Western District of Michigan
Press releases recorded for this federal judicial district.
Northern Michigan Woman Charged WIth Wire Fraud and Money Laundering in Multi-Million Dollar Scheme to DefraudRead the Press Release
Sarah Frances Bolhuis Has Agreed To Plead Guilty For Her Role In A $7.5 Million Scheme
GRAND RAPIDS, MICHIGAN — Sarah Frances Bolhuis, 70, of Antrim County, Michigan, was charged with two felonies in connection with a scheme to defraud others of their money, U.S. Attorney Patrick A. Miles, Jr. announced today. Federal investigators believe that more than 50 individuals in Michigan, Indiana, Illinois, and Florida may have fallen victim to the fraud and collectively lost more than $5 million in the scheme.
The felony charges filed today in U.S. District Court in Grand Rapids allege that Sarah Bolhuis devised and executed a scheme to defraud to obtain money from others between 2006 and 2015. As part of the scheme, the government alleges that Bolhuis, operating under the names American Financial (AMFI), TriLogic, and Prestige Benefits, falsely represented to prospective clients that she was engaged in the business of providing various financial services and investment loan opportunities. In truth, as alleged in the Felony Information, Bolhuis did not use client money as promised; instead, she made payments to a business partner, made return-of-principal and other payments to clients, paid "finder fees" to individuals who successfully recruited new clients, and paid various personal living and entertainment expenses. Bolhuis also is alleged to have laundered proceeds of the fraud by depositing into a bank account money she obtained from one victim and withdrawing $27,500 from the same account to make a payment to another victim.
Bolhuis has signed a plea agreement in which she waived her right to indictment by a Grand Jury and agreed to enter guilty pleas to the wire fraud and money laundering charges. In the plea agreement filed with the Court today, Bolhuis has admitted making the following false and fraudulent misrepresentations and promises concerning the financial services she claimed to provide:
- She falsely claimed that her business provided short term funding to adult foster care homes and to individuals seeking debt refinancing;
- She falsely claimed she would invest certain client money in overseas accounts;
- She falsely represented that certain funds would be invested in silver coins;
- She falsely promised that she was making payments on a client’s home mortgage (including a second mortgage taken out by the client to fund investments with Bolhuis) using interest and/or fees earned from the investments; and
- She promised to pay some of her clients between 3% and 5% interest per month on the principal monies provided to her by her clients. Some clients were promised even higher interest rates.
Additionally, Bolhuis admitted in the plea agreement that the total amount of money obtained in the scheme was approximately $7.5 million. Although some of those funds were paid to participants during the course of the scheme, more than $5 million in fraudulent proceeds must be repaid to the victims.
Bolhuis faces a maximum sentence of 20 years in prison on the fraud charge and a maximum sentence of 10 years in prison for money laundering. The Court will determine the sentence after considering the federal sentencing guidelines and statutory sentencing factors. An arraignment and change of plea will be scheduled with the Court. Until a defendant enters a plea and is found guilty, charges in a Felony Information are merely accusations, and a defendant is presumed innocent unless and until proven guilty in a court of law.
Internal Revenue Service Criminal Investigation (IRS-CI) and the Federal Bureau of Investigation (FBI) are investigating this matter. Assistant U.S. Attorney Christopher O’Connor is prosecuting the case.
Individuals who believe they may be victims of the fraud and have not yet been interviewed by the Internal Revenue Service or the Federal Bureau of Investigation may contact the FBI office in Traverse City at (231) 946-7201 to provide information concerning their participation. Victims of the fraud may obtain information concerning this case, including a copy of the Felony Information and Plea Agreement, and notifications of court dates, by visiting the U.S. Attorney’s victim assistance website at: http://www.justice.gov/usao-wdmi/victim-and-witness-assistance-program/vw-large-cases, or by calling the victim coordinator at (616) 808-2034.
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Hudsonville Resident Sentenced to Four Years in Prison for Investment Fraud SchemeRead the Press Release
Steven J. Hayes Ordered To Pay His Victims $822,961.23 In Restitution
GRAND RAPIDS, MICHIGAN —Steven Jack Hayes, 60, of Hudsonville, Michigan, was sentenced today to 48 months in federal prison after being convicted of two felonies in connection with an investment fraud scheme he perpetrated between 2001 and 2015. U.S. District Judge Robert Holmes Bell imposed the sentence and ordered Hayes remanded to the custody of the U.S. Marshal to start his sentence. Upon release from prison, Hayes will be supervised by the U.S. Probation office for a period of three years.
Hayes operated a tax return and investment consulting business under the name "Hayes Financial Consulting, Business and Personal Financial Consulting." Hayes admitted that he falsely represented to clients that he would invest their money in retirement accounts and other investments, including at Fidelity Investments. In total, nearly 20 individuals in West Michigan invested their money with Hayes. Hayes also pled guilty to filing a false 2011 federal tax return that allegedly underreported his income that year by at least $158,000. In addition to the $822,961.23 restitution order for the victims of his fraud, Hayes was ordered to pay the U.S. Treasury $90,806 in restitution pertaining to his false tax return conviction.
U.S. Attorney Miles stated, "For 14 years, Hayes took advantage of the trust placed in him by his friends, neighbors, and acquaintances. The victims entrusted Hayes with over $1 million of their money—in some cases, their entire retirement accounts—believing his story of a successful and reasonable investing strategy. He lulled his victims to invest more money, including some of their annual tax refunds, by creating fake account statements to make it appear as though their investments were earning interest. In truth, Hayes never invested a dollar and lived on his victims’ retirement accounts and other assets since 2001. This sentence should send a clear message: If you engage in a scheme to defraud others of their hard-earned money, and avoid paying your taxes in the process, you will be held to account for your crime."
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money as well as skirt their tax obligations," said Manny Muriel, IRS Criminal Investigation, Special Agent in Charge, Detroit Field Office. "Mr. Hayes’s actions not only caused negative ramifications to those financially connected to him, but also the honest taxpayer when he committed significant tax fraud violations. Today’s sentencing demonstrates how federal law enforcement will band together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain."
Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation investigated this matter with valuable assistance from the Ottawa County Sheriff’s Department. Assistant U.S. Attorney Christopher O’Connor prosecuted the case.
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Rockford, Michigan, High School Coach Charged Federally with Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN – Timothy Vallier, 30, of Plainfield Township, appeared in federal court today on federal criminal charges of possession and attempted production of child pornography. The federal charges follow an investigation led by the Kent County Sheriff’s Department and the Michigan State Police Internet Crimes Against Children Task Force, and joined by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The criminal complaint alleges that Vallier took hundreds of hidden videos of girls changing in locker rooms while he was the head rowing coach at the Rockford Public Schools and that a computer in his possession contained additional child pornography.
The government asked the court to detain Vallier pending trial, and he will remain in custody pending a hearing on the matter early next week. Vallier has been in state custody since July 10 on state charges. The state charges will be dismissed in light of the federal prosecution.
If convicted, Vallier faces a minimum sentence of 15 years and a maximum of 30 years in federal prison on each count of attempting to produce child pornography and up to 20 years for possession. Each offense also carries a requirement for sex offender registration, a potential fine of up to $250,000 and financial compensation to the victims, and up to life time on intensive supervised release after incarceration, during which the court can impose a number of special conditions designed to protect children.
HSI 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.
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.
The charges in an indictment are merely accusations, and the defendants are presumed innocent until and unless proven guilty in a court of law.
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Battle Creek Sex Traffickers Charged FederallyRead the Press Release
GRAND RAPIDS, MICHIGAN –A federal grand jury indicted four Battle Creek men, William Jeffrey-Davis Edwards (age 24), Dakota Dale Walters (age 24), James Gabriel Smith (age 26), and Michael Ray Noble II (age 20), on multiple counts of sex trafficking two minors, both age 14. Calhoun County previously charged all four defendants with human trafficking upon their arrest in June, and those charges will be dismissed in light of the federal prosecution. Homeland Security Investigations has been working closely with the Battle Creek Police Department on a coordinated state and federal investigation.
The defendants face up to life in prison on the sex trafficking counts, sex offender registration, and up to lifetime on intensive federal supervised release after prison. The minors will be able to seek monetary restitution for counseling, treatment, and other damages if the defendants are convicted. In addition to being charged with sex trafficking, Smith faces up to 10 years in prison on one count of being a felon in possession of a firearm.
This case, prosecuted by Assistant U.S. Attorney Tessa K. Hessmiller, 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.
The charges in an indictment are merely accusations, and the defendants are presumed innocent until and unless proven guilty in a court of law.
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United States, Enbridge Reach $177 Million Settlement After 2010 Oil Spills in Michigan and IllinoisRead the Press Release
Settlement Requires Action to Prevent Future Spills
WASHINGTON - The Department of Justice and the U.S. Environmental Protection Agency today announced a settlement with Enbridge Energy Limited Partnership and several related Enbridge companies to resolve claims stemming from its 2010 oil spills in Marshall, Michigan, and Romeoville, Illinois. Enbridge has agreed to spend at least $110 million on a series of measures to prevent spills and improve operations across nearly 2,000 miles of its pipeline system in the Great Lakes region. Enbridge will also pay civil penalties totaling $62 million for Clean Water Act violations-- $61 million for discharging at least 20,082 barrels of oil in Marshall and $1 million for discharging at least 6,427 barrels of oil in Romeoville.
In addition, the proposed settlement will resolve Enbridge's liability under the Oil Pollution Act, based on Enbridge's commitment to pay over $5.4 million in unreimbursed costs incurred by the government in connection with cleanup of the Marshall spill, as well as all future removal costs incurred by the government in connection with that spill. Today's settlement includes an extensive set of specific requirements to prevent spills and enhance leak detection capabilities throughout Enbridge's Lakehead pipeline system- a network of 14 pipelines spanning nearly 2,000 miles across seven states. Enbridge must also take major actions to improve its spill preparedness and emergency response programs. Under the settlement, Enbridge is also required to replace close to 300 miles of one of its pipelines, after obtaining all necessary approvals. Enbridge's Lakehead System delivers approximately 1.7 million barrels of oil in the United States each day.
"This settlement will make the delivery of our nation's energy resources safer and more environmentally responsible," said Assistant Attorney General John C. Cruden for the Justice Department's Environment and Natural Resources Division. "It requires Enbridge to take robust measures to improve the maintenance and monitoring of its Lakehead pipeline system, protecting lakes, rivers, land and communities across the upper midwest, as well as pay a significant penalty."
In addition to payments required under the proposed settlement, Enbridge has already reimbursed the government for $57.8 million in cleanup costs from the Marshall spill and $650,000 for cleanup costs from the Romeoville spill and Enbridge reportedly incurred costs in excess of $1 billion for required cleanup activities relating to the Marshall and Romeoville spills.
"This agreement puts in place advanced leak detection and monitoring requirements to make sure a disaster like this one doesn't happen again," said Assistant Administrator Cynthia Giles for EPA's Office ofEnforcement and Compliance Assurance. "This comprehensive program - including an independent third party to audit compliance - will protect our waterways and the people who depend on them."
"My office is pleased with this settlement, which not only provides financial accountability for the environmental harm caused by the oil spill in Marshall but also puts in place significant measures to protect the people and vital natural resources of this district going forward," said U.S. Attorney Patrick Miles Jr. for the Western District of Michigan. "Prevention of future pipeline leaks and immediate detection and repair of problem areas are critical when protecting health and the environment. With the EPA and our other federal partners, the U:S. Attorney's Office will vigorously enforce the Clean Water Act and other federal environmental laws in this district."
"This was one of the largest inland oil spills in U.S. history when Enbridge discharged one million gallons of oil to Talmadge Creek near Marshall," said Acting EPA Regional Administrator Robert Kaplan. "Together with our state and local emergency responders, EPA was able to contain the spill before it reached the Great Lakes. After 22 months of arduous cleanup work, the Kalamazoo River finally reopened for recreational activities."
Under the settlement, Enbridge is committing to the following measures, which it estimates will cost at least $110 million:
• Implement an enhanced pipeline inspection and spill prevention program;
• Implement enhanced measures to improve leak detection and control room operations;
• Commit to additional leak detection and spill prevention requirements for a portion of
Enbridge's Line 5 that crosses the Straits of Mackinac in Michigan;
• Create and maintain an integrated database for its Lakehead Pipeline System;
• Enhance its emergency spill response preparedness programs by conducting four emergency spill response exercises to test and practice Enbridge's response to a major inland oil spill;
• Improve training and coordination with state and local emergency responders by requiring incident command system raining for employees, provide training to local responders, participate in area response planning and organize response exercises;
• Hire an independent third party to assist with review of implementation of the requirements in the settlement agreement;
The government's complaint alleges that Enbridge owned or operated a 30 inch-pipeline, known as Line 6B, that ruptured near Marshall on July 25, 2010, discharging oil into the environment. Although the Line 6B rupture triggered numerous alarms in Enbridge's control room, Enbridge failed to recognize a pipeline had ruptured until at least 17 hours later. In the meantime, Enbridge had restarted Line 6B on two separate occasions on July 26, 2010, pumping additional oil into the ruptured pipeline causing additional discharges of oil into the environment. Ultimately, Line 6B discharged at least 20,082 barrels of crude oil, much of which entered Talmadge Creek and flowed into the Kalamazoo River which flows to Lake Michigan. Flooding caused by heavy rains pushed the discharged oil over the river's banks into its flood plains and accelerated its migration over 35 miles downstream before it was contained. Enbridge later replaced Line 6B, which originates in Griffith, Ind., crosses the lower peninsula of Michigan and ends in Sarnia, Canada, with a new, larger pipeline, also known as Line 6B. The rupture and discharges were caused by stress corrosion cracking on the pipeline, control room misinterpretations and other problems and pervasive organization failures at Enbridge.
The complaint also alleges that on Sept. 9, 2010, another Enbridge pipeline, known as Line 6A, discharged at least 6,427 barrels of oil which Romeoville, much of which flowed through a drainage ditch into a retention pond in Romeoville.
There will be a 30 day public comment period on the consent decree lodged today. Information on how to comment on the consent decree will be available in the Federal Register and on the Department of Justice's website: www.justice.gov/enrd/consent-decrees.
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Kentucky Resident Pleads Guilty to Role in Staged Automobile Accident Insurance Fraud RingRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S Attorney Patrick Miles announced that Gustavo Ramiro Acuna-Rosa, a resident of Kentucky, and formerly of Wyoming and Lansing, Michigan, pled guilty in United States District Court in Grand Rapids, Michigan, to conspiracy to commit mail fraud and health care fraud. The conspiracy count carries a maximum term of imprisonment of 20 years and the health care fraud count a maximum term of imprisonment of 10 years. Acuna-Rosa’s sentencing hearing is scheduled for November 28, 2016. He currently remains in federal custody.
Acuna-Rosa’s guilty pleas arise out of his involvement in a sophisticated automobile accident insurance fraud ring that operated in Kent and Ingham Counties from at least 2012 through May 2015. In the plea agreement, Acuna-Rosa admitted that he first participated in the insurance fraud ring in 2012 when owners of Revive Therapy Center in Wyoming, Michigan, paid him $1,000 to participate in a staged automobile accident. Thereafter, Acuna-Rosa sought treatment at Revive Therapy Center, and his automobile insurance company was billed for false and fraudulent claims related to his unnecessary medical treatment.
In 2013, Acuna-Rosa, with the assistance of others, opened his own physical therapy clinic in Lansing, Michigan, under the name Renue Therapy Center. While operating this therapy clinic, Acuna-Rosa used recruiters who paid other individuals to participate in staged automobile accidents or to agree to seek treatment at his clinic for injuries that they falsely claimed to have suffered as a result of their real automobile accidents. Acuna-Rosa’s therapy clinic then billed automobile insurance companies for treatment that was unnecessary or that it did not actually provide to these individuals. Acuna-Rosa further admitted to submitting false insurance claims to automobile insurance companies totaling between $250,000 and $550,000.
U.S. Attorney Miles stated that, "Those who seek to personally benefit by defrauding the system with false automobile accidents and false insurance claims will be prosecuted to the fullest extent under the law."
A federal indictment remains pending against three additional individuals that have been charged with involvement in the ring: Yoisler Herrera-Enriquez and Dolis Rojas-Lopez, both from Wyoming, Michigan, and Antonio Ramon Martinez-Lopez, from Port Richey, Florida.
The investigation is being handled by the Grand Rapids offices of the Department of Homeland Security-Homeland Security Investigations and the Federal Bureau of Investigation.
The prosecution is being handled by Assistant United States Attorney, Ronald M. Stella.
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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Grand Rapids Man Sentenced for Distribution of Child Pornography on the Dark WebRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Seth Edward Piccolo, 44, of Grand Rapids, was sentenced to 60 months’ imprisonment for his role as a member of a dark website for the distribution of child pornography, including images of very young prepubescent children being sexually assaulted. Piccolo pled guilty to charges of possession and access with intent to view child pornography in April of this year, followed by a guilty plea to distribution of child pornography in May. The pleas were accepted and the sentence imposed by U.S. District Judge Robert Holmes Bell.
Piccolo was a member of a website that operated on the "dark web." The dark web is a description given to websites that are only accessible through specialized software that utilizes layers of encryption to hide the identity of the users. Australian law enforcement authorities, in cooperation with the FBI, discovered the illegal website that was dedicated to trading child pornography. Piccolo established his membership credentials by uploading images from his own collection of child pornography. Once admitted, he was able to access and download images from the website and images posted by other users. The FBI and Australian authorities identified hundreds of members who were scattered across the globe leading to Piccolo’s apprehension and conviction. Piccolo made further attempts to conceal his activities by utilizing encryption and evidence destroying software on his home computer.
"The dark web is no sanctuary for criminal activity," U.S. Attorney Miles said. "Law enforcement in the Western District of Michigan is committed to tracking down criminals who try to use technology to evade detection of their crimes, including child exploitation offenses."
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 prosecutors’ 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 case was investigated by the FBI’s WEBCHEX Task Force and the Australian Queensland Police Service’s Task Force Argos. Assistant U.S. Attorney Justin M. Presant prosecuted the case.
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Chicago Man Sentenced to More Than 72 Years for Multiple Armed Bank RobberiesRead the Press Release
GRAND RAPIDS, MICHIGAN —U.S. Attorney Patrick A. Miles, Jr., announced today that Dominick T. Johnson, 34, of Chicago, Illinois, was sentenced to 72 years and eight months in prison by U.S. District Judge Gordon J. Quist. Johnson was convicted by a jury in January of seven crimes—including conspiracy, bank robbery, and firearms charges—after a two-week trial.
Johnson planned and served as the get-away driver for three completed bank robberies in and around Kalamazoo: the May 29, 2014, robbery of PNC Bank in Galesburg, the July 29, 2014, robbery of Comerica Bank in Comstock Township, and the January 8, 2015, robbery of Old National Bank in Oshtemo Township. Johnson’s half-brother, Nathan Benson, previously pled guilty for his role in the robberies. In all three robberies, Benson brandished a loaded firearm and pointed it at bank employees. In two of the robberies, Benson forced the employees into the bank’s vault. The conspiracy also involved three planned bank robberies that were unsuccessful; two were disrupted by law enforcement and one was thwarted by a traffic accident. One significant piece of evidence that led to the conviction of Johnson was the recovery of DNA evidence from a partially eaten hamburger recovered from the bank robbers’ path of flight from the Old National Bank robbery. Johnson also listened to two of the robberies via cell phone calls to Benson, while Johnson’s cell phone was registering with towers near the banks. Benson was sentenced to 14 years’ imprisonment in March.
“The Court’s sentence is an unambiguous message: violent crime will not be tolerated in Western Michigan,” said U.S. Attorney Miles. “The defendant placed the lives of bank employees and customers in extraordinary danger by orchestrating these robberies, and now he will face the consequences of his decisions.”
The investigation was led by the FBI and the Kalamazoo County Sheriff’s Office. Other assisting agencies were the Michigan State Police, the Kalamazoo Department of Public Safety, the Baroda-Lake Township Police Department, the Galesburg Police Department, and the Van Buren County Prosecutor’s Office.
Assistant U.S. Attorneys Justin M. Presant and Hagen W. Frank prosecuted the case.END
Inmate and Daughter-In-Law Sentenced in Social Security ScamRead the Press Release
David and Kathryn McPeters sentenced for defrauding Social Security of $250,000
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced that David R. McPeters and his daughter-in-law, Kathryn McPeters, were sentenced today in connection with their scheme to defraud the Social Security Administration.
Kathryn McPeters was sentenced to prison for a term of 36 months. Presiding Judge Janet T. Neff remarked that she selected a relatively severe sentence on Kathryn McPeters’ because she targeted a program to help the truly needy. Further, her false testimony during trial "strikes at the very integrity of the criminal justice system." David R. McPeters was sentenced to a term of 33 months, to be served consecutive to the two life sentences he is already serving in the Michigan Department of Corrections.
The two were convicted by a jury in March of defrauding the Social Security Administration between 2006 and 2015, taking in approximately $250,000 before the scheme was discovered. David McPeters has been an inmate of the Michigan Department of Corrections since 1983, when he received two life sentences for murder. Kathryn McPeters is a resident of Battle Creek,Michigan. As a prison inmate, David is prohibited by law from receiving benefits. Kathryn agreed to help him circumvent this rule by applying online for benefits using his name and other information, but hiding the fact that he was incarcerated. The plan was successful and SSA began sending funds to a bank account set up for that purpose by Kathryn. The proceeds were split between the two, with Kathryn receiving the majority of the benefits.
The case was investigated by the Grand Rapids Office of the Social Security Administration, Office of Inspector General. The case was tried by Timothy VerHey, Assistant United States Attorney.
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Houghton and Escanaba Area Heroin and Crack Cocaine Conspirators SentencedRead the Press Release
MARQUETTE, MICHIGAN — Damon Ramone Belcher, 43, of Detroit, Michigan, Corrie Venta Ruth, 36, of Flint, Michigan, and Stephanie Rae Hatch, 41, of Lake Linden, Michigan, were sentenced to prison by U.S. District Judge R. Allan Edgar for their roles in conspiring to distribute heroin and crack cocaine in the Houghton, Michigan area, U.S. Attorney Patrick A. Miles, Jr. announced today. Belcher was sentenced to 46 months in prison; Ruth was sentenced to 41 months in prison; and Hatch was sentenced to 33 months in prison. In addition to their prison terms, all three defendants were ordered to serve three years of supervised release upon the completion of their incarceration and to pay a $100 special assessment.
Earlier this year, U.S. District Judge R. Allan Edgar sentenced Isaac Scott Cooley, 31, of Mt. Pleasant, Michigan, Jaclyn Patricia Snouwaert, 29, of Escanaba, Michigan, and Donny Thomas Leffler, 25, of Escanaba, Michigan to prison for their roles in conspiring to distribute heroin and crack cocaine in the Escanaba, Michigan area. Cooley was sentenced to 120 months in prison; Snouwaert and Leffler were sentenced to 33 months in prison. In addition to their prison terms, all three defendants were ordered to serve three years of supervised release upon the completion of their incarceration and to pay a $100 special assessment.
The convictions were the result of an investigation by the Upper Peninsula Substance Enforcement Team (UPSET) and the Drug Enforcement Administration into drug distribution in the Escanaba and Houghton, Michigan areas from the beginning of 2015 through November 2015. The investigation revealed that couriers and dealers from the Detroit and Flint areas brought heroin and crack cocaine up to the Upper Peninsula, where they stayed with local residents as the drugs were distributed.
Detectives from the UPSET drug team and agents from the Drug Enforcement Administration investigated the cases. The cases were prosecuted by Assistant U.S. Attorneys Paul D. Lochner and Hannah N. Bobee.
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Holland Area Man Sentenced for Identity Theft and Mail TheftRead the Press Release
Tracy Lee Rudisel Lived and Worked in Holland While on the Run from Colorado Authorities
GRAND RAPIDS, MICHIGAN — Tracy Lee Rudisel, 49, originally from Colorado but who resided in Holland, Michigan, in 2013 and 2014, was sentenced to 39 months’ imprisonment today by U.S. District Judge Paul L. Maloney for identity theft and possession of stolen mail. The identity theft conviction resulted in a two-year mandatory minimum sentence to be served after Rudisel’s 15 months’ imprisonment for his possession of stolen mail. In pronouncing the sentence, Judge Maloney noted that identity theft remains a serious problem throughout our district, as well as across the country.
Rudisel resided in Colorado for most of his adult life before moving to Michigan in order to live with a woman he met over the internet and to evade warrants for his arrest in Colorado. After arriving in Michigan, Rudisel stole the social security account number of another individual and obtained employment and an apartment in that individual’s name. Over the next several months, Rudisel repeatedly stole the mail of Holland area residents from post-office boxes on the north-side of Holland. Rudisel’s mail theft focused upon residents’ bank statements, bank checks, driver’s licenses, investment accounts, and other mail containing personal identifying information. At the time of his arrest, Rudisel possessed the Michigan driver’s license of several different individuals, as well as information about how to make fraudulent driver’s licenses and other fraudulent identification documents.
"Unfortunately, identity theft continues to be a common offense in our digital age. My office will vigorously prosecute those who commit identity theft and cause innocent victims to suffer serious, and sometimes long-lasting, effects on their financial and personal lives," said U.S. Attorney Patrick A. Miles, Jr. "This case is especially troubling given the large-scale mail theft that went along with Rudisel’s intent to commit identity theft against many victims for his own gain. As in this case, we will continue to seek mandatory two-year minimum sentences, consecutive to any sentence for other criminal conduct, to deter others from committing identity theft against the citizens of this district."
"I applaud the interagency cooperation and the expeditious prosecution," said E.C. Woodson, Inspector in Charge, U.S. Postal Inspection Service. "Rudisel targeted communities in Colorado and Michigan and will now answer for his conduct. The U.S. Postal Inspection Service will continue to vigorously investigate acts of identity theft. We urge all citizens to review their credit reports and report incidences of identity theft immediately."
The investigation of this case was handled by the Holland Police Department and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney Ronald M. Stella.
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Former Teacher Sentenced for Sexual Exploitation of ChildrenRead the Press Release
MARQUETTE, MICHIGAN — Thomas Kevin Hamel, 67, of St. Ignace, Michigan, was sentenced to 180 months in federal prison for sexual exploitation of a minor, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R. Allan Edgar ordered Hamel to serve five years of supervised release from prison, to pay a fine of $25,000 and a $100 special assessment. Hamel will also be required to register as a sexual offender.
On February 1, 2016, Hamel pled guilty to sexual exploitation of a minor. Hamel’s activities came to light through an investigation into the distribution of child pornography in the U.S. by a foreign company. U.S. Postal Inspection Service agents obtained subscriber information and shipping records from this company, which identified Hamel as a subscriber who had purchased suspected child pornography videos. Hamel’s electronic media, including computers and flash drives, were seized during the execution of a search warrant. Forensic analysis of the electronic media revealed a significant collection of child pornographic images and videos, including what appeared to be home-made videos. Further investigation by agents of the Federal Bureau of Investigation showed that Hamel, a retired teacher who served as an athletic trainer for the football and wrestling teams at St. Ignace LaSalle High School, had secretly videotaped boys from the football and wrestling teams while they were nude.
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, 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.
The United States Postal Inspection Service, the Federal Bureau of Investigation, the Mackinac County Sheriff Department, the St. Ignace Police Department, and the Michigan State Police Computer Crimes Unit investigated the case. The case was prosecuted by Assistant U.S. Attorney Paul D. Lochner.
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Albion Man Convicted of Sexual Exploitation of A Child and Possession of Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN – Jeffrey Duane Cox, 44, of Albion, Michigan was convicted by a federal jury of seven counts of Sexual Exploitation of a Child and two counts of Possession of Child Pornography, U.S. Attorney Patrick A. Miles, Jr. announced today. The jury returned a verdict after hearing testimony and reviewing evidence during a six-day trial. Cox faces up to 240 years of imprisonment for these offenses; he will be required to serve a term of at least five years of supervised release after his prison term has been completed; and he will also be required to register as a sexual offender.
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.
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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Grand Rapids Man Sentenced to 15 Years for Bank RobberyRead the Press Release
GRAND RAPIDS, MICHIGAN — Michael Dewayne Winbush, 53, of Grand Rapids, was sentenced on June 14 to 180 months in federal prison to be followed by 3 years of supervised release, U.S. Attorney Patrick A. Miles, Jr. announced today.
On November 30, 2015, Winbush entered the Flagstar Bank on 44th Street in Grand Rapids and handed a teller a note indicating that he had a gun and demanding money. He obtained $5,505 and fled on foot. He was later identified through tips called in to Silent Observer. On February 1, 2016, Winbush pled guilty to robbing the bank. As part of the plea agreement, he will not be prosecuted for a robbery he committed at Lake Michigan Credit Union in Wyoming, Michigan on November 27, 2015. Winbush was ordered to pay restitution to both institutions. Winbush has previously been convicted of bank robberies in the U.S. District Court for the Eastern District of Michigan in 2001 and in Genesee County Circuit Court in 2005. At sentencing, U.S District Judge Robert Holmes Bell chided Winbush for repeatedly resorting to bank robbery despite being educated, articulate, and having the skills and ability to be productive.
The Federal Bureau of Investigation, Grand Rapids Police Department, and Wyoming Police Department investigated the robberies. The case was prosecuted by Assistant U.S. Attorney Alexis M. Sanford.
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Albion Couple Pleads Guilty to Producing Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN – Normann Pittelkow, 42, and his long-time girlfriend Nicole Jacob, 35, of Albion, Michigan, both pled guilty in federal court this week to producing child pornography. Pittelkow admitted that he video recorded a child posing naked and in lingerie and sold the video, as well as one of her in the bathtub, for $200 to someone he met online, and he also admitted to possessing pornographic pictures he produced of three other children. Jacob admitted to posing with three children in lingerie and nude in a series of photographs that Pittelkow took, which she intended to sell online but never did. The couple fled the state and traveled to the southwest and southeast parts of the country. They eventually surrendered after a nationwide bulletin went out for their arrest.
Pittelkow faces a mandatory minimum of 15 years and a combined maximum of 40 years in prison, and Jacob faces 15 to 30 years. They will be sentenced in October. Both Pittelkow and Jacob must register as sex offenders, agreed to pay restitution, and could spend up to a lifetime on intensive federal supervised release after prison.
The Albion Department of Public Safety and Homeland Security Investigations jointly investigated this case. Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the case.
"The children in this case were rescued from an unimaginable situation after one of them made a brave disclosure to a friend," said U.S. Attorney Patrick Miles. "I applaud that young girl for coming forward and not suffering in silence any longer, and I commend the Albion Department of Public Safety for executing a search warrant that night, where officers found the evidence that brought this couple to justice."
"The public provided critical assistance in this investigation, which ultimately led to this couple’s surrender," said HSI Special Agent in Charge Marlon Miller. "HSI will bring to bear technology and other forms of investigative techniques to ensure that the most vulnerable among us are protected from child predators."
"Many people do not realize the magnitude of evidence generated in these cases, which makes it extremely difficult for small departments to investigate on their own," said Chief Scott Kipp of the Albion Department of Public Safety. "Albion Public Safety would like to thank Homeland Security Investigations and the U.S. Attorney’s Office for all their assistance in this investigation. Without the assistance provided by the Federal Agencies involved, we would still be searching through the evidence. It is the cooperation between agencies in all branches of government that help swiftly bring these criminals who prey on small children to justice.
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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73 Year-Old Man Sentenced for Armed Robbery and Firearm PossessionRead the Press Release
GRAND RAPIDS, MICHIGAN — Simon S. Gutierrez, also known as Simon St. John Gutierrez, 73, most recently of Three Rivers, Michigan, was sentenced to 97 months’ imprisonment by U.S. District Judge Robert Holmes Bell. He will be under the court’s supervision for 5 years after he is released, and he was ordered to pay restitution. Gutierrez pled guilty to one count of armed credit union robbery and one count of being a felon in possession of a firearm in January pursuant to a plea agreement.
On January 25, 2013, Gutierrez robbed a branch of the Fifth Third Bank in Kalamazoo and brandished what appeared to be a revolver. On July 10, 2015, he robbed a branch of the Consumers Credit Union next door to the bank he robbed in 2013. In the 2015 robbery, he pretended to be making a lunch delivery before brandishing what appeared to be two handguns and robbing the credit union. Investigators later determined that the two weapons were pellet guns, but a search of his residence led to the recovery of a stolen revolver that matched the description of the weapon used in the 2013 robbery.
Gutierrez’s extensive criminal history includes armed robbery convictions dating back to the 1960s. In the 1980s, he was convicted of bank robberies in Colorado and in Illinois, where authorities described him as "a cunning and dangerous man," a sentiment Judge Bell echoed in imposing sentence. He served approximately thirty years in state and federal prison for those crimes. Altogether he has spent more than forty years in custody. He was last released in 2010.
"Hopefully Mr. Gutierrez’s career in bank robbery and violence is now at an end," U.S. Attorney Patrick Miles said. "The Court’s sentence is a message to younger citizens not to follow the path he has trodden; the consequence of not heeding that message is spending the better part of life locked up."
"The sentencing of Mr. Gutierrez sends a very clear message that the citizens of Kalamazoo County will not tolerate violent crime in our community, and will not tolerate being a crime destination for out-of-state criminals. The FBI Kalamazoo Resident Agency and our local law enforcement partners will continue to work collectively as we did in this investigation to ensure the safety of our community," said David P. Gelios, Special Agent in Charge, FBI Detroit.
The FBI, Kalamazoo Department of Public Safety, and Three Rivers Police Department investigated the robberies. Assistant U.S. Attorney Justin M. Presant prosecuted the case.
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Muskegon Man Sentenced to 96 Months in Federal Prison for Drug, Firearm, and Witness Tampering OffensesRead the Press Release
GRAND RAPIDS, MICHIGAN – Larry Dwayne Diggs, age 24, also known as "Montana" and "Montie," of Muskegon, Michigan was sentenced to 96 months in federal prison for drug, firearm, and witness tampering offenses, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell imposed a 3-year term of supervised release that will commence once Diggs is released from imprisonment.
Diggs pled guilty on February 3, 2016, to one count of possessing "crack" cocaine with the intent to distribute, one count of using and carrying a firearm during and in relation to a drug trafficking crime, and one count of witness tampering. Diggs admitted at the plea hearing that on July 2, 2015, he possessed a quantity of "crack" cocaine and a Glock pistol while at a gas station in Muskegon, Michigan. He admitted that he was on his way to sell the "crack" cocaine to a customer, and he possessed the loaded handgun for his protection. Investigation revealed that the handgun was stolen, and Diggs was a convicted felon.
Diggs’ criminal conduct was not limited to selling drugs while armed with a stolen handgun, which itself posed a significant risk to the community. In the sentencing memorandum Assistant U.S. Attorney Sean Lewis advised the judge that Diggs engaged in "a campaign of witness tampering in an effort to avoid responsibility for his crimes" and argued that such conduct "strikes at the heart of the judicial system and is affront to the Court and the community." Moreover, Diggs "has a number of prior convictions, to include a conviction for shooting at people near a crowded beach in the Muskegon area." Diggs’ conduct and history warranted "a significant custodial sentence to reflect the seriousness of his conduct, promote respect for the law, deter future criminal conduct by the defendant, deter others from engaging in similar conduct, and provide just punishment for his criminal conduct."
The charges in this case are the result of a joint investigation by the Muskegon Township Police Department and the Muskegon Violent Crime Task Force, which includes the Federal Bureau of Investigation (FBI), the Michigan State Police (MSP), and the Muskegon City Police Department. The U.S. Attorney's Office, the Muskegon County Prosecutor's Office, and federal, state, and local law enforcement are working closely together to combat violent crime and witness tampering in the Muskegon area.
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Two Lansing "Homeless IRS Scam" Defendants Get Prison TimeRead the Press Release
GRAND RAPIDS, MICHIGAN — Two additional defendants connected to a Lansing, Michigan area family-run tax scam were sentenced in federal court, U.S. Attorney Patrick Miles announced today. Defendant Ruqayya Aida Abdul-Hakim was sentenced to a term of 72 months (six years) in prison, three years of supervised release and restitution in the amount of $707,444.73. Ms. Abdul-Hakim admitted filing 587 false federal tax returns during a two year time period. Defendant Imran Dawood Ibn-Abdurrahim was sentenced to a term of 54 months (four and a half years) in prison, three years of supervised release and restitution in the amount of $254,142.60. Mr. Ibn-Abdurrahim admitted filing 200 false federal tax returns.
In earlier hearings, defendant Tsiidzoyedu Callista Chiwocha, the mother of Ruqayya Aida Abdul-Hakim and Imran Dawood Ibn-Abdurrahim, was sentenced to a term of incarceration of 12 months plus one day for filing false tax returns; and, Qasim Ibn-Ishaq Verser was sentenced to a term of 36 months of incarceration for filing false tax returns. Mr. Verser’s federal sentence will be served consecutively to his state felony drug-trafficking convictions. And in an earlier prosecution, Taka Chiwocha-Crowell pled guilty to filing false tax returns and was sentenced to 42 months’ incarceration. Two additional co-defendants still face federal charges in this district for this same alleged tax scheme; they remain innocent until proven guilty.
The tax scheme involved deceiving citizens into providing their personal identification information by promising them "free stimulus money." Many of the victims in this case were homeless persons or suffered from addiction and disability issues. The tax returns typically contained false reporting of undocumented income and abusive use of the Earned Income credit. Complaints by local citizens prompted the FBI to open a criminal investigation, including obtaining multiple search warrants to seize evidence of a tax fraud scheme. During the multi-year investigation, more than fifty subpoenas were issued to track down the tax refunds which had been paid into numerous bank accounts. In some instances, the personal identification information was used to file a tax return in a successive year.
"My office has no tolerance for those who take advantage of the trust of the vulnerable only to scam the system and line their own pockets," stated U.S. Attorney Miles. He was joined in the announcement by Jarod J. Koopman, Special Agent in Charge, Internal Revenue Service – Criminal Investigation and David P. Gelios, Special Agent in Charge, FBI Detroit Division.
The investigation was conducted by the Lansing Office of the FBI and the Lansing Office of IRS Criminal Investigations. The case is being prosecuted by Assistant U.S. Attorney Michael A. MacDonald.
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Man Sentenced to Three Years for Threatening A Witness in His Brother's Federal CaseRead the Press Release
GRAND RAPIDS, MICHIGAN – Jermaine Carr, 34, of Riverdale, Illinois, received a three-year sentence in federal prison for tampering with a witness in his brother’s federal case. The witness was assisting law enforcement officers with the investigation into Jermaine Carr’s brother, Daniel Carr, for heroin trafficking. Jermaine Carr called the witness and threatened to burn his house down and told him he was going to die. The three-year term of imprisonment represented the maximum sentence that could be imposed for tampering with a witness. Carr pled guilty to the offense in January 2016. His brother, Daniel Carr, pled guilty in April 2016 to conspiracy to distribute heroin.
At the sentencing hearing, U.S. District Judge Janet T. Neff emphasized the importance of federal witnesses being protected against threats and harassment by angry defendants and family members. She stated that Carr is a danger to society based not only on the seriousness of this offense but also in part on a long string of domestic violence assaults, including with strangulation.
In announcing the sentence, U.S. Attorney Patrick Miles stated, “When we work with witnesses in federal cases, we make their safety a priority. Any threats or harassment of our witnesses will be dealt with seriously.”
This case was investigated jointly by the Battle Creek Police Department and the DEA. Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the case.
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Teacher Indicted for Possession of Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN —Duane William Millar, age 59, of East Lansing, Michigan, appeared in federal court today to face charges that he possessed child pornography. The grand jury alleges in the two-count indictment that Millar possessed child pornography in an internet-based email account and that he possessed child pornography on various computers and media storage devices. If convicted of these charges, Millar faces up to twenty years in federal prison on each count.
Millar was a teacher with the Howell Public School District and resigned his position after the allegations came to light. The Ingham County Prosecutor’s Office initiated Millar’s prosecution for possession of child pornography and then referred the case for federal prosecution.
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.
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.
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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Re-Entry Employer Summit Held in West MichiganRead the Press Release
GRAND RAPIDS, Michigan—U.S. Attorney Patrick Miles announced the holding of an employer summit today in West Michigan as part of the Department of Justice’s Smart on Crime initiative. The U.S. Attorney’s Office and WMU-Cooley Law School are hosting the event to encourage local employers to consider increasing their talent pool through the hiring of returning citizens—formerly incarcerated individuals transitioning to the workplace.
"Meaningful employment opportunity is critical to effectively help people returning from prison so they do not re-offend," explained U.S. Attorney Miles. "This is crime prevention. Lowering the recidivism rate of returning citizens means less crime, fewer victims, lower costs on society, and saves money. My office strives to be proactive in prosecuting and preventing federal crimes."
The Summit follows the Department of Justice’s Re-Entry Week in late April, which highlighted various West Michigan re-entry efforts and programs. The Employer Summit includes a panel discussion and a Q&A session with local employers, the Michigan Department of Corrections and others to learn about local efforts, best practices, workforce development, legal considerations and workplace trends related to employer opportunities and benefits with respect to hiring returning citizens. Employers will be invited to join the "30-2-2" effort to recruit at least 30 employers to hire at least two returning citizens whose progress will be documented for two years.
According to the Michigan Department of Corrections, 10,000 prisoners were paroled in Michigan in 2014, many of whom have returned to Kent County to rebuild their lives. Cascade Engineering and Butterball Farms, Inc., two of the Summit’s sponsors and panelists, have experienced strong success rates hiring returning citizens.
Media representatives interested in interviewing U.S. Attorney Miles or a participant in the Summit should contact the U.S. Attorney’s Office Press Information Officer, Kaye Hooker, at (616) 560-6512.
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Muskegon Woman Sentenced to 24 Months in Federal Prison for PerjuryRead the Press Release
GRAND RAPIDS, MICHIGAN – Tunisia Phillips-Lark, also known as "Kesha" and "Nish Nish," of Muskegon, Michigan was sentenced to 24 months in federal prison for perjury, U.S. Attorney Patrick Miles announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell imposed a three-year term of supervised release that will commence once Phillips-Lark is released from imprisonment.
Phillips-Lark pled guilty to one count of perjury on February 4, 2016. She admitted at the plea hearing that she knowingly lied when she testified in August of 2015 before a federal grand jury sitting in Grand Rapids, Michigan. She admitted that she had done so in an effort to prevent Larry Diggs, the target of the grand jury’s investigation, from getting into trouble. Diggs has since pleaded guilty to possessing "crack" cocaine with the intent to distribute, using and carrying a firearm during and in relation to a drug trafficking crime, and witness tampering.
In its sentencing memorandum, the U.S. Attorney’s Office wrote "[p]roviding false testimony and tampering with witnesses strikes at the heart of the judicial system and is affront to the Court and the community." The U.S. Attorney’s Office emphasized that Phillip-Lark’s "conduct was not merely the result of a momentary lapse in judgment. On the contrary, this is her second conviction for lying to law enforcement." Specifically, Phillips-Lark had previously been convicted for "falsely and deliberately claim[ing] that she had seen a police officer murder her brother in cold blood. The truth, of course, was quite the opposite." In light of Phillip-Lark’s conduct and history, the U.S. Attorney’s Office wrote that "[t]he need for deterrence – both specific and general – is acute in this case."
The charges in this case are the result of a joint investigation by the Muskegon Township Police Department and the Muskegon Violent Crime Task Force, which includes the Federal Bureau of Investigation (FBI), the Michigan State Police (MSP), and the Muskegon City Police Department. The U.S. Attorney's Office, the Muskegon County Prosecutor's Office, and federal, state, and local law enforcement are working closely together to combat violent crime and witness tampering in the Muskegon area.
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Physician Assistant Ordered to Pay $77,900, Excluded from Medicare and Medicaid, and Sentenced to Six Months' Home Detention for Accepting $12,600 in Illegal KickbacksRead the Press Release
GRAND RAPIDS, MICHIGAN— U.S. Attorney Patrick Miles announced that Ronald Mingle, age 73, a physician assistant from Alma, Michigan, was sentenced to pay $62,900 in restitution to Medicare and Medicaid, a $15,000 fine, and to serve six months of home detention for accepting $12,600 in illegal kickbacks for referring patients to medical clinics, physical therapy clinics, and a home health care agency. Mingle is the eleventh person, and the fifth physician assistant, convicted of felony charges in connection with a joint federal-state investigation into a kickback scheme initiated by clinic owner Babubhai Rathod. Mingle will also be mandatorily excluded from participating with the Medicare and Medicaid programs for at least five years.
In sentencing Mingle, U.S. District Judge Janet T. Neff stated that accepting kickbacks is "a tremendously serious crime" affecting programs that "successfully meet the needs of low income people for medical services." Judge Neff further noted that when a person "cheats the government, you cheat everyone."
U.S. Attorney Miles emphasized that, "Paying kickbacks for patient referrals distorts the motives of health care professionals. Paying or receiving illegal referral payments can result in felony criminal charges, exponential financial liability, mandatory exclusion from Medicare and Medicaid, as well as professional licensing sanctions."
"Paying kickbacks for the referral of Medicare or Medicaid patients is a serious crime," said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. "Kickbacks inappropriately influence health care practitioners’ medical decision making process, lead to overutilization and/or up-coding of services, and further increase program costs. The OIG will continue to aggressively pursue kickback allegations to ensure the integrity of the Medicare and Medicaid programs and protect vital taxpayer dollars."
This case was the result of 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 U.S. Department of Health and Human Services, Office of Inspector General, and Blue Cross Blue Shield of Michigan. Assistant U.S. Attorneys Raymond E. Beckering III and Adam B. Townshend prosecuted this matter.
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Heroin Trafficking Conspiracy Broken UpRead the Press Release
But Opioid Addiction a Growing Problem Regionally and Nationally
MARQUETTE, MICHIGAN — United States Attorney Patrick A. Miles, Jr., announced the results of a joint investigation by the U.S. Drug Enforcement Administration (DEA), the Michigan State Police and its drug team, the Upper Peninsula Substance Enforcement Team (UPSET), and the Forsyth Township Police Department into heroin trafficking from Detroit to Marquette County from 2012 to 2015.
The investigation led to convictions of the following people:
Lamarol Travron Abram, age 39, of Detroit, Michigan, was sentenced to 170 months in federal prison after being convicted of conspiracy to distribute and possess with intent to distribute heroin and cocaine from 2012 to 2015. Abram’s case was transferred to the Eastern District of Michigan. He was convicted there and sentenced by U.S. District Judge John C. O’Meara in Ann Arbor on March 10, 2016.
Megan Marie Tinney, age 25, of Gwinn, Michigan, was sentenced to 46 months in federal prison after being convicted of the conspiracy charge along with Abram. U.S. District Judge R. Allan Edgar sentenced Tinney in Marquette on May 18, 2016.
Jimmy Wayne McFied, age 33, of Gwinn, Michigan, was sentenced by U.S. District Judge Robert Holmes Bell to 48 months in prison following a conviction for distribution of heroin.
Carlton Murray, Jr., age 37, of Gwinn, Michigan, was sentenced by Judge Edgar to 30 months in federal prison after being convicted of possession of heroin and cocaine with intent to distribute.
Rachel Lynn Hanson, age 32, of Ishpeming, Michigan, was sentenced by Judge Bell to 151 months in federal prison after being convicted of possession of cocaine with intent to distribute.
These convictions do not end the local problem with heroin and prescription opiates. Quite the opposite. The information gathered in this investigation reveals that a significant demand for heroin exists in Marquette County. DEA investigators conservatively estimate, based on information uncovered in the investigation, that Abram sold a minimum of several ounces of heroin per month for more than three years in the local area. It is believed that he could have sold a great deal more.
The Center for Disease Control has described prescription painkiller overdoses as a "public health epidemic." In fact, addiction to opioids (heroin and prescription opiate painkillers) is growing, and annual opioid-related deaths now exceed the number of annual traffic fatalities. A nationwide, county by county depiction of annual death rates from drug poisoning from 1999-2014 by county can be found at http://blogs.cdc.gov/nchs-data-visualization/drug-poisoning-mortality/
Nationally, about 9 people per 100,000 die from opioid abuse annually. That equates to about 78 people per day, and about 28,500 per year. And Michigan is one of the states that his hardest hit by the epidemic. For example, in Michigan, the number of babies treated for neonatal abstinence syndrome (NAS) has doubled in recent years. NAS is a group of problems that occur in a newborn who was exposed to addictive illegal or prescription drugs while in the mother’s womb. Hospitals in the Upper Peninsula had the highest rate of NAS in the state by far, with a rate of 21 cases per 1,000 births in 2014.
Ms. Tinney’s case demonstrates how opiate addiction can impact multiple generations. She began using prescription opiates many years ago and was using these substances daily by the age of 21. Now 25, she has given birth to two children and been unable to hold down any form of employment. She will now be spending the next 3-4 years in prison while someone else raises her children.
Tinney, in contrast to most addicts, however, has a unique opportunity. During her sentencing hearing, Judge Edgar recommended that she participate in the Federal Bureau of Prison’s Residential Drug Abuse Program (RDAP), which is a 9-month program offered to federal inmate with significant drug issues. These inmates reside in a separate unit from general population and devote their full day to programming, work, school and vocational activities. RDAP has been shown to be very successful in preventing recidivism and relapse and is frequently requested by drug-addicted federal convicts.
Through criminal prosecutions, law enforcement works to deter drug trafficking and spread awareness of the dangers posed by illicit drug use. But the U.S. Attorney’s Office’s efforts extend beyond prosecutions. The U.S. Attorney’s Office has offered and will continue to offer presentations on the dangers of opioid addiction, the extent of the drug diversion problem and challenges for law enforcement to audiences that include doctors and medical providers, public radio listeners, local television media affiliates, state and local law enforcement officers, the State Attorney General’s Office and even local elected officials.
To spread awareness of the dangers opioids pose, the Department of Justice has sponsored a 45-minute documentary film entitled "Chasing the Dragon," https://www.fbi.gov/news/stories/2016/february/raising-awareness-of-opioid-addiction/raising-awareness-of-opioid-addiction. The film depicts the harsh reality of opioid addiction and the rapid path to abuse, addiction and too frequently death. It contains frank discussions of the impact of opiates and heroin on the lives of users and their families. The language and the outcomes are not pleasant, but the film can serve as an instructive tool for discussions with parents and students. U.S. Attorney Miles has begun reaching out to school districts in West Michigan to begin a dialogue about how to spread awareness among vulnerable youth of the dangers of opioids. Any school district interested in such a conversation, should contact the U.S. Attorneys Office.
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U.S. Attorney Patrick Miles's "Justice Scholars" Program Culminates with Mock Trial Before Federal and State JudgesRead the Press Release
GRAND RAPIDS, MICHIGAN — At the beginning of the 2015–2016 school year, U.S. Attorney Patrick Miles introduced Justice Scholars to a class of seventh-grade students at Gerald R. Ford Academic Center, a Grand Rapids Public School. The new program was developed by U.S. Attorney Miles to expose students to the criminal justice system in a constructive way, while fostering positive connections between youth, law enforcement, and the broader legal community.
Each month over the course of the school year, the class heard from “teachers” who work in the criminal justice system. The interactive presentations took the scholars through the foundations and aims of the criminal justice system, the stages of a criminal case, and possible career paths. Presenters encouraged students to make healthy and constructive decisions during their middle- and high-school years, so they could pursue jobs in the criminal justice system in the future. U.S. Attorney Miles said that the “overwhelming volunteer response by law enforcement and legal partners in the community made the pilot year of Justice Scholars a tremendous success.”
Federal Bureau of Investigation Special Agent Sean Burns, and Chief of Staff for Grand Rapids Public Schools, Larry Johnson, himself a retired police sergeant, taught the students about criminal investigations, interviewing witnesses, and analyzing evidence. Forensic technicians from the Grand Rapids Police Department brought materials and tools so students could get hands-on experience “lifting” fingerprints from objects. Assistant United States Attorneys explained the roles and ethical responsibilities of prosecutors. Along with others from the Federal Public Defender’s Office, Interim Federal Defender Sharon Turek discussed the importance of quality legal representation for criminal defendants. United States Magistrate Judge Ellen S. Carmody talked with the class about the role of the judge in a criminal case, as well as her path to the bench. United States Probation Officer Mathew Erickson discussed the supervision of individuals on probation and federal supervised release, and Grand Rapids Police Department Sergeant Terry Dixon talked with students about some of the difficulties faced by defendants when they return to their communities after prison.
For many students, the end of the school year reflects a winding-down of activities and work. But for Justice Scholars, May is the busiest month: the program culminates with mock criminal trials, before actual judges. Today, after weeks of preparing a hypothetical bank robbery case, the seventh-grade Justice Scholars conducted mock trials in federal and state courtrooms before four judges: Judge Jane M. Beckering, Third District Michigan Court of Appeals; Chief Judge Robert J. Jonker, United States District Court for the Western District of Michigan; United States Magistrate Judge Ray Kent, United States District Court for the Western District of Michigan; and Judge Christopher P. Yates, 17th Circuit Court of Michigan, Kent County. Classroom teacher Emily Thornburg observed that, in preparing for the trials, many students made great strides in the areas of critical thinking and public speaking.
Students from Western Michigan University Cooley Law School and employees of the United States Attorney’s Office acted as civilian witnesses in the trials, while FBI Special Agents “acted” as FBI Special Agents. After working with students for several hours in the classroom over the past several weeks, attorneys from the criminal defense bar, the Federal Defender’s Office, and the United States Attorney’s Office provided advice and support, throughout the trials, to the seventh-grade prosecutors and defenders. Students from the eighthgrade class at Gerald R. Ford Academic Center served as jurors in each courtroom.
Whether the hypothetical defendants were found guilty or not guilty of bank robbery, the real Justice Scholars on both sides of the case deserve congratulations and praise for their hard work and enthusiasm in the program’s inaugural year.
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Two Lansing "Homeless" IRS Scam Defendants SentencedRead the Press Release
GRAND RAPIDS, MICHIGAN — Two additional defendants connected to a Lansing, Michigan area family-run scam were sentenced in federal court, U.S. Attorney Patrick Miles announced today. Defendant Qasim Ibn-Ishaq Verser was sentenced to a term of three years’ incarceration, three years of supervised release and restitution in the amount of $223,140.00. Defendant Tsiidzoyedu Callista Chiwocha was sentenced to a term of incarceration of 12 months plus one day, three years of supervised release and restitution in the amount of $24,385.00.
The scheme involved deceiving citizens into providing their personal identification information by promising them "free stimulus money." Many of the victims in this case were homeless persons or suffered from addiction and disability issues. The tax returns typically contained false reporting of undocumented income and abusive use of the Earned Income credit. Two more co-defendants in this tax fraud scam face sentencing in the next thirty days.
"My office has no tolerance for those who take advantage of the trust of the vulnerable only to scam the system and line their own pockets," stated U.S. Attorney Miles. He was joined in the announcement by Jarod J. Koopman, Special Agent in Charge, Internal Revenue Service – Criminal Investigation and David P. Gelios, Special Agent in Charge, FBI Detroit Division.
Complaints by local citizens prompted the Federal Bureau of Investigation to open a criminal investigation, including obtaining multiple search warrants to seize evidence of a tax fraud scheme. During the multi-year investigation, more than fifty subpoenas were issued to track down the tax refunds which had been paid into numerous bank accounts. In some instances, the personal identification information was used to file a tax return in a successive year. In an earlier prosecution, Taka Chiwocha-Crowell pled guilty to filing false tax returns and was sentenced to 42 months’ incarceration.
The IRS estimates that Chiwocha, Verser and their co-defendants were collectively responsible for filing 965 false tax returns, and collectively receiving payments of $1,403,367 in false tax refunds.
The investigation was conducted by the Lansing Office of the FBI and the Lansing Office of IRS Criminal Investigations. The case is being prosecuted by Assistant U.S. Attorney Michael A. MacDonald.
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Alcoholic Beverage Rebate Scam Shut DownRead the Press Release
Retired Ironwood Area School District Employee Convicted of Mail Fraud
MARQUETTE, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today the conviction and sentencing of Ms. Carol Rae Vitton, age 59, and a resident of Ironwood, Michigan, on charges of mail fraud.
Ms. Vitton, now a retired employee of the Ironwood Area School District with no prior criminal history, came to the attention of U.S. Postal Inspectors when employees at the Ironwood Post Office noticed that she was receiving an inordinate number of rebate checks through the mail, and that these checks were addressed to variants of Ms. Vitton’s name and address. Upon investigation, Postal Inspectors determined that Ms. Vitton picked up rebate coupons at liquor stores throughout the Ironwood area, and then manufactured counterfeit sales receipts that falsely and fraudulently indicated that she had made beer, wine and liquor purchases. She would then mail those counterfeit sales receipts along with the rebate applications to beer, wine and liquor companies, and associated rebate processing companies throughout the country.
During 2010 and 2011, Ms. Vitton manufactured and mailed more than 700 counterfeit sales receipts for beer, wine and liquor purchases that had not actually taken place. She was still an employee of the Ironwood Area School District at that time. Ms. Vitton received through the mail over $8,000 in the form of rebate payments that she was not entitled to receive. Inspectors discovered that some of these rebate checks were addressed to Ms. Vitton at the Ironwood Area School District Offices. At least 26 beer, wine, liquor and rebate processing companies were victimized and defrauded in this manner. Ms. Vitton’s rebate scheme constituted mail fraud, which is a felony violation of federal law and punishable by up to 20 years in prison.
U.S. District Judge R. Allan Edgar sentenced Ms. Vitton to: one year Probation, with four months of home detention; electronic monitoring while on home detention; restitution in the amount of $8,339.50; a $10,000.00 fine payable within 60 days and; a special assessment of $100.00.The U.S. Postal Inspection Service, which was founded by Benjamin Franklin, is tasked with enforcing the laws that defend the nation’s mail system from illegal or dangerous use, and ensuring public trust in the mail. U.S. Postal Inspectors routinely investigate a variety of frauds that are perpetrated through the use of the mails. In recent years, Inspectors have seen an increasing number of rebate fraud schemes, like the scheme carried out by Ms. Vitton, throughout the country.
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Holland Resident, Zachary Stephen Thomas, Arrested for Stealing MailRead the Press Release
Zachary Stephen Thomas Stole Checks and Financial Information from Lakeshore Residents
GRAND RAPIDS, MICHIGAN — Zachary Stephen Thomas, age 32, from Holland, Michigan, was arrested this weekend and appeared today on a criminal complaint charging him with theft and/or unlawful possession of United States mail, and bank fraud. He faces a potential prison sentence of up to 5 years on the mail theft charges and up to 30 years on the bank fraud charges.
"The integrity of the United States mail is of great importance to my office," said U.S. Attorney Pat Miles, Jr. "Theft of the mail, especially theft of financial documents and personal information, can have devastating consequences for the residents of this district. Those who choose to engage in this conduct will be held fully accountable for their actions."
According to an affidavit unsealed in federal court today, Thomas began stealing and unlawfully possessing the mail of residents of Holland, especially the lakeshore community, in December 2015. Thomas routinely stole bank account checks and credit card convenience checks mailed to Holland area residents. Thomas then forged the checks, deposited them into his own bank account, and withdrew large amounts of cash from his bank’s automated teller machine before the bank discovered that the checks were fraudulent. Local law enforcement conducted two searches of Thomas’s apartment and recovered a significant amount of mail addressed to other individuals.
Thomas is presently in the custody of the United States Marshal. His preliminary and bond hearings will occur on Thursday, May 19, 2016, in United States District Court in Grand Rapids, Michigan. The case is being investigated by the United States Postal Inspection Service and the Ottawa County Sheriff’s Office, and is being prosecuted by Assistant United States Attorney Ronald M. Stella.
The charges in a criminal complaint and supporting affidavit are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
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Lansing Man, Tyrone Smith, Sentenced to 25 Years in Federal Prison for Sex Trafficking in West Michigan, the Third Such Case to Be Sentenced in the Last Two YearsRead the Press Release
GRAND RAPIDS, MICHIGAN – Tyrone Smith, 46, of Lansing, Michigan, received a sentence of 25 years in federal prison for sex trafficking numerous women and one minor, U.S. Attorney Patrick Miles announced today. In November 2015, Smith pled guilty to two counts of using force, threats, fraud, and coercion to sex traffic two victims; and one count related to transporting two other victims from Michigan to Chicago for prostitution. Smith previously spent 12 years in prison for second degree murder.
Smith recruited vulnerable, abused, and drug addicted women, as well as a 17-year-old minor, to work under what he branded his "New Stars" prostitution label. He operated a house of prostitution in Lansing and also took the women and the minor to Grand Rapids, Ann Arbor, Detroit, and Chicago for commercial sex. Smith maintained control over the victims with a steady stream of crack cocaine and heroin, and by using force, threats, and violence against them when they disobeyed him. When one of the women left Smith, he found her, broke a window, dragged her from room to room by her hair, brought her back to his prostitution house in Lansing, heated up a metal spoon on the stove and pressed it to her eye, and video recorded her apologizing for her disloyalty to "the family." Another victim, a minor, had a severe history of sexual abuse from a young age, and Smith recruited her after she ran away from home, supplied her with hard drugs, and manipulated her with a combination of violence and what the minor perceived as affection.
One of the victims spoke at the sentencing hearing. She described how she initially felt lucky to be taken in by Smith so she would have a place to stay and not be out on the streets that winter, how Smith at first made her feel loved and special, and how he became extremely violent and manipulative towards her. She explained that Smith once held a pillow over her face and a screwdriver to her eye, threatening to take her eye out, and how he regularly hit her. She also explained that she has a long road of counseling ahead and is hoping one day to put this all behind her and get her life back on track. The judge ordered Smith to pay $20,000 in restitution to her for future counseling, which Smith will pay from prison wages. In announcing the sentence, Chief U.S. District Judge Robert J. Jonker described this as a very serious crime that people need to know is happening in their community.
"Yesterday’s sentencing sends a clear message that sex trafficking, particularly of minors, will not be tolerated," said David Gelios, Special Agent in Charge, FBI Detroit Field Office. "The efforts of the FBI and our law enforcement partners have removed a human trafficker from our streets. We will continue to prioritize the investigation of sexual exploitation crimes, bring to justice those who exploit others for profit, and endeavor to restore the rights and dignity of human trafficking victims."
The FBI, Ingham County Sheriff’s Office, and East Lansing Police Department jointly investigated the Smith case, with assistance from the Michigan State Police, and Assistant United States Attorney Tessa K. Hessmiller prosecuted it.
This was the third federal sentencing for sex trafficking in the Western District of Michigan, after Eddie Jackson received a 30-year sentence in 2014 for sex trafficking three minors in Muskegon and Grand Rapids and Christopher Bryant received a 40-year sentence last year for sex trafficking three minors and an adult. In a fourth case, Anthony Wilson-Lackey, Shyron Smith, and Stephanie Martin all pled guilty in February and are awaiting sentencing. In each case, the traffickers used different techniques to recruit the minors. Sometimes, they used another teenager or young woman to introduce them to minors in person or over social media or text messaging. One of the traffickers recruited a minor at a bus station by asking her if she wanted to make money helping him sell drugs. One of the traffickers recruited a minor over social media and asked if she wanted to make money modeling or strip dancing, and he later asked if she wanted to make $1,000 a night through commercial sex. Several of the minors lived with their families, and the traffickers brought them home after only one day away at a time. Other minors were runaways. All of the traffickers used drugs, cigarettes, alcohol, and money to lure the minors, as well as a combination of "romance" and violence as needed to control the victims. The minors in these four cases were white, black, and Hispanic, and they ranged in age from 14 to 17.
Referring to both the Smith and Bryant sex trafficking cases, Ingham County Sheriff Gene Wriggelsworth stated, "The Ingham County Sheriff’s Office continues its commitment to investigate these insidious crimes. The United States Department of Justice, FBI, Michigan State Police, East Lansing Police Department, and Ingham County Sheriff’s Office worked very hard to bring these cases to the proper conclusion by getting these criminals off the streets."
The Department of Justice (DOJ) investigates and prosecutes child sex trafficking cases as part of Project Safe Childhood, a 2006 nationwide initiative to combat child exploitation. Over the past year, the U.S. Attorney’s Office for the Western District of Michigan prosecuted over a dozen child sexual exploitation cases. Those cases included, for example, a 29-year-old man in Lansing who befriended a 15-year-old girl from the west coast online and coerced and enticed her into sending sexually explicit photographs daily for three years; a man in Grandville who drilled holes in the wall of his 12-year-old stepdaughter’s bedroom to video record her naked; a man who traveled from Las Vegas to Kalamazoo to sexually assault a nine-year-old boy while another man took pictures; and a pair of brothers who produced child pornography of sleeping children in Kent County and elsewhere in Michigan and traded the pictures with each other over email.
"My office has placed prosecuting sex traffickers and others who exploit minors as a high priority," U.S. Attorney Miles advised. "The facts of these cases shock the conscience and are hard to think about. But the victims are real children who have to deal with the repercussions for the rest of their lives after being targeted, exploited, and victimized. The reality is that the internet and cell phones have made it easier and more anonymous for people to find, communicate with, and exploit minors and harder for parents to find out."
To learn more about keeping kids safe from predators online, view this short video from the DOJ: https://www.justice.gov/psc/video/sextortion-public-service-announcement-90-seconds
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Amanda Brook Ely, Lansing IRS Scammer of Vulnerable Citizens SentencedRead the Press Release
GRAND RAPIDS, MICHIGAN — Amanda Brook Ely, the first of five defendants connected to a Lansing, Michigan area family-run tax scheme was sentenced to three years of probation and full restitution, in federal court, U.S. Attorney Patrick Miles announced today. The scheme involved deceiving citizens into providing their personal identification information by promising them "free stimulus money." Many of the victims in this case were homeless persons or suffered from addiction and disability issues. The tax returns typically contained false reporting of undocumented income and abusive use of the Earned Income credit. Ely, 22, and the mother of two minor children, requested leniency from the sentencing court due to her being only 18 years old when she participated in the tax fraud. She also advised the court that she was "significantly influenced" by the Chiwocha family. She had no prior criminal history. Four other co-defendants in this tax fraud scam face sentencing in the next 30 days.
"My office has no tolerance for those who take advantage of the trust of the vulnerable only to scam the system and line their own pockets," stated U.S. Attorney Miles. He was joined in the announcement by Jarod J. Koopman, Special Agent in Charge, Internal Revenue Service – Criminal Investigation and David P. Gelios, Special Agent in Charge, FBI Detroit Division.
Complaints by local citizens prompted the Federal Bureau of Investigation to open a criminal investigation, including obtaining multiple search warrants to seize evidence of a tax fraud scheme. During the multi-year investigation, more than 50 subpoenas were issued to track down the tax refunds which had been paid into numerous bank accounts. In some instances, the personal identification information was used to file a tax return in a successive year. In an earlier prosecution, Taka Chiwocha-Crowell pled guilty to filing false tax returns and was sentenced to 42 months’ incarceration.
The IRS estimates that Ely and her co-defendants were collectively responsible for filing 965 false tax returns, and receiving payments of $1,403,367.07 in false tax refunds. For her part, Ely was sentenced for receiving approximately $32,000 in false federal tax refunds. Ely had directed the IRS to direct payment of some of the false refunds to a bank account named "Forever Free Financial."
The investigation was conducted by the Lansing Office of the FBI and the Lansing Office of IRS Criminal Investigations. The case is being prosecuted by Assistant U.S. Attorney Michael A. MacDonald.
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Previously Convicted Child Sex Offender, Shane Scott, Sentenced to 33 Years After Using Prison Mail System to Coerce and Entice A Mentally Disabled ChildRead the Press Release
GRAND RAPIDS, MICHIGAN – Shane Scott, age 41, of Coldwater, Michigan, received a sentence of 33 years in federal prison for attempting to coerce or entice a mentally disabled 17-year-old into sex, U.S. Attorney Patrick Miles announced today.
Scott committed the offense while incarcerated at the Bellamy Creek Correctional Facility serving a sentence for criminal sexual conduct involving a 12-year-old girl in 2000. Scott committed the 2000 criminal sexual conduct offense just three months after being released from prison on a previous child sexual abuse conviction in Alabama. Between August 2014 and January 2015, he used the prison mail system to write countless times to a woman whose daughter he wanted to have sex with as soon as he was released. The 17-year-old daughter has severe mental disabilities, and Scott admitted that he knew that she had the mental capacity of someone well under age 10 and that she would not understand what sex was. Scott was scheduled for release from Bellamy Creek Correctional Facility on February 14, 2015, but authorities arrested him on the federal charge of attempted coercion or enticement just prior to his release. Scott pled guilty to the charge in January 2016.
Scott’s efforts to set up a sexual encounter with the child were persistent and detailed. He sent numerous letters directing the girl’s mother to make arrangements so he could sexually molest the child in a car and at his workplace. He specifically requested that the mother tattoo the girl, send him sexually explicit pictures of the girl, and sexually molest the child for him. Scott stated that the mother was the one who initially proposed the idea of Scott having sex with the daughter, but the mother backed out and Scott spent five months trying to persuade her to allow him to do it, thereby attempting to coerce or entice the child into sex with him through the mother as the intermediary. Scott admitted to authorities that he would have gone through with having sex with the child if law enforcement had not intervened. The child’s mother was convicted in state court for this and a related offense and is now serving up to seven years in prison.
In delivering the 33-year sentence, U.S. District Judge Paul L. Maloney described this offense as "shocking" and "virtually incomprehensible" in its gravity. Judge Maloney described Scott as "a predator" who is "virtually certain to reoffend" without a lengthy term of incarceration to incapacitate him. He ordered that the 33-year prison term – which was above the recommended guideline range – be followed by 20 years of supervised release, which will subject Scott to intensive federal monitoring and supervision.2
"If not for careful screening and monitoring of inmate mail by the Michigan Department of Corrections staff at the Bellamy Creek Correctional Facility, this predator would have carried out his perverse plan and victimized a child who never could have reported it," stated U.S. Attorney Miles. "This case represents the priority that West Michigan law enforcement agencies place on collaborating to protect the most vulnerable among us."
"Mr. Scott’s propensity, ambition, and planning to offend again once he was released is disturbing, and it is gratifying to see justice served against someone who was plotting to choose among the most vulnerable of our society to victimize so egregiously," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "It is our law enforcement partners who got us this result. From the Michigan Dept. of Corrections, to the Social Security Administration, the Ionia County Sheriff’s Office, and the Michigan State Police: their partnership with us kept a predator off the streets, and a vulnerable victim safe."
This case resulted from a joint investigation by the FBI, Michigan State Police, Michigan Department of Corrections, Social Security Administration, and Ionia County Sheriff’s Office working under the FBI’s West Michigan Based Child Exploitation Task Force (WEBCHEX). 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, visit: http://www.justice.gov/usao/miw/programs/psc.html.
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Former Employee of Shuttered Financial Services Firm, Barbara Jean Kelsey, Sentenced to 78 Months in Prison for Fraud and Money LaunderingRead the Press Release
Investigators Recover and Return Over $1 million to Victims
GRAND RAPIDS, MICHIGAN —U.S. Attorney Patrick A. Miles, Jr. announced today that Barbara Jean Kelsey of Elkhart, Indiana was sentenced by U.S. District Judge Janet T. Neff to a total of 78 months in prison for conspiracy to commit mail fraud and wire fraud and substantive money laundering crimes. Kelsey pled no contest to the charges on November 13, 2015.
U.S. Attorney Miles stated: “Financial fraud is a crime of greed and opportunity. When a person uses fraud to decimate another individual’s financial security, they deserve to face a significant prison term.”
Kelsey was an employee of the financial services firm Fabian & Associates, LLC located in Kalamazoo. Along with Joseph Stephen Fabian, the principal of Fabian & Associates, Kelsey defrauded more than 30 clients of the firm causing losses of over $3.8 million between 2007 and 2010. Fabian and Kelsey used a variety of ruses to induce clients and prospective clients to withdraw money from their existing retirement accounts, investment accounts, bank accounts, and other sources to place into investment products that the firm recommended. But Fabian fabricated many of the investment products that were recommended. Or, when the recommendation was for a legitimate investment, Fabian and Kelsey failed to deposit the money on their clients’ behalf. Kelsey assisted Fabian by creating shell corporations and opening bank accounts to divert client monies intended for investment. She represented herself to clients as a Certified Public Accountant even though she had no more than a high school education. She moved client monies between various accounts without any regard for accounting. Investigators traced nearly $1 million to Kelsey’s personal bank accounts, which Kelsey spent on herself, including the purchase of a house.
Judge Neff labeled Kelsey’s crimes as “egregious,” “immoral,” and “unconscionable.” Many of Fabian’s and Kelsey’s victims were of retirement age or near-retirement age and also included individuals and families looking for safe investment opportunities to provide income to support special-needs children or to deal with health problems and attendant medical expenses.
Fabian is currently serving a 92 month prison sentence issued by Judge Neff in 2012. Since that time, the United States has recovered through forfeiture proceedings over $1 million and applied the recoveries to victim restitution.
“Ms. Kelsey portrayed herself as a competent, trustworthy accountant, and she was neither,” said David P. Gelios, Special Agent in Charge, FBI Detroit Division. “She preyed upon individuals that were taking steps to financially secure their families’ futures. Rather than grow their investments, Kelsey misappropriated funds provided to Fabian & Associates, LLC for her own personal use, and irreparably damaged the financial futures of the victims in this case. Today, Ms. Kelsey is being held to account for her crimes.”
The case was prosecuted by Assistant U.S. Attorney Joel S. Fauson and investigated by the Federal Bureau of Investigation’s Kalamazoo Resident Agency.
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U.S. Attorney Patrick Miles Highlights West Michigan Reentry Initiatives for National Reentry WeekRead the Press Release
April 24-30, 2016
GRAND RAPIDS, MICHIGAN — As part of the Department of Justice’s National Reentry Week, April 24–30, 2016, Patrick Miles, the U.S. Attorney for the Western District of Michigan, is raising awareness about challenges faced by formerly incarcerated individuals and the importance of reentry efforts that help returning residents lead law-abiding and productive lives in their home communities.
As explained by U.S. Attorney Miles, offender reentry is part and parcel of the Office’s mission to reduce crime: “As prosecutors, my Assistant U.S. Attorneys work very hard to protect the interests of the United States and ensure the safety of our District’s residents—that generally means investigating cases, prosecuting defendants, and advocating for prison sentences that are long enough to vindicate the interests of the public and deter defendants from future criminal conduct. But our work would not be complete if we ignored the fact that many formerly incarcerated individuals return to criminal activity—perhaps because they cannot find stable employment or suitable housing, they lack supportive personal networks, or they continue to struggle with substance abuse or mental health issues.”
Nationally, approximately two-thirds of formerly incarcerated persons are re-arrested within three years of release and almost half are re-incarcerated. In Michigan, the recidivism rate is 28 percent. “If we take seriously our charge to reduce crime in the Western District of Michigan, we must focus on this population of returning residents and work with other stakeholders to address challenges they face, to help them become positive, law-abiding members of their communities. Ultimately, by increasing the success of formerly incarcerated individuals, we reduce crime and improve the safety and wellbeing of all of our communities’ residents.”
In Michigan, Reentry Week kicked off this past Friday when U.S. Attorney Miles and Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan, visited the Federal Correctional Institution in Milan to discuss reentry issues with Bureau of Prisons personnel and attend a job fair. For individuals who will soon be released, the job fair included interviews with employers. Other inmates participated in skill-building opportunities and mock interviews.
This morning, U.S. Attorney Miles hosted a Reentry Roundtable, highlighting some of the many outstanding reentry initiatives in the District. Participants included U.S. Magistrate Judge Ellen Carmody, the Michigan Department of Corrections, West Michigan Works!, the Grand Rapids Police Department, community service organizations that work with previously incarcerated individuals, including the Criminal Justice Chaplaincy, Hope Network, and KPEP, as well as two businesses that employ formerly incarcerated individuals and actively recruit other businesses to do so as well (Butterball Farms and Cascade Engineering).
With respect to employment opportunities, U.S. Attorney Miles has begun meeting with area Chambers of Commerce to promote an Employer Summit, scheduled for May 26, 2016. The purpose of the Summit is to facilitate discussions with businesses and organizations about employing formerly incarcerated individuals. Employers stand to gain dedicated and loyal employees, and may reap financial benefits through tax incentives. Potential or perceived risks can be minimized, in part, by taking advantage of federal bond insurance. Following the Employer Summit, the U.S. Attorney’s Office will hold a job fair in the fall of 2016, specifically for people who were formerly incarcerated.
Historically, the U.S. Attorney’s Office has been involved in various reentry initiatives, including the district’s dedicated federal reentry court, Accelerated Community Entry (ACE), which began in 2005 in Benton Harbor, and now operates at the federal courthouse in Kalamazoo. ACE is an intensive supervision program for individuals on federal supervised release who present a high recidivism risk. Two federal judges, attorneys from the Federal Defender’s office and the U.S. Attorney’s Office, a U.S. probation officer, and community service providers meet on a monthly basis to identify and address common reentry pitfalls, before they arise, for each of the participants. The courtroom atmosphere is non-adversarial and positive. Everyone, including the U.S. Attorney’s Office, wants ACE participants to succeed.
In 2015, U.S. Attorney Miles introduced “Facing Choices” forums, in partnership with the Michigan Department of Corrections, for state parolees. During the forums, attendees hear dual messages of encouragement and deterrence from state and federal law enforcement officials and prosecutors. “On the one hand, we want parolees to know that, if they re-offend, they will be held accountable. Sentences are more serious for people with prior convictions, and parolees who re-offend are a high priority for law enforcement. But we balance that with the equally important and true message: we want them to succeed on parole, have stable jobs, and avoid further contact with the criminal justice system.” Facing Choices attendees also hear from a formerly incarcerated individual who shares strategies for success while on parole. Community service providers and potential employers attend the event to meet with interested participants. The next Facing Choices Forum is this Friday, April 29, in Battle Creek.
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Nashville, Michigan Man, David Heinsen, Sentenced to 15 Years in Federal Prison for Child Pornography, Consecutive to 40-60 Years in State PrisonRead the Press Release
GRAND RAPIDS, MICHIGAN – 70-year-old David Heinsen of Nashville, Michigan, was sentenced today to 20 years in federal prison – the maximum term -- for receiving 650,000 images and videos of child pornography on his computers. In announcing the federal sentence, U.S. District Judge Paul L. Maloney ordered that of the 20-year sentence, 15 years must be served after Heinsen finishes his 40-60 year sentence in a related Barry County Criminal Sexual Conduct case.
"This case represents the immense damage a person with a sexual interest in children can do over the course of a lifetime, whether through hands-on sexual abuse of children or trading in child pornography, or both," said U.S. Attorney Patrick A. Miles. "Federal, state, and local law enforcement agencies in the Western District of Michigan will continue to work together to identify and prosecute offenders and give a voice to child victims."
Heinsen kept film negatives of himself molesting and strangling an 8-year-old girl with Down syndrome in his home over 20 years ago. During the investigation, Heinsen admitted to molesting at least two other children in Ohio years ago, who have not yet been identified. Heinsen pled guilty to one count of receipt of child pornography in the federal case and one count of Criminal Sexual Conduct (CSC), First Degree, in Barry County, for his abuse of the 8-year-old girl in the photos.
Recognizing that this sentence means Heinsen, 70, will never be released, Judge Maloney emphasized that that was his intention. "A more dastardly, ugly, violative of social norms case, I have not seen," Judge Maloney stated. He described it as one of the worst cases he has presided over because of the "graphic and unbelievably violent" acts depicted in the child pornography Heinsen produced, received, and possessed. Judge Maloney commented that Heinsen’s interest in child exploitation dates back to the "Eisenhower administration" and that Heinsen has been committing offenses for decades undetected. Judge Maloney ordered Heinsen to pay $12,000 in restitution to the 8-year-old girl, who is now an adult, for counseling and therapy. The other victims in the child pornography Heinsen received and possessed did not seek restitution, but some of them provided written statements about the devastating toll that the ongoing trade of their images has taken on their lives.
"Child exploitation crimes are by far the most reprehensible criminal activity HSI investigates," said HSI Detroit Special Agent in Charge Marlon Miller. "These predators cause severe damage to our society and HSI will continue to move aggressively against those who seek to exploit our children to ensure they are punished to the fullest extent of the law."
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, visit: http://www.justice.gov/usao/miw/programs/psc.html.
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Automobile Insurance Fraud Scheme Leads to Federal Health Care and Mail Fraud ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that four individuals were arrested on federal health care fraud and mail fraud charges related to their roles in an automobile insurance fraud conspiracy: Yoisler Herrera-Enriquez, age 30, and Dolis Rojas-Lopez, age 30, both of Wyoming, Michigan; Gustavo Ramiro Acuna-Rosa, Age 28, of Versailles, Kentucky; and, Antonio Ramon Martinez-Lopez, Age 34, of Port Richey, Florida.
All four defendants are currently in custody pending hearings on bond.
"Serial insurance fraud schemes undermine the fairness of the rates everyone has to pay. These schemes are and will continue to be a high priority for federal prosecution," U.S. Attorney Miles explained.
According to the indictment, Herrera-Enriquez, Acuna-Rosa and Martinez-Lopez operated physical therapy clinics in Wyoming and Lansing, Michigan, under the names "H&H Rehab Center," "Revive Therapy Center," and "Renue Therapy Center." These clinics utilized patient recruiters, including Rojas-Lopez, to find individuals who had either been involved in automobile accidents but who were not yet receiving medical treatment, or who were willing to participate in staged automobile accidents. The conspiracy then paid these automobile accident participants to claim injuries related to these automobile accidents and to become patients of the clinics. The clinics then falsely billed various automobile insurance carriers for physical therapy or other health care services that were not in fact provided. According to the indictment, two confidential government informants never received any physical therapy or other health care services of any kind at either H&H Rehab Center or Renue Therapy Center, yet those clinics billed an automobile insurance carrier for treatment allegedly provided to the confidential informants and were paid in excess of $50,000.00 between January 2014 and May 2015.
The mail fraud and conspiracy charges carry a statutory penalty of up to 20 years’ imprisonment and mandatory restitution. The health care fraud charge carries a penalty of up to 10 years’ imprisonment and mandatory restitution. The investigation is being handled by the Department of Homeland Security, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, and the Federal Bureau of Investigation. Assistant U.S. Attorney Ronald M. Stella is assigned to the prosecution.
The charges in an indictment are merely accusations, and the defendants are presumed innocent until and unless proven guilty in a court of law.
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Lawton Resident, Douglas Scott Wolhuis, Sentenced for Hoax Bomb and Anthrax Bank RobberiesRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Douglas Scott Wolthuis, 51, of Lawton, was sentenced to 54 months in prison by U.S. District Judge Robert Holmes Bell. He will be supervised for two years after he is released, and he was ordered to pay restitution and a fine. Wolthuis pled guilty to one count of bank robbery in December pursuant to a plea agreement under which the second count of bank robbery was to be dismissed.
In April 2015, Wolthuis robbed a Fifth Third Bank branch in Kalamazoo. In June 2015,he robbed a Chase Bank branch in Battle Creek. He concealed his identity for both robberies, including with a mask, and passed demand notes. For the first robbery, he claimed in his demand note that he had a bomb. For the second robbery, he claimed in his note that he had anthrax. When he was arrested a short time after the second robbery, responding officers found a clear container of white powder in his vehicle. Biohazard response teams secured the scene, shutting down traffic for hours, until they confirmed that the substance was not a biological weapon.
“Armed bank robberies are extremely dangerous, even when robbers use hoax weapons, because of the law enforcement response that is necessarily provoked,” U.S. Attorney Miles said. “I am very grateful for the work of the Michigan National Guard, the Kalamazoo County Sheriff’s Department (“KCSD”), the Battle Creek Police Department (“BCPD”), the Battle Creek Fire Department, and the Federal Bureau of Investigation (“FBI”) in addressing this potential hazard to the public’s health and safety. It instills confidence that we are prepared should we ever face such a threat.” U.S. Attorney Miles also praised the BCPD officer whose quick response to the Chase robbery led to the apprehension of Wolthuis.
“Mr. Wolthuis’s crimes go beyond the financial theft,” said David P. Gelios, Special Agent in Charge, FBI Detroit. “His claims of having various weapons of mass destruction disrupted the public and necessitated the emergency response of numerous community resources, including those of the BCPD, the BCFD, and their Hazardous Response Team, and the Michigan National Guard’s 51st Civil Support Battalion, as well as the FBI’s Weapons of Mass Destruction Coordinator. The response of each of these organizations was outstanding and critical to law enforcement’s ability to solve this case.”
The FBI, the KCSD, and the BCPD investigated the robberies. Assistant U.S. AttorneyJustin M. Presant prosecuted the case.
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Heroin Trafficker, Raymond Valentino Bowser, SentencedRead the Press Release
MARQUETTE, MICHIGAN —U.S. District Judge Robert Holmes Bell sentenced Raymond Valentino Bowser, age 31, of Chicago, IL, to 60 months in federal prison and 12 years of supervised release, U.S. Attorney Patrick Miles announced today. Sentencing followed Bowser’s guilty plea, entered last December, to distribution of heroin within 1,000 feet of a playground.
Bowser was the subject of an investigation conducted by the Gogebic-Iron Area Narcotics Team (GIANT). GIANT made an undercover purchase of heroin from Bowser in Bessemer, Michigan on February 20, 2015. The next day, Bowser was arrested on an unrelated domestic violence charge and taken into custody. During the arrest, Bowser provided a false name and a fake Illinois driver’s license bearing his photo. He was released on bond and then disappeared.
GIANT learned Bowser’s true identity and that he had a 2008 federal drug conviction in Minnesota. In addition, they learned that Bowser was still on federal supervised release and that he was not supposed to leave Minnesota.
GIANT next encountered Bowser on April 17, 2015, when they again bought heroin from him in Bessemer. After the purchase, GIANT executed a search warrant at Bowser’s residence in Bessemer and found a part of a brick of heroin that weighed about 35 grams. According to GIANT, this piece of heroin could be broken up into 350 dosage units or "points." Bowser was arrested on State of Michigan charges, and then turned over to the U.S. Drug Enforcement Administration (DEA) for federal prosecution.
Rather than proceeding to the Federal Bureau of Prisons to commence his sentence, Bowser is being transported to Douglas County, Wisconsin, to face heroin-related charges there, and to the U.S. District Court in Minnesota to answer for violations of the terms of supervised release that were imposed on him as a result of his 2008 federal drug conviction.
This case was prosecuted by Assistant U.S. Attorney Maarten Vermaat.
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Jury Convicts Inmate David R. McPeters, and Daughter-In-Law Kathryn McPeters, in Social Security ScamRead the Press Release
David and Kathryn McPeters convicted of conspiring to defraud Social Security
GRAND RAPIDS, MICHIGAN — On March 24, a federal jury convicted David R. McPeters and Kathryn McPeters of conspiracy to defraud the Social Security Administration ("SSA"), U.S. Attorney Patrick Miles announced today.
David R. McPeters, 80, has been an inmate of the Michigan Department of Corrections since 1983, when he received two life sentences for murder. Kathryn McPeters, 57, his daughter-in-law, is a resident of Battle Creek, Michigan.
The evidence presented during the three-day trial before U.S. District Judge Janet T. Neff established that the two conspired to circumvent the law prohibiting prison inmates from receiving Social Security retirement benefits. Using David’s name and personal information, Kathryn applied online for SSA retirement benefits on his behalf but concealing the fact that he was incarcerated. Her application deceived the SSA into sending funds to a bank account set up for that purpose by Kathryn. Between 2006 and 2015, the scheme netted them approximately $250,000. The proceeds were split between the two, with Kathryn receiving the majority of the benefits. David has been returned to the Michigan Department of Corrections and Kathryn has been continued on bond pending their sentencing hearings, which have not yet been scheduled.
U.S. Attorney Patrick Miles stated that he was satisfied with the result. "Social Security retirement benefits are an important safety net for all of us when we retire. McPeters is already serving his retirement at taxpayer expense at the Michigan Department of Corrections. The money he and his daughter-in-law swindled should have gone to those retired individuals who have been hardworking taxpayers all their lives."
The case was investigated by the Grand Rapids Office of the Social Security Administration, Office of Inspector General. The case was tried by Timothy VerHey, Assistant United States Attorney.
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Norway Man Sentenced for Distribution of Child PornographyRead the Press Release
MARQUETTE, MICHIGAN — Garrett Joseph Thoresen, 23, of Norway, Michigan was sentenced to 60 months in federal prison for distribution of child pornography, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered Thoresen to serve five years of court supervision following his release from prison, to pay a $100 special assessment, and to pay $3,000 in restitution to one of his victims. Thoresen will also be required to register as a sexual offender.
On December 22, 2015, Thoresen pleaded guilty to a federal felony charge of distributing child pornography. Thoresen’s activities came to light through an undercover investigation into his use of a closed peer-to-peer file sharing network. An undercover agent was able to download images and videos containing child pornography from Thoresen’s computer through peer-to-peer software. Investigators obtained a federal search warrant for computer media at Thoresen’s residence. A forensic examination of Thoresen’s computers revealed his possession of approximately 4,600 images and 189 videos containing child pornography involving approximately 65 known child victims.
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, 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.
The Federal Bureau of Investigation investigated the case. The case was prosecuted by Assistant U.S. Attorney Paul D. Lochner.
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Crystal Falls Businessman Sentenced for Distribution of Child PornographyRead the Press Release
MARQUETTE, MICHIGAN — Stephen John Plowe, 62, of Menasha, Wisconsin was sentenced to 120 months in federal prison for distribution of child pornography, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered Plowe to serve five years of court supervision following his release from prison, to pay a $100 special assessment, and to pay $12,000 to victims of his crime. Plowe will also be required to register as a sexual offender.
On December 14, 2015, Plowe pleaded guilty to a federal felony charge of distributing child pornography. Plowe’s activities came to light through three separate undercover investigations in which officers, posing as 13 to 14 year-old girls, conversed with him using Yahoo! Internet Messenger. In these online conversations, Plowe engaged in explicit sexual talk and sent child pornographic images to the undercover officers. The investigation revealed that Plowe was using a computer located at Plowe Furniture in Crystal Falls, Michigan. Investigators, armed with a federal search warrant, seized the computer and the contents of Plowe’s Yahoo! accounts. A forensic examination of the computer and Plowe’s Yahoo! accounts revealed Plowe’s possession of approximately 1,100 images and 118 videos containing child pornography. Plowe admitted engaging in online conversations with underage females, receiving nude images from them, and sending child pornography videos and images for approximately eight years.
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, 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.
Immigration and Customs Enforcement, Homeland Security Investigations, the Federal Bureau of Investigation, the Somervell County, Texas Sheriff Department, the Bay County, Florida Sheriff Department, and the Macomb County, Michigan Sheriff Department investigated the case. The case was prosecuted by Assistant U.S. Attorney Paul D. Lochner.
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Ottawa County Resident, Robert Allen Haveman, Charged with Wire Fraud and Money Laundering in $16 Million Fraud SchemeRead the Press Release
Robert Haveman Has Agreed To Plead Guilty and Repay $16,240,000
GRAND RAPIDS, MICHIGAN — Robert Allen Haveman, 68, of Ottawa County, Michigan, was charged with two felonies in connection with a scheme to defraud the Elsa D. Prince Living Trust between 1999 and 2015, U.S. Attorney Patrick A. Miles, Jr. announced today. Haveman has signed a plea agreement in which he waived his right to indictment by a Grand Jury and agreed to enter guilty pleas to wire fraud and money laundering.
The felony charges filed in U.S. District Court in Grand Rapids allege that Bob Haveman, while employed by EDP Management Company ("EDP") in Holland, Michigan, devised a scheme to defraud to obtain money belonging to Elsa D. Prince-Broekhuizen and the Elsa D. Prince Living Trust ("Prince Trust"). As part of his fraud scheme, it is alleged that 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 investment activities. Haveman allegedly 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 also is charged with money laundering in connection with the purchase of vacant land with Lake Michigan frontage in Ottawa County.
Haveman faces a maximum sentence of 20 years in prison on the fraud charge and a maximum sentence of 10 years in prison for money laundering. The Court will determine the sentence after considering the federal sentencing guidelines and statutory sentencing factors.
Haveman has signed a plea agreement in which he agreed to plead guilty to the charges and admitted causing $16,240,000 in losses to the Prince Trust. An arraignment and change of plea will be scheduled with the Court. Until a defendant enters his plea and is found guilty, charges in a felony information are merely accusations, and a defendant is presumed innocent unless and until proven guilty in a court of law.
Internal Revenue Service Criminal Investigation is investigating this matter and Assistant U.S. Attorney Christopher O’Connor is prosecuting the case.
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34 Defendants Charged with Conspiracy to Commit Fraud in Battle CreekRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that a federal grand jury returned an Indictment charging 34 defendants for their alleged roles in a conspiracy to defraud the IRS through the filing of false tax forms, mostly through using other people’s identification information. The charges result from a joint investigation led by the IRS, Veterans Affairs – Office of the Inspector General, U.S. 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.
The Indictment alleges that the defendants utilized other individuals’ personal identification information (PII)—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. In total, the Indictment alleges that for tax years 2007 through 2014, the co-conspirators, led by lead defendant DERRICK J. GIBSON, filed at least 4,668 federal income tax returns claiming false, fictitious, and fraudulent refunds totaling over $22 Million.
"In a modern world in which personal identification information can be acquired in various ways and misused, and where government funds are growing ever scarcer, my office will continue to lead investigations into cases where identification information was misused as a tool to commit tax fraud," said US Attorney Miles. "My office will bring to justice those willing to misuse other people’s identification information, often victimizing them, in order to steal money from the government."
Special Agent in Charge Jarod J. Koopman, IRS-Criminal Investigations, added: "The American tax system is designed to provide important services to the American people. It will not be used as the personal piggy bank for thieves and those who assist them. The allegations in this case show a blatant disregard of the law. The filing of false returns is notoriously disruptive to those whose information was misused without their knowledge and to the IRS’s mission. This indictment is the direct result of the hard work and dedication of numerous law enforcement agencies and the U.S. Attorney’s office to protect the American public and the principles of this country."
The alleged roles of the defendants are detailed in the Indictment, unsealed Monday, as part of initial court proceedings. Twenty-four of the defendants have been arrested on the charge so far. The individual named defendants, all from Battle Creek, are listed below.
- DERRICK J. GIBSON, 52
- CHARMICA GRIFFIN, 44
- STEPHANIE T. BAKER, 34
- LATIA M. WILLIAMS, 41
- ALVIN E. STEPHENSON II, 46
- SANDRIA M. BLAKLEY, 34
- EDWARD WARDEN, JR., 47
- CHANEL MCCLENNEY, 35
- DARWIN GIBSON, 25
- BOBBY CRABTREE, 45
- DEQYNN GIBSON, 24
- DARRIEN GIBSON, 25
- ROCHELLE R. VELASQUEZ, 29
- SCHERRIE MCNUTT, 35
- DEVOINE GIBSON, 51
- PRENTIS H. GIBSON, 74
- LAMONT JOYNER, 25
- SHAMEIKA N. CARR-MCCLENNEY, 33
- CHARLEETA CORK, 39
- KEITH CORK, 41
- MAIYA R. JACKSON, 21
- SHAWN MCKNIGHT, 36
- DAVID HAYMER, 48
- DIALLO DOTSON, 42
- ROMELL BOLDEN, 25
- LABRISHA PORTER, 23
- KYPREE TAYLOR, 22
- ROSEMARY BOYD, 53
- PATRICIA RIDDLE-MCCLINTON, 60
- JOSEPH JEREMY JOHNSON, 29
- KISHA N. EVANS, 36
- RASHALL FORD, 47
- SIMONE WATKINS, 47 and
- ROMARO CARSWELL, 45.
Each defendant faces up to 10 years imprisonment and a fine of $250,000, if convicted.
The public is reminded that 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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Muskegon Man, Fletcher Lee Salazar, Sentenced to 15 Years as Armed Career CriminalRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced that Fletcher Lee Salazar, 31, of Muskegon, was sentenced to 180 months’ imprisonment by U.S. District Judge Janet T. Neff. In April, Salazar pled guilty to being a felon in possession of ammunition. As part of a plea agreement, the United States dismissed allegations that Salazar illegally possessed a firearm, which stemmed from an incident in November 2014 during which Salazar fled from a vehicle, leaving behind a semiautomatic pistol with an obliterated serial number and an extended magazine. Salazar was sentenced under the Armed Career Criminal Act, which requires a sentence of at least 15 years because he had previously been convicted three times of a serious drug offense. Salazar’s criminal history includes three convictions under Michigan law for distribution of cocaine.
"Armed felons with a serious history of drug dealing present an immediate danger to their communities, and the penalties of the Armed Career Criminal Act ought to deter other felons from making the same decisions this defendant made,” U.S. Attorney Miles said.
“Today’s significant sentence should send a clear message to armed career criminals, you will do hard time in prison for violating Federal gun laws,” said Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) Special Agent in Charge, S. Robin Shoemaker. “This case also highlights ATF’s efforts to protect our community from violent offenders and our partnership with the Western District of Michigan’s United States Attorney’s Office, the Michigan State Police, the Michigan Department of Corrections, the Muskegon Parole Office, the Muskegon Police Department, and the U.S. Marshals Service.”
Assistant U.S. Attorney Justin M. Presant prosecuted the case.
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Mason Woman, Megan Kolberg, Sentenced to 27 Months' Imprisonment for Embezzling from Mason State Bank over Several YearsRead the Press Release
Megan Kolberg Stole Over $100K and Repeatedly Lied that an Armed Bank Robber Had Stolen the Money
GRAND RAPIDS, MICHIGAN — United States Attorney Patrick A. Miles, Jr., announced today that Megan Kolberg, age 37, of Mason, Michigan, was sentenced to 27 months’ imprisonment in the U.S. District Court for the Western District of Michigan by the Honorable Robert J. Jonker, Chief U.S. District Court Judge. In sentencing her to prison at the top of the sentencing guideline range, Judge Jonker noted that her embezzlement lasted for several years and her concealment of the offense brought other individuals into harm’s way as potential subjects of the investigation.
The Judge adjourned a final determination of restitution for ninety days, but noted that Kolberg will be ordered to pay $131,580.00 to Mason State Bank and its insurers. Kolberg admitted to embezzling over $130,000.00 from Mason State Bank’s Cedar Street branch between December 2009 and May 21, 2013, where she worked as a teller. She regularly embezzled cash from the bank and concealed her embezzlement by making false entries in the bank’s books and records. On May 21, 2013, as bank officials and law enforcement began to uncover her embezzlement, Kolberg faked an armed bank robbery through a series of elaborate steps, including: franticly calling her husband claiming a robbery was occurring, thereby causing a 911 call to the Mason Police; reporting that she was forced at gunpoint to remove cash from an outdoor ATM; claiming she was forced back inside the bank and confined to a bathroom while the robber stole additional money from her teller drawer; further reporting that the robber forced her to destroy a bank surveillance tape; and, later meeting with an FBI forensic artist in an effort to develop a composite drawing of the alleged robber. Kolberg claimed that the bank robber stole $120,000.00 in an effort to explain why the actual cash on hand at the bank was significantly less than the balance carried on the books and records. Kolberg embezzled over $4,000.00 per month on many occasions, and as much as $7,677 in the month of January, 2012.
“My office will continue to vigorously prosecute crimes that affect our federally insured financial institutions,” said U.S. Attorney Miles. “Kolberg’s significant embezzlement, which spanned several years, along with her decision to falsely claim that an armed bank robbery occurred in the hopes of concealing her crime, clearly commanded a prison sentence. Her actions caused unnecessary risk to the public and the responding police agencies as the police officers sped to the bank believing that an armed bank robbery was in progress, and resulted in limited law enforcement resources being directed to the investigation of a bank robbery that never actually occurred.” “Ms. Kolberg’s crime of continued and repeated embezzlement of funds was compounded by her false claim of an armed bank robbery,” said David P. Gelios, Special Agent in Charge, FBI Detroit Division. “This case serves as an unfortunate reminder to all organizations that not every threat comes from outside the organization.” “The Mason Police Department remains steadfast in its commitment to hold accountable those who, out of greed and without remorse prey on their victims,” commented Mason Police Chief, John Stressman. “As in this case, we seek all avenues of assistance to insure successful prosecution. The Department wishes to thank the Federal Bureau of Investigation’s Lansing Officeand the Office of United States Attorney of the Western District of Michigan, Patrick A. Miles, Jr., for all the hours of effort, investigation and the outstanding organization of case materials, without which the final accounting of Megan Kolberg’s crime would not be possible. This criminal case exemplifies the immense value of federal law enforcement at all levels of policing.”
The investigation was conducted by the Lansing office of the FBI and the Mason Police Department. The prosecution was handled by Assistant U.S. Attorney Ronald M. Stella.
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Three Co-Defendants Plead Guilty to Sex Trafficking Minors in Grand Rapids, MichiganRead the Press Release
GRAND RAPIDS, MICHIGAN – All three co-defendants in a West Michigan child sex trafficking case pled guilty today in federal court. Anthony Wilson-Lackey (22) and Shyron Smith (22), both of Grand Rapids, and Stephanie Martin (24) of Holland, Michigan, pled guilty to conspiring to sex traffic two minors in Grand Rapids and Holland, Michigan, in September and October 2014. Wilson-Lackey recruited the minors, who were 15 and 16 years old, and provided them to paying customers for commercial sex in motels around Grand Rapids and an apartment complex in Holland, Michigan. Martin rented hotel rooms and helped post online advertisements promoting the minors for commercial sex. Smith conspired with Wilson-Lackey to split the profits, and he drove the minors to the motels and to Holland to meet johns. All three co-defendants admitted that they knew the minors were only 15 and 16 years old.
Over the past 18 months, the U.S. Attorney’s Office for the Western District of Michigan has successfully prosecuted six defendants for child sex trafficking, including the three in this case. The sentencing hearings will be held on a date to be determined, in the summer of 2016. Martin and Smith face up to five years in prison and Wilson-Lackey faces up to life in prison.
U.S. Attorney Patrick Miles stated, "Sadly, sex trafficking happens everywhere in the country, even right here in West Michigan. Traffickers often target minors who are lured by the promise of money, independence, and sometimes friendship, love, drugs, or violence, into selling their bodies. The growing number of sex trafficking investigations and prosecutions represent law enforcement’s increasing focus on finding and prosecuting those who prey on the vulnerable youth in our community."
"No longer can we say these crimes don’t happen in ‘my neighborhood,’" said David P Gelios, Special Agent in Charge, FBI Detroit Division. "The sexual exploitation of minors, which routinely involves trafficking teenage girls, is repulsive and all too common. The FBI’s collective effort with our Law Enforcement partners to eliminate the ability of traffickers to victimize our children is time and resources well spent. Little can be more important than that."
The Grand Rapids Police Department, Ottawa County Sheriff’s Office, FBI, and the West Michigan Based Child Exploitation Task Force (WEBCHEX) collaboratively conducted the investigation. Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the case.
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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Kent County Tax Return Preparer, Andres Orrego-Hernandez, Sentenced for Conspiring to Defraud the Government and Aiding in the Filing of A False Tax ReturnRead the Press Release
GRAND RAPIDS, MICHIGAN – Grand Rapids resident Andres Orrego-Hernandez, age 31, was sentenced to 18 months’ imprisonment by U.S. District Judge Paul L. Maloney for conspiracy to defraud the government and aiding in the filing of a false tax return, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Maloney ordered Orrego-Hernandez to pay $371,648.00 in restitution to the IRS, and to serve two years of court supervision following his release from prison.
Orrego-Hernandez had pled guilty before Magistrate Judge Phillip J. Green in November, 2015. According to the plea agreement filed with the court, Orrego-Hernandez admitted his role in the conspiracy and in aiding and assisting in the preparation of false and fraudulent federal income tax returns. The returns filed inflated income and/or the number of dependents to qualify for the earned income credit and/or inflated or claimed entirely false deductions or credits to qualify for larger refunds. Orrego-Hernandez directed the portion of the client refunds attributable to his criminal activity to bank accounts he controlled. Orrego-Hernandez’s actions defrauded the United States of $371,648.00.
In November 2015, U.S. District Judge Paul L. Maloney sentenced co-defendant Humberto Manrique-Mendoza to 18 months imprisonment, followed by 24 months of supervised release, 200 hours of community service in lieu of a fine. He also ordered Manrique-Mendoza to pay restitution in the amount of $371,648 to the IRS, joint and severally with Orrego-Hernandez.
IRS-CI Special Agent in Charge Jarod J. Koopman stated, "Most professional tax preparers provide a great service to their clients. However, those like Orrego-Hernandez and Manrique-Mendoza should remind us all of the importance of selecting a reputable tax return preparer."
This case was investigated by Special Agents of IRS-Criminal Investigation and Assistant U.S. Attorney B. Rene Shekmer prosecuted the case.
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Grandville Man, Gary Alan Hoekstra, Sentenced for Wire FraudRead the Press Release
KALAMAZOO, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr. announced today that Gary Alan Hoekstra of Grandville, Michigan was sentenced to one year and one day confinement by U.S. District Court Judge Janet T. Neff for wire fraud. Hoekstra pleaded guilty to the charge in November of 2015.
Between January 2010 and October 2012, Hoekstra opened at least ten credit card accounts in the name of three victims by entering their personal identifying information into online credit applications using a computer in his home. Accounts were approved with Credit One Bank, Discover Financial, Bank of America, Chase Bank, Citibank, and American Express, and Hoekstra ran up balances on each of these accounts to total $49,439.00 so that he could obtain money, services, and other things of value. The fraud was discovered when one of the victims began receiving unpaid balance calls from the banks.
In addition to the one year and one day sentence of confinement, Judge Neff imposed a restitution order to compensate the victims for their losses, three years of supervised release to follow Mr. Hoekstra’s release from prison, and a special assessment of $100.
The U.S. Attorney’s Office for the Western District of Michigan was assisted in the investigation by the U.S. Postal Inspection Service.
U.S. Attorney Patrick A. Miles cautioned those who would use identity theft to defraud individuals and financial institutions. "Identity theft is a continuing challenge and a crime that worries almost everyone. I hope word gets out that perpetrators are being caught and sent to jail."
Assistant Inspector in Charge Cynthia Mormon, U.S. Postal Inspection Service, further stated, "Mr. Hoekstra took financial advantage of three individuals in his community. The U.S. Postal Inspection Service will pursue those who use the Postal Service to victimize and steal the identities of others for personal gain."
This case was prosecuted by Assistant U.S. Attorney Clay M. West.
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Hannahville Man, Errol Martin Sagataw, Sentenced for Assault of Girlfriend That Resulted in Serious Bodily InjuryRead the Press Release
MARQUETTE, MICHIGAN — Errol Martin Sagataw, 60, of Wilson, Michigan, was sentenced in U.S. District Court to 12 months’ and one day of imprisonment for assault resulting in serious bodily injury, U.S. Attorney Patrick A. Miles, Jr., announced today. In addition, Chief U.S. District Judge Robert J. Jonker sentenced Sagataw to serve 2 years of supervised release following the completion of his term of incarceration.
On February 16, 2015, Sagataw assaulted his girlfriend at his home on the Hannahville Indian reservation after the victim rebuffed his sexual advances. Sagataw repeatedly punched the victim which caused extensive bruising and a fractured nose. Sagataw was indicted by a federal grand jury and pled guilty on October 28, 2015, to assault resulting in serious bodily injury.
The Hannahville Indian Community Tribal Police and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Hannah N. Bobee prosecuted the case.
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Muskegon Defendants, Larry Dwayne Diggs and Tunisia Phillips-Lark, Plead Guilty to Drug, Firearm, Witness Tampering, and Perjury OffensesRead the Press Release
GRAND RAPIDS, MICHIGAN – Larry Dwayne Diggs, also known as "Montana" and "Montie," of Muskegon, Michigan pled guilty to federal drug, firearm, and witness tampering offenses, U.S. Attorney Patrick Miles announced today. Diggs’ codefendant, Tunisia Phillips-Lark, pled guilty to one count of perjury. Diggs faces a minimum of five years in prison and a maximum of life in prison; Lark faces up to five years in prison.
Diggs admitted at his plea hearing that on July 2, 2015, he possessed a quantity of "crack" cocaine and a Glock pistol while at a gas station in Muskegon, Michigan. He was on his way to sell the "crack" cocaine to a customer and possessed the loaded handgun for protection. Muskegon Township Police were dispatched to the scene on a report of a possible narcotics transaction. Diggs fled when police arrived, leaving behind the handgun and cocaine. Investigation revealed that the handgun was stolen, and that Diggs had previously been convicted of a felony.
Diggs further admitted at his plea hearing that after he was incarcerated, he tampered with a witness who had been subpoenaed to testify against him. He called Phillips-Lark from jail and instructed her to lie to a federal grand jury investigating the July 2, 2015 incident. Phillips-Lark subsequently testified falsely before the grand jury. In addition, Phillips-Lark and Diggs conspired to tamper with another witness so that this witness would not "implicate" Diggs.
Lark, in turn, admitted at her plea hearing that she lied about Diggs when she testified before the federal grand jury. She admitted that she did so to help him try to avoid charges.
The charges in this case are the result of a joint investigation by the Muskegon Township Police Department and the Muskegon Violent Crime Task Force, which includes the Federal Bureau of Investigation (FBI), the Michigan State Police (MSP), and the Muskegon City Police Department. The U.S. Attorney's Office, the Muskegon County Prosecutor's Office, and federal, state, and local law enforcement are working closely together to combat violent crime and witness tampering in the Muskegon area.
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Jury Convicts Traverse City Man, Jerry M. Stauffer, of Fraud and Money Laundering in Connection with Foreign Currency Trading OperationsRead the Press Release
GRAND RAPIDS, MICHIGAN — Jerry M. Stauffer, 66, of Traverse City, Michigan, was convicted of wire fraud and money laundering at the conclusion of a jury trial, U.S. Attorney Patrick Miles announced today.
U.S. Attorney Miles commented that "Stauffer used his position as a respected financial expert in Traverse City to defraud his friends and neighbors, as well as people living around the world. As a result, some people lost their life savings. This kind of crime causes long-lasting harm and will be punished whenever we find it."
During a four-day trial that began on January 26, 2016, the jury heard that Stauffer engaged in a fraudulent investment scheme between 2009 and 2015, using interstate communications to take a total of approximately $1.9 million from more than a dozen victims. He advised his "investors" that he could earn substantial profits for them with invested funds by trading in fluctuations in foreign currencies. In fact, Stauffer never invested the money as promised, but used it to pay his own expenses and make the payments necessary to keep the fraudulent scheme afloat. Two families lost $400,000 each in the scheme. Stauffer continued to persuade his investors that his actions were legitimate even after he was indicted, as a group of investors were persuaded to put up the funds he wanted to hire an attorney. The jury also heard that Stauffer laundered some of the proceeds of his crime through a bank to purchase a boat.
Stauffer now faces up to 20 years in prison for the wire fraud conviction and up to ten years in prison for the money laundering conviction. Sentencing has been scheduled for June 14, 2016 before Chief Judge Robert J. Jonker. Stauffer was permitted to remain on bond pending his sentencing.
"Mr. Stauffer’s appearance of success was masked by a tangled financial web of lies," said Jarod J. Koopman, Special Agent in Charge of IRS-Criminal Investigation. "Ponzi schemes can thrive for a short period of time based on the fraudulent claims that money is being invested and legitimate returns provided. However, that time has come to an end, and as this verdict shows, Mr. Stauffer will now face his judgment."
The Traverse City office of the FBI and the IRS-Criminal Investigation office investigated the case. Assistant U.S. Attorneys Tim VerHey and Nicole Mazzocco prosecuted it.
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