal enterprise that had caused many problems for over a decade in Holland, Michigan. His office obtained 31 convictions for a range of offenses, including conspiring to engage in racketeering, possessing firearms and conspiring to distribute cocaine and marijuana which resulted in a total of 340 years of federal prison sentences.
Effective Prisoner Re-Entry
Miles highlighted the emphasis he placed on effectively returning citizens from prison to their community as a crime reduction strategy. “Nationally, two-thirds of those released from prison will be re-arrested within three years. In Michigan, we have about a 30 percent rate of recidivism. With 800,000 Americans being released from prison annually, we must get that recidivism rate lower.” In 2014, Miles introduced the “Facing Choices” program where he and the County Prosecutor, Sheriff, a Federal Bureau of Alcohol, Tobacco, and Firearms agent, and local Chief of Police in each of the seven urban cities in the Western District address a group of recent Michigan Department of Corrections parolees and give them a “tough love” speech of warning and encouragement and steer them to social services agencies for assistance.
Miles’s U.S. Attorney’s Office hosted its first-ever job fair in September 2016 where approximately 200 returning citizens connected with about 20 employers in Grand Rapids. “Employment is crime prevention,” Miles noted. “If a prison sentence results in a life-time ban on employment, then people will likely return to criminal activity. I’m not calling for a preference to hire those with a criminal record, I’m just asking employers not to rule someone out automatically if the past offense is not related to the job opening.”
Police-Community Relations
“Improving the relationship between law enforcement and community members was very important to me from the outset as U.S. Attorney,” Miles noted. Since becoming U.S. Attorney Miles co-chaired the Grand Rapids chapter of Advocates & Leaders for Police and Community Trust (ALPACT) group which started in 2012 and consists of local community leaders from different backgrounds who meet regularly with federal, state, and local law enforcement agents and officers to discuss a variety of topics. He also helped form and supported ALPACT groups in Battle Creek, Benton Harbor, Holland, Kalamazoo, and Lansing. “We need trust between community and law enforcement to prevent and address shared problems. It’s difficult to develop trust in a crisis situation. It takes communication for a relationship, and it takes a relationship to develop trust,” Miles noted.
In the fall of 2014 Miles began meeting with law enforcement leaders in Berrien, Calhoun, Ingham, Kalamazoo, Kent, Muskegon, and Ottawa Counties to discuss their protocols and best practices before, during, and after an officer-involved shooting. “We are blessed overall with very professional police departments. I encourage police community outreach at the top and on the streets not only to influential community leaders from the Generation X and Baby Boom generations, but also to those in the Millennial Generation who have significant local social media followings.”
Hiring Veterans
The first prosecutor Miles hired in 2012 as U.S. Attorney was a Major in the U.S. Army who served in Baghdad, Iraq and Guantanamo Bay, Cuba. As U.S. Attorney, Miles also hired the Office’s Administrative Officer, Human Resources Officer, Budget Officer, and his executive assistant who are all U.S. Army or National Guard veterans. Miles received a 2013 Patriot Award from the Employer Support of the Guard and Reserve Committee for his hiring and support of reservists and veterans.
Miles’s Office hosted the local ceremony in 2012 where four members of the Montford Point Marines, who were not able to travel to Washington, DC for their award, received their Congressional Gold Medals. Montford Point Marines were the first African American Marines and served in World War II.
Community Outreach and Education
In 2015, Miles and his Office developed and launched an educational program called Justice Scholars at Gerald R. Ford Middle School in Grand Rapids for 7th grade students to learn about the American criminal justice system from law enforcement agents and officers, prosecutors, defense attorneys, judges, and probation and parole officers. For one hour each month during the school year the class receives a lesson from a professional about each step in the criminal justice process as well as that career. In the final session, the class conducts a mock trial with instruction from attorneys in a federal courtroom with a judge presiding. Justice Scholars expanded to Lansing Middle Schools in 2016.
Miles, along with the U.S. Attorney for the Eastern District of Michigan and the State Attorney General, organized Michigan’s first-ever Prescription Drug Awareness Summit in 2013 which was held in Lansing. Widely attended by law enforcement, education and medical professionals, the Summit raised awareness of prescription pain killer drug diversion and addiction and of various programs and initiatives responding to the epidemic. The increasing use of opioid pain killers is also feeding the heroin epidemic so Miles and his Office are actively educating parents, physicians, and the public about those risks and dangers as well as prosecuting healthcare providers who prescribe drugs illegally in addition to prosecuting illegal drug trafficking organizations.
Background
President Obama nominated Grand Rapids native Miles to serve as U.S. Attorney for the Western District of Michigan on March 29, 2012, and Miles was confirmed unanimously by the U.S. Senate on June 29, 2012. Prior to his presidential appointment Miles, a 1991 Harvard Law School graduate, was a partner based in Grand Rapids with a large, national law firm. Miles, who served as president of the Grand Rapids Bar Association from 2004 to 2005, was the Democratic nominee for Michigan’s Third District Congressional seat in 2010. He did not announce his future career plans, only stating, “I’m looking forward to the next challenge, whatever that may be.”
The U.S. Attorney’s Office for the Western District of Michigan has 38 attorneys and a total staff of 83 with offices in Grand Rapids, Lansing, and Marquette. The district covers 49 counties, including Michigan’s entire Upper Peninsula. The Office’s immediately prior presidentially-appointed U.S. Attorney was Margaret Chiara who was appointed by President George W. Bush and served from October 2001 until March 2007.
For additional information on the accomplishments of the U.S. Attorney’s Office for the Western District of Michigan under the direction of U.S. Attorney Miles, please refer to the Year in Reviews for years 2012, 2013, 2014 and 2015:
https://www.justice.gov/usao-wdmi/year-review
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Naturalized U.S. Citizen from Bosnia Arrested on Charge of Fraudulently Obtaining CitizenshipRead the Press Release
Indictment alleges series of lies in naturalization process, including failure to disclose Serbian-militia service and murder charges during Bosnian Conflict
GRAND RAPIDS, MICHIGAN — Alexander KNEGINICH, 56, of Crown Point, Indiana, was arrested on December 19, 2016 near Kalamazoo, Michigan by special agents of Homeland Security Investigations (HSI), U.S. Immigration and Customs Enforcement, after being indicted on a felony charge of having fraudulently obtained U.S. citizenship after he emigrated from Bosnia-Herzegovina to the United States.
The indictment, which was returned by a grand jury for the Western District of Michigan on December 15, 2016, alleges that KNEGINICH told a series of lies to U.S. immigration authorities in the course of obtaining authority to enter the United States as a refugee, subsequently obtaining permanent-resident status, and ultimately obtaining U.S. citizenship. Specifically, the indictment asserts that, when he applied for refugee status, KNEGINICH falsely stated that his wife was an ethnic Croatian and that, because he is Serbian, they had to flee Bosnia to avoid the persecution experienced by persons in ethnically-mixed marriages; that KNEGINICH knowingly failed to disclose in both his refugee application and his permanent-resident application that he had served in Bosnian Serb military units during the Balkans Conflict of the early 1990’s; that KNEGINICH knowingly failed to disclose in those applications that he had been charged, jailed and tried in Bosnia for the 1994 murders of two Muslim civilians; and, finally, that KNEGINICH falsely stated in his naturalization application that he had never lied to U.S. immigration authorities to obtain immigration benefits.
The case is being jointly prosecuted by the U.S. Attorney’s Office and the Human Rights and Special Prosecutions Section (HRSP) of the Justice Department’s Criminal Division. “For persons who immigrate into the United States, citizenship is the brass ring,” stated U.S. Attorney Pat Miles, “and this Office will zealously pursue any case where that prized status appears to have been obtained through fraud and deceit.” “Cases where people lie about their past in order to cheat the nation’s immigration system are among HSI’s highest investigative priorities,” said Steve Francis, acting Special Agent-in-Charge of HSI Detroit. “As an agency, these cases take particular precedence when the individual’s past may include human-rights violations.”
If convicted, KNEGINICH faces up to ten years in federal prison. Conviction would also result in automatic revocation of KNEGINICH’s U.S. citizenship, and likely deportation and/or extradition back to Bosnia-Herzegovina. The charges in an indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
HSI investigated the case. It is being prosecuted by HRSP Trial Attorney Jamie Perry and Assistant U.S. Attorney Hagen W. Frank. The Criminal Division’s Office of International Affairs provided assistance in this matter.
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Indiana Man Arrested and Charged with Fraudulently Obtaining Citizenship for Failure to Disclose Alleged Crimes Committed in Bosnia and Military Service During Bosnian ConflictRead the Press Release
A Crown Point, Indiana, man was arrested today after being charged with unlawfully procuring U.S. citizenship by allegedly failing to disclose during his naturalization process his Bosnian Serb Military service and charges of murder during the Bosnia Conflict in the 1990s.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Pat Miles of the Western District of Michigan and Acting Special Agent in Charge Steve Francis of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Detroit made the announcement.
Alexander Kneginich, 56, was indicted under seal by a federal grand jury on Dec. 15, 2016, with fraudulently obtaining U.S. citizenship after he emigrated from Bosnia-Herzegovina to the United States. Kneginich was arrested in Kalamazoo, Michigan, this morning, and the indictment was unsealed after his initial appearance.
The indictment alleges that Kneginich told a series of lies to U.S. immigration authorities in the course of obtaining authority to enter the United States as a refugee, that enabled him to subsequently get permanent-resident status and ultimately attain U.S. citizenship. Specifically, when he applied for refugee status, Kneginich is alleged to have falsely stated that his wife was an ethnic Croatian and that, because he is Serbian, they had to flee Bosnia to avoid the persecution experienced by persons in ethnically-mixed marriages. In addition, the indictment alleges that Kneginich knowingly failed to disclose in both his refugee application and his permanent-resident application that he had served in Bosnian Serb Military units during the Balkans Conflict of the early 1990s; that he knowingly failed to disclose in those applications that he had been charged, jailed and tried in Bosnia for the 1994 murders of two Muslim civilians; and that he falsely stated in his naturalization application that he had never lied to U.S. immigration authorities to obtain immigration benefits.
HSI investigated the case. Trial Attorney Jamie Perry of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Hagen W. Frank of the Western District of Michigan are prosecuting the case. The Criminal Division’s Office of International Affairs provided assistance in this matter.
Former Olympic Gymnastics Doctor Indicted on Federal Child Pornography ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN – A federal grand jury indicted Lawrence Gerard Nassar on federal child pornography charges. As recently as last year, Nassar was a physician for the U.S. Gymnastics Team. The grand jury alleges in the indictment that Nassar received and attempted to receive child pornography in 2004, and that he possessed thousands of images of child pornography between February of 2003 and September of 2016. If convicted of both of these charges, Nassar faces a mandatory minimum of five years’ imprisonment and up to 40 years of imprisonment, and up to lifetime supervised release after release from custody.
Nassar appeared in federal court to hear the charges against him on Friday, December 16, 2016. A hearing on whether he should receive bond pending trial is pending. The federal investigation that led to the charges is ongoing. Anyone with information about additional child pornography offenses, or criminal sexual conduct Dr. Nassar may have committed outside Michigan or abroad, should contact the Detroit FBI Office at (313) 965-2323. Anyone with information about alleged sexual assaults Dr. Nassar committed within the State of Michigan should contact Michigan State University Police at 844-99-MSUPD (67873).
The charges are the result of a joint investigation by the Federal Bureau of Investigation (FBI) and the Michigan State University Police Department (MSUPD), and this case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.
The charges in the indictment are only allegations and are not evidence of guilt. The defendant is presumed innocent unless and until proven guilty, and the government has the burden of proving his guilt beyond a reasonable doubt.
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Battle Creek Hotel Owner Indicted for Lying to the US Department of Labor About Minimum Wage PaymentsRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles announced today that Mehul Chandubhai Patel, a/k/a “Mike Patel,” 31, of Battle Creek, Michigan, appeared in federal district court today to be arraigned on charges that stem from false statements he made to the Department of Labor during an investigation into violations of the minimum wage law.
On December 14, 2016, a federal grand jury charged Patel with falsely advising the U.S. Department of Labor that he had paid his employees as required by federal minimum wage rules, when in fact he had required the employees to return the money to him after being paid. Each charge carries a maximum possible sentence of five years in prison and other penalties. Patel was released on bond after being required to surrender his passport and be subject to electronic monitoring.
U.S. Attorney Miles stated, “There are good reasons why we have a minimum wage law. Workers have the right to a fair wage for a job well done. If an employer tries to cheat his employees out of paying the bare minimum wage permitted in this country, the Department of Labor will come calling to make him follow this law. If that same employer is so brazen that he then lies to the Department of Labor about repaying his employees, federal agents will come calling with an arrest warrant.”
Prosecution of the matter has been assigned to Timothy VerHey, Assistant U.S. Attorney. The matter was investigated by the U.S. Department of Labor, Office of Inspector General, Homeland Security Investigations, and the Battle Creek Police Department. “An important mission of the Office of Inspector General is to investigate allegations relating to obstruction of U.S. Labor Department functions and investigations. We will continue to work with our law enforcement and intra-Agency partners to investigate these types of allegations," stated James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the United States Department of Labor, Office of Inspector General. Steve Francis, Acting Special Agent in Charge for HSI Detroit stated “HSI will continue to use its broad jurisdiction to hold employers accountable. One of our primary investigative priorities is to ensure a level playing field for all businesses through our worksite enforcement strategy.”
The charges in an indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
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Battle Creek Man Sentenced to 10 Years in Prison for Possessing A Firearm as A FelonRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced that 38 year-old Javon Jones, of Battle Creek, was recently sentenced to the maximum possible term of 120 months in prison, following his conviction for possessing a firearm as a felon. A three-year term of supervised release will follow Jones’s prison term.
The charges against Jones stemmed from his possession of a loaded, semiautomatic pistol in the early morning hours of November 16, 2015. After shooting eight rounds from the firearm near the intersection of High St. and Willow St., Jones sped away from the scene and led Battle Creek police officers on a vehicle chase through the surrounding residential area. Jones crashed his vehicle into a utility pole, which fell on his vehicle. Jones then accelerated his car backward toward police vehicles and officers and, once freeing his vehicle from the utility pole, drove forward in an effort to continue fleeing police. Jones’s car broke down shortly thereafter, and he was placed under arrest. Nobody else was in the car with Jones. Officers recovered the loaded pistol from the floor of the passenger side of the car. The Bureau of Alcohol, Tobacco, Firearms, and Explosives traced the firearm and determined that it had been stolen from the owner’s home approximately six months earlier.
U.S. Attorney Miles commented on the danger posed by Jones: "This intense and dangerous car chase and crash followed Mr. Jones’s firing of eight shots in a residential neighborhood, across the street from a schoolyard. Thankfully, nobody was hurt that night. The 120-month sentence will undoubtedly serve to protect the public from such reckless and dangerous conduct by Mr. Jones."
Jones was prohibited from possessing firearms because of his criminal record, specifically his five prior felony convictions. Among other factors that led to the ten-year sentence, U.S. District Court Judge Robert Holmes Bell said during the hearing that the sentence was warranted in light Jones’s extensive criminal history and the seriousness of the offense in this case, particularly the danger Jones posed to the public and to police officers, as well as the damage Jones caused. "The successful prosecution of Javon Jones highlights ATF’s partnership with the Battle Creek Police department, the Michigan State Police and the United States Attorney’s Office Western District," said ATF Special Agent in Charge S. Robin Shoemaker.
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Holland Resident Receives Two-Year Federal Prison Sentence for Stealing Mail and Cashing Forged ChecksRead the Press Release
Zachary Stephen Thomas Regularly Stole Mail from Residents of West Michigan Between December 2015 and May 2016
GRAND RAPIDS, MICHIGAN — Zachary Stephen Thomas, age 33, from Holland, Michigan, was sentenced today in the United States District Court for the Western District of Michigan, to a mandatory two-year federal prison sentence for his commission of aggravated identity theft. As part of the sentence, Thomas was ordered to pay over $18,000.00 in restitution to several financial institutions and will serve a one-year term of supervised release after his prison term.
"The integrity of the United States’ mail and the security of the personal and financial information of the residents of this district are of utmost importance to this office," said U.S. Attorney Patrick Miles. "The mandatory two-year prison sentence handed down today by U.S. District Judge Paul L. Maloney sends a message that those who seek to take advantage of others by stealing mail and accessing their finances through illegal means will face significant consequences."
Beginning in December 2015, and continuing until May 2016, Defendant stole mail from the mailboxes of hundreds of residents in Holland and surrounding lakeshore communities. Defendant regularly stole bank replacement checks or credit card convenience checks mailed by financial institutions to the residents’ homes. He made the checks payable to himself or to others cooperating with him and he forged the signatures of the true account holders. He then opened bank accounts in his name using the internet and deposited the forged checks into these accounts. He immediately withdrew from the bank’s automated teller machine the maximum amount of cash allowed and waited for the balance of the funds associated with the checks to clear the bank. Once the checks cleared the bank, he typically withdrew the remaining amounts at a casino to avoid being seen at the bank. Over the period of approximately six months, Defendant caused losses totaling over $18,000.00 to several financial institutions.
The investigation of the case was handled by the United States Postal Inspection Service in Grand Rapids and the Ottawa County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Ronald M. Stella.
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Mancelona Man Sentenced to Seventeen and A Half Years in Federal Prison for Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN – Thomas Arlan Evans, 55, of Mancelona, Michigan was sentenced today to 210 months (17.5 years) in federal prison for possessing child pornography, U.S. Attorney Patrick Miles announced. In addition to the prison term, Chief U.S. District Judge Robert Jonker imposed a seven-year term of supervised release that will commence once Evans is released from imprisonment. Evans will also be required to register as a sexual offender.
Evans pled guilty on July 15, 2016, to possessing child pornography. Evans came to the attention of law enforcement in August 2015 in connection with a domestic-abuse investigation. Police subsequently executed a search warrant at Evans’ home, where they seized a variety of electronic media containing more than 19,000 images and dozens of videos of child pornography. The material depicts victims as young as toddler-aged children, and a number of the images and videos depict sadistic sexual assaults on very young and vulnerable children. Further investigation revealed that Evans had recently had access to a child, and two additional victims disclosed that Evans sexually abused them when they were children.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.
The Federal Bureau of Investigation (FBI) and the Antrim County Sherriff’s Office investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
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Previously-Convicted Embezzler Sentenced to 18 Months in Prison for Shirking Restitution ObligationsRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Daniel Lawrence Broton, age 56, of Sparta, Michigan, was sentenced by U.S. District Judge Janet T. Neff to 18 months in prison for lying on a financial affidavit submitted to the U.S. Attorney’s Office to aid in the collection of a restitution judgment against Broton from a 2006 criminal case. In addition to his prison term, Broton was sentenced to two years of supervised release and ordered to pay a mandatory special assessment of $100.
Broton was formerly the financial comptroller and the chief financial officer of the Little River Band of Ottawa Indians. In 2005, Broton was charged with, and pled guilty to, defrauding the Little River Band of Ottawa Indians of $500,000 in construction funds devoted to their casino project. He was sentenced for this offense in 2006 by U.S. District Judge Robert Holmes Bell to three years in prison, three years of supervised release, $508,392.28 in restitution, a forfeiture money judgment of $500,000, and a mandatory special assessment of $400.
In 2009, after completing his sentence and receiving early discharge from supervised release, Broton started a rustic furniture making company called Backwoods Casual. Backwoods Casual created furniture and home décor suitable for cabins and lakefront homes using cedar logs. In 2013, the U.S. Attorney’s Office sent a financial affidavit to Broton to obtain information about his post-release financial status to assist with the collection of his outstanding restitution debt and criminal monetary penalties. Since his release, Broton had not paid a dime. Broton returned the financial affidavit to the U.S. Attorney’s Office and claimed to have no employment, no occupation, and no income. In fact, Broton started his business at least by 2011, was earning income, and had the capacity to make payments towards his restitution debt. He completed and returned a second affidavit in 2015 and similarly lied about his financial condition to continue to avoid paying restitution. On March 31, 2016, a federal grand jury indicted Broton for making false statements. Broton pled guilty to the offense on July 14, 2016.
In announcing the sentence, U.S. District Judge Janet T. Neff recognized Broton’s education and professional history as an accountant. She noted that his false statements were “not an accident” but rather a calculated means to keep his income and avoid paying restitution on his prior criminal judgment. The 18-month prison sentence was the maximum suggested sentence under the U.S. Sentencing Guidelines.
U.S. Attorney Miles stated: “The U.S. Attorney’s Office relies on financial affidavits to obtain an accurate picture of a defendant’s post-release financial condition to aid its post-judgment debt collection efforts. Broton’s sentence should serve as a warning to all defendants who consider making false statements on financial affidavits to the U.S. Attorney’s Office to avoid payment on their criminal monetary obligations. It re-victimizes victims, undermines the court’s judgment, and you will be prosecuted.”
“Today’s sentencing is a direct result of the excellent partnership between the IRS Criminal Investigation and the U.S. Attorney’s Office,” said Manny Muriel, Special Agent in Charge, IRS Criminal Investigation. “This sentence should serve as a deterrent to those who attempt to evade payment of their court-imposed restitution.”
The case was investigated by the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney Joel S. Fauson.
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Sault Ste. Marie Man Sentenced for Habitual Domestic ViolenceRead the Press Release
MARQUETTE, MICHIGAN — Justin Ryan Wykoff, 28, of Sault Ste. Marie, Michigan was sentenced to 42 months in federal prison for domestic violence by a habitual offender, U.S. Attorney Patrick Miles announced today. In addition to the prison term, U.S. District Judge Paul L. Maloney ordered Wykoff to serve three years of supervised release following his prison term.
Wykoff pled guilty to the charge in August of this year. The charge stems from an incident last December in which Wykoff assaulted a woman in the parking lot of the Sault Ste. Marie Tribal Health Center. A passerby witnessed the assault and reported it to the Sault Ste. Marie Tribal Police. Wykoff had previously been convicted of domestic violence offenses against the same woman on May 22, 2015 and September 2, 2015, in the 91st District Court, Chippewa County, Michigan. In imposing the sentence for the December assault, Judge Maloney noted both the physical abuse and the insidious psychological abuse Wykoff had inflicted upon the victim.
Before the federal charges were brought, Wykoff pleaded no contest to a misdemeanor charge in tribal court for the same December incident. But a conviction in tribal court does not foreclose federal prosecution and, after consultation with tribal authorities, the U.S. Attorney’s Office pursued the federal charges as well.
The Sault Ste. Marie Tribal Police and the Federal Bureau of Investigation investigated the case. The case was prosecuted by Assistant U.S. Attorney Paul D. Lochner.
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Sault Ste Marie Man Sentenced to 168 Months for Assaulting Federal Officers with A KnifeRead the Press Release
MARQUETTE, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Eric Michael Verwiebe, 37, of Sault Ste. Marie, Michigan, was sentenced in U.S. District Court to 168 months’ imprisonment for Assault on a Federal Officer with a Dangerous Weapon. He was also ordered to serve three years of supervised release following incarceration. While imposing sentence, Hon. Paul L. Maloney stated that assaulting federal law enforcement is a serious offense and Verwiebe’s sentence was needed not only to deter the defendant from future criminal conduct, but also to deter others who may consider assaulting law enforcement.
On July 27, 2016, Verwiebe pled guilty to assaulting two Bay Mills Tribal Officers who encountered him while on patrol in August of 2015. The officers received a notice that Verwiebe had committed an assault earlier in the day and was now armed with a knife. The officers found Verwiebe walking in the middle of the road. When the officers got out of their patrol vehicle and approached Verwiebe, he pulled a large kitchen knife, with a blade of approximately seven inches long, from the pocket of his sweatshirt. He then raised the knife and pointed it towards the officers. Officers ordered Verwiebe to put the knife down. Verwiebe responded by yelling obscenities, threatening to kill the officers, and raising the knife over his head (blade pointing towards officers) as he walked towards officers. When Verwiebe was approximately 7-10 feet from the officers, one of the officers deployed his Taser hitting Verwiebe in the chest. Verwiebe dropped the knife and fell to the ground. As officers approached, Verwiebe stood up, took a fighting stance, and attempted to punch the officers. Verwiebe continued to resist officers until he was handcuffed and secured in the patrol vehicle.
The Bay Mills Tribal Police and the FBI investigated the case. Assistant U.S. Attorney Hannah N. Bobee prosecuted the case.
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U.S. Attorney Miles Designates Federal Prosecutor to Protect the Right to Vote and Prosecute Ballot FraudRead the Press Release
GRAND RAPIDS – Patrick Miles, U.S. Attorney for the Western District of Michigan, named a federal prosecutor with over 30 years’ experience as the District’s Election Officer. Miles says Assistant U.S. Attorney Donald Daniels will handle claims of voter discrimination, intimidation, and fraud on November 8, 2016. Mr. Daniels can be reached until the polls close on election day at: (616) 808-2014.
U.S. Attorney Miles explained: "My office and the U.S. Department of Justice will ensure that all qualified voters have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation or fraud in the election process."
U.S. Attorney Miles noted that his office and local FBI agents can receive, investigate and pursue complaints of voter discrimination, intimidation, and fraud. His office coordinates and works with the Department of Justice’s Civil Rights Division’s Voting Section to enforce the civil provisions of a wide range of federal statutes that protect the right to vote including: the Voting Rights Act, the National Voter Registration Act, the Uniformed and Overseas Citizens Absentee Voting Act, the Help America Vote Act and the Civil Rights Acts. Among other things, collectively, these laws:
- prohibit election practices that have either a discriminatory purpose, based on race or membership in a minority language group, or a discriminatory result, with members of racial or language minority groups having less opportunity than other citizens to participate in the political process;
- prohibit voter intimidation;
- provide that individuals who need assistance in voting because of disability or illiteracy can obtain assistance from a person of their choice;
- provide for accessible election machines for voters with disabilities;
- require provisional ballots for voters who assert they are eligible but whose names do not appear on poll books;
- provide for absentee ballots for service members, their family members and U.S. citizens living abroad;
- require states to ensure that citizens can register through drivers’ license offices, public assistance and disability services offices, other state agencies and through the mail; and
- include requirements regarding maintaining voter registration lists.
The U.S. Attorney’s office also works in conjunction with the Civil Rights Division’s Criminal Section to enforce federal criminal statutes that prohibit voter intimidation and voter suppression based on race, color, national origin or religion.
U.S. Attorney Miles said that on Election Day, November 8, 2016, the Civil Rights Division will implement a comprehensive program to help protect the right to vote, including:
- The Civil Rights Division will conduct monitoring in the field at polling places around the country (locations for monitoring will be announced closer to Election Day).
- Civil Rights Division attorneys in both the Voting and Criminal Sections in Washington, D.C., will be ready to receive election-related complaints of potential violations relating to any of the statutes the Civil Rights Division enforces. Attorneys in the division will take appropriate action and will consult and coordinate with local U.S. Attorney’s Offices and with other entities within the Justice Department concerning these complaints before, during and after Election Day.
- Civil Rights Division staff will be available by phone to receive complaints related to voting rights (1-800-253-3931 toll free or 202-307-2767) or by TTY (202-305-0082). In addition, individuals may also report complaints, problems or concerns related to voting by fax 202-307-3961, by mail to [email protected] and by complaint forms that may be submitted through a link on the department’s website: https://www.justice.gov/crt/voting-section.
- Complaints related to violence, threats of violence or intimidation at a polling place should always be reported immediately to local authorities by calling 911. They should also be reported to the U.S. Attorney’s Office or the department after local authorities are contacted.
Criminal Division and the Department’s 94 U.S. Attorney’s Offices:
The Department’s Criminal Division oversees the enforcement of federal laws that criminalize certain forms of election fraud and vindicate the integrity of the federal election process.
The Criminal Division’s Public Integrity Section and the department’s 94 U.S. Attorney’s Offices are responsible for enforcing the federal criminal laws that prohibit various forms of election fraud, such as vote buying, multiple voting, submission of fraudulent ballots or registrations, alteration of votes and malfeasance by election officials. The Criminal Division is also responsible for enforcing federal criminal law prohibiting voter intimidation for reasons other than race, color, national origin or religion (as noted above, voter intimidation that has a basis in race, color, national origin or religion is addressed by the Civil Rights Division).
The U.S. Attorney’s Offices around the country designate Assistant U.S. Attorneys who serve as district election officers (DEOs) in the respective districts. As the DEO in the Western District of Michigan, Assistant U.S. Attorney Daniels is responsible for overseeing potential election-crime matters in their districts and coordinating with the department’s election-crime experts in Washington, D.C.
On and after Nov. 8, 2016, U.S. Attorney Miles’ Office will work with specially trained FBI personnel to ensure that complaints from the public involving possible voter fraud are handled appropriately. Specifically:
- In consultation with federal prosecutors in the Public Integrity Section in Washington, D.C., the DEOs in U.S. Attorney’s Offices, FBI officials at Headquarters in Washington, D.C., and FBI special agents serving as Election Crime Coordinators in the FBI’s 56 field offices will be on duty while polls are open to receive complaints from the public.
- Election-crime complaints should be directed to the local U.S. Attorney’s Offices or the local FBI office. As previously noted, the U.S. Attorney’s Office’s Election Officer can be reached at (616) 808-2014. A list of FBI offices and accompanying telephone numbers can be found at https://www.fbi.gov/contact-us.
- Public Integrity Section prosecutors are available to consult and coordinate with the U.S. Attorney’s Offices and the FBI regarding the handling of election-crime allegations.
- Again, complaints related to violence, threats of violence or intimidation at a polling place should be reported first to local police authorities by calling 911.
"Free and fair elections are a necessity in the United States. Protecting the right to vote and combating election fraud are thus essential to maintaining the confidence of all Americans in our democratic system of government," stated U.S. Attorney Miles. He encourages anyone who has information suggesting voting discrimination or ballot fraud to contact the appropriate authorities.
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Former State Representative Paul DeWeese, M.D., Sentenced to Three Years' Probation for Health Care Document FraudRead the Press Release
Criminal Sentencing For $172,991 Fraud Follows A Separate $273,496 Civil Settlement And The Surrender Of Dr. DeWeese’s DEA Registration And Medical License
GRAND RAPIDS, MICHIGAN — Paul Nathan DeWeese, M.D., 61, of Holt, Michigan, was sentenced by the Hon. Robert Jonker, Chief U.S. District Court Judge, to three years’ probation and a $5,000.00 fine after pleading guilty to directing others to make and use false documents in connection with claims submitted to Blue Cross Blue Shield of Michigan ("BCBSM"). Dr. DeWeese paid $172,991.56 in criminal restitution prior to the sentencing hearing.
Dr. DeWeese, a two-term state representative from 1998 through 2002, was the President and Chief Executive Officer of NBO Medical, a chain of medical clinics that was devoted to treating peripheral neuropathy with a combination of nerve block injections and electrical stimulation treatments. In April 2012, Dr. DeWeese participated in the development of a directive at NBO Medical to comply with a BCBSM policy that required physicians to supervise nerve block injections administered by nurse practitioners. When he entered his plea of guilty to criminal health care fraud charges, Dr. DeWeese admitted that instead of performing the necessary supervision, he instructed his administrative assistant and others to place his signature on electronic medical records at NBO Medical, falsely denoting that the injections had been supervised. BCBSM would not have paid the affected claims without physician supervision of the sensitive medical procedures. The investigation of this case revealed that a number of Dr. DeWeese’s signatures originated outside the State of Michigan from electronic devices that were not affiliated with NBO Medical.
The criminal sentencing followed a March 2016 civil settlement in which Dr. DeWeese and NBO Medical paid $273,496.67 to Medicare and Medicaid to resolve allegations that NBO Medical violated the federal False Claims Act and the Michigan Medicaid False Claims Act by failing to refund overpayments for (1) electrical stimulation treatments and diagnostic vestibular tests that were improperly billed to those federal health care programs; and (2) services rendered by non-physician practitioners that were improperly billed, to federal health care programs, under Dr. DeWeese’s name.
Under the terms of the civil settlement, Dr. DeWeese also paid a $15,000.00 fine and voluntarily surrendered his DEA registration to resolve allegations that after closing NBO Medical, he also violated the federal Controlled Substances Act in his treatment of patients for pain and substance use disorders by (1) prescribing patients a combination of at least one opioid, one benzodiazepine, and carisoprodol (a combination colloquially referred to as the "Holy Trinity" for its rapid euphoric effects) on several occasions; (2) failing to address indicia of drug-seeking behavior in his treatment of certain patients; (3) prescribing Ritalin and Adderall to patients, on several occasions, without appropriate diagnoses or justifications; and (4) documenting, on numerous occasions, physical examinations of patients that did not occur. Dr. DeWeese also permanently surrendered his medical license to the State of Michigan as part of a separate licensing action, filed by the Michigan Bureau of Licensing and Regulatory Affairs and the Michigan Attorney General’s Office, that stemmed from the federal investigation of Dr. DeWeese’s controlled substance prescriptions.
The civil case, United States, et al., ex rel. Risner, et al. v. Paul N. DeWeese, M.D., P.L.C., et al., No. 1:12-cv-1308 (W.D. Mich.), resulted from a lawsuit filed by two former employees of NBO Medical. The lawsuit, known as a qui tam action, was filed under the False Claims Act and the Michigan Medicaid False Claims Act, which allow private whistleblowers to bring lawsuits on behalf of the United States and the State of Michigan and receive a share of any recoveries. In this case, the United States and State of Michigan intervened in the whistleblowers’ suit. The whistleblowers received $54,699.33 of the civil settlement proceeds, as well as additional amounts for attorney’s fees and costs.
U.S. Attorney Patrick Miles emphasized that his office sought prison time for Dr. DeWeese, who qualified for a term of 24 to 30 months of incarceration under the advisory U.S. Sentencing Guidelines. "When health care professionals engage in this type of conduct, they face civil fines, criminal restitution, suspensions and revocations of their licenses, and the possibility of imprisonment. As this case demonstrates, my office will aggressively use all available criminal, civil, and administrative remedies when it receives credible allegations of fraud and the improper prescribing of controlled substances. Document frauds in the health care field are particularly damaging because insurers rely on the accuracy and presume the authenticity of documents to assess the legitimacy of health care claims. As for improper prescribing of controlled substances, our opioid epidemic warrants the serious attention we give those allegations."
"Health care fraud investigations are among the highest investigative priorities within the FBI’s White Collar Crime Program. As one of the primary investigative agencies in the fight against Health Care Fraud, the FBI has jurisdiction over both federal and private insurance program fraud matters," said David P. Gelios, Special Agent in Charge, Detroit Division of the Federal Bureau of Investigation. "The Detroit FBI leverages its resources in the private and federal arenas through investigative partnerships with an expansive range of federal, state, and local agencies. As part of our national strategy to tackle Health Care Fraud, the FBI works closely with the Department of Justice and U.S. Attorney’s Offices throughout the country to more effectively disrupt the ability of medical professionals to defraud insurance providers by aggressively seeking parallel criminal and civil remedies."
Patricia Armstrong, Acting U.S. Postal Inspector in Charge, praised the cooperation of the law enforcement agencies involved in this investigation, saying, "It is an excellent example of what can be accomplished when federal and state law enforcement agencies share their resources and focus on a common goal."
The criminal and civil cases against Dr. DeWeese and NBO Medical resulted from a coordinated effort by the U.S. Attorney’s Office for the Western District of Michigan, the Michigan Attorney General’s Office, the Federal Bureau of Investigation, the United States Postal Inspection Service, the U.S. Department of Health and Human Services, Office of Inspector General, the Michigan State Police, the Michigan Department of Health and Human Services, and Blue Cross Blue Shield of Michigan.
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DEA and Community Partners in Michigan Hold Prescription Drug Take Back Day on SaturdayRead the Press Release
- Over 130 Take Back locations across the Great Lakes State -
Detroit, MI – DEA reprises this weekend one of its most popular community programs: National Prescription Drug Take Back Day. On Saturday, October 22nd, 2016, between 10 a.m. and 2 p.m. the public can dispose of their unused, unwanted prescription medications at one of 4,700 collection sites nationwide, and over 130 sites in Michigan, operated by 3,800 local law enforcement agencies and other community partners. The service is free of charge, no questions asked.
America is presently experiencing an epidemic of addiction, overdose and death due to abuse of prescription drugs, particularly opioid painkillers. 6.4 million Americans age 12 and over, which is 2.4% of the population—abuse prescription drugs, according to the 2015 National Survey on Drug Use and Health, which was released last month. That is more people than abuse cocaine, heroin, hallucinogens, and methamphetamines combined. Drug overdoses are now the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms. The majority of prescription drug abusers report that they obtain their drugs from friends and family, including from the home medicine cabinet.
Last April, during its 11th Take Back Day, the DEA and over 4,200 of its national, tribal, and community law enforcement partners collected 893,498 pounds (about 447 tons) of unwanted prescription drugs at almost 5,400 collection sites. Since the program began six years ago, about 6.4 million pounds (about 3,200 tons) of drugs have been collected. That’s more than a quarter pound of pills for each of the 25 million children aged 12 to 17 in America, pills that won’t result in abuse or overdose.
The public can find a nearby collection site by visiting www.dea.gov, clicking on the "Got Drugs?" icon, and following the links to a database where they enter their zip code. Or they can call 800-882-9529. Only pills and other solids, like patches, can be brought to the collection sites—liquids and needles or other sharps will not be accepted.
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66 Year-Old Manistee County Man Sentenced to 20 Years for Producing Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN –William Alan Schock, age 66, of Manistee, Michigan, received a 20-year sentence in federal prison today for producing child pornography of two young girls between the ages of 6 and 8. The judge ordered him to pay $25,000 in victim restitution for counseling costs and also ordered him to reimburse the Bureau of Prisons the cost of his confinement to avoid expense to the tax payers.
For almost four years, between 2011 and 2015, Schock took nude and pornographic photographs of two young girls at his home in Manistee and his second home in Tucson, Arizona. In August 2015, one of the young girls disclosed that Schock was taking pictures of her while she "modeled" naked and that Schock rewarded her with candy. The Michigan State Police (MSP) immediately obtained a search warrant for Schock’s Manistee residence. During the execution of the search warrant, Schock admitted to taking "inappropriate" nude photographs of the child who disclosed the incidents. MSP seized computers, cameras, and CDs and found evidence that Schock victimized a second child as well. Investigators also discovered other child pornography Schock downloaded from the internet. The Manistee County Prosecutor’s Office charged Schock and later turned the case over to the U.S. Attorney’s Office and Homeland Security Investigations for federal investigation and prosecution. In June 2016, Schock pled guilty in federal court to one count of producing child pornography.
At the sentencing hearing today, the Assistant U.S. Attorney read a letter written by the mother of one of the victims. The child’s mother described her fears of the pictures ever surfacing, of people finding out what happened to her daughter, of her child’s mental and emotional quality of life, and of the lifelong trust issues her daughter could face. She wrote how her family has been torn apart and their world turned upside down. In imposing the sentence, U.S. District Judge Robert Holmes Bell discussed the importance of sending a message to other people involved in child pornography that this behavior has significant and serious consequences.
"It is tragic and all too common for a child predator to prey on children over a period of years and manipulate them into keeping a secret out of a misplaced sense of trust and loyalty to the perpetrator," stated U.S. Attorney PatrickMiles in announcing the sentence. "The urgency with which the Michigan State Police reacted to the child’s disclosure led to the immediate recovery of evidence and justice being served."
"The tragic reality of many cases like this one is that survivors of child exploitation are most often victimized by a trusted adult," said Marlon Miller of HSI Detroit. "And while this lengthy prison sentence cannot undo the immeasurable harm that Schock inflicted on his young victims, it does prevent him from exploiting any other children and essentially ensures that he will spend the remainder of his life in prison."
The MSP Internet Crimes Against Children Task Force, who conducted the forensic examination on the seized devices alongside Homeland Security Investigations, announced, "We are pleased with the outcome of this case. It is our hope that the victims and their families can take comfort in knowing that this predator will no longer be a threat to society. With that, hopefully their healing can begin."
Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the federal case as part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
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Postal Union Stewards Steal Bargaining Agreement MoneyRead the Press Release
Defendants worked at Traverse City Postal Facility
GRAND RAPIDS, MICHIGAN — Jeffrey D. Velfling, the former Union Steward for Local #307 of the National Postal Mail Handlers Union, and John L. Crosby, the former deputy Union Steward, were sentenced today for their role in stealing approximately $14,500 in overtime payments which should have been given to their co-workers at the Traverse City Mail Facility. Theft of union funds by union officers is a federal felony offense. Each defendant was sentenced to two years of probation, a $1,000 fine, full restitution and a Special Assessment penalty of $100.
"The United States will continue to pursue financial crimes, great or small, that involve a federal interest and negatively impact the quality of life in Western Michigan. We cannot allow persons who hold positions of trust to line their pockets with payments owed to coworkers," said U.S. Attorney Patrick Miles
The stolen money in this case came from two postal grievances in which mail handlers were not given the opportunity to perform "craft work" as defined under a collective bargaining agreement. Velfling and Crosby, on behalf of the union had filed successful grievances, which resulted in payment of approximately $7,000 to their custody and control. An internal review by the Union uncovered the theft of the funds. Velfling and Crosby destroyed the grievance file when they learned of the investigation. The matter was then referred to federal law enforcement.
"The actions of these two union stewards directly violated the Labor-Management Reporting and Disclosure Act and the commitment they made to their co-workers to handle the funds of the union solely for the benefit of the union and its members," said Ian Burg, district director for the Detroit-Milwaukee District Office of the U.S. Department of Labor’s Office of Labor-Management Standards. "OLMS is committed to ensuring financial integrity in labor organizations and protecting the rights of union members to fair representation and treatment by their union leadership."
"As union stewards, Jeffrey Velfling and John Crosby violated the trust placed in them when they stole settlement money intended for their fellow union members. The OIG will continue to work with our law enforcement partners to hold corrupt union officials accountable for defrauding the members they are entrusted to serve", stated James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General.
"Mr. Crosby and Mr. Velfling used their union positions to take financial advantage of the very colleagues they were charged with representing. The U.S. Postal Service Office of Inspector General together with the U.S Attorney's Office and our law enforcement partners will pursue those individuals who would use their positions of public trust within the Postal Service to victimize or steal from others for personal gain," said Special Agent in Charge L. Scott Caspall. Great Lakes Area Office of Inspector General for the U.S. Postal Service.
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Robert Haveman Sentenced to 42 Months in Prison for Stealing from the Elsa D. Prince Living TrustRead the Press Release
Haveman Ordered to Pay $11,082,666.00 in Restitution
GRAND RAPIDS, MICHIGAN — Robert Allen Haveman, 68, of Ottawa County, Michigan, was sentenced to 42 months in federal prison after pleading guilty to wire fraud and money laundering in connection with his theft of more than $16 million from the Elsa D. Prince Living Trust ("Prince Trust"). Additionally, Haveman was ordered to repay more than $11 million to the Prince Trust after having already repaid more than $5 million to the Trust before the sentencing hearing. After his release from prison, Haveman will spend three years on supervised release. U.S. District Judge Robert Holmes Bell imposed the sentence today.
Earlier this year, Haveman admitted engaging in a scheme to defraud the Elsa D. Prince Living Trust between 1999 and 2015 and engaging in money laundering using some of the fraudulent proceeds. Haveman previously entered guilty pleas to two felony charges alleging that, while employed by EDP Management Company ("EDP") in Holland, Michigan, he devised a scheme to defraud to obtain money belonging to Elsa D. Prince-Broekhuizen and Prince Trust. As part of his fraud scheme, Haveman, who primarily managed private equity investments for EDP, transferred money belonging to Ms. Prince-Broekhuizen and the Prince Trust to his personal bank account and other bank accounts for his personal use and undisclosed investment activities. Haveman caused false entries to be made in the books and records of EDP to disguise his theft of money, and made material misrepresentations to and concealed material facts from Ms. Prince-Broekhuizen and others. Haveman admitted to money laundering in connection with his purchase of vacant land with Lake Michigan frontage in Ottawa County using Prince Trust funds.
The United States secured the repayment of approximately $5 million to the Prince Trust prior to sentencing, which included but was not limited to, the liquidation of Haveman’s entire retirement account and the transfer of the vacant lakefront property to the Prince Trust. Additionally, the United States obtained a forfeiture money judgment in the amount of $11,082,666.00 to ensure that, should Haveman ever gain legal title to any money or property in the future, the government will immediately seize those funds.
Internal Revenue Service Criminal Investigation investigated the matter and Assistant U.S. Attorney Christopher O’Connor prosecuted the case.
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U.S. Attorney Patrick Miles Hosts Justice Forum in Grand Rapids to Kickoff National Community Policing WeekRead the Press Release
GRAND RAPIDS, MICHIGAN — President Barack Obama designated the week of October 2-8, 2016 as National Community Policing Week and the U.S. Department of Justice is leading events nationwide to support community policing. Locally, U.S. Attorney Patrick Miles for the Western District of Michigan convened area stakeholders today to discuss police and community relations in Grand Rapids. "The forum provided an opportunity for local community leaders, law enforcement, youth advocates, and state and local officials to establish and maintain trusting relationships, critically examine police-community issues in our city and seek solutions together," said U.S. Attorney Miles. A variety of representatives from local and federal law enforcement, the city of Grand Rapids, community and student groups, service organizations, and religious congregations met together at LINC Up in Grand Rapids with the shared aim of strengthening relationships between law enforcement officers and the community members they serve.
At the outset of the forum, U.S. Attorney Miles, Grand Rapids Chief of Police David M. Rahinsky, and Grand Rapids Mayor Rosalynn Bliss shared their respective observations on local challenges in the area of police-community relations, as well as insights and strategies for making Grand Rapids stronger, safer, and more unified. During the second part of the forum, several stakeholders and area residents spoke briefly about their perception of police-community relations, obstacles to positive police interactions, and ideas for effecting change.
During the third part of the Justice Forum, the entire group (over 25 people) had a conversation about a wide range of topics including officer training and education, community engagement, implicit bias, officer safety, promoting diversity within police departments, crisis response, transparency and officer accountability, and fostering positive police-community encounters. "The working group aspect of the forum was especially valuable," said U.S. Attorney Miles. "Participants spoke candidly with one another about a wide range of topics relating to interactions between the police and the community, and how the community and law enforcement can work together to improve the safety and wellness of all community members."
Copied below is a list of invited organizations and speakers that presented at the Justice Forum in Grand Rapids.
Speakers:
U.S. Attorney Patrick A. Miles, Jr.
City of Grand Rapids Chief of Police David M. Rahinsky
City of Grand Rapids Mayor Rosalynn Bliss
Community Presenters:
Darel Ross II, LINC UP
Dr. Aly Mageed, M.D.
Roberto Torres, Hispanic Center of Western Michigan
Eugene Brown, Todd Harris, Jr., Je’ana Mason, and Danielle McMillon, Students, Am I Next
Cle Jackson, Greater Grand Rapids NAACP
Four Students from Grand Rapids Area Schools
Larry Johnson, Grand Rapids Public Schools
The forum today is just one of several efforts U.S. Attorney Miles has launched or participates in that are designed to strengthen police-community relations and engagement:
• U.S. Attorney Miles co-founded ALPACT (Advocates and Leaders for Police and Community Trust) groups in Grand Rapids and Benton Harbor. ALPACT groups bring together police and community stakeholders on a regular basis to discuss police and community relations, promote community trust, and reduce tension. The meetings provide a forum to discuss police-related shootings and other issues that test police and community relationships. The ongoing communications result in relationships between ALPACT members and law enforcement that foster a trusting environment where tensions can be voiced and diffused.
• For youth, U.S. Attorney Miles created the Justice Scholars program last year, in which middle-school students are exposed to careers in law enforcement and learn about the Constitution and the criminal justice system. The academic year concludes with a mock trial performed by the students.
• U.S. Attorney Miles also meets semi-annually with leaders in the Middle Eastern and Muslim American communities in the Grand Rapids area. The meetings provide a forum to address issues of mutual concern and to foster better understanding on topics ranging from cultural sensitivity to hate crimes; from police and community relations to law enforcement policies and procedures.
• U.S. Attorney Miles also serves as co-chair of the Michigan Alliance Against Hate Crimes (MIAAHC) in Lansing, along with the U.S. Attorney for the Eastern District of Michigan, Barb McQuade. MIAAHC consists of representatives from federal, state, and local law enforcement, civil rights organizations, community groups, educators and anti-violence advocates who work together to establish a coordinated statewide effort against hate crimes.
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Job Fair Held for Returning Citizens as Part of the Deparment of Justice's Smart on Crime InitiativeRead the Press Release
GRAND RAPIDS, MICHIGAN —U.S. Attorney Patrick Miles announced the holding of a job fair today in West Michigan for individuals who have recently returned to our communities after serving their terms in the custody of either the Michigan Department of Corrections or the Federal Bureau of Prisons. The event is part of the Department of Justice’s Smart on Crime initiative. Approximately 250 returning citizens connected with 18 local employers about job opportunities at the Job Fair, which took place at LINC UP, 1167 Madison SE, in Grand Rapids. This is the first job fair in West Michigan targeting returning citizens.
"Employment is crime prevention," U.S. Attorney Miles explained. "We are working on not only prosecuting crimes, but also preventing them. A lack of job opportunity for those who have paid their debt to society and served their time is a primary reason they return to a life of crime. A felony record should not be an automatic life-time ban on any employment. We need those with a felony record in their past to be productive citizens contributing to society and taking care of their loved ones."
The Job Fair follows the Employer Summit U.S. Attorney Miles held with area employers in May to encourage them to consider increasing their talent pool through the hiring of formerly incarcerated individuals. Given the turn-out of employers today, the Summit succeeded. Eighteen companies were represented at the Fair, including Cascade Engineering and Butterball Farms Inc. Cascade Engineering and Butterball Farms, Inc., have experienced great success hiring returning citizens. U.S. Attorney Miles expects the many additional employers in attendance today will soon have the same experience. Approximately 250 candidates for employment attended to help prove him right.
U.S. Attorney Miles noted that "about one in three Americans has a criminal record. I appreciate those employers who recognize the importance of not excluding a large segment of our society from being productive."
The Employer Summit and Job Fair are part of U.S. Attorney Miles’s on-going efforts to address the problem of recidivism beyond simply re-prosecuting. In 2015, he introduced "Facing Choices" forums in partnership with the Michigan Department of Corrections, for state parolees. Parolees are not only reminded that they will be held accountable if they re-offend, they also hear from formerly incarcerated individuals who share strategies for success while on parole. U.S. Attorney Miles will host a Facing Choices forum next week in Benton Harbor. U.S. Attorney Miles’s office also supports the U.S. District Court’s Accelerated Community Entry program of intensive supervision for individuals on federal supervised release who present a high risk of recidivism.
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Four Sentenced in Lansing Credit Union RobberiesRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced the sentence today for the last of four co-defendants, all from Detroit, in a pair of Lansing credit union robberies. U.S. Chief District Judge Robert J. Jonker sentenced Brennen Jackson, age 25, to 92 months in federal prison; Kiarra Pennymon, age 27, to 33 months; and Maurice Clark II, age 25, and Darnell Rowell, age 21, each to 37 months.
On September 3, 2015, Jackson, Pennymon and Clark robbed the DFCU Financial on S. Pennsylvania Avenue in Lansing. Jackson recruited Clark to commit the robbery, and Jackson and Pennymon drove Clark from Detroit to Lansing, stopping at a store along the way to buy makeup to cover Clark’s tattoos and colored contacts to disguise him. Pennymon admitted to assisting by casing the credit union, and she and Jackson waited in the getaway vehicle while Clark went in with a demand note and stole $40,000. Less than a week later, on September 8, 2015, Jackson and Pennymon recruited Darnell Rowell and returned to the same credit union. Jackson and Pennymon waited in the getaway van while Rowell entered the credit union with a demand note and stole $35,000. The three were apprehended by police on the highway fleeing the scene. All but $200 that was stolen in the second robbery was recovered upon their arrest.
Pennymon and Clark pled guilty to the September 3, 2015, robbery, and Jackson and Rowell pled to the September 8th robbery. All four defendants will serve three years of court supervision after they are released from prison and were each ordered to repay the credit union through restitution. The Lansing Police Department, Ingham County Sheriff’s Office, and the FBI investigated the case, which was prosecuted by Assistant U.S. Attorney Tessa K. Hessmiller.
In announcing the sentence, U.S. Attorney Patrick Miles stated, "This case represents another example of local and federal investigators working together to protect our community. The quick work of the Ingham County Sheriff’s Office and Lansing Police Department in apprehending the robbers undoubtedly protected the community from future robberies by this group."
"The sentencing of Brennen Jackson demonstrates the resolve of the FBI and our local law enforcement partners to identify those responsible for robberies of Michigan financial institutions," said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "As part of that effort, the FBI encourages the public to use a free FBI mobile application called BANK ROBBERS, which allows members of communities to review information about unsolved bank robberies. With the public’s help, we can become even more successful in identifying, arresting, and prosecuting subjects who pose a significant threat to the public."
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Albion Man Sentenced to 240 Years in Prison for Sexually Exploiting ChildrenRead the Press Release
GRAND RAPIDS, MICHIGAN – Jeffrey Duane Cox, 44, of Albion, Michigan was sentenced to 240 years in federal prison for sexual exploitation of children and possession of child pornography, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, Chief U.S. District Judge Robert J. Jonker ordered Cox to pay $4,916 in restitution. Cox must also register as a sex offender, and, if he is ever released from prison, he will be subject to a lifetime term of supervised release.
Earlier this year, a jury convicted Cox of seven counts of Sexual Exploitation of a Child and two counts of Possession of Child Pornography, after hearing testimony and reviewing evidence during a six-day trial. The evidence presented at trial showed that Cox sexually abused and exploited seven children during 2012, 2013, and 2014. He lured the children into his home, convinced them to trust him, and then sexually abused and exploited them. Cox photographed and videotaped the children engaged in sexually explicit conduct in his home, personally taking photographs and setting up video cameras to record the exploitation, and sometimes using another person to take the photographs. Cox stored the images and video on multiple devices in his home in Albion.
In its sentencing memorandum, the U.S. Attorney’s Office noted that the seriousness of Cox’s crimes could not be overstated. "Children are amongst the most vulnerable of victims, and the children in this case were particularly vulnerable to the defendant for a host of reasons." These children "will bear the emotional and psychological scars from his abuse their entire lives." The sentencing memorandum further noted that Cox remains unrepentant and will continue to pose a risk to children unless he remains incarcerated.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.
This case was investigated by a consortium of law enforcement agencies and departments, including the Department of Homeland Security, Homeland Security Investigations (HSI), Albion Department of Public Safety, Emmett Township Department of Public Safety, Battle Creek Police Department, and Calhoun County Sheriff’s Office. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
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Howell Public School District Teacher Pleads Guilty to Child Pornography ChargeRead the Press Release
GRAND RAPIDS, MICHIGAN —Duane William Millar, age 59, of East Lansing, Michigan, pleaded guilty in federal court to receiving child pornography. As part of his guilty plea, Millar admitted that he had sought out, downloaded, and collected child pornography from the internet and had done so for years. He admitted that he had a 200 gigabyte hard drive filled with child pornography that he had amassed, adding he never deleted any of it and acknowledging that his collection of images included sadistic images of children being sexually assaulted.
Millar was a teacher with the Howell Public School District and was placed on administrative leave after he was charged in Ingham County for possession of child pornography. The Ingham County Prosecutor’s Office initiated Millar’s prosecution and then referred the case for federal prosecution. Initial federal charges were filed on May 25, 2016, and more charges were added on August 31, 2016, including allegations that Millar transported child pornography with him on trips to Maryland, the State of Wyoming, and Canada. On September 21, 2016, the charge of receipt of child pornography was filed in conjunction with Millar’s written plea agreement.
Millar will be sentenced on February 6, 2017, before the Honorable Robert Holmes Bell, U.S. District Judge. At sentencing, Millar will face a mandatory minimum of five years and a maximum of twenty years in federal prison, with at least five years and up to lifetime of supervised release, and a fine of $250,000.
The charges are the result of an investigation by the Michigan State Police Internet Crimes Against Children Task Force (MSP ICAC), working in conjunction with Homeland Security Investigations (HSI) and with the cooperation of the Ingham County Prosecutor’s Office. The case is being prosecuted by Assistant United States Attorney, Alexis M. Sanford.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
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Lansing Man Sentenced in Federal Mortgage Fraud ProbeRead the Press Release
Sam Ames Sent to Prison for Role in Mortgage Fraud Conspiracy
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Sam Ames, 33, of Charlotte, Michigan was sentenced to eight months in prison for his role in a conspiracy to commit mortgage fraud in connection with his dealings with CDC Investments and Hometowne Financial. He was also ordered to pay a fine of $7,500 and restitution in the amount of $285,000 to the financial institutions defrauded. The sentence was imposed by Chief U.S. District Judge Robert J. Jonker.
On March 15, 2016, Ames pled guilty to conspiring with others to commit bank fraud in connection with real estate in and around Lansing, Michigan, from in or about 2006 to 2007. The conspiracy, which resulted in losses to mortgage lenders exceeding $550,000, enabled the perpetrators to use bank funds to enrich themselves as a result of sham real estate transactions.
Judge Jonker decided to sentence Ames below the recommended range of 30-37 months because he felt Ames had turned his life around since committing his crimes. But the Judge rebuffed a defense request for a probationary sentence. While the Judge declared himself persuaded that Ames was a different person than the one who defrauded banks and mortgage companies, the Judge stated that it was important for the public to see that a prison term awaits anyone who engages in mortgage fraud as rampant as the Ames conspiracy was.
Ames’s prosecution is the result of a continuing investigation by the Mortgage Fraud Task Force, comprised of federal investigators including the FBI, U.S. Secret Service, the U. S. Postal Inspection Service and the HUD Office of Inspector General. The task force also includes the Lansing Police Department, investigators employed by the Michigan Attorney General’s Office and other state agencies. To date, eighteen individuals have been convicted of mortgage fraud as part of this effort, resulting in prison sentences for all the defendants and restitution orders exceeding $14,000,000.
U.S. Attorney Miles praised the cooperation between federal, state and local investigators participating in the Mortgage Fraud Task Force. The prosecution was handled by Assistant U.S. Attorney Timothy VerHey.
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Rockford, Michigan, High School Coach Agrees to Plead Guilty to Hidden Videos of Girls Changing ClothesRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that Timothy Vallier, 30, of Plainfield Township, signed a plea agreement in which he agreed to plead guilty to federal charges of attempting to produce and possessing child pornography. Vallier was a Rockford Public High School rowing coach.
Vallier faces a minimum sentence of 15 years and a maximum of 50 years in federal prison. The exact term of imprisonment will be determined by the judge at a sentencing hearing on a date to be scheduled by the court. The offenses also carry a requirement for sex offender registration, a potential fine of up to $250,000 per count, financial compensation to the victims, and at least 5 years and up to a lifetime on intensive supervised release after incarceration, during which the court can impose a number of special conditions designed to protect children.
In the plea agreement, Vallier admits that between January 2012 and April 2016, he produced approximately 86 hidden camera videos of girls changing clothes at two high school facilities: the Rockford rowing team’s boathouse and the Rockford Freshman Center. The federal charges follow an investigation led by the Kent County Sheriff’s Department, the Michigan State Police Internet Crimes Against Children Task Force, and Homeland Security Investigations. Vallier has been in custody since his arrest on related state charges on July 10, 2016, which were dismissed in light of federal prosecution. The plea hearing has not yet been scheduled and will be held at the federal courthouse in Grand Rapids. Homeland Security Investigations and the U.S. Attorney’s Office are continuing to identify and notify victims.
This case is being prosecuted by Assistant U.S. Attorney Tessa K. Hessmiller as part of the Department of Justice’s Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office, county prosecutor’s offices, and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
Homeland Security Investigations encourages the public to report suspected child predators and any suspicious activity through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form. Both are staffed around the clock by investigators. From outside the U.S. and Canada, callers should dial 802-872-6199. Hearing impaired users can call TTY 802-872-6196. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1- 800-THE-LOST. For additional information about wanted suspected child predators, download HSI’s Operation Predator smartphone app or visit the online suspect alerts page.
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Federal Judge Sentences Last of National Drug Trafficking Ring Members in CustodyRead the Press Release
Federal Authorities Continue to Search for Remaining Charged Defendant
GRAND RAPIDS, MICHIGAN —Today, Hon. Robert Holmes Bell, District Court Judge of the Federal District Court for the Western District of Michigan, sentenced Carlos Ramirez-Zuniga to 70 months’ imprisonment. Ramirez-Zuniga was the final in-custody defendant out of five total to be charged in this case which arose from allegations that the defendant conspired to distribute cocaine and marijuana obtained first in Texas, near the Mexican border, into Lansing, Michigan.
The filed indictment indicated that the leader of the conspiracy, Merced Alvarado, aka "Hector," aka "Machine," began distributing drugs into Michigan in 2001 and continued doing so until June of 2014, when members of Homeland Security Investigations and the Lansing Police Department conducted a search of the conspiracy’s Lansing stash house and discovered over 800 grams of cocaine and over $39,000. Information developed in the investigation indicated that the conspiracy obtained marijuana and later cocaine near Alvarado’s Mission, Texas home, and transported the drugs throughout the country in hallowed out drink coolers. The Indictment indicated that more than five kilograms of cocaine and more than 50 kilograms of marijuana were involved. In total, nvestigators recovered over $150,000 in drug proceeds and over two kilograms of cocaine in the course of the investigation.
"We will continue to work with our federal and state partners to detect and bring to justice those drug traffickers seeking to move wholesale quantities of drugs into our state," stated U.S. Attorney Patrick Miles, "This case presents an excellent example of state and local cooperation in an investigation which ended a multistate drug conspiracy."
For his crime, the Court sentenced Alvarado, the recognized leader of the conspiracy, to 130 months’ imprisonment. Jonathan Galvan, a courier working for Alvarado delivering the drugs to Michigan and other states, received 48 months’ imprisonment. Elva Medrano, the Michigan resident who distributed drugs on Alvarado’s behalf, collected proceeds and maintained a home for the storage of the drugs in Michigan, received a sentence of 36 months’ imprisonment. Ramirez-Zuniga was Alvarado’s largest Lansing-based drug customer.
"These prison sentences are a testament to HSI’s commitment to aggressively investigating drug smuggling organizations and ending the violence they bring to our communities," said Marlon Miller, special agent in charge of HSI Detroit. "We are committed to making our communities safer, and we will continue close collaboration with our law enforcement partners at every level to further that objective."
City of Lansing Police Chief Michael Yankowski added: "The results of this investigation is confirmation of the dedication of Law Enforcement to stop illegal narcotic distribution in our neighborhoods. The long term effects of this investigation will have a positive influence for the reduction of violent crime and quality of life in our local communities."
Investigators continue to seek information about the location of the final defendant, Raymundo Perea, another of Alvarado’s couriers who remains a fugitive, who is pictured below. Perea was last known to law enforcement to be in the area of Mission, Texas. Anyone with information about the whereabouts of Perea should contact Homeland Security Investigations at (313) 226-0533. Of course, the charges in an indictment are merely accusations, and the defendant is presumed innocent until and unless proven guilty in a court of law.
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Two-Time Felon Convicted of Possessing FirearmsRead the Press Release
MARQUETTE, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr. announced the recent sentencing of Joseph John Holm, Jr., who was convicted of being a convicted felon in possession of firearms.
Agents from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) assisted by detectives from the Upper Peninsula Substance Enforcement Team (UPSET) and officers from the Forsyth Township Police Department searched Holm’s residence in Gwinn, Michigan last December. They discovered 10 firearms including an Olympic Arms .223 caliber rifle that is similar to the popular AR-15-style assault rifle. They also found four high capacity magazines to go with this rifle. Holm was prohibited from possessing firearms because of his criminal record, specifically his prior felony convictions for criminal sexual conduct in the second degree and failure to register as a sex offender. Holm was arrested the day of the search and later indicted by a federal grand jury.
During the sentencing hearing, U.S. District Court Judge Robert Holmes Bell noted that he was disturbed by the fact that Holm used methamphetamine while released on bond pending trial. Judge Bell sentenced Holm to five years in prison to be followed by three years of supervised release.
ATF Special Agent in Charge Robin Shoemaker thanked the members of the Upper Peninsula Substance Enforcement Team and the Forsyth Township Police Department for their investigative efforts. She noted that the sentence imposed on Holm addresses the seriousness of his conduct and hopefully serves as a deterrent to others that may possess firearms Illegally.
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Leader of the Black P Stone Nation Gang Sentenced to over Twelve Years in Prison for Heroin TraffickingRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr. announced today that Kenton Maurice Taylor, age 46, of Lansing, Michigan, was sentenced by U.S. District Judge Janet T. Neff to 151 months in prison for running a heroin distribution conspiracy that began operating in and around Lansing in October 2012. In addition to his prison term, Taylor was sentenced to eight years of supervised release and ordered to pay a money judgment of $50,400.
Taylor is the leader of the Lansing branch of the Black P Stone Nation gang. As its "Prince," Taylor is the highest ranking member of the gang in the State of Michigan. The Black P Stone Nation is a street gang based in Chicago, which is estimated to have more than 30,000 members across the United States. The gang was originally formed in the 1950s and 1960s by Jeff Fort. Fort is currently serving a sentence of more than 150 years for convictions in 1987 and 1988, which stemmed from conspiring with Libya to perform acts of domestic terrorism and ordering the murder of a rival gang leader. The Black P Stone Nation imbues itself in religion to provide a gloss over its criminal activities and finances itself primarily through narcotics and firearms trafficking.
Taylor and three other gang members – Karl Alphonso Lockridge, Maurice Ray, Jr., and Eric Darnell Cooper were indicted in August 2015 for conspiracy to distribute in excess of 100 grams of heroin and for other heroin distribution and firearms possession charges. Taylor’s co-defendants all pled guilty. Taylor elected to go to trial and a jury convicted Taylor in November 2015 on the conspiracy charge and a heroin distribution charge.
The conspiracy began after Taylor was released from the Michigan Department of Corrections in late 2012, after serving a five-year prison term for cocaine distribution. Taylor returned home to Lansing, resumed leadership of the gang’s Lansing branch, and turned the gang’s focus towards heroin trafficking. Taylor, his co-defendants, and other gang members thereafter traveled to Chicago on a monthly basis to obtain heroin from Taylor’s supply sources for further distribution in Lansing. Gang members armed themselves while on trips to Chicago and in and around Lansing to protect their drugs and their drug proceeds. As the Lansing branch’s leader, Taylor ordered physical beatings of gang members that did not adhere to the gang’s code of conduct.
U.S. Attorney Miles stated: "Street gangs that traffick drugs, carry firearms, and operate through violence and intimidation are a plague on the communities in which they exist. The Black P Stone Nation is no exception. Mr. Taylor is a rampant recidivist drug dealer who, despite a lengthy criminal history and run ins with the law for over two decades, has still not learned his lesson. He is going where he belongs – behind bars."
Bureau of Alcohol, Tobacco, Firearms, and Explosives Assistant Special Agent in Charge Nicholas Starcevic commented: "The significant sentence of Kenton Maurice Taylor helps protect our community from a dangerous man and a violent gang that was delivering drugs into Lansing and beyond. Heroin and firearms violence has a devastating ripple effect; it ruins lives, families and communities. This case represents a great collaboration between federal, state, and local law enforcement and the United States Attorney’s Office."
"It is through united vigilance and unyielding determination that the law enforcement community in Michigan was able to significantly disrupt the Black P Stone Nation gang, which was engaged in the distribution of heroin in the Lansing area," stated David P. Gelios, Special Agent in Charge of the FBI Detroit Field Office. "Today’s sentencing further demonstrates the collective resolve of federal, state, and local law enforcement partners to address the growing and deadly epidemic of heroin and opioid abuse."
"The Lansing Police Special Operations Section, under the leadership of Sgt. Daniel Zolnai, was grateful to assist the FBI and ATF with this successful and worthwhile collaborative investigation of a prominent gang," stated Lansing Police Chief Michael Yankowski. "Also contributing to the effort was the Michigan Department of Corrections, the Michigan State Police, and the Capital Area Violent Crime Initiative. All of the groups worked seamlessly together to make this case a success."
The case was prosecuted by Assistant U.S. Attorneys Joel S. Fauson and Mark V. Courtade.
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Kalamazoo Man, Kevonte McNeely, Sentenced to Five Years in Federal Prison for Possessing A FirearmRead the Press Release
McNeely had one of the 21 firearms stolen from Outpost Guns, in Sturgis, Michigan, on November 12, 2015.
GRAND RAPIDS, MICHIGAN — Kevonte Derome McNeely, age 24, of Kalamazoo, Michigan, was sentenced to five years in federal prison following his conviction for unlawful possession of a firearm as a felon, U.S. Attorney Patrick A. Miles, Jr., announced. In addition to the 60-month prison term, U.S. District Court Chief Judge Robert J. Jonker imposed a fine of $1,200 and a three-year term of supervised release, which will begin when McNeely is released from prison.
McNeely pled guilty on April 19, 2016, to knowingly possessing a firearm as a felon on November 16, 2015. The firearm McNeely had in his possession was an assault rifle, similar to an AK-47, which was stolen from Outpost Guns, in Sturgis, Michigan, on November 12, 2015. In total, 21 firearms were stolen that day from the store. A joint investigation involving the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Kalamazoo Department of Public Safety, and the Sturgis Police Department revealed that, within a few days of the theft, the stolen firearms were transported from Sturgis to Kalamazoo and sold to multiple buyers. Five of the 21 stolen firearms have been recovered by law enforcement. The investigation is ongoing with respect to other subjects involved in trafficking or possessing the stolen firearms.
Kevonte McNeely is the first to be sentenced of six defendants who have been charged federally, to date, in connection with the firearms stolen from Outpost Guns. Jorel Gefferard, of Sturgis, was indicted in a separate case that charges him with the theft of the firearms, unlawful possession of one or more firearms as a felon, and possessing, concealing, and storing the stolen firearms following the Outpost Guns theft. Kevonte McNeely’s brother, Keondre McNeely, also of Kalamazoo, was indicted in the same case as Gefferard, along with a third individual, Roscoe Manns, of Sturgis, for receiving, possessing, concealing, and storing the stolen firearms following the theft. Keondre McNeely is considered a fugitive and remains at large; the District Court issued a warrant for his arrest. Two other Kalamazoo men, Ronald Eugene Dafney, and Kenneth Parnell Williams, were indicted in separate cases for unlawfully possessing as felons one or more of the firearms that were among the 21 stolen from Outpost Guns. All of these other cases remain pending. The charges in an indictment are merely accusations, and the defendants are presumed innocent until and unless proven guilty in a court of law.
"This case demonstrates how quickly a significant number of firearms can be stolen, moved, and sold, often landing in the hands of people who cannot legally purchase firearms because of prior felony convictions, thereby placing members of our communities at risk," said U.S. Attorney Patrick Miles. The U.S. Attorney’s Office works closely with the ATF to investigate, identify, and prosecute individuals involved in trafficking stolen firearms.
"Thefts from Federal Firearm Licensees will always be one of our highest priorities," said ATF Special Agent in Charge Robin Shoemaker. "Firearms in the hands of those who should not have them presents a public safety issue, and threatens the safety of our communities. ATF will continue to work with our partners to aggressively follow the gun to recover those firearms and put those individuals behind bars."
Assistant U.S. Attorney Kate Zell prosecuted the case.
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Owner of Mexican Restaurant Chains Sentenced to Federal Prison for Tax EvasionRead the Press Release
GRAND RAPIDS, Mich. – Marco Cuellar, 37, of Hudsonville, Michigan, was sentenced in U.S. District Court to serve 12 months in prison for filing false tax returns, U.S. Attorney Patrick A. Miles, Jr. announced today. Before his sentencing, Cuellar, who owns and co-owns numerous Mexican restaurant chains in Michigan, Indiana and Ohio, was also required to pay approximately $370,000.00 in restitution to the Internal Revenue Service in back taxes and penalties. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Manny Muriel, Internal Revenue Service, Criminal Investigations Division.
According to his plea-agreement with the U.S. Attorney’s Office, Cuellar filed false tax returns for 2008 through 2012 with the Internal Revenue Service. During those years, Cuellar skimmed cash from his restaurants located in Michigan and then failed to report that income in his tax returns for those years; as a result, Cuellar avoided paying taxes on $607,914.00 of unreported income.
"Successful business owners have the same legal duty to pay their taxes as any other taxpayer, and any business owner who uses his or her business to cheat the tax-paying public has to understand that he or she runs the real risk of winding up as a defendant in Federal court," stated U.S. Attorney Miles. "Mr. Cuellar ran that risk, and now he’s on his way to prison."
"Cheating on your taxes is the same as stealing," said Special Agent in Charge, Manny Muriel, of IRS Criminal Investigation. "Individuals who corruptly violate the law to further their business interests and intentionally evade paying their fair share of taxes undermine public confidence in our tax system and unfairly disadvantage businesses that follow the rules. As Marco Cuellar has discovered, operating outside the law and failing to pay taxes has severe consequences."
As a citizen of Mexico who is present in the United States as a lawful permanent resident, Cuellar also faces removal proceedings back to Mexico once he is released from the Bureau of Prisons.
This case was prosecuted by Assistant U.S. Attorney Hagen W. Frank, and was investigated by Special Agents of the IRS Criminal Investigation Division and Homeland Security Investigations, U.S. Immigration and Customs Enforcement.
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