Western District of Michigan
Press releases recorded for this federal judicial district.
Wisconsin Man Sentenced in KBIC Child Sexual Abuse CaseRead the Press Release
MARQUETTE, MICHIGAN – Douglas Emil Kugler, Jr., 34, of Eagle River, Wisconsin, was sentenced to 71 months in federal prison for abusive sexual contact with a child under twelve years old, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R. Allan Edgar ordered Kugler to serve 20 years of supervised release following completion of his prison term, and to pay a $100 special assessment.
The sentencing followed Kugler’s plea of guilty to the charge on August 13, 2014. The charge arose from an incident that occurred at a residence on Keweenaw Bay Indian Community reservation land between September 2004 and May 2006 involving Kugler, a non-Indian, and a boy between the ages of four and five. The incident came to light in December 2011, when the victim first disclosed what had happened to him. In sentencing Kugler, Judge Edgar found that Kugler had engaged in a pattern of prohibited sexual conduct with children.
The Keweenaw Bay Indian Community Tribal Police and the FBI investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case..
END
Meth Cookers Who Burned Down Trailer SentencedRead the Press Release
MARQUETTE, MICHIGAN – U.S. Attorney Patrick Miles announced today the sentencing on December 22 of Leanna Lynn Horton, age 38, and Christopher Wayne Brow, age 34, both of Marquette. Horton and Brow had each pled guilty to a single charge of conspiracy to manufacture, distribute and possess with intent to distribute methamphetamine in Marquette County from July 2013 to May 8, 2014.
U.S. District Judge R. Allan Edgar sentenced Horton to 175 months in prison and Brow to 140 months. Detectives from the Upper Peninsula Substance Enforcement Team (UPSET) began investigating this conspiracy on October 26, 2013, after the Marquette Fire Department responded to a trailer fire in the Birch Grove Mobile Home Community on Pioneer Road in Marquette and found a methamphetamine lab. The trailer was a complete loss and eventually had to be towed from the trailer park.
END
Task Force Busts Credit Union Robbery RingRead the Press Release
Joint investigation leads to multiple arrests and a federal complaint.
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today federal charges against multiple individuals in connection with eight robberies of credit unions, following an investigation by a state and federal violent crime task force. Ingham County Prosecutor Stuart Dunnings, Lansing Police Chief Michael Yankowski, Michigan State Police Captain Monica Yesh and FBI Special Agent in Charge Paul M. Abbate joined in the announcement.
Angelo George Mitchell, Allante Williams, Terrell Reese, James Steen, Defonta Howard and Jonathan Daffin have been federally charged with conspiracy to rob a credit union, a crime punishable by up to five years in prison. Robbery of a credit union is punishable by up to 20 years in prison. The affidavit in support of the federal complaint references eight robberies of credit unions and one attempted robbery that took place at various times between September 9 and December 11, 2014. The affidavit explains that on December 11, a surveillance team instigated a traffic stop by Michigan State Police Troopers of the six men. The complaint affidavit alleges the men were wearing makeup on their faces consistent with that seen by witnesses to prior credit union robberies and that the six men were on their way at the time to rob the DFCU Financial on Lake Lansing Road in Lansing, Michigan.
The other alleged victim credit unions identified in the affidavit are:
- Astera Credit Union, located at 301 East Jolly Road, Lansing, Michigan (twice);
- Lake Trust Credit Union, located at 300 North Clippert Street, Lansing, Michigan;
- Genisys Credit Union, located at 207 Huron Boulevard, Marysville, Michigan;
- CASE Credit Union, located at 4316 South Pennsylvania Avenue, Lansing, Michigan (twice);
- Lake Trust Credit Union, located at 2180 West Stadium Drive, Ann Arbor, Michigan;
- Community Choice Credit Union located at 34930 Ann Arbor Trail, Livonia, Michigan.
The arrests and charges are the result of a collaborative effort by a violent crime task force comprised of the Lansing Police Department, the Michigan State Police, the FBI, the Ingham County Prosecutor’s Office and the U.S. Attorney’s Office for the Western District of Michigan.
Following a preliminary hearing today in federal court, U.S. Magistrate Judge Hugh Brenneman found probable cause supporting the charge as to each defendant and all six were detained pending further proceedings. Assistant U.S. Attorneys Tim VerHey and Russell Kavalhuna indicated that they expect to present the matter to a federal grand jury for possible indictment in the coming weeks.The complaint and affidavit further allege that a Scantavia Ronda Isaac was involved in the conspiracy. She has not been arrested and anyone with information regarding her whereabouts should contact Detective St. Aubin at the Lansing Police Department. He can be reached at (517) 483-6862.
Charges in a complaint or indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
END
Federal and Local Law Enforcement Along with Michigan Department of Corrections Officials Meet with State Parolees to Improve Prisoner ReentryRead the Press Release
Officials encourage parolees to take advantage of services and make smart choices in leading law abiding lives or risk returning to prison
GRAND RAPIDS, MICHIGAN – In an effort to reduce the risk and rate of repeat offenses by recently released prisoners, U.S. Attorney for the Western District of Michigan Patrick Miles launched a new program called “Facing Choices” in collaboration with the Michigan Department of Corrections (MDOC) earlier this year. As part of the Facing Choices Program, state and federal law enforcement officials met today with state parolees in the Grand Rapids area. Representatives of service providers and programs available to parolees were also in attendance. This is the second in a series of such meetings to be held throughout Western Michigan.
The program is intended to help parolees make decisions that keep them on a law-abiding path and away from offending again. “The goal of the Facing Choices program is to reduce recidivism. That means less crime which means fewer victims as well as lessening the burden on law enforcement, the judicial and prison systems, and taxpayers,” U.S. Attorney Miles stated. “Nationally, approximately two-thirds of ex-offenders are rearrested within three years of release and almost half are re-incarcerated. In Michigan, the recidivism rate is 28 percent. According to one report I read, if 93 percent of prisoners in the U.S. did not commit another offense, American taxpayers would save between $17.3 billion and $1.1 trillion.”
U.S. Attorney Miles, Grand Rapids Police Chief David Rahinsky, other law enforcement representatives and MDOC officials reminded the parolees that law enforcement, prosecutors, and the MDOC are prepared to see them sent back to jail if they make poor choices and re-offend. But, they prefer seeing them become productive members of society and succeed. A parolee who re-offends is a high priority target for law enforcement. “But the point of this meeting is not just to remind you that we’ll hold you accountable if you do wrong,” U.S Attorney Miles explained. “We’re here to remind you that parole is an opportunity for you. Take advantage of the resources and the contacts that your parole status affords you.”MDOC Deputy Administrator Brian Shipman noted: “The mission of the Department of Corrections is to hold offenders accountable while promoting their success. The MDOC envisions the placement of an offender into the community as a carefully planned process. It is guided by a case plan which is meant to prepare him or her for a legally and socially acceptable adjustment to life in the community. Supported by experienced professionals in the public and private sectors, the offender will have the resources and guidance necessary to support successful community adjustment.”
Approximately 80 parolees attended the event. Following the talks from law enforcement and MDOC representatives, the parolees were directed to the attending service providers.
Representatives of the Kent County Sheriff’s Office, Kent County Prosecutor’s Office and Federal Bureau of Alcohol, Tobacco, Firearms and Explosives also spoke and shared in the message to the parolees. U.S. Attorney Miles praised the cooperation and collaboration that are critical to the Facing Choices program, “I am pleased that local, state, and federal law enforcement as well as County Prosecutors are working together to reduce recidivism,” he said. “I believe it is the mission of law enforcement and prosecutors to protect the public and that efforts to prevent repeat offenses are part of that duty.”
END
Former Radio Host John Balyo Sentenced to 40 Years in Federal Prison for Child ExploitationRead the Press Release
GRAND RAPIDS, MICHIGAN – Former local radio host John Balyo, 35, of Grand Rapids, was sentenced to 40 years in federal prison today for producing and possessing child pornography. Balyo pled guilty to the charges in July 2014 and, as part of the plea, agreed to cooperate fully with law enforcement in this investigation and the investigation into Ronald Moser. Moser pled guilty in August 2014 to producing and possessing child pornography and is scheduled for sentencing later this month. Balyo’s sentence included a lifetime of supervised release after prison. He will also have to pay $8,500 in restitution to the victims, who the judge recognized will be haunted by Balyo’s actions forever. In delivering the sentence, United States District Judge Robert Holmes Bell stressed the need for a “stern and certain judicial censure” for the “repulsive acts” Balyo committed.
Balyo met Moser online in November 2013, and the two immediately started emailing about a shared sexual interest in young boys. Balyo arranged to meet Moser and a 12-year-old boy three times in April and May 2014 in Kalamazoo and Battle Creek hotels. Balyo showed Moser other child pornography that he produced to prove that he was not a police officer. Balyo rented the rooms and brought a bondage kit containing zip ties, handcuffs, duct tape, rope, and rubber gloves. He also brought his professional grade photography equipment that he used for wedding photography. Balyo and Moser sexually assaulted and photographed the boy on all three occasions. Balyo gave the child a couple hundred dollars for his “modeling career.”
Moser was arrested in early June, through which investigators learned of Balyo. Balyo was arrested on June 20, 2014, while hosting a music festival in Gaylord, Michigan, with his radio station. That same day, Homeland Security Investigations (HSI) and Michigan State Police executed a search warrant at Balyo’s residence and searched his storage unit. Inside the storage unit, investigators found the bondage kit; video cameras; thumb drives; and various news clippings about missing children, children’s obituaries, and child pornography laws. Balyo gave his computer to a friend to hold onto shortly after Moser was arrested, and the friend turned it in to police upon learning of Balyo’s arrest. The computer contained multiple photographs of child pornography, including the ones from the Kalamazoo hotel room.
Balyo was convicted in Calhoun County of Criminal Sexual Conduct, First Degree, and was sentenced to 25-50 years in state prison. It is expected that he will serve his federal and state sentences simultaneously.
“Individuals who prey upon children and create sexually graphic images come from all walks of life, but they will be found and prosecuted. The U.S. Attorney’s Office in West Michigan and our state and federal partners are dedicated to protecting children. Predators should know that taking a single illegal picture exploiting a child means at least 15 years in a federal prison. They could also forfeit the computers, cameras, and even the houses that are used to sexually exploit children. We are committed to securing restitution for the victims to pay for the cost of medical care, counseling, and potential loss of income,” said U.S. Attorney Patrick Miles, Jr.
“Today’s significant sentencing marks an end to a case that tore at the very fabric of this community,” said Marlon Miller, Special Agent in Charge, HSI Detroit. “While no amount of jail time can adequately punish individuals involved in this type of depraved activity, my sincere hope is that the conclusion of this case can begin the healing process for all of those affected.”
The investigation was conducted by HSI, in cooperation with the Michigan State Police ICAC, Battle Creek Police Department, Kalamazoo Department of Public Safety, and Kent County Sheriff’s Department. Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the federal case.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney's Office; county prosecutor's offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
END
Sault Ste. Marie Man Convicted in Federal Court of Sexual Assault and Witness TamperingRead the Press Release
MARQUETTE, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr., announced today that Lynn Michael LaVictor, 44, of Sault Ste. Marie, Michigan, was convicted on all six counts of a federal indictment charging attempted sexual abuse; two counts of aggravated sexual abuse; assault resulting in serious bodily injury; domestic assault by a habitual offender; and attempted witness tampering. LaVictor had previously pled guilty to the seventh count of the indictment that charged him with contempt of a court order.
The charges arose from an incident on June 27, 2014, in which LaVictor sexually assaulted his then girlfriend in Sault Ste. Marie, Michigan. The victim’s injuries from the assault required her to be transported by ambulance to the hospital, where she underwent surgery later in the day. After his arrest and the placement of a no-contact order, LaVictor repeatedly contacted the victim anyway and attempted to influence her testimony.
The trial was before U.S. District Judge R. Allen Edgar. At sentencing, which is scheduled for May 8, 2015 at 10:00 a.m., LaVictor will face a potential life sentence. The Sault Ste. Marie Tribe of Chippewa Indians Tribal Police and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorneys Jeff J. Davis and Hannah N. Bobee prosecuted the case.
END
Lowell Man Sentenced to 30 Years for Producing Child Pornography at a DaycareRead the Press Release
GRAND RAPIDS, MICHIGAN – Travis C. Stiehl, 23, received a sentence today of 30 years in federal prison for producing child pornography at his mother’s daycare facility in Lowell, Michigan. Stiehl pled guilty in August 2014 to one count of producing child pornography of a 4-year-old boy. As part of the plea, the prosecution dismissed seven other counts of producing child pornography of children ages 2 to 14 between 2011 and 2013, and one count of possessing over 2,000 images and video of child pornography that Stiehl received through the internet. As part of the sentence, the judge included a condition of lifetime supervised release and an order that Stiehl undergo a psychological and physiological examination for sexual dangerousness before he can be released from the Bureau of Prisons.
In delivering the maximum possible sentence to Stiehl, Chief United States District Judge Paul L. Maloney said, “I view him as a major threat. A more horrific crime short of death is hard to imagine. Children were dropped off at a daycare facility and were victimized by one of the occupants of the home.” He added, “The victimization and the wreckage here is monumental to multiple families.” Judge Maloney explained that “lives have been shattered by the defendant’s actions,” and no mitigating factors exist to warrant a sentence below the maximum authorized.
“This U.S. Attorney’s Office is working hard to protect the vulnerable and prevent child exploitation,” said U.S. Attorney Patrick Miles. “We are vigorously prosecuting those who create and support the market for child pornography, and they are facing significant prison sentences.”
“This case is particularly disturbing because the defendant had direct access to children,” said Marlon Miller, special agent in charge of HSI Detroit. “But it also illustrates the severe penalties that await those who abuse their positions of trust to engage in this type of depraved activity.”
Stiehl was arrested April 25, 2014, and has been in custody since that time. The families of all the children photographed or videotaped by Stiehl were identified and notified directly by investigators. Families with questions about whether their children were victims are invited to contact Homeland Security Investigations at 616-235-3936, extension 2215.
The charges are the result of an investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Michigan State Police Internet Crimes Against Children. Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the case.
END
Lansing Sex Trafficker Convicted in Federal CourtRead the Press Release
GRAND RAPIDS, MICHIGAN – Patrick Miles, U.S. Attorney for the Western District of Michigan announced today that Christopher T. Bryant, 24, of Detroit was convicted on all five counts of a superseding indictment charging sex trafficking of minors; sex trafficking by force, fraud, or coercion; and interstate transportation for the purposes of prostitution. This was the second federal child sex trafficking case prosecuted by the U.S. Attorney’s Office for the Western District of Michigan. Eddie Jackson, the defendant in the first case prosecuted by this office, was convicted of child sex trafficking in April 2014.
U.S. Attorney Miles stated, “This U.S. Attorney’s Office and law enforcement are aggressively fighting child exploitation in its various forms in the Western District of Michigan. Predators who take advantage of the vulnerable and support the markets for child sex as well as human trafficking are going to face justice and answer for the harm they do to society.”
Bryant sex trafficked three 16 and 17-year-old girls in Lansing from March through July 2014. Bryant also transported an adult woman from Michigan to Arizona in August 2012 for prostitution, and then used force, fraud, or coercion to cause her to engage in sex with customers in Phoenix in early September of that year. The victims testified and described the multiple instances when Bryant threatened, beat, or strangled them to force them into prostitution or when Bryant became irate when they were not complying with his orders to have sex for money. Bryant also controlled the victims with alcohol and drugs and told them they would get rich selling sex. However, Bryant, who has dollar signs tattooed across his face, kept all the money. The jury saw internet ads that Bryant posted selling the victims for sex, numerous pictures from social media of Bryant posing with large sums of cash in hotel rooms, and an online video of Bryant and others promoting themselves as pimps. After three days of testimony, it took the jury less than an hour to find Bryant guilty of all counts.
The trial was before Chief U.S. District Judge Paul L. Maloney. At sentencing, which is scheduled for April 20, 2015 at 1:30 p.m., Bryant will face a potential life sentence. The FBI (FBI) and Ingham County Sheriff’s Office investigated the case jointly. Assistant U.S. Attorneys Tessa Hessmiller and Russ Kavalhuna are prosecuting the case.
The 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. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement.
END
Byron Center Man Sentenced to 30 Years for Ponzi SchemeRead the Press Release
GRAND RAPIDS, MICHIGAN – The U.S Attorney’s Office announced that David W. McQueen, age 44, of Byron Center, Michigan, was sentenced today 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. He was acquitted of one fraud count and two money laundering counts. The scheme affected more than 800 families, and preyed upon unsophisticated, often elderly investors.
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.
Instead of shutting down AIG, or at least notifying his investors of MRT’s cessation of interest payments, McQueen falsely touted his investment success and raised millions of dollars of additional money. In addition to AIG, McQueen created three other funds, International Opportunity Consultants (“IOC”), Diversified Liquid Asset Holdings (“DLAH”), and Diversified Global Finance (“DGF”), that were nothing more than sham corporations designed to raise millions of dollars from investors. McQueen commingled the investor money between his various and purportedly distinct funds and used it to make bogus interest payments and redemption requests to investors, pay commissions to agents that sold the funds on McQueen’s behalf, or simply spend the money. Despite knowing that he had absolutely no revenue coming in, McQueen took $100,000 of investor money per month tax free for his own personal use and enjoyment.
Recognizing that his scheme would collapse without actual investment success, McQueen placed approximately 30% of the investor funds in a series of highly speculative investments or scams. Unsurprisingly, this effort did not generate significant returns, and many lost all of the funds invested. To perpetuate his fraud, McQueen sent out monthly or quarterly account statements communicating to investors that their investments were safe and growing. Investors relied on those account statements and believed they accurately depicted the balance in their accounts. McQueen promised investors that they could liquidate their accounts at any time, but most did not because they believed that their account statements were accurate and that they had made a solid investment. In July and August 2009, McQueen sent out his final account statements showing that investors had tens of millions of dollars safe and growing in their “separate accounts.” Those statements concealed the truth – that McQueen had nearly run out of money.
On August 24, 2009, the IRS and FBI executed search and seizure warrants signed by Magistrate Judge Hugh W. Brenneman. The government seized approximately $430,000 from McQueen’s accounts. Unbeknownst to the government, McQueen later brought the remaining investor funds (approximately $440,000) back from an account located in New Zealand and used it for personal expenses and to make some last ditch investments, which failed.
McQueen was remanded to the custody of the U.S. Marshals Service after the jury rendered a guilty verdict and has been in the custody of the U.S. Marshals Service awaiting sentencing.
“The extent of this fraud scheme, perpetrated on unsophisticated investors, is staggering. The victims, many elderly, have lost their livelihoods and retirement savings; depriving them of the future they had worked hard to secure. Determined to protect potential victims from these scams, IRS-Criminal Investigation will continue to pursue financial predators like David McQueen and Trent Francke,” said IRS Special Agent in Charge Jarod Koopman.
“David McQueen, Trent Francke, and others swindled an extraordinary amount of money from many innocent investors while perpetrating this criminal fraud scheme,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “While McQueen and others paid themselves millions from investor funds, their victims, many of whom were elderly and retired, lost everything—their savings, their homes and livelihoods. This investigation, trial, convictions, and prison sentences all reflect the resolve of the FBI, IRS-Criminal Investigation and the U.S. Attorney’s Office to bring justice to bear upon those who would steal from trusting investors and undermine our financial systems.”
This case was investigated by the IRS and FBI and prosecuted by Assistant U.S. Attorneys Matthew G. Borgula, Sally J. Berens, Joel Fauson, and Heath Lynch and Securities and Exchange Commission Trial Attorney Timothy Leiman.
END
Two Insurance Agents Plead Guilty in Statewide Fake Insurance Scheme Involving Underground Storage TanksRead the Press Release
The EPA and FBI disrupted the scheme in a joint undercover operation
GRAND RAPIDS, MICHIGAN – The Environmental Protection Agency and the Federal Bureau of Investigation have uncovered and disrupted a scheme involving the fabrication of insurance certificates that were sold to owners and operators of underground storage tanks (“USTs”) throughout the state of Michigan. The fake documents made it appear that certain USTs were in compliance with laws requiring owners and operators of USTs to demonstrate the ability to clean up any environmental contamination caused by a leaking tank. Two insurance agents in Lansing, Michigan, have pled guilty for their roles in creating and selling fake insurance certificates to owners and operators of USTs.
Federal and state law requires owners and operators of certain underground storage tanks to obtain proof of financial assurance in the event of a release into the environment. Most owners and operators comply with the law by obtaining an annual insurance policy that would cover up to $1 million in clean-up costs and damages. The fake document scheme, which ran from 2011 to 2013, primarily involved gas stations with underground storage tanks that were either uninsurable due to age or condition, or were expensive to insure due to their age. Rather than replace the aging tanks, UST owners and operators purchased fake insurance certificates created by two Lansing insurance agents that made it appear to federal and state UST inspectors that the USTs were in compliance with the law. In reality, those gas stations had no insurance in the event of a leak.
The scheme was disrupted after undercover operations conducted by the EPA and FBI in the Lansing area successfully infiltrated the fraudulent creation and sale of fake documents by Allen P. Chadderdon, of Williamston, Michigan, and Dean P. Tucker, of Lansing, Michigan. Immediately upon disrupting the scheme, the EPA and State of Michigan sought to identify which USTs were not in compliance with the financial assurance requirements to mitigate the risk of harm to the environment. Gas stations that failed to present a genuine insurance policy were shut down until the owner or operator demonstrated compliance with the law.
Chadderdon and Tucker pled guilty in federal court to fabricating insurance certificates that they sold to UST owners and operators. Federal law prohibits altering or fabricating documents with the intent to impede, obstruct, or influence the proper administration of any matter that is within the jurisdiction of a federal agency. Both defendants face a maximum of 20 years in prison for the offense, but the Court will determine the sentence after considering the federal sentencing guidelines and the statutory sentencing factors. Chadderdon will be sentenced on December 3, 2014, and Tucker will be sentenced on March 5, 2015.
U.S. Attorney Patrick Miles, Jr. said, “This fraud scheme presented a serious risk of harm to many communities across Michigan. Residents of more than 30 different cities — including Battle Creek, Lansing, Ann Arbor, and Detroit — were exposed to the risk of leaking underground storage tanks where no insurance was available to pay for clean-up costs or injuries. Fuel and oil that leaks from underground storage tanks threatens not only the land surrounding the tank, but can harm drinking water and our state’s rivers and lakes. This investigation and criminal case helps ensure that owners and operators of USTs comply with the law and those who knowingly help others evade the law will be brought to justice.”
“About half of the nation’s population gets its drinking water from groundwater supplies,” said Randall K. Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Michigan. “Leaking underground storage tanks pose a significant threat to the quality and safety of that groundwater. To protect human health and the environment, EPA must receive accurate and honest documents. These recent pleas demonstrate that insurance agents who callously place the American people at risk by falsifying official certificates will be held accountable for their actions.”
“The perpetrators’ fraudulent scheme to mislead federal and state inspectors placed several Michigan communities in harm’s way and exposed these areas to the risk of leaking fuel and oil from underground storage tanks throughout the state,” said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, along with our federal, state and local partners, remains vigilant in its efforts to bring to justice those who actively assist others in evading the law and expose our communities to potential harm.”
The underground storage tank cases are being prosecuted by Assistant U.S. Attorney Christopher O’Connor.
END
Nine Defendants Charged in Federal Court with Conspiracy to Distribute Heroin in Benton HarborRead the Press Release
GRAND RAPIDS, MICHIGAN – A federal grand jury returned an Indictment charging nine defendants with federal conspiracy for their alleged roles in supplying and distributing heroin in Benton Harbor, Michigan, U.S. Attorney Patrick Miles announced today. A joint investigation led by the Drug Enforcement Administration, Federal Bureau of Investigation, and Berrien County Sheriff’s Department resulted in the federal charges. All defendants were arrested without incident on November 6, 2014, by federal agents, law enforcement members of the FBI Benton Harbor Safe Streets Task Force, and Berrien County deputies, following a federal complaint filed in U.S. District Court on November 5, 2014.
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.
The nine defendants were arraigned on November 20, 2014. Defendants Joseph Jackson, Willy Tibbs Jackson, Jacoby Ervin, Antwon Peterson, and Javel McElrath have been detained. Defendants Johnny Green, Kyeisha Bennett, Tanisha Swift, and Omar Osorio have been released on bond.
According to a 100-page affidavit filed in support of the federal arrests and search warrants, the investigation revealed that JOSEPH 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,” allegedly 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.
“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 direct investigations such as these rooting out those who would profit from spreading poison on our streets,” he said.
U.S. Attorney Miles announced the charges 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.
Joseph P. Reagan, Special Agent in Charge of DEA’s Detroit Field Division stated, “Heroin abuse in Benton Harbor and across Michigan has increased significantly in recent years. This investigation illustrates that strong cooperation between DEA and our federal, state and local law enforcement partners can lead to significant results, with the potential to improve the quality of life for the residents of Benton Harbor.”
“This case is a reflection of the unparalleled partnership among federal, state and local law enforcement in Western Michigan to combat drug trafficking in our communities,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Violence goes handin- hand with organized drug trafficking, wreaking havoc upon neighborhoods and families. The FBI and our law enforcement partners remain steadfast in the fight against these crimes and our enduring commitment to the law abiding citizens of our state.”
“As the Sheriff, I have no tolerance for heroin in our community and my department will work tirelessly to see that those involved with spreading it will be captured and prosecuted,” said Berrien County Sheriff Paul Bailey. “This sort of case does not happen without the cooperation of multiple agencies of law enforcement both on the state and federal level. We appreciate the involvement of all our partners and will continue in these joint efforts as long as necessary.”
The complaint affidavit alleges that Jackson was a wholesale supplier of heroin and worked with, WILLY TIBBS JACKSON, 38, Benton Harbor, to distribute heroin from the organization’s stash houses located at 1018 Pavone Avenue, Benton Harbor and 1073 Pearl Street, Benton Harbor. The Indictment charges Jackson and Tibbs with conspiracy to possess and distribute 100 grams or more of heroin. If convicted, they each face a mandatory minimum sentence of five years in prison and a maximum of 40 years in prison and a $5 million fine.
The filed complaint details the alleged roles of Jackson’s fellow conspiracy members. JACOBY ERVIN, also known as “Coby,” 27, Benton Harbor, and ANTWON PETERSON, also known as “Streets,” 23, Benton Harbor, are both alleged to be wholesale distributors for the organization. JAVEL McELRATH, also known as “J-Z,” 22, Benton Harbor, and JOHNNY GREEN, 55, of Elkhart, Indiana, are alleged to be repeated wholesale customers of Jackson’s organization. KYIESHA BENNETT, 23, of Benton Harbor, and TANISHA SWIFT, 26, of Benton Harbor, are alleged to have acted as couriers on Jackson’s behalf, transporting heroin from Chicago, Illinois to Benton Harbor. The complaint alleges that OMAR OSORIO, 20, of Chicago, was Jackson’s heroin source. Under the charge in the Indictment, these defendants each face up to 20 years in prison based on the quantity of drug attributable to them.
Assistant U.S. Attorney Stephen P. Baker is representing the federal government. Assistant Prosecuting Attorney Jeff Taylor handled responsibility for the state side of the prosecution.
The public is reminded that the charges in an indictment are merely accusations, and all defendants are presumed innocent until and unless proven guilty in a court of law.
END
Niles Man Sentenced to Seven Years in Federal Prison for Bank RobberyRead the Press Release
GRAND RAPIDS, MICHIGAN – Richard David Smith, 46, of Niles, Michigan, was sentenced today, November 18, 2014, to seven years in federal prison for Bank Robbery, U.S. Attorney Patrick Miles announced. In addition to the prison term, U.S. District Judge Robert Jonker ordered Smith to pay $1,817 in restitution and $1,000 in fines, and Judge Jonker imposed a three-year term of supervised release that will commence once Smith is released from imprisonment.
A jury returned a guilty verdict on the charge of Bank Robbery on August 7, 2014, after a three-day trial. The evidence presented at trial showed that on February 15, 2013, the defendant entered a Chemical Bank located in Niles, Michigan, and placed a backpack in the foyer. He then walked up to one of the bank employees and displayed a demand note that had a bullet taped to it. The note stated that a bomb had been placed in the building, and it instructed the teller to put all of the money in an envelope. The note further advised that the defendant had people watching the bank, and if the teller contacted police within 30 minutes of the robbery, he would detonate the bomb. The bank employee surrendered $1,817 to the defendant, who then fled the bank, taking the money and his demand note, but leaving his backpack in the foyer.
Local and federal law enforcement officers, including a bomb squad, responded to the scene of the robbery. The defendant’s bag was recovered, but it did not contain a bomb. The bag was swabbed for DNA, and testing later confirmed that DNA recovered from the backpack matched the defendant’s DNA. Based on a tip, police tracked the defendant down and arrested him on February 20, 2013. The defendant confessed to police, telling them why he committed the robbery and admitting there was no excuse for it. The defendant also admitted to another person that he had committed the robbery, but he said the government was going to have to prove it at trial.
Smith committed the bank robbery in this case less than four months after he completed parole for a 2007 state conviction for Bank Robbery and Armed Robbery.
The Federal Bureau of Investigation (FBI), the Michigan State Police (MSP), and the Niles Police Department investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
END
Final Two Holland Latin King Gang Members Sentenced to over 20 Years for Racketeering and Drug DealingRead the Press Release
Multi-year Investigation ends in 31 Latin King Members Convicted and Imprisoned for the Gang’s 20 years of Violence and Interstate Drug-Dealing.
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that U.S. District Court Judge Robert Holmes Bell imposed sentences of over 20 years for the final two defendants in the multi-year joint federal and state investigation and prosecution of 31 Holland Latin Kings (HLK) gang members. Judge Bell sentenced David Casillas to 30 years in federal prison, with 12 years credit for time served on earlier Latin King related offenses; he sentenced Antonio Rios to 25 years in prison, with five years credit for time already served. Casillas and Rios were convicted of conspiracy to engage in racketeering and conspiracy to deal over five kilograms of cocaine after a two-week trial in June 2014. Defendant Rios was acquitted of a separate marijuana conspiracy charge.
U.S. Attorney Miles said, “One of the Department of Justice’s top priorities is helping local law enforcement agencies protect our nation’s communities as safe places where our citizens can thrive. Violent street gangs, wherever they exist in West Michigan, are a true threat to the law-abiding people of our communities. This case is an example of the federal-state-local partnerships that my office uses as the most effective way to combat organized, violent groups. The collaboration of the Holland Police, Michigan State Police, and ATF was pivotal in this case. Without these partnerships, this case would not have been possible. My office shares great pride with our partners in successfully prosecuting this local chapter of a violent national gang.”
The three-year investigation revealed that the HLK began in the early 1990’s and grew to the size of over 50 members by the mid-2000’s. The Holland group was a local chapter of a national gang, the Almighty Latin King Nation. Holland members followed a national manifesto and regional constitution. The Holland chapter maintained a strict hierarchical structure that was mandated by national edict, including regional and local leadership positions. For example, a local chapter’s leaders were elected by membership vote. The president carried the title of “Inca,” the vice president was called the “Cacique,” and the “Enforcer” was responsible for maintaining a cache of firearms and imposing punishments (“violations”) for infractions of the gang’s rules. The organization’s finances were maintained by the “treasurer,” and the coffers were supplied by cocaine and marijuana sales.
The gang conducted secretive meetings, called “servicios,” which began with a Latin King prayer, after which members paid dues which were used to purchase narcotics, firearms, and pay
members’ criminal-defense bills. These “servicios” also included beatings of members as punishment for “violations” of the organization’s rules. Members employed anti-surveillance security procedures during “servicios,” including strip searches, which were ultimately unsuccessful because officers covertly recorded several meetings. The gang also benefitted from the national organization’s structure, which was based in Chicago, Illinois, also known to the gang as the “Motherland.” Latin King Members in Chicago and other states supported the HLK by providing guidance and narcotics. The HLK maintained supremacy among West Michigan gangs through the profitable sale of cocaine and marijuana (gang rules forbade the sale of other substances). The gang also benefitted from a well-earned reputation of violently defending its turf and members against perceived threats. This included shootings, stabbings, firebombings of residences, beatings, and events of witness intimidation.By the mid-2000’s, the Holland Latin Kings grew so large that it split into two factions: the East-Side and West-Side, with each subchapter maintaining its own leadership structure. The two subchapters grew to such strength that it became difficult for local law enforcement to conduct routine investigations of crime in Holland and West Michigan because the HLK successfully intimidated anybody otherwise willing to cooperate with law enforcement. Despite several members being convicted for minor offenses in state court, the gang would financially support incarcerated members, after which the members would quickly return to the gang’s criminal operation. This cycle of crime and violence continued until federal, state, and local authorities began collectively investigating the organization, through the use of confidential informants and the secret federal grand jury system.
The investigation became public on July 19, 2012, when over 100 state and federal officers simultaneously executed search warrants at over 15 residences and a business in Holland, which were all linked to the HLK. This collaborative effort involved the following agencies: the federal Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF); the Ottawa County Prosecutor’s Office; the Michigan State Police; the Holland Police Department; and the Ottawa County Parole Office.
On February 8, 2013, a federal Grand Jury charged 31 members of the HLK street gang with conspiracy to engage in racketeering activity and conspiracy to traffic cocaine and marijuana. The indictment also alleged acts of violence in furtherance of the gang, including attempted murders, shootings, firebombings, beatings, stabbings, and acts of witness intimidation. Of the 31 charged, 29 defendants pled guilty to racketeering offenses. The Holland Latin Kings included at least three Regional Leaders:
- Eric Ruibal, aka, Cubano – Regional Inca (Leader of all Michigan Latin Kings). Ruibal, a Cuban national, was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic over five kilograms of cocaine. He was sentenced to 20 years in federal prison, with 7.75 years credit for time already served.
- Mario Herrera, aka, Caveman – Regional Leader. Herrera was convicted by plea agreement of conspiracy to engage in racketeering activity and was sentenced to 7.67 years in federal prison, which included a substantial reduction due to Herrera’s cooperation with authorities.
Desidario Amaro, aka Desi – Regional Leader. Amaro was convicted by plea agreement of conspiracy to engage in racketeering activity and was the only defendant sentenced by
U.S. District Court Janet T. Neff, who substantially reduced Amaro’s potential sentence for his cooperation with authorities. Amaro was sentenced to 2.75 years in federal prison.
Several members held leadership positions in the local chapters of the gang. - Nicholas Bernal, aka Nicky B – Inca of the East-Side HLK. Bernal was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 19 years in federal prison.
- Francisco Martinez, Jr., aka Chewbacca – Inca of the West-Side HLK. Martinez, Jr. was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 9 years in federal prison.
- James Gonzales, aka Godfather – Cacique of the West-Side HLK. Gonzales was convicted by plea agreement of conspiracy to engage in racketeering activity. He was sentenced to 16.67 years in federal prison.
- Ramon Gaytan, Jr., aka King Snaps – Enforcer of the West-Side HLK. Gaytan, Jr. was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 16.67 years in federal prison.
- Arturo DeLeon – Cacique of the East-Side HLK. Deleon was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 9 years in federal prison.
- Francinet Cruz – Enforcer of the East-Side HLK. Cruz was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 500 or more grams of cocaine. He was sentenced to 19.5 years in federal prison, with credit for 1.5 years of time served.
- Joseph Martinez, aka Dogface – former Enforcer of the West-Side HLK. Martinez was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 20 years in federal prison.
- Julio Hernandez, aka Solo – former leader of the East-Side HLK. Hernandez was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 10 years in federal prison.
- Jose Hernandez, aka BigTime – former Inca of the East-Side HLK. Hernandez was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 9 years in federal prison.
- Frank Cisneros, aka Knuckles – former leader of the East-Side HLK. Cisneros was
convicted by plea agreement of conspiracy to engage in racketeering activity. He was sentenced to 17.5 years in federal prison. - Ramon Morales – former Inca of the East-Side HLK. Morales was convicted by plea agreement of conspiracy to engage in racketeering activity and conspiracy to traffic 100 or more kilograms of marijuana. He was sentenced to 11.25 years in federal prison.
The remaining seventeen defendants all pled guilty to racketeering offenses. Each was sentenced to federal prison for periods ranging between two and eleven years. All told, the indictment resulted in over 340 years of prison sentences for HLK members.
ATF Special Agent in Charge Steven J. Bogdalek said “Unfortunately, far too many citizens live in fear of gang related violence. One of ATF’s primary missions is to make communities safe from the criminal activities of violent gangs such as the Holland Latin Kings. Along with our state and local partners and the United States Attorney’s Office, we are pleased with the conclusion of this case, knowing that Holland is a safer community as a result of this prosecution.”
The investigation was aided by several other agencies, including the Michigan Department of Corrections and the Kerr County, Texas, Sheriff’s Department.
This case was prosecuted by Assistant U.S. Attorneys Russell A. Kavalhuna and Phillip J. Green. Mr. Green is now a federal magistrate judge in the Western District of Michigan.
END
U.S. Attorney’s Office Names Election Officer and is Available to Accept Election Day Calls Concerning ElectionRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that his office will accept calls during and after regular hours on November 4 concerning alleged election fraud or interference with the exercise of the right to vote. Miles appointed veteran federal prosecutor Don Daniels as Election Officer for the 49 counties in the Western District of Michigan. “Fair elections are critical. Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The U.S. Department of Justice will act promptly and aggressively to protect the integrity of the election process,” said U.S. Attorney Miles.
In order to respond to complaints of election fraud or voting rights abuses on election day, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Miles stated that the public can reach Assistant U.S. Attorney Daniels or an attorney in his office by dialing (616) 808-2014. Daniels joined the U.S. Attorney’s Office in 1980 and has served as the Office’s Executive Counsel for the past 15 years. He leads the Office’s Criminal Civil Rights Violations Task Force which Miles established in 2012.
In addition to the U.S. Attorney’s Office Election Officer, the FBI will have special agents available throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI offices can be reached at (616) 456-5489 (Grand Rapids), (517) 336-8367 (East Lansing), and (906)-226-2058 (Marquette).
Complaints about possible violations of the federal voting rights laws can be made directly to the U.S. Department of Justice Civil Rights Division’s Voting Section in Washington by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by online complaint form at:
http://www.justice.gov/crt/complaint/votintake/index.php.
The U.S. Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also provides that voters can cast their ballot free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them under the pretext that these are actions to uncover illegal voting may violate federal law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
U.S. Attorney Miles added, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the U.S. Department of Justice Civil Rights Division.”
END
Government Resolves False Claims Act Allegations Against Advanced Professional Home Health CareRead the Press Release
Company agrees to pay penalty and implement compliance program to resolve claims arising from alterations to physician orders for home healt care services
GRAND RAPIDS, MICHIGAN – Advanced Professional Home Health Care, a home health agency based in Troy, with offices in Grand Rapids and Flint, has entered into an agreement with the U.S. Attorney’s Office for the Western District of Michigan that requires the agency to pay $57,000 and to implement a compliance program relating to its documentation of physician orders for home health services. The settlement resolves allegations that Advanced Professional Home Health Care violated the False Claims Act by altering physician signature dates and other information on certain physician orders for home health care services that the government examined during its investigation.
Under the terms of the settlement agreement, Advanced Professional Home Health Care has agreed to implement and maintain a compliance program for at least two years. This compliance program requires the company to provide training to its staff regarding medical records and documentation requirements, including those relating to signature and retention requirements for home health care orders. In addition, the company is required to hire an independent firm to perform unscheduled and unannounced reviews for each of the next two years to evaluate the company’s physician orders for home health care services and its billings, claims, and reimbursements based on these orders.
This case resulted from a civil lawsuit filed by a whistleblower who worked in one of Advanced Professional Home Health Care’s offices. The lawsuit, known as a qui tam action, was filed under the False Claims Act, which allows private whistleblowers to bring lawsuits on behalf of the United States and receive a share of any recoveries. In this case, the United States intervened in the whistleblower’s lawsuit. The whistleblower will receive a portion of the settlement proceeds, as well as additional amounts from the company for attorney’s fees and costs.
The U.S. Attorney’s Office for the Western District of Michigan investigated this case. Assistant U.S. Attorney Ryan D. Cobb represented the United States.
END
Muskegon Computer Professional Sentenced to Four Years in Prison for Defrauding Catholic Health SystemRead the Press Release
Creighton Goins Ordered To Repay $921,158 To Trinity Health
GRAND RAPIDS, MICHIGAN – Creighton Lonel Goins, 45, of Muskegon, was sentenced to 48 months in federal prison for fraudulently stealing technology equipment paid for by his employer and reselling those items on the Internet. Goins was ordered to pay $921,158 in restitution to the victim of the scheme, Trinity Health. He will serve three years of supervised release after his prison sentence. Goins was immediately remanded to the custody of the U.S. Marshal. The Honorable Robert Holmes Bell, U.S. District Judge, imposed the sentence.
Goins pled guilty in June 2014 to one count of wire fraud in a scheme involving his former employer, Trinity Health, one of the largest Catholic health care delivery systems in the nation. Goins committed his scheme to defraud between 2006 and 2010 while employed by Trinity as a senior information technology services manager. Goins misused his purchase authority to buy computer equipment converted the stolen items to cash by selling them at discounted prices on the Internet. At the height of the fraud, Goins used a freight service to ship an entire pallet of computer equipment to a warehouse and distribution facility in New York for delivery to one of his regular purchasers of the stolen items.
U.S. Attorney Patrick Miles, Jr. said, “Trinity Health provided Mr. Goins with a good job, promoted him to management, and entrusted him with the supervision of the information technology system for one of its subsidiaries, Mercy Health Partners. In return, Goins systematically stole more than $900,000 over four years that went undetected because of his position and deceptive conduct. This sentence will punish him for stealing from a non-profit community health organization that provides free or reduced health care services in the Muskegon area, and should deter others from committing this type of crime.”
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Christopher O’Connor..
END
Former Defense Contractor Convicted in Scheme to Sell Defective Machine Gun Components to Department of DefenseRead the Press Release
Colorado Resident Howard Cahn, Who Tried to Save His Michigan Manufacturing Business by Selling Defective Machinegun Components to DoD in 2009, Convicted of Four Felonies
GRAND RAPIDS, MICHIGAN – United States Attorney Patrick A. Miles, Jr. announced today the conviction, on October 23, of Colorado resident Howard “Jack” Cahn, on four felony charges following a four-day jury trial in Kalamazoo, Michigan. The charges stem from Cahn’s conduct during 2009 when, as the owner of a manufacturing company that was under contract with the U.S. Department of Defense (DoD) to produce critical replacement parts for several machinegun weapons systems used by the U.S. Armed Forces, he tried to sell DoD parts that were defective and that did not meet contract specifications.
“Defense-procurement fraud is a serious offense,” said U.S. Attorney Miles. “When it involves misconduct that also can endanger U.S. troops in the field, it is outrageous as well. Mr. Cahn tried to save his company and make a dollar even if it meant sending U.S. troops into battle with defective weapons during the height of combat operations in Iraq and Afghanistan. He will now be held accountable.”
In 2008, Cahn purchased a machining shop in Michigan and began doing as “Aerospace Manufacturing Services (AMS),” producing components for various weapons systems under contracts with components of DoD. These contracts included ones for the production of internal components for the M-249 5.56 mm Squad Automatic Weapon (SAW) and the “Mark 19”40 mm grenade-machinegun. Both weapons systems are in wide use by all branches of the U.S. Armed Forces, and the components in question are essential to the reliable and safe functioning of those weapons. By April 2009, AMS was in serious financial trouble and Cahn was desperate to ship on the contracts so that he could receive payments from DoD. In early April, Cahn coerced employees of his to add defective M-249 “feed pawls,” which had failed dimensional testing during production and had been designated as scrap, to a shipment of good parts that was awaiting DoD acceptance. At the same time, and in an attempt to receive DoD approval to go into full production on his contract for Mark 19 “lever drives,” he coerced an employee to alter testing documents related to a sample of lever drives, that had been produced by a company in Colorado, to make it appear as though the sample had been produced by AMS. In addition, he personally prepared false certification documents claiming that the levers had been produced by AMS.
END
Former Grandville Man Sentenced for Filing A False Tax ReturnRead the Press Release
GRAND RAPIDS, MICHIGAN – Jeffrey Roger Richter, a former resident of Grandville, Michigan, was sentenced to 30 months imprisonment followed by one year of supervised release for filing a false and fraudulent U.S. income tax return with the IRS, U.S. Attorney Patrick Miles announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered Richter to pay $882,655.00 in restitution to the IRS. Richter pleaded guilty before Judge Bell on May 29, 2014.
U.S. Attorney Miles commented that: “Those who illegally fail to pay their fair share of taxes rob from all Americans. Their selfishness is unacceptable and deserves criminal prosecution and punishment. I am pleased with this sentence and restitution.”
According to court records, after graduating from Davenport College with an accounting degree, Richter was employed by John H. Dekker & Sons, Inc. Richter eventually became a part owner of Dekker & Sons, Inc. as well as Hi-Tec Building Services, Inc., a janitorial service. While at Dekker, Richter began using company credit cards for personal expenditures. Richter knowingly failed to report the income from the use of the corporate credit cards on his federal income tax returns for the 2007 through 2011 tax years. In total, for the years 2007 through 2011, Richter underreported his income by $995,436.07. By failing to accurately report all of his income, Richter avoided paying approximately $372,000 in personal income tax due and owing to the Internal Revenue Service.
“Richter chose to steal from his business as well as the American taxpayers by filing false income tax returns. IRS-CI’s primary enforcement program is, and will continue to be, directed at individuals like Richter who willfully violate the tax laws,” said Jarod Koopman, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
The case was investigated by special agents of the IRS Criminal Investigation Division and prosecuted by Assistant U.S. Attorney B. Rene Shekmer.
END
Cadillac Technology Professional Sentenced to 21 Months in Prison for Stealing $350,000 from Aar Mobility SystemsRead the Press Release
Kirk Weir Ordered To Repay $371,738.18 To The Victims Of His Scheme To Defraud
GRAND RAPIDS, MICHIGAN – Kirk Edward Weir, 40, of Cadillac, was sentenced to almost two years in federal prison for fraudulently acquiring technology equipment and software and misusing a company purchasing card. Additionally, Weir was ordered to pay $371,738.18 in restitution to the victims of the scheme and must forfeit an additional $350,000 to the United States in the form of a money judgment. He will serve three years of supervised release after his prison sentence. The Honorable Robert J. Jonker, U.S. District Judge, imposed the sentence.
Weir pled guilty in June 2014 to one count of wire fraud in a scheme involving his former employer, AAR Mobility Systems, a global supplier of rapid deployment equipment and mobile tactical shelters to the government and defense industries. Weir committed the scheme between 2007 and 2012 while employed as a technology administrator by causing AAR to purchase approximately $290,000 in equipment and software and $60,000 in company credit card purchases for items ostensibly for use by AAR. In truth, Weir diverted the technology items to sell on the Internet and purchased personal items such as outdoor and sports equipment, boating accessories, and clothing, some of which he sold on the Internet. He admitted altering company records and manipulating internal controls to conceal his crimes.
U.S. Attorney Patrick Miles, Jr. said, “Weir abused the trust placed in him by his employer by quietly but systematically stealing from the company over the course of several years. Despite the great lengths he took to conceal the theft, the scheme ended and unraveled when a concerned citizen reported the suspected fraud to law enforcement. We applaud those who refuse to simply look the other way by reporting suspected criminal activity. This helps ensure that offenders are held accountable and justice is brought to victims.”
The case was investigated by Detective/Lieutenant Todd Golnick of the Cadillac Police Department, the Wexford County Prosecutor’s Office, and the FBI. Assistant U.S. Attorney Christopher O’Connor prosecuted the case.
END
Battle Creek Man Sentenced to 12 Years for Possessing Multiple Guns and Possessing A Firearm in Furtherance of Selling HeroinRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that Vincent Isaac-Peter Jones, age 28, of Battle Creek, was sentenced to 152 months – well over 12 years -- in prison after pleading guilty to possessing two firearms as a convicted felon and possessing a third firearm in furtherance of heroin trafficking. One of the firearms had been reported stolen; another had an obliterated serial number. Jones had multiple prior felonies, including for possession of narcotics and a weapon.
U.S. Attorney Patrick Miles said, “Drugs and stolen guns are a toxic mix, which is only made worse when they are possessed by convicted felons. Battle Creek and Western Michigan neighborhoods are safer after eliminating these guns and drugs. This sentence sends a strong signal that people who use stolen guns to aid selling drugs face significant punishments in the federal system.”
ATF Special Agent in Charge Steven J. Bogdalek said “ This sentence imposed highlights our effort along with our state and local law enforcement partners, as well as the United States Attorney’s Office, to remove violent individuals like Mr. Jones from our streets. Mr. Jones’ repetitive past displayed a continued willingness to carry and use firearms to commit crimes, including narcotics trafficking, that continue to paralyze our community”.
This case resulted from a coordinated investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Battle Creek Police Department’s Gang Suppression Unit and Special Investigations Unit. This case was prosecuted by Assistant U.S. Attorney Russ Kavalhuna.
END
U.S. Attorney’s Office Seeks to Identify Victims in Cases Involving Kentwood PharmacyRead the Press Release
GRAND RAPIDS, MICHIGAN – The U.S. Attorney’s Office in the Western District of Michigan is handling criminal cases involving various individuals in connection with their employment at Kentwood Pharmacy. Kentwood Pharmacy serviced nursing homes, adult foster care homes, and other long term care facilities until November of 2010. Kentwood Pharmacy also operated retail pharmacies in Grand Rapids (formerly Eastgate Pharmacy), Shepard, Alma, and St. Louis, Michigan.
To date, multiple individuals have pled guilty to criminal offenses relating to their employment at Kentwood Pharmacy. Individual patients may have received drugs from Kentwood Pharmacy as early as 2004 that were misbranded or adulterated. Examples of such misbranded or adulterated drugs include mislabeled drugs, discolored drugs, or expired drugs. Persons who believe that they were victims of this crime by receiving or paying for drugs supplied by Kentwood Pharmacy between 2004 and November 2010, which were misbranded or adulterated may be afforded rights under the federal Crime Victims’ Rights Act including notification of court proceedings and the opportunity to submit a victim impact statement and be heard at public court proceedings.
If you believe that you are a victim of this crime, please notify the Victim Witness Unit at the United States Attorney’s Office. You may do this by clicking on Link to Victim Information Form at the website for the United States Attorney’s Office for the Western District of Michigan at http://www.justice.gov/usao/miw/programs/victimwitness.html If you are unable to access the website, you may call the Victim Witness Unit at (616) 808-2034 and they will take the information over the phone.
END
Office Manager and Husband of Lansing Area Doctor Sentenced to Prison for Accepting Kickbacks and for Not Reporting to the Irs Income from Medical Marijuana CertificationsRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. District Judge Robert Holmes Bell sentenced Mohamad Abduljaber, 50, of Okemos, Michigan to three and a half years of imprisonment on charges of receipt of health care kickback payments and falsifying an income tax return, U.S. Attorney Patrick Miles announced today.
The convictions arise from an Indictment which charged that between January 2004 and April 2011 Abduljaber conspired with his wife, Dr. Shannon Wiggins, to receive kickbacks for referring patients for electrodiagnostic testing. Abduljaber served as the office manager of his wife’s medical practice. Abduljaber also admitted signing a false tax return which did not accurately disclose cash income attributable to the billing for medical marijuana certifications. Judge Bell noted that Abduljaber’s conduct indicated a “lack of respect for the law” and that “protection of the public was very important in this matter.” Judge Bell also ordered Abduljaber to pay $285,781 in restitution to Medicaid and the IRS and to forfeit $550,000.
Last month, Judge Bell sentenced Dr. Wiggins to two years of imprisonment for the same crimes and previously sentenced the physical therapist who paid the kickback payments, Chyawan Bansil, to 13 months of imprisonment for billing insurance companies for the same electrodiagnostic testing, which he admitted he never actually performed. In total to date, the U.S. Attorney’s Office has collected $2.25 million in monetary damages on behalf of Medicare, $350,000 in restitution for Blue Cross Blue Shield of Michigan, $150,000 in forfeiture from Mr. Bansil, and approximately $400,000.00 in forfeited real property and vehicles from Dr. Wiggins.
The case against Abduljaber and Dr. Wiggins resulted from a joint investigation conducted by the Lansing Police Department, IRS-Criminal Investigation, Blue Cross Blue Shield of Michigan, the U.S. Department of Health and Human Services Office of Inspector General, the Drug Enforcement Administration, and the Michigan Attorney General’s Office. The kickback scheme was initially discovered by officers from the Lansing Police Department and personnel from Blue Cross and Blue Shield of Michigan who were investigating prescription drug diversion in Lansing, Michigan. After undercover Lansing police officers were referred for suspicious electrodiagnostic testing by Bansil at Dr. Wiggins’s office, federal investigators examined the medical records as well as the financial records of Mr. Bansil and confirmed that Bansil was billing for services that he did not perform. Investigators further determined that Bansil was paying Dr. Wiggins and Abduljaber illegal kickback payments to refer patients for the purported testing.
In its sentencing memorandum, the Government argued that such kickback payments caused Dr. Wiggins to increase her Medicare referrals for electrodiagnostic testing from 24 tests per year to more than 1,600 tests per year. The government also noted that, in addition to the crimes of conviction, Abduljaber was also caught on tape committing food stamp fraud by paying cash to use another person’s Bridge Card.
“The payment and receipt of illegal kickbacks distort the motives of health care professionals and cause unnecessary testing and expenses which increases everyone’s costs,” U.S. Attorney Miles said. “This office will continue to pursue criminal and civil proceedings, employ the resources of our law enforcement and private insurance partners, and protect the public against fraud. Medical practitioners who exploit patients and public or private health care insurance providers for unlawful and selfish financial gain face significant criminal charges and civil remedies. As this case demonstrates, those who attempt to defraud the system through illegal kickback arrangements will suffer the specter of incarceration, treble damages, civil penalties, forfeiture, and future exclusion from participating with Medicare and Medicaid.”
“Paying or receiving kickbacks in exchange for the referral of Medicare or Medicaid patients is illegal,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The payment of kickbacks leads to overutilization, corruption of medical decision-making and increased program costs. Allegations of such conduct will be aggressively investigated by the OIG and our law enforcement partners to ensure that those who are unjustly enriched by these schemes are held accountable.”
“The fraud perpetuated by Mohamad Abduljaber and his wife, Dr. Shannon Wiggins, clearly shows that they put greed before the health and safety of their patients. Today’s sentence is the culmination of the diligent investigative work of the IRS-CI and our law enforcement partners to protect the public from those who commit health care fraud,” said Acting Special Agent in Charge Jarod Koopman.
This case was prosecuted by Assistant U.S. Attorneys Raymond E. Beckering III and Adam Townshend and jointly investigated by the Lansing Police Department, Blue Cross Blue Shield of Michigan, HHS-OIG, IRS-CID, DEA, and the Michigan Attorney General’s Office.
END
Ingham County Child Sex Trafficking Ring BustedRead the Press Release
GRAND RAPIDS, MICHIGAN – The U.S. Attorney for the Western District of Michigan, the Federal Bureau of Investigation, the Ingham County Prosecutor’s Office, the Ingham County Sheriff’s Office, and the Lansing Police Department announced today that three people have been charged and arrested with operating a child sex trafficking ring in Lansing, Michigan. A federal grand jury for the Western District of Michigan indicted Christopher T. Bryant, 24, of Detroit on five counts, including sex trafficking of minors; sex trafficking by force, fraud, or coercion; and interstate transportation for the purposes of prostitution. The Ingham County Prosecutor’s Office charged Mariah Haughton, 17, and Jonathan Purnell, 27, both of Lansing, for sex trafficking girls in the same ring.
The federal indictment charges Bryant with sex trafficking three minors – including one by force, fraud, or coercion – in Ingham County and elsewhere from March through July 2014. It also charges Bryant with transporting another person from Michigan to Arizona in August 2012 for prostitution, and then sex trafficking the same person by force, fraud, or coercion in early September of that year.
The Ingham County Prosecutor’s Office charged Haughton on multiple counts, including human trafficking by recruiting minors for child sexually abusive activity. Although Haughton is only 17 years old, a federal search warrant indicates that Haughton was active in recruiting and trafficking girls for commercial sex. Purnell was arrested today in Ingham County on similar charges.
The FBI alleges in a federal search warrant application that Bryant, Haughton, and Purnell recruited minors and advertised them online to solicit sex for money. The search warrant alleges that the ring operated out of an apartment and various motels around Lansing. Allegedly, Bryant, Haughton, and Purnell provided the minors with alcohol and drugs and profited from the enterprise.
This is the second child sex trafficking case to be charged federally in the Western District of Michigan. The first federal case in this district was against Eddie Allen Jackson in April 2014 for sex trafficking three girls ages 14, 15, and 16 in Grand Rapids. Jackson was sentenced earlier this month to 30 years in federal prison.
“The crime of child sex trafficking is not new, but it is growing in part because the internet makes it easy to advertise sex anonymously. People selling children into commercial sex feel as though they cannot be found or traced, which is not the case. Awareness of the issue of human trafficking is spreading rapidly throughout West Michigan, and I am pleased local, state, and federal authorities are working together effectively to locate and stop alleged sex traffickers,” said U.S. Attorney Patrick A. Miles, Jr.
“Trafficking children for sexual exploitation is a horrific crime, and one which we are dedicated to fighting against relentlessly,” said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, in concert with its local, state and federal partners, remains steadfast in its resolve to protect the innocence of our children. Offenders like the perpetrators in this investigation must know that law enforcement will stop at nothing, and use every resource available, to fight for the interests of our young people and bring justice to bear upon those seeking to exploit their vulnerabilities."
“I’m proud of the men and women of the Lansing Police Department who were a part of this extensive investigation. Working and collaborating on investigating crime with other jurisdictions, from Federal to the State level, has always been a success,” said Lansing Police Chief Mike Yankowski.
“This insidious crime has been made much easier due to the internet. I am proud to say that our investigators – City, County, and Federal – put together a great team that was able to meet the challenge and make the appropriate arrests. We all need to continue vigilance, however, especially parents need to monitor their children’s internet use and report suspicious activity,” said Ingham County Sheriff Gene Wriggelsworth.
The federal case, which is part of Project Safe Childhood – a nationwide initiative designed to protect children from exploitation and abuse – is being prosecuted by Assistant United States Attorneys Tessa K. Hessmiller and Russell A. Kavalhuna. The U.S. Attorney's Office; county prosecutor's offices; the Internet Crimes Against Children task force (ICAC); and 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 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 www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement.
The charges in an indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law..
END
Sentencing in $2.9 Million Stolen Identity Tax ScamRead the Press Release
Grand Rapids businessman admits forging endorsements on $750,000 of US Treasury Checks
GRAND RAPIDS, MICHIGAN – Mateo Velasquez-Garcia, of Grand Rapids, Michigan, was sentenced to 48months’ incarceration and three years of supervised release for his convictions on one count of Forgery of U.S. Treasury Checks and one count of Illegal Re-entry by an Alien, U.S. Attorney Patrick A. Miles, Jr. announced today. Acting Special Agent in Charge Jarod Koopman, Internal Revenue Service Criminal Investigation, and Special Agent in Charge Marlon V. Miller of Homeland Security joined U.S. Attorney Miles in the announcement.
Velasquez-Garcia operated a grocery store located at 1814 S. Division Avenue, Grand Rapids, Michigan. An investigation revealed that $2.9 million dollars’ worth of fraudulently obtained federal tax refund checks were deposited into the bank account for the Tienda La Nueva Esperanza grocery store during the years 2011 to 2012. Velasquez-Garcia admitted to federal agents that he personally placed false endorsements on the back of 115 of the U.S. Treasury checks, which were payable to third parties. The checks totaled $750,000.
Velasquez-Garcia is also an alien. He was previously removed from the U.S. and has been found to be in the U.S. without the proper consent of the Attorney General or the Secretary of Homeland Security.
The investigation of this case was conducted by Special Agents of the Homeland Security Investigation and IRS Criminal Investigation.
END
Catholic Charities West Michigan Agrees to Implement Compliance Program in Settlement of Government’s False Claims Act AllegationsRead the Press Release
Nonprofit Organization Acknowledges That It Should Have Known
That Services Were Not Provided As ClaimedGRAND RAPIDS, MICHIGAN – Catholic Charities West Michigan, a nonprofit organization based in Grand Rapids, has entered into an agreement with the U.S. Attorney’s Office for the Western District of Michigan that requires the agency to implement a compliance program and hire an independent organization to review Catholic Charities’ claims for behavioral health services under penalty of a potential exclusion from federal health care programs. The settlement announced today resolves allegations that between May 1, 2010 and December 31, 2013, Catholic Charities’ Behavioral Health Unit submitted false Medicaid claims for services that were rendered by a Catholic Charities practitioner with a lapsed license, services that did not comply with applicable supervision and documentation requirements, and services that Catholic Charities upcoded using billing codes for higher-paying services than were actually performed.
As part of the settlement, Catholic Charities acknowledged that it should have known that (1) the agency submitted claims for services rendered by a practitioner with a lapsed license between May 31, 2010 and August 17, 2011; and (2) the agency submitted claims, under prior management, using billing codes for longer therapy sessions than were provided to patients. Under the terms of the settlement agreement, Catholic Charities has agreed to implement and maintain a compliance program for at least two years. This compliance program requires the agency to do the following, among other things: report certain violations of state or federal criminal, civil, or administrative laws to the U.S. Attorney’s Office; implement written procedures to ensure the accuracy of billing codes that are used to submit claims to insurers; and create a means by which billing concerns and other issues can be reported anonymously and confidentially, without retribution or retaliation by Catholic Charities. Catholic Charities has also agreed to hire an independent firm to evaluate the agency’s billing practices and perform unannounced reviews of Catholic Charities’ claims for behavioral health services for at least two years.
If Catholic Charities materially defaults on its obligations under the settlement agreement, the U.S. Attorney’s Office will refer Catholic Charities to the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”) for potential exclusion from federal health care programs, including Medicare and Medicaid. As part of the settlement, Catholic Charities has agreed not to contest any such exclusion.
The U.S. Attorney’s Office for the Western District of Michigan investigated this case. Assistant U.S. Attorney Adam B. Townshend represented the United States.
END
Tennessee Man Sentenced to 78 Months in Federal Prison for Theft of Interstate ShipmentRead the Press Release
Roderick Earl Nunn Stole Semi-Trucks and Trailers Containing More than $1,000,000 Worth of Goods
GRAND RAPIDS, MICHIGAN – Roderick Earl Nunn, 40, of Memphis, Tennessee, was sentenced today to 78 months in federal prison for stealing semi-trucks and trailers containing more than $1,000,000 of goods traveling in interstate commerce. The Honorable Robert J. Jonker imposed the sentence.
Nunn pled guilty in March 2014 to stealing a semi-truck and trailer in Romeoville, Illinois on April 15, 2012, which contained $175,000 worth of Wrigley candy products. He was driving the stolen cargo to Detroit, Michigan, when he was stopped by police outside of Marshal, Michigan. At sentencing, the court determined that in 2006-2012, Nunn had stolen eight other semi-trucks and trailers containing more than $1,000,000 worth of goods.
U.S. Attorney Patrick A. Miles, Jr., said, “Protecting the shipment of goods between the states is important to the financial well-being of our citizens. We continue to vigorously prosecute these types of brazen thefts.”
The case was investigated by the FBI, the Michigan State Police Southwestern Commercial Auto Recovery Unit, the Marshall, Michigan Police Department, and the Calhoun County Sheriff’s Department. It was prosecuted by Assistant U.S. Attorney Clay Stiffler.
END
Man Sentenced to 30 Years for Child Sex Trafficking in Grand RapidsRead the Press Release
GRAND RAPIDS, MICHIGAN – Eddie Allen Jackson, 31, of Grand Rapids, was sentenced today to 30 years in federal prison in West Michigan’s first federal child sex trafficking case. A jury convicted Jackson in April 2014 on three counts of child sex trafficking.
From July to August 2012, Jackson recruited teenage girls ages 14, 15, and 16 in Muskegon to work for him by prostituting on the streets of Grand Rapids. He targeted vulnerable girls with troubled backgrounds, made them walk the streets for money, and took them to local hotels and semi-vacant houses to meet customers. Jackson controlled the girls through drugs, alcohol, threats, and violence. He also manipulated them by making them feel like he loved and cared about them when they felt that no one else did. The teens, whose identities are protected, were in 8th, 9th, and 10th grades at the time. In delivering the sentence today, the judge stated, “We have three young girls, who will become young women, who were significantly harmed by what he was doing” but yet Jackson “has not accepted any responsibility for this. None.” The judge remarked that the victims were “stripped of innocence and decency that these girls were entitled to have.”
“Protecting children is a top priority in our district, and those who prey on children will be prosecuted to the fullest extent of the law. I am pleased local, state, and federal authorities are working together effectively to locate and stop sex traffickers,” said U.S. Attorney Patrick A. Miles, Jr.
“Fighting to prevent the sexual exploitation of children is of the highest priority for local, state, and federal authorities, as reflected in the efforts of the FBI’s West Michigan-Based Child Exploitation Task Force,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “While no sentencing can ever fully repair the damage caused by crimes like this, Mr. Jackson’s punishment demonstrates the relentless fortitude of law enforcement to protect our children and bring those who prey upon them to justice.”
The federal sex trafficking laws protect children all the way to age 18 from being pimped for sex. Regular citizens – especially in schools, restaurants, convenience stores, and hotels – are in the best position to recognize when a child could be at risk of sex trafficking. While kids of
every type of background can be lured into prostitution, some warning factors for child sex trafficking include:• recent friendship or attention between a teenager and an older adult who may drive the teen places or provide a place to stay overnight;
• lack of organized afterschool and summer activities and supervision;
• running away (not necessarily overnight);
• suicidal/depressed;
• tension and fighting at home;
• unexplained new cash flow – including new clothing, nails, and hair styles (for girls) generally outside the teen’s financial reach;
• new cell phone not purchased by parent/guardian;
• checking in at a hotel with no luggage or sneaking into a hotel through a side door;
• drug/alcohol dependency; and
• low self-esteem.
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; the Internet Crimes Against Children task force (ICAC); and 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 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 www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement.
The FBI, in conjunction with the West Michigan Based Child Exploitation Task Force (WEBCHEX), the Grand Rapids Police Department, and the Muskegon Police Department investigated the case. Assistant U.S. Attorneys Tessa K. Hessmiller and Russell A. Kavalhuna prosecuted the case.
END
Lansing Fugitive and Wife ArrestedRead the Press Release
GRAND RAPIDS, MICHIGAN – Patrick A. Miles, Jr., United States Attorney for the Western District of Michigan, and Paul M. Abbate, Special Agent in Charge of the FBI in Michigan, announced the arrest of a Lansing fugitive and his wife. Eric Lopez, age 40, of Lansing, was arrested by the FBI as he left City Hall in Lansing on September 9, 2014. The FBI was assisted in its fugitive investigation by the Tri-County Metro Narcotics Squad. Eric Lopez had been indicted by a federal grand jury in Grand Rapids on April 16, 2014, together with co-defendants Jose Alvarez, Rudy Gelista, Nickey Joe Duprest, and Eddie Ramirez, on a charge of conspiracy to distribute cocaine and marijuana, and had avoided apprehension since that time. His wife, Christina Lopez, age 39, was also arrested. She has been charged with making false statements to the FBI, and for being an accessory after the fact to her husband’s drug charge by assisting him in avoiding apprehension. Eric Lopez has been ordered detained without bond pending trial with co-defendant Duprest, who has pled not guilty. The remaining co-defendants have all pled guilty. Christina Lopez was released on bond pending trial on her charges.
These indictments and convictions were the result of an ongoing Drug Task Force investigation in the Lansing, Michigan, area led by the FBI and the Tri-County Metro Narcotics Squad. The case is being prosecuted by Assistant U.S. Attorney John Bruha.
The charges are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law..
END
Armed Bank Robbery of Kalamazoo Credit Union Nets Nearly A Decade in Prison for South Bend, Indiana ManRead the Press Release
Dennis Love also must pay restitution of $18,605 to four victim banks and credit unions.
GRAND RAPIDS, MICHIGAN — U.S. Chief District Judge Paul L. Maloney sentenced Dennis Love, 60, of South Bend, Indiana to 9 ½ years’ (114 months) confinement - 30 months’ confinement for the April 26, 2013 armed credit union robbery of Consumers Credit Union in Kalamazoo, to be served consecutively to 84 months’ confinement for brandishing a firearm during that same robbery, U.S. Attorney Patrick Miles, Jr. announced today. The convictions arise from an Indictment that charged four robberies that occurred in 2013: the Consumers Credit Union in Kalamazoo, the Southern Michigan Bank and Trust in Tekonsha, the Honor Credit Union in Berrien Springs, and the PNC Bank in Martin, Michigan.
Chief Judge Maloney also ordered Love to pay a total of $18,605 in restitution to the four banks involved, broken down by the loss amount from the robbery at each institution. Additionally, Love was sentenced to serve four years of supervised release on each of Counts One and Two of the indictment, to be served concurrently.
U.S. Attorney Miles praised the cooperation between federal, state, and local investigators in locating and prosecuting this serial bank robber. “Armed bank robbery while brandishing a firearm places bank employees in understandable fear for their lives. We will not tolerate this sort of offense in Western Michigan. The judgment handed down by Chief Judge Maloney appropriately recognizes the serious impact of armed bank robbery and brandishing on bank employees, customers, area financial institutions, and the community.”
“The investigation, arrest, and sentencing of Mr. Love for his acts of violence is the result of a coordinated effort between local, state, and federal law enforcement authorities,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The message here is clear—those who commit these acts of violence will be relentlessly pursued at every level, and ultimately held accountable for their actions.”
This case was prosecuted by Assistant U.S. Attorney Clay M. West and jointly investigated by the Federal Bureau of Investigation, Berrien Springs-Oronoko Township Police, Berrien County Sheriff’s Office, Kalamazoo County Sheriff’s Office, Calhoun County Sheriff’s Office, Allegan County Sheriff’s Office, and Michigan State Police.
END
Susan B. Anthony Voting Trial ReenactedRead the Press Release
GRAND RAPIDS, MICHIGAN – In commemoration of Women’s Equality Day, the United States Attorney’s Office for the Western District of Michigan, along with the Federal Bar Association, hosted a reenactment of the 1873 Susan B. Anthony criminal trial today at the Gerald R. Ford Federal Court Building in downtown Grand Rapids, Michigan.
In full period costume, Susan B. Anthony was played by Federal District Court Judge Janet T. Neff, and Federal Magistrate Hugh W. Brenneman, Jr. played the trial judge. Lawyers from the U.S. Attorney’s Office played the prosecutor, defense attorney, and witnesses. U.S. Attorney Patrick Miles appeared as Frederick Douglass, a supporter of Susan B. Anthony and women’s suffrage. The first fourteen men who came to attend the program as spectators were surprised to receive jury summons papers with instructions to sit as the all-male jury.
Susan B. Anthony was arrested for voting in Rochester, New York, in the U.S. Presidential election on November 5, 1872. Her trial took place on June 17, 1873, in Canandaigua Courthouse, New York. The trial reenactment held today followed a historically accurate transcript of the actual criminal trial. At the trial’s conclusion, the judge instructed the jury to convict Susan B. Anthony, ordering, “Upon this evidence I suppose there is no question for the jury and that the jury should be directed to find a verdict of guilty.” Susan B. Anthony responded emphatically to the verdict, arguing, “In your ordered verdict of guilty, you have trampled underfoot every vital principle of our government. My natural rights, my civil rights, my political rights, my judicial rights, are all alike ignored.” The legal right for American women to vote was not obtained until 1920, after Susan B. Anthony’s death, with the ratification of the 19th Amendment to the U.S. Constitution.
The program was developed as a project of the United States Attorney’s Office Special Emphasis Program Committee whose mission is to develop and conduct programs, including commemorative observances, which increase understanding within federal offices of the special issues that can affect employees who are minorities, women, U.S. military veterans, and persons with disabilities.
END
Lansing Area Doctor Sentenced to Prison for Accepting Kickbacks for Medical Referrals and Not Reporting Cash Income from Signing Medical Marijuana CertificationsRead the Press Release
Dr. Shannon Wiggins also ordered to forfeit her two medical offices, a 2009 Jaguar, and a 2006 Cadillac Escalade.
GRAND RAPIDS, MICHIGAN – United States District Judge Robert Holmes Bell sentenced Dr. Shannon Wiggins, 45, of Okemos, Michigan to two years of imprisonment on charges of receipt of health care kickback payments and falsifying an income tax return, U.S. Attorney Patrick A. Miles, Jr. announced today. The convictions arise from an Indictment which charged that between January 2004 and April 2011 Dr. Wiggins conspired with her husband, Mohamad Abduljaber, to receive kickbacks for referring patients for electrodiagnostic testing. Dr. Wiggins also admitted signing a false tax return which did not accurately disclose cash income that she earned from signing medical marijuana certifications. Abduljaber has entered guilty pleas to the same charges and awaits sentencing on October 2.
Judge Bell also ordered Dr. Wiggins to pay $285,781 in restitution to Medicaid and the IRS and to forfeit $550,000, including Dr. Wiggins’s former medical offices at 4415 Grand River Ave. and 2310 E. Michigan Ave. in Lansing, a 2009 Jaguar, and a 2006 Cadillac Escalade. Judge Bell previously sentenced the physical therapist who paid the kickback payments, Chyawan Bansil, to 13 months of imprisonment for billing insurance companies for the same electrodiagnostic testing, which he admitted he never actually performed. The U.S. Attorney’s Office previously collected $350,000 in restitution for Blue Cross Blue Shield of Michigan, $2.25 million in monetary damages on behalf of Medicare, and $150,000 in forfeiture from Mr. Bansil.
The case against Dr. Wiggins resulted from a joint investigation conducted by the Lansing Police Department, IRS-Criminal Investigation, Blue Cross Blue Shield of Michigan, the U.S. Department of Health and Human Services Office of Inspector General, and the Michigan Attorney General’s Office. The kickback scheme was initially discovered by officers from the Lansing Police Department and personnel from Blue Cross and Blue Shield of Michigan who were investigating prescription drug diversion in Lansing, Michigan. After undercover Lansing police officers were referred for suspicious electrodiagnostic testing by Bansil at Dr. Wiggins’s office, federal investigators examined the medical records as well as the financial records of Mr. Bansil and confirmed that Bansil was billing for services that he did not perform. Investigators further determined that Bansil was paying Dr. Wiggins and Abduljaber illegal kickback payments to refer patients for the purported testing.
In its sentencing memorandum, the Government argued that such kickback payments caused Dr. Wiggins to increase her Medicare referrals for electrodiagnostic testing from 24 tests per year to more than 1,600 tests per year. Judge Bell noted that the country is in the midst of a “prescription drug epidemic” and emphasized that the receipt of kickback payments for referring medical tests is “unlawful and unprofessional.” As part of her sentence, Dr. Wiggins was also ordered to serve three years of supervised release following her incarceration. She will also be excluded from participating with Medicare and Medicaid for a minimum of five years.
“The payment and receipt of illegal kickbacks distorts the motives of health care professionals and causes unnecessary testing and expenses which increases everyone’s costs,” U.S. Attorney Miles said. This office will continue to pursue criminal and civil proceedings, employ the resources of our law enforcement and private insurance partners, and protect the public against fraud. “Medical practitioners who exploit patients and public or private health care insurance providers for unlawful and selfish financial gain face significant criminal charges and civil remedies. As this case demonstrates, those who attempt to defraud the system through illegal kickback arrangements will suffer the specter of incarceration, treble damages, civil penalties, forfeiture, and future exclusion from participating with Medicare and Medicaid.”
“Paying or receiving kickbacks in exchange for the referral of Medicare or Medicaid patients is illegal,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The payment of kickbacks leads to overutilization, corruption of medical decision-making and increased program costs. Allegations of such conduct will be aggressively investigated by the OIG and our law enforcement partners to ensure that those who are unjustly enriched by these schemes are held accountable.”
“The fraud perpetuated by Shannon Wiggins and her husband, Mohamad Abduljaber, was rampant and clearly shows that they were driven by greed to use her medical license to dramatically increase their income, rather than to provide medical care to the community. IRS-CI will continue to work with our law enforcement partners to strike back at those who commit health care fraud,” said Acting Special Agent in Charge Jarod Koopman.
This case was prosecuted by Assistant U.S. Attorneys Raymond E. Beckering III and Adam Townshend and jointly investigated by the Lansing Police Department, Blue Cross Blue Shield of Michigan, HHS-OIG, IRS-CID, and the Michigan Attorney General’s Office.
END
Lansing Man Pleads Guilty in Federal Mortgage Fraud ProbeRead the Press Release
Richard Hollern Admits Participating in a Conspiracy to Commit Bank Fraud
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that Richard Hollern, 39, of Grand Ledge, Michigan pled guilty to a conspiracy to commit bank fraud in connection with his ownership in CDC Investments. The guilty plea occurred before U.S. District Judge Robert Holmes Bell today.
Hollern faces up to five years in prison. Sentencing in the case is scheduled for December 1, 2014.
Hollern admitted that he conspired with others at CDC, a Lansing real estate and investment company, to defraud banks in connection with mortgage loans. The fraudulent scheme enabled the perpetrators to use bank funds to enrich themselves as a result of sham real estate transactions. The felony conspiracy charge alleges that Hollern and his coconspirators at CDC defrauded mortgage lenders on 30 separate occasions resulting in losses of $2,325,000.
Hollern’s prosecution is the result of an investigation by the Mortgage Fraud Task Force, comprised of federal investigators including the FBI, U.S. Secret Service, the U. S. Postal Inspection Service and the HUD Office of Inspector General. The task force also includes the Lansing Police Department, investigators employed by the Michigan Attorney General’s Office and other state agencies. To date, eleven individuals have been convicted of mortgage fraud as part of this effort, resulting in prison sentences for all the defendants and restitution orders exceeding $14,000,000. Two additional individuals, Anthony Grundstrom and Brent Nolan have pled guilty and are awaiting sentencing.
U.S. Attorney Miles noted the cooperation among federal, state and local investigators participating in the Mortgage Fraud Task Force. He also emphasized that its work was not finished: "Mortgage fraud played a significant role in the financial crisis that brought much misery to Michigan citizens. My office will continue to vigorously pursue the perpetrators of these frauds so they will face the punishment they have earned."
END
Mattawan Man Sentenced to 30 Years in Federal Prison for Multiple Counts of Attempted Sexual Exploitation of A Child and Other Related ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN – James Alfred Beckman, Jr., 39, of Mattawan, Michigan was sentenced to 30 years in federal prison for multiple counts of Attempted Sexual Exploitation of a Child, Attempted Coercion and Enticement of a Child, and Receipt and Distribution of Child Pornography, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Janet T. Neff ordered Beckman to pay $32,480 in restitution to multiple victims, and Judge Neff imposed a lifetime term of supervised release that will commence once Beckman is released from imprisonment. Beckman will also be required to register as a sexual offender.
A jury returned guilty verdicts on these counts on March 11, 2014, after a two-week trial. The evidence presented at trial showed that the defendant sexually abused and exploited two young children during 2012. He streamed and attempted to stream live video of this abuse and exploitation to others. In exchange, he received child pornography and other things he deemed of value. The defendant’s conduct came to light when one of his victims disclosed the abuse to another adult. The Michigan State Police and the Federal Bureau of Investigation then launched an investigation. The investigation revealed a network of individuals trafficking in child pornography. Two of the defendant’s accomplices testified against him.
During the sentencing proceeding, Judge Neff stated that Beckman’s conduct was “about as serious as it gets,” and she stated that it would be difficult to imagine a more serious offense. She stated that on a scale from 1 to 10, this case was “way past 10.” U.S. Attorney Miles echoed these sentiments, stating, “The seriousness of Beckman’s crimes cannot be overstated. Preying upon children and exploiting them while also feeding the online demand for child pornography are extremely damaging to children and to our society. Protecting the vulnerable is a top priority of federal law enforcement. Child sex predators are being pursued relentlessly by local, state and federal authorities.”
“The perpetrator in this case, who egregiously exploited and sexually abused young children, is among the worst of the worst offenders” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Those who prey upon our children must know that state and federal authorities will be relentless in our efforts to protect and keep children safe, and will bring to bear the full weight of justice upon those who violate their innocence.”
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.
The Federal Bureau of Investigation (FBI) and the Michigan State Police (MSP) investigated the case. Assistant U.S. Attorneys Sean M. Lewis and Timothy P. Verhey prosecuted the case.
END
Former St. Joseph Man Sentenced to More Than 7 Years in Prison for Philippine Gold Scam and Failure to File Tax ReturnsRead the Press Release
Freeman Carl “Buck” Reed Defrauded Victims of $1.3 Million Pitching a Bogus Philippine Gold Investment and Failed to File Tax Returns for 10 Years
GRAND RAPIDS, MICHIGAN – Freeman Carl “Buck” Reed, 45, formerly of St. Joseph, Michigan, was sentenced to 87 months in federal prison for failing to file income tax returns and committing a fraud scheme involving gold bars he told investors were buried in the Philippines. He was ordered to pay $1.3 million in restitution to the fraud victims, and more than $500,000 in restitution to the Internal Revenue Service. The Honorable Janet T. Neff, U.S. District Judge, imposed the sentence.
U.S. Attorney Patrick Miles, Jr. said, “Reed’s failure to file tax returns or pay any taxes -- particularly in light of his extravagant lifestyle -- was an insult to decent, tax-paying citizens everywhere. The fraud he perpetrated was deplorable abuse of trust. This office will continue to vigorously prosecute those involved in these kinds of crimes.”Reed was convicted of failure to file tax returns following a jury trial in February 2014. At trial, the jury heard evidence that Reed had not filed any tax returns -- or paid any taxes -- for almost 10 years, despite making more than $1 million in just a three year period and living an extravagant lifestyle that included five luxury vehicles and an expensive house.
Shortly after the tax trial, Reed pled guilty to the Philippine gold fraud. He admitted that, after his direct-marketing business failed, he engaged in a scheme to defraud investors by soliciting money from investors to recover “Yamashita’s gold,” a legendary gold hoard supposedly left behind by Japanese soldiers when they were defeated by the U.S. Army at the end of World War II. Desperate for money, Reed told investors that he and a co-conspirator had located the gold and would use their money to finance the gold extraction costs. He told other investors that he had access to “gold certificates” supposedly worth millions of dollars. Reed was able to obtain $1.3 million in connection with the two schemes. Instead of using the investors’ money as promised, Reed admitted that he spent it on himself so that he could maintain his façade of wealth.
“Mr. Reed was not selling an investment; instead, he developed an elaborate hoax meant to enrich himself. The prosecution and sentencing of Mr. Reed, who diverted investor’s funds for his benefit and then intentionally failed to file income tax returns, is a fundamental element in maintaining public confidence in our tax system,” said IRS Acting Special Agent in Charge Jarod Koopman.
“For nearly a decade, Mr. Reed failed to file tax returns and defrauded investors of well over $1 million, all while lining his own packets and living an extravagant lifestyle”, stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The prosecution of Mr. Reed holds him accountable for his years of criminal conduct, and the FBI will continue to partner with the IRS to bring to justice those who commit these brazen financial crimes.”
The case was investigated by the FBI and IRS and prosecuted by Assistant U.S. Attorneys Clay Stiffler, Michael MacDonald, and Matthew Borgula.
END
West Michigan Businessman Sentenced to More Than 7 Years in Prison for Defrauding His Friends and Business AssociatesRead the Press Release
Roger Andrews Defrauded Victims of $1.4 Million Pitching a Bogus Land Deal in Indiana and Committed Perjury at Trial in an Attempt to Evade Justice
GRAND RAPIDS, MICHIGAN – Roger Lee Andrews, 54, of Coopersville, was sentenced to 87 months in federal prison for committing a fraud scheme involving real estate he claimed to own in Indiana. Additionally, Andrews was ordered to pay $1,493,870.77 in restitution to the victims of the scheme and was ordered to forfeit an additional $1,408,061.33 to the United States in the form of a money judgment. The Honorable Robert J. Jonker, U.S. District Judge, imposed the sentence.
U.S. Attorney Patrick Miles, Jr. said, “The fraud perpetrated by Roger Andrews represents a deplorable abuse of trust. Sadly, Andrews exploited his decades-long relationships with his victims to swindle them out of substantial amounts of money for his own benefit and enjoyment. This sentence holds Andrews accountable for his reprehensible conduct.”
Andrews was convicted of wire fraud following a jury trial in April 2014. At trial, the jury heard evidence that Andrews solicited money from friends, business acquaintances, and a bank for use in connection with investment property in Indiana. Andrews told his victims he had non-public “inside information” concerning the value of certain real estate in Indiana and needed funds to make capital improvements to the land to sell it at a substantial profit to the State of Indiana. In reality, Andrews never owned any property in Indiana, was never involved in any land deals in Indiana, and admitted forging documents that made it appear as though he had a contract to sell the property for more than $900,000.
“Mr. Andrews engaged in a longstanding financial fraud scheme, stealing money from friends and business acquaintances,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “When confronted at trial by his victims and evidence of his crimes, Mr. Andrews showed no remorse. The prison sentence and restitution ordered in this case holds Mr. Andrews accountable for his actions and brings justice to his victims. The FBI remains dedicated to aggressively pursuing perpetrators who commit these crimes.”
In sentencing Andrews to prison, the Court remarked that Andrews engaged in a “brazen” fraud scheme to take money from his friends over several years to gamble it away in the stock market. The Court rejected Andrews’ request for leniency and found that Andrews committed perjury while testifying at trial under oath. The Court noted that Andrews has shown “no remorse whatsoever” for perpetrating the fraud and found it “mind boggling” that Andrews has failed to apologize or explain to the victims how he actually spent their money.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorneys Christopher O’Connor and Clay Stiffler.
END
Former Radio Host John Balyo Pleads Guilty to Federal Child Exploitation ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN – Former local radio host John Richard Balyo, of Grand Rapids, pled guilty in federal court today to producing and possessing child pornography. As a result of his plea, Balyo faces a mandatory minimum sentence of 15 years in prison, up to a maximum of 50 years and must register as a sex offender. U.S. District Judge Robert Holmes Bell will determine the final sentence and the amount owed in restitution at a later hearing. His plea agreement requires his full cooperation in other federal, state, or county investigations. He also agreed to forfeit computers, photographic equipment, the contents of a storage unit, and material used to sexually abuse or exploit children.
John Balyo met up with another adult and a 12-year-old boy in Kalamazoo on April 19, 2014. Balyo rented a hotel room where he took sexually explicit photographs of the boy, including some involving bondage with the child in handcuffs. Balyo engaged in sexual conduct with the child and took photographs on both his cell phone and a camera. At the end, Balyo paid the child cash and left. He possessed these images and others on various devices, including a computer. Balyo was arrested by Calhoun County on June 20, 2014, where he still faces charges for criminal sexual conduct. Homeland Security Investigations (HSI) and Michigan State Police executed a search warrant at Balyo’s residence that same day and later searched a storage unit where they found additional material relating to child abuse and sexual exploitation. HSI and MSP later discovered that Balyo had concealed his computer and other belongings with an acquaintance shortly before his arrest. After seeing the news reports, that person turned over the property to police. The computer contained multiple photographs of child pornography, including the ones from the Kalamazoo hotel room on April 19.
“Individuals who prey upon children and create sexually graphic images will be found, and they will be prosecuted. The U.S. Attorney’s Office in West Michigan and our state and federal partners are dedicated to the protection of children. These child predators should know that taking a single illegal picture exploiting a child means at least 15 years in a federal prison. They could also forfeit the computers, cameras, and even the houses that are used to sexually exploit children. We are committed to securing restitution for the victims to pay for the cost of medical care, counseling, and potential loss of income,” said U.S. Attorney Patrick Miles, Jr.
“Child pornography creates a permanent record of a child being sexually exploited,” said Marlon Miller, special agent in charge of HSI Detroit. “These children are continually victimized every time those images are transmitted, downloaded, shared, or viewed. HSI will continue to work closely with the U.S. Attorney's Office and other law enforcement agencies to protect our children and aggressively pursue child predators.”
The investigation was conducted by HSI, in cooperation with the Michigan State Police ICAC, Battle Creek Police Department, Kalamazoo Department of Public Safety, and Kent County Sheriff’s Department. Assistant U.S. Attorney Tessa K. Hessmiller is prosecuting the federal case.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney's Office; county prosecutor's offices; the Michigan State Police Internet Crimes Against Children Task Force (ICAC); the West Michigan Based Child Exploitation Task Force (WEBCHEX); 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.
END
Kalamazoo Couple Sentenced to Prison for Tax CrimesRead the Press Release
GRAND RAPIDS, MICHIGAN – Helen C. Hale and her husband, David W. Leiter, both residents of Kalamazoo County, Michigan, were sentenced for tax crimes today by U.S. District Court Judge Judge Robert J. Jonker. U.S. Attorney Patrick Miles is joined in this announcement by Jarod Koopman, Special Agent in Charge- IRS Criminal Investigation.
Helen Hale was sentenced to 12 months and one day in prison followed by two years of supervised release for tax evasion. She was also ordered to pay $277,391.31 in restitution to the Internal Revenue Service. David Leiter was sentenced to three months in prison followed by one year of supervised release for failure to file a tax return. He was ordered to pay $105,689 in restitution to the Internal Revenue Service.
According to court records, Hale was self-employed as the owner of Kiddie Komfort Preschool and Daycare in Kalamazoo, Michigan. Hale failed to timely file Federal income tax returns for the years 2006 and 2008- 2012, despite having gross business receipts of $2,693,478. Hale did file a Federal income tax return for 2007 but failed to report approximately $380,165 in gross receipts that she received from her daycare business. In December 2013, Hale pled guilty to one count of income tax evasion.
According to court records, Leiter was self-employed as the owner of David Michael Studios, a hair salon in Kalamazoo, Michigan. Leiter failed to file Federal income tax returns for tax years 2009 through 2012, despite having gross business receipts of approximately $200,736. In December 2013, Leiter pled guilty to one count of failing to file an income tax return.
“Tax evasion is not a victimless crime,” said Special Agent in Charge (SAC) Jarod Koopman, IRS Criminal Investigation. “Individuals who corruptly violate the law to further their business interests and intentionally evade paying their fair share of taxes undermine public confidence in our tax system and unfairly disadvantage businesses that play by the rules. As Hale and Leiter have discovered, operating outside the law and failing to pay taxes has severe consequences.”
The IRS investigated the case. Assistant U.S. Attorney Rene Shekmer prosecuted it.
END
Former Upper Peninsula Resident Charged Federally for Sexual Abuse of A MinorRead the Press Release
MARQUETTE, MICHIGAN – U.S. Attorney Patrick Miles announced today that a federal grand jury has charged Tommy Alan Cain, 61, with five counts of Sexual Abuse by Threat, one count of Abusive Sexual Contact by Threat, and six counts of Sexual Abuse of a Minor. The indictment alleges Cain, formerly from Kincheloe, engaged in sexual acts with a minor victim over a four-year period beginning in 2007 on trust lands of the Sault Ste. Marie Tribe of Chippewa Indians. The Sexual Abuse by Threat counts each carry a maximum sentence of life. The remaining counts carry maximum sentences of three years and fifteen years, respectively.
Cain was arrested yesterday in Battle Creek. After his initial appearance in federal court, he was remanded to the custody of the U.S. Marshal pending a hearing next week on whether he should be released on bond or detained pending trial.
The charges are the result of an investigation conducted by the Sault Ste. Marie Tribal Police and the Marquette office of the Federal Bureau of Investigation (FBI). Assistant U.S. Attorney Hannah N. Bobee is prosecuting the case.
Investigation of this matter continues. Anyone with information regarding this investigation is encouraged to call the FBI or local law enforcement.
The charges in an indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
END
Dangerous Felon Gets Five Years for Possessing A FirearmRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that Jason Paul Arnold, age 32, formerly of Garden, Michigan, received five years in prison for being a convicted felon in possession of a firearm. Arnold was previously convicted by a jury after a one day trial in Grand Rapids on March 17, 2014.
The series of events that led to Arnold’s conviction began in January 2013, when Arnold threatened to start “World War Three” if Child Protective Services (CPS) workers removed his children from his custody. Arnold was temporarily detained by police when CPS did remove his children. While detained, Arnold attempted to commit suicide in a police vehicle. Arnold was involuntarily hospitalized following this suicide attempt. In March 2013, Arnold, who has an extensive adult criminal history that includes violent crimes, again attempted to commit suicide and was hospitalized. In early April, after his release from the hospital, Arnold obtained a Winchester .30-06 caliber rifle and affixed a scope to it. He also purchased five boxes of ammunition and shot most of this ammunition in target practice.
The Michigan State Police learned that Arnold might have obtained this high-powered rifle and questioned him. After Arnold admitted that he possessed the rifle, he was arrested. A search of Arnold’s house resulted in the discovery of the Winchester .30-06 rifle with a round in the chamber, a fully loaded magazine attached and a scope mounted on it. Additional rounds of ammunition were found along with the rifle. Arnold explained to police that he purchased the firearm simply to kill himself, which at a minimum didn’t explain the need for a high-powered rifle, scope and multiple rounds of ammunition.
At sentencing, U.S. District Judge Robert Holmes Bell recognized Arnold posed a danger to the public. He sentenced Arnold to five years in prison because Arnold was not simply going to commit suicide, but was preparing to harm others.
The Michigan State Police and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case. Assistant U.S. Attorney Maarten Vermaat prosecuted it.
END
Balyo Scheduled to Plead Guilty to Federal ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr. announced today that John Richard Balyo, 35, of Grand Rapids, is scheduled to plead guilty to federal charges related to child sexual exploitation. On July 23, 2014, the U.S. Attorney’s Office filed a two-count felony information. Count One charges Balyo with sexually exploiting a 12-year-old boy by using the child to create pornographic images. Count Two charges Balyo with possessing child pornography images. On July 24, 2014, a plea agreement was filed in the case. The plea agreement provides that Balyo will plead guilty to both counts of the felony information and agrees to forfeit computers, photographic equipment, and material used to sexually abuse or exploit children. In exchange, the U.S. Attorney’s Office will not seek additional charges from a federal grand jury. The arraignment and entry of the guilty plea is scheduled for July 29, 2014, at 10:00 a.m. before U.S. Magistrate Judge Ellen S. Carmody.
The plea agreement provides that Balyo will face a mandatory minimum sentence of 15 years and could be sentenced to a combined maximum sentence of 50 years. U.S. District Judge Robert Holmes Bell will determine the final sentence at a date to be scheduled.
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; the Michigan State Police Internet Crimes Against Children task force (ICAC); the West Michigan Based Child Exploitation Task Force (WEBCHEX); and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
The Homeland Security Investigations, in cooperation with the Michigan State Police ICAC, Battle Creek Police Department, Kalamazoo Department of Public Safety, and Kent County Sheriff’s Department investigated the case. Assistant U.S. Attorney Tessa K. Hessmiller is prosecuting the case.
Balyo has been scheduled to plead guilty but has not yet entered a guilty plea in court. The charges in the felony information are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
END
Van Buren County Man Sentenced for Selling Guns Without A LicenseRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that David Grant Rainey, age 66, was sentenced to two years supervised release, with one year to be served in home confinement following his felony conviction for selling firearms without a license. Rainey was also fined $4,000.00. U.S. District Judge Janet T. Neff, who presided over the case, also ordered the forfeiture of Rainey’s 71 firearms and some 94,000 rounds of ammunition. And now as a convicted felon, Rainey is also prohibited from possessing firearms.
Rainey pled guilty to this charge on April 10, 2014. Selling firearms without a license is punishable by up to five years’ imprisonment and a maximum fine of $250,000.
The case resulted from a joint undercover investigation by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Van Buren County Sheriff’s Office. On August 13, 2013, ATF agents executed a search warrant, with the assistance of the Van Buren County Sheriff’s Office at Rainey’s farm in Bangor, Michigan, seizing 71 firearms – both handguns and long guns – along with 93,770 rounds of various types of ammunition.
END
Peter Louis Meshigaud of Wilson, Michigan Sentenced to 60 Months for Domestic Assault – Habitual OffenderRead the Press Release
MARQUETTE, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr., announced that Peter Louis Meshigaud, 23, of Wilson, Michigan, was sentenced in U.S. District Court to 60 months’ imprisonment for domestic assault – habitual offender. As part of his sentence, Meshigaud was also ordered to pay restitution to the Hannahville Indian Community Housing Department in the amount of $1,164.75. When imposing his sentence, the Hon. R. Allan Edgar took into consideration the defendant’s extensive criminal history, which includes two prior domestic assaults, malicious destruction of property, and assault and battery. The Hon. R. Allan Edgar commented that Meshigaud’s conduct has failed to demonstrate any respect for the law.
On April 2, 2014, Meshigaud pleaded guilty to a federal indictment charging him with Domestic Assault-Habitual Offender. On October 19, 2013, Meshigaud, assaulted his live-together girlfriend. The assault occurred at their residence located on the Hannahville Indian Community reservation. During the course of the assault, Meshigaud punched his girlfriend in the face, back of the head, and body, causing injuries that required medical attention.
The Hannahville Indian Community Tribal Police and the FBI investigated the case. Assistant U.S. Attorney Hannah N. Bobee prosecuted the case.
END
Summertime Tips for Keeping Kids Safe from PredatorsRead the Press Release
GRAND RAPIDS, MICHIGAN –Children around the country are spending more time online and unsupervised. The U.S. Attorney’s Office for the Western District of Michigan, the FBI, and the Michigan State Police recommend that this is the ideal time to talk to kids about the dangers of online predators, sex trafficking, and other risks that arise for kids with additional free time and access to the internet during the summer months.
The U.S. Attorney office puts a high priority on aggressively prosecuting those who produce and distribute internet child pornography and exploit children sexually. Despite significant potential federal sentences – for example, five to 20 years in prison for receiving and distributing child pornography – pedophiles and child predators still use social media and the internet as their primary child pornography marketplace.
Child predators will find any way they can to contact kids, gain their trust, and exploit them. Summer poses a particular risk because children spend more time unsupervised. Now that smart phones put the internet directly into kids’ hands, it is much harder for parents to exert the kind of supervision they once had over the shared family computer or house landline telephone.
"The danger posed by online predators has the potential to pose real-life harm toward adolescent victims,” said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Those who attempt to exploit children online often use coercion, fear, and sometimes threats of violence to commit these crimes. As we enjoy the summer months, and our children spend more time outside of normal adult supervision, it is important for parents to remember that the children being victimized by online predators don’t live in some faraway place, outside of our everyday lives. Unfortunately, these are far too often our children—in our communities—and we must remain vigilant in our efforts to protect them from those who would do them harm."
Protecting Children from Online Predators:
Predators target children of every background. One in seven children reports receiving sexual solicitations online. Seventy percent of those are girls. Fifteen percent of teens ages 12-17 who own a cell phone say they have received sexually suggestive nude/semi-nude images of someone they know via text message. Four percent of teens ages 12-17 who own a cell phone admit to sending sexually suggestive nude/semi-nude images to others via text message. Parents should monitor children’s online activity closely, and although children feel that their online life is private, they need to know it is anything but and is more permanent than they think.
Some predators are in positions of trust and authority over kids, while others are strangers. Predators meet children on social media, chat rooms, and internet-based video games, among other places. All of these activities present opportunities for predators to gain children’s trust and groom them for eventual sexual conduct. Predators sometimes use a false identity, posing as other children or using a fake name to develop a friendship with a child. The predator may even establish social media accounts under that false identity to provide an additional sense of legitimacy. Predators often advance the relationship to text message or live video chat and encourage kids to send sexually explicit photos or videos. By that time, the child may have developed a certain level of trust in the offender that makes the child less likely to report the activity and more likely to keep the activity a secret at the request of the offender.
Here are a few internet safety tips to discuss with your children:
- Only “friend” and connect to people online that you know personally and delete those you do not know personally;
- Set social media security settings so that only confirmed friends and connections can see what you are posting;
- Never take a picture of yourself or write anything by text, email, or social media that you would not want everyone in the world to see;
- Immediately delete and never forward a picture of anyone doing something sexual;
- Choose screen names and usernames that are appropriate;
- Never post publicly or give anyone your phone number, email address, or home address unless you know them personally;
- Be aware that anyone you meet online may not be who they say they are; and
- Immediately tell a parent or trusted adult if you find yourself in an uncomfortable situation online, even if you are afraid that things have already gone too far.
Families may be in the best position to identify the warning signs of illicit computer use by adults and teens at home. Some warning signs include:
- an excessive amount of computer use, often when others are out of the house or sleeping;
- multiple computers, some of which are password protected or only used by one person in the home;
- peer-to-peer programs downloaded onto the desktop including Ares, Limewire, and others;
- cell phone security programs that hide a person’s photos from casual view by others;
- multiple email addresses, including one using false names;
- various USB thumb drives and external hard drives, especially if the person hides them or is reluctant to leave them unattended;
- lack of desire or motivation to seek employment or activities outside the house or away from the computer; and
- unfamiliar or inexplicable contacts stored on video chat programs such as Skype or Face Time.
It is important to note that not everyone involved in child pornography establishes in-person relationships with children, so families should not rule out possible child pornography trading just because a person does not interact with children in daily life. Anyone who suspects illicit computer use should report the activity to law enforcement for further investigation.
Protecting Children from Sex Trafficking:Not all predators rely on the internet. Even in West Michigan, sex trafficking and child exploitation exist.
Families, teachers, hotel workers, convenience store employees, and students are in the best position to identify potential child sex trafficking activity. While children of every background can be lured into prostitution, some warning signs of child sex trafficking include:
- lack of organized afterschool/summer activities and supervision;
- running away (not necessarily overnight);
- recent friendship/attention between a teenager and an older adult who may drive the teen places or provide a place to stay overnight;
- tension and fighting at home;
- new clothing, nails, and hair styles (for girls) generally outside the financial reach of a teen;
- new cell phone not purchased by parent/guardian;
- checking in at a hotel with no luggage or sneaking into a hotel through a side door;
- drug/alcohol dependency; and
- low self-esteem.
As part of the Innocence Lost Initiative – a collaboration among the National Center for Missing and Exploited Children, the FBI, and the Department of Justice – 3,100 child victims of sex trafficking were recovered nationwide from 2003 to 2013. The youngest was nine years old. In a 2013 national sting on child sex trafficking, Detroit ranked second-highest out of 76 cities in the number of child victims recovered.
Project Safe Childhood:
To address the growing concerns about child sexual exploitation in the digital age, the Department of Justice launched Project Safe Childhood in 2006. Project Safe Childhood expanded in 2011 to include sex trafficking of minors, crimes against children committed in Indian country, and failure to register as a sex offender.
The national initiative relies on partnerships with organizations including U.S. Attorneys’ Offices; federal investigative agencies; and state, local, tribal, and military law enforcement officials. Approximately 70 Internet Crimes Against Children (ICAC) Task Forces operate around the country for federal, state, and local law enforcement officers to collaborate in investigating online child exploitation.Under Project Safe Childhood, the U.S. Attorney’s Office for the Western District of Michigan prosecutes people who create, download, share, possess, and view child pornography. Federal sentences for these crimes are steep: up to 20 years for viewing and possessing child pornography, a mandatory minimum of 5 years and up to 20 years for downloading and sharing child pornography, and a mandatory minimum of 15 years and up to 30 years for producing child pornography. The penalties increase for each of those charges if the defendant has a prior sex offense conviction.
The U.S. Attorney’s Office for the Western District of Michigan also prosecutes those who seek to exploit children sexually by chatting online or arranging to meet children for sexual encounters. Federal sentences for those crimes are significant: 10 years to life for coercing or enticing a child for sex, 10 years to life for causing a child to travel out of state for sex, and up to 30 years for traveling to another state to have sex with a child. Defendants who traffic minors for prostitution face a mandatory minimum of 10 years and up to life in prison.
In 2013 and 2014, the U.S. Attorneys’ Office for the Western District of Michigan successfully prosecuted the following cases, among others under Project Safe Childhood:
- sex trafficking of three girls ages 14-16 in Grand Rapids;
- online enticement of a 12-year-old by a man in California;
- producing sexually explicit photos of a teenage boy (resulting in forfeiture of the defendant’s house);
- sexually abusing a 12-year-old girl on Indian territory;
- distribution and possession of over 44,000 files of child pornography by a formerly licensed counselor;
- streaming live video over the internet of children being sexually abused;
- downloading and possessing child pornography;
- receiving child pornography;
- cyber-stalking of students at Michigan State University and committing child pornography offenses; and
- viewing child pornography online.
The FBI has recently formed the West Michigan Based Child Exploitation Task Force (WEBCHEX), a collaborative effort between the FBI and state and local law enforcement partners to combat the sexual exploitation of children across West Michigan. This task force will primarily focus on investigations of child abductions, child sex trafficking, interstate travelers for sex with minors, and producers and distributors of child pornography. The participating agencies include the Michigan State Police, Grand Rapids Police Department, Ionia County Sheriff’s Office, Allegan County Sheriff’s Office, and Ottawa County Sheriff’s Office. The task force also has the support of the United States Attorney’s Office and will coordinate prosecutions between federal and state prosecutors.
How to Report Child Exploitation:
If you suspect illegal activity involving child exploitation, contact law enforcement immediately. If a child is in imminent danger, call 911. Other resources for reporting these crimes include:
- West Michigan Based Child Exploitation Task Force (WEBCHEX) at 616-456-5489;
- Homeland Security Investigations, Grand Rapids, at 616-235-3936 (x. 2215); and
- CyberTipline (National Center for Missing and Exploited Children).
To report a child missing and gain immediate assistance in launching a campaign to locate the child, or if you think you have seen a missing child, call:
- 1-800-THE-LOST (1-800-843-5678).
END
Guilty Plea in $2.9 Million Stolen Identity Tax ScamRead the Press Release
Grand Rapids businessman admits forging endorsements on $750,000 of US Treasury Checks
GRAND RAPIDS, MICHIGAN – Mateo Velasquez-Garcia, of Grand Rapids, Michigan, pled guilty to one count of Forgery of U.S. Treasury Checks and one count of Illegal Re-entry by an Alien, U.S. Attorney Patrick A. Miles, Jr. announced today. Velasquez-Garcia operated a grocery store located at 1814 S. Division Avenue, Grand Rapids, Michigan. An investigation revealed that $2.9 million dollars’ worth of fraudulently obtained federal tax refund checks were deposited into the bank account for the Tienda La Nueva Esperanza grocery store during the years 2011 to 2012. Velasquez-Garcia admitted to federal agents that he personally placed false endorsements on the back of 115 of the United States Treasury checks, which were payable to third parties. U.S. Attorney Miles was joined in the announcement by Acting Special Agent in Charge Carolyn Weber, Internal Revenue Service Criminal Investigation and Special Agent in Charge Marlon V. Miller of Homeland Security.
Velasquez-Garcia is also an alien. He was previously removed from the U.S. and has been found to be in the U.S. without the proper consent of the Attorney General or the Secretary of Homeland Security.
The maximum penalty for forging U.S. Treasury checks is imprisonment of not more than ten years and a $250,000 fine. The maximum penalty for illegal re-entry by an alien is not more than two years and a $250,000 fine.
The investigation of this case was conducted by Special Agents of the Homeland Security Investigation and IRS Criminal Investigation.
END
Michigan Man Sentenced to 40 Years for Sexting with Teenage GirlRead the Press Release
GRAND RAPIDS, MICHIGAN – Derik Eugene Rothrock, 35, of Sturgis, Michigan, who pled guilty in federal court in March to receiving sexually explicit cell phone photos of a 15-year-old West Michigan girl, was sentenced on July 14 to a term of imprisonment of 40 years followed by a lifetime of supervised release, U.S. Attorney Patrick A. Miles, Jr. announced today. In exchange for his guilty plea, the U.S. Attorney’s Office dismissed four counts of enticing three children to produce child pornography of themselves using their cell phones, and one count of possessing child pornography.
The federal penalty for receiving child pornography is usually a mandatory minimum of five years’ imprisonment and a maximum of 20. However, Rothrock faced an enhanced sentence of 15 to 40 years because he has a prior conviction for Criminal Sexual Conduct, Second Degree (Person under 13) in the 15th Circuit Court in Coldwater, Michigan. Shortly after his release from state prison on that offense, he violated parole by having inappropriate contact with children, including a sexual relationship, for which he was returned to prison. In July 2013, he met three West Michigan girls – ages 12, 14, and 15 – over a long weekend, sexually abused two of them, and convinced all of them to send him sexually explicit photos of themselves over text messages. Rothrock, then 34 years old, used a fake name and Facebook page with all three victims and told them he was either 19 or 21 years old.
In pronouncing the sentence, U.S. District Judge Janet T. Neff stated that Rothrock’s “life has been out of control pretty much his entire life,” and “the longer we can keep him away from society, and young girls in particular, the better.” In denying Rothrock’s request for a below-guideline sentence based on his own history of being sexually abused as a child, the judge emphasized the need for individualized deterrence. “In terms of receipt of child pornography cases being scaled from 1-10, this one is a 10 or more. I do not think I have seen a receipt of child pornography case more serious than this one,” explained the judge.
U.S. Attorney Miles said, “We are pleased Mr. Rothrock can no longer prey on vulnerable children, kill their innocence, and steal more childhoods. This U.S. Attorney’s Office is committed to aggressively fighting child predators who use technology and social media for evil.”
The case was jointly investigated by the Township of Kalamazoo Police Department, Michigan State Police, Federal Bureau of Investigation, Kalamazoo County Prosecutor’s Office, and the U.S. Attorney’s Office. Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the case.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney's Office; county prosecutor's offices; the Internet Crimes Against Children task force (ICAC); the West Michigan Based Child Exploitation Task Force (WEBCHEX); 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
END
Two Members of Holland Latin Kings Convicted of RacketeeringRead the Press Release
Conviction Follows Ten-Day Jury Trial
GRAND RAPIDS, MICHIGAN – A federal jury convicted David Casillas and Antonio Rios, both of Holland, Michigan, of racketeering and cocaine conspiracies today. Both defendants were charged, along with 29 other defendants, with conspiracy to engage in racketeering activity (“RICO”) for their roles in a violent, drug-trafficking street gang known as the Holland Latin Kings. The jury found sufficient proof the racketeering activity of both defendants involved at least 5 kilograms of cocaine; but the jury found insufficient proof that Rios committed two assaults with intent to murder that were not alleged against Casillas. The other count of conviction related to a separate conspiracy to distribute more than five kilograms of cocaine. Defendant Rios was acquitted of a separate marijuana conspiracy charge. Each defendant faces a maximum sentence of life imprisonment, with a mandatory minimum sentence of ten years in prison. Sentencing is scheduled for October 14, 2014.
The case resulted from a two-year grand jury investigation. The U.S. Attorney’s Office for the Western District of Michigan was assisted in the investigation by the Holland Police Department; the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); the Ottawa County Prosecutor’s Office; the Ottawa County Sheriff’s Department; the Michigan State Police; the West Michigan Enforcement Team (WEMET); the Michigan Department of Corrections; and the Kerr County, Texas, Sheriff’s Department. The other 29 defendants had already pled guilty to their roles in the racketeering conspiracy.
U.S. Attorney for the Western District of Michigan Patrick Miles, Jr. remarked, “The successful federal prosecutions of the 31 defendants associated with the Holland Latin Kings is the result of an effective collaboration among a variety of local and federal law enforcement and prosecution agencies. Working together we achieved a positive result for the Holland community.”
ATF Special Agent in Charge Steven J. Bogdalek said, “These guilty convictions show that collaborative law enforcement partnerships work in targeting violent gangs and have an impact on reducing violent crime. ATF is always honored to work with the Holland Police Department, WEMET/MSP, Ottawa County Sheriff’s Office, Michigan Department of Corrections and the Kerr County Texas Sheriff’s Office.”
Holland Police Chief Matt Messer noted “We are pleased with outcome of this lengthy investigation that has had a substantial positive impact on the Holland area and has solved crimes reaching back over the last three decades. And we appreciate the local and federal collaboration on this case that resulted in the successful prosecution of 31 high ranking members of the Latin Kings gang.”
Ottawa County Sheriff Gary Rosema added that “The Ottawa County Sheriff’s Office is also very pleased with the outcome of this investigation and the verdict that has been rendered as it relates to Luis Rios and David Casillas. We are hoping that our communities understand and appreciate the priority that has been placed on this investigation and prosecution, as this is important in making our communities a safe place to live and visit.”
This case was prosecuted by Assistant U.S. Attorneys Russell A. Kavalhuna and Phillip J. Green.
END
James Ortman of Maple Rapids Sentenced to Prison for Submitting False Claims to the Federal GovernmentRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr., announced today that James Francis Ortman, 58, of Maple Rapids, Michigan, was sentenced in U.S. District Court to 24 months’ imprisonment for submitting false claims to the U.S. Department of Housing and Urban Development (HUD). As part of his sentence, Ortman was also ordered to pay restitution to HUD in the amount of $235,412.00. When imposing his sentence, the Hon. Janet T. Neff commented that “these kinds of crimes really are corrosive to our trust and our faith in our government.”
“When used appropriately, HUD grants encourage development and new job opportunities in our local communities,” said U.S. Attorney Miles. “This office will vigorously pursue those who seek to line their own pockets by diverting from their intended purpose scarce grant monies that are funded by the hard-working taxpayers of this district.”
Ortman’s false claims related to grants that were administered by the City of St. Johns and the Michigan State Housing Development Authority (MSHDA), and ultimately funded by HUD. Ortman received the grants to improve the facades of various buildings that he owned in downtown St. Johns and to construct apartments for income-qualified individuals. In order to receive the full amount of the grants, Ortman submitted false invoices and other documents making it appear as if he spent more money on the projects than he actually did. This allowed him to divert grant monies to his various business interests, instead of spending the money on the intended purposes of the grants.
Mr. Barry McLaughlin, Special Agent in Charge, HUD-OIG, stated that his agency has “redoubled our efforts at combatting fraud within grant programs intended to justly benefit the people of Michigan. Mr. Ortman’s sentencing signals the start of our initiative to reduce this growing crime.”
“Theft of HUD grant funding amounts to stealing from hard-working taxpayers,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, in concert with our law enforcement partners, remains dedicated to pursuing those who selfishly misappropriate public funds intended for the public good.”
The Detroit office of the U.S. Department of Housing and Urban Development-Office of Inspector General, along with the Lansing office of the FBI, investigated the case. The prosecution of the case is being handled by Assistant U.S. Attorney Ronald M. Stella.
END
U.S. Attorney’s Office Issues Annual ReportRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney for the Western District of Michigan Patrick Miles announced to the media today the publication of his office’s annual report on the prior year, dubbed the “Year in Review.” Overcoming notable budgetary challenges in 2013 due to the sequester and lapse in budget appropriations commonly known as the federal government shut-down, U.S. Attorney Miles emphasized that “[t]he mission of serving the public and justice is foremost in the minds and hearts of those working in the U.S. Attorney’s Office.” The report is on the office’s website at www.justice.gov/usao/miw/about/Year_In_Review.pdf.
U.S. Attorney Miles’s report documents his office’s efforts to engage the community, prosecute complex crimes, protect the public, reduce crime and recidivism, and work with local law enforcement to deploy federal resources where they have the most impact. In particular, the report notes the office’s higher than average prosecution of financial crimes, successful child pornography prosecutions, and violent crime reduction strategy. Along with his continued participation in many pre-existing state-wide initiatives, U.S. Attorney Miles met with and spoke to numerous local organizations and representatives during the year, helped launch an Advocates and Leaders for Police and Community Trust (ALPACT) group in Benton Harbor, and organized a Drug Diversion and Addiction Summit along with Barb McQuade, the Eastern District of Michigan U.S. Attorney.
Notable criminal prosecutions included: the conviction after trial and 55 year prison sentence of Gerald Singer for his arson for profit scheme; the health care fraud criminal conviction of Babuhai Rathod and related million-dollar civil settlement, of which $900,000 went to criminal restitution; the conviction of Marcus Thames and others in the so-called “Felony Lane” identity theft ring; and the conviction of Michael Allen for illegally selling Roderick Dantzler the firearm Dantzler later used to murder seven people, including two children, in a 2011 Grand Rapids killing spree.
Among many accomplishments in civil litigation, the office secured a $2 million settlement with LG Chem for its false bills to the Department of Energy related to Recovery Act grant funds to manufacture lithium-ion batteries.
Highlights also included multiple national and local awards. Assistant U.S. Attorneys (AUSAs) Michael MacDonald and Christopher O’Connor received national recognition in the form of a Director’s Award for their efforts successfully prosecuting Gerald Singer. Kathy Schuette, a Victim-Witness Coordinator, likewise received national recognition for her work in the successful prosecution of Steven Deuman for the murder of his infant daughter. U.S. Attorney Miles personally received a Frederick Douglass award for his service to the Grand Rapids community and a Patriot Award for his hiring of U.S. veterans and supporting Guard and Reserve military service obligations of his employees. Former Interim U.S. Attorney and now retired AUSA Donald Davis received awards for his public service career and for his contributions to the professional development of lawyers in the district.
END
Former Grandville Man Pleads Guilty to Filing A False Tax ReturnRead the Press Release
GRAND RAPIDS, MICHIGAN – Jeffrey Richter, formerly of Grandville, Michigan, pleaded guilty to filing a false federal income tax return for 2007, U.S. Attorney Patrick J. Miles, Jr. announced today. U.S. Attorney Miles was joined in the announcement by Acting Special Agent in Charge Carolyn Weber, Internal Revenue Service Criminal Investigation Division.
According to court records, during 2007 through 2011 tax years, Richter failed to accurately report all of his income. During 2007, Richter underreported his income by more than $253,000. In total for the years 2007 through 2011, Richter underreported his income by $995,436.07. In addition, Richter failed to pay approximately $372,000 in tax due and owing to the Internal Revenue Service.
Richter entered the guilty plea in U.S. District Court in Grand Rapids before Judge Robert Holmes Bell. Judge Bell scheduled a sentencing hearing for September 10, 2014. Richter faces up to three years in prison, restitution of the tax due and owing, and a fine of not more than $250,000.
The case was investigated by special agents of the Internal Revenue Service Criminal Investigation, and prosecuted by Assistant U.S. Attorney B. Rene Shekmer.
END
Battle Creek Man Pleads Guilty to Federal Firearms ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr. announced today that Vincent Isaac-Peter Jones, age 28, of Battle Creek, pled guilty before U.S. District Judge Robert Holmes Bell to possessing two pistols as a convicted felon and possessing a third pistol in furtherance of heroin trafficking. Jones faces penalties of up to ten years in prison for the former offense and up to life in prison for the drug-related crime.
On January 28, 2014, Jones engaged the Battle Creek Police Department in a high-speed chase, which ended when his vehicle crashed into a snow bank. After a foot pursuit, he was apprehended and found to be carrying two loaded .45 caliber pistols. On February 19, 2014, after bonding out on state charges related to these offenses, Jones was again encountered by the Battle Creek Police Department and found in possession of a loaded .40 caliber pistol, $1,200 in cash, and heroin intended for sale.
In March 2014, Jones was indicted by a federal grand jury for possessing the .45 caliber pistols as a convicted felon and possessing the .40 caliber pistol in furtherance of drug dealing. Jones pled guilty to these charges. He was also charged with possessing heroin with intent to sell it in April 2013 and July 2013 and with possessing a fourth handgun in August 2013, but, in accordance with a plea agreement, these other charges will be dismissed at sentencing. Three of the four firearms had been reported stolen.
This case resulted from a coordinated investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Battle Creek Police Department’s Gang Suppression Unit and Special Investigations Unit.
U.S. Attorney Miles said, “Drugs and stolen guns are a toxic mix, which is only made worse when they are possessed by convicted felons. Battle Creek and West Michigan neighborhoods are safer after eliminating these guns and drugs.”
Sentencing has been scheduled for October 1, 2014. This case is being prosecuted by Assistant U.S. Attorney Russ Kavalhuna.
END