District of Minnesota
Press releases recorded for this federal judicial district.
Victims of Tom Petters Ponzi Scheme Receive Initial Distribution of More Than $16 Million in Forfeited FundsRead the Press Release
The Department of Justice announced today that an initial distribution of $16,440,674.35 has been issued to victim investors of the THOMAS PETTERS fraud scheme. These funds, forfeited to the United States through criminal and civil forfeiture proceedings prosecuted in the District of Minnesota, will be sent to approximately 364 victims worldwide.
On December 1, 2008, THOMAS JOSEPH PETTERS, of Wayzata, Minnesota, was indicted on multiple counts of mail fraud, wire fraud, money laundering, and conspiracy for orchestrating a $2.1 billion Ponzi scheme. On December 2, 2009, a federal jury found PETTERS guilty of all 20 counts against him and was later sentenced by U.S. District Judge Richard H. Kyle to 50 years in federal prison. Other defendants were convicted in related criminal proceedings. As part of their sentencing judgments, PETTERS and other defendants were ordered to forfeit assets obtained through their criminal activity, including real estate, bank and investment accounts, vehicles and other assets. Under federal law, the Department of Justice has the authority to distribute the proceeds of forfeited assets through the remission process to victim investors who lost money in connection with the scheme. The proceeds of all forfeited assets are being distributed to victim investors.
Additional forfeited funds will be distributed to victim investors through the remission process when pending forfeiture proceedings are completed. The total distribution amount is yet to be determined.
The forfeiture proceedings were part of a coordinated effort to compensate victim investors. In October 2008, the United States obtained an injunction against the fraud in a separate civil case, and the Court appointed a receiver to assist in the recovery of assets. Thereafter, multiple bankruptcy proceedings were filed in Minnesota and other states. In September 2010, the U.S. District Court and the U.S. Bankruptcy Court approved a Coordination Agreement governing the asset recovery efforts of the United States, the bankruptcy trustees, and the Court appointed receiver. In addition to the funds distributed via remission payments, additional payments are being made to victim investors and creditors through these ongoing bankruptcy and receivership proceedings in various states including Minnesota, Illinois and Florida.
For more information about the PETTERS criminal case, victim compensation, and the asset forfeiture remission process, please visit https://www.justice.gov/usao-mn/tom-petters-case
The Petters’ remission payments would not have been possible without the efforts of the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section, the U.S. Attorney’s Office for the District of Minnesota, the FBI, IRS Criminal Investigation, and the U.S. Postal Inspection Service in the prosecution of these crimes and the recovery of assets supporting the forfeiture in this case.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Saint Paul Man Charged with Illegal Export of Box Turtles to Hong KongRead the Press Release
United States Attorney Erica H. MacDonald announced a federal indictment charging RENE PATRICK VARGAS, 32, with illegally exporting box turtles to Hong Kong. VARGAS will make his initial appearance at a later date.
North American box turtle (genus terrapene) populations, native to the United States and Mexico, are in decline due to loss of habitat and illegal trade, including export to Hong Kong and China for use in food, traditional medicine, and to be kept as pets. Although box turtles are not currently threatened with extinction, they are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (“CITES”) treaty, implemented as part of the Endangered Species Act, to prevent their further decline. It is illegal to export wildlife without prior approval and inspection by the U.S. Fish and Wildlife Service, as well as valid export licenses and permits.
As alleged in the indictment, from approximately June 1, 2017 through June 14, 2017, VARGAS completed forms for international shipment of three packages containing a total of 38 box turtles. The packages were falsely labeled as “toys” or “components” and were intended to be transported in interstate and foreign commerce in violation of the Lacey Act.
This case is the result of an investigation conducted by the United States Fish and Wildlife Service.
This case is being prosecuted by Assistant U.S. Attorney Miranda E. Dugi.
Defendant Information:
RENE PATRICK VARGAS, 32
Saint Paul, Minn.
Charges:
- Lacey Act false labeling, 3 counts
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Minneapolis Opioid Dealer Sentenced to 80 Months in PrisonRead the Press Release
United States Attorney Erica H. MacDonald announced the sentencing of JOHN HENRY EDMONDS, 35, to 80 months in prison for distribution of heroin, carfentanil, methamphetamine, and furanyl fentanyl. EDMONDS, who pleaded guilty on March 20, 2018, was sentenced today before Senior U.S. District Judge Donovan W. Frank in U.S. District Court in St. Paul, Minn.
United States Attorney Erica MacDonald said, “This is the first case in the District of Minnesota involving carfentanil and one of the first involving furanyl fentanyl. Sadly, highly potent and extremely lethal opioid analogues such as these are becoming more common on the illegal drug market and the devastating societal impact of these substances, even in very small quantities, cannot be overstated. I commend the work of the DEA for taking a firm stance against those who threaten our communities with deadly drugs.”
“The trafficking of fentanyl analogues represents a significant threat to public safety,” said Assistant Special Agent in Charge Kenneth Solek. “Investigations like this are vitally important to our neighborhoods and communities, and DEA is proud of the close ties we have with our state and local counterparts, who work tirelessly along with DEA to strive for a drug free community.”
According to his guilty plea and documents filed in court, on multiple dates between July 6 and August 22, 2017, EDMONDS distributed a total of 5.9 grams of mixtures and substances containing heroin, carfentanil, methamphetamine, and furanyl fentanyl to an individual, who unbeknownst to EDMONDS, was cooperating with law enforcement. EDMONDS was taken into federal custody on September 25, 2017.
This case is the result of an investigation conducted by the Drug Enforcement Administration, the Minneapolis Police Department, and the Bloomington Police Department.
This case was prosecuted by Assistant U.S. Attorney Surya Saxena.
Defendant Information:
JOHN HENRY EDMONDS, 35
Minneapolis, Minn.
Convicted:
- Distribution of heroin, carfentanil, methamphetamine, and furanyl fentanyl, 5 counts
Sentenced:
- 80 months in prison
- Five years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Thief River Falls Chiropractor Indicted on Multiple Counts of Wire Fraud and Identity TheftRead the Press Release
United States Attorney Erica H. MacDonald today announced a federal indictment charging STEVEN RICHARD WISETH, 35, a Thief River Falls chiropractor, with six counts of wire fraud and two counts of aggravated identity theft. WISETH made his initial appearance earlier today before Magistrate Judge Hildy Bowbeer in U.S. District Court in Saint Paul, Minnesota.
As alleged in the indictment, from approximately March 2013 through April 2015, WISETH, a Doctor of Chiropractic and owner of Health Quest Family Chiropractic (“Health Quest”) in Thief River Falls, Minnesota, orchestrated a scheme to defraud health insurers by submitting and causing the submission of false and fraudulent claims for chiropractic services.
As alleged in the indictment, WISETH’S scheme was dependent on maximizing patient volume at Health Quest, and he held promotional events where he gave away free food and drink, prizes, and gift certificates to induce current and prospective patients to visit Health Quest. After the promotional events, WISETH billed insurance companies for the provision of chiropractic services to substantial numbers of individuals who attended the events, including billing for services that were not provided. In some cases, WISETH used the personal and insurance information of attendees to bill the individuals’ insurance companies for services that were not provided, unbeknownst to the attendee. For example, on February 13, 2014, WISETH held a promotional event at Health Quest that he referred to as “ValenSpine’s Day.” WISETH submitted bills to insurance companies representing that he had treated approximately 219 patients on that day, purporting to have provided approximately 641 services.
As alleged in the indictment, WISETH also submitted false bills for services by misrepresenting the services that were actually provided to patients. For example, WISETH routinely submitted false bills for treatment with a “wobble chair,” which is a device intended to develop core strength. WISETH falsely represented to insurers that the services were performed for at least eight minutes under the direct supervision of a healthcare professional when, in fact, WISETH merely stocked his clinics’ waiting rooms with wobble chairs so that patients would sit in them while waiting for their appointments.
As alleged in the indictment, over the course of the two-year scheme, WISETH billed the insurance companies more than $3.1 million dollars, including bills for hundreds of treatments that were not provided or were overbilled, and the insurance companies paid WISETH and Health Quest more than $1.1 million.
This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the United States Postal Inspection Service.
This case is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.
Defendant Information:
STEVEN RICHARD WISETH, 35
Thief River Falls, Minn.
Charges:
- Wire fraud, 6 counts
- Aggravated identity theft, 2 counts
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Repeat Tax Fraud Offender Sentenced to 10 Years in PrisonRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of ARTHUR DALE SENTY-HAUGEN, 51, for orchestrating a years-long tax fraud conspiracy while confined to the Minnesota Sex Offender Program. SENTY-HAUGEN, who pleaded guilty on January 23, 2018 to one count of conspiracy to defraud the United States, was sentenced earlier today to 10 years in prison before Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota.
“Mr. Senty-Haugen’s lengthy criminal history and flagrant disregard for the law and the criminal justice system was appropriately addressed by this significant prison sentence,” said U.S. Attorney Erica MacDonald. “We appreciate the investigative work of our partners at the IRS and their dogged pursuit of this serial fraudster.”
“Today's sentencing of Arthur Senty-Haugen continues to emphasize the diligence of the Internal Revenue Service and U.S. Attorney’s Office in their continued pursuit of those who use fraudulent methods in an attempt to corrupt our nation's tax system,” said Acting Special Agent in Charge Gabriel Grchan, IRS Criminal Investigation of the St. Paul Field Office. “Be assured that IRS Criminal Investigation Division, together with our law enforcement partners, will hold those who engage in similar behavior fully accountable, especially those like Senty-Haugen who repeatedly commit fraud.”
According to the defendant’s guilty plea and documents filed in court, since 1994, SENTY-HAUGEN has been confined to the Minnesota Sex Offender Program (“MSOP”) in Moose Lake, Minnesota. Beginning in early 2012 through late 2017, SENTY-HAUGEN devised and participated in a scheme to obtain money from the U.S. government by filing false federal income tax returns claiming fraudulent refunds on behalf of fellow clients of the MSOP (“the filers”). As part of the scheme, SENTY-HAUGEN prepared and filed the false tax returns using the filers’ names and social security numbers, as well as false wage and federal income tax withholding information. SENTY-HAUGEN enlisted the help of other individuals not confined at MSOP to assist him and the filers in preparing and filing the fraudulent returns as well as collecting and transferring the illicit proceeds. SENTY-HAUGEN admitted to filing a total of 92 fraudulent income tax returns for tax years 2011 through 2016, seeking more than $550,000 in refunds to which the filers were not entitled.
In 2000 and 2013, SENTY-HAUGEN was prosecuted in state court in Carlton County on fraud-related offenses. Additionally, in 2004, while confined at MSOP, SENTY-HAUGEN was indicted in federal court for tax fraud conspiracy, a scheme that was similar to the instant offense, and was sentenced to 57 months in prison followed by three years of supervised release. SENTY-HAUGEN began his new fraud scheme just two days after his term of supervised release expired.
This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division, and the Minnesota Department of Human Services, Office of Special Investigations.
Assistant U.S. Attorneys Amber M. Brennan and Julie E. Allyn prosecuted the case.
Defendant Information:
ARTHUR DALE SENTY-HAUGEN, 51
MSOP, Moose Lake, Minn.
Convicted:
- Conspiracy to defraud the United States, 1 count
Sentenced:
- 120 months in prison
- Three years of supervised release
- $247,000 in restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Six Members of Saint Paul Street Gang “HAM Crazy” Sentenced for Federal Firearms ConspiracyRead the Press Release
United States Attorney Erica H. MacDonald announced the sentencing of six members of a Saint Paul street gang, known as the HAM Crazy, for conspiring to illegally possess firearms. MARVELL VOSHON JEFFERSON, 24, SHELBY DELANE ASHFORD, JR., 24, CASEY JEMAR DAVIS, 24, PHILLIP DWAYNE JACKSON, 23, NAKIA MARQUIRE MARTIN, 25, and PIERRE CORTEZ JENKINS, 23, have been sentenced to prison by Senior Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minnesota. A seventh defendant, CARMELO MANUEL MARRERO, 23, has pleaded guilty to conspiracy and will be sentenced at a later date. All seven defendants either had prior felony convictions or were otherwise prohibited from legally possessing firearms or ammunition.
“Keeping our neighborhoods, communities and families safe from gun and gang violence is a top priority for the Department and for my office,” said United States Attorney Erica MacDonald. “As this case demonstrates, our concerted effort to keep guns out of the hands of criminals is ongoing. By leveraging the strong relationships we have with our federal, state and local law enforcement partners, we will remain steadfast in our duty to keep communities safe.”
“It’s unfortunate all of the violence these individuals have inflicted on St. Paul, but justice prevails,” said ATF Assistant Special Agent in Charge Kirk Howard of the St. Paul Field Division. “St. Paul Police Chief Axtell made it very clear that firearm violence will not be tolerated, and we stand united with them to end the cycle of gang and firearm-related violent crime in this city.”
Saint Paul Police Chief Todd Axtell said, “Saint Paul is a safer place today, thanks to the incredibly hard work and collaboration of our police officers, agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and our other partners. Together, we have made it clear that settling disagreements through gun violence is not welcome in our city—and we will use all available resources to hold accountable those who do engage in these types of activities.”
Since at least January 2014, the defendants maintained active membership in the street gang known as the HAM Crazy. The main purpose of the HAM Crazy gang was to preserve and protect their territory, power, status, and reputation, primarily on the Eastside of Saint Paul, through the use of violence and intimidation against rival Saint Paul gangs, such as the Hit Squad.
According to the defendants’ guilty pleas and documents filed in court, since at least January 2014, the HAM Crazy gang has been in an ongoing gang war with several rival gangs, including the Hit Squad. This gang war has resulted in gang members on both sides of the rivalry being shot and/or killed and has endangered the lives and safety of innocent bystanders and the community because many of the shootings occurred in public venues. HAM Crazy members and rival gang members often used social media platforms, such as Facebook, YouTube, and Snapchat, as a means through which to disrespect, intimidate, and threaten rivals by memorializing their brandishing of firearms, displaying of money, throwing of gang signs, and publishing of rap videos containing explicit and implicit threats against rivals.
According to the defendants’ guilty pleas and documents filed in court, due to the ongoing gang war and the need for firearms to conduct some of their gang-related activity, between January 2014 and December 2017, the defendants conspired to illegally obtain and jointly possess at least 12 firearms, including some with obliterated serial numbers, that were stolen, and/or that had high-capacity magazines. The defendants and other HAM Crazy members also attempted to buy, sell, trade, and obtain firearms through social media.
This case is the result of a joint investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Saint Paul Police Department, and the Minnesota Department of Corrections. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to specifically target and combat gun and gang crimes.
Assistant U.S. Attorneys Benjamin Bejar and Thomas Calhoun-Lopez are prosecuting the case.
Defendants’ Information:
MARVELL VOSHON JEFFERSON, a/k/a “Vo,” a/k/a “Lil Vo,” 24
Saint Paul, Minn.
Convicted:
- Conspiracy – Felon in possession of a firearm, 1 count
Sentenced:
- 60 months in prison
- Three years of supervised release
SHELBY DELANE ASHFORD, JR., a/k/a “Two Times,” 24
Columbia Heights, Minn.Convicted:
- Conspiracy – Felon in possession of a firearm, 1 count
Sentenced:
- 58 months in prison
- Three years of supervised release
CASEY JEMAR DAVIS, a/k/a “Casey Jermar Davis,” a/k/a “K Chop,” 24
Saint Paul, Minn.Convicted:
- Conspiracy – Felon in possession of a firearm, 1 count
Sentenced:
- 50 months in prison
- Three years of supervised release
PHILLIP DWAYNE JACKSON, a/k/a “Go,” a/k/a “Kid Go,” 23
Lino Lakes, Minn.
Convicted:- Conspiracy – Felon in possession of a firearm, 1 count
Sentenced:
- 60 months in prison
- Three years of supervised release
NAKIA MARQUIRE MARTIN, a/k/a “Nakia Marquette Martin,” a/k/a “Freaky,” a/k/a “Freaky Nick,” 25
Moose Lake, Minn.
Convicted:
- Conspiracy – Felon in possession of a firearm, 1 count
Sentenced:
- 55 months in prison
- Three years of supervised release
PIERRE CORTEZ JENKINS, 23, a/k/a “Pistol,” 23
Minneapolis, Minn.
Convicted:
- Conspiracy – Felon in possession of a firearm, 1 count
Sentenced:
- 48 months in prison
- Three years of supervised release
CARMELO MANUEL MARRERO, a/k/a “Melo,” a/k/a “Mello,” 23
Maplewood, Minn.
Convicted:
- Conspiracy – Felon in possession of a firearm, 1 count
Civil Complaint Filed Against Maplewood Dentist for Illegally Prescribing Opioids in Violation of the Controlled Substances ActRead the Press Release
United States Attorney Erica H. MacDonald today announced the filing of a civil complaint against Maplewood dentist DR. JERRY KENT BRUNSOMAN and his clinic INSTITUTE OF FACIAL SURGERY ST. PAUL, PLLC, d/b/a/ IDEALSKIN LASER REJUVENATION CENTER for allegedly issuing illegitimate prescriptions for opioid medications and repeatedly failing to comply with the recordkeeping requirements of the Controlled Substances Act.
United States Attorney Erica MacDonald said, “Medical professionals have an obligation to maintain accurate and complete records of their prescribing practices, particularly when it comes to highly addictive controlled substances. My office and our DEA partners will use all available tools to address the devastating opioid epidemic.”
In the complaint filed today, the United States alleges that BRUNSOMAN unlawfully issued multiple prescriptions for Schedule II controlled substances, namely, oxycodone and hydrocodone, without a legitimate medical purpose. The complaint further alleges that BRUNSOMAN failed to keep complete and accurate records regarding the receipt and dispensing of controlled substances used at his clinic. As a licensed practitioner, BRUNSOMAN must comply with the Controlled Substances Act’s recordkeeping and prescribing requirements, which Congress enacted to prevent the diversion of controlled substances for illegal purposes. As a result of BRUNSOMAN’S alleged actions, hundreds of doses of controlled substances are unaccounted for and presumed to have been diverted for illicit purposes.
The United States is seeking civil monetary penalties and injunctive relief for the defendants’ alleged violations of the Controlled Substances Act.
This case is handled by the Affirmative Civil Enforcement unit of the U.S. Attorney’s Office for the District of Minnesota, and was investigated by the Diversion Group of the Drug Enforcement Administration, Minneapolis-St. Paul District Office.
The civil complaint presents allegations only; there has been no determination of liability or wrongdoing.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Apple Valley Sex Offender Sentenced to 28 Years in Prison for Producing Child PornographyRead the Press Release
United States Attorney Erica H. MacDonald announced the sentencing of JOSEPH THOR PERKINS, 36, to 28 years in prison for sexually exploiting multiple minor victims. PERKINS, who pleaded guilty on January 16, 2018, to one count of production of child pornography, was sentenced on July 23, 2018, before Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota.
According to the defendant’s guilty plea and documents filed in court, since 2013, PERKINS has had contact with four minor victims. He contacted the minors using online messaging applications and enticed them to send him images of themselves engaged in sexually explicit conduct. After receiving the sexually explicit images, PERKINS encouraged the minors to meet him in person to engage in sexual acts and so PERKINS could take sexually explicit photographs of the minors. On multiple occasions between 2013 and 2016, PERKINS met the minor victims separately at various locations, including PERKINS’ residence. PERKINS engaged in sexual acts with the minors and photographed the minors engaged in sexually explicit conduct.
According to the defendant’s guilty plea and documents filed in court, in 2015, PERKINS was charged in Dakota County with possession of child pornography and was charged in Scott County with engaging in sexual acts with a fifth minor victim. Additionally, in 2016, PERKINS solicited a sixth individual online. He believed this sixth individual to be a 14-year-old girl and arranged for “her” to meet him in person, engage in sexually explicit conduct, and for PERKINS to take photographs of the encounter. After arranging the meeting with the purported minor, who was in reality an undercover law enforcement officer, PERKINS was arrested and charged in Washington County with online solicitation.
This case is the result of an investigation conducted by the Washington County Sheriff's Office and the Federal Bureau of Investigation.
Assistant United States Attorney Karen B. Schommer prosecuted the case.
Defendant Information:
JOSEPH THOR PERKINS, 36
Apple Valley, Minn.
Convicted:
- Production of child pornography, 1 count
Sentenced:
- 336 months in prison
- Lifetime of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Saint Paul Psychiatrist Pleads Guilty to Receipt of Child PornographyRead the Press Release
United States Attorney Erica H. MacDonald today announced the guilty plea of AVIEL LI GOODMAN, 62, to one count of receipt of child pornography. GOODMAN, who was initially charged on February 20, 2018, pleaded guilty earlier today before U.S. District Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota.
According to the defendant’s guilty plea and documents filed in court, on multiple occasions between March 1, 2015, and August 27, 2017, undercover law enforcement agents downloaded numerous image and video files depicting child pornography from IP addresses connected to GOODMAN’S Saint Paul residence. On January 17, 2018, upon execution of a search warrant on GOODMAN’S residence, law enforcement agents seized a computer containing more than 20,000 child pornography files.
This case is the result of an investigation conducted by the Federal Bureau of Investigation.
This case is being prosecuted by Assistant U.S. Attorneys Katharine T. Buzicky and Carol M. Kayser.
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. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, 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.projectsafechildhood.gov.
Defendant Information:
AVIEL LI GOODMAN, 62
Saint Paul, Minn.
Convicted:
- Receipt of child pornography, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Federal Jury Finds Oklee Man Guilty of Possessing Unregistered Pipe BombsRead the Press Release
United States Attorney Erica H. MacDonald announced the conviction of ERIC JAMES REINBOLD, 41, for illegally possessing unregistered pipe bombs. Following a three-day trial before Chief Judge John R. Tunheim in U.S. District Court in Fergus Falls, Minnesota, the jury found REINBOLD guilty of one count of possession of unregistered destructive devices. REINBOLD’S sentencing hearing is set for November 16, 2018.
“Given the dangerousness of the devices and the courage of the concerned citizens who discovered them and contacted law enforcement, we are pleased with the jury’s verdict,” said Assistant U.S. Attorney Julie Allyn.
“Regardless of the intent of use, pipe bombs are illegal improvised explosive devices, bottom line,” said ATF Assistant Special Agent in Charge Kirk Howard, of the St. Paul Field Division. “We’re grateful that somebody took the initiative to report this, and we encourage anyone who comes into contact with dangerous, illegal improvised explosive devices to reach out to us. It could save people from getting hurt or killed. Our local law enforcement partners did a tremendous job during this investigation. Their work directly lead to today’s verdict.”
As proven at trial, on October 22, 2017, law enforcement received a report of possible pipe bombs and bomb making materials found on hunting land in Oklee, Minnesota. When law enforcement responded to the property, they found a plastic tote containing items that appeared to be destructive devices, specifically, pipe bombs. In addition to the pipe bombs, there were two jugs of gun powder, fuses, batteries, toggle switches, a Christmas tree light with cut wires, a kitchen timer, Nerf-gun bullets, and 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 a book entitled “Anarchist Cookbook,” and a notebook entitled “How one (1) person Can make a difference *Instruction Booklet at the HCU (homemade commando university),” which contained 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.
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.
Assistant United States Attorneys Julie E. Allyn and Angela Munoz-Kaphing are prosecuting this case.
Defendant Information:
ERIC JAMES REINBOLD, 41
Oklee, Minn.
Convicted:
- Possession of unregistered destructive devices, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
La Crescent Man Sentenced to 75 Months in Prison for Receipt of Child PornographyRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of BRYAN SCOTT ERICKSON, 40, to 75 months in prison and 10 years of supervised release for receiving child pornography. ERICKSON, who pleaded guilty on March 19, 2018, was sentenced earlier today before U.S. District Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota.
“This case is the product of outstanding investigative work by dedicated law enforcement professionals,” said Assistant U.S. Attorney Katharine Buzicky. “I am proud to work alongside individuals who are committed to tackling some of the most difficult cases in pursuit of justice for vulnerable, young victims of exploitation.”
According to the defendant’s guilty plea and documents filed in court, ERICKSON used an online application called Kik to trade child pornography in groups dedicated to sharing images of child sexual abuse. In 2016, Homeland Security agents conducted an undercover investigation of child pornography trading on Kik and identified ERICKSON as a Kik user that was sharing child pornography. Homeland Security agents executed a search warrant at ERICKSON’S home and seized numerous computers and electronic devices. The forensic investigation revealed that ERICKSON had approximately 600 online chats with a man who claimed to have sex with his own children. ERICKSON asked the man for “advice” about when to start molesting children, and what sexual acts to engage in with children of various ages.
This case is the result of an investigation conducted by Homeland Security Investigations, with support from U.S. Customs and Border Protection.
Assistant United States Attorney Katharine T. Buzicky prosecuted this case.
Defendant Information:
BRYAN SCOTT ERICKSON, 40
La Crescent, Minn.
Convicted:
- Receipt of child pornography, 1 count
Sentenced:
- 75 months in prison
- 10 years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
District Court Orders Minnesota Dairy Farm and Owners to Stop Distributing Adulterated Meat in Interstate CommerceRead the Press Release
A federal court enjoined Todd & Patty Meech Dairy Farm and its co-owners from introducing adulterated meat into interstate commerce pending required remedial action, the Department of Justice announced today.
The U.S. District Court for the District of Minnesota entered a consent decree of permanent injunction against the Meech Dairy Farm, located in Sebeka, Minnesota, and its co-owners Todd Meech and Patty Meech. The consent decree settles a complaint filed by the Department alleging violations of the Food, Drug, and Cosmetic Act, and it requires the defendants to implement specific steps to ensure consumer safety before they can resume introducing specific food – animals and their edible tissue, into interstate commerce. In particular, the decree requires defendants to establish and implement a quarantine or segregation system that ensures ready distinction between medicated and unmediated animals and that prevents defendants from selling or delivering for food slaughter any animals with illegal new animal drug residues in their edible tissues.
“The Department of Justice is committed to protecting consumers from unsafe foods,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will continue to work with FDA to ensure that food producers maintain processes necessary to keep food safe.”
The Department filed a complaint in the District of Minnesota on Feb. 23, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, the Meech Dairy Farm has approximately 500 cattle, including approximately 400 dairy cows, and sells cows for slaughter for use as food. The complaint alleged that defendants failed to abide by laws designed to protect consumers from consuming food that contained new animal drugs above legal limits. According to the complaint, lab testing by the U.S. Department of Agriculture (USDA) detected above-tolerance drug residue in the liver of one of defendant’s cows sold for slaughter. The complaint alleged that a FDA inspection confirmed that the defendants did not record information regarding administered dosage, administration route, withdrawal time for meat, or the usable date for meat.
High levels of new animal drugs in animals’ edible tissues poses a significant public health risk. For example, consumers of edible animal tissues who are susceptible to antibiotics may experience severe allergic reactions as a result of ingesting food containing antibiotic levels above established tolerances.
“Poor recordkeeping practices and improper administration of drugs to food-producing animals poses a serious risk to consumers,” said United States Attorney Erica H. MacDonald for the District of Minnesota. “The United States Attorney’s Office, along with the FDA, will continue to take action on these types of cases to ensure that Minnesota farmers are following the law and maintaining high food safety standards.”
The government is represented by Trial Attorney Monica Groat of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Fred Siekert of the U.S. Attorney’s Office for the District of Minnesota, with assistance of Associate General Counsel for Enforcement Jennifer Argabright of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Minnesota, visit its website at https://www.justice.gov/usao-mn.
District Court Orders Minnesota Dairy Farm and Owners to Stop Distributing Adulterated Meat in Interstate CommerceRead the Press Release
WASHINGTON – A federal court enjoined Todd & Patty Meech Dairy Farm and its co-owners from introducing adulterated meat into interstate commerce pending required remedial action, the Department of Justice announced today.
The U.S. District Court for the District of Minnesota entered a consent decree of permanent injunction against the Meech Dairy Farm, located in Sebeka, Minnesota, and its co-owners Todd Meech and Patty Meech. The consent decree settles a complaint filed by the Department alleging violations of the Food, Drug, and Cosmetic Act, and it requires the defendants to implement specific steps to ensure consumer safety before they can resume introducing specific food – animals and their edible tissue, into interstate commerce. In particular, the decree requires defendants to establish and implement a quarantine or segregation system that ensures ready distinction between medicated and unmediated animals and that prevents defendants from selling or delivering for food slaughter any animals with illegal new animal drug residues in their edible tissues.
“The Department of Justice is committed to protecting consumers from unsafe foods,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will continue to work with FDA to ensure that food producers maintain processes necessary to keep food safe.”
The Department filed a complaint in the District of Minnesota on Feb. 23, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, the Meech Dairy Farm has approximately 500 cattle, including approximately 400 dairy cows, and sells cows for slaughter for use as food. The complaint alleged that defendants failed to abide by laws designed to protect consumers from consuming food that contained new animal drugs above legal limits. According to the complaint, lab testing by the U.S. Department of Agriculture (USDA) detected above-tolerance drug residue in the liver of one of defendant’s cows sold for slaughter. The complaint alleged that a FDA inspection confirmed that the defendants did not record information regarding administered dosage, administration route, withdrawal time for meat, or the usable date for meat.
High levels of new animal drugs in animals’ edible tissues poses a significant public health risk. For example, consumers of edible animal tissues who are susceptible to antibiotics may experience severe allergic reactions as a result of ingesting food containing antibiotic levels above established tolerances.
“Poor recordkeeping practices and improper administration of drugs to food-producing animals poses a serious risk to consumers,” said United States Attorney Erica H. MacDonald for the District of Minnesota. “The United States Attorney’s Office, along with the FDA, will continue to take action on these types of cases to ensure that Minnesota farmers are following the law and maintaining high food safety standards.”
The government is represented by Trial Attorney Monica Groat of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Fred Siekert of the U.S. Attorney’s Office for the District of Minnesota, with assistance of Associate General Counsel for Enforcement Jennifer Argabright of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Minnesota, visit its website at https://www.justice.gov/usao-mn.
Wife of Big Island Capital Fraudster Sentenced to 24 Months in Prison for Her Role in Million Dollar Ponzi SchemeRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of ALEX REAVES LUNDIN, 26, to 24 months in prison for her role in a $1.1 million Ponzi scheme orchestrated by her husband, Jeremy Lundin. LUNDIN, who pleaded guilty on February 15, 2018, was sentenced yesterday before Judge Wilhelmina M. Wright in U.S. District Court in Saint Paul, Minnesota. When announcing the sentence, the Honorable Judge Wright told LUNDIN, “You assisted your husband in a lengthy and complex fraud scheme at the expense of others. Your victims worked hard for their money; for some it was their life savings. You spent victims’ money on yourself, motivated by selfishness and greed to live a lavish lifestyle that you could not afford.”
U.S. Attorney Erica MacDonald said, “Jeremy Lundin swindled hundreds of thousands of dollars from his friends and associates so that he and Alex Lundin could buy luxury cars and take expensive trips. When Alex Lundin found out about her husband’s fraud, rather than taking steps to stop him or make things right, she helped him keep it going for several more months. The Lundins lied to and stole from honest, hard-working individuals who trusted them. Today’s sentence was another step towards justice for those victims.”
“Alex Lundin used investor money for her personal, financial gain. The Lundin’s spent their client’s investment money to enjoy an extravagant and luxurious lifestyle,” stated Special Agent in Charge Gabe Grchan. “Today’s sentencing illustrates that there are consequences for those who use deceit to enrich themselves at the expense of others. IRS Criminal Investigators will continue to pursue individuals who engage in this type of criminal behavior.”
“Today’s sentencing of Ms. Lundin serves as a reminder of the potential penalty for violating the public’s trust in the U.S. mail”, said Craig Goldberg, Postal Inspector in Charge of the Denver Division which covers the Twin Cities.
“Alex Lundin and her husband defrauded friends and neighbors who trusted them with their life savings,” said Minnesota Commerce Commissioner Jessica Looman. “Investment fraud is a serious crime and this case shows that if you commit fraud in Minnesota, you will be prosecuted.”
According to the defendant’s guilty plea and documents filed in court, from approximately December 2014 through May 2017, Jeremy Lundin claimed that he conducted “options trading” through his business Big Island Capital. He worked through a network of the couple’s associates and friends to solicit investors by promising to generate exponential growth through options trading, and obtained $1.1 million from 51 investors over a roughly two-year period. Between May 2015 and May 2017, at least $992,000 in investor funds was deposited into Jeremy Lundin’s “Big Island Capital” bank account. During roughly the same time period, however, Jeremy Lundin transferred $933,950 from the business account directly into his and LUNDIN’s personal checking account. The couple then used the majority of those investor funds on their personal expenses including travel, luxury automobiles, a boat, jewelry, retail purchases, and more than $366,000 in credit card payments.
According to LUNDIN’s guilty plea and documents filed in court, LUNDIN admitted that by October 2016, she became aware that her husband was not conducting options trading as he promised investors, and that she and Jeremy Lundin had spent all of the investor funds on personal expenses. However, LUNDIN continued to assist her husband in carrying out the scheme for another eight months by soliciting new investors and drafting text messages and emails intended to lull current victim-investors into believing their money was safe. During those final eight months when LUNDIN knowingly participated in the scheme, investors gave Jeremy Lundin another $315,000.
Jeremy Lundin pleaded guilty to one count of mail fraud and one count of money laundering. On February 22, 2018, he was sentenced to 110 months in prison.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS, Federal Bureau of Investigation, United States Postal Inspection Service, and Minnesota Department of Commerce Fraud Bureau.
Assistant United States Attorney Amber M. Brennan prosecuted the case.
Defendant Information:
ALEX REAVES LUNDIN, 26
Mound, Minn.
Convicted:
- Conspiracy to commit mail fraud, 1 count
Sentenced:
- 24 months in prison
- 3 years of supervised release
- $315,000 in restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Federal Jury Finds Brooklyn Park Man Guilty of Methamphetamine TraffickingRead the Press Release
United States Attorney Erica H. MacDonald announced the conviction of JOSE ANDRES VERA-GUTIERREZ, a/k/a “Bullet,” 36, for methamphetamine trafficking. After a six-day trial before U.S. District Judge Wilhelmina M. Wright in Saint Paul, Minnesota, the jury found VERA-GUTIERREZ guilty of one count of conspiracy to possess with intent to distribute methamphetamine. The jury was unable to reach a unanimous verdict on VERA-GUTIERREZ’S co-defendant, MARIBEL TORRES, who was also charged with one count of conspiracy.
“Jose Andres Vera-Gutierrez and his co-conspirators were responsible for trafficking significant amounts of methamphetamine across the country into Minnesota,” said Assistant United States Attorney LeeAnn K. Bell. “This guilty verdict demonstrates yet again law enforcement’s commitment to stopping methamphetamine traffickers from bringing this devastating drug into our communities.”
According to the evidence presented at trial, in December 2016, law enforcement commenced a wiretap investigation that led to a 25-pound methamphetamine seizure on January 18, 2017. VERA-GUTIERREZ and three co-conspirators arranged for the methamphetamine to be transported from California to Minnesota inside hidden compartments in an SUV. On January 18, 2017, the SUV and a trailing passenger car were traveling together on Interstate 35 when a Minnesota State Trooper stopped the SUV for speeding. During the traffic stop, the accompanying passenger car continued driving. Law enforcement found nine packages of methamphetamine hidden behind the panel above the SUV’s rear driver-side wheel and an additional 16 packages hidden behind the panel over the passenger-side wheel. The next morning, law enforcement determined that the passenger car had traveled to VERA-GUTIERREZ’S residence in Brooklyn Park, Minnesota.
This case is the result of an investigation by the Drug Enforcement Administration, the United States Postal Inspection Service, Homeland Security Investigations, the Minnesota State Patrol, the Dakota County Drug Task Force, Ramsey County Sheriff’s Office, Hennepin County Sheriff’s Office, Minneapolis/St. Paul Airport Police, Bloomington Police Department and the Minnesota Bureau of Criminal Apprehension.
Assistant U.S. Attorney LeeAnn K. Bell is prosecuting the case.
Defendant Information:
JOSE ANDRES VERA-GUTIERREZ, a/k/a “Bullet,” 36
Brooklyn Park, Minn.
Convicted:
- Conspiracy to possess with intent to distribute methamphetamine, 1 count
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Federal Jury Convicts Former Oil Company President for Orchestrating $30 Million Stock Manipulation SchemeRead the Press Release
United States Attorney Erica H. MacDonald announced the conviction of RYAN RANDALL GILBERTSON, 42, founder of Dakota Plains Holdings, Inc., and DOUGLAS VAUGHN HOSKINS, 50, for orchestrating a complex stock manipulation scheme that triggered more than $30 million dollars in fraudulent bonus payments. Following a 10-day trial before U.S. District Judge Patrick J. Schiltz in Minneapolis, Minnesota, the jury found the defendants guilty of multiple counts of wire fraud, conspiracy to commit securities fraud, and securities fraud.
“Ryan Gilbertson masterminded and carried out a complex scheme to manipulate the price of Dakota Plains stock. Although his scheme was complicated, Gilbertson's goal was simple—to line his own pockets at the expense of the company and its investors,” said U.S. Attorney Erica MacDonald. “Gilbertson, a former derivatives trader who co-founded a billion-dollar publicly-traded oil company, was a wealthy man. But like all too many white collar criminals, these defendants were motivated by nothing more than naked greed. The FBI, U.S. Postal Inspection Service, and IRS worked for years to understand, investigate, and prosecute Gilbertson's complex stock manipulation scheme. Thanks to their efforts, these defendants will not escape justice.”
“Postal Inspectors take very seriously their mission to deter the illegal use of the mails for any criminal activity,” said Postal Inspector in Charge, Craig Goldberg. “We are committed to working together with our law enforcement partners to identify, investigate and bring to justice those who would attempt to mask their criminal activity through the use of the mail. Today’s verdict reaffirms how critical a role the US Postal Inspection Service plays in protecting the American consumer from these types of fraudulent schemes.”
“A free market depends on honesty and integrity of those involved in publicly traded companies,” said Jill Sanborn, Special Agent in Charge of the Minneapolis Division of the FBI. “In this case, Gilbertson, the founder of Dakota Plains, along with his associate, conspired to manipulate the market for their own financial gain. We are grateful that the jury saw what we saw in this case – a scheme that looked complex, but was really about market rigging and self-dealing.”
According to the evidence presented at trial, 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 freely trading shares, 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 falsely inflated price of $12 per share.
According to the evidence presented at trial, 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 triggered a $32.8 million bonus payment to GILBERTSON and the other noteholders. 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 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.
This case is the result of an investigation conducted by the FBI, Criminal Investigation Division of the IRS, and the United States Postal Inspection Service.
This case is being prosecuted by Assistant United States Attorneys Joseph H. Thompson, Kimberly A. Svendsen, and Melinda A. Williams.
Defendant Information:
RYAN RANDALL GILBERTSON, 42
Delano, Minn.
Convicted:
- Wire fraud, 14 counts
- Conspiracy to commit securities fraud, 1 count
- Securities fraud, 6 counts
DOUGLAS VAUGHN HOSKINS, 50
Wayzata, Minn.
Convicted:- Wire fraud, 2 counts
- Conspiracy to commit securities fraud, 1 count
- Securities fraud, 3 counts
Rochester Felon Charged with Drug Distribution, Illegal Possession of FirearmsRead the Press Release
United States Attorney Erica H. MacDonald today announced a federal indictment charging RASHAD DARNELL NORWOOD, 38, with illegal possession of firearms and distribution of methamphetamine and cocaine. NORWOOD, who is currently in custody in Olmstead County on state charges, made his initial appearance earlier today before Magistrate Judge Jon T. Huseby in U.S. District Court in Saint Paul, Minnesota.
As alleged in the indictment, NORWOOD has three prior felony convictions, including drug possession in Dodge County and Ramsey County, and second-degree murder in Blue Earth County, which prohibit him from owning or possessing a firearm. NORWOOD was also charged with one count each of methamphetamine and cocaine distribution.
This case is the result of an investigation conducted by the FBI and the Rochester Police Department.
This case is being by Assistant U.S. Attorney Bradley M. Endicott.
Defendant Information:
RASHAD DARNELL NORWOOD, 38
Rochester, Minn.
Charges:
- Felon in possession of firearms, 1 count
- Possessing firearms in furtherance of drug-trafficking crime, 1 count
- Possession with intent to distribute methamphetamine, 1 count
- Possession with intent to distribute cocaine, 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 allegations, and the defendant is presumed innocent unless and until proven guilty.
Three Illinois Men Indicted on Federal Civil Rights and Hate Crime Violations in the Bombing of Bloomington, Minnesota, Islamic CenterRead the Press Release
United States Attorney Erica H. MacDonald and Acting Assistant Attorney General John Gore today announced a five-count federal indictment charging MICHAEL HARI, 47, MICHAEL MCWHORTER, 29, and JOE MORRIS, 23, with federal civil rights and hate crime violations, and using a destructive device in connection with an explosion at the Dar al-Farooq Islamic Center (“DAF”) in Bloomington, Minnesota, on August 5, 2017.1 MCWHORTER, MORRIS, and HARI were previously named in a criminal complaint filed on March 13, 2018, in the District of Minnesota, charging them with arson.
The three defendants are currently being held in custody in Urbana, Illinois, on separate charges.2
“These three defendants allegedly plotted and executed a plan designed specifically to spread fear and threaten a fundamental right afforded to all, the freedom of religion,” said U.S. Attorney Erica H. MacDonald. “In spite of this destructive and violent act alleged in the indictment, our communities have found strength in taking a unified stand against the attack. My office and our law enforcement partners are committed to upholding the laws that protect the civil rights of all Americans.”
“Last year's bombing was more than just an attack against a single structure, it was an attack on the very religious freedoms we enjoy as Americans,” said Jill Sanborn, Special Agent in Charge of the FBI's Minneapolis Division. “The ability to worship how and where we want is a cornerstone of our country's foundation, and the FBI stands ready to work with the community and our law enforcement partners whenever those freedoms are attacked.”
“All people – regardless of where they worship – have the right under federal law to live free from the threat of violence and discrimination,” said Acting Assistant Attorney General John Gore. “This Justice Department will hold accountable under the law anyone who attempts to commit violent acts of hate by threat or action.
The indictment returned by a federal grand jury alleges that HARI, MCWHORTER, and MORRIS engaged in a conspiracy to use an explosive device to intentionally cause damage to the DAF Islamic Center in Bloomington, Minnesota, which serves as a religious center as well as a religious school for children. The defendants targeted this location because of the religious character of the DAF Islamic Center, and for the purpose of making Muslims feel frightened and intimidated by interfering with their free exercise of religious liberty. As part of the conspiracy, HARI constructed a pipe bomb and, on July 27, 2017, rented a pickup truck from a vehicle rental business in Champaign-Urbana, Illinois. On August 4 and 5, 2017, HARI, MCWHORTER, and MORRIS drove together in the rented pickup truck from Illinois to Bloomington, Minnesota, stopping along the way to purchase diesel fuel and gasoline, which the defendants mixed together in a plastic container.
As alleged in the indictment and a previously filed criminal complaint, in the early morning of August 5, 2017, MORRIS used a sledge hammer to break a window at the DAF Islamic Center and threw the plastic container containing the diesel fuel and gasoline mixture into the building. It is alleged that 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 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. MCWHORTER and MORRIS returned to the pickup truck, where HARI was waiting, and sped off, driving back to Illinois.
As alleged in the previously filed criminal complaint, MCWHORTER said in reference to the DAF Islamic Center explosion, that the defendants did not intend to kill anyone, but they wanted to “scare [Muslims] out of the country” and to “show them hey, you’re not welcome here, get the [expletive] out.”
As alleged in the previously filed criminal complaint, on January 27, 2018, investigators received a tip from a confidential source with information about the three defendants and their involvement with the bombing at the DAF Islamic Center.
The Federal Bureau of Investigation is leading the investigation.
This case is being prosecuted by Assistant United States Attorneys Julie E. Allyn and John F. Docherty of the District of Minnesota, with assistance from Trial Attorney Timothy Visser of the Justice Department’s Civil Rights Division. The team is working in coordination with the U.S. Attorney’s Office in the Central District of Illinois.
Defendant Information:
MICHAEL HARI, 47
Clarence, Ill.
Charges:
- 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
MICHAEL MCWHORTER, 29
Clarence, Ill.
Charges:- 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
JOE MORRIS, 23
Clarence, Ill.
Charges:- 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
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
[1] The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
[2] Superseding Indictment Adds New Charges Against Four East Central Illinois Men
Federal Charges Filed in Two Unrelated Bank Robbery CasesRead the Press Release
United States Attorney Erica H. MacDonald today announced federal charges in two separate bank robbery cases. JAYVON DOMINIQUE GANT, 27, was charged by complaint with one count of bank robbery and DAMIEN JAMES MCDONALD, 40, was charged by complaint with one count of bank robbery. MCDONALD made his initial appearance before Magistrate Judge Jon T. Huseby, in U.S. District Court in St. Paul, MN on June 18, 2018. GANT made his initial appearance before Magistrate Judge Becky R. Thorson in U.S. District Court in St. Paul, MN on June 8, 2018.
According to the complaint and a law enforcement affidavit filed with the Court, GANT is suspected of robbing five banks throughout the Twin Cities during May 2018. He is charged with robbing a sixth bank on June 7, 2018, in Bloomington, MN. Similar to the previous robberies, on June 7, 2018, GANT entered the Bloomington bank and handed the teller a note demanding money. After the teller handed GANT the money, GANT fled the bank on foot. This case is the result of an investigation conducted by the FBI Safe Streets Task Force, the Bloomington, Blaine, Fridley, Edina, Cottage Grove and Oakdale Police Departments.
According to a complaint and a law enforcement affidavit filed with the Court, on June 6, 2018, an Eagan branch of a credit union was robbed by an individual carrying a handgun. Surveillance videos capture the alleged bank robber stopping in front of the credit union in a Mazda CX-7 SUV then leaving in the same Mazda at the conclusion of the robbery. Upon execution of a search warrant at MCDONALD’s residence later that day, law enforcement recovered clothing that matched the clothing worn by the robber and thousands of dollars in cash hidden in the residence. Additionally, cash that matched marked bills from the credit union were found on MCDONALD. This case is the result of an investigation conducted by the FBI and Eagan Police Department.
These cases are being prosecuted by Assistant U.S. Attorney Charles J. Kovats.
Defendant Information:
JAYVON DOMINIQUE GANT, 27
Bloomington, Minn.
Charges:
- Bank robbery, 1 count
DAMIEN JAMES MCDONALD, 40
St. Paul, Minn.
Charges:
- Bank robbery (armed), 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Erica MacDonald Takes Oath of Office as United States Attorney for the District of MinnesotaRead the Press Release
Erica H. MacDonald has taken the oath of office to become the United States Attorney for the District of Minnesota. U.S. Attorney MacDonald was nominated by President Donald Trump on April 10, 2018, and confirmed by the U.S. Senate on May 24, 2018. She took the oath of office from U.S. District Court Chief Judge John R. Tunheim this morning. She succeeds Gregory Brooker who has served as the United States Attorney since March 2017.
“It is truly an honor to return to this office and serve as United States Attorney,” said U.S. Attorney MacDonald. “I am looking forward to leading a team of dedicated professionals and working alongside our law enforcement partners in the pursuit of justice on behalf of all Minnesotans.”
As United States Attorney, Ms. MacDonald is the top-ranking federal law enforcement official in the District of Minnesota. She will oversee a staff of 99 employees, including 52 attorneys and 47 support personnel. The office is responsible for prosecuting federal crimes in the district, including crimes related to terrorism, firearms, narcotics, child exploitation, human trafficking, financial fraud, healthcare fraud, and public corruption. The office is also responsible for representing the United States in affirmative and defensive civil cases, as well as assisting communities throughout Minnesota in appropriate community-building efforts designed to enhance public safety.
Before taking office, U.S. Attorney MacDonald was a judge in Dakota County since 2009. Prior to her judgeship, from 2000-2009, U.S. Attorney MacDonald served as an Assistant U.S. Attorney for the Northern District of Illinois and for the District of Minnesota. She began her legal career in 1997 as a judicial clerk to Judge James Henry Alesia of the U.S. District Court in Chicago. She then joined the firm of Kirkland and Ellis in 1999.
U.S. Attorney MacDonald received her J.D. degree, with honors, from DePaul University College of Law, and her B.A. degree from the University of Notre Dame.
Upon taking office, U.S. Attorney MacDonald thanked Mr. Brooker for his continued and dedicated service to the office and to the Department of Justice.
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Twin Cities Construction Company Owner Pleads Guilty for Defrauding Investors Out of More Than $1 MillionRead the Press Release
United States Attorney Gregory G. Brooker announced the guilty plea of JESSE WELLS HAUG, 33, to one count of wire fraud. HAUG, who was charged in a superseding indictment on June 22, 2017, pleaded guilty yesterday before U.S. District Chief Judge John R. Tunheim in Minneapolis, Minnesota.
According to the defendant’s guilty plea and documents filed in court, HAUG is the owner of a Twin Cities-based construction company called 7-10 Services, LLC. From 2015 through the end of 2016, HAUG executed a scheme to defraud investors by falsely representing to them that he would use their money to purchase and renovate residential real estate, and, in exchange, he would share the profits when the properties were re-sold, or “flipped.”
According to the defendant’s guilty plea and documents filed in court, during the course of the scheme, HAUG obtained $880,000 from two victim-investors to purchase and renovate residential properties located throughout the Twin Cities. During the course of HAUG’S interactions with the victim-investors, HAUG false documentation showing how the investment money was being used, false information about upcoming real estate closings and re-sales of properties HAUG claimed to have flipped, as well as fictional documents showing “returns” from the so-called investment properties. In reality, HAUG spent the investment money on personal expenses and never purchased or sold any of the properties.
This case is the result of an investigation conducted by the FBI and the Minnesota Commerce Fraud Bureau.
Assistant United States Attorneys Kimberly A. Svendsen and Charles J. Kovats are prosecuting this case.
Defendant Information:
JESSE WELLS HAUG, 33
Rosemount, Minn.
Convicted:
- Wire fraud, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600Orono Business Man Pleads Guilty to Multi-Million Dollar Tax Fraud SchemeRead the Press Release
United States Attorney Gregory G. Brooker announced the guilty plea of SCOTT PHILLIP FLYNN, 55, to one count of conspiracy to defraud the United States and one count of filing a false tax return. FLYNN, who was initially charged on December 21, 2016, pleaded guilty yesterday before Senior U.S. District Judge Ann D. Montgomery in Minneapolis, Minnesota.
“Scott Flynn devised a complex fraud scheme by creating a labyrinth of business entities and layers of obfuscation to hide tens of millions of dollars from the IRS,” said Assistant U.S. Attorney David Maclaughlin. “Flynn generated his income using an alias name while hiding behind randomly-named Nevada-based companies titled in the name of his father. Flynn then sent the income he earned in this way to Australia to be held by nominees, and then repatriated the money indirectly, sometimes through Costa Rica. Flynn acknowledged at his plea hearing that he took these steps to defraud the Internal Revenue Service. Flynn’s scheme was animated by his desire to live a luxurious lifestyle unencumbered by income tax liabilities, a desire fulfilled by his purchase of a $2.7 million mansion in Orono with untaxed income repatriated through Costa Rica.”
“Conspiring with others to defraud the government with an elaborate stock scheme to underreport taxable income is unlawful and is also unfair to every taxpayer who obeys the law and pays their fair share,” stated Acting Special Agent in Charge Gabriel Grchan, St. Paul Field Office IRS Criminal Investigation. “Mr. Flynn's plea today serves as an important reminder that IRS-CI is committed to bringing to justice those who evade their income tax responsibilities.”
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, his father, and entities they controlled (collectively, the “Flynn Group”). 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 part of the Flynn Group. 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, or on the tax returns of members of the Flynn Group.
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, Steven Miotti. 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 capital gains 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. Throughout the course of the scheme, FLYNN concealed tens of millions of dollars in income and capital gains from the IRS and intentionally evaded the assessment of at least $3.5 million in income taxes.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS.
Assistant United States Attorneys David J. Maclaughlin and Benjamin F. Langner are prosecuting this case.
Defendant Information:
SCOTT PHILLIP FLYNN, 55
Orono, Minn.
Convicted:
- Conspiracy to defraud the United States, 1 count
- False tax return, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600Hacker Known as “Vigilance” Arrested and Charged for Series of Cyber-Attacks on Minnesota State Government DatabasesRead the Press Release
United States Attorney Gregory G. Brooker today announced a five-count indictment charging CAMERON THOMAS CROWLEY, a/k/a “Vigilance,” 19, with intentional access to a protected computer, intentional damage to a protected computer, and aggravated identity theft. CROWLEY made his initial appearance earlier this afternoon before United States Magistrate Judge Becky R. Thorson in Saint Paul, Minnesota. CROWLEY will remain in federal custody pending his detention hearing.
According to the indictment, between May 28, 2017 and June 17, 2017, CROWLEY intentionally gained unauthorized access to protected computer servers owned by the State of Minnesota and other entities. CROWLEY also caused the transmission of programs, code, and commands to the protected computer servers, causing damages and a loss to the State of Minnesota of more than $5,000. The indictment also charges CROWLEY with one count of aggravated identity theft.
This case is the result of an investigation conducted by the FBI and the Minnesota Bureau of Criminal Apprehension.
Assistant U.S. Attorney Katharine T. Buzicky is prosecuting the case.
Defendant Information:
CAMERON THOMAS CROWLEY, a/k/a “Vigilance,” 19
Lino Lakes, Minn.
Charges:
- Intentional access to a protected computer, 3 counts
- Intentional damage to a protected computer, 1 count
- Aggravated identity theft, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Walmart, Sam’s Club to Pay $825,000 to Resolve Fraud Allegations Concerning Auto Refilling Medicaid PrescriptionsRead the Press Release
United States Attorney Gregory G. Brooker and Minnesota Attorney General Lori Swanson today announced that Wal-Mart Stores, Inc. and Sam’s West, Inc. (d/b/a Sam’s Club) have agreed to pay a total of $825,000 to resolve allegations that they violated the False Claims Act and Minnesota False Claims Act by submitting claims for payment to Minnesota’s Medicaid program in violation of rules prohibiting Medicaid prescriptions from being automatically refilled.
Minnesota’s Medicaid program, called Medical Assistance, is jointly funded by the federal government and State of Minnesota to provide health care to low-income Minnesotans. Along with at least 20 other states, Minnesota does not allow pharmacies to automatically refill prescriptions paid for by Medical Assistance 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 amended complaint, Walmart and Sam’s Club pharmacies routinely enrolled Medical Assistance beneficiaries in the companies’ auto-refill program, and billed Medical Assistance for prescriptions in violation of state rules and regulations. In addition, according to the allegations, pharmacy employees reported the violation to company managers, yet Walmart and Sam’s Club continued to automatically refill Medical Assistance prescriptions.
U.S. Attorney Greg Brooker said, “Businesses that participate in federally and state funded healthcare programs have a responsibility to ensure compliance with the rules, specifically rules that are in place to avoid unused prescription medications and wasted taxpayer funds.”
“We are pleased to have worked with our federal partners in the U.S. Attorney’s Office to ensure that providers who participate in this health care safety net program fairly follow the rules,” said Minnesota Attorney General Lori Swanson.
Walmart and Sam’s Club will pay $412,500 to the federal government and $412,500 to the State of Minnesota to settle the claims.
In these civil settlements, Walmart and Sam’s Club have denied the allegations of wrongdoing and False Claims Act liability.
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 Minnesota 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.
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 Minnesota Attorney General’s Office, with substantial assistance provided by the Office of Inspector General of the U.S. Department of Health and Human Services.
The case is United States of America and the State of Minnesota ex rel. Ryan Mesaros v. Wal-Mart Stores, Inc., and Sam’s West, Inc. (d/b/a/ Sam’s Club), Civil No. 14-CV-3105 (DSD/LIB). 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
Michigan Man Charged with Multiple Counts of Heroin DistributionRead the Press Release
United States Attorney Gregory G. Brooker announced a federal indictment charging RAYMOND ANTHONY POOLE, 43, with multiple counts of heroin distribution. POOLE made his initial appearance on May 23, 2018, before Magistrate Judge Hildy Bowbeer in U.S. District Court in St. Paul, Minnesota.
According to the indictment, from April 1, 2016, through February 13, 2017, POOLE distributed and attempted to distribute more than 100 grams of heroin on the Leech Lake Indian Reservation.
This case is the result of an investigation conducted by the Leech Lake Tribal Police Department, the Paul Bunyan Drug Task Force, the Minnesota Bureau of Criminal Apprehension, the Bureau of Indian Affairs, the United States Postal Inspection Service, the Headwaters Safe Trails Task Force, and the Hennepin County Violent Offender Task Force.
Assistant United States Attorney Bradley M. Endicott is prosecuting this case.
Defendant Information:
RAYMOND ANTHONY POOLE, 43
Detroit, Mich.
Charges:
- Conspiracy to distribute heroin, 1 count
- Distribution of heroin, 5 counts
- Attempted distribution of heroin, 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.
Leader of Rochester-Based Drug Trafficking Organization Sentenced to Twenty-Six Years in PrisonRead the Press Release
United States Attorney Gregory G. Brooker announced the sentencing of MARCO ANTONIO AVILA, 30, to 26 years in prison for his leadership role in a Rochester-based methamphetamine and cocaine distribution organization. AVILA, who pleaded guilty on May 30, 2017, was sentenced on May 21, 2018, by Judge Donovan W. Frank in United States District Court in Saint Paul, Minnesota.
According to the defendant’s guilty plea and documents filed in court, from December 2015 through June 2017, AVILA was the leader and facilitator of the Avila Drug Trafficking Organization (DTO), an extensive Rochester-based methamphetamine and cocaine distribution organization. AVILA’S connections served as the source of the supply of drugs, while AVILA managed the distribution and the profits. During this same time, AVILA’S DTO was also involved in an ongoing and violent shooting war with a rival drug trafficking organization in the Rochester area.
According to documents filed in court, on January 9, 2017, AVILA was indicted for his drug trafficking activities, and on May 28, 2017, he pleaded guilty to one count of conspiracy to distribute methamphetamine and cocaine. Following his guilty plea, while awaiting sentencing, AVILA was held in the Anoka County Adult Detention Facility. While in custody, between June 2017 and September 2017, AVILA continued to facilitate the supply and distribution of methamphetamine from inside the jail walls. AVILA was again charged on October 18, 2017, and on January 22, 2018, he pleaded guilty to a second count of conspiracy to distribute methamphetamine.
The separate prosecutions were the result of investigative efforts by the Bureau of Criminal Apprehension, the Southeast Minnesota Violent Crime Enforcement Team (SEMVCET), the Drug Enforcement Administration (DEA), the Anoka-Hennepin Drug Task Force, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Rochester Police Department, the St. Paul Police Department, the Worthington Police Department, the Southeast Minnesota Narcotics & Gang Task Force (S.E.T.F.), and the Minnesota State Patrol.
Assistant U.S. Attorney Allen A. Slaughter is prosecuting the case.
Defendant Information:
MARCO ANTONIO AVILA, 30
San Jose, California
Convicted:
- Conspiracy to distribute methamphetamine and cocaine, 1 count
- Conspiracy to distribute methamphetamine, 1 count
Sentenced:
- 312 months in prison
- 10 years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Columbia Heights Restaurant Owner Pleads Guilty to Visa Fraud and Harboring an Illegal WorkerRead the Press Release
United States Attorney Gregory G. Brooker today announced the guilty plea of PISANU SUKHTIPYAROGE, a/k/a “Pat,” 71, owner of the Royal Orchid Restaurant, to one count of visa fraud and one count of alien harboring. SUKHTIPYAROGE entered his guilty plea earlier today before Judge Wilhelmina M. Wright in United States District Court in St. Paul, Minnesota.
“Pisanu Sukhtipyaroge has pleaded guilty to visa fraud and alien harboring and will now face sentencing,” said Special Agent in Charge Tracy J. Cormier, of HSI St. Paul. “HSI is proud of the work we’ve accomplished with the Anoka County Sheriff’s Office in this case and will continue to leverage our law enforcement partnerships to investigate and prosecute those who seek to exploit the most vulnerable in our communities.”
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 15, 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. 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 is 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 are prosecuting the case.
Defendant Information:
PISANU SUKHTIPYAROGE, a/k/a “Pat,” 71
Maplewood, Minn.
Convicted:
- Visa fraud, 1 count
- Alien harboring, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Eagan Man Sentenced to 25 Years in Federal Prison for Producing Pornographic Images of A Two-Year-Old GirlRead the Press Release
United States Attorney Gregory G. Brooker today announced the sentencing of ELLIS SCOTT TOOLES, 31, to 25 years in prison for production of child pornography. TOOLES, who pleaded guilty on May 12, 2017, to one count of production of child pornography, was sentenced earlier today before Judge Susan Richard Nelson in U.S. District Court in Duluth, Minnesota.
“This defendant is a dangerous predator who ruthlessly sought to harm children,” said U.S. Attorney Greg Brooker. “Although no amount of prison time will erase the horrific crimes that were committed, the sentence handed down today will hopefully provide some sense of justice for the victims and others impacted by this defendant’s evil acts.”
“The defendant admitted to attacking and perversely taking advantage of the most vulnerable and innocent member of society,” said FBI Special Agent in Charge Jill Sanborn. “Today’s sentence ensures that those victims will have the opportunity to grow up in a world where the defendant will not have the opportunity to harm anyone.”
According to the defendant’s guilty plea and documents filed in court, on February 14, 2016, TOOLES engaged in sexually explicit conduct with a two-year-old victim and used a cell phone to record and distribute a video and images of the encounter. TOOLES also produced sexually explicit images and videos of 17-year-old victim.
According to court documents, TOOLES was arrested for distributing drugs in the Duluth area in June 2016. Following the arrest, TOOLES reached out to friends and family in the Twin Cities and asked them to retrieve his cell phone so he could access the phone numbers of certain individuals to help him post bail. While TOOLES’S friends and family accessed the phone, they uncovered the horrific video of TOOLES with an infant child in diapers, along with other sexually explicit text messages demonstrating the defendant’s clear intent to harm children. The friends and family turned the phone over to law enforcement.
This case is the result of an investigation led by the FBI, with assistance from the Eagan Police Department, the Apple Valley Police Department, the Burnsville Police Department, the Duluth Police Department, the Saint Louis County Attorney’s Office, and the Dakota County Attorney’s Office.
Assistant United States Attorney Laura M. Provinzino prosecuted the case.
Defendant Information:
ELLIS SCOTT TOOLES, 31
Eagan, Minn.
Convicted:
- Production of child pornography, 1 count
Sentenced:
- 300 months in prison
- 15 years of supervised release
- $5,000 in restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
New Mexico Man Sentenced to 15 Years in Prison for Directing Computer Attacks Against Websites of Dozens of Victims and for Firearms ChargesRead the Press Release
A New Mexico man was sentenced yesterday in St. Paul, Minnesota, for directing computer attacks against the websites of his prior employers, business competitors, law enforcement, and the Minnesota State Courts system, as well as for felon-in-possession of a firearm charges. Acting Assistant Attorney General John P. Cronan of the Department of Justice’s Criminal Division; United States Attorney Gregory G. Brooker of the District of Minnesota; and Special Agent in Charge Jill Sanborn of the Federal Bureau of Investigation-Minneapolis Field Office made the announcement.
JOHN KELSEY GAMMELL was sentenced to serve 15 years in prison by District Judge Wilhelmina M. Wright of the District of Minnesota. GAMMELL pleaded guilty on January 17, 2018, to one count of conspiracy to cause intentional damage to a protected computer and two counts of being a felon-in-possession of a firearm.
“Gammell’s attacks on the websites of his victims had real consequences to small businesses, educational institutions, government entities, and others - for no reason other than that Gammell wanted to cause them harm,” said Assistant United States Attorney Timothy Rank. “Gammell used his technical knowledge and the internet’s cloak of anonymity to commit his crimes, all while knowing the damage he was causing and believing he would never be caught. Because of the FBI’s excellent investigation, he was wrong, and today's sentence sends a strong message of deterrence to others who consider committing similar crimes.”
According to admissions made in connection with his plea, from at least in or about July 2015 through in or about March 2017, GAMMELL engaged in a campaign of distributed denial of service (DDoS) attacks on websites throughout the United States. A DDoS attack is a malicious attempt to disable or interrupt service to a computer or website, usually by causing large amounts of Internet traffic to be directed to the computer or website. GAMMELL directed DDoS attacks at a number of victims’ websites, including websites operated by companies for which he worked previously, companies that declined to hire him, competitors of his business, and websites for law enforcement agencies and courts, among others.
GAMMELL admitted that he caused DDoS attacks by using computer programs on his own computers, as well as by directing “DDoS-for-hire” companies, from which he purchased services, to launch the DDoS attacks. He initiated attacks using these DDoS-for-hire companies against dozens of victims, including but not limited to Washburn Computer Group, the Minnesota State Courts, Dakota County Technical College, Minneapolis Community and Technical College, Hennepin County, and others. GAMMELL took a variety of steps to avoid detection and circumvent his victims’ DDoS attack mitigation efforts, such as using IP address anonymization services to mask his identity and location, using cryptocurrency in payment for DDoS-for-hire services, using multiple DDoS-for-hire services simultaneously to amplify his attacks, using spoofed emails to conceal his conduct, and using encryption and drive-cleaning tools to conceal digital evidence of his conduct on his computers.
GAMMELL, who is a convicted felon, also admitted that while living and working a temporary job in Colorado, he possessed parts for use in the building of AR-15 assault rifles, including upper and lower receivers, a pistol grip, a trigger guard, 15 high-capacity magazines, a buttstock, a buffer tube, as well as 420 rounds of 5.56 x 45mm full metal jacket rifle ammunition. He further admitted that he possessed a Heckler & Koch P2000 handgun; a Springfield Armory model 1911-A1, .45 caliber handgun; as well as hundreds of rounds of ammunition in New Mexico, where he had his permanent residence.
This case was investigated by the FBI’s Minneapolis Field Office.
Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota and Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section prosecuted the case. The U.S. Attorney’s Offices for the District of Colorado and the District of New Mexico also provided substantial assistance in this matter.
Defendant Information:
JOHN KELSEY GAMMELL, 55
Las Cruces, N.M.
Convicted:
- Conspiracy to commit intentional damage to a protected computer, 1 count
- Felon in possession of a firearm, 2 counts
Sentenced:
- 180 months in prison
- Five years of supervised release
- Restitution amount will be determined at a later date
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Red Lake Man Sentenced to 236 Months in Prison for MurderRead the Press Release
United States Attorney Gregory G. Brooker announced the sentencing of JOSHUA FRANCIS HILL, 20, to 236 months in prison for the murder of a minor victim on the Red Lake Indian Reservation. HILL, who pleaded guilty on January 19, 2018, was sentenced on May 15, 2018, before Senior Judge Paul A. Magnuson in U.S. District Court in Saint Paul, Minnesota.
According to the defendant’s guilty plea and documents filed in court, on June 25, 2017, law enforcement officers responded to a call reporting a deceased male subject at a private residence on the Red Lake Indian Reservation. When law enforcement officers arrived on the scene, they found the body of a deceased juvenile male who was the apparent victim of a fatal gunshot wound.
According to the defendant’s guilty plea and documents filed in court, on the day of the shooting, HILL was feuding with the victim over a stolen Playstation 3. HILL shot and killed the victim with a .308 rifle that HILL had in his possession leading up to the shooting. Following the shooting, on June 27, 2017, HILL asked two individuals to dispose of the rifle for him. Law enforcement agents recovered the rifle, which was consistent with a witness description of the rifle HILL was seen handling the day of the shooting.
This case was the result of an investigation conducted by the Red Lake Tribal Police Department and the FBI Headwaters Safe Trails Task Force.
Assistant U.S. Attorney Clifford B. Wardlaw prosecuted this case.
Defendant Information:
JOSHUA FRANCIS HILL, 20
Red Lake, Minn.
Convicted:
- Murder in the second degree, 1 count
Sentenced:
- 236 months in prison
- Five years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
New Mexico Man Sentenced to 15 Years in Prison for Directing Computer Attacks Against Websites of Dozens of Victims and Felon-In-Possession ChargesRead the Press Release
A New Mexico man was sentenced today in St. Paul, Minnesota, for directing computer attacks against the websites of his prior employers, business competitors and public services, and felon-in-possession of a firearm charges. Acting Assistant Attorney General John P. Cronan of the Department of Justice’s Criminal Division; United States Attorney Gregory G. Brooker of the District of Minnesota; and Special Agent in Charge Jill Sanborn of the Federal Bureau of Investigation-Minneapolis Field Office made the announcement.
John Kelsey Gammell was sentenced to serve 180 months in prison by U.S. District Judge Wilhelmina M. Wright of the District of Minnesota. Restitution to the victims of his computer attacks will be determined at a later date. Gammell pleaded guilty on Jan. 17, to one count of conspiracy to cause intentional damage to a protected computer and two counts of being a felon-in-possession of a firearm.
According to admissions made in connection with his plea, from at least in or about July 2015 through in or about March 2017, Gammell engaged in a campaign of distributed denial of service (DDoS) attacks on websites throughout the United States. A DDoS attack is a malicious attempt to disable or interrupt service to a computer or website, usually by causing large amounts of Internet traffic to be directed to the computer or website. Gammell directed DDoS attacks at a number of victims’ websites, including websites operated by companies he used to work for, companies that declined to hire him, competitors of his business, and websites for law enforcement agencies and courts, among others.
Gammell admitted that he caused DDoS attacks by using computer programs on his own computers, as well as by directing “DDoS-for-hire” companies from which he purchased services to launch the DDoS attacks. Gammell purchased subscriptions to multiple DDoS-for-hire companies, including VDoS, CStress, Inboot, Booter.xyz, and IPStresser. He initiated attacks using these DDoS-for-hire companies against dozens of victims, including but not limited to Washburn Computer Group, the Minnesota State Courts, Dakota County Technical College, Minneapolis Community and Technical College, the Hennepin County Sheriff’s Office, and others. Gammell took a variety of steps to avoid detection and circumvent his victims’ DDoS attack mitigation efforts, such as using IP address anonymization services to mask his identity and location, using cryptocurrency in payment for DDoS-for-hire services, using multiple DDoS-for-hire services at once to amplify his attacks, using spoofed emails to conceal his conduct, and using encryption and drive-cleaning tools to conceal digital evidence of his conduct on his computers.
Gammell, who is a convicted felon, also admitted that he possessed parts for use in the building of AR-15 assault rifles, upper and lower receivers, a pistol grip, a trigger guard, 15 high-capacity magazines, a buttstock, a buffer tube, and 420 rounds of 5.56 x 45mm full metal jacket rifle ammunition in Colorado, where he worked. He further admitted that he possessed a Heckler & Koch P2000 handgun, and a Springfield Armory model 1911-A1, .45 caliber handgun, as well as hundreds of rounds of ammunition in New Mexico, where he resided.
This case was investigated by the FBI’s Minneapolis Field Office. Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota are prosecuting the case. The U.S. Attorney’s Offices for the District of Colorado and the District of New Mexico also provided substantial assistance in this matter.
Major Twin Cities Drug Trafficker Sentenced to 25 Years in PrisonRead the Press Release
United States Attorney Gregory G. Brooker today announced the sentencing of ALEJANDRO LLAMAS-DELGADO, 24, to 25 years in prison for methamphetamine and cocaine trafficking-related offenses. On December 20, 2017, LLAMAS-DELGADO and his two coconspirators, GREGORIO RAMIREZ-MALDONADO, 28, and ERICK PARRA-SALAZAR, 24, were found guilty by a federal jury of conspiracy to distribute controlled substances, and possession with intent to distribute cocaine. RAMIREZ-MALDONADO was sentenced on April 30, 2018, to 63 months in prison; PARRA-SALAZAR is scheduled to be sentenced in U.S. District Court on May 11, 2018. In July 2017, codefendant COLIN BLAIR MCAFEE, 47, pleaded guilty to one count of possession with intent to distribute cocaine and was sentenced to 37 months in prison.
Assistant United States Attorney Thomas M. Hollenhorst stated, “Llamas-Delgado’s arrest and conviction played a significant role in disrupting a major drug trafficking organization responsible for the distribution of hundreds of pounds of cocaine and methamphetamine in the State of Minnesota over a three-year period. The 25 year prison sentence imposed by the Court is a just consequence of this defendant’s crimes.”
As proven at trial, from 2014 through May 2017, LLAMAS-DELGADO led and operated a drug trafficking organization responsible for transporting and distributing methamphetamine and cocaine from Texas and California into Minnesota. RAMIREZ-MALDONADO and PARRA-SALAZAR assisted LLAMAS-DELGADO by transporting approximately two kilograms of cocaine from Texas to the Twin Cities.
As proven at trial, in June 2014, law enforcement agents in California seized approximately 17 pounds of cocaine and 25 pounds of methamphetamine concealed in hidden compartments under the front seats of a 2005 Mini-Cooper that had been loaded onto a vehicle transport carrier destined for LLAMAS-DELGADO in the Twin Cities area. During the spring of 2017, law enforcement agents in the Twin Cities area conducted surveillance of LLAMAS-DELGADO and his coconspirators that revealed multiple residences linked to the conspiracy’s drug trafficking activities. On May 15, 2017, law enforcement agents conducted simultaneous searches of several residences, resulting in the seizure of more than $40,000 in cash, 28 pounds of marijuana, over 750 grams of cocaine, a firearm, and other drug trafficking paraphernalia.
This case was the result of an investigation by the U.S. Drug Enforcement Administration, Orono Police Department, Riverside County Sheriff’s Office (California), Albertville Police Department, Brooklyn Center Police Department, Wright County Sheriff’s Office, Hennepin County Sheriff’s Office, the Minnesota State Patrol, and the California Highway Patrol.
Assistant U.S. Attorneys Thomas M. Hollenhorst and Sarah E. Hudleston prosecuted this case.
Defendant Information:
ALEJANDRO LLAMAS-DELGADO, 24
Brooklyn Center, Minn.
Convicted:
- Conspiracy to distribute methamphetamine and cocaine, 1 count
- Possession with intent to distribute cocaine, 1 count
Sentenced:
- 300 months in prison
- Five years of supervised release
GREGORIO RAMIREZ-MALDONADO, 28
Houston, Texas
Convicted:
- Conspiracy to distribute cocaine, 1 count
- Possession with intent to distribute cocaine, 1 count
Sentenced:
- 63 months in prison
- Four years of supervised release
ERICK PARRA-SALAZAR, 24
Houston, Texas
Convicted:
- Conspiracy to distribute cocaine, 1 count
- Possession with intent to distribute cocaine, 1 count
COLIN BLAIR MCAFEE, 47
Brooklyn Park, Minn.
Convicted:
- Possession with intent to distribute cocaine, 1 count
Sentenced:
- 37 months in prison
- Three years of supervised release
###
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Federal Superseding Indictment Charges Four South Minneapolis Gang Members in Violent Drug Trafficking ConspiracyRead the Press Release
United States Attorney Gregory G. Brooker today announced a federal superseding indictment charging four members of the south Minneapolis-based 10z/20z gangs with crimes related to violent gang activity, including drug trafficking and illegal possession of firearms.[1] The four defendants named in the superseding indictment are LE’KEITH ALI DU’JUAN RAYFORD, 26, KENNETH LAMONT THOMPSON, 32, MAURICE JERRY JOHNSON, 27, and LENARDO ALEXZANDER WOODARD, 30. The superseding indictment remains sealed as to one additional individual who is charged but not yet in custody.
According to the superseding indictment, from at least April 2, 2017, through the present, the defendants maintained active membership in the 10z/20z south Minneapolis street gangs, with the purpose of making money for the gang through criminal acts, including distribution of crack cocaine, heroin, and marijuana. As part of their drug distribution schemes, the defendants and other members of the gangs possessed, carried and used firearms in order to protect their drug distribution network from rival gangs, and to protect drug distributors from being robbed of narcotics or money.
According to the indictment and documents filed in court, all four defendants were involved in a conspiracy to possess firearms in furtherance of their drug trafficking crimes and a conspiracy to distribute controlled substances. The overt acts alleged in the indictment include, among others, multiple crack cocaine and heroin sales, as well as repeated possession of illegal firearms. RAYFORD and WOODARD have prior felony offenses that make them ineligible to possess firearms.
This case was the result of an investigation conducted by the FBI Safe Streets Task Force, which is comprised of federal and local law enforcement agencies, including, but not limited to, the FBI, the Minneapolis Police Department, the Minnesota Bureau of Criminal Apprehension, and the St. Paul Police Department. The Minnesota Department of Corrections also provided assistance in this case. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat gun and gang crime.
Assistant U.S. Attorney Thomas Calhoun-Lopez is prosecuting the case.
Defendant Information:
LE’KEITH ALI DU’JUAN RAYFORD, a/k/a “Fatty,” 26
Minneapolis, Minn.
Charges:
- Conspiracy to possess a firearm in furtherance of a drug trafficking crime, 1 count
- Conspiracy to distribute controlled substances, 1 count
- Distribution of cocaine base, 2 counts
- Felon in possession of a firearm, 1 count
- Possession with intent to distribute controlled substances, 1 count
KENNETH LAMONT THOMPSON, a/k/a “Kenny OG,” a/k/a “KG,” 32
Minneapolis, Minn.
Charges:
- Conspiracy to possess a firearm in furtherance of a drug trafficking crime, 1 count
- Conspiracy to distribute controlled substances, 1 count
- Distribution of cocaine base, 3 counts
MAURICE JERRY JOHNSON, a/k/a “Reese,” a/k/a “Loco,” 27
Minneapolis, Minn.
Charges:
- Conspiracy to possess a firearm in furtherance of a drug trafficking crime, 1 count
- Conspiracy to distribute controlled substances, 1 count
- Distribution of cocaine base, 4 counts
- Use of a firearm during and in relation to a drug trafficking crime, 1 count
LENARDO ALEXZANDER WOODARD, a/k/a “Naughty,” 30
Brooklyn Park, Minn.
Charges:
- Conspiracy to possess a firearm in furtherance of a drug trafficking crime, 1 count
- Conspiracy to distribute controlled substances, 1 count
- Distribution of cocaine base, 1 count
- Distribution of heroin, 2 counts
- Felon in possession of a firearm, 2 counts
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Federal Jury Finds Minneapolis Man Guilty for His Role in Multi-Million Dollar Insurance Fraud ConspiracyRead the Press Release
United States Attorney Gregory G. Brooker today announced the conviction of YAHYE MOHAMED HERROW, 46, for his role in a multi-million dollar insurance fraud scheme. HERROW was initially indicted on December 20, 2016, and following a three-day trial before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minnesota, the jury convicted HERROW on counts of conspiracy and mail fraud.
“Minnesota’s no-fault car insurance system is designed to get patients the treatment they need, get their bills paid timely, and avoid the need for court battles over who caused the accident. Schulz, HERROW, and the others involved in this scheme treated the no-fault system like a piggy bank. They treated patients like commodities. They prescribed treatment plans to make money for the chiropractors, the runners, the patients, and personal injury attorneys, with little regard for whether the patient truly needed or benefitted from treatment.” said Assistant U.S. Attorney John Kokkinen.
“This very complex case uncovered a large-scale insurance fraud scheme orchestrated by corrupt chiropractors and their accomplices, which resulted in millions of dollars in losses for insurers and their customers,” said Minnesota Commerce Commissioner Jessica Looman. “The many convictions and guilty pleas in this case are a testament to a strong, effective partnership that involved the Minnesota Commerce Fraud Bureau, federal authorities and local law enforcement to stop fraud in Minnesota.”
“This conviction today in this sprawling multi-million dollar fraud scheme sends a strong message to those who join other criminals in defrauding automobile insurance companies,” said Special Agent in Charge of the FBI Minneapolis Division Jill Sanborn. “The FBI will vigorously investigate crimes like this, because these scams victimize law abiding Minnesotans who often face higher insurance premiums to make up for money wasted on fraudulent payments. The FBI is grateful for the strong law enforcement partnerships, such as the Minnesota Commerce Fraud Bureau, which helped bring about the verdict we see today.”
As proven at trial, from at least 2011 through February 2016, HERROW, along with multiple coconspirators, including Angela April Schulz, a chiropractor, participated in a scheme to defraud automobile insurance companies by paying kickbacks to entice patients who had been in car accidents to attend chiropractic treatments. HERROW’S role was as a “runner,” someone who solicited individuals who had been in car accidents to attend treatments at Schulz’s clinics, Meyer Injury Center and Morrow Accident Rehabilitation Center.
As proven at trial, Schulz paid illegal kickbacks to HERROW and other runners in exchange for referring patients to her clinics. Schulz generally paid between $500 and $2,500 per patient. Much of that payment was given to the patients to entice them to attend treatments that they did not need or would not have sought absent the payment. Schulz did not pay the runners or patients until the patients attended a predetermined number of appointments, thus ensuring that Schulz could recoup the cost of the kickbacks. Schulz, HERROW, and other coconspirators incentivized patients to attend treatment sessions without regard for whether the patients needed or benefitted from the treatments. As part of the scheme, the patients who were paid were often referred to personal injury attorneys in order to seek settlements from the insurance companies for “pain and suffering” and were then regularly coached that they could get even more money in the form of a settlement if they continued to attend treatment sessions.
As proven at trial, Schulz, HERROW, and other coconspirators hid the fact that runners and patients were being paid by lying to the insurance companies about the use of runners, making the payments in cash, and reminding all involved to keep the payments a secret. Ultimately, Schulz’s clinics billed the automobile insurance companies for services provided to hundreds of patients who had been paid to attend treatments. Over a five year period, Schulz paid more than $1 million to runners and patients, while receiving more than $5 million from the automobile insurance companies.
This case was a part of a larger investigation that ultimately resulted in charges against 26 individuals across seven separate metro-area chiropractic practices. Including this latest conviction, 24 of those individuals have either pleaded guilty or been found guilty following a trial.
This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the Federal Bureau of Investigation. Additional assistance was provided by the Minneapolis Police Department, Saint Paul Police Department, Minnesota State Patrol, and Homeland Security Investigations.
Assistant U.S. Attorneys John Kokkinen, David M. Maria, and Amber M. Brennan are prosecuting this case.
Defendant Information:
YAHYE MOHAMED HERROW, 46
Minneapolis, Minn.
Convicted:
- Conspiracy to commit mail fraud, 1 count
- Mail fraud, 4 counts
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Richfield Man Pleads Guilty to Violent Armed Robbery of Red & White TaxicabRead the Press Release
United States Attorney Gregory G. Brooker today announced the guilty plea of MARIO LUIS JONES, 27, for the violent armed robbery of a Red & White taxicab in Minneapolis, Minnesota. JONES was indicted on March 6, 2018, and entered his guilty plea earlier today before Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota.
“Mario Jones is a dangerous criminal who committed a violent armed robbery of a taxicab in the middle of a residential neighborhood. Violent crimes such as this will not be tolerated,” said U.S. Attorney Greg Brooker. “I am grateful for the work of our federal and local law enforcement partners who are dedicated to pursuing armed violent offenders and to keeping our businesses and communities safe.”
“This man’s reckless behavior put many lives at risk all the way from Minneapolis down to Lakeville,” said Special Agent in Charge Kurt Thielhorn of the ATF St. Paul Field Division. “Violent criminals have no place in our communities. We are pleased to partner with the Minneapolis and Lakeville Police Departments to make our community safer and bring this individual to justice.”
According to the defendant’s guilty plea and documents filed in court, on November 27, 2017, JONES got into a Red & White taxicab near the 2800 block of Pillsbury Avenue South in Minneapolis. JONES told the taxicab driver to take him to 5773 Bossen Terrace in Minneapolis, however, when they arrived, JONES told the driver that it was the wrong address. JONES then pulled out a .40 caliber semi-automatic pistol with a laser scope, placed the barrel near the driver’s head, and demanded that the driver stop the car and open the trunk. JONES got out of the taxi and walked to the trunk area. Fearing that JONES was going to kill him, the driver ran off. JONES fired the firearm and then drove off in the taxicab.
According to the defendant’s guilty plea and documents filed in court, JONES was located driving southbound on Interstate 35 in the Lakeville area. When law enforcement officers approached JONES, he sped off at speeds exceeding 100 miles per hour. JONES eventually crashed into a swampy ditch and was later apprehended and arrested.
The case was the result of an investigation conducted by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minneapolis Police Department, and the Lakeville Police Department.
Assistant U.S. Attorney Thomas M. Hollenhorst is prosecuting the case.
Defendant Information:
MARIO LUIS JONES, 27
Richfield, Minn.
Convicted:
- Interference with commerce by robbery, 1 count
- Using, carrying, and discharging a firearm during and in relation to a crime of violence, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Tax Preparer Pleads Guilty to Defrauding the IRSRead the Press Release
United States Attorney Gregory G. Brooker today announced the guilty plea of CHARLES ASONG-MORFAW, 55, to one count of aiding and assisting in the preparation of a false individual income tax return. ASONG-MORFAW entered his guilty plea on May 7, 2018, before Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota.
According to the defendant’s guilty plea and documents filed in court, between February 1, 2012 and April 13, 2015, ASONG-MORFAW, through his tax preparation business AJ & A Tax Services, located in Fridley, Minnesota, aided, assisted in and advised the preparation and presentation to the Internal Revenue Service (IRS) of false and fraudulent income tax returns. In preparing the tax returns, ASONG-MORFAW falsely represented to the IRS that the taxpayers were entitled to claim certain deductions under the provisions of the Internal Revenue laws, including unreimbursed employee business expenses, unreimbursed medical expenses and charitable deductions. During the course of the scheme, ASONG-MORFAW prepared over 100 tax returns resulting in a tax loss of approximately $103,095.
This case is the result of an investigation by the Internal Revenue Service-Criminal Investigation Division.
Assistant United States Attorney Michelle E. Jones is prosecuting the case.
Defendant Information:
CHARLES ASONG-MORFAW, 55
Champlin, Minn.
Charges:
- Aiding and assisting in the preparation of a false individual income tax return, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Wisconsin Man Pleads Guilty to Firearms Straw Purchasing ConspiracyRead the Press Release
United States Attorney Gregory G. Brooker today announced the guilty plea of MICHAEL PATRICK COUPE, 27, for his role in a firearms purchasing conspiracy. COUPE, who was charged on March 22, 2018, along with his co-defendant, JAMIE FLEMING, entered his guilty plea earlier today before Judge Donovan Frank in U.S. District Court in St. Paul, Minnesota.
“This defendant is a convicted felon who broke the law by illegally obtaining firearms through the use of a straw buyer, then resold the guns to another felon” said Assistant U.S. Attorney Jeffrey Paulsen. “These illegal purchasing schemes that seek to put guns in the hands of dangerous criminals will not be tolerated.”
According to the defendant’s guilty plea and documents filed in court, from September 13, 2017, through December 14, 2017, COUPE conspired with FLEMING and others to purchase five separate firearms, including a Mossberg Tactical 22 .22 caliber rifle, a SCCY model CPX-2, 9mm pistol, a Phoenix model HP22A .22 caliber pistol, a Taurus model PT111 9mm pistol, and a Taurus model PT140 .40 caliber pistol. When purchasing the firearms, FLEMING falsely attested on the required ATF Forms 4473 that she was the actual purchaser of the firearms, when in fact she was not. FLEMING purchased the firearms at the direction of COUPE, who has two prior felony convictions in Sawyer County, Wisconsin, and is prohibited from possessing firearms.
According to documents filed in court, following the purchase of the firearms, COUPE and FLEMING transferred some or all of the firearms to others, including an individual identified as G.T., who is a convicted felon. On multiple occasions between September 14, 2017, and November 27, 2017, COUPE and FLEMING traveled from Hayward, Wisconsin to Minneapolis, Minnesota where they met with G.T. and transferred firearms to G.T.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minneapolis Police Department, and the Sawyer County Sheriff’s Office.
Assistant U.S. Attorney Jeffrey S. Paulsen is prosecuting this case.
Defendant Information:
MICHAEL PATRICK COUPE, 27
Hayward, Wis.
Convicted:
- Conspiracy – Felon in possession of a firearm, 1 count
- Felon in possession of a firearm, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600Red Lake Man Charged with MurderRead the Press Release
United States Attorney Gregory G. Brooker today announced a criminal complaint charging MICHAEL WAYNE WHITEFEATHER, 18, with murder in the second degree. WHITEFEATHER made his initial appearance earlier today before Magistrate Judge Huseby in United States District Court in Bemidji, Minnesota.
According to the complaint and law enforcement affidavit, on April 28, 2018, following a 911 call, investigators found the body of a male victim on a trail near the intersection of Highway 1 and Pike Creek on the Red Lake Indian Reservation. The subsequent autopsy indicated that the victim died of a gunshot wound to the head. Investigators located three spent yellow shotgun shells, two were found near the victim’s body and the third was found in a nearby field. Several witnesses reported to investigators that they heard multiple gunshots during the early morning hours of April 28, 2018, near the location where the victim’s body was found.
According to the complaint and law enforcement affidavit, on May 2, 2018, investigators located and arrested WHITEFEATHER in Bemidji. During a post-Miranda interview, WHITEFEATHER admitted to possessing a pump-action shotgun and three yellow shotgun shells, and to shooting the victim in the head with the shotgun.
The FBI is still seeking individuals involved in this matter, if you have any information about their whereabouts please call the FBI at 763-569-8000.
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, and the Beltrami County Sheriff's Office.
This case is being prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.
Defendant Information:
MICHAEL WAYNE WHITEFEATHER, 18
Red Lake, Minn.
Charges:
- 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 complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former City of Plymouth Official Charged in Illegal Bribery and Kickback SchemeRead the Press Release
United States Attorney Gregory G. Brooker today announced the filing of a felony information charging RONNIE EUGENE TAGGART, 50, for soliciting and receiving bribes and kickbacks in exchange for awarding City of Plymouth contracts. TAGGART will make his initial appearance in U.S. District Court at a later date.
According to the information, from approximately October 2012 through November 2016, TAGGART was the Facilities Supervisor for the City of Plymouth, Minnesota. In his position, TAGGART was responsible for the maintenance of all buildings owned and operated by the City of Plymouth, including the authority to award contracts for City projects such as building maintenance and cleaning, landscaping, and snow removal.
According to the information, from approximately 2014 through November 2016, TAGGART devised a scheme to defraud the City of Plymouth by soliciting and receiving bribes and kickbacks in exchange for awarding City contracts to various contractors outside of the competitive bidding process mandated by Minnesota state law and City of Plymouth procurement policy. TAGGART solicited and received cash kickbacks based on the total value of certain contracts. On other contracts, TAGGART received a flat cash kickback amount from the contractor. TAGGART also solicited and received non-cash bribes from certain City contractors, including items and services for TAGGART’S home, such as thousands of dollars in kitchen appliances, installation of new carpet, a concrete driveway, a garage door, a yard irrigation and sprinkler system, and extensive landscaping and electrical work. All of these items and services were provided to TAGGART at no cost.
According to the information, in order to conceal his failure to comply with the competitive bidding requirements, TAGGART instructed the bribe- and kickback-paying contractors to submit a second, fake quotation to give the false appearance that TAGGART had complied with the state statute and City policy. TAGGART also encouraged the bribe- and kickback-paying contractors to inflate the amount of their bids to cover the cost of the kickbacks and bribes. In total, TAGGART solicited and received bribes and kickbacks worth approximately $58,532.
This case is the result of an investigation conducted by the Federal Bureau of Investigation.
Assistant United States Attorney Joseph H. Thompson is prosecuting the case.
Defendant Information:
RONNIE EUGENE TAGGART, 50
Golden Valley, Minn.
Charges:
- Wire fraud, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the information are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Federal Jury Finds Ironton Man Guilty of Distribution, Receipt and Possession of Child PornographyRead the Press Release
United States Attorney Gregory G. Brooker announced the conviction of ROGER ERIK SPLETTSTOESZER, 53, for distributing, receiving and possessing video and image files containing child pornography. SPLETTSTOESZER was charged in a six-count indictment on June 22, 2017, and, on April 19, 2018, was found guilty on all counts by a federal jury in Minneapolis, Minnesota.
As proven at trial, from at least April through September 2015, SPLETTSTOESZER, who owned and operated a computer repair business called Deepsystems in Aitkin, Minnesota, used the internet to search for, receive and distribute images and videos of child pornography. During that time period, undercover investigators with the Minnesota Bureau of Criminal Apprehension (“BCA”) and the Federal Bureau of Investigation (“FBI”), discovered multiple known child pornography files on the Ares peer-to-peer network. Investigators determined that the files were from a computer with an IP address assigned to Deepsystems. Based on the undercover downloads, investigators obtained and executed a search warrant on Deepsystems, seizing multiple computers. Following a forensic review of the computers, investigators found that the devices contained, in total, more than 35,000 photos and 400 videos of child pornography.
As set forth at trial, SPLETTSTOESZER was previously investigated in 2011 in Crow Wing County for distributing child pornography via a peer-to-peer network and possessing thousands of child pornography files. Additionally, in 1999, SPLETTSTOESZER was charged in Crow Wing County with four counts of criminal sexual conduct in the first degree for sexually assaulting and raping two children.
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 Minnesota Bureau of Criminal Apprehension, the Federal Bureau of Investigation, and the Aitkin Police Department.
Assistant U.S. Attorneys Sarah E. Hudleston and Miranda E. Dugi are prosecuting the case.
Defendant Information:
ROGER ERIK SPLETTSTOESZER, 53
Ironton, Minn.
Convicted:
- Distribution of child pornography, 4 counts
- Receipt of child pornography, 1 count
- Possession of child pornography, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Minnesota Doctor Agrees to Pay $30,000 to Resolve Alleged Controlled Substances Act ViolationRead the Press Release
United States Attorney Gregory G. Brooker today announced a $30,000 civil settlement with DR. MICHAEL T. SCHULENBERG, a Minnesota physician. The civil settlement stems from allegations that DR. SCHULENBERG violated the Controlled Substances Act.
According to an investigation conducted by the Drug Enforcement Administration (“DEA”), on April 14, 2016, DR. SCHULENBERG, prescribed Schedule 2 controlled substances in the name of an individual, knowing that the controlled substances were intended to be used by another individual, in violation of the Controlled Substances Act.
As a licensed physician in the State of Minnesota registered with the DEA as a practitioner authorized to dispense Schedule 2-5 controlled substances, DR. SCHULENBERG is subject to requirements of the Controlled Substance Act as administered by the DEA. The U.S. Attorney’s Office and DEA contend that DR. SCHULENBERG’S conduct amounted to a civil violation of the Controlled Substances Act.
“Doctors are trusted medical professionals and, in the midst of our opioid crisis, they must be part of the solution,” said U.S. Attorney Greg Brooker. “As licensed professionals, doctors are held to a high level of accountability in their prescribing practices, especially when it comes to highly addictive painkillers. The U.S. Attorney’s Office and the DEA will not hesitate to take action against healthcare providers who fail to comply with the Controlled Substances Act. We are committed to using every available tool to stem the tide of opioid abuse.”
DEA Minneapolis-St. Paul Division Assistant Special Agent in Charge Kenneth Solek said, “As Minnesota and the Nation struggle in the throes of an opioid crisis, the Drug Enforcement Administration will always strive to ensure that those responsible will be held accountable, no matter what their position may be.”
As part of the settlement, DR. SCHULENBERG has agreed to pay $30,000 to the United States within thirty days of the effective date of the agreement.
According to the settlement agreement, DR. SCHULENBERG entered into a Memorandum of Agreement (“MOA”) with the DEA under which he agreed to comply with heightened compliance requirements for logging and reporting his prescriptions of controlled substances to the DEA for a period of two years. DR. SCHULENBERG agreed to the following terms and conditions:
- Maintain log(s) of all controlled substances prescribed, including the initials and address of the patient, date, quantity, strength, dosage and diagnosis for the controlled substance.
- Allow DEA personnel to access and inspect the log(s) and all other required controlled substance records, reports and inventories and to enter his registered location at any time during business hours, without prior notice, to verify compliance with the Agreement.
- Submit to DEA copies of controlled substance log(s) on a quarterly basis.
- Allow DEA access to prescribing history using the State of Minnesota Prescription Monitoring Program and, upon demand by DEA, provide a prescribing history report to the DEA from the Minnesota Board of Pharmacy.
This matter was investigated by the DEA Minneapolis-St. Paul Division and was handled by Assistant U.S. Attorney Bahram Samie of the Civil Division of the U.S. Attorney’s Office for the District of Minnesota.
In reaching this settlement, DR. SCHULENBERG did not admit liability and the government did not make any concessions regarding the legitimacy of the claims.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Florida Executive Pleads Guilty to Orchestrating $150 Million Brazilian Factoring SchemeRead the Press Release
United States Attorney Gregory G. Brooker today announced the guilty plea of ANTONIO CARLOS DE GODOY BUZANELI, 56, for his role in a $150 million investment fraud scheme involving Brazilian factoring. BUZANELI entered his guilty plea earlier today before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minnesota. BUZANELI’S co-conspirators, JOSE MANUEL ORDOÑEZ, JR., 47, and JULIO ENRIQUE RIVERA, 61, each pleaded guilty to one count of conspiracy to commit mail fraud on February 13, 2018 and November 9, 2017, respectively. Sentencing dates for the three defendants have yet to be scheduled.
“Antonio Buzaneli orchestrated a massive fraud scheme that victimized hundreds of individual investors around the globe, including in Minnesota,” said U.S. Attorney Greg Brooker. “Many of these victims were elderly or vulnerable, and they invested their hard-earned retirement savings based on sophisticated lies about a complex investment Mr. Buzaneli and his co-conspirators claimed to be making in Brazil. Instead, they used the investors’ money to fund their lifestyles, to travel first class around the world, and to fund their other business ventures. The U.S. Attorney’s Office is grateful for the skilled investigative efforts put forth by our law enforcement partners to hold Mr. Buzaneli and his co-conspirators accountable for their scheme.”
“This vast and sophisticated fraud scheme truly circled the globe, touching venues as near as St. Louis Park, Minnesota and as far as Brazil, the United Kingdom, and China. Mr. Buzaneli and his co-conspirators lured their victims with the promise of novel international investments and huge financial returns. In reality, they stole millions simply to fund their personal interests and maintain their fraudulent conspiracy,” said Acting Special Agent in Charge Robert C. Bone II. “The FBI is committed to stopping these fraudsters and holding them accountable, no matter how complex the scheme or far flung the proceeds. We are grateful for the help of our partners at the U.S. Attorney’s Office, the United States Postal Inspection Service and the Minnesota Commerce Fraud Bureau in uncovering this complex scheme and bringing these defendants to justice.”
“Postal Inspectors take very seriously their mission to deter the illegal use of the mails for any criminal activity,” said Postal Inspector in Charge, Craig Goldberg. “We are committed to working together with our federal and local law enforcement partners to identify, investigate and bring to justice those who would attempt to mask their criminal activity through the use of the mail.”
“The defendant directed a massive fraud scheme that victimized numerous investors worldwide,” said Minnesota Commerce Commissioner Jessica Looman. “Both our securities enforcement unit and the Commerce Fraud Bureau began investigating when we received a tip about a suspicious investment opportunity being offered in Minnesota. A successful collaboration between the Fraud Bureau and federal authorities uncovered a far-reaching, sophisticated scheme that deceived investors about how their money would be used.”
According to the defendant’s guilty plea, BUZANELI, 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 the defendant’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 the defendant’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 marketing materials to show investors that their money would be used to factor accounts receivable in Brazil. The materials 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 pay purported profits to other investors and to make commission payments to brokers. BUZANELI and ORDOÑEZ also diverted investor funds to other companies they controlled, including an import/export company, a travel company, a credit restoration service, a catering company and a 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 around the world, including in London, Hong Kong, Taipei, Shanghai, Singapore, Vancouver, and Panama. In 2011 and 2012, for example, BUZANELI and ORDOÑEZ opened Providence-affiliated entities in the Bailiwick of Guernsey and in Hong Kong, through which they raised approximately $85 million from offshore investors by falsely representing they would use the investors’ money to invest in Brazilian factoring. In reality, Providence did not use the international investors’ money to purchase receivables in the Brazilian factoring market. 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 lost a total of more than $100 million.
This case is 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.
Defendant Information:
ANTONIO CARLOS DE GODOY BUZANELI, 56
Coral Gables, Fla.
Convicted:
- Conspiracy to commit mail fraud, 1 count
JOSE MANUEL ORDOÑEZ, JR., 47
Davie, Fla.
Convicted:
- Conspiracy to commit mail fraud, 1 count
JULIO ENRIQUE RIVERA, 61
Pembroke Pines, Fla.
Convicted:
- Conspiracy to commit mail fraud, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Federal Tax Prosecutions Serve as Reminder to Comply with Tax Obligations as the April 17 Filing Deadline ApproachesRead the Press Release
As Tax Day approaches, the U.S. Attorney’s Office reminds all Minnesotans that the deadline for filing federal income tax returns is Tuesday, April 17. To underscore federal law enforcement’s commitment to pursue those who fail to pay their taxes or otherwise defraud the tax system, below are several tax and related fraud prosecutions in the District of Minnesota. In addition to potential criminal penalties, including incarceration, tax evaders remain responsible for all taxes and interest due, as well as civil monetary penalties.
“Tax fraud unfairly shifts the tax burden to honest American taxpayers,” said U.S. Attorney Greg Brooker. “The U.S. Attorney’s Office for the District of Minnesota and the St. Paul Field Office of the Internal Revenue Service’s Criminal Investigation vigorously investigate and prosecute tax fraud and other financial crimes.”
“Year-round efforts of IRS Criminal Investigation are directed at those Americans who willfully and intentionally violate their legal duty to voluntarily file lawful and accurate tax returns and those individuals who commit other related financial crimes,” said Hubbard Burgess, Acting Special Agent in Charge of the St Paul Field Office. “Prosecutions of individuals committing tax fraud are a vital element in fostering confidence in our tax system and compliance with the law.”
JOSEPH ARNOLD MCGLYNN, of Burnsville, was sentenced to 30 months in prison for failing to pay over his employees’ withheld employment taxes to the IRS. Between 2009 and 2016, MCGLYNN was the owner, CEO and President of United Credit Consulting (UCC), a credit repair service company located in Burnsville. MCGLYNN withheld the employment taxes from his employees’ wages, but failed to pay over the taxes to the IRS for many quarters. Instead, MCGLYNN used the money to fund a lavish lifestyle, including luxury vacations, rentals of luxury vehicles, visits to strip clubs and purchases of luxury items such as jewelry, handbags and a boat. In total, MCGLYNN failed to pay to the IRS at least $159,157 in employment taxes.
ROYLEE BELFREY and THURLEE BELFREY, of St. Paul, and LANORE BELFREY, of Minnetonka, operated multiple home health care businesses and over several years committed a multi-million dollar heath care fraud, conspired to defraud the U.S., and failed to pay over almost $4 million in employee withheld taxes. Instead of paying over their employees’ withheld taxes to the IRS, they directed and permitted the money to be spent for other purposes, including for their own personal use. ROYLEE BELFREY was sentenced to 60 months in prison and ordered to pay $4,592,593.74 in restitution. THURLEE BELFREY was sentenced to 96 months in prison and ordered to pay $8,944,036.82 in restitution. LANORE BELFREY was sentenced to 15 months in prison and ordered to pay $402,158.00 in restitution. Related to the BELFREY investigation, the former mayor of Stillwater, KENNETH HARYCKI pleaded guilty to one count of conspiracy. HARYCKI was sentenced to 12 months and one day in prison and ordered to pay more than $2 million in restitution.
DIANE L. KROUPA, a former Federal Tax Court judge, of Minnetonka, was sentenced to 34 months in prison, and her husband, ROBERT E. FACKLER was sentenced to 24 months in prison for tax offenses. Between 2002 and 2012, KROUPA and FACKLER conspired to obstruct the IRS by falsifying and reporting personal expenses as business expenses on their joint tax return. For several years, they fraudulently deducted at least $500,000 of personal expenses as business expenses. FACKLER also failed to report approximately $450,000 of income earned from his business, Grassroots Consulting. KROUPA and FACKLER fraudulently understated their income by approximately $1,000,000 and fraudulently understated the amount of tax they owed by at least $450,000.
JOHN BURWOOD ROBINSON, of Crystal, was sentenced to 33 months in prison and ordered to pay $624,132 in restitution for stealing more than $1.1 million from his employer. ROBINSON pleaded guilty to mail fraud and filing a false tax return. ROBINSON was employed as the controller for North Central Stamping & Manufacturing, Inc. (“NCSMI”) from 1991 through 2016. In that role, ROBINSON devised a fraud scheme to steal money from NCSMI by opening a bank account in the name of NCSMI without the company’s knowledge or authorization, depositing customers’ payments into the fraudulent bank account, and using the deposits for his personal expenses.
MICHAEL TOBAK of Wayzata was sentenced to 24 months in prison for filing a false tax return. During an eight-year period, TOBAK failed to report more than $3.3 million in income from his non-profit home health care company, International Health Care Services. As a result, TOBAK failed to pay an additional $1,851,640 in taxes.
HASSAN OSMAN, of Minneapolis, was sentenced to 108 months in prison on charges of conspiracy, aiding and assisting in the preparation of a false tax return, and unlawful flight from prosecution. OSMAN and two co-conspirators filed more than 80 fraudulent tax returns for years 2008-2010 attempting to obtain close to $1 million in tax refunds.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Justice Department Announces Nationwide Initiative to Combat Sexual Harassment in HousingRead the Press Release
WASHINGTON — Today, as the Department of Justice recognizes the 50th Anniversary of the Fair Housing Act, Attorney General Jeff Sessions announced the nationwide rollout of an initiative aimed at increasing awareness and reporting of sexual harassment in housing. The announcement includes an interagency task force between the Department of Housing and Urban Development (HUD) and the Justice Department to combat sexual harassment in housing, an outreach toolkit, and a public awareness campaign. This three-pronged approach will strengthen the Department’s efforts to combat sexual harassment in housing.
“Sexual harassment in housing is illegal, immoral, and unacceptable," said Attorney General Sessions. “It is all too common today, as too many landlords, managers, and their employees attempt to prey on vulnerable women. We will not hesitate to pursue these predators and enforce the law. In October, I ordered a new initiative to bring more of these cases, and we have already won relief for 15 victims. Today we announce three new steps to make the initiative more effective and to win more cases. I want to thank the dedicated and committed professionals in our Civil Rights Division and our partners in the Department of Housing and Urban Development for their hard work in this effort. We will continue to aggressively pursue harassers, because everyone has a right to be safe in their home.”
“All discrimination stains the very fabric of our nation, but HUD is especially focused on protecting the right of everyone to feel safe and secure in their homes, free from unwanted sexual harassment,” said Secretary Ben Carson. “No person should have to tolerate unwanted sexual advances in order to keep a roof over his or her head. Part of our mission at HUD is to provide safe housing and we will remain diligent in this mission to protect those we serve. I look forward to working with Attorney General Sessions and the Department of Justice as part of this task force to bring an end to this type of discrimination.”
In October 2017, the Justice Department announced an initiative to combat sexual harassment in housing and launched pilot programs in D.C. and the Western District of Virginia. The initiative sought to increase the Department’s efforts to protect women from harassment by landlords, property managers, maintenance workers, security guards, and other employees and representatives of rental property owners. During the pilots, the Department developed and tested ways to better connect both with victims of sexual harassment in housing and with those organizations that victims may turn to first for help – including law enforcement, legal services providers, public housing authorities, sexual assault services providers, and shelters. The Department also tested certain aspects of the initiative in other jurisdictions, including New Jersey, the Central District of California, Massachusetts, Vermont, and Michigan.
The two pilot programs generated an upswing in harassment reporting to the Department from both D.C. and the Western District of Virginia. In D.C., the Department generated six leads since the October 2017 launch. In Virginia, the Department generated three leads. While the Justice Department recognizes that leads and investigations do not always lead to enforcement actions, the pilot program’s results—when extrapolated across all the U.S. Attorney’s Offices across the country—could lead to hundreds of new reports of sexual harassment in housing across the country.
Because of these promising results, the Department is rolling out three major components to the Initiative.
First, the new HUD-DOJ Task Force to Combat Sexual Harassment in Housing will drive a shared strategy between the Department and HUD for combatting sexual harassment in housing across the country. It will focus on five key areas: continued data sharing and analysis, joint development of training, evaluation of public housing complaint mechanisms, coordination of public outreach and press strategy, and review of federal policies.
Second, the outreach toolkit is designed to leverage the Justice Department’s nationwide network of U.S. Attorney’s Offices. The toolkit provides templates, guidance, and checklists based on pilot program feedback. It ultimately will amplify available enforcement resources and help victims of sexual harassment connect with the Department.
Third, the public awareness campaign has three major components: a partnership package with relevant stakeholders, launch of a social media campaign, and Public Service Announcements (PSAs) run by individual U.S. Attorney’s offices. The campaign is specifically designed to raise awareness, and make it easier for victims all over the country to find resources and report harassment.
More information about the Civil Rights Division and the civil rights laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of sexual harassment in housing should call the Department at 1-844-380-6178, send an e-mail to [email protected], or contact HUD at 1-800-669-9777. If you have information or questions about any other housing discrimination, you can contact the Department at 1-800-896-7743.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Burnsville Coin Dealer Indicted for Fraud SchemeRead the Press Release
United States Attorney Gregory G. Brooker today announced an indictment charging BARRY RON SKOG, 67, with five counts of sale of counterfeit coins and one count of mail fraud. The defendant made his initial appearance earlier today before Magistrate Judge Franklin L. Noel in U.S. District Court in Minneapolis, Minnesota.
According to the indictment, from June 2012 through October 2016, SKOG devised a scheme to advertise and sell counterfeit coins by fraudulently representing that the coins were legitimate U.S. coins worth hundreds of dollars.
According to the indictment, SKOG owned and operated a business called Burnsville Coin Company and through his business, he posted advertisements for coins in a publication called Numismatic News. When victims 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 are no other owners or employees of the company other than SKOG. In total, SKOG fraudulently obtained more than $80,000 from his victims.
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, 67
Burnsville, Minn.
Charges:
- Sale of counterfeit coins, 5 counts
- Mail fraud, 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 82 Months in Federal Prison for Violent AssaultRead the Press Release
United States Attorney Gregory G. Brooker today announced the sentencing of RICHARD JAMES SMITH, 27, to 82 months in prison for violent assaulting an individual on the Red Lake Indian Reservation. SMITH, who pleaded guilty to one count of assault resulting in serious bodily injury, was sentenced earlier today before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota. In reaching the final sentence of 82 months, Judge Tunheim levied an upward departure from the federal sentencing guidelines to address the extreme physical and psychological injury SMITH inflicted on the victim.
According to the defendant’s guilty plea and documents filed in court, during the afternoon hours of June 29, 2017, SMITH was at his mother's residence located within the exterior boundaries of the Red Lake Indian Reservation. The victim, an employee with the Red Lake Forestry Department, was at the residence on a work-related matter when SMITH came up behind the victim and struck him in the head with an aluminum baseball bat. As a result of the assault, the victim sustained a severe traumatic brain injury with intracranial hemorrhage and had to be hospitalized for more than three weeks.
The case was investigated by the Red Lake Department of Public Safety, Federal Bureau of Investigation, FBI Headwaters Safe Trails Task Force, and U.S. Customs and Border Protection.
Assistant U.S. Attorney Deidre Y. Aanstad prosecuted the case.
Defendant Information:
RICHARD JAMES SMITH, 27
Red Lake, Minn.
Convicted:
- Assault resulting in serious bodily injury, 1 count
Sentenced:
- 82 months in prison
- 3 years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former Controller of Saint Paul Town & Country Club Pleads Guilty to Million Dollar Embezzlement SchemeRead the Press Release
United States Attorney Gregory G. Brooker announced the guilty plea of JULIE ANN LEE, 53, former controller of the Town & Country Club in St. Paul, Minnesota, for operating a million dollar embezzlement scheme. LEE, who was indicted on August 23, 2017, entered her guilty plea yesterday before Senior Judge Donovan W. Frank in U.S. District Court in St. Paul, Minnesota.
“The Town & Country Club has been a Saint Paul institution since 1888. Unfortunately, Julie Lee, who was entrusted with the club’s finances, chose to use her position to embezzle more than one million dollars. She then spent the money on things such as home improvements, travel and vehicles,” said U.S. Attorney Greg Brooker. “With this guilty plea, the defendant has accepted responsibility for her crimes.”
“Tax evasion and wire fraud charges are not victimless crimes,” said Acting Special Agent in Charge Hubbard Burgess of the St. Paul Field Office IRS Criminal Investigation. “We all pay when others steal from their employers and the government. The magnitude of this fraud committed by Ms. Lee, along with this degree of dishonesty and deceit deserves to be punished.”
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.
According to the defendant’s guilty plea and documents filed in court, 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. As part of the scheme, 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.
According to the defendant’s guilty plea and documents filed in court, LEE attempted 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.
This case is being prosecuted by Assistant U.S. Attorney Joseph H. Thompson.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS, the United States Secret Service, and the Saint Paul Police Department.
Defendant Information:
JULIE ANN LEE, 53
Farmington, MN
Convicted:
- Wire fraud, 1 count
- Filing a false tax return, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Credit Repair Business Owner Sentenced to 30 Months in Prison for Tax FraudRead the Press Release
United States Attorney Gregory G. Brooker today announced the sentencing of JOSEPH ARNOLD MCGLYNN, JR., 33, former owner, CEO and President of McGlynn Marketing, LLC, d/b/a United Credit Consulting (“UCC”), to 30 months in prison for failing to account for and pay over employment taxes to the Internal Revenue Service (“IRS”). MCGLYNN pleaded guilty on November 28, 2017, and was sentenced earlier today before Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn.
According to the defendant’s guilty plea and documents filed in court, between approximately 2009 and 2016, MCGLYNN was the owner, CEO and President of UCC, a credit repair service company located in Burnsville, Minnesota. MCGLYNN was responsible for ensuring that UCC’s Employer’s Quarterly Federal Tax Returns were filed and that employment taxes were paid. However, although MCGLYNN caused employment taxes to be withheld from the wages of UCC employees, he failed to pay over such taxes to the IRS for multiple quarters between April 30, 2014 and April 30, 2017. Instead, MCGLYNN used the money to fund a lavish lifestyle, including luxury vacations, rentals of luxury vehicles, visits to strip clubs and purchases of luxury items such as jewelry, handbags and a boat. In total, MCGLYNN failed to pay to the IRS at least $159,157 in employment taxes.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS and the United States Postal Inspection Service.
Assistant U.S. Attorney Michelle E. Jones prosecuted the case.
Defendant Information:
JOSEPH ARNOLD MCGLYNN, JR., 33
Burnsville, Minn.
Convicted:
- Willful failure to account for and pay over employment taxes, 2 counts
Sentenced:
- 30 months in prison
- Two years of supervised release
- $ 159,157.26 in restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Two Wisconsin Individuals Charged in Firearms Straw Purchasing ConspiracyRead the Press Release
United States Attorney Gregory G. Brooker today announced a federal indictment charging MICHAEL PATRICK COUPE, 27, and JAMIE FLEMING, 30, in a firearms purchasing conspiracy. COUPE is charged with one count of conspiracy and four counts of being a felon in possession of a firearm, FLEMING is charged with one count of conspiracy. Both defendants made an initial appearance today before Magistrate Judge Hildy Bowbeer in U.S. District Court in St. Paul, Minnesota.
According to the indictment, between September 13, 2017, and September 16, 2017, FLEMING purchased five separate firearms, including a Mossberg Tactical 22 .22 caliber rifle, a SCCY model CPX-2, 9mm pistol, a Phoenix model HP22A .22 caliber pistol, a Taurus model PT111 9mm pistol, and a Taurus model PT140 .40 caliber pistol. When purchasing the firearms, FLEMING falsely attested on the required ATF Forms 4473 that she was the actual purchaser of the firearms, when in fact she was not. FLEMING purchased the firearms at the direction of COUPE, who has two prior felony convictions in Sawyer County, Wisconsin, and is prohibited from possessing firearms.
According to the indictment, following the purchase of the firearms, COUPE and FLEMING transferred some or all of the firearms to others, including an individual identified as G.T., who is a convicted felon. On multiple occasions between September 14, 2017, and November 27, 2017, COUPE and FLEMING traveled from Hayward, Wisconsin to Minneapolis, Minnesota where they met with G.T. and transferred firearms to G.T.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minneapolis Police Department, and the Sawyer County Sheriff’s Office.
Assistant U.S. Attorney Jeffrey S. Paulsen is prosecuting this case.
Defendant Information:
MICHAEL PATRICK COUPE, 27
Hayward, Wis.
Charged:
- Conspiracy – Felon in possession of firearms, 1 count
- Felon in possession of a firearm, 4 counts
JAMIE FLEMING, 30
Hayward, Wis.
Charged:- Conspiracy – Felon in possession of firearms, 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 allegations, and the defendants are presumed innocent unless and until proven guilty.
Iranian Citizen Sentenced for Conspiring to Facilitate the Illegal Export of Technology to IranRead the Press Release
Alireza Jalali, 39, of Iran, was sentenced to 15 months in prison for his participation in a conspiracy to defraud the United States. Jalali pleaded guilty on Nov. 29, 2017,
Assistant Attorney General for National Security John C. Demers, U.S. Attorney Gregory G. Brooker for the District of Minnesota, Acting Special Agent in Charge Robert C. Bone II of the FBI’s Minneapolis Division, Special Agent in Charge Dan Clutch of the Department of Commerce-Office of Export Enforcement (OEE) and Special Agent in Charge Tracy Cormier of Homeland Security Investigations (HSI) St. Paul Field Office made the announcement. Jalali was sentenced today before U.S. District Judge Joan N. Ericksen.
“Jalali and his co-conspirators illegally sent sensitive military-use technology to Iran, where it could fall into the hands of Iran’s Islamic Revolutionary Guard Corps, in clear violation of U.S. law,” said Assistant Attorney General Demers. “This is a threat to the national security of the United States and our allies, and we will aggressively prosecute those who brazenly violate our export control laws.”
“This multi-year investigation highlights the importance of preventing U.S.-origin technology from being transferred to unauthorized end users. Fana Moj has designed components for the Iranian military's missile systems,” said Acting Special Agent in Charge Bone. “We must prevent U.S. technology from falling into the wrong hands, where it could be used against our military members.”
“A top priority of OEE is identifying and disrupting the illicit export of controlled technology to Iran,” said Special Agent in Charge Clutch. “OEE will continue to collaborate with its law enforcement partners to combat these criminal schemes that threaten U.S. national security.”
“U.S. export controls are in place to keep sensitive technology from falling into the hands of our nation's enemies,” said Special Agent in Charge Cormier. “One of HSI's highest priorities is to prevent illicit procurement networks, terrorist groups, and hostile nations from illegally obtaining military items and controlled dual-use technology.”
According to the defendant’s guilty plea, from 2009 through December 2015, Jalali was a part-time employee of Green Wave Telecommunication, Sdn Bhn, (Green Wave) a Malaysian company located in Kuala Lumpur, Malaysia. Since its incorporation in 2009, Green Wave operated as a front company for Fanavar Moj Khavar (Fana Moj), an Iran-based company that specializes in both broadcast communications and microwave communications.
As part of the conspiracy, Green Wave was used to acquire unlawfully sensitive export-controlled technology from the United States on behalf of Fana Moj. In order to accomplish these acquisitions, Jalali and his co-conspirators concealed the ultimate unlawful destination and end users of the exported technology through false statements, unlawful financial transactions, and other means.
As part of the conspiracy, the defendant’s co-conspirators would contact producers and distributors of the sought-after technology, solicit purchase agreements, and negotiate the purchase and delivery of the goods with the seller. When the goods were received by Green Wave in Malaysia, Jalali repackaged and unlawfully exported the items from Malaysia to Fana Moj in Tehran, Iran. In 2017, Fana Moj was designated by the United States Department of the Treasury as a Specially Designated National for providing financial, material, technological or other support for, or goods or services in support of, the IRGC.
This case is the result of an investigation conducted by the FBI, the U.S. Department of Commerce-OEE and HSI.
This case is being prosecuted by Assistant U.S. Attorney Charles J. Kovats of the District of Minnesota and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section, with assistance provided by Assistant U.S. Attorney Douglas M. Pravda for the Eastern District of New York.