District of Minnesota
Press releases recorded for this federal judicial district.
Convicted Felon Sentenced to 30 Months in Prison for StalkingRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of DESMOND GEORGE DANIAL, 51, to 30 months in prison for interstate stalking. DANIAL, who pleaded guilty on November 8, 2018, was sentenced today before Senior Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minnesota.
According to his guilty plea and documents filed in court, between August 5, 2014, and March 20, 2018, DANIAL repeatedly harassed and threatened his victim, her husband and her family. In 2012, DANIAL was charged and convicted of stalking in Stearns County, Minnesota, and a restraining order was filed against DANIAL preluding him from having contact with the victim. In August 2014, even after the victim left Minnesota and moved to Wyoming, DANIAL continued his harassment by repeatedly sending threatening text messages and emails, including threats of violence, to both the victim and her husband. DANIAL also harassed and threatened the victim’s parents who lived in Bemidji, Minnesota.
This case was the result of an investigation conducted by the Beltrami County Sheriff’s Office with assistance from the FBI Headwaters Safe Trails Task Force.
This case was prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.
Defendant Information:
DESMOND GEORGE DANIAL, 51
City of residence unknown
Convicted:
- Interstate stalking, 1 count
Sentenced:
- 30 months in prison
- Three years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Hopkins Man Indicted for Distributing Fentanyl Causing the Deaths of Eleven PeopleRead the Press Release
United States Attorney Erica H. MacDonald today announced a federal indictment against AARON RHY BROUSSARD, 28, charging him with twenty-one counts related to the distribution of controlled substances, including fentanyl, which resulted in the deaths of eleven people and caused serious bodily injury to four people. BROUSSARD will be arraigned on these charges before a Magistrate Judge in U.S. District Court at a later date. On December 6, 2016, the U.S. Attorney’s Office for the Middle District of Pennsylvania indicted BROUSSARD on one count of distribution and possession with intent to distribute a controlled substance and he is scheduled to stand trial on those charges on May 14, 2019. BROUSSARD was arrested on December 7, 2016, and is in custody in Scranton, Pennsylvania.
According to the allegations in the indictment, from 2014 through December 6, 2016, BROUSSARD obtained controlled substances, including fentanyl, from China-based drug suppliers. Upon receipt, BROUSSARD repackaged the controlled substances, marketed them for sale, and sold them to customers in the United States. BROUSSARD used various websites to market the controlled substances including PlantFoodUSA.Net, and distributed the controlled substances to customers using the United States mail and a United States Postal Service “Click-N-Ship” account.
According to the allegations in the indictment, on March 12, 2016, BROUSSARD placed a drug order for 100 grams of 4-FA, a controlled substance, which was shipped from China and contained approximately 100 grams of fentanyl. Between April 1 and April 27, 2016, BROUSSARD sent packages containing fentanyl to multiple customers throughout the United States. After ingesting the controlled substance received from BROUSSARD, eleven of the customers died from a fentanyl overdose and four customers suffered serious bodily injury. BROUSSARD continued to distribute controlled substances to customers even after learning that some had overdosed.
This case is the result of an investigation conducted by the U.S. Drug Enforcement Administration, the U.S. Postal Inspection Service, the University of Minnesota Police Department, the Peoria Heights (Illinois) Police Department, the Hazel Green (Wisconsin) Police Department, the Dallas (Texas) Police Department, the Broome County (New York) Sheriff’s Office, the Velusia County (Florida) Sheriff’s Office, the Orange County (California) Sheriff’s Office, and the Atlanta (Georgia) Police Department.
Assistant U.S. Attorney Thomas M. Hollenhorst is prosecuting the case.
Defendant Information:
AARON RHY BROUSSARD, 28
Hopkins, Minn.
Charges:
- Drug conspiracy resulting in death/serious bodily injury, 1 count
- Importation of 40+ grams of fentanyl, 1 count
- Possession with intent to distribute 40+ grams of fentanyl, 1 count
- Distribution resulting in death/serious bodily injury, 12 counts
- Possession with intent to distribute controlled substance analogues, 5 counts
- Possession With Intent To Distribute 4-EMC, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Red Lake Man Sentenced to 108 Months in Prison for Attempting to Murder Minor VictimRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of DOMINIC EDWARD DESJARLAIT, 19, to 108 months in prison for assault with intent to commit murder. DESJARLAIT, who pleaded guilty on December 19, 2018, was sentenced today before Judge Joan N. Erickson in United States District Court in Minneapolis, Minnesota.
According to documents filed with the court, including a law enforcement affidavit, during the evening hours of August 29, 2018, DESJARLAIT began an argument with the victim and a group of six other minor males at a grocery store on the Red Lake Reservation. The victim and the group of minor males left the grocery store and relocated to a residence on the reservation. DESJARLAIT also left the grocery store and followed the group, riding in a black SUV. Upon reaching the residence, DESJARLAIT exited the vehicle with a firearm, shouted the victim’s name and began firing multiple shots at the victim and the group of six other minor males. Multiple bullets hit two nearby residences that were occupied at the time.
DESJARLAIT also admitted to a previous assault with intent to commit murder against the same victim. On July 28, 2017, DESJARLAIT emerged from a wooded area on the Red Lake Reservation, near a residence where the victim and other males were located. DESJARLAIT fired a shotgun at the victim, causing wounds to his face and upper body.
This case was the result of an investigation conducted by the FBI Headwaters Safe Trails Task Force and Red Lake Department of Public Safety. This case is part of Project Safe Neighborhoods, an initiative that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
Assistant U.S. Attorney Angela Munoz-Kaphing prosecuted the case.
Defendant Information:
DOMINIC EDWARD DESJARLAIT, 19
Red Lake, Minn.
Convicted:
- Assault With Intent To Commit Murder, 1 count
Sentenced:
- 108 months in prison
- Three years of supervised release
- $715.83 in restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
U.S. Attorney’s Office Observes National Crime Victims’ Rights WeekRead the Press Release
Each year in April, the Department of Justice and United States Attorneys’ offices observe National Crime Victims’ Rights Week nationwide by taking time to honor victims of crime and those who advocate on their behalf. This year’s observance takes place April 7-13, with the theme: Honoring Our Past. Creating Hope for the Future.
“Victims of crime deserve justice. This Department works every day to help them recover and to find, prosecute, and convict those who have done them harm,” said Attorney General William P. Barr. “During this National Crime Victims’ Rights Week, we pause to remember the millions of Americans who have been victims of crime and we thank public servants who have served them in especially heroic ways. This week the men and women of the Department recommit ourselves once again to ensuring that crime victims continue to have a voice in our legal system, to securing justice for them, and to preventing other Americans from suffering what they have endured.”
“Justice is not only prosecuting the offender, it is upholding the rights of victims,” said U.S. Attorney Erica MacDonald. “During Crime Victims’ Rights Week, and throughout the year, we honor the resilience of victims and survivors and we commemorate those who champion victims’ rights and advocate for victim-centered approaches within the criminal justice system.”
The Department of Justice’s Office for Victims of Crime, within the Office of Justice Programs, leads communities across the country in observing National Crime Victims’ Rights Week each year. President Ronald Reagan proclaimed the first National Crime Victims’ Rights Week in 1981 to bring greater sensitivity to the needs and rights of victims of crime. More information about the Office of Justice Programs and its components can be found at www.ojp.gov. More information about Crime Victim’s Rights Week can be found at https://ovc.ncjrs.gov/ncvrw/.
The U.S. Attorney’s Office for the District of Minnesota has a dedicated team of Victim Witness Specialists. In addition to ensuring compliance with victims’ rights, as set forth in federal statute, team members accompany crime victims to court, make referrals for counseling, and assist in accessing victim compensation funds. For more information or to contact the Victim Witness Specialists, please visit https://www.justice.gov/usao-mn/victim-witness.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Florida Executive Sentenced to 20 Years in Prison for Orchestrating $150 Million International Ponzi SchemeRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of ANTONIO CARLOS DE GODOY BUZANELI, 57, to 240 months in prison for his role in a $150 million investment fraud scheme involving Brazilian factoring. BUZANELI, who entered his guilty plea on April 19, 2018, was sentenced today before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minnesota. BUZANELI’S co-conspirators, JOSE MANUEL ORDOÑEZ, JR., 48, was sentenced on January 23, 2019, to 120 months in prison and JULIO ENRIQUE RIVERA, 62, will be sentenced on April 16, 2019.
U.S. Attorney Erica MacDonald said, “Antonio Buzaneli was the primary architect of a $150 million Ponzi scheme that targeted hundreds of victims worldwide, many of whom were elderly and vulnerable. Some victims lost their retirement savings, others lost the ability to provide a college education to their children or grandchildren. For these egregious crimes, Mr. Buzaneli will spend the next 20 years behind bars. I applaud our law enforcement partners for their steadfast efforts in seeking justice for the victims.”
“No matter how complex the scheme, the FBI is committed to stopping fraudsters like these from preying on people, especially elderly investors who may have lost their life savings in this case,” said Jill Sanborn, Special Agent in Charge of the FBI's Minneapolis Division. “We are grateful for our partners at the U.S. Attorney’s Office, the United States Postal Inspection Service and the Minnesota Commerce Fraud Bureau for thoroughly investigating this global scheme and bringing these criminals to justice; and we believe this matter further illuminates the need for citizens to be wary of those peddling these kinds of fraudulent business investments.”
“Our securities enforcement unit and the Commerce Fraud Bureau began investigating this scheme after receiving a tip about a suspicious investment opportunity being offered in Minnesota,” said Steve Kelley, Commissioner of the Minnesota Department of Commerce. “We are proud that the Commerce Fraud Bureau collaborated successfully with federal authorities, bringing to justice a far-reaching operation that deceived Minnesotans.”
According to his guilty plea, BUZANELI, along with his co-conspirators, ORDOÑEZ and RIVERA, were the principals of Providence Holdings International, Inc., a company based in Key Biscayne, Florida. BUZANELI and ORDOÑEZ became principals of Providence Financial Investments, Inc. and Providence Fixed Income Fund LLC (collectively, along with Providence Holdings International, Inc., “Providence”) in order to raise money from investors.
According to BUZANELI’s guilty plea and documents filed in court, from about 2010 until June 2016, Providence raised approximately $150 million from investors worldwide by representing that Providence would invest the money in Brazilian factoring. “Factoring” is a financial transaction in which accounts receivable are purchased at a discount. Providence’s marketing materials explained that in Brazil consumers write ten separate post-dated checks for $100 – one per month – to pay for $1,000 in retail items such as consumer electronics or groceries. The retailer then sells the post-dated checks to Providence for approximately $820, and Providence earns $180 over ten months as the checks mature. As a result, Providence claimed to make a 48 percent annual return on money invested in Brazil.
According to BUZANELI’s guilty plea and documents filed in court, Providence raised more than $64 million from U.S. investors by employing a network of brokers who sold promissory notes bearing annual interest rates between 12 percent and 24 percent. Investors were told their money would be used to factor accounts receivable in Brazil. BUZANELI, ORDOÑEZ and RIVERA provided the brokers with an Executive Memorandum to show investors that their money would be used to factor accounts receivable in Brazil. The Executive Memorandum falsely stated that funds would be used “for the sole purpose” of making loans to a Brazilian subsidiary of Providence “which will use the proceeds of the loan to acquire receivables or financial instruments such a post-dated checks and/or Duplicatas in the Brazilian Factoring Market.”
According to the defendant’s guilty plea and documents filed in court, BUZANELI and ORDOÑEZ instead used a significant amount of the investors’ funds to make Ponzi-style payments to other investors and to make commission payments to Providence’s nationwide network of brokers. BUZANELI and ORDOÑEZ also diverted investor funds to other companies they controlled, including an import/export company, a travel company, a realty company, a credit rehabilitation company, and a catering company and food truck operated by BUZANELI’S wife.
According to the defendant’s guilty plea and documents filed in court, BUZANELI and ORDOÑEZ also opened Providence offices and affiliates in locations around the world, including London, Taipei, Shanghai, Singapore, Vancouver, and Panama. For example, in 2011 and 2012, BUZANELI and ORDOÑEZ opened Providence affiliates in the Bailiwick of Guernsey and in Hong Kong, through which they raised approximately $85 million from offshore investors based on the same lies they told investors in the United States – that their money would be used to invest in Brazilian factoring. Instead, much of the investors’ money was transferred to other Providence-controlled entities around the world as well as to bank accounts controlled by BUZANELI and ORDOÑEZ, where the money was used for payments unrelated to Brazilian factoring, including to pay commissions to U.S. brokers and to make interest payments to American investors in Providence’s U.S.-based entities. As a result of the fraud scheme, Providence investors worldwide – including more than 500 victims in the United States alone – lost a total of more than $100 million.
This case was the result of an investigation conducted by the FBI, United States Postal Inspection Service, and the Minnesota Commerce Fraud Bureau. United States Attorney MacDonald would also like to thank the Securities and Exchange Commission for their assistance on this case.
Assistant U.S. Attorneys Kimberly A. Svendsen and Joseph H. Thompson prosecuted this case.
Defendant Information:
ANTONIO CARLOS DE GODOY BUZANELI, 57
Coral Gables, Fla.
Convicted:
- Conspiracy to commit mail fraud, 1 count
Sentenced:
- 240 months in prison
- $51,353,861.45 in restitution
- Three years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Recent Tax Prosecutions Serve as A Reminder to Accurately File and Pay Taxes as the April 15 Deadline ApproachesRead the Press Release
The U.S. Attorney’s Office reminds all Minnesotans that the deadline for filing federal income tax returns is Monday, April 15. Although the filing season is nearing the end, the U.S. Attorney’s Office and the Internal Revenue Service’s Criminal Investigation Division work year round to protect the integrity of our nation’s tax system by investigating and prosecuting individuals who violate the tax laws.
“We owe it to every American taxpayer to use all lawful means to identify and prosecute those who seek to violate our nation’s tax laws. It is a matter of maintaining public confidence in our system of taxation,” stated U.S. Attorney Erica MacDonald.
“Taxpayers thinking about participating in fraudulent tax schemes, such as failing to report all forms of income or falsifying deductions should take a good look at the serious and detrimental consequences of taking the next step,” stated Special Agent in Charge Gabe Grchan of the IRS Criminal Investigation Division. “Those who might consider preparing false and fraudulent tax returns should be aware of the extremely negative consequences that could result in prison time, large tax bills, including substantial fines, interest and penalties.”
As the tax filing season winds down next week, the following court actions serve as a reminder to taxpayers, to think before filing a false or fraudulent tax return and to be wary of any schemes that falsify your income or deductions.
MICHAEL DEAN CARNICLE, of Henderson, Nevada, was sentenced to nine months in federal prison and ordered to pay $303,881 in restitution for willfully failing to file his tax returns. CARNICLE received gross income in the amount of $1,276,858 for tax year 2007 and $575,840 for tax year 2008, but willfully failed to file tax returns resulting in a total tax loss of $303,881.
SHARI ANN NATYSIN, of Elk River, Minnesota, pleaded guilty to multiple counts of wire fraud and tax evasion related to payments she received while employed as a bookkeeper of a family-owned concrete flooring company in Anoka, Minnesota. Utilizing her position, NATYSIN manipulated the company’s payroll processing service to overpay herself more than $630,000 while concealing the fraudulent transactions from the owners of the business. NATYSIN also attempted to file tax returns that grossly understated her income to evade the income tax she owed to the United States.
MELISSA VANG PASKEWICH, owner and operator of WIN SOLUTIONS, a temporary staffing agency, pleaded guilty to one count of willful failure to pay payroll taxes and one count of filing a false tax return. During the tax years 2014 through 2017, PASKEWICH caused the business to withhold payroll taxes from only some employees’ wages and pay the amounts to the IRS as required. For most workers, whom she called “cash” employees, PASKEWICH did not pay the payroll taxes as required and did not report the employees’ wages on IRS Forms 941 and Forms 1120S. PASKEWICH admitted keeping $740,564.22 in payroll taxes and filing a false 2016 income tax return in which she only reported $80,949 in business income when, in fact, WIN SOLUTIONS’s net income was $609,538. The total criminal tax loss is approximately $1,132,110.75.
SCOTT PHILLIP FLYNN, of Orono, Minnesota, was sentenced to 87 months in prison and was ordered to pay more than $5 million in restitution for evading the assessment of millions of dollars in income taxes by fraudulently hiding millions of shares of stock that he obtained for himself. In one year alone, FLYNN received approximately $2.7 million in proceeds which he used to purchase a house in Orono, Minnesota while only reporting income of $26,136 to the IRS.
JEROME C. RUZICKA, W. JEFFERY TAYLOR, SCOTT A. NELSON, and JEFFREY LEE LONGTAIN, were recently sentenced for their roles in a massive fraud scheme perpetrated against Eden Prairie-based Starkey Laboratories, Inc. (Starkey) and its principal owner William F. Austin. Following a nearly eight-week trial, both RUZICKA and TAYLOR were convicted of mail and wire fraud and RUZICKA was convicted of tax fraud. NELSON pleaded guilty to conspiracy to commit mail fraud and wire fraud and LONGTAIN pleaded guilty to making and subscribing a false tax return.
JULIE ANN LEE, former controller of the Town & Country Club (“TCC”) in St. Paul, Minnesota, was sentenced to 42 months in prison for operating a million dollar embezzlement scheme. LEE stole more than $1 million in cash, checks, and credit card payments and, in order to conceal the shortage of funds, LEE filed false quarterly payroll tax returns with the IRS understating TCC’s payroll tax liability. At times, LEE also filed TCC’s quarterly payroll tax returns late and made TCC’s quarterly tax payments late, which resulted in TCC paying more than $300,000 in interest and penalties to the IRS.
ELLIS ALANCE BANKS, of Brooklyn Center, Minnesota, was sentenced to 92 months in prison on charges of conspiracy to defraud the United States and aggravated identity theft. BANKS filed more than 250 false tax returns seeking $1.2 million in fraudulent tax refunds. Additionally, he obtained social security numbers, dates of birth, and other personal identifying information of individuals to use to file fraudulent income tax returns.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former Shakopee School Superintendent Sentenced to Prison for Soliciting BribesRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of RODNEY KEITH THOMPSON, 53, to 24 months in prison for corruptly soliciting a bribe. THOMPSON, who pleaded guilty on November 15, 2018, was sentenced before Judge Susan R. Nelson in U.S. District Court in St. Paul, Minnesota.
According to the defendant’s guilty plea and documents filed in court, from 2011 through June 2017, THOMPSON served as the Superintendent of the Shakopee School District. In his official capacity, THOMPSON had the authority to select contractors to perform construction and related services for the School District. THOMPSON used his position and authority to obtain personal benefits from a company interested in being awarded contracts with the School District. THOMPSON solicited things of value from the company, such as home improvement projects, personal travel, and attendance at sporting events, in exchange for contracts with the School District. For example, between July 2010 and November 2015, at THOMPSON’s demand, the company spent more than $44,000 remodeling and improving the basement of THOMPSON’s Shakopee house.
“Mr. Thompson abused his position of trust throughout his entire tenure with the Shakopee School District. And now, his greedy and corrupt dealings have earned him a prison sentence,” said U.S. Attorney Erica H. MacDonald.
“Today’s sentence of Mr. Thompson demonstrates our collective commitment to hold public officials accountable”, said Jill Sanborn, Special Agent in Charge of the FBI’s Minneapolis Division. “The success of this investigation was due in large part to the collaboration between the FBI, Department of Justice, the Scott County Attorney’s Office and the Shakopee Police Department. Together with our law enforcement partners, the FBI will continue to investigate public officials who abuse their positions and violate the public trust.”
This case was the result of an investigation conducted by the FBI.
Assistant U.S. Attorney David J. MacLaughlin prosecuted the case.
Defendant Information:
RODNEY KEITH THOMPSON, 53
Shakopee, Minn.
Convicted:
- Corrupt solicitation of a bribe, 1 count
Sentenced:
- 24 months in prison
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Volunteer and Former Employee of Minneapolis Charter School Charged with Sexually Exploiting MinorsRead the Press Release
United States Attorney Erica H. MacDonald announced a federal criminal complaint against JOSIAH RAUL MOSQUEDA, 27, charging him with coercion and enticement of two separate minors, transfer of obscene material to a minor, and receipt, distribution, and production of child pornography. MOSQUEDA made his initial appearance today before Magistrate Judge Tony N. Leung in U.S. District Court in Minneapolis, Minnesota. MOSQUEDA was ordered to remain in custody pending a formal detention hearing, which is scheduled for Monday, April 1, 2019.
According to the allegations in the complaint, MOSQUEDA was a volunteer and former employee of a Minneapolis charter school and a volunteer at a different Minneapolis middle school. From July 6, 2017, through December 23, 2018, MOSQUEDA engaged in sexually explicit communications, including transferring graphic, sexually explicit images and videos, to minors via Facebook Messenger. MOSQUEDA sent hundreds of messages to at least one minor, repeatedly requesting images and videos of sexually explicit acts or suggesting sexual encounters. In one instance, a minor reached out to MOSQUEDA for financial help getting his cell phone fixed. MOSQUEDA paid for the repair with the condition that the minor repay him by “hook[ing] up.”
According to the allegations in the complaint, MOSQUEDA was aware that his conduct was illegal, sending a message to one minor that read, “I mean if I show you you literally cant show anyone. I would go to jail and never be able to teach or work in a school lol.” MOSQUEDA’s Facebook also contained posts regarding law enforcement officers, as well as the Government in general, stating that, “all pigs must die,” and “[expletive] the pigs, barbeque them all.”
Based on the evidence obtained in this investigation, authorities believe there may be additional victims of the alleged conduct. Anyone with information about this matter is encouraged to call the BCA Tip Line at 1-877-996-6222. Callers may remain anonymous.
This case is the result of an investigation conducted by the Minnesota Bureau of Criminal Apprehension (“BCA”).
This case is being prosecuted by Assistant U.S. Attorney Carol M. Kayser and Special Assistant U.S. Attorney Lindsey Middlecamp.
Defendant Information:
JOSIAH RAUL MOSQUEDA, 27
Minneapolis, Minn.
Charges:
- Receipt of child pornography, 1 count
- Coercion and enticement of a minor, 4 counts
- Production of child pornography, 1 count
- Transfer of obscene material to a minor, 1 count
- Distribution of child pornography, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Otsego Home Health Care Company to Pay More Than $700,000 to Resolve False Claims Act LiabilityRead the Press Release
United States Attorney Erica H. MacDonald today announced that Accurate Home Care, LLC (“Accurate Home Care”), a home health care company headquartered in Otsego, Minnesota, has agreed to pay $726,957.59 to resolve federal False Claims Act violations arising from the unlawful submission of claims for payment to Minnesota Medicaid, a jointly funded federal and state health care program.
According to the settlement agreement, Accurate Home Care voluntarily disclosed to the United States that it had submitted claims for payment for home care services to both Minnesota Medicaid and private insurers for the same service, and fraudulently retained full payment from Minnesota Medicaid, even where it was not the primary insurer. Pursuant to the settlement agreement, Accurate Home Care must pay the United States and the State of Minnesota a total of $726,957.59 to resolve the misconduct. Accurate worked cooperatively with the Department of Justice in voluntarily disclosing the false claims. Department of Justice policy encourages self-reporting of fraud and values company cooperation.
The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
This matter was handled by the U.S. Attorney’s Office for the District of Minnesota, with assistance from the Medicaid Fraud Control Unit of the Minnesota Attorney General’s Office and the Office of Inspector General of the U.S. Department of Health and Human Services.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Two Individuals Charged in 64 Pound Methamphetamine BustRead the Press Release
United States Attorney Erica H. MacDonald today announced a criminal complaint charging GONZALO JIMINEZ-PAZ, JR., 22, and REY DAVID LUNA-SANTILLANES, 22, with conspiracy to distribute methamphetamine. JIMINEZ-PAZ and LUNA-SANTILLANES were arrested earlier today and made their initial appearances before Magistrate Judge Tony Leung in U.S. District Court in Saint Paul, Minnesota.
According to a criminal complaint, on March 23, 2019, law enforcement officers with the Ramsey County Violent Crime Enforcement Team (VCET) executed a search warrant at a residence in the downtown area of Minneapolis. During execution of the search warrant, officers recovered approximately 64 pounds of suspected methamphetamine, a large sum of U.S. currency, 3 pounds of suspected heroin, a bag containing unidentified blue pills and two loaded hand guns. The methamphetamine was found inside two suitcases, the heroin was hidden inside of a shoebox, and a large amount of cash was located in a kitchen cupboard.
This case is the result of an investigation conducted by the St. Paul Police Department, the Ramsey County VCET, the DEA, the Minnesota Bureau of Criminal Apprehension (“BCA”), and the Minnesota State Patrol.
Assistant U.S. Attorney LeeAnn K. Bell is prosecuting the case.
Defendant Information:
GONZALO JIMINEZ-PAZ, JR., 22
Minneapolis, Minn.
Charges:
- Conspiracy to distribute methamphetamine, 1 count
REY DAVID LUNA-SANTILLANES, 22
Minneapolis, Minn.
Charges:
- Conspiracy to distribute methamphetamine, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the criminal complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Defendants Sentenced for Fraud Scheme Involving Local Environmental Company’s Improper Disposal of Toxic ChemicalsRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of LUMINAIRE ENVIRONMENTAL AND TECHNOLOGIES, INC., and co-defendants JOHN D. MILLER JR., 61, and JOSEPH V. MILLER, 59, for a $1 million fraud scheme involving the improper disposal of toxic waste. Defendants LUMINAIRE and JOHN MILLER were sentenced today before Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota. Defendant JOSEPH MILLER was sentenced on March 5, 2019.
According to the defendants’ guilty pleas and documents filed in court, LUMINAIRE ENVIRONMENTAL AND TECHNOLOGIES, INC. (“LUMINAIRE”) provided recycling and waste disposal services to customers. Among other services, LUMINAIRE offered to pick up customers’ fluorescent light ballasts containing polychlorinated biphenyls (“PCBs”), transport the PCB-containing ballasts to the LUMINAIRE facility located in Plymouth, Minnesota, and remove and dispose of all the PCBs in accordance with the Toxic Substances Control Act (TSCA). In exchange, LUMINAIRE charged customers a fee of approximately $0.35 per pound of PCB lighting ballasts plus transportation costs. Because the PCBs contained in the ballasts are considered a toxic chemical, regulations promulgated by the United States Environmental Protection Agency (“EPA”), pursuant to TSCA, mandate special procedures and documentation for the transportation and disposal of PCB waste.
According to the defendants’ guilty pleas and documents filed in court, between 2010 until 2015, JOHN MILLER, owner of LUMINAIRE, and other LUMINAIRE employees falsely represented to customers that LUMINAIRE would properly transport and dispose of customers’ toxic chemicals. Instead, after picking up loads of PCB-ballasts from customers, JOHN MILLER instructed LUMINAIRE employees to remove warning labels from the containers holding the PCB-ballasts, and then sell the PCB-ballasts as scrap metal to scrap yards and metal recycling facilities. In order to conceal the fact that the PCB-ballasts had not been received and processed at LUMINAIRE’S facility, JOHN MILLER directed LUMINAIRE employees, including JOSEPH MILLER, to falsely certify on shipping manifests that the PCB-ballasts had arrived at LUMINAIRE’S facility. At JOHN MILLER’S direction, LUMINAIRE employees also sent copies of the falsified shipping documentation by mail to customers and to certain state environmental agencies. In addition, JOHN MILLER instructed LUMINAIRE employees to prepare and deliver falsified invoices to customers who, in turn, made payments to LUMINAIRE. As a result of the scheme, LUMINAIRE fraudulently collected more than $1,000,000 in fees and additional profits.
This case was the result of an investigation conducted by the U.S. Environmental Protection Agency and the Hennepin County Department of Environmental Protection.
Assistant U.S. Attorneys Benjamin F. Langner and Amber M. Brennan prosecuted this case.
Defendant Information:
LUMINAIRE ENVIRONMENTAL AND TECHNOLOGIES, INC.
Plymouth, Minn.
Convicted:
- Mail fraud, 1 count
Sentenced:
- Five years of probation with special conditions, including an Environmental Compliance Plan
- $10,000 fine
JOHN D. MILLER JR., 61
Plymouth, Minn.
Convicted:
- Conspiracy to commit mail and wire fraud, 1 count
Sentenced:
- 36 months in prison
- $15,000 fine
- $1,049,848.78 in restitution
JOSEPH V. MILLER, 59
Chanhassen, Minn.
Convicted:
- Falsification of documents with intent to obstruct a federal matter, 1 count
Sentenced:
- Two years of probation
- $3,000 fine
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Minneapolis Man Charged with Wire Fraud, Child PornographyRead the Press Release
United States Attorney Erica H. MacDonald announced two separate federal indictments against OTIS RAY MAYS, JR., 26, charging him with production and receipt of child pornography and wire fraud. Following his arraignment and detention hearing yesterday before Magistrate Judge Katherine M. Menendez, MAYS was ordered to remain in custody pending further proceedings.
According to the allegations in the first indictment, from May 2017 through September 20, 2017, MAYS devised a scheme to defraud two victims, a husband and wife couple. As part of the scheme, MAYS falsely told the couple that he was a lawyer and offered to help them with the eviction of tenants from their rental properties. MAYS also told them that their son, a college student, had visited terrorist websites and, as a result, was facing federal, criminal, terrorism charges. MAYS told the victims that in exchange for a payment of $30,000, their son could avoid being detained on those federal terrorism charges, and in exchange for further payment of $6,222, those charges would be dropped. Additionally, MAYS told the victims that their son’s computer contained videos that had been “pirated” and in exchange for a $305,000 payment, MAYS could resolve any legal difficulties arising from the allegedly pirated videos. In total, MAYS stole more than $340,000 from the victims.
According to the allegations in the second indictment, on November 20, 2017, and on November 29, 2017, MAYS engaged in sexually explicit conduct with a minor victim for the purpose of producing video recordings of the conduct. Additionally, on November 29, 2017, and on December 1, 2017, MAYS received multiple video files containing child pornography.
Based on the evidence obtained in both cases, authorities believe there may be additional victims of the alleged conduct. Anyone with information about this matter is encouraged to call the FBI at (763) 569-8000. Callers may remain anonymous.
These cases are the result of an investigation conducted by Bloomington Police Department, Richfield Police Department, and the FBI.
These cases are being prosecuted by Assistant U.S. Attorney John Docherty.
Defendant Information:
OTIS RAY MAYS, JR., 26
Minneapolis, Minn.
Charges:
- Wire fraud, 3 counts
- Production of child pornography, 9 counts
- Receipt of child pornography, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictments are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Statement by U.S. Attorney MacDonald in Response to the Attacks in Christchurch, New ZealandRead the Press Release
United States Attorney Erica H. MacDonald issued the following statement in response to the mosque shootings in Christchurch, New Zealand:
“United, we must condemn all acts of violence fueled by hatred, bigotry, and intolerance. My commitment to freedom and safety for all of our faith communities and houses of worship is unwavering. This is a sad day and we are grieving with the people of Christchurch, New Zealand,” said U.S. Attorney MacDonald.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Saint Paul Man Pleads Guilty to Armed Robbery of Two Eagan BanksRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of DAMIEN JAMES McDONALD, 40, to two counts of armed bank robbery. McDONALD, who was indicted on July 18, 2018, pleaded guilty today before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minnesota.
According to the defendant’s guilty plea, on April 14, 2018, McDONALD entered the US Bank branch in the Lunds & Byerly’s grocery store in Eagan, Minnesota, pointed a firearm at two tellers and demanded money. The tellers complied with his demands and McDONALD fled the store with $2,739 in cash. On June 6, 2018, McDONALD entered the Associated Healthcare Credit Union in Eagan, Minnesota. McDONALD pointed a firearm at a teller, threw a bag on the counter and demanded that the teller fill it with cash. After the teller complied, McDONALD ordered the teller to pass the bag to an adjacent teller, who was also instructed to fill the bag with cash. McDONALD ordered the two tellers to a back room and then fled the credit union with $8,236 in cash, which included ten pre-recorded $20 bait bills. Upon review of the surveillance video of the credit union robbery, law enforcement recognized McDONALD and executed a search warrant at his residence and for his vehicles later that day. Law enforcement recovered clothing that matched the clothing worn by the robber during the two robberies and thousands of dollars in cash hidden in the residence. Additionally, investigators found over one-thousand dollars cash in McDONALD’S pocket following his arrest, including cash that matched some of the pre-recorded bait bills from the credit union robbery.
This case is the result of an investigation conducted by the FBI and Eagan Police Department. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat violent crime.
This case is being prosecuted by Assistant U.S. Attorneys Benjamin Bejar, Thomas Calhoun-Lopez, and Charles J. Kovats.
Defendant Information:
DAMIEN JAMES McDONALD, 40
Saint Paul, Minn.
Convicted:
- Bank robbery (armed), 2 counts
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Meadowlands Man Sentenced to 15 Months in Prison for Stealing Social Security BenefitsRead the Press Release
United States Attorney Erica H. MacDonald announced the sentencing of STEVEN PHILLIP SVOBODA, 37, to 15 months in prison for stealing more than $100,000 in Social Security benefits. SVOBODA, who pleaded guilty to one count of theft of government funds on November 6, 2018, was sentenced by Judge Wilhelmina M. Wright in U.S. District Court in Saint Paul, Minnesota.
According to the defendant’s guilty plea and documents filed in court, from July 2010 through August 2017, SVOBODA applied for and received survivor benefits as the representative payee on behalf of his two minor children. In his application and in subsequent annual paperwork submitted to the Social Security Administration (“SSA”), SVOBODA repeatedly lied by saying the two minor children lived with him, that he was the sole provider of financial support and care, and that the survivor benefit funds were being used to pay for the children’s care. In reality, the minor children resided with their grandparents and SVOBODA spent the survivor benefit funds on himself. In total, SVOBODA stole approximately $113,804.00 from the SSA.
This case was the result of an investigation by the Social Security Administration-Office of the Inspector General. Special Assistant U.S. Attorney Lindsey E. Middlecamp prosecuted the case.
Defendant Information:
STEVEN PHILLIP SVOBODA, 37
Meadowlands, Minn.
Convicted:
- Theft of government funds, 1 count
Sentenced:
- 15 months in prison
- Three years of supervised release
- $113,804.00 in restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Twin Cities Bank Robber Sentenced to Eight Years in PrisonRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of JAYVON DOMINIQUE GANT, 28, to eight years in prison for bank robbery. GANT, who pleaded guilty on August 20, 2018, was sentenced today before Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota.
According to his guilty plea and documents filed in court, on June 7, 2018, GANT entered Premier Bank in Bloomington, Minnesota, and passed a note to the teller that contained a demand for money, followed by a verbal demand of the teller to, “give me all the money and no trackers.” In response to his demand, the teller handed GANT $3,710 and, after receiving the money, GANT fled the bank on foot. Following the robbery, law enforcement officers located GANT at his home in Bloomington. Upon law enforcement’s entry to the residence, GANT jumped from his third floor balcony to the second floor below, broke the sliding glass door and entered the second floor apartment in an attempt to escape. When confronted by law enforcement on the second floor, GANT jumped from the second floor balcony to the ground level where he was apprehended.
According to his guilty plea and documents filed in court, GANT committed five additional robberies of other banks located throughout the Twin Cities area. In all instances, GANT used similar tactics by passing a note to the teller that contained a demand for money. For example, one such note stated, “Give me all the money out the top and bottom drawer act calm and normal NO Gps or Dypack Im going to go through the money at this counter so don’t play games with me give me the money act normal no one will get hurt.”
This case was the result of an investigation conducted by the FBI Safe Streets Task Force, the Bloomington, Blaine, Fridley, Edina, Cottage Grove and Oakdale Police Departments. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat violent crime.
This case was prosecuted by Assistant U.S. Attorney Charles J. Kovats.
Defendant Information:
JAYVON DOMINIQUE GANT, 28
Bloomington, Minn.
Convicted:
- Bank robbery, 1 count
Sentenced:
- 96 months in prison
- Three years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
North Dakota Man Sentenced to Prison for Threatening to Murder A Federal JudgeRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of ROBERT PHILIP IVERS, 65, to 18 months in prison for threatening to murder a federal judge and interstate transmission of a threat to injure. IVERS, who was convicted by a federal jury on September 14, 2018, was sentenced today before Judge Robert W. Pratt, in United States District Court in Saint Paul, Minnesota.
As proven at trial, in January 2017, a United States District Court Judge (the “Victim Judge”) held a bench trial on a lawsuit brought by IVERS. The Victim Judge ruled against IVERS. He responded by sending a series of threatening letters and calling a court employee to say he was crazy angry at the Victim Judge and described himself as a “walking bomb.” IVERS was told repeatedly by Deputy U.S. Marshals to stop his threatening language.
On November 9, 2017, IVERS filed another civil lawsuit alleging the same facts as those in the case he lost before the Victim Judge. As part of the new civil case, IVERS was referred to two volunteer lawyers for a telephone consultation. After the lawyers discussed his case and told IVERS they did not believe he had a valid legal claim, IVERS began talking about his previous case with the Victim Judge. One of the lawyers described IVERS as becoming “intensely angry” and making threatening statements including:
• “This [expletive] judge stole my life from me.”
• “I had overwhelming evidence.”
• The Judge “stacked the deck” to make sure I lost this case.
• “She is lucky” I was “going to throw some chairs.”
• “You don’t know the fifty different ways I planned to kill her.”
After the lawyer reported the threats IVERS made during the phone conversation, two Deputy U.S. Marshals went to a residence in West Fargo, North Dakota to speak with IVERS about the threats. When confronted, IVERS became extremely agitated, and screamed at the Deputies, among other things, that he was glad the Victim Judge was scared, because “that [expletive] judge stole my life.”
This case was the result of an investigation conducted by the United States Marshals Service.
Assistant U.S. Attorneys Julie E. Allyn and Timothy C. Rank prosecuted the case.
Defendant Information:
ROBERT PHILIP IVERS, 65
West Fargo, N.D.
Convicted:
- Threatening to murder a federal judge, 1 count
- Interstate transmission of a threat to injure the person of another, 1 count
Sentenced:
- 18 months in prison
- Three years of supervised release with location monitoring
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former U.S. Probation Officer Pleads Guilty to Lying to the FBIRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of DENNIS EDWARD BRESNAHAN, 55, a former United States Probation Officer, to two counts of making false statements to the FBI. BRESNAHAN, who was indicted on August 15, 2018, entered his guilty plea earlier today before Judge Robert W. Pratt in U.S. District Court in Saint Paul, Minnesota.
“People who work in the criminal justice system hold positions of trust over others and are to use that authority appropriately,” said Jill Sanborn, Special Agent in Charge of the FBI's Minneapolis Division. “The FBI takes seriously its responsibility to maintain the integrity of the criminal justice system by investigating allegations where that trust was violated. All citizens, including the vulnerable victims in this case, expect and deserve equal protection under the law.”
According to the defendant’s guilty plea and documents filed in court, for more than twenty-five years, and until August 22, 2016, BRESNAHAN was employed as a United States Probation Officer for the District of Minnesota. In his role, BRESNAHAN was responsible for supervising defendants on federal pretrial and supervised release, and had access to records and maintained communications with individuals under his supervision. Between January 2016 and April 1, 2016, BRESNAHAN engaged in sexually inappropriate conduct with an individual (identified as “Witness A”) under his supervision, including repeated phone and email discussions of a sexual nature.
According to the defendant’s guilty plea and documents filed in court, on August 22, 2016, FBI agents interviewed BRESNAHAN regarding both his sexually inappropriate conduct in his role as a United States Probation Officer and his relationship with Witness A. BRESNAHAN admitted to engaging in sexually inappropriate behavior and to receiving one topless photograph from Witness A. When FBI agents asked BRESNAHAN whether he had asked for additional sexual photographs from Witness A, BRESNAHAN lied and said that he had not. FBI agents then asked BRESNAHAN if he had engaged in any similar inappropriate sexual conduct with other probationers, including asking for sexual photographs, to which BRESNAHAN again lied and claimed that he had not. However, upon further investigation, it was revealed that BRESNAHAN had in fact asked for sexual photographs from other probationers, specifically an individual identified as Witness B. Witness B was under BRESNAHAN’S supervision from July 2013 until approximately February 2014. During that time, BRESNAHAN engaged in multiple email exchanges of a sexual nature with Witness B, including asking for sexual photographs.
This case is the result of an investigation conducted by the FBI.
Assistant U.S. Attorneys Julie E. Allyn and Allen A. Slaughter are prosecuting the case.
Defendant Information:
DENNIS EDWARD BRESNAHAN, 55
Forest Lake, Minn.
Convicted:
- Making false statements or representations to an agency of the United States, 2 counts
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Inver Grove Heights Cell Phone Store Robber Sentenced to 15 Years in PrisonRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of JAMAAL MARQUIE MAYS, 34, to 180 months in prison for the armed robbery of an Inver Grove Heights business. MAYS and his co-defendant, JAQUON KESHAWN MOMAN, 26, were charged in a superseding indictment on February 7, 2018. MAYS, who pleaded guilty on September 21, 2018, was sentenced yesterday before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota. MOMAN pleaded guilty on August 1, 2018, and was sentenced on January 2, 2019, to 72 months in prison.
United States Attorney MacDonald said, “These defendants showed complete disregard for human life when they made the decision to commit armed robbery of a business establishment located in a busy suburban retail area. Such brazen acts of violence will not be tolerated in our communities and we, along with our law enforcement partners, are committing all necessary resources to bringing violent criminals to justice.”
According to the defendant’s guilty plea and documents filed in court, on August 17, 2017, MAYS and MOMAN entered a Verizon Wireless store in Inver Grove Heights, Minnesota, armed with a .45 caliber semi-automatic pistol. After waiting for customers to leave the store, MAYS and MOMAN held the store employee at gunpoint while demanding money and cell phones. The employee pretended to comply, but then shot MAYS in self-defense with a firearm the employee was licensed to carry. MAYS’ firearm was also discharged. During the exchange of gunfire, a stray bullet grazed a worker in an adjacent restaurant. MAYS was wounded and remained at the scene, while MOMAN fled on foot.
The Hobbs Act, passed by Congress in 1946, allows federal prosecutors to prosecute individuals who commit armed robberies of businesses engaged in interstate commerce.
This case was the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Inver Grove Heights Police Department. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat violent crime.
Assistant U.S. Attorney David P. Steinkamp prosecuted the case.
Defendant Information:
JAMAAL MARQUIE MAYS, 34
Unknown
Convicted:
- Hobbs Act robbery, 1 count
- Discharging a firearm during and in relation to a crime of violence, 1 count
Sentenced:
- 180 months in prison
- Five years of supervised release
JAQUON KESHAWN MOMAN, 26
Unknown
Convicted:
- Hobbs Act robbery, 1 count
- Discharging a firearm during and in relation to a crime of violence, 1 count
Sentenced:
- 72 months in prison
- Three years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Red Lake Man Charged with First Degree MurderRead the Press Release
United States Attorney Erica H. MacDonald today announced an indictment charging JEREMIAH KINGBIRD, 38, with first and second degree murder.[1] KINGBIRD made his initial appearance yesterday before Magistrate Judge Jon T. Huseby in U.S. District Court in Bemidji, Minnesota.
According to the indictment and documents filed in court, on January 6, 2019, law enforcement responded to a call from a woman who said that an unknown male had stopped at her house and said that he had found his wife on Old Ponemah Road and that she had been there all night. Responding officers found the victim, KINGBIRD’S wife, lying face down in the snow; she had severe physical injuries, and was having difficulty breathing. The victim was transported to the Red Lake IHS Hospital where hospital staff were unsuccessful in reviving her.
According to the indictment and documents filed in court, during a search of KINGBIRD’S vehicle, law enforcement observed blood on the front passenger window of the vehicle. KINGBIRD admitted to physically assaulting his wife and leaving her outside in the elements following a night of drinking in Bemidji.
This case is the result of an investigation conducted by the Red Lake Tribal Police Department and the FBI Headwaters Safe Trails Task Force.
This case is being prosecuted by Special Assistant U.S. Attorney Gina L. Allery and Assistant U.S. Attorney Deidre Y. Aanstad.
Defendant Information:
JEREMIAH KINGBIRD, 38
Ponemah, Minn.
Charges:
- Murder in the first degree, 1 count
- Murder in the second degree, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Registered Sex Offender Charged in “Sextortion” CaseRead the Press Release
United States Attorney Erica H. MacDonald today announced the indictment of DYLAN MATTHEW DELING, a/k/a “Jason Keens,” a/k/a “Dylan Nash,” 19, on child pornography and extortion charges. DELING made his initial appearance yesterday before Magistrate Judge Katherine Menendez, in U.S. District Court in Minneapolis, Minnesota.
“As the cyber threat landscape continues to evolve, sextortion crimes are becoming more prevalent through the use of social media platforms and messaging apps,” said U.S. Attorney Erica MacDonald. “These types of cases cause very real harm and can have a devastating impact, especially on young victims. Teachers, parents, and students alike need to be aware of this issue, know how to defend against online predators, and be vigilant in reporting these crimes.”
According to the allegations in the indictment, on May 14, 2018, DELING, a registered sex offender, persuaded, induced, and coerced a minor victim (Minor A) to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. On July 8, 2018, DELING contacted a second minor victim (Minor B) and threatened to kidnap and injure the victim and her parents if she did not provide DELING with sexually explicit images.
This case is the result of an investigation conducted by the FBI, in coordination with multiple state and local law enforcement agencies inside and outside of Minnesota.
This case is being prosecuted by Assistant U.S. Attorney Miranda E Dugi.
Defendant Information:
DYLAN MATTHEW DELING, a/k/a “Jason Keens,” a/k/a “Dylan Nash,” 19
Fairmont, Minn.
Charges:
- Production and attempted production of child pornography, 1 count
- Penalties for registered sex offenders, 1 count
- Interstate commination with intent to extort, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Three Men Charged in Red Lake Heroin Trafficking Conspiracy Resulting in the Shooting Deaths of Two IndividualsRead the Press Release
United States Attorney Erica H. MacDonald today announced an indictment charging FRANKLIN JACKSON, a/k/a “Frankie,” 23, KRISTOPHER SULLIVAN, a/k/a “Blood Money,” 24, and BRYAN BOARDMAN, a/k/a “Boon,” 24, with conspiracy to distribute heroin. SULLIVAN and BOARDMAN were also charged with using and carrying a firearm during a drug trafficking crime.
According to the indictment, between October 1, 2018, and October 21, 2018, JACKSON, SULLIVAN, and BOARDMAN conspired with each other to distribute heroin on the Red Lake Indian Reservation. On October 21, 2018, the defendants’ drug trafficking activities resulted in the shooting deaths of two individuals, identified in the indictment as J.R. and R.B.
This case is the result of an investigation conducted by the FBI Headwaters Safe Trails Task Force and the Red Lake Tribal Police Department.
Assistant U.S. Attorneys Jeffrey S. Paulsen and Julie E. Allyn are prosecuting the case.
Defendant Information:
FRANKLIN JACKSON, a/k/a “Frankie,” 23
Unknown
Charges:
- Conspiracy to distribute heroin, 1 count
KRISTOPHER SULLIVAN, a/k/a “Blood Money,” 24
Minneapolis, Minn.
Charges:
- Conspiracy to distribute heroin, 1 count
- Using and carrying a firearm during a drug trafficking crime, 1 count
BRYAN BOARDMAN, a/k/a “Boon,” 24
Minneapolis, Minn.
Charges:
- Conspiracy to distribute heroin, 1 count
- Using and carrying a firearm during a drug trafficking crime, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Cass County Man Charged with Stalking, Child PornographyRead the Press Release
United States Attorney Erica H. MacDonald today announced a four-count federal indictment against JARED ROSS BOSWELL, 32, for distributing child pornography, sending obscene material to a minor, and stalking a minor via the internet. BOSWELL, who was charged in a criminal complaint on January 22, 2019, will remain in detention pending further proceedings.
According to the allegations in the indictment, from April 2018 through September 2018, BOSWELL used the internet to stalk a minor victim. Also during that time, BOSWELL used the internet to send obscene materials and distribute sexually explicit images, including visual depictions of minors, to a second minor victim.
This case is the result of an investigation conducted by the Red Lake Department of Public Safety, the Mille Lacs Tribal Police Department, the Bemidji Police Department, the Hubbard County Sheriff’s Office, the Minnesota Bureau of Criminal Apprehension, and the FBI.
This case is being prosecuted by Assistant U.S. Attorney Angela Munoz-Kaphing.
Defendant Information:
JARED ROSS BOSWELL, 32
Cass County, Minn.
Charges:
- Stalking, 1 count
- Distribution of child pornography, 2 counts
- Transfer of obscene material to minors, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Burnsville Coin Dealer Pleads Guilty to Counterfeit Coin Fraud SchemeRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of BARRY RON SKOG, 68, for perpetrating a counterfeit coin fraud scheme. SKOG, who was indicted on April 10, 2018, entered his guilty plea earlier today before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minnesota.
According to the defendant’s guilty plea, SKOG owned and operated a business called Burnsville Coin Company, which engaged in advertising and selling numismatic coins. Through his business, SKOG posted advertisements for coins in a publication called Numismatic News. When potential buyers responded to the ads, SKOG would mail them lists of available coins for purchase, many of which were counterfeit. In his communications with the victims, SKOG would often represent himself as an employee of the Burnsville Coin Company named “Ron Peterson,” when, in fact, there were no other owners or employees of the company other than SKOG. In total, SKOG stole more than $57,000 from his victims. SKOG also intended to create additional loss by advertising for sale 275 additional counterfeit coins at an advertised sale value of approximately $235,000.
This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the Burnsville Police Department.
Based on the evidence obtained in this case, authorities believe there may be additional victims who have not yet been identified. Anyone with information about this matter is encouraged to call the Minnesota Commerce Fraud Bureau at 651-539-1617. Callers may remain anonymous.
Assistant U.S. Attorney Manda M. Sertich is prosecuting the case.
Defendant Information:
BARRY RON SKOG, 68
Burnsville, Minn.
Convicted:
- Sale of counterfeit coins, 1 count
- Mail fraud, 1 count
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Federal Jury Convicts North Minneapolis Gang Member for His Role in Violent Drug Trafficking ConspiracyRead the Press Release
United States Attorney Erica H. MacDonald today announced the conviction of HAKEEM MALIK DONTAE FLAX, a/k/a “Keem,” 32, for crimes related to violent gang activity, including conspiracy, distribution of heroin, and firearms violations. FLAX was found guilty following a four-day trial before Judge Wilhelmina M. Wright in U.S. District Court in Saint Paul, Minnesota. Prior to trial, FLAX pleaded guilty to one count of felon in possession of ammunition. Co-defendants DOMONICK DESHAY WRIGHT, BRIAN FUNTANOUS MACK, and JAMES LAVELL BROWN each pleaded guilty to count of conspiracy to possess a firearm in furtherance of a drug trafficking crime.
“This conviction signifies the aggressive stance my office is taking against gun and gang violence under the Project Safe Neighborhood crime reduction strategy,” said U.S. Attorney Erica MacDonald. “We are committed to the work of ensuring safe neighborhoods and communities for all Minnesotans.”
“These individuals were engaged in gang warfare that resulted in shootings deaths of gang members on both sides of the conflict,” said Assistant U.S. Attorney Thomas Calhoun-Lopez. “Their actions posed a clear and present danger to Minneapolis communities through dangerous drug trafficking and public shootings. This conviction is a victory for North Minneapolis.”
“Hakeem Flax and his associates caused a significant amount of violence in furtherance of their drug distribution activities,” said ATF Assistant Special Agent in Charge Kirk Howard. “Getting this group off the streets is a huge win for North Minneapolis, which has been plagued by violence. There is more work to be done there, but this verdict is a step in the right direction toward making that community safer for residents.”
As proven at trial, FLAX and his co-defendants maintained active membership in the 1-9 Block Dipset Gang with the purpose of making money for the gang through criminal acts, including distribution of heroin. As part of the gang’s heroin distribution scheme, FLAX and other members of the gang possessed, used and carried firearms in order to protect themselves from rival gang members and maintain their drug distribution territory.
As proven at trial, members of the 1-9 Block Dipset Gang were involved in a violent gang war with rival North Minneapolis gangs, including the Tre Tre Crips and the Young-N-Thuggin gangs, which resulted in the shooting deaths of gang members on both sides of the conflict. Disputes over gang territories and retaliation for prior acts of violence also contributed to the gun violence. As an example, on August 5, 2017, FLAX shot and killed a member of the rival Tre Tre Crips gang in a parking lot outside of a North Minneapolis restaurant.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Minneapolis Police Department. This case is part of Project Safe Neighborhoods, an initiative that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.
This case is being prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.
Defendant Information:
HAKEEM MALIK DONTAE FLAX, a/k/a “Keem,” 32
Vadnais Heights, Minn.
Convicted:
- Conspiracy to possess a firearm in furtherance of a drug trafficking crime, 1 count
- Conspiracy to distribute heroin, 1 count
- Discharge of a firearm in furtherance of a drug trafficking crime, 1 count
- Felon in possession of ammunition, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former Grain Elevator Manager Pleads Guilty to Mail Fraud and Tax EvasionRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of JEROME ROBERT HENNESSEY, 56, to one count of mail fraud and one count of tax evasion. HENNESSEY, who was charged via felony information on December 18, 2018, entered his guilty plea earlier today before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota.
According to the defendant’s guilty plea and documents filed in court, from 2003 through September 2018, HENNESSEY, the former manager of Ashby Farmers’ Co-Operative Elevator Company (“the Co-op”), was responsible for overseeing the day-to-day activities of the Co-op, controlling the bank accounts and obtaining loans for the business. Using his position and his control over the Co-op’s bank accounts, HENNESSEY wrote checks to himself and to third parties for, among other things, renovations and improvements to his residence and a cabin, the purchase of real estate, the purchase of all-terrain vehicles, outstanding credit card balances, property taxes, expensive hunting trips, and taxidermy services.
According to the defendant’s guilty plea and documents filed in court, HENNESSEY attempted to disguise the payments by writing descriptions on the carbon copies of the checks falsely indicating that the checks were for the purchase of corn and soybeans or other operating expenses and supplies. HENNESSEY then provided the carbon copies to the Co-op’s bookkeeper, thus ensuring that the Co-op’s accounting records would give the false impression that the funds HENNESSEY had taken had been used for legitimate purposes. In order to make sure that the Co-op had sufficient funds to cover its legitimate expenses and to cover the millions of dollars that HENNESSEY stole, HENNESSEY obtained a line of credit for more than $7 million. In total, HENNESSEY stole approximately $5,338,922.21.
This case is the result of an investigation conducted by the Internal Revenue Service-Criminal Investigation Division, the Grant County Sheriff’s Office, and the Minnesota Bureau of Criminal Apprehension.
Assistant U.S. Attorney John Kokkinen is prosecuting the case.
Defendant Information:
JEROME ROBERT HENNESSEY, 56
Dalton, Minnesota
Convicted:
- Mail Fraud, 1 count
- Income Tax Evasion, 1 count
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Burnsville Man Pleads Guilty to Violent KidnappingRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of DONTAY LAVARICE REESE, 37, for kidnapping. REESE entered his guilty plea yesterday afternoon before Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota.
According to the defendant’s guilty plea and documents filed in court, in the early morning hours of August 6, 2017, REESE met the victim, T.M., in downtown Minneapolis. REESE offered T.M. a ride home; however, instead of driving her home, he drove in the wrong direction into Wisconsin. The defendant told the victim that he was going to take her “several states away” and use her to make money as a prostitute. The victim attempted to escape multiple times - each time she was captured and violently restrained by REESE. A family witnessed one of the escape attempts and called 911.
After the 911 call, Wisconsin State Patrol found the victim running out of a wooded area, with her wrists bound together, and screaming for help. REESE came out of the same wooded area shortly after, fully naked and attempted to cross the interstate on foot. He was taken into custody.
“The victim endured a terrifying experience, and has shown incredible courage throughout this process. Because of her courage a violent offender is no longer in our community,” said United States Attorney Erica H. MacDonald.
"Thoughts today are with the victim in this case who courageously helped put her assailant in prison for many years,” said Jill Sanborn, Special Agent in Charge of the Minneapolis Division of the FBI. “Thanks to the victim and diligent work of law enforcement from Minnesota and Wisconsin working with the FBI, justice was served and Mr. Reese was held accountable for his actions."
Sentencing has been scheduled for June 4, 2019, at 9:00 am in U.S. District Court in Minneapolis.
This case is the result of an investigation conducted by the FBI, Wisconsin State Patrol, Jackson County (Wisconsin) Sheriff’s Department, Eau Claire County (Wisconsin) Sheriff’s Department, and Minneapolis Police Department.
Assistant U.S Attorneys Angela Munoz-Kaphing and John Docherty are prosecuting the case.
Defendant Information:
DONTAY LAVARICE REESE, 37
Burnsville, Minnesota
Convicted:
- Kidnapping, 1 count
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Brooklyn Park Tax Preparer Known as “Papa Eric” Charged with Tax FraudRead the Press Release
United States Attorney Erica H. MacDonald today announced a federal indictment charging ERIC WILLOR, 69, with 15 counts of aiding and assisting in the preparation of a false tax return. WILLOR will make his initial appearance in United States District Court at a later date.
According to the indictment, WILLOR, also known as “Papa Eric,” ran a tax preparation business called Willor’s Tax Preparation and Planning out of his home in Brooklyn Park, Minnesota. WILLOR regularly prepared and filed tax returns using false and fraudulent itemized deductions in order to fraudulently obtain large tax refunds to which his clients were not entitled. Specifically, WILLOR regularly prepared and filed returns falsely claiming that his clients had significant tax-deductible charitable contributions, medical expenses, and educational expenses. In reality, WILLOR knew that these claimed deductions were fraudulent. Between 2012 and 2017, WILLOR prepared and filed approximately 100 fraudulent tax returns that fraudulently claimed a total of approximately $316,000 in tax refunds to which his clients were not entitled.
This case is the result of an investigation conducted by the Internal Revenue Service-Criminal Investigation Division.
This case is being prosecuted by Assistant United States Attorney Joseph H. Thompson.
Defendant Information:
ERIC WILLOR, 69
Brooklyn Park, Minn.
Charges:
- Aiding and assisting in the preparation of a false tax return, 15 counts
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The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Activities of the U.S. Attorney’s Office During the Lapse in AppropriationsRead the Press Release
Throughout the recent 35-day lapse in appropriations, press releases for the U.S. Attorney’s Office for the District of Minnesota were very limited as required by Department of Justice rules. However, during any lapse in Congressional appropriations, the Department of Justice’s essential public safety and national security missions continue unabated. As a result, the U.S. Attorney’s Office and federal investigative agencies continued to work full-time alongside their state, local, and tribal partners on all criminal cases and prosecutions. Highlighted below are convictions and sentencings that occurred between December 22, 2018 and January 25, 2019.
On January 2, 2019, MICHAEL SCOTT HANUMAN, 27, pleaded guilty before Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minnesota, to one count of possession with intent to distribute methamphetamine and one count of possessing a firearm in furtherance of the drug-trafficking crime. HANUMAN is scheduled to be sentenced on May 14, 2019. This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Dakota County Sheriff’s Office, and the Dakota County Drug Task Force. Assistant U.S. Attorney Benjamin Bejar is prosecuting the case.
On January 8, 2019, PRESLEY AARON PELTIER, 22, pleaded guilty to stealing four firearms from a federally licensed firearms dealer. PELTIER entered his guilty plea before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minnesota. This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lakeville Police Department. Assistant U.S. Attorney Benjamin Bejar is prosecuting the case.
On January 14, 2019, AVIEL LI GOODMAN, 63, was sentenced to 87 months in prison for receipt of child pornography. GOODMAN, a St. Paul psychiatrist, pleaded guilty to one count of receipt of child pornography on July 20, 2018. This case was the result of an investigation conducted by the FBI. Assistant U.S. Attorneys Katharine T. Buzicky and Carol M. Kayser prosecuted the case.
On January 15, 2019, NOEL DEBRA HALL, 41, was sentenced to 60 months in prison for possession with the intent to distribute heroin and fentanyl. HALL pleaded guilty on September 13, 2018, to a one-count felony information. This case was investigated by the Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Surya Saxena.
On January 16, 2019, STEVEN MITCHELL GANT, 38, pleaded guilty to conspiring to distribute heroin on the White Earth Indian Reservation. GANT entered his guilty plea before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minnesota. This case is the result of an investigation conducted by the FBI Headwaters Safe Trails Task Force, the West Central Minnesota Drug & Violent Crimes Task Force, the White Earth Police Department, and the Becker County Sheriff’s Office. Assistant U.S. Attorney Deidre Y. Aanstad is prosecuting the case.
On January 16, 2019, KELVIN BAEZ, 34, was found guilty of methamphetamine and firearms violations following a jury trial before Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minnesota. BAEZ is scheduled to be sentenced on May 14, 2019. This case is the result of an investigation conducted by the Drug Enforcement Administration. Assistant U.S. Attorney David P. Steinkamp is prosecuting the case.
On January 17, 2019, PHILLIP MARK REINHART, 38, pleaded guilty to production and attempted production of child pornography. REINHART entered his guilty plea before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minnesota. A sentencing hearing is scheduled for June 6, 2019. This case is the result of an investigation conducted by the FBI and the Nicollet County Sheriff's Office. Assistant U.S. Attorney Manda M. Sertich is prosecuting the case.
On January 22, 2019, AMOS KIPROP KOECH, 44, was convicted by a federal jury for sex trafficking a 15-year-old minor. KOECH’S codefendant, ANDRE MATHIS, JR., 33, pleaded guilty on January 10, 2019, to one count of sex trafficking of a minor. This case is the result of an investigation conducted by the FBI and the Duluth Police Department. Assistant U.S. Attorney Laura M. Provinzino is prosecuting the case with Special Assistant U.S. Attorney Jonathan D. Holets.
On January 22, 2019, DAKOTA JAMES LAFAVE, 29, pleaded guilty to assault with a dangerous weapon in aid of racketeering, witness retaliation, and discharge of a firearm in furtherance of a crime of violence. LAFAVE entered his guilty plea before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota. This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minneapolis Police Department, the Drug Enforcement Administration, the Minnesota Bureau of Criminal Apprehension, the Mille Lacs Tribal Police Department, and the Minnesota Department of Corrections. Assistant U.S. Attorneys Andrew R. Winter and Bradley Endicott are prosecuting the case.
On January 23, 2019, JOSE MANUEL ORDONEZ, JR., 47, was sentenced to 120 months in prison for his role in a $150 million international Ponzi scheme. ORDONEZ pleaded guilty on February 13, 2018, to one count of conspiracy to commit mail fraud. This case was the result of an investigation conducted by the FBI, United States Postal Inspection Service, and the Minnesota Commerce Fraud Bureau. Assistant U.S. Attorneys Kimberly A. Svendsen and Joseph H. Thompson are prosecuting the case.
On January 23, 2019, two defendants in separate cases, DARVELL DEVONTRE EDWARDS, 27, and CAMERON DAVON DURAND, 25, each pleaded guilty to one count of being a felon in possession of a firearm. EDWARDS and DURAND entered their guilty pleas before Judge Eric C. Tostrud in U.S. District Court in Saint Paul, Minnesota. These cases are thedid result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Saint Paul Police Department. They are being prosecuted by Assistant U.S. Attorneys Benjamin Bejar and Thomas Calhoun-Lopez.
On January 24, 2019, RASHAD YASIN DAVIS, 27, pleaded guilty to one count of criminal damage to property on the Bois Forte Indian Reservation. DAVIS entered his guilty plea before Judge Nancy E. Brasel in U.S. District Court in Saint Paul, Minnesota. This case was the result of an investigation conducted by the FBI and the Bois Forte Police Department, with assistance from the St. Louis County Sheriff’s Office and the Breitung Police Department. Assistant U.S. Attorney Deidre Y. Aanstad is prosecuting the case.
On January 25, 2019, ROGER ERICK SPLETTSTOESZER, 54, was sentenced to 210 months in prison for distribution, receipt, and possession of child pornography. SPLETTSTOESZER was found guilty on April 19, 2018, following a four-day jury trial. This case was investigated by the FBI and prosecuted by Assistant U.S. Attorneys Sarah E. Hudleston and Miranda E. Dugi.
“I am honored to lead an office comprised of public servants who are dedicated to the shared mission of pursuing justice,” said United States Attorney Erica H. MacDonald. “I want to thank each and every one of these individuals for their selfless and unwavering service during the course of the partial government shutdown.”
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Owner of Illegal Massage Parlor Found Guilty of Sex TraffickingRead the Press Release
United States Attorney Erica H. MacDonald today announced the conviction of OMAR KASHAKA TAYLOR a/k/a “Shaka,” 44, for sex trafficking two victims, including one minor victim. Following a seven-day trial before Senior Judge Donovan W. Frank in U.S. District Court in St. Paul, Minnesota, the jury found TAYLOR guilty on all counts.
“Sex trafficking is an abhorrent crime that will not be tolerated in our communities,” said United States Attorney Erica MacDonald. “Omar Taylor targeted young, Native American women and girls and coerced them into performing commercial sex acts during massages for his own financial benefit. I commend the work of the investigators and the prosecutors in obtaining justice for the victims.”
Assistant U.S. Attorney Manda Sertich said the convictions “should serve as a warning to those who seek to traffic and exploit vulnerable Native American girls and women.”
As proven at trial, from August 2017 through March 2018, TAYLOR, a registered sex offender, operated an illegal massage business out of his Minneapolis residence. TAYLOR recruited several young women and girls to work in his illicit massage business and then, through force, fraud, and coercion, made them perform commercial sex acts in exchange for money for his own financial benefit. TAYLOR used Backpage.com to solicit prospective clients by posting advertisements with photos of the victims, offering massage services that would include sex acts.
This case is the result of an investigation conducted by Homeland Security Investigations, the Minnesota Bureau of Criminal Apprehension, the Minnesota Human Trafficking Investigators Task Force, and the Beltrami County Sheriff’s Office.
Assistant United States Attorneys Manda M. Sertich and Michelle E. Jones are prosecuting this case.
Defendant Information:
OMAR KASHAKA TAYLOR, a/k/a “Shaka,” 44
Minneapolis, Minn.
Convicted:
- Sex trafficking of a minor, 1 count
- Sex trafficking by force, fraud and coercion, 2 counts
- Commission of a felony offense involving a minor when required to register as a sex offender, 1 count
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Convicted Sex Offender Pleads Guilty to Using Snapchat to Produce Child PornographyRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of BARTON GEORGE SCOTT, 35, a registered sex offender, for producing child pornography. SCOTT, who was indicted on September 12, 2018, entered his guilty plea earlier today before Judge Wilhelmina M. Wright in U.S. District Court in Saint Paul, Minnesota.
According to the defendant’s guilty plea and documents filed in court, between April 30 and August 8, 2017, SCOTT gained unauthorized access to the Snapchat accounts of dozens of victims, including minors between 14-16 years of age. In several cases, SCOTT used threats and extortionate tactics in an attempt to obtain sexually explicit images and videos from the victims.
Based on the evidence obtained in this case, authorities believe there may be additional victims of this alleged conduct. Anyone with information about this matter is encouraged to call the FBI at (763) 569-8000. Callers may remain anonymous.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case is the result of an investigation conducted by the FBI, the New Richmond Police Department, the Anne Arundel County Police Department, the Carver County Sheriff’s Office, the St. Croix County Sheriff’s Office, the Stillwater Police Department, the Spring Green Police Department, and the Washington County Sheriff’s Office.
Assistant U.S. Attorney Katharine T. Buzicky is prosecuting the case.
Defendant Information:
BARTON GEORGE SCOTT, 35
City of residence unknown
Convicted:
- Production of child pornography, 1 count
- Penalties for registered sex offenders, 1 count
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Columbia Heights Restaurant Owner Sentenced to 42 Months in Prison for Visa Fraud and Harboring an Illegal WorkerRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of PISANU SUKHTIPYAROGE, a/k/a “Pat,” 72, owner of the Royal Orchid Restaurant, to 42 months in prison for visa fraud and alien harboring. The sentence was handed down by U.S. District Judge Wilhelmina M. Wright in St. Paul, Minnesota.
“This defendant not only violated our immigration laws, he exploited a young, vulnerable victim for his own financial and sexual benefit,” said Assistant United States Attorney Laura M. Provinzino. “While nothing can make the victim truly whole, the prison sentence - which was above the guideline range for his crimes - and restitution ordered by the Court represent a just outcome. Our hope is that this brave, resilient victim can finally move forward.”
“This individual used his knowledge of our laws to fraudulently bring the victim to our country on smoke and mirror promises of the American Dream,” said Special Agent in Charge Tracy J. Cormier, of HSI St. Paul. “Instead he used the victim for sex and forced them to work at his business without pay. HSI is proud of the work accomplished in bringing Sukhtipyaroge to justice.”
According to the defendant’s guilty plea and documents filed in court, in July 2015, SUKHTIPYAROGE assisted in the procurement of an F-1 student visa for an individual identified as A.M., a citizen of the Dominican Republic whom the defendant met and befriended. At the time, SUKHTIPYAROGE was very familiar with the F-1 student visa process and knew that an F-1 student visa is a temporary, non-immigrant visa that does not permit employment in the United States. SUKHTIPYAROGE used false statements in preparing the visa application and instructed A.M. as to what he should and should not say during the visa interview.
According to the defendant’s guilty plea and documents filed in court, October 19, 2015, upon arrival in the United States, A.M. lived with the defendant and the defendant’s family in Maplewood and attended Edison High School until May 2016. At some point during this time, A.M. began living and working at the Royal Orchid Restaurant in Columbia Heights. At the restaurant, A.M. was subjected to poor living and working conditions. SUKHTIPYAROGE told A.M. he would be paid $500 per month in cash for his labor; however, A.M. did not receive the promised pay each month, as SUKHTIPYAROGE deducted the costs incurred in bringing A.M. to the United States in a debt bondage scheme. A.M. also worked at SUKHTIPYAROGE’S home in Maplewood without pay. SUKHTIPYAROGE admitted to engaging in a sexual relationship with A.M. shortly after he brought A.M. to the United States.
SUKHTIPYAROGE has also been charged in Anoka County with one felony count of third degree criminal sexual conduct and one felony count of labor trafficking.
This case was the result of an investigation conducted by Homeland Security Investigations, the Anoka County Sheriff’s Office, U.S. Department of State Diplomatic Security Service, and U.S. Department of Labor Wage and Hour Division.
The District of Minnesota is one of six districts designated through a competitive, nationwide selection process as a Phase II Anti-Trafficking Coordination Team (ACTeam), through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
Assistant U.S. Attorneys Melinda A. Williams and Laura M. Provinzino prosecuted the case.
Defendant Information:
PISANU SUKHTIPYAROGE, a/k/a “Pat,” 72
Maplewood, Minn.
Convicted:
- Visa fraud, 1 count
- Alien harboring, 1 count
Sentenced:
- 42 months in prison
- 3 years of supervised release
- Restitution ordered – amount to be determined at a later date
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Orono Man Sentenced to 87 Months of Prison for Tax Fraud SchemeRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of SCOTT PHILLIP FLYNN, 57, to 87 months of federal prison. He was also ordered to pay over $5 million in restitution. FLYNN was sentenced by Senior U.S. District Judge Ann D. Montgomery on January 24, 2019, in Minneapolis, Minnesota. On June 4, 2018, FLYNN pleaded guilty to one count of conspiracy to defraud the IRS and one count of tax evasion.
According to the defendant’s guilty plea and documents filed in court, between 2005 and 2015, FLYNN evaded the assessment of millions of dollars in income taxes by fraudulently hiding millions of shares of stock that he obtained for himself. In 2006 and 2008, FLYNN assisted two privately-held Wisconsin-based companies, Tower Tech Systems, Inc. and Advanced Fiberglass Technologies, in becoming publicly traded through stock-for-stock “reverse merger” transactions. As compensation for FLYNN’S work, millions of shares of publicly-traded stock in the resulting public companies were transferred to “Integritas, Inc.” and “Diversified Equities Partners,” both of which were controlled by FLYNN. FLYNN, who exercised control over the stock, which had considerable value, was required to, but did not, report the receipt of the shares of stock as income on his individual income tax returns.
According to the defendant’s guilty plea and documents filed in court, in order to conceal his control and ownership of the stock, and to evade paying income taxes, FLYNN caused a portion of the stock to be put in the names of Australian nominees recruited by FLYNN’S co-conspirator. The Australian nominees, who never actually owned or controlled the stock, were directed to open brokerage accounts in the United States to receive the shares, but FLYNN possessed their login and password data so he could maintain control of the accounts and the shares of stock.
According to the defendant’s guilty plea and documents filed in court, during the course of the conspiracy, when FLYNN needed money, he caused the Australian nominees to sell shares of stock and transfer the proceeds to entities in the United States controlled by FLYNN, which in turn made payments to FLYNN or on his behalf. These sales generated millions of dollars in income, which FLYNN purposely failed to report to the IRS. For example, in 2007, FLYNN received approximately $2.7 million of the proceeds from the Australian nominees to buy a house in Orono, Minnesota, which was considered income to FLYNN. That year, in a tax return FLYNN acknowledged was materially false at his guilty plea hearing, FLYNN reported only $26,136 of total income.
United States Attorney MacDonald thanked the Criminal Investigation Division of the IRS who investigated the case and Assistant United States Attorneys David J. Maclaughlin and Benjamin F. Langner who prosecuted the case.
Defendant Information:
Scott Phillip Flynn, 57
Orono, Minnesota
Convicted:
- Conspiracy to defraud the IRS, 1 count
- Tax Evasion- 2007, 1 count
Sentenced:
- 87 months (60 months on Count 1 and 27 months on Count 3 to run consecutively)
- 2 years of supervised release
- $5,392,442.87
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Four Men Convicted in String of Robberies of Auto Parts Stores Throughout Twin Cities MetroRead the Press Release
United States Attorney Erica H. MacDonald today announced the conviction of TONY LENDELL REED, 32, of Memphis, Tennessee, for robbery. Following a five-day trial before U.S. District Judge Joan N. Ericksen, in Minneapolis, Minnesota, a federal jury found REED guilty on February 1, 2019, of six counts of interference with commerce by robbery, known as the Hobbs Act. The Hobbs Act prohibits actual or attempted robbery affecting interstate or foreign commerce “in any way or degree.”
Co-defendant ORLANDO LORENZO HARRIS, 36, of Minneapolis, Minnesota, pleaded guilty on March 22, 2018, to two counts of Hobbs Act robbery.
Co-defendant DERF REGLAN RAHINE REED, 46, of Chicago, Illinois, pleaded guilty on November 13, 2018, to one count of Hobbs Act robbery.
Co-defendant TYRELL DANDRE CAMPBELL, 24, of Minneapolis, Minnesota, pleaded guilty on November 27, 2018, to one count of Hobbs Act robbery.
As proven at trial and in documents filed in court, on six separate occasions, REED and his co-defendants robbed auto parts stores throughout the Twin Cities metro region. During each of the robberies, the defendants displayed what appeared to the victims to be a gun, threatened the victims, and demanded money. REED and his co-defendants also restrained the employees of the stores they robbed, using zip ties to bind the victims’ wrists and ankles.
United States Attorney Erica H. MacDonald thanked the Minneapolis Division, Chicago Division, and Memphis Division of the FBI, the Minneapolis Police Department, the Crystal Police Department, the Columbia Heights Police Department, the White Bear Lake Police Department, the Anoka County Sheriff’s Office, and the Holly Springs, Mississippi Police Department for their work in investigating the robberies.
United States Attorney MacDonald further thanked Assistant United States Attorneys LeeAnn K. Bell and Ruth Shnider who prosecuted the case.
Defendant Information:
TONY LENDELL REED, 32
Memphis, Tennessee
Convicted:
- Interference with Commerce by Robbery (Hobbs Act), 6 counts
ORLANDO LORENZO HARRIS, 36
Minneapolis, Minnesota
Convicted:
- Interference with Commerce by Robbery (Hobbs Act), 2 counts
DERF REGLAN RAHINE REED, 46
Chicago, Illinois
Convicted:
- Interference with Commerce by Robbery (Hobbs Act), 1 count
TYRELL DANDRE CAMPBELL, 24
Minneapolis, Minnesota
Convicted:
- Interference with Commerce by Robbery (Hobbs Act), 1 count
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Two Illinois Men Plead Guilty to Bombing of Islamic CenterRead the Press Release
Michael McWhorter, 29, and Joe Morris, 23, both of Clarence, Illinois, pleaded guilty today to multiple charges including federal civil rights charges in United States District Court in St. Paul, Minnesota.
United States Attorney for the District of Minnesota Erica H. MacDonald; United States Attorney for the Central District of Illinois John C. Milhiser; Assistant Attorney General for Civil Rights Eric S. Dreiband; and Jill Sanborn, Special Agent in Charge of the FBI's Minneapolis Division, announced today’s guilty pleas.
“The defendants engaged in a violent multi-state crime spree that terrorized communities, including members of the Dar al-Farooq Islamic Center in Minnesota. The defendants’ criminal acts are reprehensible and antithetical to our values as a nation. Every individual has the fundamental right to live life free from the threat of violence and discrimination, no matter who they are, what they believe, or where they worship,” said United States Attorney Erica H. MacDonald. “The dedication and collaboration of our law enforcement partners across several jurisdictions to bring these defendants to justice is a powerful example of our unwavering devotion to seek justice for all victims, and to prosecute to the fullest extent of the law any individual or group that seeks to threaten another’s civil rights through the commission of such vile hate crimes.”
"We will continue to work with our federal and state partners to identify and prosecute dangerous and radical groups that choose to terrorize our communities,” said United States Attorney John C. Milhiser.
"All people are entitled to live free from violence and fear, regardless of their religion or place of worship," said Assistant Attorney General Eric Dreiband of the Civil Rights Division. "The Justice Department is committed to holding hate crimes perpetrators accountable under the law for their dangerous and criminal actions against innocent community members."
“This crime was not only an attack on the intended target, it was meant to threaten and intimidate an entire community. Because of that wide-ranging impact, investigating this crime and others like it are high priority for the FBI,” said Jill Sanborn, Special Agent in Charge of the FBI Minneapolis Division. “The FBI is charged with protecting civil rights and our agents in both the Minneapolis and Springfield field offices in conjunction with the Joint Terrorism Task Force swiftly investigated this case side by side with the ATF, the Bloomington Police Department and other law enforcement partners with one singular goal – to bring the bombers to justice and most importantly to help the Dar al-Farooq community begin to feel safe and secure once again.”
Defendants McWhorter and Morris pleaded guilty in the District of Minnesota to federal charges that originated in both the District of Minnesota and the Central District of Illinois. The pleas to the charges originating in the Central District of Illinois were entered in Minnesota pursuant to Federal Rule of Criminal Procedure 20, which allows for the transfer of charges for the entry of guilty pleas and the imposition of sentence. McWhorter, Morris, and co-defendant Michael Hari, 47, were federally indicted on possession of a machine gun; conspiracy to interfere with commerce by threats and violence (the Hobbs Act); and attempted arson, via a superseding indictment on May 2, 2018, in the Central District of Illinois. McWhorter, Morris, and Hari were indicted in the District of Minnesota on June 21, 2018, with federal civil rights charges, and possession and use of a destructive device in furtherance of a federal crime of violence.
McWhorter and Morris entered their guilty pleas earlier today before U.S. District Court Senior Judge Donovan Frank. Defendant Hari remains in custody in the Central District of Illinois.[1]
According to McWhorter’s and Morris’ guilty pleas, during the summer of 2017, Michael Hari started a militia group in central Illinois, which was eventually called the “White Rabbits,” and which defendants McWhorter and Morris, together with others, joined.
According to McWhorter’s and Morris’ guilty pleas and documents filed in court, on August 4 and 5, 2017, McWhorter, Morris, and Hari drove in a rented truck from central Illinois to the Dar al-Farooq (“DAF”) Islamic Center in Bloomington, Minnesota, leaving their mobile phones in Illinois and avoiding toll roads in an attempt to remain undetected. The defendants stopped along the way to purchase diesel fuel and gasoline, which Hari mixed in a plastic container. About an hour outside of Minnesota, Hari disclosed to McWhorter and Morris that there was a pipe bomb in the truck (which had been created using previously purchased materials) and that they were going to bomb a mosque.
As admitted by McWhorter and Morris during their guilty plea hearings, the two, along with Hari, arrived at the DAF Islamic Center, at approximately five in the morning on August 5, 2017. Morris used a sledgehammer to break a window at the DAF Islamic Center and threw the plastic container containing the diesel fuel and gasoline mixture into the building. McWhorter then lit the fuse on the pipe bomb that Hari had built and threw the pipe bomb through the broken window at the DAF Islamic Center. According to the court documents, the window that was broken was part of the DAF Islamic Center Imam’s office. When the pipe bomb exploded, it ignited the mixture in the plastic container, causing extensive fire and smoke damage to the Imam’s office together with water damage caused when the building’s sprinkler system activated. McWhorter and Morris ran back to the truck, where Hari was waiting in the driver’s seat, and drove back to Illinois. At the time of the explosion, congregants were in the mosque for morning prayers, however, the Imam’s office was unoccupied and the bombing caused no fatalities or injuries.
According to their guilty pleas, Hari selected the DAF Islamic Center because it is an Islamic house of worship. McWhorter and Morris admitted that the bombing was an attempt to scare Muslims into believing they are not welcome in the United States, and should leave the country. The defendants also stated that the DAF Islamic Center was targeted, because they believed it was far enough away from central Illinois that the three thought it unlikely they would be suspected in the bombing.
As part of their guilty pleas, McWhorter and Morris admitted to participating in an armed home invasion in the town of Ambia, Indiana on December 16, 2017, where they, masquerading as police officers, carried firearms, including two that had been illegally converted into machine guns. McWhorter and Morris also conducted armed robberies of two Wal-Mart stores, along with co-defendant Hari, one in Watseka, Illinois, and one in Mt. Vernon, Illinois, on December 2, 2017 and December 17, 2017, respectively.
McWhorter and Morris also admitted that along with co-defendant Hari, they attempted to set on fire the Women’s Health Practice in Champaign, Illinois, on November 7, 2017. Morris admitted to breaking a window and placing an incendiary device in the Women’s Health Practice and to lighting a strip of magnesium that was being used as a fuse. However, the device did not ignite and was found on the floor by an employee of the Women’s Health Practice when the employee arrived to work that morning.
The Federal Bureau of Investigation is leading the investigation.
This case is being prosecuted by Assistant United States Attorneys John Docherty and Julie E. Allyn of the District of Minnesota, with assistance from Trial Attorney Timothy Visser of the Justice Department’s Civil Rights Division. The team also worked closely with Assistant United States Attorney Eugene Miller of the U.S. Attorney’s Office for the Central District of Illinois.
Defendant Information:
MICHAEL MCWHORTER, 29
Clarence, Ill.
Convicted:
- Intentionally Obstructing, and Attempting to Obstruct, by Force and the Threat of Force, the Free Exercise of Religious Beliefs, 1 count
- Carrying and Using a Destructive Device During and in Relation to Crimes of Violence, 1 count
- Possession of a Machine Gun, 1 count
- Conspiracy to Interfere with Commerce by Threats and Violence, 1 count
- Attempted Arson, 1 count
JOE MORRIS, 23
Clarence, Ill.
Convicted: - Intentionally Obstructing, and Attempting to Obstruct, by Force and the Threat of Force, the Free Exercise of Religious Beliefs, 1 count
- Carrying and Using a Destructive Device During and in Relation to Crimes of Violence, 1 count
- Possession of a Machine Gun, 1 count
- Conspiracy to Interfere with Commerce by Threats and Violence, 1 count
- Attempted Arson, 1 count
MICHAEL HARI, 47
Clarence, Ill.
Charges in the District of Minnesota: - Intentionally Defacing, Damaging, and Destroying any Religious Real Property Because of the Religious Character of that Property, 1 count
- Intentionally Obstructing, and Attempting to Obstruct, by Force and the Threat of Force, the Free Exercise of Religious Beliefs, 1 count
- Conspiracy to Commit Federal Felonies by Means of Fire and Explosives, 1 count
- Carrying and Using a Destructive Device During and in Relation to Crimes of Violence, 1 count
- Possession of an unregistered destructive device, 1 count
Charges in the Central District of Illinois[2]:
- Possession of a Machine Gun, 1 count
- Conspiracy to Interfere with Commerce by Threats and Violence, 1 count
- Attempted Arson, 1 count
- Possession of a firearm by a felon, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
[1] The charges against defendant Michael Hari are accusations, and he is presumed innocent unless and until proven guilty.
[2] Superseding Indictment Adds New Charges Against Four East Central Illinois Men
Wayzata Man Sentenced for Role in Stock Manipulation SchemeRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of DOUGLAS VAUGHN HOSKINS, 50, to 24 months of federal prison. HOSKINS was sentenced earlier today by Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota. A federal jury convicted HOSKINS and RYAN RANDALL GILBERTSON, 42, of multiple counts of wire fraud, securities fraud, and conspiracy to commit securities fraud, on June 26, 2018, following an 11-day jury trial before Judge Schiltz.
GILBERTSON who was the founder of Dakota Plains Holdings, Inc., (“Dakota Plains”) was sentenced on December 11, 2018, to 144 months of federal prison.
Dakota Plains was a privately held company based in Wayzata, Minnesota that owned and operated a transloading facility in New Town, North Dakota. As proven in court, as part of the fraud scheme, GILBERTSON caused Dakota Plains to go public via a reverse merger with a company called Malibu Club Tan, which was a publicly traded shell company. GILBERTSON made it a secret condition of the reverse merger that HOSKINS, his friend and polo coach, be able to purchase the majority of the “float” of freely trading shares, which were the only shares that could trade publicly following the reverse merger. GILBERTSON then gave $30,000 to HOSKINS, who was deeply in debt and owed money to the IRS and other creditors, in order to purchase 50,000 shares of Dakota Plains stock at a price of $0.50 per share on March 23, 2012, the morning of the reverse merger.
On the first day of public trading, HOSKINS began selling his newly acquired shares for an inflated price of $12 per share at GILBERTSON’S direction, and continued to do so throughout the first 20 days of public trading following the reverse merger. Throughout that 20-day period, GILBERTSON, with the help of HOSKINS and others, manipulated the price of Dakota Plains stock to increase the average trading price to $11.30 per share. This inflated share price triggered a $32.8 million bonus payment to GILBERTSON and the other noteholders.
In the wake of the fraud scheme, HOSKINS was interviewed by the Securities and Exchange Commission (SEC) about his involvement in these stock sales. HOSKINS repeatedly lied under oath during the deposition, covering up both his and GILBERTSON’S involvement in the stock manipulation scheme. Among other things, HOSKINS claimed that he did not discuss the stock trades with any other individuals.
Ultimately, GILBERTSON made millions as a result of his stock manipulation scheme. HOSKINS made less money, but still pocketed more than $125,000 from his stock sales, much of which he used to purchase an Argentine polo pony.
“The expertise of our partners – the FBI, the U.S. Postal Inspection Service, and the Securities and Exchange Commission - brought to light a complex and detailed stock manipulation scheme, resulting in the convictions of Gilbertson and Hoskins,” said United States Attorney Erica H. MacDonald. “It is thanks to their tireless digging and collaboration that this case had a just outcome.”
This case is the result of an investigation conducted by the FBI and the United States Postal Inspection Service. United States Attorney MacDonald would also like to thank the Securities and Exchange Commission for their assistance on this matter.
This case was prosecuted by Assistant United States Attorneys Joseph H. Thompson, Kimberly A. Svendsen, and Melinda A. Williams.
The Criminal Docket Number for this case is: 17-cr-00066
Defendant Information:
DOUGLAS VAUGHN HOSKINS, 50
Wayzata, Minn.
Convicted:- Wire fraud, 2 counts
- Conspiracy to commit securities fraud, 1 count
- Securities fraud, 3 counts
Sentenced:
- 24 months imprisonment
- 1 year supervised release
- $15,135,360 in restitution (owed jointly with defendant Gilbertson)
RYAN RANDALL GILBERTSON, 42
Delano, Minn.
Convicted:
- Wire fraud, 14 counts
- Conspiracy to commit securities fraud, 1 count
- Securities fraud, 6 counts
Sentenced:
- 144 months imprisonment
- 2 years supervised release
- $2 million fine
- $15,135,360 in restitution (owed jointly with defendant Hoskins)
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Wabasha County Brothers Charged with RobberyRead the Press Release
Erica H. MacDonald today announced the unsealing of a federal indictment charging LENNIE DWAYNE BROOKS, 33, RANDY LORENZO BROOKS, 23, and AUTUMN MARIE NICHOLS, 20, each with one count of robbery. [1]
As alleged in the indictment, LENNIE BROOKS, RANDY BROOKS, and NICHOLS stole approximately $50,000 in cash belonging to the Shaung Hur Asian Markets and as a result, caused the death of a robbery victim.
ATF and local law enforcement executed federal search warrants the morning of December 20, 2018. All three defendants are in custody and are scheduled to make their initial appearances today at 2:00 p.m. before Magistrate Judge Becky R. Thorson in U.S. District Court in St. Paul, Minnesota.
The defendants are charged with violating the Hobbs Act. The Hobbs Act prohibits actual or attempted robbery affecting interstate or foreign commerce “in any way or degree.”
This case is the result of a multi-jurisdictional investigation conducted by ATF, Eden Prairie Police Department, Steele County Sheriff’s Office, Woodbury Police Department, Cottage Grove Police Department, St. Paul Police Department, Minneapolis Police Department, Winona Police Department, Wabasha Police Department, Prior Lake Police Department, Southeast Minnesota Violent Crime Enforcement Team, St. Croix County Sheriff’s Office, Wabasha County Sheriff’s Office, Washington County Sheriff’s Office, Olmstead County Sheriff’s Office, and the Winona County Sheriff’s Office. This case is part of Project Safe Neighborhoods, an initiative that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
Assistant United States Attorney Jeffrey S. Paulsen is prosecuting the case.
Defendant Information:
LENNIE DWAYNE BROOKS, 33
Zumbro Falls, Minn.
Charges:
- Interference with Commerce by Robbery, 1 count
RANDY LORENZO BROOKS, 23
Wabasha, Minn.
Charges:
- Interference with Commerce by Robbery, 1 count
AUTUMN MARIE NICHOLS, 20
St. Paul, Minn.
Charges:
- Interference with Commerce by Robbery, 1 count
###
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[1] The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Four Defendants Sentenced for Roles in Fraud Scheme Against Starkey LaboratoriesRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencings of W. Jeffery Taylor, 57, Scott A. Nelson, 60, and Jeffery Longtain, 59, for their roles in the fraud scheme perpetrated against Starkey Laboratories, Inc. (Starkey) and its principal owner William F. Austin. Taylor was sentenced to 18 months of prison, Nelson was sentenced to 24 months of prison, and Longtain was sentenced to one year of probation. The defendants were sentenced today in United States District Court by Chief Judge John R. Tunheim. Jerome Ruzicka, 62, was sentenced on December 19, 2018 to 84 months of federal prison, by Chief Judge Tunheim.
“The sentencings today are a testament to the remarkable skill, dedication, and professionalism of our law enforcement partners,” said United States Attorney Erica H. MacDonald. “I am thankful for their unrelenting pursuit of justice during this investigation and trial.”
Taylor was convicted on March 3, 2018, following a nearly 8-week trial presided over by Chief Judge John R. Tunheim. Longtain pleaded guilty on April 20, 2017, to a criminal information charging him with one count of making and subscribing a false return. Nelson pleaded guilty on December 19, 2017, to a criminal information charging him with one count of conspiracy.
This case was the result of an investigation conducted by the FBI, Criminal Investigation Division of the IRS, and the United States Postal Inspection Service.
Assistant United States Attorneys Benjamin Langner and Surya Saxena, and former Assistant United States Attorney Lola Velazquez-Aguilu prosecuted the case.
Defendant Information:
Jerome C. Ruzicka, 61
Plymouth, Minn.
Convicted:
- Mail fraud, 4 counts
- Wire fraud, 3 counts
- Tax fraud, 1 count
Sentenced:- 84 months imprisonment
- 1 year supervised release
- Court will issue a restitution order
W. Jeffery Taylor, 57
Cologne, Minn.
Convicted:
- Mail fraud, 1 count
- Wire fraud, 2 counts
Sentenced:- 18 months imprisonment
- 2 years supervised release
Scott A. Nelson, 60
Prior Lake, Minn.
Convicted:
- Conspiracy to commit mail fraud and wire fraud, 1 count
Sentenced:- 24 months imprisonment
- 1 year supervised release
Jeffrey Lee Longtain, 58
West Linn, Ore.
Convicted:
- Marking and Subscribing a False Return, 1 count
Sentenced:
- One year of probation
###
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Former Controller of Saint Paul Town and Country Club Sentenced to 42 Months of Prison for Embezzlement SchemeRead the Press Release
JULIE ANN LEE, 53, former controller of the Town & Country Club, was sentenced today to 42 months of federal prison for operating a million dollar embezzlement scheme. LEE, who pleaded guilty on April 4, 2018, was sentenced by Senior Judge Donovan W. Frank in U.S. District Court in St. Paul, Minnesota.
“For more than eight years, Ms. Lee used her position to embezzle more than a million dollars from Town and Country. She took elaborate steps to hide her deception from her employer, her colleagues and the club’s members who entrusted her with the club’s finances, said United States Attorney Erica H. MacDonald. “Today’s sentence highlights the seriousness of financial crimes.”
According to the defendant’s guilty plea and documents filed in court, from 2008 through December 2016, LEE was the controller of the Town & Country Club (“TCC”) in St. Paul, Minnesota. In her role, LEE was responsible for managing TCC’s finances and had authority to sign and issue checks on behalf of TCC as well as signing authority on TCC’s bank accounts, including a line of credit TCC had with Alliance Bank. LEE used her position as controller to devise a scheme to embezzle more than $1 million from TCC over the course of eight years.
As part of her embezzlement scheme, LEE fraudulently issued herself more than 50 checks totaling approximately $163,357 directly from TCC’s bank accounts. LEE also stole approximately $250,000 in cash from TCC, which she deposited into her personal bank account. LEE also made payments on her personal credit cards directly from TCC bank accounts totaling approximately $764,932. LEE spent the funds she embezzled on things unrelated to TCC, including personal travel, home improvements and her mortgage, a 2013 Dodge Charger, a 2015 GMC Sierra K3500 pickup truck, a motorcycle, and a recreational vehicle.
LEE admitted to attempting to conceal her embezzlement scheme and cover the shortage of money in TCC’s bank accounts by taking advances on TCC’s line of credit at Alliance Bank. As a result of LEE’s embezzlement, TCC was left without sufficient funds to make its quarterly payroll tax payments to the IRS. In order to conceal the shortage of funds, LEE filed false quarterly payroll tax returns with the IRS understating TCC’s payroll tax liability. At times, LEE also filed TCC’s quarterly payroll tax returns late and made TCC’s quarterly tax payments late, which resulted in TCC paying more than $300,000 in interest and penalties to the IRS.
United States Attorney Erica H. MacDonald thanked the Criminal Investigation Division of the Internal Revenue Service, the United States Secret Service, and the Saint Paul Police Department for their work on the investigation, and Assistant United States Attorney Joseph H. Thompson for prosecuting the case.
Defendant Information:
JULIE ANN LEE, 53
Farmington, MN
Convicted:
- Wire fraud, 1 count
- Filing a false tax return, 1 count
Sentenced:
- 42 months imprisonment
- 3 years supervised release
- $1,178,189 in restitution
- $200 special assessment
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Telemarketing Scammer Charged with Multiple Counts of Mail and Wire FraudRead the Press Release
United States Attorney Erica H. MacDonald today announced a federal indictment charging WAYNE ROBERT DAHL, JR., 50, with four counts of mail fraud and four counts of wire fraud. DAHL will make his initial appearance in U.S. District Court at a later date.
According to the indictment, DAHL owned “Your Magazine Service, Inc.” a fraudulent telemarketing company that operated a call center in Chaska, Minnesota. DAHL devised a scheme to trick mostly elderly customers into signing up for costly magazine subscriptions using false representations and fraudulent sales tactics. From 2009 through 2016, DAHL fraudulently obtained more than $10 million from 13,000 victims across the United States.
According to the indictment, DAHL purchased lists of consumers who had active magazine subscriptions through other companies. DAHL directed his employees to call these consumers and falsely claim they were calling to offer the consumers a $150 reduction on their existing account balance. In reality, as DAHL knew, the consumers did not have an existing magazine subscription with his company. During the calls, DAHL directed his employees to obtain consumers’ credit card information by falsely claiming that the company was conducting a survey on credit card and banking usage. DAHL then directed his employees to use this information to trick consumers into signing up for expensive magazine subscription packages that they did not want nor realize they were purchasing. These new subscription packages resulted in DAHL’s company billing his victim-consumers 20 monthly payments of $49.90, for a total cost of $998.
This case is the result of an investigation conducted by the United States Postal Inspection Service and the Federal Bureau of Investigation.
Assistant U.S. Attorney Joseph H. Thompson is prosecuting the case.
Defendant Information:
Wayne Robert Dahl, Jr., 50
Fridley, Minn.
Charges:
- Mail Fraud, 4 counts
- Wire Fraud, 4 counts
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The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Otter Tail Country Violent Felon Charged with Illegal Possession of A FirearmRead the Press Release
United States Attorney Erica H. MacDonald today announced a federal indictment charging ANTHONY DALE RANDKLEV, 39, with illegally possessing a firearm. RANDKLEV has been previously convicted of multiple violent offenses, including assault, drug, and kidnapping convictions, which prohibit him, under federal law, from owning or possessing a firearm.
According to the indictment, on or about July 22, 2018, the defendant possessed a Remington model 870 12-gauge shotgun. If convicted of the federal charge, RANDKLEV faces a mandatory minimum sentence of 15 years in federal prison.
RANDKLEV is also indicted in Otter Tail County District Court on three counts of first-degree criminal sexual conduct, as well as one count each of kidnapping, first-degree burglary, false imprisonment, felon in possession of a firearm, and fleeing a police officer. He is currently in custody in the Otter Tail County Jail.
This case is the result of an investigation conducted by the ATF, the Otter Tail County Sheriff’s Office, the Minnesota Bureau of Criminal Apprehension, and the Otter Tail County Attorney’s Office. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state, and local law enforcement to combat violent crime.
Assistant U.S. Attorney Joseph H. Thompson is prosecuting the case.
Defendant Information:
Anthony Dale Randklev, 39
Pelican Rapids, Minn.
Charges:
- Felon in Possession of a Firearm, 1 count
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The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Former Starkey President Sentenced in Massive Fraud Scheme Perpetrated Against Starkey LaboratoriesRead the Press Release
Jerome Ruzicka, 62, was sentenced today in United States District Court in Minneapolis by Chief Judge John R. Tunheim to 84 months of federal prison. Ruzicka and co-defendant W. Jeffery Taylor, 57, were convicted on March 3, 2018, of charges related to stealing more than $15 million from the Eden Prairie-based Starkey Laboratories, Inc. (Starkey) and its principal owner William F. Austin, as well as one of Starkey’s suppliers, Sonion. Chief Judge John R. Tunheim presided over the trial, which lasted nearly eight weeks, in Minneapolis, Minnesota.
Taylor and defendants, Jeffery Longtain, 59, and Scott A. Nelson, 60, will be sentenced on December 20, 2018, by Chief Judge John Tunheim for their roles in the fraud scheme. Longtain pleaded guilty on April 20, 2017, to a criminal information charging him with one count of making and subscribing a false return. Nelson pleaded guilty on December 19, 2017, to a criminal information charging him with one count of conspiracy.
United States Attorney Erica H. MacDonald, announcing the sentencing, said, “The defendant served as the President of Starkey Laboratories and had the confidence and trust of the company’s owner and its employees. Mr. Ruzicka abused that trust when he stole millions of dollars through a brash and complex fraud scheme. The sentence imposed today marks the end to a long and meticulous investigation and trial.”
"It is unfortunate that Ruzicka misused his position of trust over a period of years to steal millions from a company that does so much to give the gift of hearing to so many people in need," said Special Agent in Charge Jill Sanborn of the FBI Minneapolis Division. "Corporate fraud has far-reaching negative effects on so many institutions and individuals and that's why the FBI continues to work tirelessly with our criminal justice partners to detect corporate fraud and hold those responsible to account for their crimes."
“IRS Criminal Investigation, along with the U.S. Attorney’s Office and other law enforcement agencies, will continue to investigate individuals who misuse their position of trust and authority within their corporations. As all financial transactions leave a trail, IRS Criminal Investigation special agents used their accounting skills and expertise to analyze the complex financial transactions made by the defendant. The sentencing of this individual should serve as a deterrent to those who might contemplate similar fraudulent actions,” stated Special Agent in Charge Gabriel Grchan of the IRS Criminal Investigation Chicago Field Office.
"Today's sentence illustrates that regardless of your economic status, financial fraud on any level is still a crime, and criminals will be held accountable for their actions. Postal Inspectors will continue to protect the integrity of the U.S. Postal Service and aggressively investigate those cases where the U.S. Mails are used to defraud individuals and businesses of money and property," said Lesley Allison, (Acting) Postal Inspector in Charge for the Twin Cities Field Office, Denver Division.
As proven at trial, between 2006 and September 2015, Ruzicka and Taylor worked together to embezzle and misappropriate money and business opportunities belonging to Starkey and Sonion, a major supplier of hearing aid components to Starkey. The defendants, using their leadership positions, deployed various tactics to steal from Starkey, including controlling a complicated web of sham companies and dummy entities, surreptitiously awarding themselves restricted stock in Starkey’s retail affiliate, and embezzling money from the company by causing payments to be made by Starkey for the benefit of the defendants and others.
For example, as proven at trial, Ruzicka and Taylor controlled a sham entity, Archer Acoustics. Taylor falsely represented to Sonion this entity was a Starkey affiliate, thereby securing Starkey’s discounted pricing on hearing-aid components for Archer Acoustics. The defendants obtained at least $600,000 in profits, commissions, and rebates by fraudulently leveraging Starkey’s purchasing power for their own benefit.
Another facet of this scheme related to Starkey’s retail affiliate, Northland Hearing Centers. The purpose of Northland was to acquire and operate retail hearing aid establishments. In 2013, after awarding themselves restricted stock in Northland, Ruzicka and Nelson paid themselves and Longtain approximately $15 million in exchange for terminating the restricted stock grants.
As proven at trial, in 2014, Ruzicka additionally embezzled $200,000 from Starkey under the guise of “officer’s insurance.” He used those funds to pay his state and federal personal income taxes. Ruzicka also stole a 2011 Jaguar automobile that Starkey purchased for Ruzicka’s use at a cost of $119,188.77. Starkey paid the fees, insurance premiums, and other costs associated with the automobile. Nevertheless, in July 2015, Ruzicka transferred ownership of the car from Starkey to himself by signing the title as both representative of the seller and also as the buyer. He did not pay Starkey for the vehicle, nor was it reported as a taxable benefit.
When some details of the scheme were discovered in September 2015, Ruzicka was terminated by Starkey.
This case was the result of an investigation conducted by the FBI, Criminal Investigation Division of the IRS, and the United States Postal Inspection Service.
Assistant United States Attorneys Benjamin Langner and Surya Saxena, and former Assistant United States Attorney Lola Velazquez-Aguilu prosecuted the case.
Defendant Information:
JEROME C. RUZICKA, 61
Plymouth, Minn.
Convicted:
- Mail fraud, 4 counts
- Wire fraud, 3 counts
- Tax fraud, 1 count
Sentenced:
- 84 months imprisonment
- 1 year supervised release
- Court will issue a restitution order
Registered Sex Offender Sentenced to 17 Years in Prison for Child PornographyRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of BRIAN ALAN KAELBLE, 33, to 212 months in federal prison for receipt of child pornography. KAEBLE, who has two prior convictions in the States of Missouri and Kansas for crimes related to child pornography, pleaded guilty on August 14, 2018, to a criminal information. He was sentenced December 12, 2018, by Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota.
According to KAELBLE’s guilty plea, on November 3, 2017, law enforcement officers executed a federal search warrant at KAELBLE’s residence in Brooklyn Center. KAELBLE admitted to the officers that he was downloading child pornography, both at home and while at work. KAELBLE worked delivering pizzas. Officers seized electronics from the residence.
More than 85,000 files containing child pornography were found during a forensic review of the electronics seized from KAELBLE’s bedroom, many of the files contained pornography depicting very young children.
This case was prosecuted by Assistant U.S. Attorney Carol M. Kayser. Ms. Kayser observed that Mr. Kaelble was a “purposeful” and “prolific” collector of child pornography. “The Court’s sentence of 212 months ensures that Mr. Kealble will not be able to hurt children for a very long time,” said Assistant United States Attorney Carol M. Kayser.
United States Attorney Erica MacDonald thanks the FBI and the Minneapolis Police Department for their work in the investigation.
Defendant Information:
BRIAN ALAN KAELBLE, 33
Brooklyn Center, MN
Convicted:
- Receipt of Child Pornography, 1 count
Sentenced:
- 212 months imprisonment
- 20 years supervised release
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Red Lake Man Pleads Guilty to MurderRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of MICHAEL WAYNE WHITEFEATHER, 18, to murder in the second degree. WHITEFEATHER entered his guilty plea today before Judge Susan Richard Nelson in United States District Court in St. Paul, Minnesota.
According to the defendant’s guilty plea, during the early morning hours of April 28, 2018, the defendant was traveling in a car on the Red Lake Indian Reservation and saw Anthony Allen Wells and another male walking in a parking lot near the Red Lake Skate Park. WHITEFEATHER admitted to getting out of the car with a shotgun and chasing after the victim and the other male. WHITEFEATHER eventually caught up to the victim and shot him in the face, which resulted in the victim’s death.
This case is the result of an investigation conducted by the Red Lake Department of Public Safety, the FBI Headwaters Safe Trails Task Force, the Paul Bunyan Drug Task Force, the Bemidji Police Department, the Beltrami County Sheriff's Office, and United States Customs and Border Protection. This case is part of Project Safe Neighborhoods, an initiative that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
This case is being prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.
Defendant Information:
MICHAEL WAYNE WHITEFEATHER, 18
Red Lake, Minn.
Convicted:
- Murder in the second degree, 1 count
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Oklee Man Sentenced to Five Years in Federal Prison for Possessing Unregistered Pipe BombsRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of ERIC JAMES REINBOLD, 41, to five years in federal prison for illegally possessing unregistered pipe bombs. REINBOLD was convicted on July 20, 2018, following a three-day trial before Chief Judge John R. Tunheim in U.S. District Court in Fergus Falls, Minnesota.
“The defendant possessed multiple pipe bombs and other items that presented a potentially dangerous situation for the Red Lake County community,” said Assistant U.S. Attorney Julie Allyn. “It is because of a courageous decision made by relatives of the defendant to report the pipe bombs, that the community is safe.”
"Those engaged in building illegal improvised explosive devices are a threat to the community, therefore, this sentence is well deserved," said ATF Special Agent in Charge Kurt Thielhorn of the St. Paul Field Division. "We are grateful that a member of the community came forward and provided information regarding a public safety risk. We are thankful for, and appreciative of, the partnerships we have with local authorities who were an important part of this case."
As proven at trial, on October 22, 2017, law enforcement responded to a report of possible pipe bombs and bomb making materials on hunting land in Oklee, Minnesota. Specifically, they found a plastic tote containing pipe bombs, jugs of gunpowder, fuses, and other bomb making material as well as a receipt for the fuses containing REINBOLD’S name and address.
As proven at trial, on November 2, 2017, law enforcement executed a search warrant at REINBOLD’S residence in Oklee. Officers recovered materials similar to those found on the hunting land as well as handwritten notes related to manufacturing pipe bombs, making homemade explosives, how to use pipe bombs, and diagrams of bombs that match the bombs found in the tote.
Chief Judge John R. Tunheim sentenced REINBOLD today in U.S. District Court in Fergus Falls.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Red Lake County Sheriff’s Office, the Crow Wing County Sheriff’s Office, and the Pennington County Sheriff’s Office. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state, and local law enforcement to combat violent crime.
Assistant United States Attorneys Julie E. Allyn and Angela Munoz-Kaphing prosecuted this case.
Defendant Information:
ERIC JAMES REINBOLD, 41
Oklee, Minn.
Convicted:
• Possession of unregistered destructive devices, 1 count
Sentenced:
- 60 months imprisonment
- 3 years supervised release
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Thirty-Six Defendants Guilty for Their Roles in International Thai Sex Trafficking OrganizationRead the Press Release
Five defendants were convicted yesterday by a federal jury for their roles in operating a massive international sex trafficking organization that was responsible for coercing hundreds of Thai women to engage in commercial sex acts across the United States.
Michael Morris, 65, of Seal Beach, California; Pawinee Unpradit, 46, of Dallas, Texas; Saowapha Thinram, 44, of Hutto, Texas; Thoucharin Ruttanamongkongul, 35, of Chicago Illinois; and Waralee Wanless, 39, of The Colony, Texas, were convicted following a six-week trial before Senior Judge Donovan Frank in U.S. District Court in St. Paul, Minnesota. Thirty-one defendants previously pleaded guilty for their roles in the sex trafficking organization.
The convictions were announced yesterday by U.S. Attorney Erica H. MacDonald for the District of Minnesota, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division, Special Agent in Charge Tracy J. Cormier of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) St. Paul, Supervisory Special Agent Todd Strom of IRS Criminal Investigation (IRS-CI) and Directing Attorney Panida Rzonca for the Thai Community Development Center.
“More than two years ago, my office filed the first federal indictment against a criminal organization that relied on the sexual exploitation of women for their own financial gain,” said U.S. Attorney MacDonald. “Since then, our team of prosecutors and investigators systematically dismantled the organization, while seeking justice for every victim of this organization. The process has been long, but today’s guilty verdict represents both a successful and just outcome. While our work combatting human trafficking continues, this case stands as a powerful example of the Department of Justice's commitment to achieving justice for victims. I applaud our law enforcement partners for the remarkable dedication and collaboration they have demonstrated throughout this process.”
“The defendants convicted yesterday participated in a massive yet brutally efficient criminal enterprise that trafficked hundreds of vulnerable Thai women for sexual exploitation and used sophisticated money laundering techniques to conceal and sustain itself,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The Criminal Division, through our Money Laundering and Asset Recovery Section, is committed to working with our law enforcement partners to dismantle the financial infrastructure supporting criminal organizations such as these.”
“Sex trafficking is a horrific crime that seeks to erode the human dignity of victims," said Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division. “I want to thank U.S. Attorney Erica H. MacDonald, the District of Minnesota’s Anti-Trafficking Coordination Team, HSI St. Paul, IRS Criminal Investigations, the State Department’s Diplomatic Security Service, and other law enforcement and local partners for their hard work on this case which dismantled an extensive transnational trafficking enterprise. The Department of Justice will bring the full force of the law against perpetrators of sex trafficking crimes.”
“The convictions of these defendants close this chapter for law enforcement, however mark only the beginning of the recovery process for the victims,” said Special Agent in Charge Comier. “I am extremely proud of the work done by HSI’s special agents, and of the teamwork demonstrated by our law enforcement partners in dismantling this criminal organization. Our communities are safer as a result of this investigation.”
“The cruel and illegal actions of the defendants tear at the fabric of our community, causing trauma, fear and anguish both seen and unseen,” said St. Paul Police Chief Axtell. “Thankfully, due to the exceptional work of many law enforcement agencies and their representatives, the guilty will be held accountable for their actions and survivors will get help, support and justice.”
“The guilty verdict of these five individuals received yesterday is the culmination of a large sophisticated international sex trafficking criminal enterprise," said IRS-CI Special Agent in Charge Strom. "This criminal organization exploited women and laundered hundreds of thousands of illicit profits. Pooling the skills of each agency in this complex investigation made a tremendous team including IRS Criminal Investigation who provided the financial expertise to follow the money trail of these criminals. Today’s guilty verdict demonstrates the collective efforts of law enforcement and U.S. Attorney’s Office who brought down an international sex trafficking organization.”
As proven at trial, this criminal organization compelled hundreds of women from Bangkok, Thailand, to engage in commercial sex acts in various cities across the United States, including Minneapolis, Los Angeles, Chicago, Atlanta, Phoenix, Washington, D.C., Las Vegas, Houston, Dallas, Seattle and Austin. The trafficking victims were often from impoverished backgrounds and spoke little or no English. They were coerced to participate in the criminal scheme through misleading promises of a better life in the United States and the ability to provide money to their families in Thailand.
Once in the United States, the victims were sent to houses of prostitution where they were forced to have sex with strangers – every day – for up to 12 hours a day, at times having sex with 10 men a day. The victims were isolated from the outside world. They were not allowed to leave the houses of prostitution unless accompanied by a member of the criminal organization. The victims moved around the United States between houses of prostitution in multiple cities. They and their families in Thailand were threatened.
The organization also engaged in widespread visa fraud to facilitate the international transportation of the victims. Traffickers assisted the victims in obtaining fraudulent visas and travel documents by funding false bank accounts, creating fictitious backgrounds and occupations, and instructing the victims to enter into fraudulent marriages to increase the likelihood that their visa applications would be approved. Traffickers also coached the victims as to what to say during their visa interviews. While working to obtain visa documents, traffickers gathered personal information from the victims, including the location of the victims’ families in Thailand. This information was later used to threaten victims who sought to flee the organization in the United States.
The organization dealt primarily in cash and engaged in rampant and sophisticated money laundering in order to promote and conceal illegal profits. The organization used “funnel accounts” to launder and route cash from cities across the United States to the money launderers in Los Angeles. To date, investigators have been able to recover $1.5 million in cash and $15 million in money judgments secured through plea agreements. During the extensive investigation, law enforcement traced tens of millions of dollars to the organization. Indeed, at trial, there was testimony that more than $40 million was sent to Thailand by one money launderer alone.
The District of Minnesota is one of six districts designated through a nationwide selection process as a Phase II Anti-Trafficking Coordination Team (ACTeam), an ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies. Today’s convictions validate the continued ACTeam mission—to take on and take down the most entrenched and sophisticated human trafficking organizations that seek to profit from human exploitation.
U.S. Attorney MacDonald, Assistant Attorney General Benczkowski and Assistant Attorney General Dreiband commended the multiple agencies that assisted in this investigation over the past three years including: HSI; IRS-CI; the Department of Justice’s Criminal Division’s Money Laundering and Asset Recovery Section; the Department of Justice’s Civil Rights Division’s Human Trafficking Prosecution Unit; the St. Paul Police Department; the Bureau of Criminal Apprehension’s Minnesota Human Trafficking Investigators Task Force; the Anoka County Sheriff’s Office; the Cook County (Illinois) Sheriff’s Office; the State Department Diplomatic Security Service; and the International Organized Crime Intelligence and Operations Center (IOC-2). U.S. Attorney MacDonald also thanks the Thai Community Development Center for the support and advocacy they have done on behalf of the victims of this sex trafficking organization.
U.S. Attorney MacDonald, Assistant Attorney General Benczkowski and Assistant Attorney General Dreiband further thanked the trial team led by Assistant U.S. Attorneys Melinda A. Williams and Laura Provinzino, with assistance from HSI Special Agent Tonya Price, IRS-CI Special Agent John Tschida, Senior Investigator Steven Baker of the Justice Department’s Criminal Division’s Money Laundering and Asset Recovery Section, and the Justice Department’s Civil Rights Division’s Human Trafficking Prosecution Unit for their dedication to the pursuit of justice
This case is filed as United States v. Michael Morris, et al., 17-cr-107 (DWF/TNL) and United States v. Sumalee Intarathong, et al., 16-cr-257 (DWF/TNL).
Defendants:
MICHAEL J. MORRIS, 65
Seal Beach, Calif.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Sex trafficking by use of force, fraud, and coercion, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
PAWINEE UNPRADIT, 46
Dallas, Texas
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
SAOWAPHA THINRAM, 44
Hutto, Texas
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
THOUCHARIN RUTTANAMONGKONGUL, 35
Chicago, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
WARALEE WANLESS, 39
The Colony, Texas
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
CHATARAK TAUFFLIEB, 52
San Jose, Calif.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
PEERACHET THIPBOONNGAM, 58
Los Angeles, Calif.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
GREGORY ALLEN KIMMY, 38
Hutto, Texas
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
WILAIWAN PHIMKHALEE, 40
Chicago, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
KANYARAT CHAIWIRAT, 52
Chicago, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
PORNTHEP SUKPRASERT, 42
Huntington Beach, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
MULCHULEE CHALERMSAKULRAT, 41
Huntington Beach, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
BHUNNA WIN, 51
San Diego, Calif.
Convicted:
- Unlicensed money transmitting business, 1 count
NATCHANOK YUVASUTA, 50
Los Angeles, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
NATTAYA LEELARUNGRAYAB, 47
Los Angeles, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
PEERASAK GUNTETONG, 61
North Hollywood, CA
Convicted:
- Conspiracy to engage in money laundering, 1 count
VEERAPON GHETTALAE, 57
Lake Elsinore, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
MATTHEW MINTZ, 27
Chicago, Ill.
Convicted:
- Conspiracy to commit alien harboring, 1 count
- Conspiracy to engage in money laundering, 1 count
MOHIT TANDON, 38
Burr Ridge, Ill.
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
RICHARD ALEXANDER, 53
DeKalb, Ill.
Convicted:
- Conspiracy to commit marriage fraud, 1 count
- Conspiracy to engage in money laundering, 1 count
TANAKRON PATRATH, 60
Houston, Texas
Convicted:
- Conspiracy to engage in money laundering, 1 count
PANWAD KHOTPRATOOM, 47
Houston, Texas
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
CHABAPRAI BOONLUEA, 44
Winder, Ga.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
NOPPAWAN LERSLURCHACHAI, 37
Lomita, Calif.
Convicted:
- Sex trafficking by use of force, fraud, and coercion, 1 count
- Conspiracy to engage in money laundering, 1 count
WATCHARIN LUAMSEEJUN, 48
Unknown
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
PANTILA RODPHOKHA, 33
Mount Prospect, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
SOYSUDA SIANGDANG, 34
Chicago, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
ANDREW FLANIGAN, 53
Winder, Ga.
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
TODD VASSEY, 56
Lahanina, Hawaii
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
THI VU, 50
Atlanta, Ga.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
JOHN ZBRACKI, 61
Lakeville, Minn.
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
JOHN NG, 41
Cottage Grove, Minn.
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
PATCHARAPORN SAENGKHAM, 43
Los Angeles, Calif.
Convicted:
- Conspiracy to enter the United States by means of misrepresentation and concealment of facts, 1 count
CHANANCHIDA SENASU, 42
Dallas, Tex.
Convicted:
- Conspiracy to enter the United States by means of misrepresentation and concealment of facts, 1 count
YADAPORN PANNGOEN, 32
Chicago, Ill.
Convicted:
- Conspiracy to enter the United States by means of misrepresentation and concealment of facts, 1 count
CHONTHICHA SOICHAISONG, 38
Austin, Tex.
Convicted:
- Conspiracy to enter the United States by means of misrepresentation and concealment of facts, 1 count
Thirty-Six Defendants Guilty for Their Roles in International Thai Sex Trafficking OrganizationRead the Press Release
WASHINGTON – Five defendants were convicted yesterday by a federal jury for their roles in operating a massive international sex trafficking organization that was responsible for coercing hundreds of Thai women to engage in commercial sex acts across the United States.
Michael Morris, 65, of Seal Beach, California; Pawinee Unpradit, 46, of Dallas, Texas; Saowapha Thinram, 44, of Hutto, Texas; Thoucharin Ruttanamongkongul, 35, of Chicago Illinois; and Waralee Wanless, 39, of The Colony, Texas, were convicted following a six-week trial before Senior Judge Donovan Frank in U.S. District Court in St. Paul, Minnesota. Thirty-one defendants previously pleaded guilty for their roles in the sex trafficking organization.
The convictions were announced yesterday by U.S. Attorney Erica H. MacDonald for the District of Minnesota, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division, Special Agent in Charge Tracy J. Cormier of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) St. Paul, Supervisory Special Agent Todd Strom of IRS Criminal Investigation (IRS-CI) and Directing Attorney Panida Rzonca for the Thai Community Development Center.
“More than two years ago, my office filed the first federal indictment against a criminal organization that relied on the sexual exploitation of women for their own financial gain,” said U.S. Attorney MacDonald. “Since then, our team of prosecutors and investigators systematically dismantled the organization, while seeking justice for every victim of this organization. The process has been long, but today’s guilty verdict represents both a successful and just outcome. While our work combatting human trafficking continues, this case stands as a powerful example of the Department of Justice's commitment to achieving justice for victims. I applaud our law enforcement partners for the remarkable dedication and collaboration they have demonstrated throughout this process.”
“The defendants convicted yesterday participated in a massive yet brutally efficient criminal enterprise that trafficked hundreds of vulnerable Thai women for sexual exploitation and used sophisticated money laundering techniques to conceal and sustain itself,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The Criminal Division, through our Money Laundering and Asset Recovery Section, is committed to working with our law enforcement partners to dismantle the financial infrastructure supporting criminal organizations such as these.”
“Sex trafficking is a horrific crime that seeks to erode the human dignity of victims," said Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division. “I want to thank U.S. Attorney Erica H. MacDonald, the District of Minnesota’s Anti-Trafficking Coordination Team, HSI St. Paul, IRS Criminal Investigations, the State Department’s Diplomatic Security Service, and other law enforcement and local partners for their hard work on this case which dismantled an extensive transnational trafficking enterprise. The Department of Justice will bring the full force of the law against perpetrators of sex trafficking crimes.”
“The convictions of these defendants close this chapter for law enforcement, however mark only the beginning of the recovery process for the victims,” said Special Agent in Charge Comier. “I am extremely proud of the work done by HSI’s special agents, and of the teamwork demonstrated by our law enforcement partners in dismantling this criminal organization. Our communities are safer as a result of this investigation.”
“The cruel and illegal actions of the defendants tear at the fabric of our community, causing trauma, fear and anguish both seen and unseen,” said St. Paul Police Chief Axtell. “Thankfully, due to the exceptional work of many law enforcement agencies and their representatives, the guilty will be held accountable for their actions and survivors will get help, support and justice.”
“The guilty verdict of these five individuals received yesterday is the culmination of a large sophisticated international sex trafficking criminal enterprise," said IRS-CI Special Agent in Charge Strom. "This criminal organization exploited women and laundered hundreds of thousands of illicit profits. Pooling the skills of each agency in this complex investigation made a tremendous team including IRS Criminal Investigation who provided the financial expertise to follow the money trail of these criminals. Today’s guilty verdict demonstrates the collective efforts of law enforcement and U.S. Attorney’s Office who brought down an international sex trafficking organization.”
As proven at trial, this criminal organization compelled hundreds of women from Bangkok, Thailand, to engage in commercial sex acts in various cities across the United States, including Minneapolis, Los Angeles, Chicago, Atlanta, Phoenix, Washington, D.C., Las Vegas, Houston, Dallas, Seattle and Austin. The trafficking victims were often from impoverished backgrounds and spoke little or no English. They were coerced to participate in the criminal scheme through misleading promises of a better life in the United States and the ability to provide money to their families in Thailand.
Once in the United States, the victims were sent to houses of prostitution where they were forced to have sex with strangers – every day – for up to 12 hours a day, at times having sex with 10 men a day. The victims were isolated from the outside world. They were not allowed to leave the houses of prostitution unless accompanied by a member of the criminal organization. The victims moved around the United States between houses of prostitution in multiple cities. They and their families in Thailand were threatened.
The organization also engaged in widespread visa fraud to facilitate the international transportation of the victims. Traffickers assisted the victims in obtaining fraudulent visas and travel documents by funding false bank accounts, creating fictitious backgrounds and occupations, and instructing the victims to enter into fraudulent marriages to increase the likelihood that their visa applications would be approved. Traffickers also coached the victims as to what to say during their visa interviews. While working to obtain visa documents, traffickers gathered personal information from the victims, including the location of the victims’ families in Thailand. This information was later used to threaten victims who sought to flee the organization in the United States.
The organization dealt primarily in cash and engaged in rampant and sophisticated money laundering in order to promote and conceal illegal profits. The organization used “funnel accounts” to launder and route cash from cities across the United States to the money launderers in Los Angeles. To date, investigators have been able to recover $1.5 million in cash and $15 million in money judgments secured through plea agreements. During the extensive investigation, law enforcement traced tens of millions of dollars to the organization. Indeed, at trial, there was testimony that more than $40 million was sent to Thailand by one money launderer alone.
The District of Minnesota is one of six districts designated through a nationwide selection process as a Phase II Anti-Trafficking Coordination Team (ACTeam), an ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies. Today’s convictions validate the continued ACTeam mission—to take on and take down the most entrenched and sophisticated human trafficking organizations that seek to profit from human exploitation.
U.S. Attorney MacDonald, Assistant Attorney General Benczkowski and Assistant Attorney General Dreiband commended the multiple agencies that assisted in this investigation over the past three years including: HSI; IRS-CI; the Department of Justice’s Criminal Division’s Money Laundering and Asset Recovery Section; the Department of Justice’s Civil Rights Division’s Human Trafficking Prosecution Unit; the St. Paul Police Department; the Bureau of Criminal Apprehension’s Minnesota Human Trafficking Investigators Task Force; the Anoka County Sheriff’s Office; the Cook County (Illinois) Sheriff’s Office; the State Department Diplomatic Security Service; and the International Organized Crime Intelligence and Operations Center (IOC-2). U.S. Attorney MacDonald also thanks the Thai Community Development Center for the support and advocacy they have done on behalf of the victims of this sex trafficking organization.
U.S. Attorney MacDonald, Assistant Attorney General Benczkowski and Assistant Attorney General Dreiband further thanked the trial team led by Assistant U.S. Attorneys Melinda A. Williams and Laura Provinzino, with assistance from HSI Special Agent Tonya Price, IRS-CI Special Agent John Tschida, Senior Investigator Steven Baker of the Justice Department’s Criminal Division’s Money Laundering and Asset Recovery Section, and the Justice Department’s Civil Rights Division’s Human Trafficking Prosecution Unit for their dedication to the pursuit of justice
This case is filed as United States v. Michael Morris, et al., 17-cr-107 (DWF/TNL) and United States v. Sumalee Intarathong, et al., 16-cr-257 (DWF/TNL).
Defendants:
MICHAEL J. MORRIS, 65
Seal Beach, Calif.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Sex trafficking by use of force, fraud, and coercion, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
PAWINEE UNPRADIT, 46
Dallas, Texas
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
SAOWAPHA THINRAM, 44
Hutto, Texas
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
THOUCHARIN RUTTANAMONGKONGUL, 35
Chicago, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
WARALEE WANLESS, 39
The Colony, Texas
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
CHATARAK TAUFFLIEB, 52
San Jose, Calif.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
PEERACHET THIPBOONNGAM, 58
Los Angeles, Calif.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
GREGORY ALLEN KIMMY, 38
Hutto, Texas
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
WILAIWAN PHIMKHALEE, 40
Chicago, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
KANYARAT CHAIWIRAT, 52
Chicago, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
PORNTHEP SUKPRASERT, 42
Huntington Beach, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
MULCHULEE CHALERMSAKULRAT, 41
Huntington Beach, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
BHUNNA WIN, 51
San Diego, Calif.
Convicted:
- Unlicensed money transmitting business, 1 count
NATCHANOK YUVASUTA, 50
Los Angeles, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
NATTAYA LEELARUNGRAYAB, 47
Los Angeles, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
PEERASAK GUNTETONG, 61
North Hollywood, CA
Convicted:
- Conspiracy to engage in money laundering, 1 count
VEERAPON GHETTALAE, 57
Lake Elsinore, Calif.
Convicted:
- Conspiracy to engage in money laundering, 1 count
MATTHEW MINTZ, 27
Chicago, Ill.
Convicted:
- Conspiracy to commit alien harboring, 1 count
- Conspiracy to engage in money laundering, 1 count
MOHIT TANDON, 38
Burr Ridge, Ill.
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
RICHARD ALEXANDER, 53
DeKalb, Ill.
Convicted:
- Conspiracy to commit marriage fraud, 1 count
- Conspiracy to engage in money laundering, 1 count
TANAKRON PATRATH, 60
Houston, Texas
Convicted:
- Conspiracy to engage in money laundering, 1 count
PANWAD KHOTPRATOOM, 47
Houston, Texas
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
CHABAPRAI BOONLUEA, 44
Winder, Ga.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
NOPPAWAN LERSLURCHACHAI, 37
Lomita, Calif.
Convicted:
- Sex trafficking by use of force, fraud, and coercion, 1 count
- Conspiracy to engage in money laundering, 1 count
WATCHARIN LUAMSEEJUN, 48
Unknown
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
PANTILA RODPHOKHA, 33
Mount Prospect, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
SOYSUDA SIANGDANG, 34
Chicago, Ill.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
ANDREW FLANIGAN, 53
Winder, Ga.
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
TODD VASSEY, 56
Lahanina, Hawaii
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
THI VU, 50
Atlanta, Ga.
Convicted:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to engage in money laundering, 1 count
JOHN ZBRACKI, 61
Lakeville, Minn.
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
JOHN NG, 41
Cottage Grove, Minn.
Convicted:
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
PATCHARAPORN SAENGKHAM, 43
Los Angeles, Calif.
Convicted:
- Conspiracy to enter the United States by means of misrepresentation and concealment of facts, 1 count
CHANANCHIDA SENASU, 42
Dallas, Tex.
Convicted:
- Conspiracy to enter the United States by means of misrepresentation and concealment of facts, 1 count
YADAPORN PANNGOEN, 32
Chicago, Ill.
Convicted:
- Conspiracy to enter the United States by means of misrepresentation and concealment of facts, 1 count
CHONTHICHA SOICHAISONG, 38
Austin, Tex.
Convicted:
- Conspiracy to enter the United States by means of misrepresentation and concealment of facts, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Target Corporation to Pay $3,000,000 to Resolve False Claims Act Allegations Concerning Auto Refilling Medicaid Prescriptions in MassachusettsRead the Press Release
United States Attorney Erica H. MacDonald and Massachusetts Attorney General Maura Healey today announced that Target Corporation has agreed to pay a total of $3,000,000 to resolve allegations that it violated the federal False Claims Act and Massachusetts False Claims Act by submitting claims for payment to Massachusetts’ Medicaid program in violation of rules prohibiting Medicaid prescriptions from being automatically refilled.
Massachusetts’ Medicaid program, called MassHealth, is jointly funded by the federal government and the Commonwealth of Massachusetts to provide health care to low-income individuals. Along with at least 20 other states, Massachusetts does not allow pharmacies to automatically refill prescriptions paid for by Medicaid without an explicit request from the beneficiary for each refill. This policy provides an important control against wasted or unnecessary prescriptions that are reimbursed by taxpayer funds.
According to the allegations in the complaint, Target pharmacies knowingly and routinely enrolled MassHealth beneficiaries in the company’s auto-refill program, and billed MassHealth for prescriptions in violation of the state’s regulation prohibiting the practice. This practice continued until Target sold its pharmacy business to CVS Health in or around December 2015.
“This resolution demonstrates our ongoing commitment to ensuring compliance with rules that are specifically designed to protect taxpayer funds and prevent wasted medications,” said United States Attorney Erica H. MacDonald.
"Unauthorized automatic refills can result in inappropriate prescription drug use and wastes taxpayer dollars," said Massachusetts Attorney General Maura Healey. "This settlement will bring money back to our state and will help ensure that our health care resources reach those who need them the most."
This settlement resolves allegations filed in a civil lawsuit originally brought by a whistleblower under the qui tam provisions of the federal False Claims Act and Massachusetts False Claims Act, which allow private parties to bring suit on behalf of the government for false claims and to share in any recovery. The government often relies on whistleblowers to bring fraud schemes to light that might otherwise go undetected.
In this civil settlement, Target has denied the allegations of wrongdoing and False Claims Act liability. Target cooperated with the government’s investigation of this matter.
The case was handled by the Civil Division of the U.S. Attorney’s Office for the District of Minnesota and the Medicaid Fraud Control Unit of the Massachusetts’ Attorney General’s Office.
The case is United States of America, State of Minnesota, Commonwealth of Massachusetts, State of New York, and Commonwealth of Virginia, ex rel. Ryan Mesaros v. Target Corp., Civil No. 15-CV-2684 (PAM/TNL). The claims resolved by the settlement are allegations only; there has been no determination of liability.
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former Oil Company President Sentenced to 12 Years in Prison for Stock Manipulation SchemeRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of RYAN RANDALL GILBERTSON, 42, founder of Dakota Plains Holdings, Inc., to 144 months in federal prison, a $2 million fine, and over $15 million in restitution. GILBERTSON was sentenced today by Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota. A federal jury convicted GILBERTSON and co-defendant DOUGLAS VAUGHN HOSKINS, 50, of multiple counts of wire fraud, securities fraud, and conspiracy to commit securities fraud, on June 26, 2018, following an 11-day jury trial before Judge Schiltz.
HOSKINS is scheduled to be sentenced on December 21, 2018, by Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota.
As proven in court, in November 2008, GILBERTSON and his business partner founded Dakota Plains, Inc. (“Dakota Plains”), a privately held company based in Wayzata, Minnesota that owned and operated a transloading facility in New Town, North Dakota. From the outset, GILBERTSON and his partner concealed their involvement in the company by installing their fathers as the company’s executives and two-person board of directors. Rather than capitalize the company at the outset, GILBERTSON caused the company to issue $9 million in promissory notes to himself and other corporate insiders. The notes paid 12% annual interest and included a provision that paid GILBERTSON and the other noteholders a bonus payment based on the average trading price of Dakota Plains stock during the first 20 days of public trading. The bonus payment provision operated as an “embedded derivative” in which the value of the bonus payment would be based on the average price of Dakota Plains stock during the first 20 days of public trading.
GILBERTSON then caused the company to go public via a reverse merger with a company called Malibu Club Tan, which was a publicly traded shell company that operated a single defunct tanning salon in suburban Salt Lake City, Utah. GILBERTSON made it a secret condition of the reverse merger that DOUG HOSKINS, his friend and polo coach, be able to purchase the majority of the “float” of freely trading shares, which were the only shares that could trade publicly following the reverse merger. GILBERTSON then gave $30,000 to HOSKINS, who was deeply in debt and owed money to the IRS and other creditors, in order to purchase 50,000 shares of Dakota Plains stock at a price of $0.50 per share on March 23, 2012, the morning of the reverse merger. That same day, again at the direction of GILBERTSON, HOSKINS began selling his shares at the fraudulently inflated price of $12 per share.
On the first day of public trading, HOSKINS began selling his newly acquired shares for an inflated price of $12 per share at GILBERTSON’S direction, and continued to do so throughout the first 20 days of public trading following the reverse merger. At the same time, GILBERTSON directed a local stockbroker at a Minneapolis-based securities brokerage firm to purchase shares of Dakota Plains stock on behalf of both himself and his clients at inflated prices. GILBERTSON also instructed a Salt Lake City-based business consultant to manipulate the price of the stock by ensuring that none of the shell company shareholders sold their stock for less than the $12 per share price offered by his friend and polo coach, HOSKINS. Indeed, on April 4, 2012, GILBERTSON sent a text message to the consultant in Utah bragging that the shell company shareholders “would be participating on sales at 7 bucks [a share] not 12 were it not for my involvement.”
Throughout the 20-day period following the reverse merger, GILBERTSON, with the help of HOSKINS and others, manipulated the price of Dakota Plains stock to increase the average trading price to $11.30 per share. This inflated share price triggered a $32.8 million bonus payment to GILBERTSON and the other noteholders. When the cash-strapped company was unable to pay the bonus, GILBERTSON instructed its CEO to raise money for use in paying GILBERTSON’s fraudulently inflated bonus payment.
Ultimately, GILBERTSON made millions as a result of his stock manipulation scheme. HOSKINS made less money, but still pocketed more than $125,000 from his stock sales, much of which he used to purchase an Argentine polo pony.
In the wake of the fraud scheme, HOSKINS was interviewed by the Securities and Exchange Commission (SEC) about his involvement in these stock sales. HOSKINS repeatedly lied under oath during the deposition, covering up both his and GILBERTSON’S involvement in the stock manipulation scheme. Among other things, HOSKINS claimed that he did not discuss the stock trades with any other individuals. At trial, GILBERTSON falsely denied his role in the stock manipulation scheme, but conceded that he had arranged for HOSKINS to purchase Dakota Plains stock prior to the reverse merger and had provided HOSKINS with the money with which he purchased the stock.
“Mr. Gilbertson orchestrated an extraordinarily complex stock manipulation scheme in order to obtain millions of dollars from a publicly traded company. He executed his scheme over many years at the detriment of the company, which is now bankrupt, its shareholders and the trading public,” said United States Attorney Erica H. MacDonald. “He did not care about how his actions may impact others; he only cared about lining his own pockets. Despite the complexity of his scheme, and how much of a game he tried to play, he lost, thanks to the diligent and thorough work of investigators, prosecutors, a federal jury, and the Court.”
“Mr. Gilbertson created a complex and complicated scheme that was unraveled thanks to the diligence of highly trained agents who don't give up,” said Jill Sanborn, Special Agent in Charge of the Minneapolis Division of the FBI. “The heavy sentence imposed today on Mr. Gilbertson underscores that market rigging and self-dealing for one's own financial gain are nefarious activities that will be discovered and that those who engage in them will be dealt with accordingly."
“Today’s sentence sends a clear message regarding the critical role the U.S. Postal Inspection Service and its law enforcement partners play in protecting the investing public from these types of fraudulent schemes, “ said Acting Postal Inspector in Charge Lesley Allison. “We will continue to protect and ensure the nation’s mail stream is not used by criminals to prey upon our citizens.”
This case is the result of an investigation conducted by the FBI and the United States Postal Inspection Service.
This case was prosecuted by Assistant United States Attorneys Joseph H. Thompson, Kimberly A. Svendsen, and Melinda A. Williams.
The Criminal Docket Number for this case is: 17-cr-00066
Defendant Information:
RYAN RANDALL GILBERTSON, 42
Delano, Minn.
Convicted:
- Wire fraud, 14 counts
- Conspiracy to commit securities fraud, 1 count
- Securities fraud, 6 counts
Sentenced:
- 144 months imprisonment
- 2 years supervised release
- $2 million fine
- $15,135,360 in restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Willmar Man Sentenced for Illegal Cache of Machine Guns, Pipe Bombs, SilencersRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of CHAD LEE MONSON, 46, for illegally possessing machine guns, pipe bombs, and silencers. MONSON, who pleaded guilty on August 16, 2018, was sentenced today in U.S. District Court in Minneapolis, Minnesota, by Judge Joan N. Ericksen to 36 months in prison.
According to the defendant’s guilty plea and documents filed in court, on January 30, 2018, law enforcement officers executed a search warrant at MONSON’S residence in Willmar, Minnesota. Inside the residence, officers found personal use amounts of illegal narcotic drugs, as well as sixteen firearms, and a large quantity of ammunition. On February 21, 2018, law enforcement officers executed two additional search warrants at a commercial utility building near MONSON’S residence. There, officers found ten machine guns, two of them with obliterated serial numbers, three pipe bombs, and three unregistered silencers. As part of his guilty plea, MONSON was required to forfeit to the United States 12 firearms, three pipe bombs, and three silencers.
United States Attorney Erica MacDonald thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives, the CEE-VI Gang and Drug Task Force, and the Kandiyohi County Attorney’s Office who investigated this case, and Assistant United States Attorney John Docherty who prosecuted the case.
Defendant Information:
CHAD LEE MONSON, 46
Willmar, Minn.
Convicted:
- Possession of a machine gun, 1 count
- Possession of an unregistered destructive device (pipe bomb), 1 count
- Possession of an unregistered silencer, 1 count
Sentenced:
- 36 months
- 3 years supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600