Western District of Michigan
Press releases recorded for this federal judicial district.
Grand Rapids Man, Carl Luther Thompson II, Sentenced to More Than Eight Years in Prison for Felony Gun and Drug PossessionRead the Press Release
GRAND RAPIDS, MICHIGAN — Carl Luther Thompson II was sentenced to eight years and two months’ federal incarceration after his conviction on two counts of being a felon in possession of a firearm and one count of possessing heroin, cocaine base, and marijuana with intent to distribute. U.S. District Judge Janet T. Neff pronounced the sentence. A jury found Thompson guilty of all three counts on April 10, 2015.
Thompson was convicted after possessing one of two firearms left on a picnic table in Dickinson Buffer Park on Grand Rapids’s southeast side on June 11, 2013. The next day, Thompson got into an altercation with a woman who requested that members of the Madison Avenue street gang move away from her house on Brown Street near Madison Avenue in Grand Rapids. Thompson threatened the woman by brandishing a 9mm semiautomatic pistol and stating, "We own Brown Street." The State was unable to prosecute the felonious assault when the victim recanted at a preliminary hearing out of fear of retaliation. More than a year later, a federal grand jury returned an indictment of Thompson for being a felon in possession of firearms. During his arrest on the federal gun charges, he was found to be in possession of heroin, crack cocaine, and marijuana, which led the grand jury to subsequently bring the drug charges as well.
U.S. Attorney Patrick Miles praised the cooperation of federal, state, and local investigators in prosecuting Thompson. "This conviction and sentence result from cooperation among the Grand Rapids Police Department, the Michigan State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Attorney’s Office in pursuing justice against individuals who destabilize communities through drug dealing and gun violence."
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Grand Rapids Police with assistance from the Michigan State Police. It was prosecuted by Assistant U.S. Attorney Sally J. Berens and former Assistant U.S. Attorney Russell A. Kavalhuna.
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Byron Center Man, David W. McQueen's , Conviction and 30-Year Sentence for Ponzi Scheme Upheld on AppealRead the Press Release
GRAND RAPIDS, MICHIGAN — The U.S. Attorney’s Office for the Western District of Michigan announced today that the Sixth Circuit Court of Appeals has upheld the conviction and 30-year sentence of David W. McQueen. On December 3, 2014, McQueen, age 44, of Byron Center, Michigan, was sentenced to 30 years in prison and ordered to pay $32,036,997.63 in restitution to his victims and $926,787.00 in restitution to the IRS. McQueen was convicted on May 9, 2014, after a six-week jury trial of six counts of mail fraud, six counts of money laundering, and three tax counts stemming from a massive Ponzi scheme that spanned three years. The scheme affected more than 800 families, and preyed upon unsophisticated, often elderly investors. The Sixth Circuit’s opinion can be found online at http://www.ca6.uscourts.gov/opinions.pdf/16a0033n-06.pdf.
The Court of Appeals unanimously rejected McQueen’s claims that the government lacked sufficient evidence of his guilt, that he should receive a new trial, and that his sentence was unconstitutional and unreasonable. The Court agreed with the U.S. Attorney’s Office’s arguments on appeal that there was ample evidence of guilt and that McQueen received a fair trial and a fair sentence.
The evidence at trial showed that, as with many investment frauds, McQueen likely did not set out to create a criminal enterprise that would result in a financial tragedy for his investors. In 2006, McQueen, who made an adequate living in sales, used borrowed funds to invest in a company called Multiple Return Transactions (“MRT”). MRT was owned and operated by Jim Clements. Clements promised returns of 10% per month or higher to McQueen. After a few months of making such returns, McQueen decided to capitalize on his apparent investment success and invited others to invest through him. McQueen created a company called Accelerated Income Group (“AIG”), through which he promised returns as high as 5-6% to investors. In addition, McQueen recruited insurance agents to sell his investments to their clients. For a short time, AIG was very successful (at least on paper). McQueen used MRT’s promised returns of 10%, to make AIG’s promised returns of 5%. McQueen could meet his 5% obligations to his investors and then keep 5% for himself.
In mid-2007, MRT stopped making payments and meeting redemption requests. MRT was merely a Ponzi scheme, and their money was gone and would never be recovered. Instead of notifying AIG investors that MRT had failed, however, McQueen continued to tell investors that their money was safe and growing. Without MRT making its monthly payments, McQueen and AIG could not meet their 5% monthly obligations to investors based on investment earnings. Instead, McQueen used the only funds he had available to make promised interest payments – money from new investors.
West Michigan Jury Convicts Chicago-Based Bank Robber, Dominick T. Johnson, of Participating in Three Kalamazoo-Area RobberiesRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced that Dominick T. Johnson, 33, of Chicago, Illinois, has been convicted by a federal jury of seven crimes: conspiracy to commit bank robbery, three counts of armed bank robbery, and three counts of brandishing a firearm during and in relation to a crime of violence. The Honorable Gordon J. Quist presided over the two-week trial. Under existing law, Johnson faces a mandatory minimum of 67 years in federal prison when he is sentenced.
According to the proofs at 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 prevented by a traffic accident.
U.S. Attorney Miles praised law enforcement’s thorough investigation and commitment to solving and preventing the consummated and planned robberies. "Going into a bank or any business with a loaded weapon to steal money creates extraordinary risk and can have a lasting effect on the victims even when no one is hurt," said U.S. Attorney Miles. "The planner and organizer of these kinds of robberies—who emboldens and encourages his criminal associates—is just as dangerous, sometimes even more so, as the person he persuades to enter the bank."
"It goes without saying that this level of threat and violence cannot, and will not, be tolerated in our communities," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "Seeing that Mr. Johnson and his co-conspirator are off the streets raises the level of safety of our community, both for our citizens and our businesses."
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.
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Muskegon Man, Adam James Fitzpatrick, Sentenced to Twenty Years in Prison for Distributing Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN – Adam James Fitzpatrick, 26, of Muskegon, Michigan was sentenced yesterday to 20 years in federal prison for distributing child pornography via the Internet, U.S. Attorney Patrick A. Miles, Jr. announced. In addition to the prison term, U.S. District Judge Paul L. Maloney imposed a 10-year term of supervised release that will commence once Fitzpatrick is released from imprisonment. Fitzpatrick will also be required to register as a sexual offender.
Fitzpatrick pled guilty on September 22, 2015, to distributing child pornography. He came to the attention of law enforcement in early 2015, when they discovered that he was distributing child pornography via the Internet. The FBI executed a search warrant at Fitzpatrick’s residence on August 5, 2015, and seized his computer. Forensic examination of the computer revealed thousands of images and videos, including hard-core, graphic material, such as images and videos of prepubescent children, to include infants and toddlers, being raped and tortured. Investigation further revealed that Fitzpatrick had access to children, attempted to convince other adults to abuse their children for him, and attempted to webcam with children. Fitzpatrick confessed to possessing child pornography and sharing it with others on the Internet.
In its sentencing memorandum, the U.S. Attorney’s Office wrote that "[t]he possession and distribution of child pornography is a very serious offense in any case. But here, the extreme depravity of the defendant’s collection and conduct makes his offense all the more serious and calls for a severe punishment." Judge Maloney agreed, noting that this was the worst child pornography case he had seen.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.
The FBI and the Michigan State Police investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
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Kentwood Resident and Tax Return Preparer, Gregory Claxton, Pleads Guilty to Evading Payment of Income TaxesRead the Press Release
GRAND RAPIDS, MICHIGAN — Kentwood resident Gregory Claxton, pled guilty in the courtroom of U.S. Magistrate Judge Ray Kent to willfully evading the payment of $148,779 in federal income taxes for the calendar years 2006 through 2012. The indictment alleged he hid his assets from the IRS by placing money and property in the names of others. Claxton faces up to five years in prison, up to $250,000 in fines and must pay over $200,000 in restitution, counting interest.
According to court records, Claxton was a certified public accountant until approximately 2000 and still operates a business in which he prepares tax returns for his clients. Claxton admitted he intentionally deposited the proceeds of his tax preparation business into bank accounts in the name of his wife to avoid the appearance of having the ability to pay his income taxes. Claxton also admitted that, just two days prior to meeting with the IRS to discuss his ability to pay his outstanding tax bill, he transferred the deed of his house to a trust in his wife’s name in an effort to thwart IRS collection efforts.
"With the tax filing season quickly approaching, it is important for people to have confidence that when they pay their taxes, they know their neighbors, co-workers and tax return preparers are doing the same," said Jarod J. Koopman, Special Agent in Charge, IRS – Criminal Investigation.
This case was investigated by Special Agents of Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney Sally J. Berens.
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Physician Assistant, Kyle D. Gandy, Sentenced to Fourteen Months in Prison for Accepting Illegal KickbacksRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Kyle D. Gandy, age 37, a physician assistant who formerly resided in Mt. Pleasant, Michigan, was sentenced to 14 months in prison and two years of supervised release for accepting $1,000.00 in illegal kickbacks for referring patients to medical clinics, physical therapy clinics, and a home health care agency. Gandy is the tenth person, and the fourth physician assistant, convicted of felony charges in connection with a joint federal-state investigation into a kickback scheme initiated by Babubhai Rathod. As part of this felony conviction, Gandy was ordered to pay $18,030.17 in restitution, representing the amount of the referred services paid by Medicare and Medicaid. Gandy will be excluded from participating with the Medicare and Medicaid programs for at least five years.
In sentencing Gandy, U.S. District Judge Janet T. Neff stated that accepting kickbacks is "a very serious crime" that "take[s] advantage of government programs that help so many people." Judge Neff emphasized that receiving illegal kickbacks in any amount is a "strike at the whole [health care] system." Judge Neff further noted the need to punish and deter those who have "the education and opportunity to work in a dignified profession," but use such opportunities "to commit fraud and theft."
In its sentencing memorandum, the Government cited Gandy’s acknowledgements that the subject kickback payments influenced his referral patterns and resulted in services that were not medically necessary. U.S. Attorney Miles reiterated that, "Paying kickbacks for patient referrals distorts the motives of health care professionals. The U.S. Attorney’s Office will continue to aggressively investigate and prosecute all kickback schemes using the available criminal and civil remedies, including felony prosecutions, treble civil damages, monetary penalties, and program exclusions."
"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."2
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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Eaton Rapids Man, Benjamin Jordan Knight, Sentenced to More Than Seventeen Years in Prison for Distribution Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN – Benjamin Jordan Knight, 29, of Eaton Rapids, Michigan was sentenced today to 210 months (17.5 years) in federal prison for distributing and attempting to distribute child pornography via the Internet, U.S. Attorney Patrick A. Miles, Jr. announced. In addition to the prison term, Chief U.S. District Judge Robert Jonker imposed a 10-year term of supervised release that will commence once Knight is released from imprisonment. Knight will also be required to register as a sexual offender.
Knight pled guilty on September 17, 2015, to distributing and attempting to distribute child pornography. Knight came to the attention of law enforcement on December 27, 2014, when a witness told police that Knight had used a cell phone to display child pornography in a public place. Ensuing police investigation revealed that Knight had distributed and attempted to distribute child pornography to another individual via the Internet. Investigation further revealed that Knight possessed a quantity of child pornography. Knight’s collection of child pornography included hard-core, graphic material, such as images and videos depicting brutal sexual assaults on infants and toddlers. In addition, investigation revealed that Knight had claimed in chat communications that he had himself sexually abused children in the past and wanted to do so again in the future. He offered to pay the parent of a young child if the parent would allow him to sexually abuse the child. In addition, investigation revealed that Knight had previously held employment taking care of a vulnerable child.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.
The Department of Homeland Security, Homeland Security Investigations (HSI), Battle Creek Police Department, and Emmett Township Department of Public Safety investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
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Former Credit Union Manager, Kathryn Sue Simmerman, Sentenced to Six and A Half Years in Prison for EmbezzlementRead the Press Release
Kathryn Sue Simmerman Embezzled Almost $2 Million From Shoreline Federal Credit Union
GRAND RAPIDS, MICHIGAN — Kathryn Sue Simmerman, 55, of Muskegon, Michigan, was sentenced to 78 months (six and a half years) in federal prison today for embezzling $1.9 million from her former employer, Shoreline Federal Credit Union. She was also ordered to pay $1.9 million in restitution and serve two years of court supervision following her release from prison. U.S. District Judge Robert Holmes Bell imposed the sentence. He remanded Simmerman to prison immediately after issuing the sentence.
For more than 15 years, Simmerman embezzled $1,945,000 from Shoreline by removing cash from its vault and placing it in her purse. She deposited some of the cash into Shoreline accounts she controlled, and took the remainder of it home to spend on her own use and enjoyment. She hid her activity by manipulating Shoreline’s books and records.
The case was investigated by the Norton Shores Police Department and Special Agents from the FBI and IRS. It was prosecuted by Assistant U.S. Attorney Clay Stiffler.
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Former Lansing Resident, Tsiidzoyedu Callista Chiwocha, Pleads Guilty on Federal Tax ChargeRead the Press Release
Defendant illegally received over $24,000 in tax refunds.
GRAND RAPIDS, MICHIGAN — On December 23, 2015, Tsiidzoyedu Callista Chiwocha, 43, a former resident of Lansing Michigan, pled guilty in federal court to having obtained more than $24,000 from the United States Treasury in 2011 by causing false federal tax returns to be filed with the Internal Revenue Service, U.S. Attorney Patrick Miles announced today. Her scheme involved deceiving citizens into providing their personal identification information by promising them "free stimulus money." The tax returns typically contained false reporting of undocumented income and abusive use of the Earned Income credit.
U.S. Attorney Miles affirmed his commitment to pursing stolen identity fraud cases as a high priority for his office. "When someone cheats on a federal tax return, they are hurting all honest taxpayers in the Western District of Michigan and elsewhere."
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, the sister of Tsiidzoyedu Chiwocha, pled guilty to filing false tax returns and was sentenced to 42 months’ incarceration. Tsiidzoyedu Chiwocha’s sentencing has been scheduled for May 16, 2016 before Chief U.S. District Judge Robert J. Jonker.
"We take these types of fraud very seriously," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "These schemes were multi-layered in that they involved countless stolen identities, various amounts of money taken from numerous individuals, as well as large sums of money diverted from the American people as a whole. This conviction should serve as a reminder of the FBI’s commitment to the investigation of all types of financial fraud schemes."
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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Former Lansing Resident, Amanda B. Ely, Pleads Guilty on Federal Tax ChargesRead the Press Release
Defendant illegally received over $32,000 in tax refunds.
GRAND RAPIDS, MICHIGAN — On December 22, 2015, Amanda B. Ely, 22, a former resident of Lansing Michigan, pled guilty in federal court to having obtained more than $32,000 from the United States Treasury in 2011 and 2012 by causing false federal tax returns to be filed with the Internal Revenue Service, U.S. Attorney Patrick Miles announced today. Her scheme involved deceiving citizens into providing their personal identification information by promising them "free stimulus money." The tax returns typically contained false reporting of undocumented income and abusive use of the Earned Income credit.
U.S. Attorney Miles affirmed his commitment to pursing stolen identity fraud cases as a high priority for his office. "When someone cheats on a federal tax return, they are hurting all honest taxpayers in the Western District of Michigan and elsewhere."
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. Ely’s sentencing has been scheduled for May 3, 2016 before Chief U.S. District Judge Robert J. Jonker.
"We take these types of fraud very seriously," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "These schemes were multi-layered in that they involved countless stolen identities, various amounts of money taken from numerous individuals, as well as large sums of money diverted from the American people as a whole. This conviction should serve as a reminder of the FBI’s commitment to the investigation of all types of financial fraud schemes."
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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Kalamazoo Man, Edward Oneal Bowen, Pleads Guilty to String of Armed RobberiesRead the Press Release
Edward Oneal Bowen Committed 3 Kalamazoo Area Credit Union Robberies in 2014
GRAND RAPIDS, MICHIGAN — Edward Oneal Bowen, 48, of Kalamazoo, pled guilty in federal court on December 18 to three counts of armed credit union robbery and one count of brandishing a firearm during a crime of violence, U.S. Attorney Patrick Miles announced today. He faces up to 25 years in federal prison for each count of armed robbery, and a mandatory consecutive sentence of at least seven years up to life in prison for the firearms charge. He will be sentenced in April 2016 by Chief U.S. District Judge Robert J. Jonker.
On May 5, 2014, Bowen robbed the Preferred Credit Union in Kalamazoo of approximately $6,200. On June 18, 2014, he robbed the Preferred Credit Union again, making off with approximately $6,400, but leaving behind an orange juice cup and straw smelling of alcohol. On July 8, 2014, he robbed the Kellogg Community Federal Credit Union in Kalamazoo, forcing the employees to access the vault, stealing approximately $41,000, and locking the employees in a utility closet. During each robbery, Bowen wore a wig and brandished a handgun. He was able to escape after each robbery.
Kalamazoo Department of Public Safety officers solved the robberies by obtaining a DNA sample from the straw left behind at the scene of the second Preferred Credit Union robbery. Surveillance photos from that robbery showed the suspect holding the cup in his left hand while pointing a gun at employees with his right hand. Witnesses said the suspect had the straw from the cup in his mouth at the start of the robbery. The DNA profile from the straw matched a DNA profile of Bowen contained in the Combined DNA Index System ("CODIS"). Bowen’s DNA profile was in CODIS because a sample was taken from him after a 1996 conviction for assault with intent to commit murder. Officers also obtained a fingerprint match from the cup Bowen left behind.
The case was investigated by the Kalamazoo Department of Public Safety, the Kalamazoo County Sheriff’s Department, and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Clay Stiffler and former Assistant U.S. Attorney Russ Kavalhuna.
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Grand Rapids Man, Senecca Keily Freeman, Sentenced to Twenty-Two Years in Federal Prison for Possessing Firearm to Protect Lethal Drug TradeRead the Press Release
GRAND RAPIDS, MICHIGAN – Senecca Keily Freeman, 35, of Grand Rapids was sentenced today to more than twenty-two years in federal prison for possessing a firearm to protect a lethal drug trafficking operation, U.S. Attorney Patrick Miles announced. In addition to the 270-month prison term, Chief U.S. District Judge Robert Jonker imposed a five-year term of supervised release that will commence once Freeman is released from imprisonment and ordered him to pay a $2,500 fine.
Freeman pleaded guilty on August 7, 2015, to illegally possessing a firearm as a convicted felon. The relevant conduct surrounding Freeman’s conviction was outlined in the government’s sentencing memorandum and motion for upward departure and variance. On November 18 and 19, 2014, Freeman distributed controlled substances to two of his drug customers. The customers believed they were buying heroin, but the substance was in fact fentanyl, a potent synthetic opiate. The customers used the drug, and one of them overdosed and died of "acute fentanyl toxicity" as a result. The Grand Rapids Police responded to a call for a drug overdose and found the customers outside Freeman’s home. Police learned that Freeman, a convicted felon, had been distributing drugs from his home and that he had a firearm. Police obtained a search warrant and found more than 60 bags of fentanyl and a stolen firearm. Investigation revealed that Freeman used the stolen firearm to protect and further his drug operation.
Freeman received a lengthy sentence both because of the loss of life and because he was eligible for increased penalties under the Armed Career Criminal Act ("ACCA"). Under federal law, a person who possesses a firearm after sustaining at least three previous felony convictions of a certain type and severity must be sentenced to at least fifteen years in prison. Freeman’s prior convictions included incidents involving robbery, drug dealing, and assault and battery.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Grand Rapids Police Department (GRPD) investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
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Former Lansing Resident, Qasim I. Verser, Pleads Guilty to Federal Tax ChargeRead the Press Release
Defendant Illegally received over $190,000 in tax refunds.
GRAND RAPIDS, MICHIGAN — On December 21, 2015, Qasim I. Verser, 25, a former resident of Lansing Michigan, pled guilty in federal court to having obtained more than $190,000 from the United States Treasury in 2012 and 2013 by causing false federal tax returns to be filed with the Internal Revenue Service, U.S. Attorney Patrick Miles announced today. His scheme involved deceiving citizens into providing their personal identification information by promising them "free stimulus money." The tax returns typically contained false reporting of undocumented income and abusive use of the Earned Income credit.
U.S. Attorney Miles affirmed his commitment to pursing "stolen identity fraud cases" as a high priority for his office. "When someone cheats on a federal tax return, they are hurting all honest taxpayers in the Western District of Michigan and beyond."
Complaints by local citizens prompted the Federal Bureau of Investigation to open a criminal investigation which included 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, defendant Verser’s aunt, Taka Chiwocha-Crowell, pled guilty to filing false tax returns and was sentenced to 42 months’ incarceration. Verser’s sentencing has been scheduled for May 2, 2016 before Chief U.S. District Judge Robert J. Jonker.
The investigation was conducted by Special Agent Rod Charles, Lansing FBI, and Special Agent Paula Wood, Lansing IRS Criminal Investigations, and the case is being prosecuted by Assistant U.S. Attorney Michael A. MacDonald.
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Western U.P. Crystal Meth Conspiracy Shut DownRead the Press Release
Las Vegas Connection Uncovered by Joint GIANT-DEA Investigation
MARQUETTE, MICHIGAN — Richard Jon Hill, age 39 known in the Ironwood, Michigan area as "Rock Star Rick," was sentenced to 180 months in federal prison for his conviction on federal drug charges. The sentence represents the culmination of a two-year investigation by the Gogebic-Iron Area Narcotics Team (GIANT) and the U.S. Drug Enforcement Administration (DEA). The joint investigation led to seven federal convictions, sentences measured by years and even decades, and the complete dismantling of a major criminal drug trafficking operation.
Hill, a 1994 graduate of Luther L. Wright High School in Ironwood, moved to Las Vegas in about 2000 and became a heavy methamphetamine user. He returned to Ironwood in 2012, but maintained his connections in Las Vegas. Soon he was traveling back to Las Vegas to pick up drugs that he would sell in Ironwood. To minimize the risk of traveling with large amounts of methamphetamine, he enlisted friends and associates to receive packages that he had shipped from Las Vegas. Hill would collect these packages, use some of the methamphetamine himself, and sell the rest in order to finance his next trip to Las Vegas. This became a lucrative cycle driven by Hill and his friends and associates that helped spread a methamphetamine epidemic across the Western Upper Peninsula.
By the fall of 2013, GIANT – a multi-agency task force fighting drug trafficking in the western part of the Upper Peninsula and the Hurley, Wisconsin area – had identified Hill as a significant supplier of methamphetamine. Officers assigned to GIANT arranged for several undercover purchases of methamphetamine from Hill. These undercover buys gave the officers the evidence they needed to get a search warrant for the residence Hill shared with Rebecca Jean Suzik. There, GIANT officers found more than 400 grams of crystal methamphetamine that was 99.9% pure and more than $20,000 in cash. Methamphetamine is commonly sold on the street in quarter and half gram quantities, so the amount seized from Hill and Suzik’s residence alone represented more than a thousand units and had an estimated street value of $40,000. As a whole, the conspiracy involved at least $200,000 worth of methamphetamine.
GIANT officers then partnered with DEA agents in Marquette in order to investigate and pursue appropriate charges against the people working with Hill. An extensive investigation of travel records, text messages and shipping records led to the identification of several co-conspirators in the Upper Peninsula of Michigan and Hurley, Wisconsin, as well as Hill’s source in Las Vegas. A series of federal charges followed over the next year and a half.
The following individuals were ultimately convicted of drug trafficking charges and sentenced in federal court in Marquette:
• Richard Jon Hill, a/k/a "Rock Star Rick," age 39, sentenced to 180 months in federal prison.
• Joshua Aaron Anderson, age 32, of Ironwood, sentenced to 151 months in federal prison.
• David Anthony Tristan, age 46, of Bullhead City, Arizona, sentenced to 87 months in federal prison.
• Anthony Peter Giovanoni, age 37, of Hurley, Wisconsin, sentenced to 120 months in federal prison.
• Vickie Marie Sporleder, age 48, of Rockland, Michigan, sentenced to 63 months in federal prison.
• Jack Michael Ribich, age 33, of Ironwood, sentenced to 97 months in federal prison.
• Rebecca Jean Suzik, age 39, of Ironwood, sentenced to 24 months in federal prison.
U.S. Attorney Patrick A. Miles, Jr. said "This dismantling of a destructive drug trafficking operation and the significant convictions and sentences are a credit to the joint law enforcement operation undertaken by GIANT and the DEA. Richard Hill and his coconspirators preyed on the citizens of the U.P. Methamphetamine is highly addictive, and drug addiction not only ravages the addict but tears at the fabric of families and communities. Trips to Las Vegas and a catchy nickname sound glamorous, but Richard Hill’s next destination is far from glamorous and he will now have to answer to the number the Bureau of Prisons assigns to him."
DEA Special Agent in Charge Joseph P. Reagan, who is responsible for DEA operations in all of Michigan, Ohio and Kentucky, said "Methamphetamine is a major threat to communities across the nation, and northern Michigan is no exception. Meth use and addiction is a threat to every community, and the dismantling of this drug distribution conspiracy is a victory for the safety and well-being of the people of the Upper Peninsula and northern Wisconsin. This investigation was successful thanks to solid police work and strong cooperation between local, state, and federal law enforcement."
Chris Colassaco, the current head of GIANT, and a Sergeant with the Hurley Police Department noted that addiction is a problem that affects all cities, towns, villages and townships. "Addiction is a community problem. Addiction not only destroys homes, breaks up families, and ruins lives; it also lowers property values, increases crime rates, and makes communities less desirable places to raise families. The battle to control addiction requires involvement from federal, state, and local government, community leaders, and residents. We encourage residents to get involved and help save your communities from the perils of addiction. Contact your local law enforcement agency with any information no matter how insignificant you feel it may be; it could be the information that makes a difference. With that being said, we would like to thank the residents of Gogebic County and also Iron County, Wisconsin, for their assistance in this case. We would also like to thank all law enforcement, including the officers assigned to the GIANT team, for their dedication and extraordinary effort in the battle against addiction."
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Gwinn Felon, Kevin Leonard Houle, Sentenced to Prison for Possessing A FirearmRead the Press Release
MARQUETTE, MICHIGAN — Kevin Leonard Houle, 42, of Gwinn, Michigan, was sentenced to 84 months in prison, U.S. Attorney Patrick A. Miles, Jr. announced today. U.S. District Judge R. Allan Edgar also ordered Houle to serve three years of supervised release following his prison term.
On August 4, 2015, Houle pleaded guilty to being a felon in possession of a firearm. The charge arose from an investigation surrounding the discharge of a firearm during a domestic dispute on March 20, 2015. Officers arrived on the scene, whereupon Houle led them in a high speed car chase through a residential area. Houle then abandoned his car and fled on foot. He was found hiding in a neighbor’s residence. He admitted that he had taken a rifle and shot several holes in the windshield of his vehicle after arguing with his wife. Houle had previously been convicted of felony drug and robbery charges in New Hampshire.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Forsyth Township Police Department and the Michigan State Police investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
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Kalamazoo Tax Preparer, Fontrice Lenee Charles, Guilty on Multiple Counts of Tax FraudRead the Press Release
"#1 Tax Lady" found guilty of filing multiple phony tax returns
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles announced today that Fontrice Lenee Charles, 39, of Kalamazoo, Michigan, was found guilty of 27 felony tax charges following a four-day jury trial. The charges stem from Charles’s Kalamazoo business, "#1 Tax Lady."
The jury found Charles guilty of 25 counts of filing false tax returns on behalf of clients between January 17, 2011 and February 4, 2014. Each of these counts carries a maximum possible sentence of five years in prison and other penalties. The evidence showed that Charles supplied false information designed to ensure hefty refunds. Further, the jury was advised that Charles prepared a total of 967 such tax returns during this period, resulting in improper tax refunds of approximately $4,000,000.
The jury also found Charles guilty of filing her own false tax returns for 2010 and 2011. These returns were false because they did not report the income that Charles earned as a result of her fraudulent tax preparation activity, and because she claimed a deceased person as a dependent. Each of these offenses carries a maximum penalty of three years in prison.
Charles will be sentenced before U.S. District Judge Paul Maloney at a future date. Prosecution of the matter was handled by Timothy VerHey, Assistant U.S. Attorney. The matter was investigated by the Grand Rapids office of the Internal Revenue Service Criminal Investigation.
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Petoskey Attorney, Michael Aho Kennedy, Pleads Guilty to Mail Fraud Scheme and Filing False Tax ReturnsRead the Press Release
Michael Aho Kennedy Embezzled Over One Million Dollars from Two Elderly Clients
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Michael Aho Kennedy, age 67, formerly a licensed attorney in Petoskey, Michigan, pled guilty to one count of mail fraud and one count of filing a false tax return in conjunction with an indictment filed on October 8, 2015. Kennedy’s sentencing hearing in the United States District Court for the Western District of Michigan will be scheduled in the near future before United States District Judge Janet T. Neff. At that time, Kennedy faces a maximum term of imprisonment of 20 years on the mail fraud conviction and up to 3 years’ imprisonment for filing a false tax return. The plea agreement additionally requires Kennedy to pay restitution to the victims of his mail fraud scheme and to the Internal Revenue Service in conjunction with his false tax filings.
According to the plea agreement, Kennedy drafted a trust for his long-time client and family friend and eventually became her trustee. In his role as trustee, Kennedy defrauded her of over $1,000,000.00 by regularly withdrawing more money from her investment accounts than necessary to pay her expenses, transferring this excess money to his law office’s business account, and then using the money for his own personal and business expenses. Kennedy concealed his fraud from this client by sending her false monthly statements of account that showed that the balance of her account was stable and earning interest, when in fact the balance of her account was rapidly diminishing due to his fraud. When Kennedy exhausted all of her funds, he defrauded an additional elderly client of $114,000.00 that he then used for his own benefit and to pay the continuing expenses of the initial client that he defrauded. Kennedy pled guilty to filing a false federal tax return because he originally filed federal tax returns that included all of the income that he embezzled from his clients, but when the Internal Revenue Service inquired as to why he had not paid his tax liabilities on that income, Kennedy falsely amended his returns claiming that the proceeds of his fraud scheme were loans and working capital that were not subject to income tax.
“Vigorous prosecution of fraud cases, especially those involving professionals who prey upon clients to whom they owe the highest fiduciary duties, remains a priority of this Office,” said United States Attorney Patrick A. Miles, Jr. “Unfortunately, Kennedy used his position of trust to line his own pockets, rather than to protect his clients.”
“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 Jarod J. Koopman, IRS Criminal Investigation, Special Agent in Charge. “Mr. Kennedy’s actions not only caused financial harm to his elderly clients, but also the honest taxpayer when he committed significant tax fraud violations as detailed in the indictment. Tax crimes have erroneously been referred to as victimless, but that position could not be more wrong since we all end up paying when someone attempts to dodge our tax system.”
The investigation of this case was handled by the Traverse City office of the Internal Revenue Service-Criminal Investigation Division. Assistant United States Attorney Ronald M. Stella is handling the prosecution.
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Michigan Man, Tyrone Smith, Pleads Guilty to Sex Trafficking Four Victims, Including One MinorRead the Press Release
GRAND RAPIDS, MICHIGAN – Tyrone Smith, 45, of Lansing, Michigan, pled guilty yesterday in federal court to three counts of sex trafficking girls and women and transporting them across state lines for prostitution. He will be sentenced in April 2016 and faces a mandatory minimum of 15 years in federal prison, up to a maximum of 25 years.
After serving 15 years in the Michigan Department of Corrections for second degree murder, Smith began recruiting women in Lansing for his interstate commercial sex operation. A federal grand jury indicted him in July 2015 on seven counts involving four victims, including one minor. The indictment charged Smith with three counts of sex trafficking by force, threats of force, fraud, and coercion; one count of sex trafficking a minor; and three counts of transporting adult women and the minor from Michigan to Illinois for commercial sex. In a written plea agreement, Smith admitted to recruiting the first victim, an adult woman, in about December 2012, providing her with heroin, posting commercial sex ads of her online in lingerie, and arranging for johns to pay for sex with her in Lansing, Chicago, and elsewhere over a two-year period. Smith admitted to being physically violent and threatening towards her throughout this time, knowing that this would cause her to continue to engage in commercial sex acts. Smith also admitted to recruiting a 17-year-old girl and sex trafficking her from December 2014 to June 2015. He arranged for johns to buy sex from her in his Lansing residence and area motels, and he took her to Chicago for several weeks in early 2015. The minor watched Smith assault another woman for her disloyalty to Smith’s prostitution business, and Smith continued to cause the minor to engage in commercial sex acts after that. In June 2015, while Smith and the minor were in a Lansing motel, Smith grabbed her by the neck and threw her on the bed to stop her from leaving with the cell phone he gave her, which had a large amount of information on it about his prostitution business. The minor sought medical attention afterwards for a concussion, a laceration on the bridge of her nose, and bruising on her face and body. Smith admitted that a short time later, he reconnected with the minor and continued arranging commercial sex dates for her.
The conviction resulted from a joint investigation led by the FBI, Ingham County Sheriff’s Office, and East Lansing Police Department, with assistance from the Michigan State Police (MSP). Assistant United States Attorney Tessa K. Hessmiller prosecuted the case. This is the third federal sex trafficking conviction in the Western District of Michigan, following cases against Eddie Jackson and Christopher Bryant. This is the fourth sex trafficking conviction obtained in the past year as a result of the FBI’s joint investigation with the Ingham County Sheriff’s Office and other Lansing area law enforcement partners, who collaborated in the federal Christopher Bryant trial and the related state convictions of Jonathan Purnell and Mariah Haughton in Ingham County.
In announcing the conviction, U.S. Attorney Patrick Miles stated, “Sex trafficking is real and happens in West Michigan. Traffickers target victims by identifying vulnerabilities to exploit, whether through drugs, money, violence, or a false sense of security and affection provided by the trafficker. My office is working hand-in-hand with federal, state, and local law enforcement to identify and prosecute human trafficking, including the sex trafficking of children.”
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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Leader of the Black P Stone Nation Gang, Kenton Maurice Taylor, Convicted on Heroin Charges by Federal JuryRead the Press Release
THREE OTHER GANG MEMBERS PLED GUILTY PRIOR TO TRIAL
GRAND RAPIDS, MICHIGAN — United States Attorney Patrick A. Miles, Jr. announced today that a jury convicted Kenton Maurice Taylor, age 45, of heroin trafficking and conspiracy. He faces a federal prison term of at least ten years up to life and supervised release of at least eight years up to life.
Taylor is the leader of the Lansing branch of the Black P Stone Nation gang. As its "Prince," Taylor is the highest ranking member of that gang in the State of Michigan. The Black P Stone Nation is a street gang based in Chicago, which is estimated to have more than 30,000 members across the United States. The gang was originally formed in the 1950s and 1960s by Jeff Fort. Fort is currently serving a sentence of more than 150 years for convictions in 1987 and 1988, which stemmed from conspiring with Libya to perform acts of domestic terrorism and ordering the murder of a rival gang leader. The Black P Stone Nation imbues itself in religion to provide a gloss over its criminal activities and finances itself primarily through narcotics and firearms trafficking.
Taylor and three other gang members – Karl Alphonso Lockridge, Maurice Ray, Jr., and Eric Darnell Cooper – were charged with conspiracy to distribute in excess of 100 grams of heroin and trafficking in heroin. Taylor’s co-defendants all pled guilty prior to trial. Lockridge and Ray each face up to 40 years in prison for their role in the conspiracy. Cooper faces up to 20 years in prison for his role. Sentencing for Taylor is set for March 28, 2016 before U.S. District Judge Janet T. Neff in Grand Rapids. Sentencing is scheduled for February 29 for Lockridge and March 14 for Ray and Cooper.
The conspiracy began in late 2012 when Taylor was released from the Michigan Department of Corrections after serving a five year prison term for cocaine distribution. Taylor returned home to Lansing, resumed leadership of the gang’s Lansing branch, and turned the gang’s focus towards heroin trafficking. Taylor, his co-defendants, and other gang members thereafter traveled to Chicago on a monthly basis to obtain heroin from their supply sources for further distribution in Lansing. Gang members armed themselves while on trips to Chicago and in and around Lansing in order to protect their drugs and their drug proceeds.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Federal Bureau of Investigation, and the Lansing Police Department led the investigation, which began in January 2014. Other agencies contributing to the investigation included the Drug Enforcement Administration, the Michigan State Police, the Ingham County Sheriff’s Department, the Michigan State University Police Department, and the Michigan Department of Corrections. All agencies worked in concert as members of the Capital Area Violent Crimes Initiative (VCI).
Assistant U.S. Attorneys Joel S. Fauson and Mark V. Courtade are handling the prosecution.
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Eaton County Man, Christopher Todd Ritchey, to Serve 15 Years as Armed Career CriminalRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Christopher Todd Ritchey, 31, of Bellevue, was sentenced on Friday to 180 months in prison by Chief U.S. District Judge Robert J. Jonker. Ritchey pled guilty to being a felon in possession in July, after he was caught with a gun in his residence while on parole in January. The Armed Career Criminal Act mandated a sentence of at least 15 years because Ritchey had previously been convicted seven times of breaking and entering under Michigan law.
"Today we send a message to recidivist felons that they simply cannot possess firearms under the law," U.S. Attorney Miles said. "When armed career criminals do not heed that warning, they will be prosecuted, and the sentence will be strict, as the law requires."
The Bureau of Alcohol, Tobacco, Firearms, and Explosives led the investigation, with assistance from the Michigan Department of Corrections, the U.S. Marshals Service, and the Michigan State Police. Assistant U.S. Attorney Justin M. Presant prosecuted the case.
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Mason Woman, Megan Kolberg, Guilty of Embezzling from Mason State BankRead the Press Release
Megan Kolberg Admits to Stealing Over $100,000.00 and Staging Armed Bank Robbery
GRAND RAPIDS, MICHIGAN — United States Attorney Patrick A. Miles, Jr., announced today that Megan Kolberg, age 37, of Mason, Michigan, pled guilty in federal court to bank embezzlement. She faces up to 30 years’ imprisonment, supervised release of up to five years, and will be ordered to pay restitution to Mason State Bank.
According to the plea agreement, Kolberg admitted to embezzling more than $130,000 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 officers were beginning to uncover her embezzlement, Kolberg reported that as she was checking the outside ATM prior to closing the bank for the day, an armed man emerged from some nearby bushes, stole approximately $120,000 from the ATM and her teller drawer, and destroyed the surveillance tape. At her plea hearing, Kolberg admitted that she staged the bank robbery in an effort to explain why the balances of the accounts that she controlled at the bank were greater than the actual cash on hand at the branch.
“Crimes of this nature are not just crimes against an institution, they cause financial losses to the public.” said David P. Gelios, Special Agent in Charge of the FBI, Detroit Division. “It was a strong collaboration between our Lansing office and the Mason Police Department that solved this case and, ultimately, that’s a win for the public.”
Kolberg will be sentenced in the United States District Court for the Western District of Michigan on February 29, 2016 at 2:00 p.m.
The investigation was conducted by the Lansing office of the Federal Bureau of Investigation and the Mason Police Department. The prosecution is being handled by Assistant U.S. Attorney Ronald M. Stella.
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Justice Department Sues Three Michigan Apartment Complexes for Discriminating Against Families with ChildrenRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against the owners and manager of three Michigan apartment complexes – Parkside East Apartments, in East Lansing, Michigan, Holt Manor Apartments in Holt, Michigan, and Kelly Manor Apartments in Owosso, Michigan – for discriminating against families with children.
The lawsuit, filed in the Eastern District of Michigan in Detroit, alleges that the defendants refused to allow children in Parkside East, which consists of 41 one-bedroom apartments, and also refused to allow children in the one bedroom apartments at Holt Manor and Kelly Manor. At Holt Manor, 23 of the 27 apartments are one-bedroom apartments. At Kelly Manor, 17 of the 25 apartments are one-bedroom apartments. The suit names as defendants the Bloomfield Hills, Michigan-based corporate entities that own the complexes, Parkside East Inc., Holt Manor Inc., and Kelly Manor Inc., as well as Bloomfield Hills resident Sudi Hopper, who serves as the rental agent for the three properties.
The allegations are based on evidence collected by the Fair Housing Center of Southeastern Michigan, based in Ypsilanti, Michigan, which had testers posing as prospective residents contact the defendants’ offices and speak with Hopper about renting a one-bedroom apartment. The testing revealed that Hopper did not allow single parent households with a minor child to live in a one-bedroom apartment, but did allow households with two adults to rent such an apartment.
“Although housing discrimination against families with children has been illegal under the Fair Housing Act for more than 25 years, too many families still face such discrimination when they look for housing,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of these families.”
“The Fair Housing Act gives parents the right to decide what type of apartment is appropriate for their families,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan. “It is unlawful for landlords to substitute their judgment for that of a parent, and to turn people away from a one-bedroom apartment simply because they have a child. We hope that this complaint sends a message to landlords and renters that we are prepared to defend the rights of all families to fair treatment in housing.”
“The U.S. Department of Justice is committed to protecting the rights of Americans,” said U.S. Attorney Patrick A. Miles Jr. of the Western District of Michigan. “We will continue to fight illegal discrimination and ensure the fair housing rights of families wherever they are challenged.”
The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendant’s actions and a civil penalty.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Individuals who may have information related to this lawsuit should contact the Justice Department toll-free at 1-800-896-7743, mailbox number 93, or e-mail the Justice Department at [email protected].
Fighting illegal housing discrimination is a top priority of the Justice Department. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt/housing-and-civil-enforcement-section. Individuals who believe that they have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777. More information about the Fair Housing Act can also be found at http://www.justice.gov/crt/housing-and-civil-enforcement-section or www.hud.gov/fairhousing.
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DO NOT REPLY TO THIS MESSAGE. IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE OFFICE OF PUBLIC AFFAIRS AT 202-514-2007.
Kent County Tax Return Preparer, Andres Orrego-Hernandez, Pleads Guilty to Conspiracy 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 30, pled guilty to conspiracy to defraud the government and aiding in the filing of a false tax return, U.S. Attorney Patrick A. Miles, Jr. announced today. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Jarod J. Koopman, IRS– Criminal Investigation.
According to the plea agreement filed with the court, Orrego-Hernandez admitted his role in the conspiracy that ran between January 2010 and May 2011 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, such as credits for qualified education expenses. 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 well in excess of $67,682.
Orrego-Hernandez pled guilty before U.S. Magistrate Judge Phil Green but will be sentenced by U.S. District Judge Paul L. Maloney in approximately three months. Judge Maloney will determine the total amount of the loss to the government as a result of Orrego-Hernandez’s criminal activity. He faces up to five years in prison on the conspiracy conviction and up to three years in prison on the conviction for aiding and abetting the filing of a false tax return.
"We cannot allow special credits, such as qualified education expenses, to be abused by people like Orrego-Hernandez. Each of us must be vigilant when using a return preparer," said Special Agent in Charge Jarod J. Koopman. "Taxpayers should review their return for accuracy before it is filed."
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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Battle Creek Man, Timothy Siangdun, Sentenced to Eight Months’ Confinement for School Shooting ThreatsRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr. announced that Timothy Siangdun of Battle Creek, Michigan was sentenced to eight months’ confinement and two years of supervised release for making a Facebook post that threatened school shootings at Western Michigan University. Siangdun also was ordered to stay off the campus of Western Michigan University and was prohibited from posting any communications on any social media platform for the two year term of his supervised release. Siangdun made the Facebook threat following a trial and guilty verdict on related Facebook threat postings before United States District Judge Janet T. Neff on March 12, 2015. Siangdun pleaded guilty to the present charges on August 4, 2015.
The U.S. Attorney’s Office for the Western District of Michigan was assisted in the investigation by the Springfield Department of Public Safety, Western Michigan University Department of Public Safety, Calhoun County Sheriff’s Office, Calhoun County Prosecuting Attorney, Battle Creek Police Department, and the Federal Bureau of Investigation.
U.S. Attorney Miles praised federal, state, and local investigators in locating and prosecuting Siangdun. "Online threats of violence have no place in the Western District of Michigan. We will continue to use all available prosecution tools to ensure that Western Michigan universities and learning institutions are safe for faculty, staff, students, family, and the public."
"These types of threats are never discounted or taken lightly by the FBI. Public safety is our utmost concern, and every threat of this nature is treated as legitimate," stated David P. Gelios, Special Agent in Charge, FBI - Detroit Division. "Mr. Siangdun repeatedly posted threats of a school shooting at Western Michigan University, and threatened other violence online via social media. Even after being convicted for doing so, and after being cautioned against doing so by a federal judge, he persisted in posting an additional threat. As always, we continually work to identify, pursue, and hold accountable individuals who use the internet or other means to broadcast these types of threats."
This case was prosecuted by Assistant U.S. Attorney Clay M. West.
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Real Estate Developer, Charles P. Gahan, Sentenced to 70 Months for Eight Million Dollar Title Insurance Fraud SchemeRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Charles P. Gahan, currently a resident of New Smyrna Beach, Florida, and formerly of Grand Rapids, Michigan, was sentenced today in U.S. District Court to 70 months’ imprisonment for his role in a conspiracy to commit wire fraud affecting financial institutions. Gahan was also ordered to pay restitution of $8,205,405.71. The Honorable Robert Holmes Bell noted the significant impact that his fraud scheme had upon numerous homeowners in the Western District of Michigan, as well as the victim title insurance companies, and remanded Gahan to the custody of the U.S. Marshal at the conclusion of the sentencing hearing.
"This was a very sophisticated and long-running title insurance fraud scheme that involved numerous residential developments," said U.S. Attorney Miles. "Innocent homeowners arrived home to find foreclosure notices on their doors, from banks they had never heard of, solely because Gahan fraudulently diverted closing funds from those banks to his own pocket. The Court’s sentence today reflects the seriousness of this financial crime."
From 2002 to 2006, Gahan operated as a real estate developer under the name GBW Development. Gahan conspired with Scott Hoeft, then the owner of Prime Title Services, to divert real estate closing proceeds to his own pocket. The essence of the fraud was that Hoeft assisted Gahan in obtaining construction loan financing by agreeing to provide the prospective lenders with fraudulent title commitments that purposefully failed to disclose the existence of prior liens against the property on which new homes would be constructed. After a home was constructed and sold, Hoeft would fail to disclose these prior liens to the buyer’s lender or, if he did disclose such liens, he did not pay off the liens with the loan proceeds deposited to his escrow account. Instead, those funds were transferred to Gahan, who used them to support his lifestyle or to build the next home in his development. The two title insurance companies that Hoeft used to issue the title insurance policies suffered over $8,000,000.00 in losses to provide clear title to the homeowners. Hoeft was previously sentenced to 63 months’ imprisonment for his role in the scheme, which was reduced to 45 months’ imprisonment for his cooperation in the prosecution of Gahan.
The case was investigated by the Grand Rapids Office of the FBI and the U.S. Postal Inspection Service. Assistant U.S. Attorney Ronald M. Stella prosecuted the case.
Kent County Tax Return Preparer, Yashica Toshian Tucker, Sent to Prison for Filing A False Claim Against the U.S. GovernmentRead the Press Release
Yashica Tucker also ordered to pay $196,784 in restitution to the IRS
GRAND RAPIDS, MICHIGAN — Grand Rapids resident Yashica Toshian Tucker, 40, was sentenced to one year and one day in federal prison for making a false claim against the U.S. Government, U.S. Attorney Patrick A. Miles, Jr. announced today. Chief U.S. District Judge Robert J. Jonker, who imposed the sentence, also ordered Tucker to pay restitution to the IRS in the amount of $196,784. U.S. Attorney Miles was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation.
Tucker was charged in April 2015 by a federal grand jury in a 10-count indictment that alleged she prepared and filed false federal tax refund claims between January 2011 and February 2013. Tucker pled guilty to one of those counts in August 2015. At the sentencing hearing today, Chief Judge Jonker held Tucker responsible for knowingly filing numerous false federal tax returns that fraudulently claimed refunds totaling $196,784. Tucker has agreed to be permanently barred from preparing or filing federal tax returns for anyone other than herself, and was ordered not to file returns on behalf of others during the three years she will be supervised by the U.S. Probation Office following release from prison.
This case was investigated by Special Agents of Internal Revenue Service Criminal Investigation and the U.S. Postal Inspection Service. Assistant U.S. Attorney Christopher O’Connor prosecuted the case on behalf of the United States.
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Baraga Man, Jacob Charles Maki, Sentenced for Assault by StrangulationRead the Press Release
MARQUETTE, MICHIGAN — Jacob Charles Maki, 35, of Baraga, Michigan, was sentenced in U.S. District Court to 27 months’ imprisonment for assault by strangulation, U.S. Attorney Patrick A. Miles, Jr., announced today. In addition, Judge R. Allan Edgar sentenced Maki to serve 3 years of supervised release following the completion of his term of incarceration.
On February 28, 2015, Maki assaulted a victim. The assault began in the bedroom and continued into the bathroom where Maki pinned the victim in the tub and used his hands to strangle her. On March 1, 2015, he resumed the assault and repeatedly strangled the victim. Maki was indicted by a federal grand jury and pled guilty on June 22, 2015, to one count of assault by strangulation.
The Keweenaw Bay Indian Community Tribal Police and the FBI investigated the case. Assistant U.S. Attorney Hannah N. Bobee prosecuted the case.
Petoskey Attorney, Michael Aho Kennedy, Indicted for Mail Fraud and False Tax ReturnsRead the Press Release
Michael Aho Kennedy Allegedly Embezzled Over One Million Dollars from Client
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Michael Aho Kennedy, age 67, of Petoskey, Michigan, was indicted by a federal grand jury for carrying out a mail fraud scheme and filing false federal income tax returns. Counts 1 to 6 of the indictment allege that Kennedy served as the trustee of a trust that he drafted for his client, Virginia Weber. According to the indictment, Kennedy allegedly embezzled over one million dollars from Ms. Weber’s trust between 2006 and 2012 and concealed his embezzlement by sending her false periodic statements of account that made it appear as if the trust assets still existed.
Counts 7 to 9 of the indictment allege that Kennedy filed false amended tax returns for tax years 2007, 2008 and 2009. Kennedy initially reported the embezzled funds as income on his federal income tax returns for those years and paid the 2007 income taxes with money he embezzled from the victim. However, when the Internal Revenue Service attempted to collect the income taxes owed for tax years 2008 and 2009, Kennedy amended his federal income tax returns for all years by falsely claiming that the embezzled funds were loans or investments not subject to income tax.
Kennedy is currently lodged at the Emmet County Jail on charges brought by the Michigan Attorney General’s Office relating to his embezzlement from the same victim from October 8, 2009 to February 22, 2010.
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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Habitual Motorhome Thief, Ronald Bruce Myers, Sentenced to 30 Years in PrisonRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Ronald Bruce Myers, who is 56 years old, was sentenced to thirty years in prison for his leading role in stealing eight different motor homes across the United States as part of an extensive criminal conspiracy uncovered by the FBI. U.S. District Court Judge Robert Holmes Bell also ordered Myers to pay over $2M in restitution. Myers has four prior federal felony convictions for transporting stolen motor homes. He began his latest crime spree almost immediately after being released from a Kentucky prison on yet another charge. The Judge found that defendant Myers caused just over $2.9 million dollars’ worth of losses to the victim businesses, private citizens and insurance companies.
In April of this year, a federal jury returned guilty verdicts on all counts against Myers who was accused of conspiring with others to steal, transport, and sell motorhomes throughout the United States, including the theft of three motor homes from businesses in Western Michigan. The jury also convicted Myers of transporting the stolen motorhomes out of Michigan. Myers stole a Country Coach motor home from Holland Bus and Motor Homes on March 28, 2012. Myers returned to Michigan in early May 2012, at which time he stole two more motor homes from Midway RV Center of Kentwood. The defendant also stole two motor homes in Alabama, one in Missouri, one in North Carolina, and one in Florida.
The jury also convicted Myers of three counts related to money laundering. The evidence at trial showed that Myers used a series of aliases to obtain false title documents, open bank accounts and to forward mail as part of his criminal scheme. The defendant moved hundreds of thousands of dollars through the bank accounts opened under false names and/or using purported corporations. IRS records showed that the defendant, and his corporations, did not file tax returns from 2008 to 2012. Myers had already been convicted in four previous federal prosecutions involving stolen vehicles.
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Plainwell Man, Benjamin Cance, Pleads Guilty to Illegal Arms Exportation, Money LaunderingRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Pat Miles announced today that Benjamin James Cance pled guilty before U.S. District Judge Robert Holmes Bell to federal charges of international arms trafficking and money laundering. The arms trafficking charge is punishable by imprisonment for up to 20 years; the maximum penalty for money laundering is ten years in prison.
In pretrial filings with the court, the government disclosed that Cance’s illegal dealings with his overseas customers were conducted through illegal internet sites, referred to as the "darknet." He also utilized electronic currencies, such as Bitcoin, to get paid for his services in an effort to hide the nature of his activities.
A plea agreement filed in connection with the hearing disclosed that the government will move to dismiss a third charge, machine gun possession, at sentencing. Judge Bell was advised that Cance has been cooperating with U.S. and international law enforcement agencies against the recipients of many of his shipments in the United Kingdom, Poland and Germany. Judge Bell allowed Cance to remain on bond pending sentencing so this cooperation can continue.
The case was assigned to Timothy VerHey, Assistant U.S. Attorney, for prosecution. Investigation of the case was conducted by the Department of Homeland Security, Immigration and Customs Enforcement, the Internal Revenue Service, the U.S. Postal Inspection Service, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
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More Former Stamp Farms Employees Sentenced for ConspiracyRead the Press Release
Andrew and Robert Trowbridge hid a $100,000 pulling tractor and other Stamp Farms assets from the bankruptcy trustee
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that brothers Andrew and Robert Trowbridge of South Haven, Michigan, were sentenced for conspiring to conceal assets from the Stamp Farms bankruptcy trustee. Robert Trowbridge also made a fraudulent crop insurance claim. U.S. District Judge Robert Holmes Bell sentenced each brother to one year of probation, a $10,000 fine and 200 hours of community service.
Andrew and Robert Trowbridge hid a high-performance pulling tractor from the Stamp Farms bankruptcy trustee and lied about it during bankruptcy proceedings. The pulling tractor, named "Ghost Rider," was worth more than $100,000. Robert Trowbridge also made a fraudulent claim for approximately $50,000 in crop insurance, and accepted payment of more than $22,000 that was concealed from the bankruptcy trustee. The Trowbridges ultimately returned the pulling tractor, and Robert Trowbridge repaid some of the assets he concealed from the bankruptcy trustee. The Trowbridges told Judge Bell they committed these crimes at Michael Stamp’s request.
To date, five former Stamp Farms employees have been convicted of federal felonies for their involvement in crimes arising out of their employment there, including Melissa Stamp, who is serving a twenty-one month sentence for hiding approximately $200,000 of bankruptcy assets.
The U.S. Attorney’s Office is continuing to investigate crimes arising out of the business formerly known as Stamp Farms. Anyone with knowledge of those crimes should contact the U.S. Attorney’s Office at 616-456-2404.
This case was investigated by the U.S. Bankruptcy Trustee’s Office, and agents with IRS Criminal Investigations, the U.S. Secret Service, and the USDA Office of Inspector General. Assistant U.S. Attorneys Michael A. MacDonald and Clay Stiffler prosecuted the case.
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DEA’s Prescription Drug Take-Back Effort A Big Success in Michigan and Across the United StatesRead the Press Release
Over 20,000 pounds of unwanted, unused or expired drugs handed over in Michigan
WASHINGTON, D.C. – Thousands of Americans in communities across the country discarded more than 350 tons of unused, expired, or unwanted drugs as part of the Drug Enforcement Administration’s (DEA) National Prescription Drug Take-Back Day Initiative (NTBI) on Saturday, September 26.
This past weekend, more than 3,800 federal, state and local counterparts took in more than 702,365 pounds of unused, expired or unwanted drugs at more than 5,000 collection sites across the United States. In Michigan, 20,369 pounds of the prescription drugs were turned in at 146 sites across the state. This was the tenth NTBI event since September 2010; cumulatively, these events have collected 5,525,021 pounds of drugs.
"The numbers are shocking—approximately 46,000 Americans die each year from drug-related deaths. More than half of those are from heroin and prescription opioids," said Acting DEA Administrator Chuck Rosenberg. "With four out of five new heroin users starting with prescription medications, I know our take-back program makes a real difference."
The NTBI addresses a crucial public safety and public health issue. According to the 2014 National Survey on Drug Use and Health, 6.5 million Americans abused controlled prescription drugs. That same study showed that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. The DEA’s NTBI events are also a significant piece of the White House Office of National Drug Control Policy’s prescription drug abuse prevention strategy.
In his Weekly Address, President Obama spoke about the importance of preventing and treating substance use disorders and called on Americans to participate in National Prescription Drug Take-Back Day: https://www.whitehouse.gov/the-press-office/2015/09/26/weekly-address-dispose-your-expired-and-unwanted-prescription-drugs .
Kalamazoo Security Company Owner, Michael Downey, Sentenced to 27 Years for Child Pornography and Illegal FirearmsRead the Press Release
GRAND RAPIDS, MICHIGAN – Former security company owner Michael Downey, 45, of Kalamazoo, Michigan, was sentenced today to 27 years in federal prison for child pornography and illegal firearm charges, announced U.S. Attorney Patrick A. Miles, Jr. Downey received 18 years for the child pornography count and 9 years for the firearm count, which will be served consecutively. Downey pled guilty in March 2015 to attempting to receive child pornography over the internet through live streaming videos and illegally possessing an unregistered short-barreled rifle. After the 27-year term of imprisonment, Downey will serve 10 years on supervised release and be required to register as a sex offender wherever he works or lives.
Downey admitted engaging in online chats with people overseas to solicit children as young as eight years old for live sex shows. Homeland Security Investigations identified Downey after a couple in the Philippines was arrested for selling live sex shows of children to people online. Philippine authorities raided the couple’s home and rescued two children who were being used for child pornography. A search warrant on the couple’s email revealed that Downey was corresponding with them and that they were sending him child pornography by email. A search warrant on Downey’s email discovered chats between him and numerous other people between February 2012 and August 2013 where he offered to pay to see live videos of people sexually abusing children.
When Homeland Security Investigations conducted a search warrant on Downey’s residence in Kalamazoo, Michigan, they found unregistered and illegal firearms. The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) seized the firearms, resulting in three charges for possession of the unregistered short-barreled rifle and an unregistered silencer with no serial markings. Downey was released on bond on conditions including no computers and no firearms. While Downey was on bond, ATF discovered additional firearms hidden in his home after he offered to sell one of them to a friend, and Downey’s bond was revoked.
“The participation of the defendant in these chatroom conversations in which he was seeking youngsters to perform some sexual conduct and paying for it is the basest form of abuse,” said U.S. District Judge Paul L. Maloney in announcing the sentence. “Individuals like Mr. Downy create the market for this filth,” he continued, and “the word needs to get out” about the seriousness with which Congress and the courts view these “abhorrent” crimes.
“The internet has dramatically increased the reach of child predators, who believe they are operating anonymously,” stated U.S. Attorney Patrick A. Miles, Jr. “However, the U.S. Attorney’s Office and our federal investigative partners will continue working to expose and prosecute these perpetrators and rescue children.”
“This case is another disturbing example of how some child predators believe they can evade detection and prosecution by sexually exploiting minors on the internet overseas,” said Marlon V. Miller, special agent in charge of Homeland Security (HSI) Detroit. “Child predators are mistaken if they believe they can hide behind a computer screen and keyboard to commit sex crimes against children. HSI has highly trained, computer savvy special agents with the expertise and technology to find them and bring them to justice.”
“ATF has always been very active within our statutory jurisdiction to follow the gun, which, in this case, led to a heinous investigation involving crimes again children,” said ATF Special Agent in Charge S. Robin Shoemaker. “Crimes such as this against our children cannot and will not be tolerated.”
Assistant U.S. Attorney Tessa K. Hessmiller prosecuted this 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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Travel Agent, Sandra M. White, Booked for Nearly Eight Years in Prison for FraudRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr. announced today the sentencing of Sandra M. White, 53, of Coloma, Michigan, for wire fraud and aggravated identity theft. White, who was convicted in June after an eight-day jury trial that was held in U.S. District Court in Kalamazoo, was sentenced to serve 7 years and 10 months for a long-running scheme that not only caused over $600,000 in loss, but that also caused severe harm to other travel agencies through which she booked airline tickets.
Doing business as "Corporate Travel Consultants/Travel by Design (CTC/TBD)," White defrauded airlines that included United, American, Delta and Lufthansa of hundreds of thousands of dollars in airfares by falsely claiming that CTC clients were entitled to substantially discounted "military fares," by claiming that they possessed discount and/or upgrade certificates, and by manipulating online ticketing programs to sell fares that were no longer available. By consistently obtaining significantly lower fares for CTC’s clients than they could obtain anywhere else, White developed and maintained a large and loyal client base which – unaware that their fares were being obtained by fraud – used CTC exclusively. By maintaining an extremely high volume of sales, White was able to collect booking fees, agent commissions, and bonuses that constituted a large percentage of CTC’s overall income.
CTC functioned independently as an industry-accredited travel agency until 2003, when its license to directly sell air carrier inventories was revoked after airline audits discovered six-figure-fraud. From 2003 on, however, CTC continued its fraudulent practices, with White obtaining sub-contractor positions with accredited travel agencies in Indiana, Colorado, Texas, Florida, and elsewhere, working online from CTC’s location in Berrien County.
By exploiting the access to airline inventory of accredited travel agencies, White was able to continue her fraudulent ticketing as a subcontractor without the airlines realizing who they were dealing with. In each instance, however, airline audits did eventually identify the fraud, and the agencies through whom White had done the ticketing were left with liability for six-figure losses. In some cases, the debts caused by White’s misconduct endangered the survival of the host-agencies. Further, when airline audits would expose what appeared to be fraud, White would manufacture and present fake birth certificates, passports, discount and upgrade certificates, and U.S. military identification cards in attempts to prove that the fares were properly obtained. In other instances, she would use credit accounts of wealthy clients to pay for the costs of other clients’ fares.
In imposing the sentence, U.S. District Court Judge Paul L. Maloney commented on the seriousness and pervasiveness of White’s fraud, and on the fact that she had continued to commit fraud even after airlines revoked her license to sell directly.
White was allowed to remain on bond pending assignment by the Federal Bureau of Prisons to a specific facility, and she will be allowed to self-surrender to commence serving her sentence. White was also ordered to pay close to $600,000 in restitution to the host travel-agencies she victimized, and also to several airlines.
The case was investigated by the U.S. Secret Service and by the U.S. Postal Inspection Service. It was prosecuted by Assistant U.S. Attorney Hagen W. Frank.
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Stamp Farms Employee Sentenced for Role in ConspiracyRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles announced that Larry Thomas Stambeck was sentenced today for his role in the concealment of Stamp Farms’ assets that should have been disclosed in a bankruptcy case. U.S. District Court Judge Robert Holmes Bell noted that Stambeck had no prior criminal history before sentencing him to pay a $10,000 fine. Stambeck had earlier re-paid over $20,000 to a bankruptcy court trustee, which money represented Stamp Farms’ crops that had been improperly sent to the Hamilton Elevator by Michael D. Stamp in the fall of 2012.
Melissa Stamp, the wife of Michael D. Stamp, was already sentenced and she is expected to surrender to the U.S. Bureau of Prisons in early October to begin serving a twenty-one month term of incarceration for her role in the bankruptcy fraud. She admitted hiding approximately $200,000 of bankruptcy assets with family members. Two additional former Stamp Farms employees face sentencing for their role in the bankruptcy fraud on October 6, 2015.
These convictions and sentences are part of the continuing investigation into transactions and bankruptcy proceedings involving the business formerly known as Stamp Farms.
"Our bankruptcy structure is in place to provide some measure of protection for those experiencing extreme financial distress. Individuals that abuse this process by concealing assets, threaten its overall integrity. The IRS will continue to work with the U.S. Attorney’s Office and our other law enforcement partners to ensure the public’s continued confidence is maintained," said Jarod J. Koopman, Special Agent in Charge, IRS Criminal Investigation.
This case is being investigated by the U.S. Bankruptcy Trustee’s Office, IRS Criminal Investigation, U.S. Secret Service, and the USDA Office of Inspector General. Assistant U.S. Attorneys Michael A. MacDonald and Clay Stiffler are prosecuting the case.
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Muskegon Man Indicted for Drug and Firearms OffensesRead the Press Release
GRAND RAPIDS, MICHIGAN – A federal grand jury indicted Larry Dwayne Diggs, also known as "Montana," of Muskegon, Michigan for three drug and firearm related offenses. Specifically, the grand jury indicted Diggs for being a Felon in Possession of a Firearm and Ammunition, Possessing a Controlled Substance with Intent to Distribute, and Using and Carrying a Firearm During and in Relation to a Drug Trafficking Crime. The grand jury alleges in the indictment that Diggs committed these offenses on or about July 2, 2015. If convicted of these charges, Diggs faces up to life in federal prison.
The charges are the result of a joint investigation by the Muskegon Township Police Department and the Muskegon Major Crimes Initiative 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 in the Muskegon area.
The charges in the indictment are only allegations and are not evidence of guilt. The defendant is presumed innocent unless and until proven guilty, and the government has the burden of proving his guilt beyond a reasonable doubt.
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DEA to Hold 10th National Prescription Drug Take-Back Day this SaturdayRead the Press Release
Event will take place from 10 am-2 pm on Saturday, September 26th
This Saturday from 10 a.m. to 2 p.m. local time, come to one of the almost 5,000 collection sites around the nation to return all unwanted, unneeded, or expired prescription drugs for safe and anonymous disposal. This is the U.S. Drug Enforcement Administration’s (DEA’s) 10th National Prescription Drug Take-Back Day in the past five years. Collection sites in every local community, manned by DEA and its local law enforcement and community partners, can be found by going to www.dea.gov or calling 800-882-9539. All states and some territories will be participating Saturday (with the exception of Pennsylvania and Delaware, which held their events earlier in the month).
The National Prescription Drug Take-Back Day addresses vital public safety and health issues. Many Americans are not aware that medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that many abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. In addition, many Americans do not know how to properly dispose of their unused medications, often flushing them down the toilet or throwing them away – posing safety and environmental hazards.
"Our goal is to reduce the risk of addiction and the 46,000 overdose deaths a year that come with prescription drug abuse. Take Back Day is a great opportunity for folks to help reduce the threat," DEA Acting Administrator Chuck Rosenberg said. "Please clean out your medicine cabinet and make your home safe from drug theft and abuse." 2
DEA’s previous nine nationwide Take-Back events collected 4,823,251 pounds—more than 2,411 tons—of drugs.
Third and Final Member, Victor Hugo Quesada-Pacheco, of Kalamazoo Counterfeit Identification Document Ring SentencedRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Victor Hugo Quesada-Pacheco, also known as "Galvan," age 34, a citizen of Mexico who most recently resided illegally in Kalamazoo, Michigan, was sentenced to 30 months’ imprisonment today for his role in a counterfeit identification document ring. Quesada-Pacheco is the final defendant involved in the ring to be sentenced. Jesus Emmanuel Lopez-Garcia and Jaime Velasco-Jimenez previously received sentences of 36 months’ imprisonment.
Between September, 2013, and March, 2015, the ring produced hundreds of counterfeit identification documents at the apartments of Velasco-Jimenez in Plainwell and Kalamazoo, Michigan. Velasco-Jimenez recruited Lopez-Garcia and Victor Hugo Quesada-Pacheco to solicit illegal aliens residing in Kent and Kalamazoo counties in need of counterfeit identification documents. Lopez-Garcia and Quesada-Pacheco provided the names, false social security account numbers, and other false biographical information for their customers to Velasco-Jimenez who then produced counterfeit driver’s licenses, state identification documents, social security account number cards, lawful permanent resident cards, and other false identification documents at his apartment in Kalamazoo. Lopez-Garcia and Quesada-Pacheco then delivered the counterfeit identification documents to their customers and collected a fee that was shared with Velasco-Jimenez.
Marlon Miller, special agent in charge for HSI Detroit, commented that "HSI will continue to aggressively target counterfeit identity document schemes." He explained that "The proliferation of counterfeit identity documents can have a rippling effect on all of us because it potentially compromises national security and the integrity of the U.S. immigration system."
Quesada-Pacheco forfeited numerous electronic devices and cash related to his crime. And he faces removal from the United States.
Assistant U.S. Attorney Ronald M. Stella prosecuted the case, which was investigated by the Department of Homeland Security, U.S. Immigration and Customs Enforcement, Homeland Security Investigations division in Grand Rapids.
Former Grand Rapids Man, Marvin Deshawn Whetstone, Sentenced to Seven Years in Prison for Check-Writing and Tax Refund SchemesRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Marvin Deshawn Whetstone, 34, formerly of Grand Rapids, was sentenced to seven years in prison for check-writing and income tax refund schemes. U.S. District Judge Robert Holmes Bell imposed the sentence.
From June 2012 through October 2014, Whetstone defrauded the U.S. Post Office and area retailers by recruiting accomplices to open bank accounts with a nominal amount of money and directing them to write thousands of dollars of bad checks to purchase rolls of postage stamps, retail gift cards, and other goods. They provided Whetstone with the fraudulently acquired stamps, gift cards, and goods, which he sold online.
At the same time, Whetstone used his accomplices to recruit individuals who had no legitimate employment and were not entitled to income tax refunds to provide him with their identifying information, such as their Social Security Numbers, dates of birth, and addresses. Whetstone then filed fraudulent income tax returns in their names to obtain tax refunds, which were directly deposited into "Green Dot" and "RushCard" general purpose reloadable prepaid debit cards. He then withdrew cash from the debit cards and, in some cases, split the proceeds with the individuals in whose name the refunds were filed, while in other cases he kept the proceeds himself.
All told, Whetstone defrauded the U.S. Postal Service and retailers of approximately $100,000, and the Internal Revenue Service of approximately $54,000.
In addition to ordering the prison sentence, Judge Bell ordered Whetstone to serve three years of supervised release after prison, pay restitution, and forfeit his Bentley Continental, which was purchased with proceeds of the crimes.
The case was investigated by the U.S. Postal Service Office of Inspector General, and prosecuted by Assistant U.S. Attorney Clay Stiffler.
Belding Man, Timothy Masters, Sentenced to 27 Years for Producing Child PornographyRead the Press Release
The eighth federal conviction in west Michigan for WEBCHEX, a West Michigan Based Child Exploitation Task Force
GRAND RAPIDS, MICHIGAN – Timothy Masters, 32, of Belding, Michigan, was sentenced to 27 years in federal prison for producing child pornography, announced U.S. Attorney Patrick A. Miles, Jr. He is the second Masters brother convicted and sentenced this year in federal court, and his case marks the eighth federal conviction and sentence in west Michigan for the task force that investigated the case.
The brothers were active collectors of child pornography and regularly emailed back and forth about their sexual interest in children. They escalated their criminal conduct to sexual assaults and produced their own child pornography that they shared with each other. Timothy Masters bragged to his brother that he groped several girls he knew, ages 10-14, during trips to an amusement park and in the girls’ homes. He took pornographic pictures of one of the girls while she slept. He was a friend of the family and was invited into the home. That child wrote a statement that her mother read tearfully at the sentencing hearing. The victim described how she has panic attacks in places that remind her of Timothy Masters and continues to experience significant emotional pain and fear.Timothy’s brother, Eric Masters, 28, pled guilty in federal court last year to producing child pornography of three other young girls, including the graphic sexual abuse of a toddler that is now the subject of Kent County criminal sexual conduct charges. He was sentenced in federal court in March 2015 to 50 years in prison. If he is convicted on the pending state criminal sexual conduct charges, the Kent County judge will determine whether the state and federal sentences will be served concurrently or consecutively.
In announcing the sentence, U.S. Judge Paul L. Maloney stated, “To say this is despicable is an understatement.” He noted that the sentences in child exploitation cases are “high for a reason because these victims have to live with this forever,” and “many never fully recover.” Judge Maloney recognized that Timothy Masters had no other criminal history, which “is not atypical in these cases.” “The defendant has got some deep, deep recesses,” the judge continued, and during the long sentence, Timothy Masters can try to help mental health professionals “in understanding how he got to this point.”
Timothy Masters was the eighth federal offender convicted and sentenced in west Michigan based on investigations led by a local task force called WEBCHEX, which stands for West Michigan Based Child Exploitation Task Force. WEBCHEX, launched in late 2013 under the leadership of the FBI in Grand Rapids, is staffed by officers and detectives from each of the following:- - Michigan State Police;
- - Allegan County Sheriff’s Office;
- - Ionia County Sheriff’s Office;
- - Kent County Sheriff’s Department;
- - Ottawa County Sheriff’s Office; and
- - Grand Rapids Police Department.
Other law enforcement entities have also worked closely with WEBCHEX, including the Michigan State Police Internet Crimes Against Children (ICAC) Task Force, the Kentwood Police Department, Holland Police Department, Muskegon County Sheriff’s Office, Muskegon Police Department, Walker Police Department, Wyoming Police Department, and. And WEBCHEX has facilitated collaboration with out-of-state law enforcement agencies from Colorado to Georgia. By working hand-in-hand with other law enforcement agencies and entities outside the Task Force, WEBCHEX enhances the collective law enforcement effort for everything from interviewing victims and executing residential search warrants to conducting computer forensic exams.
The Task Force is just one of the law enforcement entities that the U.S. Attorney’s Office for the Western District of Michigan works with to investigate and prosecute crimes against children. Other partner agencies for the U.S. Attorney’s Office include Homeland Security Investigations; the Michigan State Police ICAC Task Force; and other federal, state, and local law enforcement offices around the country.
In the eight WEBCHEX cases sentenced federally so far in the Western District of Michigan, the sentences range from 15 to 50 years, with an average of 26 years. A total of 11 child sexual abuse victims have been rescued in these cases alone. The cases include convictions for production and possession of child pornography, online coercion and enticement of a minor, and child sex trafficking. In addition to the Masters brothers, other defendants brought to justice through WEBCHEX investigations include: Joseph Arpin, who traveled from California to Allegan County to have sex with a 12-year-old he met online; Gary Hampton, who molested and photographed a teenage boy in his home in Grand Rapids; and Eddie Jackson, who sex trafficked three Muskegon teens in Grand Rapids.WEBCHEX investigations also led to charges in 17 additional cases in multiple state courts and other federal districts. For example, in the case against Clint Williamson from 2014 to 2015, the Task Force discovered that Williamson sent live video feed of a child’s sexual abuse to a couple in Georgia. Through the Task Force’s collaboration with state and federal authorities in Atlanta, the state of Georgia convicted the woman of child molestation, and a federal court in the Northern District of Georgia convicted the man for downloading thousands of images of child pornography. The woman received a sentence of life plus 10 years, and the man received a sentence of just over eight years.
U.S. Attorney Patrick Miles applauded the Task Force, calling it “a force multiplier for rescuing child victims and protecting other children all over west Michigan from being victimized. The hard work of the Task Force and the generosity of the participating agencies make our community that much safer.”Acting Special Agent in Charge of the FBI Detroit Division, John R. Shoup, said, “The whole purpose of the WEBCHEX Task Force is to protect children from sexual exploitation, abduction and trafficking, so to see this collaborative effort producing results in such a short amount of time is really gratifying, and lets us know that we are on the right track.”
“Victimized children are voiceless and often find themselves in hopeless situations,” stated Sergeant Chad McKersie and Sergeant Terry Dixon of the Grand Rapids Police Department. “We need to continue to break the silence to protect our children and rid our society of these awful predators. WEBCHEX’s work is the thundering roar of action on their behalf holding perpetrators accountable and providing hope to the silenced victims.”
For Detective First Lieutenant Mike Anderson, Michigan State Police 6th District Special Investigation Commander, “There is no higher calling for law enforcement than protecting our children. The Michigan State Police is excited to be part of the Task Force that has brought justice for eleven children thus far.”
The U.S. Attorney’s Office for the Western District of Michigan works closely with the WEBCHEX Task Force, among other agencies, as part of the Department of Justice’s Project Safe Childhood program. Federal, state, and local collaboration on these crimes is a priority for the U.S. Attorney’s Office to ensure the broadest reach and the highest level of effectiveness in protecting children. For more information about Project Safe Childhood in West Michigan, visit: http://www.justice.gov/usao/miw/programs/psc.html.
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West Michigan Farmer, Leonard Arthur Kolberg, Jr., Sentenced to Prison for Defrauding Federal Farm Programs of More Than $500,000Read the Press Release
GRAND RAPIDS, MICHIGAN — Leonard Arthur "Lenny" Kolberg, Jr., 57, of Bangor, Michigan, was sentenced today to one year and one day in prison for defrauding federal farm programs of more than $500,000. U.S. District Judge Paul L. Maloney imposed the sentence.
In December 2009, Kolberg, who was a farmer and owner of Kolberg Farms, pledged a portion of his harvested corn in exchange for a $145,000 marketing assistance loan from the Farm Services Agency. Marketing assistance loans are designed to provide farmers with interim financing at harvest time to help them meet cash flow needs without having to sell their commodities when market prices are at their lowest. Kolberg defrauded the Farm Services Agency by lying about the amount of corn he pledged as security for the loan, and by selling the corn in the private market and keeping the proceeds, instead of paying off the loan. Kolberg hid some of his activity by selling the corn in other peoples’ names.
At the same time, Kolberg filed fraudulent crop insurance claims in connection with his 2009 harvest. He subsequently filed fraudulent crop insurance claims in connection with his 2013 and 2014 harvests. All told, Kolberg defrauded federal farm programs of $524,838.00.
U.S. Attorney Miles said that "protecting taxpayers and honest, hardworking farmers who rely on farm assistance programs is an important part of our mission. Individuals who defraud those programs should know that they will be prosecuted."
The case was investigated by the U.S. Department of Agriculture Office of Inspector General. It was prosecuted by Assistant U.S. Attorney Clay Stiffler.
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Second Kalamazoo Man, Jaime Velasco-Jimenez, Sentenced for His Role in Counterfeit Identification Document RingRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Jaime Velasco-Jimenez, age 37, a citizen of Mexico who most recently resided illegally in Kalamazoo, Michigan, was sentenced to 36 months’ imprisonment today for his role in a counterfeit identification document ring. Velasco-Jimenez is the second of three individuals involved in the ring to be sentenced. Jesus Emmanuel Lopez-Garcia previously received a sentence of 36 months’ imprisonment in August of this year.
Between September, 2013, and March, 2015, Velasco-Jimenez produced hundreds of counterfeit identification documents at his apartments in Plainwell and Kalamazoo, Michigan. Velasco-Jimenez recruited Lopez-Garcia and Victor Hugo Quesada-Pacheco to solicit illegal aliens residing in Kent and Kalamazoo counties in need of counterfeit identification documents. Lopez-Garcia and Quesada-Pacheco provided the names, false social security account numbers, and other false biographical information for their customers to Velasco-Jimenez who then produced counterfeit driver’s licenses, state identification documents, social security account number cards, lawful permanent resident cards, and other false identification documents at his apartment in Kalamazoo. Lopez-Garcia and Quesada-Pacheco then delivered the counterfeit identification documents to their customers and collected a fee that was shared with Velasco-Jimenez.
"The proliferation of counterfeit identity documents can have a rippling effect on all of us because it potentially compromises national security and the integrity of the U.S. immigration system," said Marlon Miller, special agent in charge for HSI Detroit. "HSI will continue to aggressively target the groups who profit from counterfeit identity document schemes."
Velasco-Jimenez forfeited numerous electronic devices and $8,108.00 related to his crime. And he faces removal from the United States. The sentencing hearing for Quesada-Pacheco, the last member of the ring, is scheduled for September 17, 2015, in federal court in Grand Rapids.
Assistant U.S. Attorney Ronald M. Stella is prosecuting the case, which has been investigated by the Department of Homeland Security, U.S. Immigration and Customs Enforcement, Homeland Security Investigations division in Grand Rapids.
Former Owner of Muskegon Restaurant, Pablo Razo Fierro, Pleads Guilty to Social Security Disability FraudRead the Press Release
Defendant fled to Mexico to avoid prosecution
GRAND RAPIDS, MICHIGAN — Pablo Razo Fierro, 66, pled guilty today to Social Security Fraud. Fierro applied for and began receiving disability benefits in 1996, after claiming he had a back injury that prevented him from working. As part of the application process, he promised to notify the Social Security Administration if his health improved, or if he returned to work. In 2004, he opened "Pablo’s Tacos," a popular Mexican restaurant in Muskegon. Fierro concealed his gainful employment from Social Security, because he knew it would lead to the termination of his disability benefits.
In 2008, the Muskegon Chronicle published a newspaper story and an internet video about the success of Pablo’s Tacos, and interviewed Fierro on camera. Fierro told the reporter he had been working long hours, nearly seven days a week, since opening the restaurant. The Social Security Administration Office of the Inspector General opened an investigation, and discovered Fierro had been fraudulently receiving disability payments for years. Federal agents interviewed Fierro, who admitted concealing his income so he could continue receiving disability, and admitted spending the money on car payments and other personal expenses.
After plea negotiations broke down in 2012, Fierro disappeared. On June 30, 2015, the U.S. Marshal’s Service arrested Fierro in Twin Lake, MI. Fierro admitted he fled to Mexico to avoid prosecution, but returned to the United States after family members mistakenly advised him that there was no pending warrant for his arrest. Fierro now faces up to five years in prison. The amount of restitution he must pay back will be determined at his sentencing.
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CEO of Kentwood Pharmacy, Kim Duron Mulder, Sentenced to Ten Years in Prison for Health Care FraudRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr. announced that Kim Duron Mulder, 56, formerly of East Grand Rapids, was sentenced today to ten years in prison. Mulder, the CEO of Kentwood Pharmacy, pled guilty to a conspiracy to commit health care fraud based on billing Medicare Part D Plans, Medicaid, and private insurance plans for misbranded and adulterated drugs. At a sentencing hearing in Grand Rapids, Chief U.S. District Judge Robert Jonker also ordered that Mulder serve three years of supervised release following his prison term
Following the execution of federal search warrants on November 2, 2010 and the execution of an Immediate Suspension Order by the DEA, Kentwood Pharmacy ceased operations. As a result of the subsequent investigation, a total of 18 employees at Kentwood Pharmacy were convicted of criminal offenses stemming from the practices at Kentwood Pharmacy, including the felony convictions of six licensed pharmacists. The sentences for these defendants included 14 years in prison for Richard Clarke, formerly Kentwood Pharmacy’s Vice President of Sales, for his involvement in the health care fraud conspiracy and a separate charge of possession of child pornography. Judge Jonker also sentenced chief pharmacist Lawrence Harden to six years’ imprisonment for his role in the conspiracy.
The process by which Kentwood Pharmacy returned drugs to pharmacy stock resulted in the cross-contamination of drugs, improper labeling of drugs, the placement of different drug dosages into stock bottles, and the placement of the altogether wrong drugs into stock bottles. These practices also allowed Vice President Richard Clarke to remove returned controlled substances from the pharmacy, including Vicodin and OxyContin, and sell the drugs on the street in northern Michigan.
Judge Jonker found that public and private insurers paid more $79,000,000.00 for adulterated and misbranded drugs that were sent to patients at more than 800 nursing and adult foster care homes serviced by Kentwood Pharmacy from 2006 to 2010. Based on the licensing of Kentwood Pharmacy in the name of Mr. Mulder’s wife, who had nothing to do with running the pharmacy, Judge Jonker found that the business was "conceived in fraud" and, given Mulder’s felony convictions, "should never have received a [pharmacy] license." Judge Jonker commented that Mulder "created a culture of chaos" that "created real dangers associated" with cross-contamination and generally taking controlled substances out of the traceable regulatory schemes. Judge Jonker concluded that "this was fraud, pure and simple, from the top" and "perpetrated by a person with a history of fraud."
U.S. Attorney Patrick Miles said, "The public must be able to rely on those who own and run pharmacies to operate in compliance with the federal and state laws regulating the handling, packaging, and distribution of drugs. When health care providers violate regulations meant to protect the public and then bill public and private health care insurers for such drugs, my office will pursue serious charges, including health care fraud."
"A key element of FDA’s mission to protect the public’s health is to ensure that safe and effective prescription drugs are properly distributed and accounted for via the supply chain and dispensed to the ultimate consumer. The sentence imposed today reflects the seriousness of the harm that could have been inflicted on innocent victims by the defendant’s criminal acts," said Special Agent in Charge John J. Redmond of the FDA’s Office of Criminal Investigations, Chicago Field Office. "We will continue to pursue and bring to justice those who would put the public’s health at risk by compromising the prescription drug supply chain."
"This sentence reflects the seriousness of the crimes committed by Mr. Mulder and should serve as a significant deterrence to those who may be contemplating the execution of similar healthcare fraud schemes", said Lamont Pugh III, Special Agent in Charge of the U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. "The OIG will continue to work diligently with our law enforcement partners to root out those who would put the public’s health and safety at risk through the commission of healthcare fraud and ensure that they are held accountable."
The investigation of this matter involved the FDA, HHS-OIG, FBI, DEA, IRS, the Michigan Attorney General’s Office and the Michigan State Police. Assistant U.S. Attorneys Ray Beckering and Adam Townshend prosecuted the case on behalf of the United States.
The investigation of this case was initiated by confidential tips. If Michigan residents or medical professionals suspect possible violations of law or other dangerous practices involving pharmacies or prescription drugs, they can contact the FDA at http://www.fda.gov/ICECI/criminalInvestigations/default.htm. To report health care fraud generally, persons can contact 1-800-HHS-TIPS.
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Attempted Robbers of Jewelry Store SentencedRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Darnell Kenneth-Maurice Brown, 23, Zackary Ian Cender, 19, and Charles Milton Fortune, 22, of East Lansing, Michigan, have been sentenced for their roles in the attempted robbery of Paul Medawar Fine Jewelry that occurred on January 23, 2015, in Grand Rapids. U.S. District Judge Janet T. Neff imposed a sentence of 12 months and one day of imprisonment on Cender, while Brown and Fortune were sentenced last week to 30 months each.
On the morning of January 23, Brown, Cender, and Fortune, along with four men left Lansing for Grand Rapids in two cars for the purpose of robbing a jewelry store in Grand Rapids. They drove by the jewelry store before parking at a nearby apartment complex. They then stole a pickup truck, and Brown, Cender, and three others travelled to the jewelry store in the stolen truck. Fortune and another stayed with the cars at the apartment complex. Once at the store, the driver waited in the truck while four robbers, including Brown and Cender, entered. Brown acted as a lookout while Cender and two others went to jewelry cases containing Rolex watches and began smashing the glass cases with short-handled sledgehammers. Employees and customers fled the showroom. The robbery was disrupted when one of the employees returned to the showroom and fired a weapon in the direction of the robbers. Brown, Cender, and Fortune were apprehended by local police while fleeing the area. The other four conspirators escaped and have yet to be charged.
“This was a carefully planned attempted robbery,” U.S. Attorney Miles said. “The coordination and circumstances of this robbery indicate that these defendants had help. We are asking for the public’s assistance in identifying the other perpetrators of this criminal act and in bringing them to justice.” The U.S. Attorney noted that the public can contact the Federal Bureau of Investigation (“FBI”) at (313) 965-2323 with any information about this case."The audacity with which this robbery was committed posed a substantial threat to the business place and public-at-large, and will not be tolerated,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, along with its law enforcement partners on both sides of the state, is committed to seeing that all of the co-conspirators involved in this case are arrested and brought to justice, and will not stop pursuing them until this is accomplished.”
The FBI and the Kent County Sheriff’s Department are investigating this case. Assistant U.S. Attorneys Justin M. Presant and Daniel Y. Mekaru are prosecuting it.
Federal Court Sentences Benton Harbor Heroin Trafficker, Joseph Jackson, to 204 Months in PrisonRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Joseph Jackson, aka “Jo Jo,” the lead defendant of a nine defendant heroin distribution conspiracy centered in Benton Harbor, Michigan, was sentenced to 204 months (17 years) in prison. All nine defendants have been charged, convicted and sentenced in the Federal District Court for the Western District of Michigan. The Honorable Gordon J. Quist sentenced Jackson to also serve ten years of supervised release following his return to society from prison. Judge Quist noted that Jackson was “a major supplier of heroin in Benton Harbor,” and lamented the severe effect heroin was having in Michigan and throughout the country. “Heroin leads to death,” Judge Quist said.
U.S. Attorney Miles announced the sentence as the result of a joint investigation led by the Drug Enforcement Administration, Federal Bureau of Investigation, and Berrien County Sheriff’s Department. The investigation initially focused on two of the alleged conspiracy members and ultimately resulted in the charging of nine conspirators and the seizure of approximately 100 grams of heroin, several medical-grade fentanyl patches, a small amount of crack cocaine, and approximately $27,000 in alleged drug proceeds.
According to a 100-page affidavit filed in support of the federal arrests and search warrants in the case, the investigation revealed that Jackson lead a drug trafficking organization responsible for distributing between 50 and 65 grams of heroin per week in Benton Harbor from 2013 to the date of his arrest. Jackson, 44, of Benton Harbor, also known as “Jo Jo,” assigned responsibility for heroin acquisition and distribution to other individuals. As relayed in the complaint, Jackson acquired his heroin in Chicago, and then recruited others to transport it to Benton Harbor for him. Once in Benton Harbor, Jackson tasked others with the heroin’s storage and further distribution.
All nine defendants now have been sentenced. On June 11, 2015, the District Court sentenced Jacoby Ervin to 132 months’ imprisonment, Javel McElrath to 110 months’ imprisonment, and Antwon Peterson to 27 months’ imprisonment. On July 14, 2015, the Court sentenced Omar Osorio to 21 months’ imprisonment. On August 20, 2015, the Court sentenced Willie Tibbs Jackson to 54 months’ imprisonment, Johnny Green to 7 months’ imprisonment, followed by 5 months’ home confinement, Kyeisha Bennett, a courier for Jackson, to 1 day in custody and 2 years’ supervised release, and Tanisha Swift, another courier, to 68 days’ time served, to be followed by 4 months’ home confinement.
“This investigation is a prime example of the benefits of coordinated law enforcement efforts to root out organized drug trafficking in our district. The extraordinary cooperation among the DEA, FBI, Berrien County Sheriff’s Department, Berrien County Prosecuting Attorney’s office and Michigan State Police made these charges possible,” said U.S. Attorney Miles. “Heroin remains a plague upon our society. My office will continue to seek appropriate penalties for those who would profit from it,” he said.
U.S. Attorney Miles announced these sentences with Joseph P. Reagan, Special Agent in Charge of DEA’s Detroit Field Division of the Drug Enforcement Administration; and Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office, Paul Bailey, Sheriff of Berrien County, and Michael J. Sepic, Berrien County Prosecuting Attorney.
Assistant U.S. Attorney Stephen P. Baker represented the United States in the case.
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Kalamazoo Man, Jesus Emmanuel Lopez-Garcia, Sentenced for His Role in Counterfeit Identification Document RingRead the Press Release
The ring operated throughout Kent and Kalamazoo counties
GRAND RAPIDS, MICHIGAN — Jesus Emmanuel Lopez-Garcia, age 31, a citizen of Mexico who most recently resided illegally in Kalamazoo, Michigan, was sentenced to 36 months’ imprisonment today for his role in a counterfeit identification document ring. U.S. District Judge Robert Holmes Bell noted that the offense “undermined the authority of the United States” in imposing a sentence above the sentencing guidelines.
Between September, 2013, and March, 2015, Lopez-Garcia conspired with Jaime Velasco-Jimenez and Victor Hugo Quesada-Pacheco (also citizens of Mexico residing illegally in Kalamazoo), to produce and distribute counterfeit identification documents. Lopez-Garcia and Quesada-Pacheco solicited business from illegal aliens residing in Kent and Kalamazoo counties in need of counterfeit identification documents. Lopez-Garcia and Quesada-Pacheco provided the names, false social security account numbers, and other false biographical information for their customers to Velasco-Jimenez who then produced counterfeit driver’s licenses, state identification documents, social security account number cards, lawful permanent resident cards, and other false identification documents at his apartment in Kalamazoo. Lopez-Garcia and Quesada-Pacheco then delivered the counterfeit identification documents to their customers and collected a fee that was shared with Velasco-Jimenez. The ring produced well in excess of 100 sets of counterfeit identification documents during its operation.
“The U.S. is a nation where the rule of law governs,” said U.S. Attorney Patrick Miles. “Producing counterfeit identification documents for profit under the seal and purported authority of state and federal agencies is blatantly illegal and will be prosecuted to the fullest extent of the law.”
“Document fraud directly threatens national security and undermines the integrity of our nation’s immigration system,” said Marlon Miller, special agent in charge of HSI Detroit. “HSI will continue to aggressively target and dismantle criminal organizations as well as individuals who perpetrate these schemes.”
Lopez-Garcia now faces proceedings regarding his deportation from the United States and recently forfeited numerous electronic devices and $17,488.00 related to his crime. Velasco-Jimenez will be sentenced in federal court on September 11, 2015, and Quesada-Pacheco on September 17, 2015.
Assistant United States Attorney Ronald M. Stella is prosecuting the case. The investigation is being handled by the Department of Homeland Security, U.S. Immigration and Customs Enforcement, Homeland Security Investigations division in Grand Rapids.END
Former Credit Union Manager, Kathryn Sue Simmerman, Pleads Guilty to EmbezzlementRead the Press Release
Kathryn Sue Simmerman Embezzled Almost $2 Million From Shoreline Federal Credit Union
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Kathryn Sue Simmerman, 54, of Muskegon, Michigan, pled guilty to embezzlement from her former employer, Shoreline Federal Credit Union. She also pled guilty to a separate crime of structuring deposits of the embezzled cash in increments less than $10,000. Simmerman faces up to 30 years in prison for the embezzlement, and up to five years in prison for the structuring. U.S. District Judge Robert Holmes Bell, who conducted the plea hearing, will sentence Simmerman on November 30, 2015.
Between October 1, 2001, and February 3, 2015, Simmerman embezzled $1,945,000 from Shoreline by removing cash from its vault and placing it in her purse. She deposited some of the cash into Shoreline accounts she controlled, and took the remainder of it home to spend on her own use and enjoyment. She hid her activity by manipulating Shoreline’s books and records.
The case was investigated by the Norton Shores Police Department and Special Agents from the FBI and IRS. It is being prosecuted by Assistant U.S. Attorney Clay Stiffler.
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Guatemalan Man, Manolo Miguel Santos-Deleon, Sentenced for Illegal Reentry and Failure to Register as A Sex OffenderRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Manolo Miguel Santos-Deleon, 33, of Guatemala, was sentenced to 56 months in prison by U.S. District Judge Paul L. Maloney. In May, Santos-Deleon pled guilty to illegally reentering the country following a felony conviction and failure to register as a sex offender. Santos-Deleon will be removed from the United States after the completion of his term of incarceration.
In 2012, Santos-Deleon was convicted in New York of first-degree sexual abuse, contact by forcible compulsion, which required him to register as a sex offender. Later that year, Immigration and Customs Enforcement ("ICE") removed Santos-Deleon to his native country of Guatemala. In 2014, Santos-Deleon returned to the United States illegally and travelled to Michigan. He did not register as a sex offender in Michigan or update his registration in New York, although he was required to do so by federal and state law.
Rebecca Adducci, ICE Enforcement and Removal Operations Field Office Director for Detroit, said that "ICE will continue to focus enforcement efforts on priority cases like this one. Targeted enforcement ensures the very best use of agency resources."
ICE Enforcement and Removal Operations led the investigation, with assistance from the U.S. Marshals Service. Assistant U.S. Attorney Justin M. Presant prosecuted the case.
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Welfare Fraud Probe Nets Prison Time for Three Karaein Brothers and Orders to Pay Back over A Million DollarsRead the Press Release
Emad, Jawad and Khader Karaein Sentenced for Role in Multiple Welfare Fraud Schemes
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that brothers Emad, Jawad and Khader Karaein were sentenced by U.S. District Judge Janet T. Neff for their roles in multiple schemes to defraud the federal government in connection with subsistence benefits.
On August 5, 2014, the three defendants, along with other family members, were charged with multiple federal offenses alleging that they engaged in fraud while operating the Middle Eastern Market ("MEM") in Grand Rapids, Michigan. One fraudulent scheme alleged against them was that they allowed customers receiving federal subsistence benefits to obtain cash and other prohibited items in exchange for the federal funds allotted to the customers. This fraudulent activity resulted in a large amount of federal welfare money being deposited into the MEM bank account. The charges further alleged that the Karaein brothers individually signed up for federal welfare benefits for themselves and their families. They did not disclose the MEM bank account and other sources of income that would have disqualified them from receiving the benefits and therefore fraudulently obtained food assistance, cash assistance and Medicaid benefits.
During December, 2014, Emad, Jawad and Khader Karaein each entered a guilty plea to one of the charges pending against them. In each case, the defendants agreed that the sentencing judge could consider all of the fraudulent conduct charged in arriving at the appropriate sentence. In exchange for these guilty pleas, the government agreed to dismiss the charges pending against their wives and other family members.
On June 2, 2015, Judge Neff sentenced Emad Karaein to a prison term of 34 months, to be followed by 36 months of supervision after release from prison. Emad Karaein was also ordered to pay restitution totaling $1,271,983 to the state and federal governments. Judge Neff sentenced Jawad Karaein on July 13, 2015. He received a prison term of 30 months, to be followed by supervised release of 24 months and restitution of $1,271,983. Khader Karaein was sentenced on August 13, 2015 and received a prison term of 12 months, to be followed by supervised release of 2 years and restitution of $1,272,713.
U.S. Attorney Pat Miles stated, "We work hard to stamp out fraud involving welfare benefits whenever we see it, because the taxpayers have the right to demand that the money they provide for these programs goes to those who are in need. Any unscrupulous person thinking of illegally taking advantage of the public welfare system should take notice—if you do it, you will find out the hard way that it is not worth it."
USDA Office of Inspector General, Special Agent-in-Charge Anthony V. Mohatt stated: "The Supplemental Nutrition Assistance Program and Women, Infant, and Children program were created to provide food and nutrition to those who truly need this assistance. Those who are involved in fraud and abuse of SNAP, WIC, and other USDA programs will be aggressively pursued by our office. Our joint investigation with the Federal Bureau of Investigation (FBI) and Michigan Department of Health and Human Services (MDHHS) has brought to justice Emad Karaein, Jawad Karaein, and Khader Karaein from Middle Eastern Market who obtained approximately $1.2 million from the SNAP and WIC programs through illegal schemes. The USDA Office of Inspector General will continue to dedicate resources and work with our federal and state law enforcement partners in order to protect the integrity of these programs and to prosecute those who commit fraud."
This case was investigated by the Department of Agriculture, Office of Inspector General, the Federal Bureau of Investigation, and the Michigan Department of Health and Human Services, Office of Inspector General. The case was prosecuted by AUSA Timothy VerHey.
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