Western District of Michigan
Press releases recorded for this federal judicial district.
Federally-Sponsored Statewide Rapid Response Training to Be Held in Grand RapidsRead the Press Release
GRAND RAPIDS, MICHIGAN – The U.S. Attorney’s Offices for the Eastern and Western Districts of Michigan, along with the Federal Bureau of Investigation (FBI) and the Grand Rapids Public Schools, will be hosting Advanced Law Enforcement Rapid Response Training (ALERRT) next week. The training will be held at Pine School in Grand Rapids from July 15-18, 2013. The training is presented by Texas State University through funding by a number of government sources and is offered at no cost to participants. The training offered in Grand Rapids is a partnership between the FBI, the Bureau of Justice Assistance, VALOR, Texas State University and the United States Attorney Offices in Eastern and Western Michigan. The Advanced Law Enforcement Rapid Response Training Center at Texas State University has partnered with the FBI to deliver this vital active shooter training across the nation. ALERRT has trained more than 45,000 officers in the United States since 2002 through federal and state funding.
This training lasts two days and involves both classroom work and practical exercises. The first session is for Law Enforcement Departments from the Eastern District of Michigan and it will be held July 15-16, 2013. The second session is for Law Enforcement Departments from the Western District of Michigan and will be held July 17-18, 2013. Each session will have approximately 30 officers from 20 departments, allowing about 60 officers from over 40 departments to be trained over the four day period. The United States Attorney Offices and the FBI are particularly grateful to the Grand Rapids Public Schools for allowing the use of Pine Elementary School for this important training.
The U.S. Attorney for the Western District of Michigan, Patrick A. Miles, Jr., stated “Unfortunately no community is immune from a potential active shooter situation. This training in Grand Rapids is so law enforcement is ready if it does.”
Robert D. Foley III, Special Agent in Charge of the FBI Detroit Field Office added, “The FBI is proud to partner with the U.S. Attorney Offices in the Eastern and Western Districts along with other agencies to offer this valuable training designed to save lives during active shooter situations. The F.B.I. is committed to ensuring the safety of citizens and protecting our communities.”
Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan stated, “This training will better equip officers in Michigan to respond to an active shooter situation, which we have seen can occur at any time or any place.”
Larry Johnson, Assistant Superintendent and Executive Director of Public Safety for Grand Rapids Public Schools said, "As a district, we are committed to comprehensive, ongoing training and emergency preparedness to ensure our professional staff are well equipped to handle the most difficult situations. It is truly an honor for us to partner with the U.S. Attorney's Offices and the FBI on this important training by making one of our schools available and to having some of our staff members participate."
If the media is interested in receiving additional information regarding this training, please contact Kaye Hooker at 616-560-6512. There will be an opportunity for the media to meet with instructors, learn about the training and take some still shots on Thursday, July 18, 2013 at 12:30 p.m.
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Final Defendant Sentenced in Operation Holiday ExpressRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr. announced today that Samuel Aaron Collins of Gardena, California was sentenced by Chief U.S. District Judge Paul L. Malone to 11 years in prison for his participation in a cocaine conspiracy that trafficked thousands of kilograms of cocaine from California to Michigan for over a decade. Collins and eleven other co-conspirators were indicted by a Grand Jury in the Western District of Michigan on December 1, 2009. When law enforcement executed arrest warrants in California on December 2, 2009, Collins fled. Collins remained a fugitive from justice until a fugitive task force under the U.S. Marshals Service apprehended him in Aurora, Colorado in November 2012. On February 8, 2013, Collins pled guilty to three counts of using a telephone to facilitate the cocaine conspiracy. Each count carried a statutory maximum of four years imprisonment.
Collins, along with his childhood friend, drug kingpin Charles Jackson, Sr., began trafficking cocaine from California to Michigan in the mid-1990s. The two men were indicted in the Eastern District of Michigan in 1998. Collins pled guilty to interstate travel in aid of racketeering (“ITAR”) and served a five year prison sentence. Jackson, Sr. successfully eluded law enforcement for over a decade and remained a fugitive on the Eastern District of Michigan indictment. After Collins completed his ITAR sentence in 2004, he resumed cocaine trafficking with Jackson, Sr. Collins’ primary role was to manage the multiple couriers that transported the cocaine from California to Michigan, test the quality of the cocaine, prepare the cocaine for cross-country shipment, and drop off and pick up drug proceeds and transport vehicles on Jackson, Sr.’s behalf. Jackson, Sr. ultimately surrendered to law enforcement in 2010, after being indicted in the Western District of Michigan. Thereafter, he pled guilty to cocaine conspiracy and money laundering conspiracy charges and is presently serving a 27 year prison term.
Collins’ sentence marks the culmination of the Organized Crime and Drug Enforcement Task Force (“OCDETF”) investigation “Operation Holiday Express.” The investigation was led by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and the Lansing Police Department. The investigation began with the bust of a street-level crack cocaine dealer in Lansing, Michigan in 2004. From there, investigators followed the drug and money trail to a Lansing street gang known as AHH DEE AHH, which was responsible for trafficking large quantities of cocaine, heroin, and marijuana between Detroit and Lansing from 2001 to 2006. Federal prosecution of AHH DEE AHH began in 2005, and resulted in the conviction of 27 members and associates. Investigators next identified AHH DEE AHH’s Detroit-based cocaine suppliers, who were prosecuted in 2007. The investigation turned westward in 2008 and resulted in the identification and prosecution of members and associates of two California-based drug trafficking organizations that supplied the cocaine being peddled in Detroit and Lansing. Charles Jackson, Sr. led one of these drug trafficking organizations with the assistance of Samuel Aaron Collins. The investigation revealed that over $176,000,000 of drug proceeds were generated by these two organizations. Including Collins, over forty defendants have been charged, convicted, and sentenced as a result of this investigation.
U.S. Attorney Miles praised the tenacity and dedication of the ATF and the Lansing Police Department. “The ATF, the Lansing Police Department, and the United States Attorney’s Office have worked hand-in-glove on this investigation for nearly a decade. Based on investigators’ dogged efforts, what began as the bust of a street-level crack cocaine dealer resulted in the prosecution and dismantlement of two drug trafficking organizations responsible for transporting thousands of kilograms of cocaine from California to Michigan for further redistribution throughout the Eastern and Western Districts of Michigan.” U.S. Attorney Miles also recognized the efforts of the U.S. Marshals Service in apprehending Collins, who remained a fugitive for nearly three years. “Those that decide to flee from justice should know that their day is coming. Ultimately, such individuals will be caught by the agency that investigated the case or by the U.S. Marshals Service.”
ATF Acting Special Agent in Charge Daryl McCrary commented: “This investigation is an example of ATF’s commitment and determination in making our communities safe. ATF’s Frontline strategy is our business model that addresses violent gun and narcotics trafficking crime. These accomplishments could not have been achieved without the collaboration and hard work of ATF, Lansing Police Department, and the United States Attorney’s Office.”
Lansing Police Chief Michael Yankowski stated: “The City of Lansing is highly appreciate of the partnerships it has established with the U.S. Attorney’s Office and the ATF. Only through this strong collaboration was it possible to dismantle such a large drug operation that crossed several states and required a multi-agency investigation. The City of Lansing and the country have benefitted greatly as a result of the elimination of these two drug trafficking organizations that terrorized our citizens with agony, gloom, and violent crime through the sale of narcotics. The City of Lansing, with the highest level of gratitude, thanks the U.S. Attorney’s Office for their tenacious, meticulous, and successful prosecution of these cases.”
Operation Holiday Express was prosecuted by Assistant U.S. Attorney Joel Fauson and former Assistant U.S. Attorney Brian Lennon.
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Grand Rapids Man Pleads Guilty to Transferring Firearm Used to Kill Seven PeopleRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that Michael James Allen, a 35-year-old Grand Rapids resident, pled guilty to transferring a Glock 9mm semiautomatic pistol to Roderic Dantzler, knowing that Dantzler was a convicted felon and prohibited by law from possessing a firearm. Dantzler used that firearm on July 7, 2011, to kill seven people in Grand Rapids, including two children; he then led police on a high-speed chase through highly-populated areas of Grand Rapids; and he used the pistol to take three hostages and to shoot at pursuing officers before using the gun to commit suicide.
Allen, himself a multi-convicted felon, faces up to ten years’ imprisonment. Federal law prohibits the transfer of a firearm to another person if the transferor either knows or has reasonable cause to believe the person has previously been convicted of a felony. Dantzler served three years in prison after being convicted in 2000 of felony assault with intent to do bodily harm. Dantzler had also incurred misdemeanor convictions for assault and battery, domestic violence, and malicious destruction of property. Allen’s criminal history includes a 1997 misdemeanor conviction for possession of marijuana, a 2000 misdemeanor conviction for attempted assault with a dangerous weapon, a 2000 felony conviction for possession with intent to distribute cocaine, a 2001 felony conviction for possession with intent to deliver cocaine, a 2001 felony conviction for being a felon in possession of a firearm, and a 2008 felony conviction for delivery/manufacture of marijuana.
This case is the result of a joint two-year investigation by the Grand Rapids Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The search for the person who provided the firearm to Dantzler began within hours of its recovery from the crime scene.
In a related case, on May 20, 2013, 31-year-old Joseph Michael Krul, a multi-convicted felon, pled guilty before the Honorable Robert Holmes Bell to possessing the same Glock 9mm pistol prior to its transfer to Allen. Krul’s federal felon-in-possession conviction carries a maximum penalty of ten years’ imprisonment. His criminal history includes a 2008 felony conviction for assault with a dangerous weapon. Krul will be sentenced on October 1, 2013.
U.S. Attorney Miles praised the work of the Grand Rapids Police Department and the ATF, noting the dedication, professionalism, and countless hours of work that resulted in this successful prosecution. He also noted the importance of enforcing those laws intended to deter the illegal trafficking of firearms. “This case exemplifies the insidious nature of illegal gun trafficking that all too often leads to a tragic end. The primary purpose of the federal laws barring convicted felons from possessing firearms, and prohibiting the transfer of firearms to convicted felons, is the prevention of violent crime, such as caused the senseless death of seven innocent people on July 7, 2011. Hopefully, those intent on circumventing the federal firearms laws will get the message that we are prepared to protect the public by bringing them to justice.”
“This investigation is an example of ATF’s commitment and determination in making our communities safe. ATF’s Frontline strategy is our business model that addresses such violent gun crime. These accomplishments could not have been achieved without the collaboration and hard work of ATF, Grand Rapids Police Department, and the United States Attorney’s Office”, said ATF Acting SAC Daryl McCrary.
Allen will be sentenced by the Honorable Paul L. Maloney. A sentencing hearing has not yet been scheduled.
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Pharmacists Plead Guilty to Felony Misbranding of Drugs in Kentwood Pharmacy InvestigationRead the Press Release
GRAND RAPIDS, MICHIGAN – James D. Orr, 75, of Grand Rapids, Michigan, and Thomas N. Verhage, 68, of Kentwood, entered guilty pleas to a felony charge of misbranding drugs related to their conduct while employed as staff pharmacists at Kentwood Pharmacy. At plea hearings held before U.S. Magistrate Judge Joseph Scoville yesterday and today in Grand Rapids, Orr and Verhage acknowledged that they were aware that Kentwood Pharmacy restocked drugs that were returned from nursing homes and adult foster care homes. Orr and Verhage admitted that receiving such returned drugs and placing the returned drugs back on the stock shelves resulted in the drugs being placed into stock bottles and other containers which did not maintain the accurate lot numbers and expiration dates for the drugs. The pharmacists stated that, as staff pharmacists, they approved prescriptions that were prepared and dispensed to foster care and nursing homes. Orr acknowledged that some of the prescriptions contained drugs that he knew were returned to stock in violation of state and federal laws, including drugs that had been misbranded.
U.S. Attorney Patrick Miles said, “The Federal Food Drug and Cosmetic Act provides an essential regulatory framework to safeguard the public’s use of prescription drugs. These federal regulations are buttressed by explicit state laws which strictly limit the reuse of drugs which have left the control of pharmacies. The public must be able rely on pharmacists who have both professional and statutory duties to ensure that pharmacies operate in compliance with these federal and state laws regulating the handling, packaging, and distribution of drugs.”
“Patients must have confidence that the prescription drugs they receive from pharmacies are safe and effective,” said Acting Special Agent in Charge John J. Redmond of the U.S. Food and Drug Administration, Office of Criminal Investigations, Chicago Field Office. “The FDA will aggressively pursue those who cause drugs to become misbranded while held for sale, and the agency will strive to ensure that they are prosecuted to the full extent of the law.”
The investigation of this matter is ongoing and is being coordinated by the FDA, FBI, DEA, and IRS. Assistant U.S. Attorney Ray Beckering is prosecuting the case on behalf of the government.
The investigation of this case was initiated by confidential tips. If Michigan residents or medical professionals suspect possible violations of law or other dangerous practices involving pharmacies or prescription drugs, they can contact the FDA.
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Sex Offender Sentenced for Possession of Child PornographyRead the Press Release
MARQUETTE, MICHIGAN – Shane Eric Hanley, 45, of Norway, Michigan, was
sentenced to 188 months in federal prison for possession of child pornography, U.S. Attorney
Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R.
Allan Edgar ordered Hanley to serve twenty years of supervised release following his release
from prison, to pay $17,769.00 in restitution to victims, and to pay a $100 special assessment.
Hanley will also be required to re-register as a sexual offender.On February 22, 2013, Hanley pleaded guilty to a federal indictment charging him with
possession of child pornography. The investigation into Hanley’s activities began in July 2011
when agents with the Internet Crimes Against Children task force in Grand Rapids, Michigan
discovered that Hanley was sharing child pornography via peer-to-peer software on his
computer. Subsequent investigation revealed that Hanley had child pornography stored on both
his home computer and DVDs. Hanley admitted that he had used peer-to-peer software to locate
and download child pornography, which he compared to stamp collecting. Hanley had been
previously convicted of criminal sexual conduct in Michigan in 1993 and 1994. Both convictions
involved acts with minors. He was a registered sex offender in Michigan.This case is part of Project Safe Childhood, a nationwide initiative designed to protect
children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's
offices, Internet Crimes Against Children task force (ICAC), federal, state, and local law
enforcement are working closely together to locate, apprehend, and prosecute individuals who
exploit children. The partners in Project Safe Childhood work to educate local communities
about the dangers of online child exploitation, and to teach children how to protect themselves.
For more information about Project Safe Childhood, please visit the following web site:
www.projectsafechildhood.gov.The Michigan State Police and Homeland Security Investigations investigated the case.
The case was prosecuted by Assistant U.S. Attorney Paul D. Lochner.END
Canton Businessman Sentenced to Prison for Violating the Clean Air ActRead the Press Release
GRAND RAPIDS, MICHIGAN – Anthony Michael Davis, 34, of Canton, Michigan, was sentenced to 12 months in prison for violating the federal Clean Air Act, U.S. Attorney Patrick Miles announced today. U.S. District Judge Robert Holmes Bell also ordered Davis to pay $168,029.59 in restitution to the U.S. Environmental Protection Agency (“EPA”) and serve two years of supervised release following his release from prison.
Davis purchased a former paper mill in Otsego, Michigan to salvage valuable scrap material from a powerhouse building containing large boilers and turbines. Davis knew that asbestos-containing insulation was present in the powerhouse because certain insulation carried warning labels stating: “Hazardous Substance Asbestos.” A representative of the former owner of the Otsego paper mill also warned Davis of the asbestos in the powerhouse and recommended an asbestos inspection before removing anything from the structure. Despite those warnings, and in an effort to cut costs, Davis failed to conduct a thorough asbestos inspection. Additionally, he paid laborers to scrap materials from the powerhouse without following basic rules of asbestos removal, such as wetting the asbestos with water prior to its removal until it is collected and contained for proper disposal. The salvage operation resulted in the release of a significant quantity of asbestos-containing insulation onto multiple floors of the building, which was open to the outside environment.
At sentencing, the court stated that the defendant’s offense was “serious” and that his actions endangered the health of those who live and work near the paper mill in Otsego. The court also found troubling the defendant’s misrepresentations to state investigators when he initially claimed that he did not know he was dealing with asbestos in the powerhouse.
U.S. Attorney Miles said, “Davis exposed his workers and the public to dangerous asbestos fibers that have been shown to cause serious illnesses like lung cancer and other serious respiratory diseases. Some of his workers wore their dirty clothes and shoes into their homes, potentially exposing their family to the dangers presented by the inhalation of asbestos fibers. The court’s sentence should send a clear message to those who seek increased profits at the expense of the environment and the health and safety of others.”
“Exposure to asbestos can be fatal. Its unsafe and illegal disposal endangers human health and can seriously harm the environment,” said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Michigan. “The defendant failed to comply with regulations that would have shown the extent to which the building contained asbestos-contaminated material. This case should serve notice that EPA and its partner agencies will prosecute those who ‘cut corners’ by avoiding the costs of handling or disposing of asbestos properly.”
The case was investigated by the EPA Criminal Investigation Division and the Michigan Department of Natural Resources Environmental Investigation Section. Assistant U.S. Attorney Christopher O’Connor prosecuted the case on behalf of the United States.The investigation of this case was the result of a confidential tip. If Michigan residents suspect a possible violation of environmental laws or regulations, they are encouraged to call the U.S. EPA hotline at 1-800-621-8431, or submit a tip on the Internet at www.epa.gov/tips.
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Brimley Felon Sentenced for Possession of Firearms on Bay Mills ReservationRead the Press Release
MARQUETTE, MICHIGAN – Patricia Marie Sawasky, 46, of Brimley, Michigan, was sentenced to 24 months in federal prison for being a felon in possession of firearms, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R. Allan Edgar ordered Sawasky to serve two years of supervised release following her release from prison, and to pay a $100 special assessment. Sawasky had pled guilty in February.
The investigation into Sawasky’s activities stemmed from the execution of a search warrant at a residence Sawasky occasionally occupied with her boyfriend. In the process of being taken into custody on an outstanding state arrest warrant, Sawasky assaulted a tribal officer. During the execution of the search, eleven firearms were located in the residence, some in a gun cabinet and others in the master bedroom. The firearms included a .50 caliber revolver. Sawasky, who had been previously convicted of a felony drug offense in Michigan, admitted that she had handled the .50 caliber revolver and had ready access to the other firearms in the residence.
The Bay Mills Indian Community Tribal Police, the Chippewa County Sheriff Department, and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
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Five Men Convicted in Record Crystal Meth SeizureRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr., announced that five men have been convicted in connection what is believed to be the largest seizure of crystal methamphetamine (or “ice”) in the state of Michigan. In June of 2012, a confidential informant told the Department of Homeland Security about a large amount of crystal meth that was being offered for sale in Southwestern Michigan. A Michigan State Police undercover officer was introduced to a person selling the meth, and several undercover purchases were made. In August of 2012, more than 20 pounds of pure crystal meth were seized from a vehicle and pole barn in Van Buren County. The meth had a wholesale value of nearly $1/2 million, and is believed to be the largest seizure of crystal meth in Michigan.
Five men were indicted for conspiracy and possession with intent to distribute the seized methamphetamine. Four of those men, Alejandro Garcia, age 45, of Grand Junction, MI; Thomas Streich, age 59, of Lawton, MI; and Jon Jeannin, Jr., age 33, and Brent Kellerman, age 25, both of the Kansas City, MO area; pled guilty to the conspiracy charge before trial. On June 18, 2013, a federal jury in Grand Rapids found Jose Sierra-Villegas, age 39, of Kansas City, MO, guilty of the conspiracy and possession with intent to distribute charges, following a five day trial before the Hon. Robert J. Jonker.
Alejandro Garcia was recently sentenced to 108 months in prison for his role in the conspiracy. The other defendants remain in custody awaiting sentencing of up to life in prison.
U.S. Attorney Miles praised the cooperative effort of federal, state and local law enforcement agencies in this investigation: “This case prevented an extremely large amount of crystal meth from flooding our community. It is an excellent example of what can be accomplished when federal, state and local law enforcement agencies share their resources and focus their mutual attention on a large drug trafficking group.” The case was investigated by the U.S. Department of Homeland Security Investigations (HSI), the federal Drug Enforcement Administration (DEA), and the Michigan State Police Metropolitan Enforcement Team (MET), with assistance from other state and local agencies.
The case was prosecuted by Asst. U. S. Attorneys John Bruha and Hannah Bobee.
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Florida Man Sentenced for Counterfeit Razor BladesRead the Press Release
Receives 30 Month Sentence
GRAND RAPIDS, MICHIGAN – Jeffrey Steven Telsey, 56, of Delray Beach, Florida, was sentenced for conspiring to traffic in counterfeit Gillette razorblades, announced U.S. Attorney Patrick A. Miles, Jr. U.S. District Judge Janet T. Neff sentenced the defendant to 30 months custody followed by three years of supervised release. Telsey was ordered to pay $400,506.17 in restitution and a $25,000 fine. In sentencing Telsey, Judge Neff characterized the trafficking of counterfeit merchandise as a quintessential white collar crime that is a serious offense against the public. Judge Neff expressed a desire to send a strong message of deterrence.
Along those lines, U.S. Attorney Miles noted, “Much of our nation’s value in the global economy is derived from intellectual property – ideas, brands, innovations, and creations. We must vigilantly protect those properties. Would be criminals should know that they face prosecution and serious criminal penalties when they steal from companies and the public by committing fraud through counterfeit and pirated goods.”
In January 2008, Homeland Security Investigations (HSI) learned that counterfeit Gillette Mach3 razor refills were being distributed through Meijer Stores. Officials from Meijer Stores and Proctor and Gamble (P&G), the owners of the Gillette brand, immediately cooperated with HSI. HSI coordinated a series of controlled purchases of counterfeit razorblades from Telsey, who operated a business called JCA Enterprises (JCA). At the same time, Meijer Stores conducted a company-wide recall of the Gillette razorblades to confiscate the counterfeit product.
JCA was a “diverter” business and collected odd and leftover lots of health and beauty care products for resale to wholesalers and large retail outlets. Mixed in with JCA’s legitimate business was the trafficking of counterfeit razorblades. U.S. Attorney Miles stated, “Trafficking in counterfeit products undermines the public trust. The public expectation of quality and value in brand names can be easily dashed by one bad experience.”
In November 2009, HSI executed a search warrant on JCA located in Boca Raton, Florida, and seized approximately 27,000 units of counterfeit Gillette-branded razors were identified and seized, valued at approximately $425,000 MSRP. On the same day the search warrant was executed, HSI agents seized Telsey’s business bank account which contained $400,506.17. In March 2010, HSI discovered that Telsey continued to sell counterfeit merchandise to other distributors supplying other national and regional retailers.
After a lengthy investigation, HSI determined that Telsey obtained the counterfeit merchandise from an importer in New Jersey. The importer, in turn, obtained the counterfeit razorblades from manufacturers in China. The volume of counterfeit razorblades is estimated to be in the millions of dollars. P&G advised that it is committed to the highest quality products and only manufactures its Gillette razorblades in facilities in Boston, Massachusetts, and Berlin, Germany. P&G reports that sales of counterfeit Gillette razorblades have decreased substantially since HSI’s investigation of Telsey.
“Counterfeit goods cost American brand holders billions of dollars on an annual basis,” said William Hayes, acting special agent in charge for HSI Detroit. “The unfortunate reality is that these losses are then passed on to the end user: you and me. HSI will continue to work collaboratively with our law enforcement partners to aggressively target individuals and groups involved in the trafficking of counterfeit goods.”
This case was investigated by Homeland Security Investigations. Prosecution of the case is assigned to Daniel Y. Mekaru, Assistant United States Attorney.
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Armed Bank Robber Gets 19 Years in PrisonRead the Press Release
GRAND RAPIDS, MICHIGAN – Shariff Marcelle Williams, 33, from Grand Rapids, Michigan, was sentenced to 19 years in prison for Armed Bank Robbery and Brandishing a Firearm During a Robbery, announced U.S. Attorney Patrick A. Miles, Jr. today. U.S. District Judge Robert J. Jonker sentenced Williams to 12 years on the Armed Bank Robbery charge and seven years on the Brandishing a Firearm During a Robbery charge to be served consecutively. Williams must also pay $43,762.95 in restitution. At the sentencing hearing, Judge Jonker noted Williams’ prior history of violent crimes, including two prior robberies in 2007.
In May of 2012, Williams committed two armed bank robberies in Grand Rapids -- the May 7 robbery of the PNC Bank branch located on Lake Eastbrook Boulevard and the May 24 robbery of the Fifth/Third Bank branch located on Chicago Drive. During the robbery of the Fifth/Third Bank, Williams produced a semi-automatic handgun from his waistband, racked a round into the weapon’s chamber, and started waving the handgun around to make the bank employees move faster.
Williams was apprehended after his failed attempt to rob the same PNC Bank branch on October 5, 2012. Employees at PNC Bank saw Williams approaching dressed in a dark, hooded sweatshirt and wearing a dark mask and gloves. The employees locked the door and called for the police. After a short chase, Williams was arrested as was his accomplice, Rosheda Durham, who was acting as the getaway driver. Durham was sentenced in a separate proceeding in March 2013. She was sentenced to serve one year in custody and also ordered to pay restitution.
This case was investigated by the FBI. Prosecution of the case is assigned to Daniel Y. Mekaru, Assistant U.S. Attorney.
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Bay Mills Man Sentenced for Assault on A Federal OfficerRead the Press Release
MARQUETTE, MICHIGAN – Lorne Anthony Lyons, 51, of Brimley, Michigan and a member of the Bay Mills Indian Community, was sentenced to 14 months in federal prison for assault upon a federal officer, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R. Allan Edgar ordered Lyons to serve two years of supervised release following his release from prison and to pay a $100 special assessment.
On December 4, 2012, after a two-day jury trial, Lyons was convicted of assault upon a federal officer with a dangerous weapon. The charge arose from an incident on May 7, 2012, during which Lyons sent text messages to his estranged wife claiming he had committed a suicidal act. Bay Mills Tribal Police responded to an emergency call, and with the assistance of U.S. Border Protection agents, searched Lyons’ residence trying to locate him. Lyons, who was hiding in a closet, refused to come out when asked by the officers, and instead produced a short sword, thrusting it at the Tribal Police officer, waving it around, and throwing it at the officer after he was shot with a taser.
The Bay Mills Indian Community Tribal Police, U.S. Border Patrol and the FBI investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case..
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Major Drug Traffickers with Ties to the Sinaloa Cartel Sentenced in West MichiganRead the Press Release
Drug Dealers Sold Cocaine in West Michigan and Crystal Methamphetamine in Minnesota; Leader Gets 25 Years In Federal Prison
GRAND RAPIDS, MICHIGAN – Four men from California and five men from West Michigan have been sentenced to federal prison for their involvement in a multi-state drug conspiracy, U.S. Attorney Patrick A. Miles, Jr. announced today. U.S. District Judge Robert J.
Jonker sentenced the group’s leader, Lucio M. Nunez, 32, of Mecca, California, to 25 years’ imprisonment.Court records show that Nunez and the California members of the conspiracy obtained 20-30 kilograms of cocaine from sources affiliated with the Sinaloa Cartel and shipped it to the Michigan members of the conspiracy, who were led by Pablo G. Aguilera, 31, of Muskegon. The cocaine was typically hidden inside hollowed-out X-Box game consoles. The conspirators also concealed cocaine inside hidden vehicle compartments. Aguilera sold the cocaine in West Michigan and laundered the proceeds through various banks. Agents have identified $350,000 in drug proceeds, which they believe to be only a fraction of the total amount of money laundered by the conspiracy.
At the same time they were sending cocaine to Michigan, Nunez and the California members of the conspiracy distributed 20-30 pounds of crystal methamphetamine in Minnesota.
The investigation began in February 2012, when officers with the West Michigan Enforcement Team (“WEMET”), a local narcotics team, caught Aguilera with a kilogram of cocaine. They worked closely with U.S. Homeland Security Investigations (“HSI”) and Drug Enforcement Administration (“DEA”) agents to build the case against the other members of the conspiracy, who were charged in August 2012 with conspiracy to distribute cocaine and money laundering.
In total, nine members of the conspiracy pled guilty and received sentences from Judge Jonker:
- Lucio M. Nunez, 32, of Mecca, California: 300 months’ imprisonment;
- Jesus Joel Rios, aka “Chuy,” 30, of Mecca, California: 132 months’ imprisonment;
- Pablo G. Aguilera, 31, of Muskegon, Michigan, 128 months’ imprisonment;
- Tyree A. Brown, 40, of Muskegon, Michigan: 60 months’ imprisonment;
- Bradley E. Hatcher, 39, of Muskegon, Michigan: 46 months’ imprisonment;
- Adan V. Chaidez, 32, of Mecca, California: 36 months’ imprisonment;
- Victor Aguilera, 23, of Muskegon, Michigan: 30 months’ imprisonment;
- Mark Barnes, 23, of Muskegon, Michigan: 30 months’ imprisonment;
- Mario Alberto Molina-Martinez, 39, of Coachella, California: 36 months’ imprisonment.
Acting Special Agent in Charge William Hayes of the HSI Detroit Field Office said, “It’s this type of close, nationwide law enforcement liaison capability that gives Homeland Security Investigations unparalleled ability to dismantle drug trafficking organizations like the one involved in this case. The convictions and sentences in this case were a direct result of law enforcement coordination and field efforts by HSI, WEMET, and the DEA.”
Officers and agents from WEMET, HSI and DEA investigated this case. They received assistance from the U.S. Postal Service and the Muskegon County Prosecutor. Assistant U.S. Attorney Clay Stiffler handled the prosecution.
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Insurance Broker Sentenced to Prison for Defrauding Seniors Out of Annuity FundsRead the Press Release
Williamsburg’s William Lowder Sentenced to 60 Months in Prison for Wire Fraud and Tax Charges
GRAND RAPIDS, MICHIGAN – William Edward Lowder, age 58, of Williamsburg, Michigan, was sentenced today to serve 60 months in prison for defrauding several clients, many who were elderly, out of significant investment funds as part of a wire fraud scheme that he committed while he operated Lowder Insurance. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Erick Martinez, IRS Criminal Investigation, Special Agent in Charge Robert D. Foley III of the FBI, and Sheriff Thomas Bensley of the Grand Traverse Sheriff’s Office. U.S. District Judge Robert Holmes Bell sentenced Lowder and included a 36-month concurrent sentence on a separate charge of filing a false tax return in 2008. In handing down the sentence, the court emphasized the significant duration of Lowder’s fraud and his repeated failure to re-pay any of his victims. As part of his sentence, Lowder was ordered to pay restitution of $1,567,908.00, and to complete 300 hours of community service after serving his sentence of imprisonment.
Lowder was a licensed insurance agent and annuities producer. Beginning in 2001, Lowder began defrauding several of his elderly clients by convincing them to liquidate existing annuity investments under the promise that the proceeds would be reinvested in annuities earning higher rates of return. After the clients liquidated their annuities, Lowder convinced them to provide the proceeds directly to him for reinvestment. Instead of reinvesting the proceeds, Lowder deposited the proceeds into his own bank account. To conceal his fraud, Lowder provided these clients with false statements of account.“Vigorous prosecution of professionals who commit financial crimes remains one of the top priorities of this Office,” said U.S. Attorney Miles. “This case is especially troubling given that Mr. Lowder stole significant amounts of money from elderly clients who, like most citizens, rely upon their limited investments to provide for their financial security.” FBI Special Agent in Charge Foley agreed, stating “those who target elderly victims, many of whom live on a fixed income, rob them of their hard-earned savings and their security. The FBI is committed to stopping predatory scams against seniors.”
Between 2001 and 2009, Lowder stole in excess of one million dollars from his clients, which he used to fund his own comfortable lifestyle. Lowder admitted that he did not claim the amounts stolen from his clients as income on his U.S. individual income tax returns from 2006 to 2009, despite knowing that he had an obligation to do so.
“The victims of Lowder’s scheme worked hard for their retirement and he stole their hard earned savings,” said Erick Martinez. “IRS Criminal Investigation is committed to pursuing those who perpetrate these crimes.”The investigation and prosecution of this case was conducted by the Grand Traverse County Sheriff’s Office, the IRS and the FBI, who were assisted by the Michigan Office of Financial and Insurance Regulation. The case was prosecuted by Assistant U.S. Attorney Ron Stella.
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Pennsylvania Man Sentenced for Cyber-stalking and Child Pornography OffensesRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr., announced today that Joseph J. Ostrowski, 29, of Wilkes-Barre, Pennsylvania, was sentenced yesterday to serve 30 years in federal prison by a federal judge in the Middle District of Pennsylvania for offenses that included a charge of cyber-stalking in the Western District of Michigan.
The investigation of the cyber-stalking charge by the Lansing, Michigan FBI and the Michigan State University Police Department (MSUPD) resulted in the execution of a federal search warrant for Ostrowski’s residence in Wilkes-Barre in May 2012. That search resulted not only in the seizure of evidence of cyber-stalking of MSU students, but also in the discovery that Ostrowski – at the time the head football coach of a local high school – was committing numerous child-pornography felonies in Pennsylvania. Charged both in the Western District of Michigan with cyber-stalking and in the Middle District of Pennsylvania with numerous child pornography felonies, Ostrowski pled guilty to both cases in Pennsylvania as part of a plea agreement that allowed for the transfer of the Michigan case to Pennsylvania for guilty-plea and sentencing.
The investigation began in 2011 after MSUPD was made aware of MSU student social-networking sites being compromised and exploited by a then-unknown perpetrator to harass, threaten, and intimidate MSU students. When investigation by the MSU Police Computer Forensic Unit obtained information indicating that the perpetrator resided outside of Michigan, the Lansing FBI was contacted for assistance and joined the investigation. Working together, FBI and MSUPD obtained and executed the federal search warrant that resulted in Ostrowski’s arrest and ultimate conviction.
Commenting on the sentences, U.S. Attorney Miles stated, “Internet communications and social networking are positive in many respects, but they can also be very dangerous. Those who criminally exploit others through the Internet and social networks deserve prosecution. Thanks to the outstanding work of MSUPD and the FBI, there’s one more on-line predator out there who won’t be logging on again anytime soon.”
Addressing the fact that Ostrowski’s stalking crime involved taking over the social-network accounts of numerous victims by, in part, exploiting personal information that had been posted on those sites, Miles also observed, “People of all ages need to be careful and think twice about personal information they share on the Internet and to whom.”
Robert D. Foley III, Special Agent in Charge of FBI Detroit, added, “Those individuals who seek and obtain pornographic images of minors, and conduct intrusions through the Internet will face severe consequences for their crimes. The FBI is committed to working with the MSUPD and to holding these deplorable criminals accountable.”
The case was investigated by the Lansing and Wilkes-Barre offices of the FBI and by the MSUPD. It was prosecuted by Assistant U.S. Attorney Hagen W. Frank, who serves as the principal of the Identity Theft and Cybercrime Task-Force of the U.S. Attorney’s Office.
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Former Tax Preparers Sent to Federal Prison for Conspiracy to Defraud the U.s. TreasuryRead the Press Release
GRAND RAPIDS, MICHIGAN – Chad Anthony Chertos, 37, of Ada, Michigan, was sentenced to 30 months in prison and Gregory Edward VanDyke, 39, of Newaygo, Michigan, was sentenced to 63 months in prison, for conspiring to defraud the U.S. Treasury, U.S. Attorney Patrick Miles announced today. U.S. District Judge Robert J. Jonker also ordered both defendants to pay more than $240,000 in restitution to the U.S. Treasury.
Chertos and VanDyke were business partners and operated under the names “Integrity Tax” and “The Tax Guys.” Chertos and VanDyke admitted participating in a scheme to obtain payment of income tax refunds from the U.S. Department of the Treasury by preparing and filing false federal income tax returns on behalf of some of their clients. Many of those clients, who were told they could obtain significant tax refunds even if they earned little or no earned income, were solicited in a door-to-door sales pitch. In some cases, even if their clients actually earned income, the defendants ignored their clients’ true income information and prepared tax returns reflecting false and fraudulently-inflated income to obtain a substantial refund. Chertos and VanDyke profited in the scheme by taking substantial fees from the fraudulently-obtained refund checks.
At Van Dyke’s sentencing hearing, Judge Jonker expressed serious concern with VanDyke’s “extraordinary” criminal history and high risk for recidivism, and noted that he has a history of “taking advantage of vulnerable people.” As part of their guilty pleas, both defendants agreed to be permanently barred from preparing or filing, or assisting in the preparing or filing, of any federal tax return or documents for any other person or entity.
U.S. Attorney Miles said, “‘Integrity Tax’ was in name only. These former tax preparers abused vital tax credits for the working poor by fraudulently inflating their clients’ earned income or simply making up non-existent income. They took advantage of their clients and the hard working taxpayers of the United States. They will now pay the price for stealing from the American people.”
Erick Martinez, Special Agent in Charge of the Detroit office of the IRS-Criminal Investigation, joined in the announcement of the sentences and said, “Most return preparers are assiduous in performing their duties and play an important role in our tax system by preparing accurate returns for their clients. These defendants used their business to steal from the government and take advantage of their vulnerable clients. This case spotlights the importance of carefully selecting a tax return preparer.”
IRS-Criminal Investigation in Grand Rapids investigated the case, and Assistant U.S. Attorney Christopher O’Connor prosecuted it.
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United Courier Service Owner Goes to Jail for Filing False Tax ReturnsRead the Press Release
GRAND RAPIDS, MICHIGAN – Thomas Richard Fulger, age 65, of Lansing, Michigan, was sentenced to 9 months imprisonment and 1 year of supervised release for willfully filing false tax returns for the tax year 2005, U.S. Attorney Patrick A. Miles, Jr. announced today. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
In addition, U.S. District Judge Janet T. Neff also ordered Fulger to pay a special assessment of $200 and restitution to the Internal Revenue Service of $139,988.
According to court records, Fulger who is the owner of United Courier Service in Lansing, evaded taxes by routinely under-reporting his S Corporate income and under-reporting his individual income on the corresponding federal income tax returns. For 2005, Fulger reported his personal gross income was negative $23,123 when in fact his true gross income was $293,750.
In addition to pleading guilty to filing false tax returns for the tax year 2005, the defendant admitted that he deliberately failed to pay $139,988 in taxes between 2004 and 2007. In addition to a sentence of 9 months’ imprisonment, the defendant will be required to pay his unpaid tax balance.
“Fulger’s sentence emphasizes the importance that everyone must honestly report their income,” said Special Agent in Charge Erick Martinez. “IRS Criminal Investigation will investigate individuals that deliberately file false returns and there are severe consequences for those who violate the law.”
The investigation of this case was conducted by special agents of the Internal Revenue Service, and prosecuted by Assistant U.S. Attorney Rene Shekmer.
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Grand Haven Man Sentenced on Tax Evasion ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN – Matthew Daniels, 46, of Grand Haven, Michigan, having pled guilty to filing a false tax return, has been sentenced to serve 6 months in prison, followed by 1 year of supervised release, and ordered to pay more than $119,000 in restitution to the Internal Revenue Service, U.S. Attorney Patrick A. Miles, Jr. announced today. Daniels was also ordered to pay a mandatory $100 special assessment. Mr. Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
According to the Plea Agreement filed on January 23, 2013, Daniels filed false tax returns for 2007 and 2008 with the Internal Revenue Service. In particular, Daniels under reported his gross receipts on his Schedule C for both 2007 and 2008. The 2008 tax return that Daniels filed was a false and fraudulent income tax return which under-reported gross receipts by $362,489. At sentencing, Judge Robert Holmes Bell found that the Government had established that Daniels had substantially underreported gross receipts and owed taxes to the Internal Revenue Service of $119,003.
“Cheating on your taxes is the same as stealing,” said IRS Criminal Investigation Special Agent in Charge, Erick Martinez. “We should not expect the honest taxpayer to foot the bill for those who hide income from the IRS.”
This case is being prosecuted on behalf of the United States by Assistant U.S. Attorney Matthew Borgula and was investigated by Special Agents of the IRS Criminal Investigation.
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Watervliet Man Pleads Guilty to Receipt of Child PornograpyRead the Press Release
GRAND RAPIDS, MICHIGAN – David Alan Inman, 51, of Watervliet, Michigan pleaded guilty on Tuesday, April 16, 2013, to receiving child pornography videos via the Internet, U.S. Attorney Patrick A. Miles, Jr. announced today. Inman faces a minimum of five years and a maximum of 20 years of imprisonment, and he will be required to serve a term of supervised release after his prison term has been completed. Inman will also be required to register as a sexual offender.
The case stemmed from an online investigation that took place in late 2009. During that investigation, members of law enforcement learned that an individual, later identified as Inman, had made numerous items of child pornography available for download on the Internet. Agents ultimately executed two search warrants at Inman’s home and recovered a number of computers that contained a substantial collection of child pornography. Inman confessed to downloading child pornography images and videos from the Internet, and he further admitted to sharing child pornography with others via the Internet.
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.
The Federal Bureau of Investigation (FBI) and the Berrien County Sheriff's Department investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
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Grand Rapids Podiatrist Sentenced to Prison in Health Care Fraud SchemeRead the Press Release
GRAND RAPIDS, MICHIGAN – Anthony J. Kirk, D.P.M., 61, of Grand Rapids, Michigan, was sentenced to six months in prison, fined $15,000, and ordered to pay $65,110 in restitution for committing health care fraud, U.S. Attorney Patrick Miles announced today. Upon release from prison, Dr. Kirk will be placed on home detention for a period of five months, during which time he must remain in his residence except for employment and other activities approved in advance by his probation officer. The sentence was imposed by U.S. District Judge Janet T. Neff.
Dr. Kirk, a licensed doctor of podiatric medicine, pled guilty in November 2012 to knowingly and willfully executing a scheme to defraud the Medicare program. Dr. Kirk defrauded Medicare by repeatedly submitting false and fraudulent claims for nail avulsion services he did not actually perform on his patients. A nail avulsion is a surgical procedure that involves the separation and removal of the entire nail, or a border of the nail, from the nail bed to the layer of epidermis extending over the base of a nail. Dr. Kirk admitted billing the surgical procedure when in fact he only performed “routine foot care,” a service that generally is not reimbursable by Medicare. Kirk admitted that he received $65,110 in fraudulent payments from the Medicare program over several years. Dr. Kirk has paid the full amount of restitution. The $15,000 fine imposed by the Court will be paid in addition to the restitution amount.
U.S. Attorney Miles stated, “Dr. Kirk abused the trust placed in him by our community and the health care profession. This particular form of health care fraud -- billing for nail avulsions not actually performed -- is a popular scheme authorities do not tolerate. Investigating and prosecuting those who engage in fraudulent billing schemes against government health care programs is a top priority of the U.S. Attorney’s office. We are vigorously pursuing those who knowingly defraud taxpayers by falsely billing Medicare for services they have not performed for payments they are not entitled to receive.”
This case was investigated by the Health and Human Services Office of Inspector General and prosecuted by Assistant U.S. Attorney Christopher O’Connor.
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Members of Lansing Mortgage Fraud Ring SentencedRead the Press Release
Members of CDC Investments Scam Receive Prison Time
GRAND RAPIDS, MICHIGAN – Six of seven defendants indicted in connection with the CDC Investments mortgage fraud scheme were sentenced this week, announced U.S. Attorney Pat Miles today. U.S. District Judge Robert J. Jonker sentenced the defendants to prison, as indicated below:
- Eric Williams, a realtor, was sentenced to 12 months in prison.
- CDC cofounder Aaron Teachout was sentenced to 51 months in prison.
- Isaac Modert, another founding member CDC, was sentenced to 60 months in prison.
- Rick Artibee, a mortgage loan officer, was sentenced to 15 months in prison.
- Dennis Sare, a title and closing agent, was sentenced to 15 months in prison.
- Nichole Buda, a mortgage borrower, was sentenced to 18 months in prison.
The seventh defendant, Mario Giannandrea, is scheduled to be sentenced on May 28, 2013.
In most cases, the defendants received a reduced sentence from Judge Jonker because they had provided information to federal investigators about mortgage fraud in the Lansing, Michigan area.
The fraud scheme alleged in the August 2, 2012 indictment charged the defendants with engaging in an “equity stripping” scheme involving approximately 35 homes. In the scheme, banks would be asked to finance sham real estate purchases that were designed to extract funds from lenders, which would then be split up among the participants in the scheme to be used for their own benefit. The mortgages were not paid and went into foreclosure, resulting in losses of over three million dollars since the lenders were only able to recover a fraction of the outstanding mortgage balances when they sold the properties after foreclosure.
This prosecution was brought by the Mortgage Fraud Task Force, made up of investigators from the Federal Bureau of Investigation, the United States Secret Service, the United States Postal Inspection Service, the Department of Housing and Urban Development, Office of Inspector General, and the Lansing Police Department. Prosecution of the case is assigned to Timothy VerHey and Ronald Stella, Assistant United States Attorneys.
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Lansing Landscapers Sentenced to Prison for Defrauding Unemployment Insurance ProgramRead the Press Release
Business owners forced laborers to work for free while collecting unemployment insuranceGRAND RAPIDS, MICHIGAN – Kevin Romando Johnson, 39, of Lansing, was sentenced to four years in prison; his mother Sara Johnson, 69, was sentenced to three years’ imprisonment, U.S. Attorney Patrick Miles announced today. U.S. District Judge Gordon J. Quist also ordered the Johnsons to pay restitution of $315,471 to the Michigan Unemployment Insurance Agency (“UIA”). The sentence was imposed as the result of a conviction on October 30, 2012, after a six-day jury trial in Grand Rapids.
"In hard times, we all need to pull together," said U.S. Attorney Miles. “Stealing from the unemployment insurance system is selfish, illegal, and clearly not worth the risk."
The evidence presented at trial and sentencing established that the Johnsons owned and operated Lansing Total Lawn Care (“LTLC”), a commercial landscaping company. At the end of each mowing season between 2006 and 2010, the defendants laid-off laborers and coerced them into applying for unemployment insurance benefits. The defendants would then force workers to toil for the company for free throughout the winter, driving snowplow trucks and performing other labor. The defendants informed them that unemployment "was their paycheck." Workers testified that if they refused, the defendants would call the Michigan UIA and report them as "refusing to work," leading to termination of their unemployment benefits.
Kevin Johnson also applied for unemployment benefits for himself while running the company. He lied on over 50 UIA certifications that he had been "laid off." Meanwhile, he represented himself as the owner of LTLC on loan applications, including for the purchase of property at the Las Vegas “Planet Hollywood” resort. Documents and testimony presented at trial established that Johnson used his unemployment checks to pay for a Chrysler 300 Limited luxury sedan, cash and other personal expenses. When interviewed by law enforcement, Johnson lied under oath that he had “never knowingly allowed any of his employees to work while collecting unemployment,” resulting in his additional conviction for lying to a federal agent.
Neither defendant ever admitted responsibility for their crime. The Court described Sara Johnson as the "enforcer" of the scheme, who told workers that if they reported the fraud, they would go to jail for collecting unemployment while her lawyer would assure that she and her son remained unscathed. The Court noted the pernicious scheme undermined a program that enables laid-off workers to support themselves and their families with dignity while looking for employment.
The Department of Labor Office of Inspector General investigated the case and Assistant U.S. Attorneys Nils R. Kessler, and Carolyn Almassian.
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Northern Michigan Cinemas Owner Sentenced for Tax Evasion and Ordered to Pay Nearly $1,000,000 in RestitutionRead the Press Release
GRAND RAPIDS, MICHIGAN – Elaine Dawson, 69, of Bellaire, Michigan was sentenced to 1 year in prison followed by 1 year of supervised release, announced U.S. Attorney Patrick Miles, Jr. U.S. District Court Judge Janet T. Neff also ordered Dawson to pay restitution of $988,366.00 to the U.S. Internal Revenue Service. The sentence was imposed as the result of an October 10, 2012 guilty plea to a felony information charging her with tax evasion. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Erick Martinez of the IRS Criminal Investigation.
According to court records, Dawson willfully evaded nearly a million dollars in corporate and personal income taxes between 2004 and 2010. Dawson owned five cinemas in Bellaire, Petoskey, Gaylord, Mackinaw City, and Cheboygan, Michigan. She routinely under-reported the number of patrons who bought movie tickets, and under-reported her receipts from sales of concessions, gift certificates and other items. Dawson skimmed the cash from the unreported sales for personal use, and disclosed only the remaining sales as income when preparing her tax returns.
In addition to paying all the back taxes she had evaded, Dawson is required to pay substantial fraud penalties to the IRS. Dawson liquidated substantial personal assets in order to be able to pay the restitution and penalties.
“Defrauding the tax system does a great deal of harm to the American public,” said Martinez. “Especially in challenging times, everyone’s full contribution counts,” said Miles, “hiding one’s wealth while allowing other hard-working, honest citizens to carry the burden isn’t fair, and won’t be tolerated.”
The case was prosecuted by Assistant U.S. Attorney Nils R. Kessler.
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Muskegon-Area Landlord Convicted by Jury of Arson, Insurance Fraud, and Tax FraudRead the Press Release
Gerald Singer “arson for profit scheme” lasted almost twenty yearsGRAND RAPIDS, MICHIGAN – A federal jury convicted Muskegon-area landlord Gerald Singer, 73, of two counts of Arson, three counts of Use of Fire to Commit Mail Fraud (Insurance Fraud), one count of Mail Fraud, four counts of Filing a False Tax-Related Document, and one count of Obstructing Tax Administration after a four-week trial. Singer was acquitted of three other counts of Use of Fire to Commit Mail Fraud. Gerald Singer was immediately taken into custody by the United States Marshal Service pending sentencing on August 21, 2013.
U.S. Attorney Patrick Miles stated, “The United States Attorney's Office and its federal and local law enforcement partners are committed to safeguarding our communities and removing individuals who intentionally destroy property, harm neighborhoods, and prey on the vulnerable, especially when their motivation is profit. Arson under any circumstance is a serious crime that endangers the lives of residents and first-responders who risk their lives searching for victims and suppressing the fire. It also costs neighbors with higher insurance premiums. Gerald Singer caused much damage and now justice caught up with him.”
The jury convicted Gerald Singer of arson and use of fire to commit mail fraud at the following properties, which were destroyed by fire:
- June 20, 1999: 1292 E. Broadway, Norton Shores, MI, a commercial building formerly known as “The Fair” fabric store, which was insured by Hartford Insurance and Westport Insurance;
- November 9, 2006: 250 Myrtle St., Muskegon, MI, an investment/rental property which was insured by Foremost Insurance; and
- August 28, 2007: 2608-2614 7th Street, Muskegon Heights, MI, a four-unit apartment complex insured by Farm Bureau General Insurance Company.
The mail fraud charge included those properties as well as fires at six additional properties in Grand Haven, MI; Muskegon Heights, MI; and Gary, IN, and two attempted fires at properties in Muskegon Heights, MI.
The jury also convicted Gerald Singer of filing a false tax-related document in the years 2005, 2006, 2007, and 2008, for failing to disclose to the IRS approximately $500,000 in insurance proceeds from the fire at 1292 E. Broadway, Norton Shores, MI. Finally, the jury found Singer guilty of obstructing the administration of the tax laws in the following five ways:
Causing to be filed false individual income tax returns for tax years 2005 through 2008;
Making false and misleading statements to IRS officials about his individual income tax returns;
Misleading his tax preparer by withholding information;
Concealing income from the IRS by means of “structuring” the payout of insurance funds; and
Causing the filing of false home buyer tax credit claims against the IRS.
“Arson for Profit is not a victimless crime. Our communities as a whole become the victim because arson destroys property and places an ever increasing economic burden on our communities. ATF is committed to the investigation and prevention of Arson and Arson for Profit schemes.” ATF Acting Special Agent in Charge, Gilbert Salinas stated. “I would like to commend the outstanding work and dedication of the United States Attorney’s Office in Grand Rapids, the Internal Revenue Service, Grand Rapids Office of the ATF, City of Muskegon Police and Fire Departments, Norton Shores Police and Fire Departments and the Gary Indiana Police Department”.
Internal Revenue Service Criminal Investigation Assistant Special Agent in Charge, Carolyn Weber, stated, “Gerald Singer lined his pockets with the proceeds of false insurance claims. The IRS will always go after those who seek to profit from illegal activities.”
A conviction for use of fire to commit mail fraud carries a mandatory minimum sentence of 10 years in prison, to be served after any other term of imprisonment. In the case of two or more convictions for using fire to commit mail fraud, the mandatory minimum sentence increases to 20 years. The arson charge carries a sentence of not less than 5 years and up to 20 years in prison. The mail fraud conviction carries a sentence of up to 20 years in prison. The tax counts carry up to 3 years of imprisonment. In addition to prison, Singer also faces the possibility of fines, costs, and restitution to victims. The sentence will be imposed by United States District Judge Gordon Quist after consideration of the applicable statutory factors and the advisory United States Sentencing Guidelines.
This case was prosecuted by Assistant U.S. Attorneys Michael MacDonald and Christopher O’Connor, and investigated by the Grand Rapids office of the Bureau of Alcohol, Tobacco, Firearms & Explosives; the Internal Revenue Service - Criminal Investigation; and the Muskegon Heights Fire Department.
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State Parolee Sentenced for Possession of Sawed-off Shotgun on Sault Tribe ReservationRead the Press Release
MARQUETTE, MICHIGAN – Shawn Marshall Brewer, 23, of St. Ignace, Michigan, was sentenced to 48 months in federal prison for being a felon in possession of a firearm, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered Brewer to serve three years of supervised release following his release from prison, and to pay a $100 special assessment. Brewer had pleaded guilty to the charge last November 8.Brewer, a convicted felon on parole after a 2009 conviction for unlawfully driving away a motor vehicle, was visited by his parole officer and law enforcement in August 2011. During this visit, Brewer was found in possession of a sawed-off 16 gauge shotgun, along with 38 knives, swords, a hatchet, a throwing star, and 16-gauge shotgun ammunition. The shotgun barrel had been cut down to just over 15 inches in length, and the shoulder stock had been replaced with a homemade pistol grip.
The Sault Sainte Marie Tribal Police, the Michigan State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
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Man Sentenced for Possession of Stolen Firearm on Hannahville ReservationRead the Press Release
MARQUETTE, MICHIGAN – Marco Antonio Arteaga, 20, of Wilson, Michigan, was sentenced to 24 months in federal prison for possession of a stolen firearm, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered Arteaga to serve three years of supervised release following his release from prison, and to pay a $100 special assessment. Arteaga pled guilty to the charge last October.The investigation into Arteaga’s activities stemmed from an unrelated assault in which a 12 year-old child had a gun pointed at his head. Through the course of the investigation, it was discovered that the gun used in that incident, as well as other guns, had been stolen from a residence on the Hannahville reservation. One of the stolen firearms was found in Arteaga’s house underneath his mattress. Arteaga ultimately admitted to concealing two of the firearms that had been stolen in his residence.
The Hannahville Indian Community Tribal Police, the Federal Bureau of Investigation, the Upper Peninsula Substance Enforcement Team, and the Menominee County Sheriff Department investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case..
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Kbic Man Sentenced to Prison for Sexual Abuse of A MinorRead the Press Release
MARQUETTE, MICHIGAN – Brian Paul Loonsfoot, 31, of Baraga, Michigan, was sentenced to 78 months in federal prison for sexual abuse of a minor, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered Loonsfoot to serve ten years of supervised release following his release from prison, and to pay a $100 special assessment. Loonsfoot’s sentence to custody will begin after his release from the Wisconsin prison system, where he is serving a sentence for sexual abuse of the same victim. Loonsfoot had pled guilty to the federal charge last November.
The investigation of this case revealed that Loonsfoot, who was 28 years old at the time of the offense, had sexual relations with a 12 year old girl who was a close friend of his family. These sexual acts occurred in Green Bay, Wisconsin, and on the Keweenaw Bay Indian Community reservation. Loonsfoot was prosecuted by Brown County, Wisconsin authorities for his offenses in Green Bay. In September 2011, Loonsfoot pleaded guilty to one count of second degree sexual assault of a child under 16. He was sentenced to seven years of confinement by the Brown County Circuit Court in December, 2011.
The Keweenaw Bay Indian Community Tribal Police and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
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Grand Marais Man Sentenced in Child Pornography CaseRead the Press Release
MARQUETTE, MICHIGAN – Roger Harrison White, 70, of Grand Marais, Michigan, was sentenced to 63 months in federal prison for possession of child pornography, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered White to serve five years of supervised release following his release from prison, and to pay a $300 fine and a $100 special assessment. White will also be required to register as a sexual offender. White had pled guilty to the charge last October.
The investigation into White’s activities stemmed from his brief subscription to a child pornography website in 2008. The investigation ultimately led to a search of White’s computer and compact disks. That search revealed that White had downloaded and stored thousands of images, as well as videos, of child pornography via the internet over a period of several years.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov.
Homeland Security Investigations investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
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Defendant in Children Charity Fraud Case Pleads GuiltyRead the Press Release
Nehemiah Muzamhindo Admits Bilking W.K. Kellogg Foundation of $800,000GRAND RAPIDS, MICHIGAN – Nehemiah Muzamhindo, a resident of Grand Rapids, Michigan and citizen of Zimbabwe, pled guilty to federal money laundering and income tax charges before U.S. Magistrate Judge Ellen Carmody, U.S. Attorney Patrick Miles announced today. Joining Miles in the announcement were Scott Collins, Special Agent in Charge of the Diplomatic Security Service (“DSS”) and Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
Muzamhindo faces a maximum sentence of 23 years in prison; an order of restitution and criminal fines, and deportation. Sentencing, which will be conducted by U.S. District Judge Janet T. Neff, has not yet been scheduled.
Muzamhindo was investigated by federal agents in 2008 for his role in a scheme to obtain fraudulent U.S. passports. While conducting a search warrant on his home, agents discovered evidence that Muzamhindo had received large wire transfers from bank accounts held by the W.K. Kellogg Foundation (“WKKF”) in the Republic of South Africa. WKKF has its headquarters in Battle Creek, Michigan and is one of the world’s largest children’s charities. The investigation ultimately determined that Muzamhindo was part of a fraudulent scheme to submit bogus invoices for payment to WKKF, which paid members of the scheme approximately $800,000 between 2006 and 2008 before learning that it was being swindled.
By pleading guilty to a federal money laundering charge, Muzamhindo admitted to being part of the scheme, and to wiring roughly half of the fraudulent funds back to Africa, where one of his accomplices lived. He also admitted that he had filed false income tax returns during 2006 and 2008 because he did not report any of the money he received from WKKF during those years.
U.S. Attorney Miles commented that “The positive result in this case is directly attributable to the dedicated and coordinated efforts of federal law enforcement, beginning with the Diplomatic Security Service uncovering Muzamhindo’s scheme in the course of an unrelated passport fraud investigation. Their diligence prevented the loss of even more money meant to help disadvantaged children. Then agents of the IRS worked to have Muzamhindo held accountable for his attempt to cheat on his taxes, reinforcing the message that swindlers will be held accountable for the full measure of their deceit in this district.”
“The worldwide presence and investigative capabilities of the Diplomatic Security Service enabled us to pull all of the pieces together – uncovering the connections to South Africa; allowing DS agents to compile the evidence that assisted the prosecution team to accepting Muzamhindo’s guilty plea,” said Scott Collins, Assistant Special Agent in Charge of the Chicago Field Office of the Diplomatic Security Service. “Our Detroit Resident Office led our investigation and worked collaboratively with the IRS and U.S. Attorney’s Office. DSS takes very seriously our charge to protect the integrity of the U.S. passport and visa. Those who fraudulently acquire U.S. travel documents often do so in order to commit other crimes.”
Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation added that Muzamhindo’s crime was worse than many typical fraud cases: “He diverted money intended for children for his own greedy purposes.”
The case was prosecuted by Assistant U.S. Attorney Timothy VerHey and was investigated by special agents of the IRS-Criminal Investigation and of the Diplomatic Security Service.
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Former Owner of Lansing-area Chain of Coffee Stores Sentenced to Federal PrisonRead the Press Release
David Lewis Many Defrauded Investors of Over One Million DollarsGRAND RAPIDS, MICHIGAN – U.S. District Judge Robert Holmes Bell sentenced David Lewis Many, 42, formerly of Lansing, Michigan, to 63 months in federal prison for his fraud scheme that bilked investors in his chain of coffee stores out of over one million dollars. The court further ordered Many to make restitution to his victims in the amount of $1,515,896.00.
“Our economy depends upon investors who are willing to assume legitimate business risks after receiving honest representations. Individuals like Mr. Many, who misrepresent the truth so that they can personally gain from the hard-earned money of honest individuals, will be prosecuted to the fullest extent of the law,” said U.S. Attorney Patrick A. Miles, Jr.
Many’s scheme began in 2006 when he started his first CornerStone Coffee Store with money from relatives, promising them employment that he never delivered. Many then attracted investors in additional stores by misrepresenting his personal net worth, claiming he gained special retail computer software skills while working as an engineer for Microsoft, representing that his business was profitable, and telling investors that he would not draw a salary from the company. In reality, the stores were losing money and Many was drawing significant funds from the company to spend on an extravagant lifestyle that included luxury cars, an executive-style home, and entertainment at local gentlemen’s clubs.
By 2007, Many began selling franchise locations in an effort to satisfy obligations to prior investors and to try to keep his stores afloat. Many represented that a franchisee’s investment would be placed into an escrow account and used solely for the costs of constructing the franchise location. In reality, Many defrauded the franchisees by obtaining hundreds of thousands of dollars up front, and then using the money for his personal benefit and to operate his existing corporate locations. The last franchisee invested over $280,000.00 for his store location but received nothing but a building with stud-walls and a dirt floor. Many then fled to Texas.
The Lansing office of the Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorney Ronald M. Stella conducted the prosecution.
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Third Member of Three-Woman Bank Robbery Ring Sentenced to 19 Years for Participation in String of Bank RobberiesRead the Press Release
Case Results in Conviction of Three Individuals and Resolves Three Bank Robberies in Kalamazoo and an Attempted Bank Robbery in FlintGRAND RAPIDS, MICHIGAN – LaTasha Ann Nichols, 28, of Flint, Michigan, was sentenced by U.S. District Judge Robert Holmes Bell to 19 years in Federal Prison for her role in a string of bank robberies that took place between 2009 and 2012. Nichols pled guilty to two counts of armed bank robbery and one count of using a firearm in the commission of a violent felony. In addition to the 19 year sentence for Nichols, Judge Bell previously sentenced Miranda Jamelle Dixon (28) to 17 years and Suzanne Cherre Alguarelles (38) to six years in prison for their roles in what the judge described as a dangerous and violent string of robberies.
U.S. Attorney Patrick A. Miles Jr. stated, “Armed bank robbery is a very serious crime that terrorizes members of our society and has the very real potential of causing serious personal injury, if not death, to innocent bystanders. This prosecution and the lengthy prison terms imposed reflect that violent crime will not be taken lightly in this district.”
The bank robbery string began in June, 2009, when Nichols, Dixon and Alguarelles stole a Dodge Neon from an apartment complex in Kalamazoo, Michigan. Nichols and Dixon drove the Dodge Neon to the National City Bank on Stadium Drive where they robbed the bank at gunpoint and obtained over $8,000.00. Nichols and Dixon then abandoned the stolen vehicle and traveled on foot to a nearby apartment complex where Alguarelles served as the get-away driver and facilitated their escape to the Detroit area. Nichols and Dixon attempted another bank robbery in Flint, Michigan, on November 16, 2011, but were thwarted by a security guard. The two traveled to Kalamazoo, Michigan, and on November 17, 2011, stole another Dodge Neon and robbed the Charter One Bank on West Main Street at gun-point. The bank tellers handed over $7,222.01 after Dixon threatened that if the tellers used dye-packs she would come back and get them. Finally, on February 14, 2012, Dixon, acting alone, robbed the PNC Bank on Gull Road in Kalamazoo Township. Dixon again threatened the tellers with a firearm and obtained over $4,000.00.
The Kalamazoo office of the Federal Bureau of Investigation, the Kalamazoo Department of Public Safety, and the Kalamazoo Township Police Department jointly investigated the robberies. The cases were prosecuted by Assistant U.S. Attorney Ronald M. Stella.
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Leader of Fraudulent Immigration-document Ring SentencedRead the Press Release
GRAND RAPIDS, MICHIGAN – Jacinto Morales-Martinez, 48, a citizen of Mexico who is also a previously-deported felon, was sentenced Tuesday to serve 60 months in a United States Federal prison for his leading role in a family-based document-trafficking ring that manufactured fraudulent immigration and identification documents for illegal aliens throughout Southwest Michigan. The scheme involved 11 charged defendants, all of whom have since been convicted of felonies including conspiracy to produce and sell fraudulent immigration documents, and of possessing and transferring such documents. U.S. District Judge Robert J. Jonker sentenced Morales-Martinez and included a 60-month concurrent sentence on a separate charge of returning to the United States after being deported following conviction for an aggravated felony.The scheme involved the defendants, most of whom were related and all of whom are themselves illegal aliens, producing high-quality documents such as Permanent Resident cards (“Green Cards”) and Social Security cards for persons they believed were illegal aliens. Despite their extensive efforts to avoid detection, a ten-month-investigation by the Grand Rapids office of U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI) culminated in the execution of five search warrants in Holland and Grand Rapids in mid-June 2012, the arrests of 14 undocumented aliens associated with the investigation, and the seizure of two document-production facilities.
In addition to the sentence for Jacinto Morales-Martinez, Judge Jonker previously imposed the following prison sentences: Juan Jose Morales-Martinez (34), was sentenced to 46 months; Ricardo Uriel Morales-Jimenez (21), was sentenced to 15 months; Rodolfo Esquivel (61) and Ledin Over Ovalle-Perez (29) were both sentenced to 12 months; Luis Alberto Morales-Jimenez (23) and Jacinto Jonathan Morales-Mendoza (19) were both sentenced to 10 months; Maria De La Luz Mendoza-Martinez (43), Giovanni Sanabria-Morales (29), and Amparo Mercado (36) were all sentenced to eight months; and Hugo Alexis Morales-Jimenez (22) was sentenced to six months. With the exception of Ovalle-Perez, who is a Guatemalan national, all of the Defendants are citizens of Mexico illegally present in the United States.
Commenting on the sentences, U.S. Attorney Patrick A. Miles Jr. stated, “Illegal immigration remains a serious law enforcement concern of the United States Government. People who engage in the production and trafficking of fraudulent government documents for profit are a major part of the problem, not a part of the solution. This Office will continue to aggressively investigate and prosecute such persons. The fact that this case was the fourth prosecution in a series of cases going back over eight years, directly reflects how relentless we are in shutting down the fraudulent document trade.”
William Hayes, Acting Special Agent in Charge of HSI Detroit, added, “Document and identity fraud is a serious crime motivated by greed. It affects real people and has far-reaching, serious implications for law-abiding Americans. This final conviction shuts down a sophisticated document mill and holds all of the individuals involved in this criminal activity accountable for their actions.”
The Grand Rapids office of HSI investigated the case. Assistant U.S. Attorney Hagen W. Frank, who serves as the principal of the Identity Theft and Cybercrime Task-Force of the U.S. Attorney’s Office, prosecuted it..
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Lansing Businessman Pleads Guilty to Obstructing the Irs by Evading Payment and Falsifying Quarterly Tax Returns Totalling over $250,000.00Read the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that George Adatsi, age 49, of Lansing, Michigan, pled guilty to a felony tax offense of obstructing the IRS. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service (IRS) Criminal Investigation Division. Adatsi appeared before U.S. Magistrate Judge Ellen Carmody in Grand Rapids to enter his guilty plea.Adatsi owned two companies, Health Staffers, Inc. (HSI) and Health Staffers of Michigan, Inc. (HSMI) that employed nurses and home health aides who provided health care services in private homes and nursing homes. Adatsi admitted that he did not forward to the IRS $121,214 of the Social Security and Medicare taxes (commonly referred to as “FICA taxes”) he had withheld from the employees of HSI from 2001 through 2003. He also admitted that he later intentionally hid assets from the IRS to avoid payment of this amount. Adatsi further admitted that from 2004 through 2008 he filed false quarterly federal tax returns that under reported HSMI’s gross wages paid to its employees and, consequently, under reported both the income taxes and FICA taxes withheld from the HSMI employees. Adatsi acknowledged that the total of the underreported employment taxes was an additional $129,929.
“Adatsi grossly under reported the wages of his employees. He hid assets from the IRS and claimed he did not have the money to pay the taxes which he had already collected from his employees,” said Special Agent in Charge Erick Martinez. “The law is clear on the issue of employers’ responsibility to accurately report and forward withholding taxes and to deal honestly with the IRS.”
A sentencing hearing will be set by U. S. District Court Judge Janet T. Neff. The maximum penalty for obstructing the IRS is not more than three years in prison and a $250,000 fine.
This IRS investigated the case, and Assistant U.S. Attorney Ray Beckering prosecuted it.
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Thirty-One Alleged Holland Latin Kings Gang Members and Associates Indicted for Racketeering Related ChargesRead the Press Release
Joint Federal and State Investigation Targets Gang Violence, Drug DealingGRAND RAPIDS, MICHIGAN – A federal grand jury indicted 31 alleged members and associates of the Holland Latin Kings gang for a range of offenses, including conspiring to engage in racketeering, committing violent crimes in aid of racketeering, possessing firearms and conspiring to distribute cocaine and marijuana. The grand jury alleges in the indictment that the Holland Latin Kings gang is an enterprise whose members and associates engaged in crimes of violence and drug trafficking in order to promote the gang and enrich its members while insulating themselves from law enforcement, among other things. The charges are the result of a joint federal and state investigation targeting gang violence and drug trafficking in the Holland, Michigan, area.
U.S. Attorney Patrick Miles was joined in the announcement of the charges by: Gil Salinas, Acting Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives; Ronald J. Frantz, Prosecuting Attorney, Ottawa County; D/F/Lt. Mike Harvitt, Michigan State Police; Gary Rosema, Sheriff, Ottawa County Sheriff’s Office; and Matt Messer, Chief of Public Safety, City of Holland Police Department.
The charges in the indictment are only allegations and are not evidence of guilt. The defendants are presumed innocent unless and until proven guilty, and the government has the burden of proving their guilt beyond a reasonable doubt.
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Grandville Man Pleads Guilty to Distribution of Child PornograpyRead the Press Release
GRAND RAPIDS, MICHIGAN – William Russell Odett, 41, of Grandville, Michigan pleaded guilty on Monday, February 11, 2013, to distributing images of child pornography via the Internet, U.S. Attorney Patrick A. Miles, Jr. announced today. Odett faces a minimum of five years and a maximum of 20 years of imprisonment, and he will be required to serve a term of supervised release after his prison term has been completed. Odett will also be required to register as a sexual offender.The case stemmed from an undercover online investigation that took place in May 2012. During that investigation, an undercover officer was able to download child pornography that Odett had made available on the Internet. Agents then executed a search warrant at Odett’s home and recovered a number of computers that contained a substantial collection of child pornography.
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.
The Department of Homeland Security, Homeland Security Investigations (HSI) and the Ottawa County Sheriff's Office investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
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Former Attorney Sentenced for $900,000 Mail Fraud Against Clients and Trust BeneficiariesRead the Press Release
Ken Hoesch also sentenced for federal tax offense.GRAND RAPIDS, MICHIGAN – Kenneth Hoesch, age 59, formerly an attorney in Zeeland, Michigan, was sentenced to 78 months imprisonment and 3 years of supervised release for his embezzlement from trusts and trust accounts he controlled as an attorney on behalf of clients as well as his failure to report this ill-gotten income on his taxes, U.S. Attorney Patrick Miles announced today. In addition, United States District Judge Robert Jonker also ordered Hoesch to pay a special assessment of $200.00. Additionally, he was ordered to pay restitution to his victims in the amount of $1,295,518.19 and restitution to the Internal Revenue Service in the amount of $211,654.00.
“Kenneth Hoesch was an attorney who stole from his clients and preyed on seniors. His prosecution and sentence show justice will be served on those who do so whether that person uses a gun and a mask or a pen and a legal pad. Both harm society.” Miles stated.
U.S. Attorney Patrick Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service (IRS) Criminal Investigation Division. “Kenneth Hoesch’s sentence today is evidence that no one is above the law. Hoesch violated the trust of vulnerable victims and now he will pay the price for that crime,” said Special Agent in Charge Erick Martinez.
In July of 2012, Hoesch pled guilty to one count of mail fraud and one count of filing a false tax return. According to court records, during 2006 through 2010 tax years, Hoesch worked as an attorney specializing in trusts and estate law. During this time period, Hoesch stole over $800,000 from his clients and trust beneficiaries and purposely falsified his federal income tax return when reporting his income. Of the $800,000 Hoesch stole, over $300,000 was embezzled directly from trust accounts intended for beneficiaries such as the American Cancer Society. His victim clients include the elderly and even the deceased. The remaining amount of over $600,000 was stolen through an Interest on Lawyers Trust Account (IOLTA) controlled by Hoesch. IOLTAs are a standard type of account where, for example, monies to be directed to clients or beneficiaries are held pending disbursement. Because he did not report to the IRS the income that he stole from his clients and beneficiaries, Hoesch knew his tax return was not correct. In sum, Hoesch failed to pay over $200,000 in tax due and owing to the IRS. Hoesch’s former law partners had no knowledge or involvement in the criminal activity.
This case was jointly investigated by the Ottawa County Sheriff’s Department, the U.S. Secret Service, the U.S. Postal Inspection Service and the Criminal Investigation Division of the IRS. Assistant U.S. Attorney Michael MacDonald prosecuted the case. U.S. Attorney Miles praised the cooperation among local and federal law enforcement agencies by stating, “By working together we served justice and prevented further harm.”.
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Village Market Food Centers’ Comptroller Charged with Stealing from CompanyRead the Press Release
GRAND RAPIDS, MICHIGAN – Christopher E. Pratt was charged Friday, February 1, 2013, with defrauding his former employer, Village Market Food Centers. In a one count Felony Information, the United States Attorney’s Office alleged that from 2004 until 2012 Pratt, who was Village Market’s Comptroller stole over $6,000,000 by diverting funds from Village Market Food Centers accounts to pay Pratt’s personal credit card bills. The Information alleges that Pratt used the money primarily to finance and maintain a fleet of muscle-cars. Pratt will appear in Court sometime in the next few weeks for his arraignment.If convicted, Mr. Pratt faces up to twenty years in prison, supervised release of up to three years, and other fines and penalties. This case is being investigated by the Federal Bureau of Investigation.
The charges in an information are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law..
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Interstate Identity-theft Ringleader Sentenced to Almost Ten Years in Federal PrisonRead the Press Release
GRAND RAPIDS, MICHIGAN – Marcus Montell Thames, 32, of Ft. Lauderdale, Florida, was sentenced to serve nine years and seven months in Federal prison for his leading role in an interstate identity-theft conspiracy that was based out of Florida, but whose members traveled throughout the Southeast and Upper Midwest committing bank fraud and identity theft during 2010 and 2011. The scheme involved eight charged defendants, all of whom have since been convicted of felonies including conspiracy to commit identity theft and bank fraud; bank fraud; and aggravated identity theft.The scheme involved the defendants, travelling in teams controlled by Thames, going to locations such as gyms, day-care centers, and other places where they hoped to find purses that had been left in vehicles. After breaking into the vehicles and stealing purses to obtain check books, driver licenses, and other means of identification, the defendants would then forge high face-value checks from one victim’s bank account made payable to another victim, and then travel to branches of the payee victim’s bank that had drive-through teller lanes. There, female fraud-team members wearing basic disguises would cash the forged checks from the lane farthest from the teller window, presenting that victim’s stolen means of identification as proof of identity. The fast-moving and wide-ranging scheme, dubbed “Felony Lane” by the lawenforcement agencies that investigated it, victimized significant numbers of private citizens and federally-insured financial institutions in states that included Georgia, Ohio, Indiana, Illinois and Michigan.
The investigation of Thames and his accomplices began with a February 2011 arrest by the Blackmon Township Police Department of defendant Wendy S. Bailey, 44, of Saginaw, Michigan, after she attempted to cash a forged check while on a trip with Thames and others. After initial investigation by Blackmon Township developed evidence that Bailey was part of an interstate fraud ring, the Lansing office of the FBI joined the investigation. From there, the investigation grew to include participation by the Meridian Township Police Department, the Michigan State Police, and numerous other law-enforcement agencies in communities outside of Michigan through which the fraud teams had passed.
The sentence was imposed by U.S. District Judge Janet T. Neff, who commented on the seriousness of identity theft in general, and on the aggravated character of this scheme in particular given its geographic reach, the number of victims over time, and the financial and psychic harms it caused.
Other defendants received the following sentences: Peter P. Simone, 50, of Davie, Florida, who was convicted following a jury trial in October 2011, received a sentence of six years in prison; Jarod L. Jackson, 29, of Ft. Lauderdale, Florida, was sentenced to 41 months in prison; Lucious L. Felder, 23, of Ft. Lauderdale, was sentenced to 30 months in prison; Carlton L. Brown, 24, of Ft. Lauderdale, was sentenced to 18 months in prison; Kimberly L, Kirkby, 52, of Florence, Alabama, was sentenced to 12 months in prison; and Wendy S. Bailey, 44, of Saginaw, Michigan, received a sentence of time-served, or approximately three months. Erica S. Robinson, 29, of Smyrna, Georgia, is pending sentencing on February 19, 2013. She is presently in the custody of the U.S. Marshals Service. All of the sentences were imposed by U.S. District Judge Neff, who also presided over the Simone trial.
Commenting on the sentences, U.S. Attorney Patrick A. Miles Jr. stated, “identity theft is a particularly pernicious form of property crime because it involves more than simply stealing money, it involves stealing the peace of mind of victims and, sometimes, harming their reputations and their credit-worthiness. For that reason, my Office will continue to aggressively pursue identity thieves – particularly those who mistakenly believe that they can escape accountability if they just keep moving quickly enough from county to county or from state to state.”
Robert D. Foley III, Special Agent in Charge, FBI Detroit Division stated, “Those individuals who engage in identity theft and other crimes as part of a ring, are robbing citizens of their money and their piece of mind. The FBI is committed to pursuing and prosecuting these criminals for these illegal acts.”
The Lansing office of the FBI was the lead investigating agency in the case. It was prosecuted by Assistant U.S. Attorney Hagen W. Frank, who serves as the principal of the Identity Theft and Cybercrime Task-Force of the U.S. Attorney’s Office..
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Insurance Broker Defrauds Seniors Out of Annuity FundsRead the Press Release
Williamsburg’s William Lowder Pleads Guilty to Wire Fraud and Tax ChargesGRAND RAPIDS, MICHIGAN – William Edward Lowder, age 57, of Williamsburg, Michigan, pleaded guilty to one count of wire fraud and one count of filing a false federal income tax return, U.S. Attorney Patrick A. Miles, Jr. announced today. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation Division, Special Agent in Charge Robert D. Foley III of the FBI, and Sheriff Thomas Bensley of the Grand Traverse Sheriff’s Office.
According to a Felony Information filed on January 9, 2013, Lowder was a licensed insurance agent and annuities producer who operated as Lowder Insurance and Ash Brokerage. Beginning in 2001, Lowder began defrauding several of his elderly clients by convincing them to liquidate existing annuity investments under the promise that the proceeds would be reinvested in annuities earning higher rates of return. After the clients liquidated their annuities, Lowder convinced them to provide the proceeds directly to him for reinvestment. Instead of reinvesting the proceeds, Lowder deposited the proceeds into his own bank account. To conceal his fraud, Lowder provided these clients with false statements of account.
“Vigorous prosecution of professionals who commit financial crimes remains one of the top priorities of this Office,” said U.S. Attorney Miles. “This case is especially troubling given that Mr. Lowder stole significant amounts of money from elderly clients who, like most citizens, rely upon their limited investments to provide for their financial security.” FBI Special Agent in Charge, Robert D. Foley III, agreed, stating “those who target elderly victims, many of whom live on a fixed income, rob them of their hard-earned savings and their security. The FBI is committed to stopping predatory scams against seniors.”
Between 2001 and 2009, Lowder stole in excess of one million dollars from his clients, which he used to fund his own comfortable lifestyle. As part of his plea, Lowder admitted that he did not claim the amounts stolen from his clients as income on his U.S. individual income tax returns from 2006 to 2009, despite knowing that he had an obligation to do so.
“There is never a time when it is okay to steal from someone, especially our seniors. IRS Criminal Investigation is committed to finding these perpetrators and pursuing them to the full extent of the law,” said Special Agent in Charge Erick Martinez..
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Charlotte Contractor Pleads Guilty to Tax EvasionRead the Press Release
GRAND RAPIDS, MICHIGAN – Thomas Lee Earl, 37, of Charlotte, pled guilty to tax evasion, U.S. Attorney Patrick Miles announced today. Earl, owner of Earl’s Exterior Plus, admitted that he had received substantial business income after a hail storm hit the greater Lansing area in 2008. Earl hid that income from the IRS and filed a false tax return for 2009 that underreported his income.U.S. Attorney Miles stated that “the United States Attorney’s Office will not hesitate to bring to justice those individuals who choose to defraud the IRS by willfully understating their income to avoid paying taxes. Such conduct is criminal and is unfair to honest citizens who pay
their taxes on a timely basis.”U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation. “It is important to remember, especially during filing season, that there are serious consequences for intentionally failing to
report all of your income,” said Special Agent Martinez.Earl faces up to five years in prison. A date for sentencing has not yet been scheduled.
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Five-Year-Sentence for Bomb-Plot Hoaxes Against Ford Federal Bulding and Palisades Nuclear PlantRead the Press Release
GRAND RAPIDS, MICHIGAN – Anthony Mario Fortuna, 36, of Allendale, Michigan, was sentenced Monday to serve the maximum-authorized penalty of five years in Federal prison for falsely reporting, to the FBI and the U.S. Marshals Service (USMS), plots to bomb the Gerald R. Ford Federal Building, in Grand Rapids, and the Palisades Nuclear Plant, in Covert, Michigan. Fortuna pled guilty to the charge in September, 2012.The sentence was imposed by Chief U.S. District Judge Paul L. Maloney in Kalamazoo, who commented that the maximum sentence was necessary based on Fortuna’s prior criminal history, which included a 2000 Federal conviction in Alabama for lying to the FBI about a murder-for-hire plot, and because the false reports required both the FBI and the USMS to waste time and resources conducting extensive investigations of what, if true, would have been extremely serious plots.
Commenting on the sentence, U.S. Attorney Patrick A. Miles Jr. stated, “Falsely reporting a serious crime to Federal law-enforcement agencies is itself a serious crime because it wastes the limited resources of agencies such as the FBI and of my Office. Time spent running down false leads is time that cannot be spent pursuing genuine crime. For that reason, there is nothing harmless or funny about hoaxes such as those perpetrated by Mr. Fortuna, and people who engage in them will be treated sternly.”
Fortuna perpetrated the first hoax in February 2010, when he reported a fictitious plot by several others to blow up the Ford Building in retaliation for a Federal prosecution that was, in fact, ongoing at the time. Joint investigation by the FBI and USMS established that Fortuna’s story was a hoax. Four months later, however, Fortuna again contacted the FBI with another false report, this time involving an insider plot against the Palisades plant. After a second investigation by the FBI determined that this story was also untrue, Fortuna was indicted on two counts of making false statements to Federal agents. Although the second charge involving the Palisades facility was dismissed as part of his plea-agreement with the Justice Department, Fortuna admitted that he committed both offenses, and explained that he was motivated by a desire to gain favor with the FBI in the hope that doing so would limit his punishment in State of Michigan prosecutions that were then ongoing. U.S. District Judge Maloney was able to consider all of the conduct in selecting a sentence..
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ATF and Lansing Police Department Arrest Seven on Federal Drug and Firearm ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN – Federal and State authorities arrested seven residents of Northwest Lansing on various federal drug and firearm charges following the return of multiple federal indictments, U.S. Attorney Patrick A. Miles, Jr., Acting Special Agent in Charge Gilbert Salinas, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Chief Teresa Szymanski, Lansing Police Department (LPD), announced today. The ATF and LPD are jointly targeting drug activity and violent crime in Northwest Lansing.Merza Mizori, 23, Gregory Dalton, 23, DeShun Dalton, 21, and Serwan Mizori, 22, (who was already in custody on unrelated state charges), jointly face multiple drug charges, including conspiring to distribute and to possess with intent to distribute crack cocaine and marijuana and actually distributing or possessing with intent to distribute those drugs as well as heroin. They face a minimum of ten years and up to life in prison on the conspiracy charge, up to 20 years in prison on the cocaine and heroin charges and up to five years in prison on the marijuana charges.
In a separate indictment, Jerome Houston, 26, faces charges for possessing firearms as a convicted felon, while Keith Houston, 22, stands charged with receiving a firearm while under indictment for a felony drug offense. Each charge is punishable by up to ten years in prison.
In another unrelated indictment, Brandon Jones, 26, (also already in custody on unrelated state charges) has been charged with possessing firearms, including an SKS rifle, as a convicted felon. That charge is punishable by up to ten years in prison.
Finally, Demanual Porter, 24, and Kevin Henry, 43, separately face charges for distributing crack cocaine. Each charge is punishable by up to 20 years in prison.
The charges in a federal indictment or state felony information are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
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Charlevoix Man Pleads Guilty to Receipt of Child PornograpyRead the Press Release
GRAND RAPIDS, MICHIGAN – Scott Thomas Barrett, 49, of Charlevoix, Michigan pleaded guilty on Monday, January 7, 2013, to receiving via the Internet images and videos of child pornography, U.S. Attorney Patrick A. Miles, Jr. announced today. Barrett faces a minimum of 5 years and a maximum of 20 years of imprisonment, and he will be required to serve a term of supervised release after his prison term has been completed. Barrett will also be required to register as a sexual offender.The case stemmed from an undercover online investigation that took place in 2011. During that investigation, an undercover officer was able to download child pornography that Barrett had made available on the Internet. Agents then executed a search warrant at Barrett’s home and recovered a computer that contained a substantial collection of child pornography. Barrett gave a full confession and admitted to downloading the child pornography images and videos from the Internet.
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.
The Department of Homeland Security, Homeland Security Investigations (HSI) investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case..
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Former Grand Rapids Area Financial Adviser Sentenced to 54 Months in Prison for Wire FraudRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr. announced today that Lawrence Maxwell McCoy of Bitely, Michigan was sentenced by U.S. District Judge Janet T. Neff to 54 months in prison for wire fraud. The U.S. Attorney’s Office filed a one-count Felony Information on September 7, 2012 charging McCoy with a scheme to defraud. McCoy pled guilty to the charge on September 20, 2012 pursuant to a plea agreement.McCoy sold mutual funds and insurance in and around Holland and Grand Rapids, doing business as Hallbrook Asset Management and Hallbrook Group, LLC. Under these auspices, McCoy provided legitimate investment advice and services, but also defrauded six of his clients, causing total losses of $708,267.37 between 1995 and 2009. To perpetrate his fraudulent scheme, McCoy fabricated an investment that he called “Marsico Private Ledger.” He represented to his clients that Marsico Private Ledger was an investment offered through Marsico Capital Management, LLC, a real mutual fund provider based in Colorado. McCoy then induced many of his existing clients, who otherwise had legitimate investments managed by McCoy, to invest in Marsico Private Ledger. After McCoy received his clients’ money under these fraudulent pretenses, he diverted it to his own use. To cover up the fraudulent scheme, McCoy fabricated investment return information and published it to his clients by manually entering the phony returns on a legitimate third-party internet reporting site dedicated to wealth management reporting. McCoy also sent e-mails to his clients to communicate the phony return information and to assure them that their investments in Marsico Private Ledger were safe. McCoy specifically targeted clients that he knew would not have an immediate need for their money. Through his scheme, McCoy stole clients’ nest eggs and money earmarked for college funds.
In handing down McCoy’s sentence, Judge Neff pointed out that McCoy’s behavior was “not aberrant” but, rather, “a thread in his history.” In 2009, McCoy was sentenced in 28th Circuit Court in Cadillac, Michigan to five years of probation for embezzling money from investments that he managed for a family member. Judge Neff added: “When people fall prey to this type of financial misconduct, it is really devastating.”
U.S. Attorney Miles stated: “Financial fraud often is a silent crime that can go undetected for months, if not years. When that happens, the impact on a victim’s nest egg is truly devastating. The United States Attorney’s Office for the Western District of Michigan is committed to pursuing and bringing to justice financial professionals who defraud their clients.”
In addition to his 54-month prison sentence, McCoy was also sentenced to two years of supervised release and was ordered to pay restitution in the amount of $690,267.37.
The case was prosecuted by Assistant U.S. Attorney Joel Fauson and was investigated by the Federal Bureau of Investigation, Grand Rapids Resident Agency..
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