District of Minnesota
Press releases recorded for this federal judicial district.
Latvian Cybercriminal Extradited for "Scareware" Hacking Scheme That Caused Millions of Dollars in LossRead the Press Release
A Latvian man made his initial appearance today in Minneapolis following extradition from Poland for his involvement in a “scareware” hacking scheme that targeted the Minneapolis Star Tribune’s website and caused millions of dollars in losses to Internet users. Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice’s Criminal Division; Acting U.S. Attorney Gregory G. Brooker of the District of Minnesota; and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Field Office made the announcement.
Peteris Sahurovs aka “Piotrek” aka “Sagade,” was indicted in 2011 in the District of Minnesota on charges of wire fraud, computer fraud and conspiracy. Sahurovs was arrested on the indictment in Latvia in June of 2011. He was released by a Latvian court and later fled. In November of 2016, Sahurovs was located in Poland and apprehended by Polish law enforcement, after which the U.S. began extradition proceedings. Sahurovs was at one time the FBI’s fifth most wanted cybercriminal and a reward of up to $50,000 had been offered for information leading to his arrest and conviction.
Scareware is a type of malicious software, or malware, that poses as legitimate computer security software and purports to detect a variety of threats on the affected computer that do not actually exist. Computer users are informed they must purchase what they are told is anti-virus software in order to repair their computers. The users are then barraged with aggressive and disruptive notifications – and sometimes prevented from using their computer – until they supply their credit card number and pay for a fraudulent “anti-virus” product.
According to the indictment, Sahurovs and members of the conspiracy relied on fraudulent online advertising to spread their malware. The defendants created a phony advertising agency and claimed that they represented an American hotel chain that wanted to purchase online advertising space on the Minneapolis Star Tribune’s news website, startribune.com. After their advertisement began running on the website, the defendants changed the computer code in the ad so that the computers of visitors to the startribune.com were infected with malware.
The indictment alleges that the malware caused users’ computers to “freeze up” and then generate a series of pop-up warnings in an attempt to trick users into purchasing purported “antivirus” software to fix the problems created by the malware. The “antivirus” software, if purchased, “unfroze” victim computers and stopped the pop-ups and security notifications, but the malware remained hidden on their computers. Users who failed to purchase the “antivirus” software found that all information, data and files stored on the computer became inaccessible. The scheme generated more than $2 million in proceeds.
An indictment is merely an allegation and defendants are presumed innocent until proven guilty.
This case is being 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 are prosecuting the case. The Department’s Office of International Affairs provided substantial assistance in this matter. The Latvian State Police; and the Polish National Police, the National Prosecutor’s Office, and the Ministry of Justice also provided significant assistance and cooperation.
Rochester Woman Indicted for Tax Fraud and Aggravated Identity TheftRead the Press Release
Acting United States Attorney Gregory G. Brooker announced a federal indictment charging ROSA MARGARITA MALDONADO with two counts of filing a false claim for tax refund, one count of theft of public money, and two counts of aggravated identity theft. MALDONADO will make her initial appearance in United States District Court on June 21, 2017.
According to the indictment, MALDONADO filed false U.S. Individual Income Tax Returns in her name for tax years 2011 and 2012 in which she reported false dependents, claimed fraudulent Earned Income Tax Credits and Additional Child Tax Credits, and claimed tax refunds to which she was not entitled.
According to the indictment, MALDONADO stole a $7,712 tax refund from the U.S. Treasury for tax year 2012 and unlawfully used the names, Social Security numbers, and birth dates of two minor children in the course of that theft of public money.
This case is part of an investigation conducted by the Internal Revenue Service-Criminal Investigation, United States Postal Inspection Service, Homeland Security Investigations, Federal Bureau of Investigation, United States Secret Service, and the Department of Treasury, Office of Inspector General.
This case is being prosecuted by Assistant United States Attorney Allen A. Slaughter and U.S. Department of Justice Trial Attorney Christopher S. Strauss.
Defendant Information:
ROSA MARGARITA MALDONADO
Rochester, Minn.
Charges:
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False, fictitious or fraudulent claims, 2 counts
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Theft of public money, 1 count
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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 accusations, and the defendant is presumed innocent unless and until proven guilty.
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Serial Fraudster Sentenced to 90 Months in Prison for Investment Scam and Money LaunderingRead the Press Release
Acting United States Attorney Gregory G. Brooker announced the sentencing of RANDY MILAND, 63, to 90 months in federal prison for operating a Ponzi scheme through which he stole or attempted to steal more than $500,000 from purported investors. MILAND was indicted on June 7, 2016, and pleaded guilty on September 9, 2016. MILAND was sentenced on June 6, 2017, before United States District Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minn.
“Randy Miland is a serial scam artist whose trail of swindles has now led him straight to a lengthy prison sentence,” said Minnesota Commerce Commissioner Mike Rothman, whose agency regulates investment securities at the state level. “Over and over again, he stole people’s life savings with his fraudulent schemes. By stopping these scams, we are protecting Minnesotans in the financial marketplace.”
“IRS Criminal Investigation remains committed to uncovering investment fraud schemes and bringing to justice those who prey on investors for their personal financial gain,” said Special Agent in Charge Shea Jones of St. Paul Field Office IRS Criminal Investigation. “Today’s 90 month sentencing of Randy Miland shows that committing investment fraud will result in severe consequences.”
“Randy Miland is a conman and serial fraudster who lied to and stole hundreds of thousands of dollars from his friends and chiropractic patients,” said Assistant United States Attorney Joseph H. Thompson. “Thanks to the collaborative work of the Minnesota Department of Commerce and Criminal Investigation Division of the IRS, Mr. Miland will now pay for his many years of criminal conduct.”
According to the defendant’s guilty plea and documents filed in court, MILAND, who was a licensed chiropractor in the state of Minnesota, had prior convictions in state and federal court for various financial fraud schemes. In 1999, MILAND was convicted in state court of theft by swindle, sentenced to 55 months in prison, and ordered to pay more than $1.5 million in restitution to the victims. As of May 2016, MILAND still owed those victims nearly the entire amount of restitution ordered. In 2006, MILAND was convicted in federal court of fraud, sentenced to 41 months in prison, and ordered to pay more than $250,000 in restitution to the victims. MILAND currently still owes approximately $124,000 in restitution to the victims of his 2006 federal case.
According to the defendant’s guilty plea and documents filed in court, from 2010 through 2014, MILAND fraudulently solicited more than $500,000 from ten investors, telling them that he would use their money to invest in futures and other legitimate investments. In reality, he used their money to pay personal expenses, including court-ordered restitution payments to victims of his prior scams, and to make Ponzi-type payments of purported investment returns to other investors.
MILAND concealed material facts from his new victims, including the fact that he had been twice convicted of fraudulent conduct, that the Minnesota Board of Chiropractic Examiners suspended his license, that he was forbidden by the Minnesota Department of Commerce from offering or selling securities, and that he still owed more than $1.5 million in restitution to victims of prior schemes.
The case is being prosecuted by Assistant United States Attorney Joseph H. Thompson.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS and the Minnesota Department of Commerce Fraud Bureau.
Defendant Information:
RANDY MILAND, 63
White Bear Lake, Minn.
Convicted:
- Mail fraud, 1 count
- Money laundering, 1 count
Sentenced:
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90 months in prison
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$214,517 in restitution
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Three years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Woodbury Woman Pleads Guilty in Labor Trafficking CaseRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the guilty plea of LILI HUANG, 36, for withholding the victim’s documents in furtherance of forced labor. HUANG, who was indicted on October 4, 2016, entered her guilty plea today before U.S. District Senior Judge David S. Doty in Minneapolis, Minn.
“It is critical for law enforcement to be able to recognize the indicators of human trafficking because these types of crimes can exist right in our own communities,” said Acting U.S. Attorney Gregory Brooker. “The collaborative work of the ACTeam and our local law enforcement partners brought forth this successful prosecution and provided the victim with a sense of safety and closure.”
“Forced labor is nothing short of modern-day slavery,” said Special Agent in Charge Alex Khu of HSI St. Paul. “On behalf of HSI I would like to gratefully acknowledge the Woodbury Police Department’s cooperation in this matter and their support in having their officers specifically trained to identify victims of human trafficking.”
According to the defendant’s guilty plea and documents filed in both state and federal court, on February 25, 2016, HUANG brought the victim (identified as F.L.) from Shanghai, China to her home in Woodbury, Minn. to work as a nanny and housekeeper. Although F.L. had previously worked for the defendant in China where she cooked, cleaned and cared for the defendant’s children, the scope of work and the defendant’s treatment of F.L. was significantly different once she arrived in Minnesota. HUANG forced F.L. to work up to 18 hours a day cooking, cleaning, and providing childcare. HUANG was very demanding about household tasks and became emotionally and physically abusive toward F.L. if she did not do exactly what was asked.
According to the defendant’s guilty plea and documents filed in both state and federal court, on April 23, 2016, due to the repeated physical abuse, F.L. asked HUANG to buy her an airplane ticket so she could return home to China. Instead of buying her a ticket, HUANG took F.L.’s passport and told F.L. that she was not leaving. HUANG continued to physically abuse F.L. by kicking, punching, grabbing F.L. by her hair, and subjecting her to other abuse. On July 13, 2016, F.L. fled the house after HUANG approached her with a large kitchen knife. Just after midnight on July 14, 2016, F.L. was found wandering the streets several miles from the defendant’s home walking in the direction of the airport. F.L., who was visibly shaken and crying, was taken to United Hospital for medical treatment. The victim sustained several bruises and injuries to her face, including two black eyes, significant weight loss, and fractures to her sternum and ribs.
HUANG has also been charged in Washington County with five felony counts and will be pleading guilty to third-degree assault.
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.
This case is the result of an investigation conducted by Homeland Security Investigations, Woodbury Police Department, U.S. Department of State Diplomatic Security Service, U.S. Department of Labor Office of the Inspector General, and the Washington County Attorney’s Office.
This case is being prosecuted by Assistant United States Attorneys Laura M. Provinzino and Manda M. Sertich.
Defendant Information:
LILI HUANG, 36
Woodbury, Minn.
Convicted:
- Unlawful conduct with respect to documents in furtherance of forced labor, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former Bemidji Assistant Principal Arrested on Federal Child Sexual Exploitation ChargesRead the Press Release
Acting United States Attorney Gregory G. Brooker announced a federal criminal complaint charging BRANDON MARK BJERKNES, 34, with production and distribution of child pornography and attempted coercion and enticement of a minor. BJERKNES, who was taken into custody on May 30, 2017, made his initial appearance earlier today in U.S. District Court in St. Paul, Minn.
According to the criminal complaint and documents filed in court, since 2006, BJERKNES was employed by the Bemidji Area Schools and, for the past three years, served as the Assistant Principal of Bemidji Middle School until his resignation in April 2017. While holding the position of Assistant Principal, BJERKNES posed as a 13-15-year-old male named “Brett Larson,” and used various social media profiles on Facebook and Snapchat with “decoy photographs” to contact minor females and males in middle and high school. Using the alias profiles, BJERKNES directed the minor victims to send him sexually explicit photographs. BJERKNES also used the alias profiles to engage in sexually explicit conversations with the minor victims. Some of the minor victims BJERKNES contacted on social media were students at Bemidji Middle School.
According to the criminal complaint and documents filed in court, on March 20, 2017, law enforcement executed a search warrant at BJERKNES’ Bemidji residence. Officers seized a number of electronic devices including BJERKNES’ personal iPhone and work iPhone, multiple iPads, computers and external hard drives. The social media accounts and the electronic devices contained multiple sexually explicit photos and videos of multiple known minor victims. The forensic review is ongoing. To date, law enforcement has identified evidence that BJERKNES used the alias social media accounts to contact more than 50 minor victims.
This case is the result of an investigation conducted by the Minnesota Bureau of Criminal Apprehension and the Beltrami County Sheriff's Office.
Based on the evidence obtained in this case, authorities believe there may be additional victims of this alleged conduct. Anyone with information about this matter is encouraged to call the Beltrami County Sheriff’s Office at 218-333-9111. Callers may remain anonymous.
This case is being prosecuted by Assistant United States Attorney Angela Munoz-Kaphing.
Defendant Information:
BRANDON MARK BJERKNES, 34
Bemidji, Minn.
Charges:
- Production of child pornography, 2 counts
- Distribution of child pornography, 1 count
- Attempted coercion and enticement of a minor, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the criminal complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Minnesota Mental Health Nonprofit and Its Leaders to Pay $4.5 Million to Resolve Fraud AllegationsRead the Press Release
Acting United States Attorney Gregory G. Brooker and Minnesota Attorney General Lori Swanson today announced that Complementary Support Services and its related entities (collectively “CSS”), TERI DIMOND and HERBERT STOCKLEY have agreed to pay a total of $4.52 million to resolve allegations that they violated the False Claims Act (FCA) and Minnesota False Claims Act by defrauding Medicaid, a program jointly funded by the federal government and State of Minnesota to provide health care to low-income Minnesotans. CSS will pay the government $4 million, DIMOND agreed to pay $400,000, and STOCKLEY agreed to pay $120,000.
According to the allegations in the complaint, CSS, led by DIMOND and STOCKLEY, provided in-home mental health services to children and adults through two programs funded by the Medicaid program: Adult Rehabilitative Mental Health Services (“ARMHS”) and Children’s Therapeutic Services and Supports (“CTSS”). Both programs restrict reimbursement to time spent providing face-to-face services with the patient, and prohibit reimbursement for a therapist’s time completing paperwork. In addition, both programs require patient care to be clinically supervised by a licensed therapist, like a social worker or psychologist, to ensure that the services being paid for by taxpayers are appropriate and medically necessary.
According to the allegations, between January 1, 2007 and April 8, 2016, CSS billed Medicaid for claims while knowingly violating clinical supervision requirements. During most or all of this time period, CSS did not engage licensed professionals who agreed to accept full professional responsibility for the actions and decisions of unlicensed direct service providers. Rather than submitting claims that reflected signature by licensed professionals serving as clinical supervisors, DIMOND “batch signed” CSS progress notes that formed the basis for billing Medicaid over the years. Since January 1, 2007, CSS submitted to Medicaid more than 85,000 claims for payment. These claims represent hundreds of clients serviced by unlicensed staff members across multiple regions within the State of Minnesota. These client files could not have been, and were not, reviewed and supervised as required by law.
According to the allegations, CSS also impermissibly billed Medicaid for time completing paperwork since January 1, 2007. Specifically, CSS employees, at the direction of DIMOND and STOCKLEY, routinely added an extra billable unit for paperwork time for each client visit, fraudulently representing the added unit as face-to-face time. This practice resulted in thousands of additional billable units paid for by Medicaid in direct violation of state law.
Assistant U.S. Attorney David Fuller said, “These settlements reflect our Office’s commitment to take decisive action against health care providers who seek financial enrichment by taking advantage of federal health care programs. We thank our law enforcement partners, the whistleblower, and our colleagues at the Minnesota Attorney General’s Office for their assistance in recovering these Medicaid funds.”
“Providers of mental health services have an obligation to ensure that patients receive treatment that is necessary, appropriate and is administered with proper clinical supervision,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “To deviate from legal requirements in order to maximize profits and potentially jeopardize patient safety and well-being is completely unacceptable. The OIG will continue to work with our law enforcement partners, prosecutorial authorities and the public to identify, investigate and hold accountable those who seek to wrongfully obtain vital taxpayer dollars.”
The government’s investigation also revealed that DIMOND transferred $2 million in Medicaid funds from CSS to a nonprofit entity she started in Wisconsin. The government seized the $2 million in allegedly ill-gotten gains in June of 2016. In a negotiated civil forfeiture resolution, the government will retain $1.75 million of these alleged proceeds of the healthcare fraud scheme, bringing the government’s total recovery to $6.27 million in alleged proceeds of Medicaid fraud.
As a part of the settlements, CSS is permanently excluded from participating in federal and state health care programs. CSS’s patients were transferred to other providers of CTSS and ARMHS services. DIMOND agreed to an exclusion from federal and state health care programs for a period of not less than 8 years, and STOCKLEY agreed to an exclusion from state health care programs only for a period of not less than 5 years. Excluded providers or entities cannot participate in any way in the submission of claims to government health care programs.
These settlements resolve allegations filed in a civil lawsuit originally brought by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government for false claims and to share in any recovery. The government often relies on whistleblowers to bring fraud schemes to light that might otherwise go undetected.
In these civil settlements, Defendants CSS, DIMOND, and STOCKLEY have denied allegations of wrongdoing.
The case was handled by the Civil Frauds Unit 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 assistance from 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. William L. Schwandt v. Complementary Support Services, CSS South, LLC, CSS Central, LLC, CSS North, LLC, CSS Metro, LLC, Clinical Support Services, LLC, Teri Dimond, and Herbert Stockley, Civil No. 13-CV-1018 (PJS/SER). The claims resolved by these settlements 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
Twenty-One Additional Defendants Indicted for Their Roles in Thai Sex Trafficking EnterpriseRead the Press Release
Tens of millions of dollars in illicit sex trafficking proceeds laundered and smuggled by criminal organization
Coordinated takedown results in 20 arrests, recovery of victims from active houses of prostitution, seizures of hundreds of thousands of dollars in cash and numerous weapons
SAINT PAUL – A superseding indictment unsealed earlier today in Saint Paul, Minn., charges twenty-one members of an international sex trafficking ring for their roles in the organization. The eight count superseding indictment outlines sex trafficking and money laundering offenses stemming from a criminal enterprise that, through the use of overwhelming bondage debt, force, threats of force, fraud, and coercion, trafficked women from Thailand to cities across the United States.
All of the charged defendants acted at high levels in the sophisticated criminal enterprise, which include 10 Thai nationals and 11 U.S. citizens. Twenty of the twenty-one charged defendants were arrested yesterday at various locations in Los Angeles, San Diego, Dallas, Austin, Houston, and Chicago. One defendant remains at large. During the coordinated takedown, law enforcement seized hundreds of thousands of dollars in cash, cell phones and condoms as well as multiple weapons.
The announcement was made by Acting U.S. Attorney Gregory G. Brooker of the District of Minnesota, Special Agent in Charge Alex Khu of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) St. Paul Division, Special Agent in Charge Shea Jones of the Internal Revenue Service (IRS) Criminal Investigation Division’s St. Paul Field Office, and Cook County (Illinois) Sheriff Thomas J. Dart.
“This indictment outlines charges against twenty-one members of a multi-million dollar, modern day organized crime operation. This is a highly complex case that required years of hard work, steadfast determination and dedication to bring these defendants to justice and provide hope to the hundreds of victims,” said Acting United States Attorney Gregory Brooker. “With the cooperation and coordination of our law enforcement partners and the various resources they all bring to bear, we were able to significantly disrupt and dismantle this criminal organization from all angles.”
“HSI fully utilizes our authorities and resources to address the immediate needs of victims, as well as targeting the organizations victimizing them,” said Special Agent in Charge Alex Khu of HSI St. Paul. “These arrests, achieved through interagency cooperation, are a testament to our combined resolve to dismantling this organization and preventing future harm to potential victims of this heinous crime.”
“I’m proud of the comprehensive efforts that went into this investigation by my office and each of the agencies that participated,” said Cook County Sheriff Thomas J. Dart. “The complexities of this organization represent the lengths to which criminals will go to profit off of human beings. This is an important reminder that sex trafficking and the associated buying, are not victimless crimes – this organization preyed and profited on vulnerable women. I am grateful that justice will be served.”
St. Paul Police Chief Todd Axtell said, “This operation sends a strong message to those who benefit financially from the exploitation of women. Your operations are not welcome here. If you engage in human trafficking, we will combine the public’s resources to find you, arrest you and ensure that you are not be allowed to retain your ill-gotten financial gains.”
“The special agents of IRS Criminal Investigation are committed to taking the profit away from these human traffickers,” stated Special Agent in Charge Shea Jones of the St. Paul Field Office IRS Criminal Investigation. “Today’s indictment sends a clear message that this activity will not be tolerated in our communities. As all financial transactions leave a trail, IRS Criminal Investigation special agents used their accounting expertise to analyze the complex financial transactions made by these criminals. Today’s indictment is a reminder that IRS Criminal Investigation is committed to following the money trail across the globe.”
According to the superseding indictment, which was returned under seal on May 16, 2017, from January 2009 through May 2017, the sophisticated criminal organization trafficked hundreds of women from Bangkok, Thailand, to various cities across the United States, including Minneapolis, Los Angeles, Chicago, Atlanta, Phoenix, Washington, D.C., Las Vegas, Houston, Dallas, Seattle, and Austin. Once in the United States, the victims were placed in houses of prostitution where they were forced to work long hours – often all day, every day – having sex with strangers. The victims were isolated from the outside world; they often had no freedom of movement and were not allowed to leave the prostitution houses unless accompanied by a member of the criminal organization.
According to the superseding indictment, the victims, who were often from impoverished backgrounds and spoke little English, were promised access to a better life in the United States, in exchange for an exorbitant “bondage debt” of between $40,000 and $60,000. Before being transported to the United States, the organization would typically arrange to have professional-quality escort-style photographs taken of the victims, which would ultimately be sent to traffickers in the United States and used to advertise the victims for sex on websites like backpage.com and eros.com. The organization also encouraged victims to have breast implants in Thailand to make the victims “more appealing” to potential sex buyers in the United States. The cost of the cosmetic surgery was added to the victims’ already significant bondage debts.
According to the superseding indictment, the organization engaged in widespread visa fraud to facilitate the international transportation of the victims. Traffickers assisted the victims in obtaining fraudulent visas and travel documents by funding false bank accounts, creating fictitious backgrounds and occupations, and instructing the victims to enter into fraudulent marriages to increase the likelihood that their visa applications would be approved. Traffickers also coached the victims as to what to say during their visa interviews. While working to obtain visa documents, traffickers gathered personal information from the victims, including the location of the victims’ families in Thailand. This information was later used to threaten victims who became non-compliant or tried to flee the organization in the United States.
According to the superseding indictment, the defendants held various roles in the organization including traffickers, house bosses, money launderers, and facilitators. It was common for a member of the conspiracy to hold more than one role, over time or simultaneously, in order to maximize profits. The traffickers were the individuals who held the bondage debt of a victim until it was fully repaid or, in some instances, a victim’s bondage debt would be sold from one trafficker to another. The house bosses were the individuals who “owned” the houses of prostitution and ran the day-to-day operations at the house. The money launderers were responsible for the successful and continued operation of the enterprise by making bank accounts available, coordinating deposits and withdrawals of cash as well as the movement of money in and back to Thailand. The organization’s facilitators assisted with all manner of needs including renting prostitution houses, facilitating the transport of victims, assisting with money laundering and entering into fraudulent marriages with members of the conspiracy so those members could gain immigration status in the United States.
According to the superseding indictment, the organization dealt primarily in cash and engaged in rampant and sophisticated money laundering in order to promote, redistribute and conceal illegal profits. The organization used “funnel accounts” to launder and route cash from cities across the U.S. to the money launderers in Los Angeles. Upon entry to the U.S., victims were often escorted by a member of the organization to a bank and instructed to open an account in her own name; once the account was open a member of the organization took control of the account and then provide the account information to other co-conspirators to coordinate deposits throughout the United States.
According to the superseding indictment, the organization also engaged in bulk cash smuggling by physically transporting and mailing illegal sex trafficking proceeds to Thailand. The money launderers recruited other individuals to carry large volumes of cash on their person when traveling to Thailand as well as hide cash in items such as clothing and dolls. The organization used a hawala system, a method in which financial transactions are based on trust and family association, to transfer money to Thailand and elsewhere outside the United States. The result is the movement of funds from one location to another without the need to actually transfer or wire the funds. The criminal organization moved tens of millions of dollars in illegal proceeds from the United States to Thailand and elsewhere using this hawala-based system.
This indictment relates to the case United States v. Intarathong, et al., 16-cr-257 (DWF/TNL). To date, three of seventeen defendants in that matter have pleaded guilty.
This case is the result of an investigation conducted by Homeland Security Investigations, Criminal Investigation Division of the IRS, Diplomatic Security Service, International Organized Crime Intelligence and Operations Center, St. Paul Police Department, and the Anoka County Sheriff’s Office, with assistance from the Cook County (Illinois) Sheriff’s Office and the Cook County Human Trafficking Task Force. We also want to acknowledge the support and assistance of United States Attorney’s Offices and law enforcement from across the country who came together to assist in executing a one-day, nationwide takedown of this international criminal organization.
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. Today’s charges represent our continued ACTeam mission—to take on and take down the most entrenched and sophisticated human trafficking organizations that would attempt to profit from human misery.
Assistant U.S. Attorneys Laura M. Provinzino, Melinda A. Williams and Julie E. Allyn are prosecuting the case with the assistance of the Money Laundering and Asset Recovery section of the Criminal Division of the Department of Justice, the DOJ Office of International Affairs, and the DOJ Civil Rights Division’s Human Trafficking Prosecution Unit.
Defendant Information:
MICHAEL MORRIS, 63
Seal Beach, Calif.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Sex trafficking by use of force, fraud, and coercion, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
CHATARAK TAUFFLIEB, 51
San Jose, Calif.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Sex trafficking by use of force, fraud, and coercion, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
PEERACHET THIPBOONNGAM, 57
Los Angeles, Calif.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
- Unlicensed money transmitting business, 1 count
PAWINEE UNPRADIT, 44
Dallas, Texas
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
SAOWAPHA THINRAM, 43
Hutto, Texas
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
GREGORY ALLEN KIMMY, 36
Hutto, Texas
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
WILAIWAN PHIMKHALEE, 38
Chicago, Ill.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
KANYARAT CHAIWIRAT, 50
Chicago, Ill.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
PORNTHEP SUKPRASERT, 40
Huntington Beach, Calif.
Charges:
- Conspiracy to engage in money laundering, 1 count
- Unlicensed money transmitting business, 1 count
MULCHULEE CHALERMSAKULRAT, 39
Huntington Beach, Calif.
Charges:
- Conspiracy to engage in money laundering, 1 count
BHUNNA WIN, 49
San Diego, Calif.
Charges:
- Conspiracy to engage in money laundering, 1 count
NATCHANOK YUVASUTA, 50
Los Angeles, Calif.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Unlicensed money transmitting business, 1 count
NATTAYA LEELARUNGRAYAB, 45
Los Angeles, Calif.
Charges:
- Conspiracy to engage in money laundering, 1 count
VEERAPON GHETTALAE, 55
Lake Elsinore, Calif.
Charges:
- Conspiracy to engage in money laundering, 1 count
THOUCHARIN RUTTANAMONGKONGUL, 34
Chicago, Ill.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
MATTHEW MINTZ, 25
Chicago, Ill.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
MOHIT TANDON, 37
Burr Ridge, Ill.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
RICHARD ALEXANDER, 52
DeKalb, Ill.
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
WARALEE WANLESS, 38
The Colony, Texas
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
TANAKRON PATRATH, 58
Houston, Texas
Charges:
- Conspiracy to commit sex trafficking, 1 count
- Conspiracy to commit transportation to engage in prostitution, 1 count
- Conspiracy to engage in money laundering, 1 count
- Conspiracy to use a communication facility to promote prostitution, 1 count
###
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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 not guilty unless and until proven guilty.
Itasca County Christmas Tree Thief SentencedRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the sentencing of JOSEPH LEON EDMINSTER, 70, for stealing thousands of black spruce tree tops from the Chippewa National Forest. EDMINSTER, who pleaded guilty on January 13, 2017, to one count of theft of government property, was sentenced today before U.S. District Judge Wilhelmina M. Wright in St. Paul, Minn.
“People need to understand that taking plants or animals from federal lands is a serious crime punishable by substantial fines and even time in federal prison,” Assistant U.S. Attorney Laura Provinzino notes. “Mr. Edminster took responsibility for his actions. Had he not, his punishment could have been even more severe. But make no mistake, those who steal from our public lands for personal profit will be held accountable as today’s sentence shows.”
“The successful outcome of this case is the result of federal agencies working together to protect the resources of our national forests,” said Mary King, special agent in charge for the U.S. Forest Service Eastern Region. “The penalties reflect the seriousness of the crimes committed against our nation’s natural resources, and we hope they will act as a deterrent in the future. Our goal is to dissuade illegal activities from taking place in our forests and serve notice to everyone that Forest Service law enforcement officers are ever vigilant in the service of conservation and public safety.”
According to the defendant’s guilty plea and documents filed in court, between October 2008 and October 2014, EDMINSTER illegally cut and stole more than 12,000 black spruce tree tops from the Chippewa National Forest. After stealing the tree tops, EDMINSTER sold them to wholesalers and retailers for use as Christmas decorations for approximately $1.50 each. Retailers would then sell the tops to various retail outlets in Minnesota, Iowa and Illinois for up to $6 each. Since 2008, EDMINSTER stole more than $24,000 worth of spruce tops from federal land.
Black spruce is a North American pine species. It is widespread across Canada and the northern United States, including the Great Lakes region. Black Spruce is found in northern and northeastern parts of Minnesota, extending as far south as northern Anoka County.
The popularity of black spruce tops and other forest products that are used in the seasonal holiday decorative market has surged over the last 20 years. The spruce tops are sold at landscape retailers and some grocery and home improvement stores nationwide.
The cutting or otherwise damaging of any timber, tree or other forest product, to include black spruce is prohibited on National Forest land except as authorized by a special use authorization, timber sale, contract or other federal law or regulation.
This case is the result of an investigation conducted by the U.S. Forest Service’s Law Enforcement and Investigations division.
This case was prosecuted by Assistant United States Attorney Laura Provinzino.
Defendant Information:
JOSEPH LEON EDMINSTER, 70
Grand Rapids, Minn.
Convicted:
- Theft of government property, 1 count
Sentenced:
-
Three years’ probation
-
$ 24,199.50 in restitution paid to the U.S. Forest Service
-
200 hours community service
Red Lake Man Sentenced to 41 Months in Prison for Violent AssaultRead the Press Release
Acting United States Attorney Gregory G. Brooker announced the sentencing of DREW WILLIAM GRAVES, 29, to 41 months in federal prison for a violent assault committed on the Red Lake Indian Reservation. GRAVES, who pleaded guilty on December 29, 2016, was sentenced on May 17, 2017, before Senior Judge Paul A. Magnuson in U.S. District Court in
St. Paul, Minn.
According to the defendant’s guilty plea and documents filed in court, on March 25, 2016, GRAVES violently assaulted a female victim within the exterior boundaries of the Red Lake Indian Reservation. GRAVES broke the victim’s arm by slamming a car door on it, threw her to the ground and kicked her several times.
To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.
This case resulted from an investigation conducted by the Red Lake Tribal Police Department and the FBI Headwaters Safe Trails Task Force.
The case was prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.
Defendant Information:
DREW WILLIAM GRAVES, 29
Red Lake, Minn.
Convicted:
- Assault resulting in serious bodily injury, 1 count
Sentenced:
-
41 months in prison
-
Three years of supervised release
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Two Minneapolis Men Sentenced for Violent Armed Robbery of A Minneapolis Convenience StoreRead the Press Release
Acting United States Attorney Gregory G. Brooker announced the sentencing of STEPHON TREAVON REGGS, 22, to 197 months in prison and JOSHUA REGGS, 20, to 120 months in prison for the armed robbery of a convenience store in south Minneapolis. Both defendants entered guilty pleas and were sentenced on May 16, 2017, before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minn. A third defendant, JERROD NAJEE WILLIAMS, 29, was also charged in connection with the robbery. WILLIAMS pleaded guilty on June 6, 2016, and is awaiting sentencing.
According to the defendant’s guilty plea and documents filed in court, on January 6, 2016, STEPHON REGGS, JOSHUA REGGS and JERROD WILLIAMS entered a convenience store in south Minneapolis, Minn. STEPHON REGGS and WILLIAMS were armed with semi-automatic pistols. WILLIAMS demanded from the store employee money from the cash register, to which the store employee complied, giving the defendants approximately $2,000. During the robbery, STEPHON REGGS pistol-whipped the employee, causing a serious injury that required stitches. When the employee fled the store on foot, STEPHON REGGS followed the employee and discharged the semi-automatic pistol he was carrying. All three defendants then fled the scene in a stolen vehicle and WILLIAMS crashed it into a parked car. When police tried to arrest them, all three defendants attempted to flee on foot and had to be physically subdued by police officers.
This is the result of an investigation by the Minneapolis Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant United States Attorney David Steinkamp prosecuted this case.
Defendant Information:
STEPHON TREAVON REGGS, 22
St. Paul, Minn.
Convicted:
-
Hobbs Act robbery, 1 count
- Discharging a firearm during and in relation to a crime of violence, 1 count
Sentenced:
-
197 months in federal prison
-
Five years supervised release
JOSHUA REGGS, 20
Minneapolis, Minn.
Convicted:
-
Hobbs Act robbery, 1 count
- Using, carrying and discharging a firearm during and in relation to a crime of violence, 1 count
Sentenced:
-
120 months in federal prison
- Five years supervised release
JERROD NAJEE WILLIAMS, 29
Minneapolis, Minn.
Convicted:
-
Hobbs Act 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
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Former CEO of Community Action of Minneapolis Sentenced to 48 Months in Prison for Conspiracy, Fraud and Theft of Public FundsRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the sentencing of WILLIAM JAMES DAVIS, 66, for stealing more than $380,000 from Community Action of Minneapolis. DAVIS, who pleaded guilty on June 16, 2016, to all 16 counts of the indictment, was sentenced today before U.S. District Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minn.
“William Davis abused his position of trust to steal hundreds of thousands of dollars that were intended to help the most needy people in Minneapolis,” said Acting U.S. Attorney Gregory Brooker. “The sentence imposed today appropriately recognizes this defendant’s crimes.”
“The sentence handed down to day underscores the seriousness of the defendant’s crimes in using his leadership position to divert taxpayer funds for his personal use and that of his family and friends.” said FBI Special Agent in Charge for the Minneapolis Division Richard T. Thornton. “The FBI together with our law enforcement partners remain committed to ferreting out these types of crimes and bringing those responsible to justice.”
According to the defendant’s guilty plea and documents filed in court, for 24 years DAVIS served as CEO of Community Action of Minneapolis (“CAM”), a non-profit organization with a mission to help people who were living in poverty in the City of Minneapolis. CAM’s primary funding sources included federal grants administered by the Minnesota Department of Commerce and Minnesota Department of Human Services. CAM also received funding from CenterPoint Energy and Xcel Energy in exchange for providing certain conservation and weatherization services to qualifying homeowners.
According to the defendant’s guilty plea and documents filed in court, between March 2007 and October 2014, DAVIS diverted CAM funds for his own personal use and the use of his family and friends, including a no-show job for his son, JORDAN DAVIS, who was convicted on June 28, 2016, for his role in the fraud scheme. DAVIS used CAM funds for personal expenses, including airline tickets, hotel stays, rental cars and a Caribbean cruise.
According to the defendant’s guilty plea and documents filed in court, DAVIS concealed his theft from CAM’s Board of Directors by charging the majority of his CAM-paid personal expenses to a slush fund on CAM’s books that was not subject to the same oversight as CAM’s state and federal grant proceeds. DAVIS could therefore instruct CAM’s fiscal staff to charge personal expenses to this slush fund with less risk of detection.
In October 2013, the Minnesota Department of Human Services (DHS) began an audit intended to determine whether CAM was using the federal and state grant funds that it received through DHS in accordance with the applicable contracts. DHS personnel sought documents and information about the purposes of various CAM expenditures. On June 3, 2014, DAVIS sent correspondence to the Commissioner of DHS containing false material representations about his personal travel. On October 13, 2014, DAVIS was suspended from his position as CEO without pay. In total, DAVIS stole more than $387,063.67 from the agency.
This case is the result of an investigation conducted by the Federal Bureau of Investigation, United States Department of Health and Human Services Office of the Inspector General, Internal Revenue Service – Criminal Investigation and the United States Department of Energy Office of the Inspector General.
This case was prosecuted by Assistant United States Attorneys Kimberly A. Svendsen and Amber M. Brennan.
Defendant Information:
WILLIAM JAMES DAVIS, 66
Brooklyn Park, Minn.
Convicted:
-
Conspiracy to commit theft concerning programs receiving federal funds, 1 count
-
Mail fraud, 10 counts
-
Wire fraud, 1 count
- Theft concerning programs receiving federal funds, 4 counts
Sentenced:
-
48 months in prison
-
Two years of supervised release
-
$387,063.67 in restitution
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
-
Red Lake Man Sentenced to 37 Months in Prison for Violent StabbingRead the Press Release
Acting United States Attorney Gregory G. Brooker announced the sentencing HAROLD JAMES JOHNSON, JR., 24, an enrolled member of the Red Lake Band of Chippewa Indians, to 37 months in federal prison for a violent assault committed on the Red Lake Indian Reservation. JOHNSON, who pleaded guilty on December 22, 2016, was sentenced on May 10, 2017, before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minn.
According to the defendant’s guilty plea and documents filed in court, on July 10, 2016, JOHNSON assaulted a male victim at a private residence within the exterior boundaries of the Red Lake Indian Reservation. JOHNSON used a knife to stab the victim several times in the face and torso. As a result of the attack, the victim suffered nearly fatal stab wounds and internal bleeding as well as surgery and extended hospitalization.
To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.
This case resulted from an investigation conducted by the Red Lake Tribal Police Department and the FBI Headwaters Safe Trails Task Force.
The case was prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.
Defendant Information:
HAROLD JAMES JOHNSON, JR., 24
Red Lake, Minn.
Convicted:
- Assault resulting in serious bodily injury, 1 count
Sentenced:
-
37 months in prison
-
Three years of supervised release
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Leader of A Multi-State Heroin Trafficking Organization Sentenced to 300 Months in PrisonRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the sentencing of OMAR SHARIF BEASLEY, 39, for leading a multi-state heroin trafficking conspiracy. BEASLEY, who was charged along with 40 other co-defendants on May 20, 2015, pleaded guilty to Count 1 of the indictment. The defendant was sentenced today before Chief Judge John R. Tunheim in United States District Court in Minneapolis, Minn.
“Omar Beasley led a drug trafficking organization that flooded the Red Lake and White Earth Indian Reservations with heroin and other deadly drugs,” said Acting U.S. Attorney Gregory Brooker. “I would like to thank the dedicated prosecutors and law enforcement partners who worked tirelessly to shut down this organization and bring this dangerous drug trafficker to justice.”
DEA Supervisory Special Agent Kent Bailey said: “This defendant is a career criminal who preyed on the citizens of Minnesota and the surrounding area with complete disregard for the community’s health and welfare. Our communities will be much safer with him behind bars for a long period of time.”
Red Lake Police Department’s Public Safety Director William Brunelle said: “The successful cooperation and outstanding partnership of both tribal and federal agencies has clearly demonstrated a precise and orchestrated strike against drug dealers in Indian Country. Today’s sentence sends a strong message that tribal lands are no place to sell your drugs.”
“Justice was served today,” stated ATF Special Agent in Charge James Modzelewski. “Although we were able to remove one trafficker from the drug ring, we all need to remain vigilant. Others will likely follow. I am confident that with the strong partnerships we have built throughout this investigation anyone willing to put themselves in a similar position as Omar Beasley will see the same fate. I want to thank all of our partners for the tremendous job on this investigation. ATF is proud to be a part of this collective investigative effort.”
Special Agent in Charge of the Federal Bureau of Investigation Minneapolis Division Richard Thornton said: “The sentence handed down today reflects the seriousness of the major drug trafficking crimes committed by the defendant. Our communities are much safer when drug traffickers such as this are held accountable for the havoc they have caused and lives they have ruined. This case sends a strong message that together with our law enforcement partners we will arrest those who sell drugs for a living and argue for substantial prison terms.”
Minnesota Bureau of Criminal Apprehension Superintendent Drew Evans said: “Heroin and prescription opioids have a devastating effect on people in our communities and the loved ones of those afflicted with this addiction. Holding Mr. Beasley accountable for the harm he inflicted demonstrates that we will pursue anyone supplying these dangerous drugs in our state.”
According to the defendant’s guilty plea and documents filed in court, from April 2014 through April 2015, OMAR SHARIF BEASLEY led a drug trafficking conspiracy in which he recruited drug sources, managers, distributors, facilitators, couriers and drivers to bring heroin and other drugs to the Red Lake and White Earth Indian Reservations in Minnesota and Native American communities in North Dakota. BEASLEY would travel from Minneapolis, Minn. to Red Lake, Minn., White Earth, Minn., and to North Dakota to provide drugs to co-conspirators for distribution on the Indian Reservations. BEASLEY would then return to major cities in Minnesota, Wisconsin, Illinois, and Michigan to replenish the supply of drugs to bring into Indian Country. BEASLEY and his co-conspirators also maintained drug stash houses on the reservations and gave the proceeds of the drug sales to co-conspirators.
To date, 39 co-defendants have pleaded guilty for their respective roles in the conspiracy. One defendant remains at large:
-
WILLIAM DAVID ALONZO, 25, was sentenced on March 2, 2017, to 120 months in prison and four years of supervised release on Counts 8 and 10 of the indictment.
-
TRAVIS JAMES BAKER, 27, was sentenced on April 14, 2016, to time served and three years of supervised release on Count 2 of the indictment.
-
ROSE LYNN BARRETT, 29, was sentenced on April 28, 2016, to 39 months in prison and three years of supervised release on Count 1 of the indictment.
-
SONNIE MARIE BARRETT, 28, was sentenced on December 2, 2015, to 60 months in prison and four years of supervised release on Count 1 of a felony Information.
-
CALVIN BEASLEY, 60, will be sentenced on June 29, 2017
-
TIMOTHY JOSEPH BEAULIEU, JR., 35, was sentenced on January 18, 2017, to 60 months in prison and five years of supervised release on Count 8 of the indictment.
-
WILLIE BELLAMY, JR., 69, will be sentenced on May 18, 2017.
-
LAMARCUS ANTONIO BROCK, 39, was sentenced on January 18, 2017, to 60 months in prison and five years of supervised release on Count 1 of a felony Information.
-
MICHAEL TRAVELL COLLINS, 40, will be sentenced on August 24, 2017.
-
MICHAEL JOSEPH DOMINGUEZ, 31, was sentenced on April 14, 2016, to 72 months in prison and four years of supervised release on Count 1 of a felony Information.
-
STACEY RAE DUCHAINE, 26, was sentenced on August 3, 2016, to time served and three years of supervised release on Count 1 of the indictment.
-
ERNESTINE DUKES, 46, was sentenced on May 10, 2016, to 60 months in prison and four years of supervised release on Count 1 of the indictment.
-
MICHAEL LENIOR DUKES, 49, was sentenced on February 24, 2017, to 120 months in prison and five years of supervised release on Count 1 of the indictment.
-
BRENDA ANN FAGAN, 69, will be sentenced on May 18, 2017.
-
WILLIAM JAMES FASTHORSE, 27, was sentenced on May 8, 2017, to time served and three years of supervised release on Count 1 of the indictment.
-
APRIL MARIE GRAVES, 33, was sentenced on October 26, 2016, to 20 months in prison and four years of supervised release on Count 1 of the indictment.
-
STEPHEN MARTIN HOLLIS, 39, was sentenced on April 19, 2016, to 60 months in prison and four years of supervised release on Count 12 of the indictment.
-
YALONZO RAMON HULL, 52, will be sentenced on June 29, 2017.
-
DURIAL JOHN JACKSON, 31, was sentenced on December 16, 2016, to 12 months and 1 day in prison and three years of supervised release on Count 1 of the indictment.
-
JUSTIN LEE JOHNSON, 26, was sentenced on December 14, 2016, to 65 months in prison and three years of supervised release on Count 1 of the indictment.
-
VELVET ILENE JOHNSON, 46, was sentenced on August 23, 2016, to 22 months in prison and three years of supervised release on Count 1 of the indictment.
-
GENE MICHAEL KEEZER, 39, was sentenced on January 25, 2017, to 96 months in prison and three years of supervised release on Count 1 of a felony Information.
-
NAKOYA HARRIS KEEZER, 39, was sentenced on February 16, 2017, to 30 months in prison and three years of supervised release on Count 1 of the indictment.
-
RODNEY LEE KEEZER, 38, was sentenced on April 26, 2017, to 60 months in prison and five years of supervised release on Count 1 of the indictment.
-
JARVIS ALLEN KING, 25, was sentenced on December 16, 2016, to 30 months in prison and three years of supervised release on Count 1 of the indictment.
-
JODI LYNN KJOLBERG, 46, was sentenced on September 23, 2016, to 18 months in prison and three years of supervised release on Count 4 of the indictment.
-
YVETTE KOUAYARA, 55, was sentenced on March 2, 2017, to time served and three years of supervised release on Count 1 of the indictment.
-
JENNIFER LYNN OPPEGARD, 29, was sentenced on April 14, 2016, to 30 months in prison and three years of supervised release on Count 1 of the indictment.
-
JESSICA RAE OPPEGARD, 38, was sentenced on February 24, 2017, to a three year term of probation on Count 1 of a felony Information.
-
LEE ALLEN OPPEGARD, 41, was sentenced on January 18, 2017, to 40 months in prison and three years of supervised release on Count 1 of the indictment.
-
BURNEY ABDULAH PEOPLES, 29, remains at large.
-
CHRISTOPHER ERVING PEOPLES, 35, was sentenced on July 11, 2016, to 8 months in prison and three years of supervised release on Count 1 of the indictment.
-
RAVONNA RAYE PEOPLES, 45, was sentenced on September 7, 2016, to time served and three years of supervised release on Count 1 of the indictment.
-
LUCAS JOHN PETERSON, 28, was sentenced on April 28, 2017, to 120 months in prison and five years of supervised release on Count 1 of the indictment.
-
DOERON EARL RAYFORD, 43, was sentenced on December 22, 2016, to 110 months in prison and five years of supervised release on Count 1 of the indictment.
-
SHERRLENE ROSE ROBERTS, 69, was sentenced on January 19, 2017, to a two year term of probation on Count 1 of a felony Information.
-
MAISIE ANN SARGENT, 27, was sentenced on August 26, 2016, to 30 months in prison and three years of supervised release on Count 1 of the indictment.
-
DALE ANDREW SIGANA, 34, was sentenced on July 5, 2016, to 120 months in prison and five years of supervised release on Count 1 of the indictment.
-
SARAH ELIZABETH THOMPSON, 32, was sentenced on December 22, 2016, to 110 months in prison and five years of supervised release on Count 1 of the indictment.
-
ROBYN JOANNE WIPF, 35, was sentenced on April 27, 2017, to a three year term of probation on Count 1 of the indictment.
This case is the result of a cooperative investigation conducted by the Red Lake Police Department, the White Earth Police Department, the Paul Bunyan Drug Task Force, the FBI Safe Trails Task Force, the West Central Minnesota Drug and Violent Crimes Task Force, the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Federal Bureau of Investigation, and the Minnesota Bureau of Criminal Apprehension, assisted by the following law enforcement agencies and task forces, Becker County Sheriff’s Office, Beltrami County Sheriff’s Office, Bemidji Police Department, Bloomington Police Department, Bureau of Indian Affairs, Clearwater County Sheriff’s Office, Customs and Border Protection, Detroit Lakes Police Department, Frazee Police Department, Hubbard County Sheriff’s Office, Mahnomen County Sheriff’s Office, Minnesota Department of Correction, Minnesota State Highway Patrol, Lakes to River Drug Task Force, North Dakota Bureau of Criminal Investigation, Pine to Prairie Drug Task Force, and Wisconsin Department of Criminal Investigation.
This case was prosecuted by Assistant U.S. Attorneys Deidre Y. Aanstad and Melinda A. Williams.
Defendant Information:
OMAR SHARIF BEASLEY, 39
Anoka County Jail
Convicted:
- Conspiracy to Distribute Heroin, Methamphetamine, Oxycodone, Hydromorphone, Hydrocodone, and Methadone, 1 count
Sentenced:
-
300 months in prison
-
10 years of supervised release
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Former Lutonix Executive Pleads Guilty to Stealing Trade SecretsRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the guilty plea of CHRISTOPHER BARRY, 46, for stealing trade secrets from his former employer, Lutonix, Inc. BARRY, who was charged by felony information on April 5, 2017, pleaded guilty before U.S. District Judge Richard H. Kyle in St. Paul, Minn.
According to the defendant’s guilty plea, from 2007 until May 1, 2015, BARRY was the Vice President of Research & Development for Lutonix, Inc. (“Lutonix”), a company based in New Hope, Minn. that develops, manufactures, and sells drug coated balloon (“DCB”) medical products. In his role, BARRY was responsible for all research and development, quality assurance, and manufacturing activities for the company, among other things. BARRY was also directly involved in the development of Lutonix’s primary product, an extremely valuable proprietary DCB called the Lutonix 035 DCB.
According to the defendant’s guilty plea, in May 2015, BARRY left Lutonix and accepted employment as CEO of Urotronic, a start-up medical device company founded by a former Lutonix employee. As BARRY was planning to leave Lutonix, he stole numerous trade secret files belonging to the company so that he could utilize the proprietary information in connection with his next job. During his employment with Urotronic, BARRY transferred the stolen trade secret files from his portable hard drive onto his Urotronic work computer. Additionally, while BARRY was employed at Urotronic, he shared several procedural documents containing Lutonix trade secrets with other Urotronic employees.
This case is the result of an investigation conducted by the FBI, the Criminal Investigation Division of the IRS, and the United States Postal Inspection Service.
This case is being prosecuted by Assistant United States Attorney Benjamin Langner.
Defendant Information:
CHRISTOPHER BARRY, 46
Medina, Minn.
Convicted:
-
Theft of Trade Secrets, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
-
St. Paul Accountant Sentenced to 41 Months in Prison for Long-Term Embezzlement SchemeRead the Press Release
Acting United States Attorney Gregory G. Brooker announced the sentencing of JOHN WILLIAM ROWAN, 65, to 41 months in prison for stealing more than $1.2 million from the insurance company where he was employed for more than 20 years. ROWAN, who pleaded guilty on January 19, 2017, to one count of wire fraud, was sentenced on May 5, 2017, before U.S. District Judge Susan R. Nelson in U.S. District Court in St. Paul, Minn.
“Over the course of nearly two decades, this defendant systematically abused the trust of his employer to steal more than $1.2 million,” said Acting United States Attorney Gregory G. Brooker. “This case exemplifies the seriousness of embezzlement and the damage it causes to small business owners. Criminals who engage in this type of conduct will be brought to justice.”
“Rowan abused his position of trust as he stole more than $1.2 million from the insurance business that employed him for many years,” said Minnesota Commerce Commissioner Mike Rothman. “He diverted business funds to his own personal use while concealing his fraudulent activity. The case was the result of close cooperation involving the Minnesota Commerce Fraud Bureau with local and federal law enforcement.”
According to his guilty plea and documents filed in court, from at least October 1995 until July 2015, ROWAN, as the accountant and controller of his company, exploited his access to his employer’s financial accounts and stole more than $1.2 million. Using his insider knowledge of how the company managed its financial transactions, ROWAN issued a total of 150 unauthorized checks to himself from the company’s bank accounts causing a total loss of $1,216,218.64.
This case is the result of an investigation conducted by the FBI, Minnesota Department of Commerce Fraud Bureau, and the North St. Paul Police Department.
This case was prosecuted by Assistant U.S. Attorney Michelle E. Jones.
Defendant Information:
JOHN WILLIAM ROWAN, 65
St. Paul, Minn.
Convicted:
-
Wire fraud, 1 count
Sentenced:
-
41 months in prison
-
Three years of supervised release
-
$ 1,216,218.64 in restitution
# # #
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Former Investment Advisor Sentenced to 72 Months in Prison for $5 Million Securities Fraud SchemeRead the Press Release
Acting United States Attorney Gregory G. Brooker announced the sentencing of BRADLEY THOMAS SMEGAL, 63, to 72 months in prison for stealing more than $5.1 million from several of his investment advisory clients. SMEGAL, who pleaded guilty on August 11, 2016, to two counts of securities fraud, was sentenced today before U.S. District Judge David S. Doty in Minneapolis, Minn.
“The defendant stole from clients who trusted his professional investment advice,” said Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Field Office. “The sentence handed down today sends a clear message that those who abuse their positions of trust for personal gain will be brought to justice and held accountable for their crimes.”
According to his guilty plea and documents filed in court, SMEGAL was a registered broker and investment advisor from 1980 until May 2012 when the Financial Industry Regulatory Authority (FINRA) barred him from the securities industry.
According to his guilty plea and documents filed in court, between August 2007 and January 2013, SMEGAL convinced several investment advisory clients to invest in entities in which SMEGAL had an undisclosed ownership or management role, or otherwise controlled the bank accounts. SMEGAL told investors that these entities were involved in international infrastructure and mining projects, among other things. SMEGAL, without disclosing his personal stake, often described the investments as conservative and guaranteed specific rates of return to the clients.
According to his guilty plea and documents filed in court, SMEGAL fraudulently convinced his clients to invest approximately $5.14 million into these entities. He diverted $825,900 of those funds to his personal bank account. As part of an effort to hide this theft, SMEGAL often routed the money through multiple bank accounts before depositing it into his personal account. In order to keep the scheme going, SMEGAL sometimes made Ponzi-type payments to investors.
According to his guilty plea and documents filed in court, just prior to being barred by FINRA, in November 2011, Wells Fargo, where SMEGAL had been working, terminated his employment. SMEGAL had not disclosed to his employer that he had a financial interest in all of the entities to which he steered his investment advisory clients. After he was terminated, SMEGAL led certain clients to believe that he was still employed by Wells Fargo.
This case is the result of an investigation conducted by the FBI and the United States Postal Inspection Service.
This case is being prosecuted by Assistant U.S. Attorney David M. Maria.
Defendant Information:
BRADLEY THOMAS SMEGAL, 63
Minneapolis, Minn.
Convicted:
-
Securities fraud, 2 counts
Sentenced:
-
72 months in prison
-
Two years of supervised release
-
$4,978,195.35 in restitution
# # #
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Former Starkey Executive Pleads Guilty to Tax EvasionRead the Press Release
Acting United States Attorney Gregory G. Brooker announced the guilty plea of JEFFREY LEE LONGTAIN, 58, for filing a false tax return. LONGTAIN, who was charged on March 1, 2017, by felony information, pleaded guilty before U.S. District Chief Judge John R. Tunheim in Minneapolis, Minn.
According to the defendant’s guilty plea, from 2006 until his termination in 2015, LONGTAIN was the Chief Operating Officer and President of Northland Hearing Centers, Inc. (“Northland”), a subsidiary of Starkey Laboratories (“Starkey”) that was responsible for acquiring and managing retail hearing aid facilities. During this time, LONGTAIN reported to Starkey’s President, Jerome Ruzicka, and worked closely with Starkey’s Chief Financial Officer, Scott Nelson.
According to the defendant’s guilty plea and documents filed in court, in 2002, Starkey’s principal owner, William Austin, created Northland US, LLC for the purpose of acquiring and operating retail hearing aid establishments. In 2006, without Austin’s knowledge, Ruzicka and Nelson surreptitiously transferred Northland LLC’s assets to a new entity they controlled, Northland Hearing Centers, Inc. They forged Austin’s signature to complete the transfer of assets, later awarded themselves restricted stock, and ultimately paid themselves and LONGTAIN approximately $15 million in exchange for terminating the restricted stock grants.
According to the defendant’s guilty plea and documents filed in court, in 2014, when Ruzicka, Nelson and LONGTAIN realized they had not taken enough money to cover their entire tax obligations, took additional money from the company. LONGTAIN told Nelson that he needed $115,000 to cover his additional tax payments. In reality, LONGTAIN only needed $85,000 but asked for the higher amount so he could keep $30,000 for himself. Nelson and LONGTAIN disguised the $115,000 payment as a loan but, as LONGTAIN knew, the payment was income that should have been reported on his 2014 tax returns.
According to the defendant’s guilty plea and documents filed in court, between 2010 and 2015, LONGTAIN purposely failed to report money that he received from Starkey and Northland, as well as several companies that provided services to Starkey and Northland, as income on his tax returns. For example, Audiometrix, LLC and Socio, LLC, two companies that provided services to Starkey and/or Northland, made payments totaling approximately $182,915 to or on behalf of LONGTAIN. Approximately $77,315 of the total amount was paid directly to LONGTAIN and $105,600 was paid to Oregon Golf Club to offset LONGTAIN’S golf club dues and fees. LONGTAIN knew that receipt of these payments was a conflict of interest given his position at Northland. To avoid paying additional taxes, LONGTAIN purposely concealed the golf club payments from his tax preparer.
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 Lola Velazquez-Aguilu and Benjamin Langner.
Defendant Information:
JEFFREY LEE LONGTAIN, 58
West Linn, Ore.
Convicted:
- Making and Subscribing a False Return, 1 count
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Minnesota Chiropractor Sentenced to 33 Months in Prison for Tax EvasionRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the sentencing of DONALD GIBSON, 61, to 33 months in prison for tax evasion and for presenting a fake financial instrument to the U.S. Department of Treasury. GIBSON was convicted on December 2, 2016, following a five-day jury trial before U.S. District Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minn.
As proven at trial, GIBSON failed to file his 2004 through 2014 individual income tax returns and attempted to evade his income tax liabilities for these years by diverting money to a warehouse bank called MYICIS, cashing over $800,000 in business checks at a check-cashing facility, and submitting fake money orders and bogus financial instruments to the Internal Revenue Service (IRS). GIBSON also formed Sovereign Christian Mission (SCM), a purported religious organization, as a way to further hide his chiropractic income and pay for his personal expenses. GIBSON used SCM to pay for his groceries, entertainment, dinners, and car repairs. Evidence presented at trial established that while the IRS was auditing his tax returns, and later during the criminal investigation, GIBSON presented a fake financial instrument purporting to be worth $300 million to the IRS and claimed that it paid off his income tax liabilities.
This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division.
This case was prosecuted by Assistant United States Attorney Joseph Thompson and Trial Attorney Ryan Raybould of the Tax Division.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Defendant Information:
DONALD GIBSON, 61
Lindstrom, Minn.
Convicted:
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Tax evasion, 5 counts
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Fictitious obligation, 1 count
Sentenced:
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33 months in prison
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Two years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Blaine Man Indicted for Production and Possession of Child PornographyRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced a federal indictment charging SCOTT FRANCIS FORTIER, 38, with production and possession of child pornography. FORTIER was indicted on April 12, 2017, and will make his initial appearance in United States District Court later this week.
According to the indictment and documents filed in court, FORTIER was associated for many years with Circle R Ranch (“the Camp”), a co-ed horseback riding camp located in Todd County, Minn. Through his involvement with the Camp, FORTIER met a 17-year-old minor (“Minor Victim #1). On September 9, 2016, FORTIER invited Minor Victim #1 and her 15-year-old friend (Minor Victim #2) to his house in Blaine, Minn., where he gave them both alcohol and induced the two minors to engage with him in sexually explicit conduct. FORTIER used his cell phone to produce multiple videos of Minor Victim #1 and Minor Victim #2 engaged in that activity. In addition, FORTIER also possessed on his computer videos of prepubescent minors engaging is sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case is the result of an investigation conducted by the FBI.
This case is being prosecuted by Assistant U.S. Attorney Carol M. Kayser.
Defendant Information:
SCOTT FRANCIS FORTIER, 38
Blaine, Minn.
Charged:
- Production of child pornography, 4 counts
- Possession of child pornography, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Founder of Wind Energy Company Charged in Multi-Million Dollar Fraud SchemeRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced a federal indictment charging SHAWN ROBERT DOOLING, 50, founder of a renewable energy company, with three counts of mail fraud, one count of wire fraud, and one count of engaging in a monetary transaction in criminally derived property.
As alleged in the indictment, in 2009, DOOLING founded Renewable Energy SD, LLC (“RESD”), a wind energy company headquartered in Excelsior, Minn. From 2010 through 2013, DOOLING executed a scheme to defraud RESD customers by falsely representing that for an agreed-upon contract price, his company would build and maintain wind energy turbines on customers’ land. DOOLING marketed the electricity-generating wind turbines as a way for customers to save money by generating enough electricity to supply their needs and eventually sell excess electricity to utility companies.
As alleged in the indictment, DOOLING told customers that he would send a portion of their money to a third-party manufacturer as a down payment to reserve a specific wind turbine. Then, when the wind turbine was completed and ready to be shipped, he would send the remaining portion of the money to the manufacturer to complete the wind turbine purchase In reality, instead of reserving and purchasing wind turbines for his customers, DOOLING often took customers’ money out of RESD bank accounts for his own personal use and benefit. As part of the scheme, DOOLING also used some customers’ money to pay for other customers’ wind turbine projects.
As alleged in the indictment, DOOLING furthered his scheme by lying to customers about the status of their orders and told customers that RESD’s failure to deliver the wind turbines was due to manufacturer delays. As a result of this scheme, more than 60 customers paid a combined total of more than $13 million to DOOLING and his company and never received the promised wind turbines or a refund of their money. In total, DOOLING used approximately $2 million from RESD’s bank accounts for his own personal benefit.
This case is the result of an investigation conducted by the FBI.
Assistant U.S. Attorneys Surya Saxena and John Kokkinen are prosecuting the case.
Defendant Information:
SHAWN ROBERT DOOLING, 50
Excelsior, Minn.
Charges:
- Mail fraud, 3 counts
- Wire fraud, 1 count
- Engaging in a monetary transaction in criminally derived property, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Itasca County Felon Indicted for Possession of Methamphetamine and FirearmsRead the Press Release
Acting United States Attorney Gregory G. Brooker announced an indictment charging JAYSEN LANE HEYER, 38, with one count of possession with intent to distribute methamphetamine and two counts of being a felon in possession of a firearm. On April 13, 2017, HEYER made his initial appearance in U.S. District Court in Duluth, Minn.
According to the indictment, on December 28, 2016, HEYER was found to be in possession of approximately 210 grams of methamphetamine, a Smith and Wesson M&P 40 pistol and a Luger 9mm Tech 9 pistol. Because he is a felon, HEYER is prohibited under federal law from possessing a firearm at any time.
If convicted, HEYER faces a potential maximum penalty of 40 years in prison for drug possession and up to 10 years for being a felon in possession of a firearm. All sentences will be determined by a federal district court judge.
This case is the result of an investigation conducted by the Itasca County Sheriff’s Office, Minnesota Bureau of Criminal Apprehension, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and the U.S. Marshall’s Service.
This case is being prosecuted by Assistant United States Attorney Deidre Y. Aanstad.
Defendant Information:
JAYSEN LANE HEYER, 38
Squaw Lake, Minn.
Charges:
- Possession with Intent to Distribute Methamphetamine, 1 count
- 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 indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Russian Citizen Pleads Guilty for Involvement in Global Botnet ConspiracyRead the Press Release
A Russian citizen pleaded guilty today for his participation in a criminal enterprise that installed and exploited malicious computer software (malware) on tens of thousands of computer servers throughout the world to generate millions of dollars in fraudulent payments.
Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice’s Criminal Division, Acting U.S. Attorney Gregory G. Brooker of the District of Minnesota and Assistant Director Scott Smith of the FBI’s Cyber Division made the announcement.
Maxim Senakh, 41, of Velikii Novgorod, Russia, pleaded guilty today to conspiracy to violate the Computer Fraud and Abuse Act and to commit wire fraud before U.S. District Judge Patrick J. Schlitz of the District of Minnesota. Sentencing is set for Aug. 3, 2017. Senakh was indicted on Jan. 13, 2015, and was subsequently arrested by Finnish authorities, who extradited him to the United States.
According to admissions made in connection with the plea agreement, the malware, which is known as Ebury, harvested log-on credentials from infected computer servers, allowing Senakh and his co-conspirators to create and operate a botnet comprising tens of thousands of infected servers throughout the world, including thousands in the United States. Senakh and his co-conspirators used the Ebury botnet to generate and redirect internet traffic in furtherance of various click-fraud and spam e-mail schemes, which fraudulently generated millions of dollars in revenue. As part of the plea, Senakh admitted that he supported the criminal enterprise by creating accounts with domain registrars which helped build the Ebury botnet infrastructure and personally profited from traffic generated by the Ebury botnet.
The FBI Minneapolis Field Office is investigating the case. Senior Counsels Aaron Cooper and Benjamin Fitzpatrick of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Kevin Ueland of the District of Minnesota are prosecuting this case. The Department of Justice extends its thanks to the government of Finland, the Bundeskriminalamt (BKA), CERT-Bund and the cyber security firm ESET. The Criminal Division’s Office of International Affairs also provided substantial assistance.
Russian Citizen Pleads Guilty for Involvement in Global Botnet ConspiracyRead the Press Release
WASHINGTON – A Russian citizen pleaded guilty today for his participation in a criminal enterprise that installed and exploited malicious computer software (malware) on tens of thousands of computer servers throughout the world to generate millions of dollars in fraudulent payments.
Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice’s Criminal Division, Acting U.S. Attorney Gregory G. Brooker of the District of Minnesota and Assistant Director Scott Smith of the FBI’s Cyber Division made the announcement.
MAXIM SENAKH, 41, of Velikii Novgorod, Russia, pleaded guilty today to conspiracy to violate the Computer Fraud and Abuse Act and to commit wire fraud before U.S. District Judge Patrick J. Schlitz of the District of Minnesota. Sentencing is set for August 3, 2017. SENAKH was indicted on January 13, 2015, and was subsequently arrested by Finnish authorities, who extradited him to the United States.
According to admissions made in connection with the plea agreement, the malware, which is known as Ebury, harvested log-on credentials from infected computer servers, allowing SENAKH and his co-conspirators to create and operate a botnet comprising tens of thousands of infected servers throughout the world, including thousands in the United States. SENAKH and his co-conspirators used the Ebury botnet to generate and redirect internet traffic in furtherance of various click-fraud and spam e-mail schemes, which fraudulently generated millions of dollars in revenue. As part of the plea, SENAKH admitted that he supported the criminal enterprise by creating accounts with domain registrars which helped build the Ebury botnet infrastructure and personally profited from traffic generated by the Ebury botnet.
The FBI Minneapolis Field Office is investigating the case. Senior Counsels Aaron Cooper and Benjamin Fitzpatrick of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Kevin Ueland of the District of Minnesota are prosecuting this case. The Department of Justice extends its thanks to the government of Finland, the Bundeskriminalamt (BKA), CERT-Bund and the cyber security firm ESET. The Criminal Division’s Office of International Affairs also provided substantial assistance.
Defendant Information:
Maxim Senakh, 41
Velikii Novgorod, Russia
Convicted:
- Conspiracy to Violate the Computer Fraud and Abuse Act, and to Commit Wire Fraud, 1 count
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White Earth Man Sentenced to 30 Years in Prison for MurderRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the sentencing of STERLING KYLE ANDERSEN, 24, to 30 years in prison for second degree murder. ANDERSON, who was indicted on February 1, 2016, pleaded guilty on November 9, 2016, before U.S. District Judge Ann D. Montgomery in Minneapolis, Minn.
According to the defendant’s guilty plea and documents filed in court, on October 7, 2015, while babysitting his girlfriend’s three-year-old son (identified as S.W.W.), ANDERSEN became agitated when he was not able to stop S.W.W. from crying. As a result of his frustration, ANDERSEN brutally assaulted S.W.W. with his fists and knees causing traumatic internal and external injuries. When emergency personnel and law enforcement arrived, ANDERSEN said that S.W.W. had fallen in the woods while running and hit his head, but ultimately confessed to the brutal assault. The victim was transported to the hospital via helicopter but was pronounced dead shortly after arriving.
This case is the result of an investigation conducted by the Minnesota Bureau of Criminal Apprehension, White Earth Police Department, Becker County Sheriff’s Office, and the FBI.
Assistant U.S. Attorney Deidre Y. Aanstad prosecuted the case.
Defendant Information:
STERLING KYLE ANDERSEN, 24
Duluth, Minn.
Convicted:
- Murder in the second degree, 1 count
Sentenced:
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360 months in prison
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Five years supervised release
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Inver Grove Heights Chiropractor Charged in No-Fault Automobile Insurance Fraud SchemeRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced a federal indictment charging TIMOTHY WAYNE GUTHMAN, 43, a licensed chiropractor, with one count of conspiracy to commit health care fraud and one count of mail fraud. GUTHMAN made his initial appearance last week in U.S. District Court in Minneapolis.
Under the Minnesota No-Fault Automobile Insurance Act, auto insurance policies must include a personal injury protection provision (PIP). The PIP provision carries a minimum coverage amount of $40,000 for expenses resulting from injuries sustained in an automobile accident, $20,000 of which may be used for medical expenses.
According to the indictment, from 2012 through 2015, GUTHMAN engaged in a scheme to defraud automobile insurance companies by submitting fraudulent no-fault insurance claims and receiving reimbursements through his chiropractic clinics. These claims were for services that either were not medically necessary or were never rendered. GUTHMAN prescribed and purportedly provided services that were not determined medically necessary by the physical condition of each patient, but were instead designed to fraudulently maximize reimbursement from the patients’ automobile insurance companies.
According to the indictment, in order to get more patients to come to chiropractic appointments for treatment they did not need, GUTHMAN would make illegal kickback payments to patient recruiters, known as “runners.” The kickback payments typically ranged between $500 and $1,500 per automobile accident patient that the runner brought to GUTHMAN’S clinics. GUTHMAN would often require a refund of the kickback payment if the patient failed to attend a minimum number of treatment sessions. In order to keep the patients coming back for medically unnecessary appointments, the runners often paid illegal kickbacks to the patients.
This case is the result of an investigation conducted by the Minnesota Department of Commerce Fraud Bureau and the FBI.
Assistant U.S. Attorneys John E. Kokkinen and David M. Maria are prosecuting the case.
Defendant Information:
TIMOTHY WAYNE GUTHMAN, 43
Inver Grove Heights, Minn.
Charges:
- Conspiracy to commit health care fraud, 1 count
- Conspiracy to commit 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 defendants are presumed innocent unless and until proven guilty.
University Law Professor Charged in Multi-Million Dollar Corporate Fraud SchemeRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced a federal indictment charging EDWARD S. ADAMS, an attorney and university law professor, with orchestrating an elaborate fraud scheme to embezzle millions of dollars of investors’ funds. ADAMS is expected to make his initial appearance in U.S. District Court in Minneapolis later this week.
“The defendant’s brazen theft of millions of dollars of investor’s funds over the course of several years is compounded by the fact that he holds positions of public trust as an attorney and law school faculty member,” said FBI Special Agent in Charge for the Minneapolis Division Richard T. Thornton. “The FBI remains committed to working with our law enforcement partners to detect corporate crime in all its forms and bring those responsible to justice.”
“The U.S. Postal Inspection Service vigorously pursues prosecution of criminals who callously defraud our citizens using the U.S. Mail. Postal Inspectors are committed to ensuring public confidence in the U.S. Mail. Fraud of this magnitude is not a victimless crime. Honest, hardworking Americans pay the price when fraudsters wrongfully steal their hard-earned money.” said Postal Inspector in Charge, Craig Goldberg.
“IRS Criminal Investigation Special Agents are proud to work with our law enforcement partners and the U.S. Attorney’s Office to investigate and prosecute individuals, such as Edward Adams, who attempt to enrich themselves by fraudulent means,” stated Shea Jones, Special Agent in Charge of the St. Paul Field Office. “IRS Criminal Investigation is committed to using our financial investigative expertise to stop investment fraud schemes and other types of white collar crime."
According to the indictment and documents filed in court, Apollo Diamond, Inc. (“Apollo Diamond”) and Apollo Diamond Gemstone Corporation (“Apollo Gemstone”) (collectively, “Apollo”) was a privately held company that produced lab-grown diamonds. ADAMS, a Minneapolis lawyer and law professor, became involved with Apollo through familial relations and held various managerial titles with the company such as CFO, Secretary, EVP, and General Counsel.
According to the indictment, in 2003, at the direction of ADAMS, Apollo retained ADAMS’ financial services firm, Equity Securities, Inc., to provide investment banking services and to raise money for Apollo. Equity Securities raised more than $25 million for Apollo, for which Equity Securities received approximately $4 million in commission. Following the fundraising efforts, ADAMS continued to handle the ongoing financial matters for Apollo with minimal oversight from the Board of Directors.
According to the indictment, from 2006 through 2009, ADAMS opened multiple bank accounts with various titles including “RL Investments,” “DL Investments,” “ADR Investments,” “Apollo Diamond, Inc.,” and “Apollo Diamond Gemstone Corporation,” none of which were authorized by Apollo or its Board of Directors. ADAMS was the sole signatory and the only person with access to the accounts and the account statements, which were mailed to his personal addresses.
According to the indictment, ADAMS told investors that they could purchase shares in Apollo by making their checks payable to the accounts he controlled. He promised that their money would be used for Apollo’s operations, including working capital, funding additional diamond growing equipment, and research and development, when, in reality, ADAMS was embezzling the money. For example, ADAMS deposited approximately $2,400,000 of investors’ funds into the RL Investments account and then surreptitiously diverted more than $1,200,000 for his own personal use, an additional $101,500 to his law firm’s bank account, and distributed the remainder of the funds to various individuals as determined by ADAMS.
According to the indictment, in 2010, due in part to ADAMS’ embezzlement, Apollo could no longer meet its financial obligations and was on the brink of insolvency. To prevent his theft from being uncovered through bankruptcy litigation, ADAMS devised a scheme to appease shareholders by convincing them to convert their worthless Apollo stock into stock in a new company, which ADAMS secretly controlled. In March 2011, ADAMS and his law partner (identified in the indictment as “M.M.”) created a privately held company called Scio Diamond Technology Corporation (“Private Scio”), of which ADAMS and his partner were the sole shareholders and board members. ADAMS and his partner then notified shareholders that Private Scio would acquire the assets of Apollo for approximately $2,000,000 and that shareholders, without expending any additional money, would receive the same number of shares in the new entity. However, Private Scio was not yet capitalized and did not have the funds to complete the asset purchase. To further this scheme, ADAMS orchestrated a “reverse merger” transaction between Private Scio and Krossbow Holding Corporation, a publicly traded shell company, which resulted in a new publicly traded company, also called Scio Diamond Technology Corporation (“Public Scio”).
According to the indictment, ADAMS used Public Scio to raise the $2,000,000 necessary to complete the Apollo asset purchase, leading the former Apollo investors to believe that their investments were safe and that they now held shares in a publicly traded, operational company. However, ADAMS used Public Scio’s acquisition of Apollo as yet another opportunity for personal profit and funneled the majority of the $2,000,000 into bank accounts controlled by ADAMS. In total, from 2006 through 2013, ADAMS stole from investors more than $4.38 million and paid to his own law firm more than $2.54 million.
This case is the result of an investigation conducted by the FBI, United States Postal Inspection Service, and the Criminal Investigation Division of the IRS.
Assistant U.S. Attorneys David M. Maria and John E. Kokkinen are prosecuting the case.
Defendant Information:
EDWARD S. ADAMS, 64,
Minneapolis, Minn.
Charges:
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Mail fraud, 8 counts
-
Wire fraud, 6 counts
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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Former Oil Company President Charged with Orchestrating $30 Million Stock Manipulation SchemeRead the Press Release
Acting United States Attorney Gregory G. Brooker announced a 13 count indictment charging RYAN RANDALL GILBERTSON, 41, founder of Dakota Plains, Inc., DOUGLAS VAUGHN HOSKINS, 48, and NICHOLAS HARRIS SHERMETA, 49, with wire fraud stemming from a complex stock manipulation scheme that resulted in the company owing more than $30 million in fraudulent bonus payments. The defendants are expected to make their initial appearances in U.S. District Court in Minneapolis within the next week.
“This fraud scheme, like other financial crimes involving the mail, erodes public trust and threatens the integrity of the U.S. Mail," said Craig Goldberg, Inspector in Charge of the U.S. Postal Inspection Service, Denver Division, which includes Minnesota. "It is critical we make every effort to protect shareholders from being cheated. To help protect the public and ensure America's confidence in the U.S. Mail, Postal Inspectors are committed to working with our federal, state and local partners to aggressively investigate any fraud in which the mail is used.”
“IRS Criminal Investigation is committed to unraveling complex financial transactions where individuals, such as Ryan Randall Gilbertson, Douglas Vaughn Hoskins, and Nicholas Harris Shermeta operated a stock scheme to defraud investors,” stated Shea Jones, Special Agent in Charge of IRS-CI’s St. Paul Field Office. “Those individuals who engage in this type of stock manipulation fraud should know they will not go undetected and will be held accountable."
“As alleged, each of the defendants played a key role in this complex fraud scheme,” said Special Agent in Charge Richard T. Thornton of the Minneapolis Division of the FBI. “The FBI will continue to work closely with our law enforcement partners to ensure those who engage in this type of criminal behavior will be brought to justice.”
According to the indictment, in December 2008, GILBERTSON and his business partner (identified in the indictment as “Individual A”) founded Dakota Plains, Inc. (Dakota Plains), a privately held Minnesota corporation that owned and operated a transloading facility in New Town, North Dakota, for loading crude oil onto trains for transport to oil refineries.
According to the indictment, in January 2011, GILBERTSON and his partner caused Dakota Plains to issue a $1.9 million cash dividend to shareholders, from which GILBERTSON and his ex-wife received nearly $450,000 in dividend payments. That same month, GILBERTSON and his partner caused Dakota Plains to issue $3.5 million in promissory notes (the “Senior Notes”) from which GILBERTSON purchased a $1 million promissory note and another $100,000 promissory note in the name of Total Depth Foundation, GILBERTSON’S nonprofit corporation. In April 2011, GILBERTSON and his partner caused Dakota Plains to issue $5.5 million in promissory notes (the “Junior Notes”) in which GILBERTSON instructed the company to include an “additional payment” provision stating that the noteholders would receive bonus payments based on the price of Dakota Plains’ stock at the time of an initial public offering (“IPO”). From the Junior Notes, GILBERTSON purchased a $2 million promissory note and another $250,000 promissory note on behalf of Total Depth Foundation.
According to the indictment, in November 2011, at GILBERTSON’S direction, Dakota Plains combined the Senior Notes and Junior Notes into a series of consolidated promissory notes (the “Consolidated Notes”). GILBERTSON then directed Dakota Plains to alter the “additional payment” provision from the Junior Notes to (a) apply to the new total value of the Consolidated Notes; and (b) apply not only in the event of an IPO but also if Dakota Plains became public via a reverse merger. Specifically, the “additional payment” provision provided that if Dakota Plains’ average stock price exceeded $2.50 per share during the first 20 days of public trading, the noteholders would receive bonus payments which would increase relative to the average stock price.
According to the indictment, as part of the scheme, in late 2011 and early 2012, GILBERTSON arranged for Dakota Plains to become a publicly traded company by entering into a “reverse merger” agreement with MCT Holding Corporation (“MCT”), a public shell company that owned a single defunct tanning salon in Salt Lake City, Utah. At GILBERTSON’S direction, HOSKINS, who was a player and manager for GILBERTSON’S polo team, purchased 50,000 freely trading shares of MCT stock and opened a trading account with a broker in Salt Lake City, Utah, which would allow him to sell the MCT stock. HOSKINS, who had no prior investing experience or assets and a significant amount of debt, received $30,000 from GILBERTSON to purchase the stock. On March 23, 2012, following the merger of Dakota Plains with MCT, Dakota Plains Holdings became a publicly traded company.
According to the indictment, on the first day of public trading, HOSKINS offered to sell his newly acquired shares for an inflated price of approximately $12 per share at GILBERTSON’S direction, and continued to do so throughout the first 20 days of trading following the reverse merger. During this same time period, SHERMETA, who had a series of bogus consulting agreements with GILBERTSON, began purchasing shares of Dakota Plains stock on behalf of both himself and his clients at inflated prices without their knowledge. Throughout the 20-day period following the reverse merger, GILBERTSON, with the help of SHERMETA and HOSKINS, manipulated the price of Dakota Plains stock to increase the average trading price to $11.30 per share which, as stated in the “additional payment” provision in the Consolidated Notes, triggered a bonus payment of approximately $32,851,800 to GILBERTSON and the other noteholders. GILBERTSON, who controlled 40 percent of the Consolidated Notes, was entitled to more than $12 million in bonus payments.
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 and Kimberly A. Svendsen.
Defendant Information:
RYAN RANDALL GILBERTSON, 41
Delano, Minn.
Charges:
- Wire Fraud, 13 counts
DOUGLAS VAUGHN HOSKINS, 48,
Wayzata, Minn.
Charges:
- Wire Fraud, 7 counts
NICHOLAS HARRIS SHERMETA, 49
Minnetonka, Minn.
Charges:
-
Wire Fraud, 5 counts
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Isanti Felon Indicted for Conspiracy to Distribute Methamphetamine, Possession of Stolen FirearmsRead the Press Release
Acting United States Attorney Gregory G. Brooker announced an indictment charging JEFFREY MARCUS LUCAS, 62, with one count of conspiracy to distribute methamphetamine, one count of possession with intent to distribute methamphetamine, one count of possession of a stolen firearm, and one count of being a felon in possession of a firearm. On March 17, 2017, LUCAS made his initial appearance in U.S. District Court in St. Paul, Minn.
According to the indictment and documents filed in state court, from 2009 through August 2016, LUCAS, operating from his residence in Isanti, Minn., sold and traded methamphetamine for stolen property and firearms.
According to the indictment and documents filed in state court, on August 8, 2016, law enforcement executed a search warrant for the property, which includes a house, two campers and several pole barns. As a result of the search, law enforcement officers recovered several stolen firearms, ammunition and more than $25,000 in stolen property.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the East Central Drug and Violent Offenders Task Force, with assistance from the Braham Police Department, Cambridge Police Department, Isanti Police Department, Isanti County Sheriff’s Office, and the Anoka Hennepin Drug Task Force.
This case is being prosecuted by Assistant United States Attorney David P. Steinkamp.
Defendant Information:
JEFFREY MARCUS LUCAS, 62
Isanti, Minn.
Charges:
-
Conspiracy to Distribute Methamphetamine, 1 count
-
Possession with Intent to Distribute Methamphetamine, 1 count
-
Possession of Stolen Firearms, 1 count
-
Felon in Possession of a Firearm, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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Statement from U.S. Attorney Andrew LugerRead the Press Release
“At the request of the Attorney General of the United States, I have submitted my resignation to the President, effective immediately. Serving the people of Minnesota as their United States Attorney has been the most fulfilling and rewarding experience of my professional life. The Office that I am leaving this evening is comprised of the most talented and motivated professionals I have ever known. The women and men of the United States Attorney’s Office are deeply committed to public service. I was fortunate to work alongside them for the past three years. I also have had the honor of working with federal, state and local law enforcement on some of the most difficult and impactful cases our state has faced. All Minnesotans should know that we are protected by these highly skilled law enforcement officials. I admire them greatly. Finally, I have had the honor of developing close working relationships and deep friendships with diverse communities across Minnesota. I am proud of our accomplishments and encourage the work to continue.”
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Minnesota Man Who Sent Threatening Letter to Islamic Center Sentenced to 12 Months in PrisonRead the Press Release
The Justice Department announced that Daniel George Fisher, 57, of Minneapolis, Minnesota was sentenced today in the District of Minnesota to 12 months in prison and three years of supervised release for mailing a letter in which he threatened to blow up an Islamic Center.
On Nov. 30, 2016, Fisher pleaded guilty to violating 18 U.S.C. § 247, for obstructing, by threat of force, the free exercise of religious beliefs. According to his guilty plea, in September 2015, Fisher wrote and mailed an anonymous letter to the Tawfiq Islamic Center (TIC), located in Minneapolis, and threatened to “blow up your building with all you immigrants in it.” The letter also included slurs and disparaging statements, evincing the Defendant’s strong anti-Muslim animus.
Fisher told investigators that he had been increasingly angry with Muslims since the 9/11 terrorist attacks in New York and DC. Fisher admitted that he sent the letter to scare and intimidate the TIC's members so they would stop building the Center in his former neighborhood.
“The free exercise of one’s religious beliefs is a fundamental tenet of our Democracy,” said Acting Assistant Attorney General Tom Wheeler. “This sentence sends a message that anyone who threatens others with violence because of religious intolerance will face significant consequences.”
“My Office takes very seriously any threat of violence against an individual or their place of worship based on race, religion or cultural practices,” said U.S. Attorney Andrew Luger of the District of Minnesota. “We will continue to work closely with the FBI to prosecute these types of crimes, which threaten religious freedoms and violate fundamental civil rights.”
“The sentence handed down today committing the defendant to federal prison reflects the severity of his appalling hate crime,” said Special Agent in Charge Richard T. Thornton of the FBI's Minneapolis Division. “The FBI will continue to prioritize, investigate, and bring to justice those who commit federal hate crimes and other civil rights violations.”
The FBI’s Minneapolis Division investigated the matter. Assistant U.S. Attorney Angela Munoz-Kaphing of the District of Minnesota and Trial Attorney Olimpia Michel of the Civil Rights Division’s Criminal Section prosecuted the case.
Minnesota Man Who Sent Threatening Letter to Islamic Center Sentenced to 12 Months in PrisonRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of DANIEL GEORGE FISHER, 57, to 12 months in prison for threatening to blow up the Tawfiq Islamic Center in Minneapolis. FISHER pleaded guilty on November 30, 2016, before U.S. District Judge Wilhelmina M. Wright in Saint Paul, Minn.
"My Office takes very seriously any threat of violence against an individual or their place of worship based on race, religion or cultural practices,” said United States Attorney Andrew Luger. "We will continue to work closely with the FBI to prosecute these types of crimes, which threaten religious freedoms and violate fundamental civil rights."
“The free exercise of one’s religious beliefs is a fundamental tenet of our Democracy,” said Acting Assistant Attorney General Tom Wheeler. “This sentence sends a message that anyone who threatens others with violence because of religious intolerance will face significant consequences.”
"The sentence handed down today committing the defendant to federal prison reflects the severity of his appalling hate crime," said Special Agent in Charge Richard T. Thornton of the FBI's Minneapolis Division. "The FBI will continue to prioritize, investigate, and bring to justice those who commit federal hate crimes and other civil rights violations."
According to the defendant’s guilty plea and documents filed in court, on September 30, 2015, the Tawfiq Islamic Center received an anonymous handwritten letter, which threatened to “blow up your building with all you immigrants in it.” The letter also included profanities, racial and ethnic slurs, and other derogatory commentary about the religious and cultural practices of the members of the Tawfiq Islamic Center.
According to the defendant’s guilty plea and documents filed in court, FBI Special Agents interviewed FISHER on June 14, 2016. FISHER reported that he was angry that the Tawfiq Islamic Center selected Minnehaha Avenue for its new location and he wanted the Center to build somewhere else. FISHER further reported that he had become “increasingly angry with Muslims since 9/11.” FISHER confessed to writing the letter and mailing it to Tawfiq Islamic Center with the intent to threaten and scare members of the Tawfiq Islamic Center.
This case is the result of an investigation conducted by the FBI.
Assistant United States Attorney Angela Munoz-Kaphing and Trial Attorney Olimpia Michel of the Civil Rights Division’s Criminal Section prosecuted the case.
Defendant Information:
DANIEL GEORGE FISHER, 57
No known address
Convicted:
- Obstruction of Persons in the Free Exercise of Religious Beliefs, 1 count
Sentenced:
-
12 months in prison
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Supervised release term of three years
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Six months of community confinement
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Minnesota Business Owner Pleads Guilty to Stealing More Than $755,000 from Employee Pension PlanRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of WALLACE DAVID GREGERSON, 65, for operating an embezzlement scheme to defraud his employees and steal more than $755,000 from their pension plans. The defendant pleaded guilty on March 6, 2017, before United States District Judge Joan N. Ericksen in Minneapolis, Minn.
According to his guilty plea and documents filed in court, GREGERSON was the president and sole owner of Lighting Affiliates, Inc. (“Lighting Affiliates”), a Minnesota corporation that sold lighting fixtures and related products. The Lighting Affiliates 401(k) Profit Sharing Plan (the “Plan”) was established as an employee benefit for eligible employees’ retirement savings. The Plan was funded by three types of contributions: voluntary salary reduction 401(k) contributions the Lighting Affiliates’ employees had deducted from their paychecks; 401(k) matching contributions made by Lighting Affiliates; and profit sharing contributions made by Lighting Affiliates.
According to his guilty plea and documents filed in court, GREGERSON, who was the sole trustee of the Plan, used his position to withdraw funds from the Plan and deposit those funds into Lighting Affiliates’ bank accounts. Between February 2011 and July 2013, GREGERSON drained the profit sharing portion of the Plan by withdrawing a total of approximately $675,233.55. Between December 2014 and March 2015, after Lighting Affiliates had closed, GREGERSON drained his former employees’ individual 401(k) accounts by withdrawing a total of approximately $80,667.23.
According to his guilty plea and documents filed in court, as part of the scheme, GREGERSON persuaded the financial institutions holding the Plan’s assets to provide him with funds belonging to the Plan and its participants by making false representations. GREGERSON provided written statements falsely affirming that the funds would be re-invested in another qualified plan or that the withdrawals were made at employee requests.
According to his guilty plea and documents filed in court, GREGERSON used the majority of the funds to either pay for Lighting Affiliates’ expenses or for personal expenses such as country club membership dues, tickets for sporting events, clothing purchases, and tuition payments for his daughter.
The case is being prosecuted by Assistant United States Attorney Kimberly A. Svendsen.
This case is the result of an investigation conducted by the U.S. Department of Labor Employee Benefits Security Administration and the U.S. Department of Labor Office of the Inspector General.
Defendant Information:
WALLACE DAVID GREGERSON, 65
Plymouth, Minn.
Charges:
-
Mail fraud, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Attorney Pleads Guilty for Role in Multi-Million Dollar Scheme to Fraudulently Obtain Copyright Infringement Settlements from Victims Who Downloaded Pornographic MoviesRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of JOHN L. STEELE, 45, for his role in a multi-million dollar scheme to fraudulently obtain payments to settle sham copyright infringement lawsuits by lying to state and federal courts throughout the country. On March 6, 2017, STEELE pleaded guilty to conspiracy to commit mail fraud and wire fraud and conspiracy to commit money laundering before U.S. District Judge Joan N. Ericksen of the District of Minnesota. Sentencing has not yet been scheduled.
“John Steele and his co-defendant devised an egregious fraudulent scheme by abusing their positions of trust and exploiting our justice system,” said U.S. Attorney Andrew Luger. “My Office will continue working diligently to ensure that criminals who engage in corrupt and fraudulent behavior are held responsible for their actions, regardless of their position or profession.”
According to STEELE’S admissions in the plea, between 2011 and 2014, STEELE and co-defendant PAUL HANSMEIER, both practicing lawyers, executed a scheme to fraudulently obtain more than $6 million by threatening copyright lawsuits against individuals who supposedly downloaded pornographic movies from file-sharing websites. STEELE admitted that he and HANSMEIER created a series of sham entities to obtain copyrights to pornographic movies – some of which they filmed themselves – and then uploaded those movies to file-sharing websites like “The Pirate Bay” in order to lure people to download the movies. STEELE and HANSMEIER then filed bogus copyright infringement lawsuits that concealed both their role in distributing the movies, and their personal stake in the outcome of the litigation. After fraudulently inducing courts to give him and co-defendants the power to subpoena Internet service providers and to thereby identify the subscriber who controlled the IP address used to download the movie, STEELE and HANSMEIER used extortionate tactics such as letters and phone calls that threatened victims with enormous financial penalties and public embarrassment unless they agreed to pay a $3,000 settlement fee.
To distance themselves from the specious lawsuits and any potential fallout, STEELE admitted that he and co-defendants created and used Prenda Law, among other law firms, to pursue their claims.
According to the plea, after various courts began to restrict the defendants’ ability to sue multiple individuals in the same copyright lawsuit, the defendants changed their tactics and began filing lawsuits falsely alleging that computer systems belonging to their sham clients had been hacked. To facilitate their phony “hacking” lawsuits, STEELE and HANSMEIER recruited “ruse defendants,” who had been caught downloading pornography from a file-sharing website, to be sued in exchange for STEELE and HANSMEIER waiving their settlement fees while pursuing claims against their supposed “co-conspirators.”
According to the plea, as courts began to uncover the defendants’ unscrupulous litigation tactics, judges began denying the defendants’ requests to subpoena ISPs, dismissing lawsuits, accusing STEELE and co-defendants of deceptive and fraudulent behavior and imposing sanctions against STEELE and his associates. For example, on May 6, 2013, the U.S. District Court for the Central District of California issued an order imposing sanctions against the defendants. In total, STEELE and co-defendants obtained approximately $6 million from the fraudulent copyright lawsuits.
PAUL R. HANSMEIER, of St. Paul, Minnesota, was charged as a co-defendant in an indictment filed on December 16, 2016. The charges contained in the indictment against him are merely accusations, and he is presumed innocent unless and until proven guilty.
FBI and IRS-CI are investigating the case. Assistant U.S. Attorneys Benjamin Langner and David Maclaughlin of the District of Minnesota and Senior Trial Counsel Brian Levine of the Criminal Division’s Computer Crime and Intellectual Property Section and are prosecuting the case.
Defendant Information:
JOHN L. STEELE, 45
Unknown, Pennsylvania
Convicted:
- Conspiracy to commit mail fraud and wire fraud, 1 count
- Conspiracy to commit money laundering, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Attorney Pleads Guilty for Role in Multi-Million Dollar Scheme to Fraudulently Obtain Copyright Infringement Settlements from Victims Who Downloaded Pornographic MoviesRead the Press Release
An Illinois attorney pleaded guilty today for his role in a multi-million dollar scheme to fraudulently obtain payments to settle sham copyright infringement lawsuits by lying to state and federal courts throughout the country.
Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice’s Criminal Division, U.S. Attorney Andrew M. Luger of the District of Minnesota, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division made the announcement.
John L. Steele, 45, currently residing in Pennsylvania, pleaded guilty to conspiracy to commit mail fraud and wire fraud and conspiracy to commit money laundering before U.S. District Judge Joan N. Ericksen of the District of Minnesota. Sentencing has not yet been scheduled.
According to Steele’s admissions in the plea, between 2011 and 2014, Steele and co-defendant Paul Hansmeier, both practicing lawyers, executed a scheme to fraudulently obtain more than $6 million by threatening copyright lawsuits against individuals who supposedly downloaded pornographic movies from file-sharing websites. Steele admitted that he and Hansmeier created a series of sham entities to obtain copyrights to pornographic movies – some of which they filmed themselves – and then uploaded those movies to file-sharing websites like “The Pirate Bay” in order to lure people to download the movies. Steele and Hansmeier then filed bogus copyright infringement lawsuits that concealed their role in distributing the movies, as well as their personal stake in the outcome of the litigation. After fraudulently inducing courts into giving him and co-defendants the power to subpoena Internet service providers and thereby identify the subscriber who controlled the IP address used to download the movie, Steele and Hansmeier used extortionate tactics such as letters and phone calls to threaten victims with enormous financial penalties and public embarrassment unless they agreed to pay a $3,000 settlement fee.
To distance themselves from the specious lawsuits and any potential fallout, Steele admitted that he and co-defendants created and used Prenda Law, among other firms, to pursue their claims.
According to the plea, after various courts began to restrict the defendant’s ability to sue multiple individuals in the same copyright lawsuit, the defendant changed his tactics and began filing lawsuits falsely alleging that computer systems belonging to their sham clients had been hacked. To facilitate their phony “hacking” lawsuits, Steele and Hansmeier recruited “ruse defendants,” who had been caught downloading pornography from a file-sharing website, to be sued in exchange for Steele and Hansmeier waiving their settlement fees while pursuing claims against their supposed “co-conspirators.”
According to the plea agreement, as courts began to uncover the defendant’s unscrupulous litigation tactics, judges began denying the defendant’s requests to subpoena ISPs, dismissing lawsuits, accusing Steele and co-defendants of deceptive and fraudulent behavior and imposing sanctions against the Steele and his associates. For example, on May 6, 2013, the U.S. District Court for the Central District of California issued an order imposing sanctions against the defendant. In total, the Steele and co-defendants obtained approximately $6 million from the fraudulent copyright lawsuits.
Paul R. Hansmeier, of St. Paul, Minnesota, was charged as a co-defendant in an indictment filed on Dec. 16, 2016. The charges contained in the indictment against him are merely accusations, and he is presumed innocent unless and until proven guilty.
FBI and IRS-CI are investigating the case. Senior Trial Counsel Brian Levine of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Benjamin Langner of the District of Minnesota are prosecuting the case.
steele_plea_agreement_1.pdfAnoka County Resident Sentenced to Six Months in Prison for Threatening Two Clinics that Provide Reproductive Health ServicesRead the Press Release
On, Feb. 27, 2017, Michael John Harris, 34, was sentenced to six months imprisonment and one year of supervised release for making telephonic threats to two medical clinics in Minneapolis, Minnesota, that provide reproductive health services.
On March 2, 2016, Harris pleaded guilty to two violations of 18 U.S.C. § 248(a)(1). During his plea hearing, Harris admitted that on May 12, 2014, he made telephonic threats to two different health clinics in Minneapolis that provide reproductive health services. In a call to the first clinic, Harris threatened to kill the recipient of the call with his bare hands and to cut the recipient’s head off with a band saw. In a call to the second clinic, Harris told the recipient that he was going to kill the recipient and the recipient’s co-workers, and that he was going to travel to the clinic and shoot everyone present. Harris further admitted that he made these threats because the recipient was and has been, and in order to intimidate the recipient and any other person from, obtaining and providing reproductive health services.
“This defendant threatened these clinic workers with death and brutality,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “The department is pleased that the defendant accepted responsibility and will face consequences for his actions. The Department is committed to vigorously enforcing the civil rights of all individuals in this country.”
“The violence threatened by this defendant against health care workers is unacceptable,” said United States Attorney Andrew M. Luger of the District of Minnesota. “This sentence should serve as a reminder to individuals who would engage in such threats that the federal government will prosecute these crimes.”
This case is being investigated by the Federal Bureau of Investigation, and is being prosecuted by Trial Attorney Risa Berkower of the Civil Rights Division of the United States Department of Justice and Assistant U.S. Attorney Manda M. Sertich of the U.S. Attorney’s Office for the District of Minnesota.
Twin Cities Man Sentenced to 41 Months in Prison for Filing Fraudulent Tax ReturnsRead the Press Release
United States Attorney Andrew M. Luger announced the sentencing of JULIUS LEE BOSTON, 37, to 41 months in prison for filing false income tax returns seeking approximately $135,000. BOSTON pleaded guilty on August 31, 2016, before U.S. District Judge Patrick J. Schiltz.
“At the IRS, protecting taxpayer dollars is a serious matter. Detecting and catching fraudulent tax refund claims is an integral part of our mission,” said IRS Criminal Investigation Special Agent in Charge Shea Jones of the St. Paul Field Office. “The 41-month sentencing for Julius Boston serves as a strong warning to those who are considering filing false tax returns to obtain fraudulent refunds this filing season.”
According to the defendant’s guilty plea, between July 2011 and at least August 6, 2012, BOSTON filed almost 100 fraudulent income tax returns with the IRS. In order to file the fraudulent income tax returns, BOSTON convinced various people to provide him with their personal identifying information, including dates of birth and social security numbers, to use in filing the returns. He filed returns in the names of those individuals which reported false or inflated W-2 wage income, false withholding amounts, and other fraudulent information.
According to his guilty plea and documents filed in court, during the course of executing the scheme, BOSTON filed fraudulent claims for tax refunds seeking approximately $135,000. The IRS paid more than $64,000 in tax refunds, which BOSTON had mailed to his home or other addresses to which he had access. He later shared a portion of the proceeds of his fraud with the taxpayers who had provided him with their personal identifying information.
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:JULIUS LEE BOSTON, 37
Convicted:
• Making false claims for tax refunds, two countsSentenced:
• 41 months in prison
• Supervised release for a term of three years
• Restitution of $64,139Twin Cities Man Sentenced to 15 Years in Prison for Conspiring to Sell HeroinRead the Press Release
United States Attorney Andrew M. Luger announced the sentencing of JAIME EDWARD MCCLELLAN, a/k/a “Goldie Armani Callaway,” a/k/a, “Jaime Edward McClennan,” a/k/a, “Armando Blanco,” a/k/a, “Red,” 32, to 15 years in prison for conspiring to distribute heroin and related charges. MCCLELLAN pleaded guilty on October 17, 2016.
According to the defendant’s guilty plea and documents filed in court, between January 2014 and December 2015, MCCLELLAN conspired with others in Minnesota to distribute more than two pounds of heroin. In December 2015, MCCLELLAN sold heroin on at least four separate occasions to undercover law enforcement agents. When arrested on December 16, 2015, the defendant was in possession of 10mm semi-automatic pistol, which he was prohibited from owning because he had previously been convicted of a felony.
This case is the result of an investigation conducted by the Anoka-Hennepin Narcotics and Violent Crime Task Force, West Metro Drug Task Force, Anoka County Sheriff’s Office, Hennepin County Sheriff’s Office, Sherburne County Sheriff’s Office, Blaine Police Department, Coon Rapids Police Department, Elk River Police Department, Maple Grove Police Department, Medina Police Department, Mounds View Police Department, and U.S. Drug Enforcement Administration.
Assistant U.S. Attorney David Steinkamp prosecuted the case.
Defendant Information:JAIME EDWARD MCCLELLAN, a/k/a, “Goldie Armani Callaway,” a/k/a, “Jaime Edward McClennan,” a/k/a, “Armando Blanco,” a/k/a, “Red,” 32
Brooklyn Park, Minn.
Convicted:
• Conspiring to distribute heroin, 1 count
• Possession of a firearm during and in relation to a drug trafficking crime, 1 countSentenced:
• 15 years in prison
• Supervised release for a term of five yearsThree Charged in Millville Gun Shop RobberyRead the Press Release
United States Attorney Andrew M. Luger announced an indictment charging ALEX BOYD, 38, SASAH MARIE ERDNER, 30, and TRINITY JAMES WICKA, 19, with stealing and attempting to sell approximately 75 guns. BOYD, who is a convicted felon, was also charged with illegally possessing a firearm. The indictment was unsealed yesterday in U.S. District Court in Minneapolis, Minn.
“This was one of the largest Minnesota gun shop burglaries we’ve seen in the past few years,” said James Modzelewski, ATF Special Agent in Charge. “Although we’ve been able to identify folks involved in the robbery and have recovered some of the stolen firearms, there are still a number of guns left to recover. Anyone with information regarding the remaining firearms is encouraged to reach out to ATF or local authorities. It’s been a pleasure to work with the Wabasha County Sheriff’s Office, Winona County Sheriff’s Office, the Winona Police Department and the Winona County Attorney’s office, and we look forward to continuing our partnership with them.”
According to the indictment and documents filed in court, on September 1, 2016, WICKA and others met and decided to rob the Millville Rod and Gun Shop in Millville, Minn. Early the next morning, WICKA and two of his associates robbed the gun shop by kicking in the door and breaking into glass display cases. They stole approximately 75 firearms, most of which were handguns.
According to the indictment, on the evening of September 2, 2016, BOYD and three other individuals committed two aggravated robberies in Winona, Minn., while in possession of stolen guns from the Millville Rod and Gun Shop.
According to the indictment, on September 16, 2016, a juvenile male was found in possession of 15 handguns that had all been stolen during the Millville Gun Shop burglary.
This case is the result of an investigation conducted by U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Wabasha County Sheriff’s Office, Winona County Sheriff’s Office, Winona Police Department, and the Winona County Attorney’s Office.
Assistant U.S. Attorney David Steinkamp is prosecuting the case.
Defendant Information:ALEX BOYD, 38
UnknownCharges:
• Conspiracy to possess and distribute stolen firearms, 1 count
• Possession of stolen firearms, 1 count
• Felon in possession of a firearm, 1 countSASHA MARIE ERDNER, 30
UnknownCharges:
• Conspiracy to possess and distribute stolen firearms, 1 count
• Possession of stolen firearms, 1 countTRINITY JAMES WICKA, 19
Winona, Minn.Charges:
• Conspiracy to possess and distribute stolen firearms, 1 count
• Possession of stolen firearms, 1 countSeng Xiong Convicted After Trial of Defrauding Hmong EldersRead the Press Release
United States Attorney Andrew M. Luger today announced the conviction of SENG XIONG, 49, for operating an affinity scheme targeting Hmong elders. After a trial lasting more than two weeks, the jury verdict was returned in approximately two hours. A sentencing date has not been set.
“Seng Xiong took the Hmong people’s tragic history of war and displacement and manipulated that for his own benefit,” said Assistant United States Attorney Amber Brennan. “We hope today’s verdict sends a message that the United States will protect those who have been defrauded. We’d especially like to thank the dedicated officers of the Saint Paul Police Department who serve the largest population of Hmong immigrants in the United States.”
As proven at trial, XIONG conducted a fraud scheme through his organization “Hmong Tebchaws,” in which Hmong elders were directed to deposit $3,000 to $5,000 into a bank account held in the name of SENG XIONG. In exchange for the payments, victims were promised 10 acres of land, a house, and many other benefits in a future country that would be established as a Hmong homeland somewhere in Southeast Asia.
As proven at trial, XIONG claimed to be working with the White House and United Nations to establish the new Hmong country. He also claimed that a piece of land had already been set aside for the Hmong people somewhere in Southeast Asia.
As proven at trial, XIONG offered several “investment” options which purported to represent varying levels of return that “founders” would be able to receive on their investment in the new country. Investments between $3,000 and $5,000 would guarantee the “investor” and his or her future generations, land, a house, free healthcare, free education, and government financial assistance for people over 65 years of age, as well as a return on that investment equal to a percentage of the income generated by the new Hmong country. Those who could not afford the $3,000 - $5,000 “founders” option could pay $20 per month, or $240 per year. This lesser investment would secure a spot in the new Hmong country along with some of the benefits.
If you or someone you know could be a victim, please contact the Minnesota Financial Crimes Task Force by sending an email to [email protected].
This case is the result of an investigation conducted by the Saint Paul Police Department, United States Secret Service, Federal Bureau of Investigation, Minnesota Financial Crimes Task Force, and Appleton Police Department.
Special assistance was provided by the United States Attorney’s Offices for the Eastern District of California.
This case is being prosecuted by Assistant United States Attorneys Amber M. Brennan and Surya Saxena.
Defendant Information:SENG XIONG, 49
Maplewood, Minn.Convicted:
• Wire fraud, 1 count
• Mail fraud, 1 countOhio Woman Sentenced to Five Years in Prison for Conspiring to Exploit Foreign Workers at Minnesota FarmRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of SANDRA LEE BART, 69, to five years in prison for requiring foreign workers on temporary H-2A work visas to pay illegal fees and kickbacks. BART was found guilty by a jury of conspiring with others to commit fraud.
Co-defendant WILIAN SOCRATE CABRERA pleaded guilty on July 14, 2016, to conspiracy to commit fraud in foreign labor contracting, and co-defendant JOHN JAMES SVIHEL pleaded guilty on June 16, 2016, to conspiracy to commit fraud in foreign labor contracting and agreed to pay more than $974,000 in restitution, unpaid wages, and a forfeiture money judgment.
“The Diplomatic Security Service is pleased with the success of this case. This shows the positive outcome when federal agencies work together to stop criminals from exploiting U.S. visas and foreign workers for illegal profit,” said Diplomatic Security Service’s Minneapolis Resident Agent-In-Charge Daniel Bleakmore. “We’re committed to investigating U.S. business operators who cause criminal visa applications at overseas U.S. Embassies and Consulates.”
As proven at trial, from 2008 to May of 2015 BART and CABRERA operated an unregistered business called “Labor Listo,” which they used to recruit employers like SVIHEL, who ran Svihel Vegetable Farm in Foley, Minn., to hire seasonal workers from the Dominican Republic on temporary work visas. The visa programs require employers to pay for workers’ housing and travel expenses to and from their home country, and forbid employers from collecting recruitment fees or wage kickbacks. BART, CABRERA, and SVIHEL violated all of these rules.
As proven at trial, CABRERA charged the workers a one-time recruitment fee of between $420 and $2,385, as well as an annual fee of $374, which he split with BART. The workers were told that if they didn’t pay the fees they would not be allowed to return for the following growing season. At the end of each season, SVIHEL collected a percentage of the workers’ wages along with full reimbursement from the workers for their flights. BART, CABRERA, and SVIHEL were clearly using the program to profit from the workers. “Costs – pass on to applicant,” was written on a business plan from a 2008 Labor Listo meeting between BART and CABRERA.
As proven at trial, BART and CABRERA recruited SVIHEL in 2010 to hire four Dominican workers using the H-2A visa program, which provides temporary visas to agriculture workers, falsely telling him that a church in the Dominican Republic would pay for workers’ airfares for the first year. When the wage Svihel was required to pay the workers was increase from $9.75 per hour to $10.62 per hour in 2011, SVIHEL expressed hesitation in continuing to use the program. BART told SVIHEL that the workers would be willing to pay wage and airfare kickbacks to make up the difference. Over three farming seasons, SVIHEL kept a total of more than $200,000 in kickbacks and spent it on travel and leisure expenses.
As proven at trial, when BART learned there was an investigation into the working conditions at Svihel Farm, she tried to have CABRERA talk the workers into signing a document retracting any statements they made to the Department of Labor about illegal fees. SVIHEL and BART exchanged a list of workers, labeling the workers “G” for good or “B” for bad, based on which workers they thought had spoken to the Department of Labor. The workers labeled “bad” were sent back to the Dominican Republic first in the 2014 season and were not invited back in 2015.
This case is the result of an investigation conducted by the U.S. Department of State Diplomatic Security Service, U.S. Department of Labor Wage and Hour Division, U.S. Department of Labor Office of the Inspector General, and the Homeland Security Investigations Document and Benefit Fraud Task Force.
This case is being prosecuted by Assistant United States Attorneys and Manda Sertich and David Maria.
Defendant Information:SANDRA LEE BART, 69
Seven Hills, OhioConvicted:
• Conspiracy to commit false swearing in an immigration matter, 1 count
• Conspiracy to commit fraud in foreign labor contracting, 1 count
• Conspiracy to commit wire and mail fraud, 1 countSentenced:
• Five years in prisonWILIAN SOCRATE CABRERA, 44
Dominican RepublicConvicted:
• Conspiracy to commit fraud in foreign labor contracting, 1 countSentenced:
• 26 months in prisonJOHN JAMES SVIHEL, 53
Foley, Minn.Convicted:
• Conspiracy to commit fraud in foreign labor contracting, 1 countSentenced:
• Six months in prisonColin Chisholm Pleads Guilty to Stealing More Than $2 Million from Investors in Television Network StartupRead the Press Release
United States Attorney Andrew M. Luger announced the guilty plea of COLIN ALEXANDER CHISHOLM, 67, for stealing more than $2.1 million from investors by lying to them about an investment in a purported television network startup. The defendant pleaded guilty yesterday before U.S. District Chief Judge John R. Tunheim in Minneapolis, Minn.
“Colin Chisholm is now facing the consequences for his long trail of lies as he ripped people off,” said Minnesota Commerce Commissioner Mike Rothman. “Chisholm lied to prospective investors about his personal and professional background. But most damaging for his victims, he lied about what he was doing with the money they had entrusted to him. Stopping this investment scam and bringing this white-collar criminal to justice demonstrate the strong partnership between the Commerce Fraud Bureau and federal authorities.”
“The U.S. Postal Inspection Service will continue to protect the integrity of the US Mail and aggressively investigate individuals such as Colin Chisholm who use the mail to defraud individuals or businesses of money and property,” said Craig Goldberg, Inspector in Charge of the Denver Division of the United States Postal Inspection Service, which covers Minnesota.
According to the defendant’s guilty plea, since 2004, CHISHOM used The Caribbean Television Network, Inc., (TCN) an entity he formed purportedly to broadcast satellite television throughout the Caribbean, to solicit funds from investors. Throughout the scheme, CHISHOLM told investors that TCN was on the verge of securing between $20 million and $100 million in funding to begin broadcasting, and that their investment would be used as interim financing for TCN.
According to the defendant’s guilty plea, as part of his scheme to obtain money from potential investors, CHISHOLM lied to them about the progress and viability of the main funding sources for TCN.
According to documents filed in court, CHISHOLM also lied to investors about his personal background. He told some investors that he was the grandson of Hugh J. Chisholm, Jr., and the son of William Chisholm, of the Oxford Paper Company. In falsely claiming this family lineage, CHISHOLM gave the false impression that he came from considerable family wealth. CHISHOLM also claimed to be a Scottish Chieftain of the Clan Chisholm and claimed to have close personal ties to members of the Bush family, specifically to Prescott S. Bush, Jr., the deceased brother of former President George H.W. Bush. CHISHOLM further claimed to provide scholarships to Bowdoin College, where Hugh J. Chisholm, Jr., received an honorary degree.
According to his guilty plea, CHISHOLM also lied about his professional background, most notably making the claim to potential investors that he had worked as Vice President for Turner Program Services, to have a relationship with Ted Turner, and to have participated in the development and launch of CNN and CNN Headline News, including writing the business plan for CNN.
According to his guilty plea, CHISOLM stole a total of more than $2.1 million from at least 38 investors.
This case is the result of an investigation conducted by the Minnesota Department of Commerce Fraud Bureau and the United States Postal Inspection Service.
The U.S. Attorney’s Office thanked the Hennepin County Attorney’s Office for its substantial assistance in this case.
This case is being prosecuted by Assistant United States Attorney Lola Velazquez-Aguilu.
Defendant Information:COLIN ALEXANDER CHISHOLM, 67
Minneapolis, Minn.Convicted:
• Mail fraud, 1 countJordan Davis Sentenced to 24 Months in Prison for Conspiring to Steal Money from Community Action of MinneapolisRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of JORDAN JAMES DAVIS, 36, to 24 months in prison for conspiring with his father, WILLIAM JAMES DAVIS, to steal funds from Community Action of Minneapolis (CAM). JORDAN DAVIS was convicted on June 28, 2016, after a jury trial. He was sentenced today before U.S. District Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minn.
As proven at trial, WILLIAM DAVIS used CAM funds to pay his son JORDAN DAVIS for a no-show job at a Ben & Jerry’s ice cream shop operated by CAM as a PartnerShop near the University of Minnesota campus in Minneapolis. Ben & Jerry’s waived its standard franchise fees so that CAM could operate the store to provide job and entrepreneurial training to underprivileged youth facing barriers to employment.
Between 2002 and October 2006, JORDAN DAVIS worked as the manager of the Ben & Jerry’s PartnerShop. In October 2006, JORDAN DAVIS obtained employment with the Minneapolis Police Department, and thereafter stopped working at the Ben & Jerry’s.
WILLIAM DAVIS instructed CAM’s fiscal staff to continue issuing JORDAN DAVIS the full paycheck he had been receiving for managing the ice cream shop. Even though JORDAN DAVIS never again worked a shift at the Ben & Jerry’s, from at least November 2006 until January 2011, he continued to receive his full paycheck, $1,320 biweekly. In addition to receiving paychecks for his no-show job, Jordan Davis also used a CAM-owned vehicle, made personal purchases using a Ben & Jerry's debit card, and received a $6,000 “bonus” check. During this same period, the Ben & Jerry’s store was consistently losing money, forcing CAM to transfer approximately $100,000 in federal grant funds each year in order to keep the doors open.
In April 2011, CAM closed the Ben & Jerry’s PartnerShop because CAM could no longer afford the rent for the store, and CAM terminated its youth job skills training program.
This case is the result of an investigation conducted by the Federal Bureau of Investigation, United States Department of Health and Human Services Office of the Inspector General, Internal Revenue Service – Criminal Investigation and the United States Department of Energy Office of the Inspector General.
This case was prosecuted by Assistant United States Attorneys Kimberly A. Svendsen and Amber M. Brennan.
Defendant Information:JORDAN JAMES DAVIS, 36
Ostego, Minn.Convicted:
• Conspiracy to commit theft concerning programs receiving federal funds, 1 count
• Mail fraud, 5 countsSentenced:
• 24 months in prison
• Two years of supervised release
• Restitution in an amount to be determinedTwin Cities Child Care Provider Charged with Stealing Hundreds of Thousands from Low-Income Assistance ProgramRead the Press Release
United States Attorney Andrew M. Luger today announced an indictment charging FOZIA SHEIK ALI, 50, for fraudulently obtaining at least hundreds of thousands of dollars for child care services that had not been provided. ALI is charged with wire fraud and theft of public money. The indictment was unsealed late yesterday in U.S. District Court in Minneapolis, Minn.
“This indictment describes a selfish criminal act that kept money from being available for deserving families,” said Minnesota Bureau of Criminal Apprehension Superintendent Drew Evans. “BCA agents, along with our partners, will continue to identify and arrest people who commit these costly crimes.”
According to the indictment and documents filed in state court, ALI operated the Salama Child Care Center (Salama) in Minneapolis. Between at least December 2013 and May 2015, ALI defrauded the Child Care Assistance Program (CCAP) to obtain payments from the Minnesota Department of Human Services (DHS) for child care services that were not actually provided. The CCAP program was designed to help eligible families pay for the costs of child care. CCAP in Minnesota is administered by DHS and funded by the United States Department of Health and Human Services (HHS) and the State of Minnesota.
According to the indictment, ALI submitted claims for CCAP payments that overstated the number of children who actually attended and received day care services from Salama. The claims asserted that more than 100 children attended and received child care at Salama on a given day. On more than one occasion, the claims falsely inflated the number of children that had attended Salama on a given day by more than 400 percent, including on days when Salama was closed.
According to the indictment, ALI stole hundreds of thousands of dollars from the State of Minnesota and the federal government.
This case is the result of an investigation conducted by the Minnesota Bureau of Criminal Apprehension, Criminal Investigation Division of the IRS, FBI, HHS-OIG, and the Minnesota Department of Human Services.
Assistant U.S. Attorney John Kokkinen is prosecuting the case.
Defendant Information:FOZIA SHEIK ALI, 50
Hopkins, Minn.Charges:
• Wire fraud, 4 counts
• Theft of public money, 1 countItasca County Christmas Tree Thief Pleads GuiltyRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of JOSEPH LEON EDMINSTER, 70, for stealing thousands of black spruce tree tops from the Chippewa National Forest. EDMINSTER pleaded guilty to one count of theft of government property today before U.S. District Judge Wilhelmina M. Wright in St. Paul, Minn.
According to the defendant’s guilty plea and documents filed in court, between October 2008 and October 2014, JOSEPH EDMINSTER cut and stole more than 2,700 black spruce tree tops from the Chippewa National Forest. EDMINSTER did not have the authority to take the tree tops from federal lands.
After taking the tree tops, EDMINSTER would sell them to wholesalers for use as Christmas decorations. EDMINSTER sold the tops for $1.50 to $2.50 each to various wholesale vendors, who in turn would sell each top for up to $6 each to various retail outlets in Minnesota, Iowa and Illinois. The retail cost for individual spruce tops ranges from $2.50 to $7.50 depending on the height. Spruce tops are most often sold in bundles of five or 10 depending on the height with each bundle retailing from $12.99 to $36.99. Since 2008, EDMINSTER stole at least $24,199.50 worth of spruce tops from federal land.
“We will vigorously pursue those responsible for such acts, dedicating any and all investigative resources needed in order to bring these matters to a just conclusion,” said Darla Lenz, the Chippewa National Forest supervisor. “The public can rest assured that this matter has been resolved and we will continue to protect our national forests.”
Black spruce is a North American pine species. It is widespread across Canada and the northern United States, including the Great Lakes region. Black Spruce is found in northern and northeastern parts of Minnesota, extending as far south as northern Anoka County.
The popularity of black spruce tops and other forest products that are used in the seasonal holiday decorative market has surged over the last 20 years. The spruce tops are sold at landscape retailers and some grocery and home improvement stores nationwide.
The cutting or otherwise damaging any timber, tree or other forest product, to include black spruce is prohibited on National Forest land except as authorized by a special use authorization, timber sale, contract or other federal law or regulation.
This case is the result of an investigation conducted by the U.S. Forest Service’s Law Enforcement and Investigations division.
This case is being prosecuted by Assistant United States Attorney Laura Provinzino.
Defendant Information:JOSEPH LEON EDMINSTER, 70
Grand Rapids, Minn.Convicted:
• Theft of government property, 1 countSaint Paul Woman Sentenced to Two Years in Prison for Using Stolen Identities to File Fraudulent Income Tax ReturnsRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of EBONY SHANTE YARBROUGH, 28, to two years in prison for aggravated identity theft. YARBROUGH pleaded guilty on August 12, 2016, before U.S. District Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minn.
“Tax season is almost here and the sentencing of Ebony Yarbrough for filing false tax returns is a powerful reminder of what can happen when you decide to steal from honest taxpayers,” said Shea Jones, Special Agent in Charge of the St. Paul Field Office. “Through our partnership with the US Attorney’s Office and other law enforcement agencies, IRS Criminal Investigation’s Special Agents will continue the aggressive pursuit of those who would attempt to defraud America's tax system.”
According to the defendant’s guilty plea, between 2013 and 2015, YARBROUGH convinced friends and family members to allow her to file their state and federal income tax returns by claiming she knew how to prepare the returns and would charge less than a tax preparation service.
According to her guilty plea, YARBROUGH prepared taxpayers’ returns by claiming false Schedule C income characterized as “hair stylist,” “cleaner” or “exotic dancer.” Additionally, YARBROUGH included dependents on taxpayers’ returns by using stolen personal identifying information belonging to minors, enabling them to qualify for other tax credits. YARBROUGH’S scheme accounted for more than $500,000 in false state and federal claims.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS. The Minnesota Department of Revenue assisted in the investigation.
Assistant U.S. Attorney Kimberly A. Svendsen prosecuted the case.
Defendant Information:
EBONY SHANTE YARBROUGH, 28
Saint Paul, Minn.Convicted:
• Aggravated Identity Theft, 1 countSentenced:
• 24 months in prison
• Restitution in the amount of $298,054.01Minneapolis Man Sentenced to 195 Months in Prison for Drug Distribution and Unlawful Possession of FirearmsRead the Press Release
United States Attorney Andrew M. Luger announced the sentencing of EUGENE RYAN BOOS, 44, to 195 months in prison after pleading guilty on August 15, 2016, to conspiracy to distribute methamphetamine and possession of a firearm in furtherance of a drug-trafficking crime. BOOS was sentenced before Senior U.S. District Judge David S. Doty in U.S. District Court in Minneapolis, Minn.
“Eugene Boos is a dangerous, repeat offender,” said James Modzelewski, Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge. “Getting him off the streets is critical to keeping our communities safe. I want to commend the Hennepin and Anoka County Sheriff’s Offices for their contributions in this case. ATF will continue to partner with all Minnesota law enforcement to reduce gun-related violent crimes.”
According to BOOS’ guilty plea and documents filed in court, on December 10, 2014, while BOOS was on felony supervised release from the Minnesota Department of Corrections for a 1994 second-degree murder conviction, officers with the Hennepin County Sheriff’s Office seized from the defendant’s home three firearms, ammunition, 132.5 grams of highly pure methamphetamine, digital scales, packaging materials, over 100 controlled substance pills, and more than $12,000 hidden in a speaker.
According to the defendant’s guilty plea and documents filed in court, in addition to the aforementioned contraband, BOOS possessed additional quantities of methamphetamine and materials commonly used to manufacture methamphetamine in the garage of the residence. In fact, the strong chemical odor of ammonia emanating from the garage was so overwhelming that officers summoned a haz-mat cleanup team to respond to the residence and properly dispose of the hazardous chemicals.
According to the defendant’s guilty plea and documents filed in court, among the firearms that BOOS illegally possessed were a .380-caliber semi-automatic handgun with an obliterated serial number and a stolen .45 caliber semi-automatic pistol.
The case was prosecuted by Assistant United States Benjamin Bejar and was the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, in collaboration with the Anoka County Sheriff’s Office and the Hennepin County Sheriff’s Office.
Defendant Information:EUGENE RYAN BOOS, 44
Minneapolis, Minn.Convicted:
• Possession with intent to distribute methamphetamine, 1 count
• Possession of firearms in furtherance of a drug-trafficking crime, 1 countSentenced:
• 195 months in prison
• Supervised release for a term of five yearsDrug Trafficker Sentenced to 196 Months in PrisonRead the Press Release
United States Attorney Andrew M. Luger announced the sentencing of EDUARDO PENALOZA-ROMERO, 27, to 196 months in prison after pleading guilty last year to conspiracy to distribute methamphetamine and marijuana. PENALOZA-ROMERO was sentenced before U.S. District Judge Susan Richard Nelson in U.S. District Court in Saint Paul, Minn.
“HSI’s collaboration with our federal, state and local law enforcement partners continues to yield significant results in Minnesota,” said Alex Khu, special agent in charge of HSI St. Paul. “Individuals like Mr. Penaloza, who conspire to flood our communities with dangerous and illicit drugs, can expect to face serious consequences. HSI will continue to seek them out and dismantle the entire criminal organization.”
According to PENALOZA-ROMERO’s guilty plea and documents filed in court, between at least November 2013 and August 2014, he conspired with others to distribute methamphetamine and marijuana. At various times during the indicted period, PENALOZA-ROMERO sold controlled substances to law enforcement, including one pound of methamphetamine on November 15, 2013, and one pound of marijuana on January 15, 2014.
According to the defendant’s guilty plea and documents filed in court, in August 2014, PENALOZA-ROMERO arranged for methamphetamine to be trafficked from California to Minnesota. Approximately 8 pounds of methamphetamine was recovered from a vehicle transporting that methamphetamine into Minnesota.
According to the defendant’s guilty plea and documents filed in court, when law enforcement executed a search warrant at PENALOZA-ROMERO’s home on September 24, 2014, law enforcement recovered a semiautomatic pistol and more than 2.5 pounds of methamphetamine in both crystal and liquid form.
The case was prosecuted by Assistant United States Allen Slaughter and was the result of an investigation conducted by Homeland Security Investigations, in collaboration with the Anoka County Drug Task Force, the Drug Enforcement Administration, the Fridley Police Department, the Minneapolis Police Department, the Minnesota State Patrol, the Ramsey County Violent Crime Enforcement Team, the Saint Paul Police Department, and the Spring Lake Police Department.
Defendant Information:
EDUARDO PENALOZA-ROMERO, 27
Spring Lake Park, Minn.Convicted:
• Conspiracy to distribute methamphetamine and marijuana, 1 countSentenced:
• 196 months in prisonInvestment Advisor Sentenced to Five Years for Defrauding Investors of $1.725 MillionRead the Press Release
The United States Attorney’s Office for the District of Minnesota announced the sentencing of DAVID BLAINE WELLIVER, 56, to five years in prison for defrauding investors in the Dblaine Fund of $1.725 million. WELLIVER pleaded guilty on July 13, 2016, to one count of securities fraud. He was sentenced today before Senior U.S. District Judge Paul A. Magnuson in U.S. District Court in St. Paul, Minn.
According to the defendant’s guilty plea, WELLIVER was the CEO and CIO of Dblaine Capital, LLC, an investment advisory company he founded in Buffalo, Minn. In September 2010, WELLIVER negotiated an agreement with Lazy Deuce Capital Company, LLC (Lazy Deuce), to purportedly finance the merger between Dblaine Capital and other mutual funds.
According to the defendant’s guilty plea, WELLIVER, in 27 separate transactions between October 2010 and May 2011, borrowed a total of $4 million from Lazy Deuce. Aside from a $95,000 payment to acquire the assets of a mutual fund, WELLIVER did not use any of the other proceeds of the Lazy Deuce loans to acquire mutual funds as he had represented to Lazy Deuce. Instead, WELLIVER diverted over $500,000 in proceeds from the Lazy Deuce loans to his own personal use, including for landscaping and interior decorating at his personal residence, to purchase land adjacent to his personal residence, to buy a personal vehicle, and to pay for his son’s college tuition.
According to the defendant’s guilty plea, between December 16, 2010, and April 15, 2011, WELLIVER caused $1.725 million in Dblaine Fund investors’ money to be invested in a shell company formed by several Lazy Deuce principals, called Semita Partners LLC (Semita). At the time WELLIVER made the investments in Semita, he knew that Semita was a shell company formed by principals of Lazy Deuce – the same company from which Dblaine Capital had borrowed money – and that Semita had no operations. On December 31, 2010, in order to meet a series of redemptions in the Dblaine Fund, WELLIVER liquidated nearly all of the stocks held by the Dblaine Fund. Following this liquidation, the Dblaine Fund’s only holdings consisted of worthless Semita shares and cash held in a money market account.
This case was the result of an investigation conducted by the United States Postal Inspection Service, the Federal Bureau of Investigation, and the Internal Revenue Service – Criminal Investigation.
This case was prosecuted by Assistant United States Attorneys Kimberly A. Svendsen and Benjamin F. Langner.
Defendant Information:DAVID BLAINE WELLIVER, 56
Buffalo, Minn.Convicted:
• Securities fraud, 1 countSentenced:
• Five years in prison
• Three years of supervised release
• Restitution of $2,161,079.83Two Indicted for Conspiracy to Commit Public Assistance FraudRead the Press Release
United States Attorney Andrew M. Luger announced an indictment charging KYLE LEWIS KIRSCHMAN, 52, and HOLLY KAY BLOOM, 37, with conspiring to commit public assistance fraud. The indictment was filed in U.S. District Court in Minneapolis on December 21, 2016.
According to the indictment, KIRSCHMAN owned a house in Mankato, Minn. The house was divided into two apartments. KIRSCHMAN occupied apartment 1. On June 13, 2006, KIRSCHMAN and BLOOM entered into a lease for BLOOM and her family to reside in apartment 2. KIRSCHMAN filed an application to have the apartment designated as Section 8 housing under the US Department of Housing and Urban Development (HUD) Section 8 program. Among the requirements for Section 8 approval were that no member of BLOOM and KIRSCHMAN’s immediate families were related and that apartment 2 was the BLOOM family’s only residence. Around the same time, BLOOM applied for the Supplemental Nutrition Assistance Program (SNAP) and Medical Assistance (MA) benefits. She did not list KIRSCHMAN as a member of her household.
According to the indictment, BLOOM claimed for at least six years that she lived in apartment 2. However, from at least June 2007 through February 2014, KIRSCHMAN and the BLOOM family lived together in Apartment 1 and 2. During this time, KIRSCHMAN was an immediate family member of a member of the BLOOM family and the BLOOM family lived in both apartments 1 and 2, so KIRSCHMAN unlawfully received Section 8 rental subsidies. Additionally, BLOOM unlawfully received SNAP and MA benefits during this time because KIRSCHMAN was a member of her household, was continuously employed, and earned an income that disqualified the household for any such benefits.
During the relevant time period, KIRSCHMAN and BLOOM received Section 8 rental subsidies for apartment 2 in the amount of $35,221. BLOOM received SNAP benefits totaling $25,216 and MA benefits totaling $14,624.
This case is the result of an investigation conducted by the Blue Earth County Sheriff’s Office Welfare Fraud Investigator and US Department of Housing and Urban Development OIG.
This case is being prosecuted by Assistant U.S. Attorney Manda Sertich.
Defendant Information:KYLE LEWIS KIRSCHMAN, 52
Mankato, Minn.Charges:
• Conspiracy to commit public assistance fraud, 1 countHOLLY KAY BLOOM, 37
Mankato, Minn.Charges:
• Conspiracy to commit public assistance fraud, 1 countThe charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Chiropractic Insurance Fraud Conspiracies Cracked by Minnesota Commerce Fraud Bureau and FBIRead the Press Release
United States Attorney Andrew M. Luger today announced federal criminal charges filed against 21 defendants for conspiring to commit health care fraud. The defendants, charged by four indictments and two felony informations, fraudulently billed insurance companies for millions of dollars over the course of the parallel conspiracies.
“State and federal law enforcement are cracking down on no-fault automobile insurance fraud,” said U.S. Attorney Luger. “The charges unsealed today represent a serious effort to expose crooked billing abuses that harm consumers. The Commerce Fraud Bureau and FBI continue to work closely with my office to ensure that our efforts to stop fraud and abuse are aligned with the interests of all Minnesotans.”
“Today’s charges send a clear message to criminal networks that committing insurance fraud will result in a concerted effort by the FBI and our law enforcement partners to bring those responsible to justice,” said Special Agent in Charge of the FBI Minneapolis Division Richard T. Thornton. “Fraud schemes perpetrated by those in the health care sector not only undermine public trust and betray the medical profession, but also result in the theft of funds earmarked to cover legitimate health care expenses. For these reasons, the FBI will continue to aggressively investigate all forms of insurance fraud to include the types of schemes charged today.”“We will not tolerate those who perpetrate staged car accidents, illegal kickbacks, nor fake medical billing,” said Commerce Commissioner Mike Rothman. “Today’s crackdown will help stop these fraud schemes that threaten our public safety and prey on Minnesota consumers. I commend the great teamwork among our Commerce Fraud Bureau, the U.S. Attorney’s Office, and the FBI, with the assistance from partners in state and local law enforcement agencies, which are focused on stopping these kinds of criminal schemes.”
Under the Minnesota No-Fault Automobile Insurance Act, auto insurance policies must include a personal injury protection provision (PIP). The PIP provision carries a minimum coverage amount of $40,000 for expenses resulting from injuries sustained in an automobile accident, $20,000 of which may be used for medical expenses.
According to the charging documents, at various times between at least 2010 and 2015, chiropractors PRESTON E. FORTHUN, ANGELA A. SCHULZ, HUY NGOC NGUYEN, ADAM J. BURKE, and other Doctors of Chiropractic, engaged in schemes with others to defraud automobile insurance companies. The schemes, which were nearly identical fraud schemes largely carried out independent of one another, involved the submission of fraudulent no-fault insurance claims.
According to the charging documents, chiropractors involved in the scheme would submit claims and receive reimbursements for chiropractic services that either were not medically necessary or were never rendered. Each chiropractor would prescribe and purportedly provide services that were not determined medically necessary by the physical condition of each patient, but were instead designed to fraudulently maximize reimbursement from the patients’ automobile insurance companies.
According to the charging documents, in order to get more patients to come to chiropractic appointments for treatment they did not need, the chiropractors charged would make illegal payments to patient recruiters, known as “runners.” Runners typically made upwards of $1,000 per automobile accident patient in exchange for bringing the patient into the chiropractor’s office. Runners were often not paid, or paid only in part, until after the patient had attended a minimum threshold number of treatment sessions. In order to keep the patients coming back for medically unnecessary appointments, the runners often paid illegal kickbacks to the patients.
According to the charging documents, some of the charged chiropractors would conceal the kickback payments in various ways. For example, FORTHUN wrote checks to runners and falsely described those checks on the memo lines as payments for services such as “transportation” or “marketing.” Defendant BURKE encouraged runners to form corporate entities such as LLCs with names that sounded like legitimate businesses to which BURKE made kickback payments. And defendant NGUYEN tried to conceal kickback payments by making checks out to “cash” for several thousand dollars. He often wrote multiple such checks each week, falsely characterizing them as having been for “chiropractic supplies” of “office supplies.”
This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the FBI. Additional assistance was provided by the Minneapolis Police Department, Saint Paul Police Department, Minnesota State Patrol, and Homeland Security Investigations.
This case is being prosecuted by Assistant U.S. Attorneys David M. Maria and John E. Kokkinen.
Defendant Information:Chiropractors
ANGELA A. SCHULZ, 47
Chaska, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countPRESTON E. FORTHUN, 38
Bloomington, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countHUY NGOC NGUYEN, 42
Brooklyn Park, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countADAM JOHN BURKE, 32
Minneapolis, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countRunners
ABDISALAN ABDULAHAB HUSSEIN, 48
Minneapolis, Minn.Charges:
• Conspiracy to commit health care fraud, 2 counts
• Conspiracy to commit mail fraud, 2 countsSAHAL ALI WARSAME, 35
Minneapolis, Minn.Charges:
• Conspiracy to commit health care fraud, 2 counts
• Conspiracy to commit mail fraud, 2 countsYAHYE MOHAMED HERROW, 45
Minneapolis, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countTEMITAYO IFELOJU OLUSHOLDA DANIEL, 35
Minneapolis, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countMERRON REDI SAMUEL, 36
Saint Paul, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countABDIRAHIN KHALIF IBRAHIM, 25
Saint Paul, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countDANA ENOCH KIDD, 35
Elk River, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countSAMATAR HASSAN OMAR, 28
Edina, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countABDINASIR MAYON ABIKAR, 31
Minneapolis, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countALI M ABIKAR, 28
Edina, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countDANA STEPHEN COMEAUX, 57
Brooklyn Center, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countCARLOS PATRICIO LUNA, 48
Minneapolis, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countJEROME TARLVE DOE, 52
Brooklyn Park, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countNAPOLEAN TUTEX DEAH, 32
New Brighton, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countSAMMANY RATHY SPANGLER, 27
Woodbury, Minn.Charges:
• Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 count