District of Minnesota

United States Attorney Andrew M. Luger announced the guilty plea of KELLY LOUISE JAEDIKE, 46, for failing to pay taxes that she withheld from her employees. JAEDIKE pleaded guilty yesterday to conspiracy and attempting to evade or defeat tax and for failing to hold in trust and pay over to the IRS, employee money for which she was responsible. JAEDIKE’s brother, DAVID AHERN, 49, pleaded guilty on October 13, 2015, to conspiracy.

“The defendants used their restaurant as a personal piggy bank,” said Assistant United States Attorney Tracy L. Perzel. “What should have been an extremely profitable restaurant bounced employee paychecks, issued IOUs to servers for tips, and couldn’t get deliveries from vendors because of rampant overspending. Employees and the vendors who serviced this restaurant deserved better.”

 “Kelly Jaedike and David Ahern cheated their employees by failing to hold in trust and pay over the employees’ taxes, as required by law,” said IRS Criminal Investigation Special Agent in Charge Shea Jones. “In these situations, employees suffer. Their social security statements may not match their actual work histories. And, if those employees do not contact the Social Security Administration to correct this, it will have a lifelong effect on their social security payments. IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves on the backs of hardworking people.”

According to the defendants’ guilty pleas and documents filed in court, from at least 2006 through 2012, the defendants, who are siblings, operated a Melting Pot restaurant franchise in Minneapolis, Minn. As employers, the defendants were responsible for withholding taxes from their employees and paying those withheld taxes to the IRS. In 2006, the IRS imposed a penalty on JAEDIKE for $266,000 because she had failed to pay over taxes withheld from her employees’ paychecks. Instead of working to pay off the debt, JAEDIKE, AHERN, and others worked to hide JAEDIKE’s income and assets to prevent the IRS from seizing them to repay the debt. Among other methods of deception, JAEDIKE and others transferred the restaurant to a nominee entity and issued paychecks that falsely made her wages appear to be wages of her husband, with the intent to hide JAEDIKE’S income and assets.

According to the defendants’ guilty pleas and documents filed in court, from 2009 to 2011, JAEDIKE and AHERN again failed to pay over employment taxes totaling $680,000, including more than $404,000 that was withheld from employee paychecks. JAEDIKE, AHERN and members of their family received more than $1.29 million in personal payments from the restaurant between 2007 and 2011.

According to the defendant’s guilty plea and documents filed in court, JAEDIKE and AHERN used the proceeds of their crime to pay mortgage loans on three family residences, vehicle leases and loans, and expenses for unrelated business ventures like Ahern’s Irish Pub, a restaurant JAEDIKE sought to open in Minneapolis.

JAEDIKE pleaded guilty yesterday before U.S. District Judge Donovan W. Frank in U.S. District Court in St. Paul, Minn. 

This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS.

This case is being prosecuted by Assistant United States Attorney Tracy L. Perzel.

Defendant Information:

KELLY LOUISE JAEDIKE, 46
Eagan, Minn.

Convicted:

• Conspiracy to defraud the United States, 1 count
• Attempt to evade or defeat tax, 1 count

DAVID DALE AHERN, 49
Eau Claire, Wisc.

Convicted:

• Conspiracy to defraud the United States, 1 count

 

United States Attorney Andrew M. Luger today announced the guilty plea of IRINA VOROTINOV, 49, to defrauding Mutual of Omaha Insurance Company of more than $2 million in life insurance proceeds by falsely claiming that her former husband died.

“The FBI and Criminal Investigation Division of the IRS determined that Igor Vorotinov’s death was faked,” said Assistant United States Attorney David J. Maclaughlin. “The hard work of the agents on this case illustrates the ability of the United States government to effectively investigate complex international crimes. Would-be fraudsters should be warned that it is very difficult to steal millions of dollars from United States insurance companies with impunity.”

According to the defendant’s guilty plea and documents filed in court, in March 2010, Igor Vorotinov purchased a life insurance policy on his own life from Mutual of Omaha, and listed IRINA VOROTINOV as the beneficiary. On October 1, 2011, police in Moldova received a phone call reporting a dead body at the entrance of the Cojusna village in central Moldova. Documents recovered from the body, including a passport, hotel cards, and contact phone numbers, identified the man as Igor Vorotinov.

According to the defendant’s guilty plea and documents filed in court, on November 7, 2011, IRINA VOROTINOV filed a death claim with Mutual of Omaha, despite the fact that she knew IGOR was not dead. Mutual of Omaha paid the claim to the defendant with a check for $2,048,414.09. 

According to the defendant’s guilty plea and documents filed in court, IRINA VOROTINOV recruited a third party to open an account at a local branch of U.S. Bank and to deposit the insurance check into the account. She then caused the third party to transfer $1.5 million to another account at US Bank in the name of her son, Alkon Vorotinov.  Ultimately, Between March 29, 2012 and January 2015, the defendant caused more than $1.5 million of the life insurance proceeds to be transferred to accounts located in Switzerland and Moldova.

The defendant pleaded guilty today before U.S. District Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minn.

This case is the result of an investigation conducted by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division.

Assistant U.S. Attorney David J. Maclaughlin is prosecuting the case.

 

Defendant Information:

IRINA VOROTINOV, 49

Plymouth, Minn.

Convicted:

• Mail 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

United States Attorney Andrew M. Luger today announced a federal criminal complaint charging DOLORES LUDMILLA CASTILLO, 40, and FRANCISCO SILVESTRE-MARTINEZ, 27, possessing with intent to distribute more than 140 pounds of methamphetamine. The defendants made initial appearances on May 11, 2016, in U.S. District Court in Minneapolis, Minn.

“This is what successful collaborative law enforcement efforts can do,” said Anoka County Sheriff James Stuart. “I am very proud of the team that worked so hard to make this operation a success. Let this be a clear message to those who would try to poison our communities in the name of evil greed; we will continue in this hunt and we will find you.”

“DEA takes the trafficking of methamphetamine in Minnesota very seriously,” said Assistant Special Agent in Charge Kent Bailey. “Working with our local law enforcement partners on the Anoka Hennepin Drug Task Force, we are taking dangerous drugs off the streets. The seizure of more than 140 pounds of methamphetamine announced today is but one example of the work we do every day to keep Minnesotans safe.”                                      

According to the criminal complaint and documents filed in court, since September 2015, the DEA and the Anoka Hennepin Drug Task Force (AHDTF) have been conducting an investigation into the drug activity of a Nicholas Nelson, who was believed to be involved in the sale multi-ounce to multi-pound quantities of methamphetamine.

According to the criminal complaint and documents filed in court, in March and April 2016, authorities conducted a number of undercover purchases of methamphetamine from Nelson. During the course of the investigation, law enforcement came to believe that a particular home in Brooklyn Center, Minn., was being used a storage facility for methamphetamine.

According to the criminal complaint and documents filed in court, on May 9, 2016, officers seized approximately 140 pounds of methamphetamine from home in Brooklyn Center. Some of the methamphetamine had been divided into quart-sized bags in one pound increments. Officers also recovered documents indicating that CASTILLO and SILVESTRE-MARTINEZ were the primary residents of the home.

According to the criminal complaint and documents filed in court, on May 10, 2016, CASTILLO and SILVESTRE-MARTINEZ were arrested at a home in Maplewood, Minn., with approximately two pounds of methamphetamine. Officers also found $130,000 in cash.

This case is the result of an investigation conducted by the United States Drug Enforcement Administration and the Anoka Hennepin Drug Task Force.

This case is being prosecuted by Assistant United States Attorney David P. Steinkamp.

 

Defendant Information:

DOLORES LUDMILLA CASTILLO, 40

Maplewood, Minn.

Charges:

• Possession with intent to distribute methamphetamine, 1 count

 

FRANCISCO SILVESTRE-MARTINEZ, 27

Maplewood, Minn.

Charges:

• Possession with intent to distribute methamphetamine, 1 count

   

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The charges contained in the criminal complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

United States Attorney Andrew M. Luger and Assistant Attorney General for National Security John P. Carlin today announced the sentencing of CHERNO NJIE, 58, ALGIE BARROW, 43, and BANKA MANNEH, 43, PAPA FAAL, 47, for their roles in  planning and executing an unsuccessful coup attempt to overthrow the government of The Gambia on December 30, 2014. Three other members of the conspiracy were killed.

“These defendants conspired to overthrow a foreign government,” said U.S. Attorney Luger. “Regardless of the legitimacy of their personal and emotional connections to The Gambia, these men placed countless innocents in harm’s way when they engaged in a brazen and fatally flawed attempt at regime change. They violated U.S. laws that exist to protect the foreign policy of our country and all Americans both at home and abroad. While I respect the right of any person to voice opposition to a government or its policies, this case is a good example of how not to do so.” 

According to the defendants’ guilty pleas and documents filed in court, the coup plotting began in at least 2013 when members of the conspiracy participated in meetings and discussions with other individuals about changing the leadership in The Gambia. As these discussions progressed, the co-defendants and other co-conspirators decided to attempt to change the regime in The Gambia through a coup. Defendants NJIE, MANNEH and BARROW led the effort to research, plan, supply, and execute the coup.

According to the defendants’ guilty pleas and documents filed in court, throughout the planning of the coup, the defendants participated in regular discussion by phone, email, or face-to-face at NJIE’s residence in Texas. The defendants engaged in military planning for the coup, which included an operations plan that identified the equipment and other logistical support needed for the coup. The defendants also engaged in political planning for The Gambia after the coup, which they expected would result in NJIE becoming the interim leader of The Gambia.

According to the defendants’ guilty pleas and documents filed in court, NJIE provided money for FAAL, MANNEH and BARROW to purchase firearms, all in furtherance of the coup. NJIE himself bought two expensive sniper rifles in Texas. NJIE also paid for the travel of his co-defendants to Texas for planning meetings and to Senegal to conduct the coup in The Gambia.

According to the defendants’ guilty pleas and documents filed in court, on the night of the attempted coup, they found that their target, the State House in Banjul, The Gambia, had been fortified with extra soldiers. The co-conspirators took heavy fire from the guard towers and suffered casualties. After their plan failed, the co-defendants fled The Gambia to Senegal before ultimately returning to the United States.

This investigation was led by the Federal Bureau of Investigation and its partners on Joint Terrorism Task Forces in multiple FBI field offices.

Assistant U.S. Attorney Charles Kovats prosecuted this case, with assistance from Richard Scott, a Deputy Chief of the National Security Division’s Counterintelligence and Export Control Section. A number of other U.S. Attorney’s Offices, including those in the Middle District of Tennessee, District of Maryland and the Western District of Texas provided critical support during the investigation.

Defendant Information:

CHERNO NJIE, 58
Lakeway, Tex.

Convicted:

• Conspiracy to violate the Neutrality Act, 1 count

• Conspiracy to possess a firearm in furtherance of a crime of violence, 1 count

  Sentenced: • One year and one day in prison

  ALAGIE BARROW, 43
  Lavergne, Tenn.

  Convicted: • Conspiracy to violate the Neutrality Act, 1 count
  • Conspiracy to possess a firearm in furtherance of a crime of violence, 1 count

  Sentenced: • Six months in prison

  BANKE MANNEH, 43
  Jonesboro, Ga.

  Convicted: • Conspiracy to violate the Neutrality Act, 1 count
  • Conspiracy to possess a firearm in furtherance of a crime of violence, 1 count

  Sentenced: • Six months in prison

  PAPA FAAL, 47
  Brooklyn Center, Minn.

  Convicted: • Conspiracy to violate the Neutrality Act, 1 count
  • Conspiracy to Smuggle Firearms in violation of the Arms Export Control Act, 1 count

  Sentenced: • Time served

United States Attorney Andrew M. Luger today announced an indictment charging MST MINERALIEN SCHIFFAHRT SPEDITION UND TRANSPORT GMBH (“MST”), a German company and operator of the M/V Cornelia, with violating the Act to Prevent Pollution from Ships (APPS) by failing to maintain an accurate ship record about the disposal of oil-contaminated waste. The defendant is also charged with presenting falsified records to the U.S. Coast Guard.

According to the indictment and documents filed in court, from February 2015 through October 2015, the M/V Cornelia, a German-owned commercial vessel, experienced significant leakages of oily waste-water. As a result, the M/V Cornelia was accumulating a substantial volume of machinery space bilge water.

On at least ten occasions during the indicted period, the M/V Cornelia’s Chief Engineer and/or Second Engineer instructed members of the engine room crew to transfer machinery space bilge water from the dirty bilge tank to the clean bilge tank, which is a separate tank that is supposed to contain only clean, oil-free water, and then discharge the oily waste-water overboard. At least one occasion when machinery space bilge water was transferred to the clean bilge tank and then discharged overboard occurred in approximately May 2015 while the ship was in the Great Lakes.

On each occasion in which oily waste-water was transferred internally and then discharged overboard, the Chief Engineer intentionally failed to record the transfers and subsequent discharges of oily waste-water in the M/V Cornelia’s Oil Record Book (ORB).  This gave the false impression in the ORB that all of the oily waste-water had been properly handled and disposed.

On November 3, 2015, the M/V Cornelia called upon the Port of Duluth to load grain for transport to Africa. At that time, U.S. Coast Guard inspectors boarded the vessel to conduct a Port State Control examination and were presented with the M/V Cornelia’s ORB containing the omissions and false entries.

The indictment is the result of an investigation conducted by the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency.

This case is being prosecuted by Assistant U.S. Attorneys Benjamin F. Langner and John Kokkinen.

Defendant Information:

MST MINERALIEN SCHIFFAHRT SPEDITION AND TRANSPORT GMBH
Schnaittenbach, Germany

Charges:

• Violation of the Act to Prevent Pollution From Ships, 1 count
• False Entries/Omissions in Records in a Federal Investigation, 8 counts

United States Attorney Andrew M. Luger and Ed Grace, Deputy Assistant Director for the U.S. Fish and Wildlife Service (USFWS), today announced the sentencing of YIWEI ZHENG, A/K/A “Steve Zheng,” 43, for smuggling elephant ivory and illegally exporting rhinoceros horns from the United States to China.

ZHENG was ordered to pay $500,000 into the Lacey Act Reward Fund, which is used by USFWS to reward those who provide information about wildlife crimes and to pay the costs incurred in caring for fish, wildlife or plants that are being held as evidence in ongoing investigations. The defendant was also sentenced to serve three years’ probation, a six-week period of intermittent confinement, and to perform 150 hours of community service.

Under the Lacey Act, it is unlawful to import, export, transport, sell or purchase wildlife, fish or plants that were taken, possessed, transported or sold in violation of a state, federal or foreign law. When it was passed in 1900, the Lacey Act became the first federal law protecting wildlife.

“Those who engage in this illegal trade create demand, and a market for, the exploitation of endangered species such as black rhinoceros,” said Assistant United States Attorney Laura M. Provinzino. “This defendant helped to sustain this illegal market for years, engaging in more than 300 sales and earning more than $1 million. His profit was earned at the expense of these threatened and endangered species.”

“Stopping wildlife trafficking and trade in ivory and rhino continues to be a huge conservation priority for us,” said U.S. Fish and Wildlife Service Deputy Assistant Director for Law Enforcement Ed Grace. “It takes all of us to protect these endangered species, here and around the world.”

According to the defendant’s guilty plea and documents filed in court, on April 30, 2011, ZHENG smuggled elephant ivory out of the United States to a recipient in Shanghai, China. ZHENG also violated the Lacey Act by exporting two rhinoceros horns from the U.S. between July 25, 2010 and July 27, 2010, with knowledge that the two rhinoceros horns were transported and sold in violation of the laws and regulations of the United States, including the Endangered Species Act.

ZHENG operated an online business known as Crouching Dragon Antiques. As part of this business, ZHENG offered for sale and sold a variety of items, including items made of elephant ivory and rhinoceros horn. On May 5, 2011, U.S. Customs and Border Protection officers identified a package containing a number of elephant ivory carvings being shipped from the United States to an individual in Shanghai, China. The shipper was identified as YIWEI ZHENG. The ivory contained within the shipment had not been declared to the U.S. Fish and Wildlife Service upon export nor had ZHENG obtained any Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) permits for the ivory being exported as required.

In total, ZHENG smuggled into and out of the United States and sold in China and elsewhere, elephant ivory, rhinoceros horn and other items worth more than $1,000,000.

ZHENG pleaded guilty on January 13, 2016, and was sentenced today by U.S. District Chief Judge John R. Tunheim in U.S. District Court in Minneapolis.

This case is the result of an investigation by the U.S. Fish and Wildlife Service.

The case was prosecuted by Assistant U.S. Attorney Laura M. Provinzino.

 

Defendant Information:

YIWEI ZHENG, A/K/A “Steve Zheng,” 43

St. Cloud, Minn.

Convicted:

• Smuggling goods from the United States, 1 count

• Violation of the Lacey Act, 1 count

Sentenced:

• $500,000 fine payable to the Lacey Act Reward Fund

• Three years’ probation

• Six weeks of intermittent confinement

• 150 hours community service

 

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United States Attorney Andrew M. Luger today announced the guilty plea of EITAN BENJAMIN FELDMAN, 28, for illegally dealing in firearms without a license. The defendant pleaded guilty today before U.S. District Judge Patrick J. Schiltz in United States District Court in Minneapolis, Minn. A sentencing date has been set for August 30, 2016.

According to the defendant’s guilty plea, between January 2014 and January 2016, FELDMAN engaged in a regular pattern and practice of unlawfully dealing in firearms without a license by repeatedly purchasing firearms and offering them for resale within days of getting them. FELDMAN routinely purchased firearms offered by out-of-state Federal Firearms Licensees (FFLs) through websites such as gunbroker.com, an online firearms auction site. FELDMAN arranged to have the firearms transferred to L.E. Gun Sales, a FFL in Minnesota, where he received and took possession of the guns after completing and signing the appropriate documentation and submitting to a National Instant Criminal Background System (NICS) check.

According to the defendant’s guilty plea, during the same time period, FELDMAN regularly listed and offered the same firearms for sale – often at a higher price than what he paid – on armslist.com, a website that allows individuals to list firearms for sale. On average, FELDMAN made a potential $90 profit on each firearm he resold.  Of the 41 guns FELDMAN purchased and re-sold during this time, the average time he actually possessed a gun before offering it for resale was only nine days.

In July 2015, an ATF Special Agent told FELDMAN that some of the firearms he had received at L.E. Gun Sales, and subsequently sold, had been linked to crime scenes within days of FELDMAN taking possession of and selling the guns.

On October 2, 2015, ATF Special Agents served FELDMAN with a written Warning Notice of Unlicensed Firearms Dealing in Violation of Federal Law, warning him that his continuous and repetitive firearm-related activity appears to make him an unlicensed “dealer in firearms” and that he should stop immediately or risk criminal prosecution. Despite the warning, FELDMAN continued his unlawful dealing in firearms on at least eight more occasions, including two sales of firearms to undercover federal agents. During those two sales, FELDMAN did not ask for any identification nor make an effort to determine whether the putative purchasers were prohibited by law from purchasing the firearms.

This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Minneapolis Police Department, the Saint Paul Police Department and the Bloomington Police Department.

Assistant U.S. Attorney Benjamin Bejar is prosecuting the case.

Defendant Information: 

EITAN BENJAMIN FELDMAN, 29
Saint Paul, Minn.

Convicted:

• Willfully engaging in the business of dealing in firearms without a license, 1 count

“While we had hoped for a different outcome, we respect the verdict of the jury and thank them for their service during this long and difficult trial. We strongly believe that this case needed to be brought before a Court, publicly tried, and decided by a jury. Our office is reviewing its options as to those remaining counts of the indictment upon which the jury was unable to reach a unanimous verdict.”     

 

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United States Attorney Andrew M. Luger today announced the sentencing of ELISEO ORTIZ, 50, to 70 months in prison for conspiring to file false state and federal tax returns and claim tax refunds. Co-defendants STACEY JEAN BERGHAMMER, 34, who was sentenced yesterday to time served, and SHANNON LEE TROLLEN, 38, each pleaded guilty to one count of conspiracy to file false claims. ORTIZ, who pleaded guilty on September 18, 2015, to one count of conspiracy to file false claims, was sentenced today before U.S. District Judge Susan R. Nelson in St. Paul, Minn.

According to his guilty plea and documents filed in court, between 2008 and at least April 28, 2010, ORTIZ was incarcerated at Stillwater Correctional Facility, where he recruited and directed numerous co-conspirators to provide names and social security numbers to be used in preparing and filing the false tax returns. In addition, ORTIZ recruited help from outside the prison to execute the scheme, including help from co-defendants BERGHAMMER and TROLLEN. ORTIZ’ co-conspirators were asked to provide addresses for unincarcerated trusted associates who could transfer money from tax refunds to the defendants and other co-conspirators. ORTIZ provided the information he obtained from the co-conspirators to BERGHAMMER or TROLLEN, who would then complete and file the false tax returns that fraudulently claimed refunds to which the recruits were not entitled.

According to his guilty plea and documents filed in court, ORTIZ filed false income tax returns for tax years 2007, 2008 and 2009 by claiming false wages, withholdings, and other tax credits. ORTIZ and other co-conspirators obtained payments for their roles in the scheme in various ways. Payments were sometimes obtained through a direct deposit, debit cards or by having the tax refund check sent to an associate who would then cash the check and split the money between the co-conspirator, the defendants, and others.

This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division.

This case was prosecuted by Assistant U.S. Attorney Michael L. Cheever.

 

Defendant Information:

ELISEO ORTIZ, 50

Bartlett, Ill.

Convicted:

• Conspiracy to file false claims, 1 count

Sentenced:

• 70 months in prison
• Three years supervised release

 

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United States Attorney Andrew M. Luger today announced an information charging KIRSTEN ANN TJOSAAS, 38, for embezzling more than $5.7 million from Fagen, Inc. (Fagen), an industrial contracting company for which she served as Chief Financial Officer. TJOSAAS is charged with wire fraud and money laundering. The defendant is expected to appear at a later date before Judge Donovan W. Frank in U.S. District Court in St. Paul, Minn.

“As alleged in the information, Ms. Tjosaas carried on an egregious embezzlement scheme over an eight-year period, stealing millions from a family-owned business,” said U.S. Attorney Andrew Luger. “These charges reflect a clear violation of both the law and the trust her employer placed in her.”

According to the information, between 2006 and November 2015, TJOSAAS abused her authority as Corporate Controller and Chief Financial Officer of Fagen to issue at least 19 checks and make wire transfers totaling approximately $4.5 million from Fagen to Fairmont Investments, LLC (Fairmont), a Nebraska-based corporation controlled by the defendant.

According to the information, after registering Fairmont, TJOSAAS opened a bank account at Granite Falls Bank in the name of Fairmont for the purpose of embezzling money from Fagen. TJOSAAS signed these checks using the signature stamp of another Fagen executive without the authority or knowledge of that executive. The defendant also entered false entries into Fagen’s general ledger to disguise the illegitimate checks as payments to Fagen partners or payments to legitimate Fagen vendors. After depositing checks into the Fairmont account, TJOSAAS transferred the funds she had stolen into her own personal bank accounts. She used the illicit proceeds to buy five houses and other real estate in Florida, Minnesota, Tennessee, and Arizona, as well as at least three automobiles, two all-terrain vehicles, a motorcycle, a jet-ski, and a sailboat.

According to the information, TJOSAAS also fraudulently issued Fagen checks payable to another company. TJOSAAS had access to and control over the bank account of this company. Between June 2006 and November 2015, TJOSAAS issued approximately 25 fraudulent checks into this account, totaling more than $1.2 million.

This case is the result of an investigation conducted by the FBI.

Assistant U.S. Attorney Joseph H. Thompson is prosecuting the case.

 

Defendant Information:                                                                                                                                                        

KIRSTEN ANN TJOSAAS, 38

Granite Falls, Minn.

Charges:

• Wire fraud, 1 count
• Money laundering, 1 count

 

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 The charges contained in the information are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

United States Attorney Andrew M. Luger today announced a federal indictment charging EBONY SHANTE YARBROUGH, 27, for filing fraudulent income tax returns for friends and family and stealing the identities of minors to obtain tax refunds.[1] YARBROUGH is charged with nine counts of making false, fictitious and fraudulent claims and three counts of aggravated identity theft. The defendant appeared today before Magistrate Judge Franklin Noel in U.S. District Court in Minneapolis, Minn.

“IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority,” said Shea Jones, Special Agent in Charge of the IRS - Criminal Investigation Division, St. Paul Field Office. “As our tax filing season winds down next week, today’s court action should serve as a warning to taxpayers, to be wary of any scheme to defraud the IRS and steal from American taxpayers. The IRS will continue to pursue those who unjustly enrich themselves by preparing false claims for refunds.”

According to the indictment and documents filed in court, 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. YARBROUGH would then obtain from the taxpayers W-2s and 1099s, as well as personal identifying information such as social security numbers, addresses and dependent information.

According to the indictment and documents filed in court, as part of her scheme, YARBROUGH would prepare taxpayers’ returns by claiming false Schedule C income characterized as “hair stylist,” “cleaner” or “exotic dancer.” Additionally, YARBROUGH would include 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.

As Tax Day approaches, the U.S. Attorney’s Office reminds all Minnesotans that the deadline for filing federal income tax returns is Monday, April 18. Federal law enforcement is committed to pursuing those who commit tax fraud or attempt to defraud the tax system.

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 is prosecuting the case.

 

Defendant Information:                                                                                                                                                      

EBONY SHANTE YARBROUGH, 27

St. Paul, Minn.

Charges:

• Making False, Fictitious and Fraudulent Claims, 9 counts

• Aggravated Identity Theft, 3 counts

 

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The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

United States Attorney Andrew M. Luger today announced a federal indictment charging JAIME EDWARD MCCLELLAN, a/k/a “Goldie Armani Callaway,” a/k/a, “Jaime Edward McClennan,” a/k/a, “Armando Blanco,” a/k/a, “Red,” 31, for conspiring to distribute heroin and selling heroin that resulted in the death of at least one person.  MCCLELLAN is charged with conspiracy to distribute heroin, distribution of heroin resulting in death, distribution of heroin, possession with intent to distribute heroin, using and carrying a firearm during and in relation to a drug trafficking crime, and felon in possession of a firearm.

“Heroin continues to threaten people’s lives,” said U.S. Attorney Luger. “This indictment marks the first time my office has charged a defendant with distributing heroin resulting in death. As our state continues to grapple with the dangers of heroin and other harmful drugs, law enforcement will remain vigilant in tracking down and prosecuting dealers.”

According to the indictment and documents filed in state court, on October 23, 2015, MCCLELLAN sold heroin to a victim in Medina, Minn. The defendant warned the victim to be careful while using the heroin that night because it was “good stuff.” The defendant was arrested on December 16, 2015, at which time he had in his possession at least 15 grams of heroin and approximately $400,000 in cash.

According to the indictment, 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 is prosecuting 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,” 31

Brooklyn Park, Minn.

Charges:

• Distribution of heroin resulting in death, 1 count
• Conspiring to distribute heroin, 1 count
• Distribution of heroin, 4 counts
• Possession with intent to distribute heroin, 1 count
• Possession of a firearm during and in relation to a drug trafficking crime, 1 count
• Felon in possession of a firearm, 1 count

United States Attorney Andrew M. Luger announced the sentencing of TIMOTHY JON OLIVER, 62, for stealing $500,000 from ARS Tectonica, a Mexican construction company, in connection with a purported real estate project in Libya. OLIVER, who pleaded guilty to one count of wire fraud on September 10, 2014, was sentenced on April 1, 2016, before Senior U.S. District Judge Michael J. Davis in U.S. District Court in Minneapolis.

“Lying and stealing are always damaging to the victims and to society writ large,” said Assistant United States Attorney David J. MacLaughlin. “Such conduct is especially egregious, and particularly undermining of trust between people, when it is perpetrated by a licensed attorney, a person on whose advice others rely to conduct themselves in accordance with the law. Mr. Oliver’s disbarment, and his 41-month sentence, appropriately punish him for the deceit and dishonesty to which he pled guilty.”

According the defendant’s guilty plea and documents filed in court, from May 2009 to May 2010, OLIVER controlled two companies, American Diversified Industries, LLC (ADI), which was used to receive proceeds of the scheme, and GVA International Limited, which was purported to be developing a real estate project in Bani Walid, Libya. OLIVER pressured, and ultimately convinced, ARS Tectonica to send $500,000 to ADI to secure a letter of credit from a Minnesota credit union.

According to his guilty plea, OLIVER told ARS Tectonica that the letter of credit would be presented to the Organization for Development of Administrative Centers (ODAC), an arm of the Libyan government, as a performance bond for the real estate project in Libya. He also told ARS Tectonica that, once ODAC approved the letter of credit, it would be awarded the opportunity to become the construction manager for the Bani Walid project.

According to documents filed in court, on May 21, 2009, ARS Tectonica wired $500,000 to OLIVER, which was received through ADI’s account that was maintained by the defendant. Instead of using the money to secure a letter of credit, OLIVER spent the money on unrelated debts. For almost a year thereafter, OLIVER lulled ARS Tectonica into believing that the $500,000 remained at the credit union and was being utilized by the credit union to secure the letter of credit. As part of his sentence, OLIVER is ordered to pay $500,000 in restitution to ARS Tectonica.

This case was prosecuted by Assistant U.S. Attorney David J. MacLaughlin.

This case is the result of an investigation conducted by the Federal Bureau of Investigation.

 

Defendant Information:

TIMOTHY JON OLIVER, 62

Plymouth, MN

Convicted:

• Wire fraud, 1  count

Sentenced:

• 41 months in prison
• $750,000 in restitution

 

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Diane Kroupa Filed Fraudulent Tax Returns While a Sitting U.S. Tax Court Judge

Kroupa and Her Husband Conspired to Evade More Than $400,000 in Federal Taxes

U.S. Attorney Andrew M. Luger for the District of Minnesota today announced a federal indictment charging Diane L. Kroupa, 60, and her husband, Robert E. Fackler, 62, with conspiring with each other to evade assessment of taxes.  Each defendant is charged with conspiracy, tax evasion, making and subscribing false tax returns and obstruction of an Internal Revenue Service (IRS) audit.  The defendants are expected to appear later this week in U.S. District Court in Minneapolis, Minnesota.

“The allegations in this indictment are deeply disturbing,” said U.S. Attorney Andrew Luger.  “The tax laws of this country apply to everyone, and those of us appointed to federal positions must hold ourselves to an even higher standard.”

“As a former tax court judge, Kroupa dealt regularly with individuals who cheated on their taxes, which makes these allegations particularly troubling,” said Chief Richard Weber of the IRS-Criminal Investigation.  “Reporting personal expenses as business expenses on your tax returns is not tolerated, regardless of your job or position. We expect all taxpayers to follow the law –whether you are a business owner, individual, or government official – we all must play by the same rules and pay our fair share.”

According to the indictment and documents filed in court, between 2004 and 2012, Kroupa and Fackler conspired to evade their tax obligations.  Kroupa was appointed to the U.S. Tax Court on June 13, 2003, for a term of 15 years, but she retired on June 16, 2014.  During the same period, Fackler was a self-employed lobbyist and political consultant who owned and operated a business known as Grassroots Consulting.  From 2004 to 2013, Kroupa and Fackler owned a home in Minnesota.  From 2007 to 2013, they also leased a second residence in Maryland.

According to the indictment and documents filed in court, as part of the conspiracy to defraud the United States, Kroupa and Fackler fraudulently claimed personal expenses as Grassroots Consulting business deductions.  They fraudulently claimed the following personal expenses as deductible business expenses: rent and utilities for the Maryland home; utilities, upkeep and renovation expenses of the Minnesota home; pilates classes; spa and massage fees; jewelry and personal clothing; wine club fees; Chinese language tutoring; music lessons; personal computers; and expenses for vacations to Alaska, Australia, the Bahamas, China, England, Greece, Hawaii, Mexico and Thailand.

According to the indictment and documents filed in court, Kroupa and Fackler made a series of other false claims on their tax returns, including failing to report approximately $44,520 that Kroupa received from a 2010 land sale in South Dakota.  The defendants falsely claimed financial insolvency to avoid paying tax on $33,031 on cancellation of indebtedness income.

According to the indictment and documents filed in court, in 2006, Kroupa and Fackler concealed documents from their tax preparer and an IRS Tax Compliance Officer during an audit.  During a second audit in 2012, Kroupa and Fackler caused misleading documents to be delivered to an IRS employee in order to convince the IRS employee that certain personal expenses were actually business expenses of Grassroots Consulting.

According to the indictment and documents filed in court, between 2004 and 2010, Kroupa and Fackler purposely understated their taxable income by approximately $1 million and purposely understated the amount of tax they owed by at least $400,000.

This case is the result of an investigation conducted by the IRS-Crimination Investigation and the United States Postal Inspection Service.

Assistant U.S. Attorneys Benjamin Langner and Timothy Rank are prosecuting the case.

United States Attorney Andrew M. Luger today announced a federal indictment charging DIANE L. KROUPA, 60, and her husband, ROBERT E. FACKLER, 62, with conspiring with each other to evade assessment of taxes.[1] Each defendant is charged with conspiracy, tax evasion, making and subscribing false tax returns and obstruction of an IRS audit. The defendants are expected to appear later this week in U.S. District Court in Minneapolis, Minn.

“The allegations in this indictment are deeply disturbing,” said United States Attorney Andrew Luger. “The tax laws of this country apply to everyone, and those of us appointed to federal positions must hold ourselves to an even higher standard.”

“As a former tax court judge, Kroupa dealt regularly with individuals who cheated on their taxes, which makes these allegations particularly troubling,” said Richard Weber, Chief, IRS - Criminal Investigation. “Reporting personal expenses as business expenses on your tax returns is not tolerated, regardless of your job or position. We expect all taxpayers to follow the law –whether you are a business owner, individual, or government official – we all must play by the same rules and pay our fair share.”

According to the indictment and documents filed in court, between 2004 and 2012, KROUPA and FACKLER conspired to evade their tax obligations. KROUPA was appointed to the United States Tax Court on June 13, 2003 for a term of 15 years, but she retired on June 16, 2014. During the same period, FACKLER was a self-employed lobbyist and political consultant who owned and operated a business known as Grassroots Consulting. From 2004 to 2013, KROUPA and FACKLER owned a home in Minnesota. From 2007 to 2013, they also leased a second residence in Maryland.

According to the indictment and documents filed in court, as part of the conspiracy to defraud the United States, KROUPA and FACKLER fraudulently claimed personal expenses as Grassroots Consulting business deductions. They fraudulently claimed the following personal expenses as deductible business expenses: rent and utilities for the Maryland home; utilities, upkeep and renovation expenses of the Minnesota home; pilates classes; spa and massage fees; jewelry and personal clothing; wine club fees; Chinese language tutoring; music lessons; personal computers; and expenses for vacations to Alaska, Australia, The Bahamas, China, England, Greece, Hawaii, Mexico and Thailand.

According to the indictment and documents filed in court, KROUPA and FACKLER made a series of other false claims on their tax returns, including failing to report approximately $44,520 that KROUPA received from a 2010 land sale in South Dakota. The defendants falsely claimed financial insolvency to avoid paying tax on $33,031 on cancellation of indebtedness income.

According to the indictment and documents filed in court, in 2006, KROUPA and FACKLER concealed documents from their tax preparer and an IRS Tax Compliance Officer during an audit. During a second audit in 2012, KROUPA and FACKLER caused misleading documents to be delivered to an IRS employee in order to convince the IRS employee that certain personal expenses were actually business expenses of Grassroots Consulting.

According to the indictment and documents filed in court, between 2004 and 2010, KROUPA and FACKLER purposely understated their taxable income by approximately $1,000,000 and purposely understated the amount of tax they owed by at least $400,000.

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. Attorneys Benjamin Langner and Timothy Rank are prosecuting the case.

Defendant Information:                                                                                                                                                             DIANE L. KROUPA, 60
Minnetonka, Minn.

Charges:

• Conspiracy to defraud the United States, 1 count
• Tax evasion, 2 counts
• Making and subscribing, 2 counts
• Obstruction of an IRS audit, 1 count

 

ROBERT E. FACKLER, 62

Minnetonka, Minn.

Charges:

• Conspiracy to defraud the United States, 1 count
• Tax evasion, 2 counts
• Making and subscribing, 2 counts
• Obstruction of an IRS audit, 1 count

United States Attorney Andrew M. Luger today announced a federal criminal complaint charging SENG XIONG, 48, with wire fraud for operating an affinity fraud scheme.  XIONG was arrested on Thursday, March 24, 2016, at Los Angeles International Airport, prior to boarding a flight bound for Thailand. XIONG made an initial appearance on Friday, March 25, 2016, before United States Magistrate Judge Jacqueline Chooljian in U.S. District Court in Los Angeles, Calif. XIONG was denied bail and ordered remanded into custody pending removal to the District of Minnesota. A next court date has not yet been scheduled.

“This defendant is charged with targeting ethnic Hmong elders,” said United States Attorney Andrew Luger. “I encourage adults and immigrant families to remain on the lookout for thieves who seek to exploit vulnerable victims. My Office, the FBI, and the Minnesota Financial Crimes Task Force, which is comprised of local and federal law enforcement officers, are all resources to seek out if and when you are concerned about a suspicious investment opportunity.”

According to the criminal complaint and documents filed in court, on September 14, 2015, the Appleton, Wisc., Police Department received a tip that Hmong elders were being directed to deposit $3,000 to $5,000 into a bank account held in the name of SENG XIONG. In exchange for the payments, elders were allegedly 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.

According to the criminal complaint and documents filed in court, on September 28, 2015, law enforcement in Saint Paul, Minn., received information that SENG XIONG was believed to be conducting a fraud scheme through his organizations, “International Fund for Hmong Development,” and “Hmong Tebchaws.” The website for “Hmong Tebchaws,” stated the mission of the organization was to “Pursue Hmong self-ruled (sic) in the mainland of Asia in accordance in international law.” The website also contained links to YouTube videos where more information about the “investment program” was available. Other promises made by “Hmong Tebchaws” included that the organization was working with the White House and United Nations to secure land for the Hmong Homeland, and that China, Japan, Laos, Cambodia and Vietnam have all agreed to acknowledge the Hmong people and have saved a piece of land for the Hmong people.

According to the criminal complaint and documents filed in court, a witness known as “K.X.,” has been following the “Hmong Tebchaws” website. According to the witness, since October 2014 the organization has been posting information on its website and various social media sites and has been hosting conference calls for potential “investors.” K.X. participated in six such calls between April 4, 2015, and September 21, 2015.

According to the criminal complaint and documents filed in court, XIONG was targeting elderly Hmong to make contributions to a future Hmong country that would be created sometime between 2015 and 2030. Different “investment options” were offered, which purported to represent varying levels of return that “founders” would be able to receive on their investments. 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.

According to the criminal complaint and documents filed in court, “investors” were ultimately provided XIONG’s name and a bank account associated with XIONG to which they could direct funds.
 
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 Minnesota Financial Crimes Task Force, Saint Paul Police Department, United States Secret Service, Federal Bureau of Investigation 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 Attorney Amber M. Brennan.

Defendant Information:

SENG XIONG, 48
No known address

Charges:

• Wire fraud, 1 count

A Minnesota man was sentenced today to 121 months in prison for possession of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Andrew M. Luger of the District of Minnesota.

On Dec. 8, 2015, Frank Russell McCoy, 72, was found guilty of possession of child pornography after a two-day trial.  U.S. District Judge Patrick J. Schiltz of the District of Minnesota sentenced McCoy today and also ordered him to serve a 10 year term of supervised release.

According to the evidence presented at sentencing, for years, McCoy has written and distributed short stories describing extreme sexual abuse and other acts of violence perpetrated against very young children.  In 2013, he was convicted in the Middle District of Georgia of one count of transportation of obscene matters after sending one such story via the Internet to an Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) undercover agent.  In Dec. 2013, while on bond pending appeal of that conviction, McCoy amassed a large numbers of computers and related equipment in his home in Minnesota that, a search requested by his U.S. Probation Officer revealed, contained dozens of videos of child exploitation.  Evidence at trial further demonstrated that though McCoy had installed forensic wiping software on his computers in order to destroy any evidence of child exploitation images, he had transferred the majority of those files onto a portable video player device just before the seizure. 

Assistant U.S. Attorney Katharine T. Buzicky of the District of Minnesota and former Trial Attorney Jeffrey Zeeman of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted the case.  ICE-HSI and CEOS’s High Technology Investigative Unit investigated the case. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and 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.

An Otsego man was sentenced today to 121 months in prison for possession of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Andrew M. Luger of the District of Minnesota.

On Dec. 8, 2015, Frank Russell McCoy, 72, was found guilty of possession of child pornography after a two-day trial.  U.S. District Judge Patrick J. Schiltz of the District of Minnesota sentenced McCoy today and also ordered him to serve a 10 year term of supervised release.

According to the evidence presented at sentencing, for years, McCoy has written and distributed short stories describing extreme sexual abuse and other acts of violence perpetrated against very young children.  In 2013, he was convicted in the Middle District of Georgia of one count of transportation of obscene matters after sending one such story via the Internet to an Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) undercover agent.  In Dec. 2013, while on bond pending appeal of that conviction, McCoy amassed a large numbers of computers and related equipment in his home in Minnesota that, a search requested by his U.S. Probation Officer revealed, contained dozens of videos of child exploitation.  Evidence at trial further demonstrated that though McCoy had installed forensic wiping software on his computers in order to destroy any evidence of child exploitation images, he had transferred the majority of those files onto a portable video player device just before the seizure. 

Assistant U.S. Attorney Katharine T. Buzicky of the District of Minnesota and former Trial Attorney Jeffrey Zeeman of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted the case.  ICE-HSI and CEOS’s High Technology Investigative Unit investigated the case. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and 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.

 

# # #

United States Attorney Andrew M. Luger today announced the sentencing of SEAN GERALD PENONCELLO, 42, for the production of child pornography involving two minor victims. On June 9, 2015, PENONCELLO was charged by superseding indictment with two counts of producing child pornography and one count of possessing child pornography. Following a three-day trial before Judge Patrick J. Schiltz, a jury on September 23, 2015, found PENONCELLO guilty of all counts. The defendant was sentenced today before Judge Schiltz.

“Penoncello is a predator,” said Assistant United States Attorney Laura Provinzino. “Not only did he commit a series of heinous crimes against women and children, but he also showed not one iota of remorse to his victims, including a 5-year-old girl entrusted to his care.  The long sentence handed down today is warranted.”

“The FBI remains committed to protecting those who are most vulnerable,” said Special Agent in Charge of the FBI Minneapolis Division Richard T. Thornton. “Those who would engage in the production, distribution, or viewing of child pornography will always be on the radar of law enforcement.”

As proven at trial, on April 3, 2014, a series of nude images of an unidentified five-year-old minor were submitted to the National Center for Missing and Exploited Children (NCMEC) that were traced back to PENONCELLO’s residence in Cherry, Minn. On March 27, 2015, law enforcement executed a search warrant of PENONCELLO’s residence and recovered two hidden thumb drives and a surreptitious recording device taken from PENONCELLO’s truck.

As proven at trial, the evidence contained on the two thumb drives revealed sexually explicit images and videos of a second minor victim, produced when the victim was 14-years-old. The thumb drives also contained numerous pornographic images and videos of other known NCMEC-identified minor victims.

If you know of any child who may have been a victim of exploitation, please call the National Center for Missing or Exploited Children (NCMEC) at 1-800-THE-LOST (1-800-843-5678) or visit NCMEC’s web site at www.missingkids.com.

This case is the result of an investigation conducted by the Federal Bureau of Investigation and the St. Louis County Sheriff’s Office, with assistance from the St. Louis County Attorney’s Office, Virginia Police Department and Eveleth Police Department.

This was prosecuted by Assistant U.S. Attorneys Laura M. Provinzino and Benjamin F. Langner.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

 

Defendant Information:                                                                                                                     

SEAN GERALD PENONCELLO, 42

Iron, Minn.

Convicted:

• Production of Child Pornography, 2 counts

• Possession of Child Pornography, 1 count

Sentenced:

• 33 1/3 years in prison

• 10 years supervised release

   

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  United States Attorney’s Office, District of Minnesota: (612) 664-5600

United States Attorney Andrew M. Luger today announced a federal criminal complaint charging JOHN JAMES DENICOLA, 55, with traveling from the Atlanta, Ga., area to the Twin Cities for the purpose of having sex with a 13-year-old girl in Bloomington hotel. DENICOLA made an initial appearance today in U.S. District Court in St. Paul, Minn., before Magistrate Judge Hildy Bowbeer. A detention hearing is expected to be held on Friday, March 11, 2016.

“The sexual exploitation of children is a heinous crime,” said U.S. Attorney Luger. “According to the complaint, this 55-year-old defendant flew to Minnesota to have sex with an eighth grader. Working with our law enforcement partners, we are actively preventing predators from sexually exploiting vulnerable children and we will continue to prosecute those who attempt to engage in such activity to the fullest extent of the law.”

“With this arrest, HSI has taken a suspected pedophile off the street and has prevented the potential abuse of additional innocent victims,” said HSI St. Paul Acting Special Agent in Charge William Lowder. “The sexual abuse of children is an unconscionable crime that will not be tolerated. HSI will use all the resources at its disposal to combat this reprehensible behavior and seek justice for the victims.”

According to the criminal complaint and documents filed in court, on February 26, 2016, DENICOLA, using the screen name “Johnnyman,” initiated a conversation on teenchat.com with an undercover law enforcement officer who DENICOLA believed was a 13-year-old girl. During the conversation, DENICOLA asked the undercover agent questions of a sexual nature, sent a picture of himself to the undercover agent, and told the agent that he had previously traveled to Nebraska to “meet a girl.” DENICOLA also told the agent that he would try to take time off from work to travel to the Twin Cities on March 7, 2016, to see the agent.

According to the criminal complaint and documents filed in court, DENICOLA repeatedly expressed concern to the undercover agent that “she” was a law enforcement officer. During the communications, the undercover agent repeatedly stated that “she” was a 13-year-old girl and an eighth grader. During the Kik Messenger conversation, DENICOLA asked numerous questions about the undercover agent’s sexual experience and also indicated various sexual acts in which he wished to engage with “her.” The defendant also indicated to the undercover agent that he had previously had sex with three or four other young girls on separate occasions.

According to the criminal complaint and documents filed in court, DENICOLA and the undercover agent continued to message one another using Kik Messenger. On February 29, 2016, DENICOLA sent the undercover agent the itinerary for his upcoming trip, which indicated that DENICOLA would fly on March 7, 2016, from Atlanta to Minneapolis/St. Paul. The defendant indicated to the undercover agent that he would bring a video recording device and that he had booked a room at the Park Plaza Hotel in Bloomington, Minn.

According to the criminal complaint and documents filed in court, upon arrival in Minnesota, DENICOLA went to a local Target and bought condoms and candles. He also went to a local florist and bought several bouquets of flowers and helium balloons that read “love you,” or words to that effect. DENICOLA was arrested inside the hotel room he had rented for his planned rendezvous. A video camera was found in DENICOLA’s room at the time of his arrest.

This case is the result of an investigation conducted by Homeland Security Investigations (HSI) Twin Cities, HSI Atlanta, HSI Laredo and HSI San Jose.

This case is being prosecuted by Assistant United States Attorney Carol M. Kayser.

 

Defendant Information:

JOHN JAMES DENICOLA, 55

Suwanee, Ga.

Charges:

• Traveling with the intent to engage in illicit sexual conduct, 1 count

• Attempted coercion and enticement, 1 count

 

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The charges contained in the criminal complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

Principal Deputy Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division and U.S. Attorney Andrew M. Luger of the District of Minnesota announced today that Michael John Harris, 33, pleaded guilty to making telephonic threats to two clinics that provide reproductive health services in Minneapolis.

In connection with his plea, Harris admitted that on May 12, 2014, he made telephonic threats to two different health clinics in Minneapolis that provide reproductive health services.  In his call to the first clinic, Harris threatened to kill the person on the other end of the call using his bare hands, and then cut the person’s head off with a band saw.  In his call to the second clinic, Harris said he would kill the person on the other end of the call and everyone else who worked there, and that he was going to travel to the clinic and shoot everyone present.  Harris admitted that he made these threats to intimidate people from obtaining or providing reproductive health services. 

“Harris’s violent threats against clinics that provide reproductive health services constitute a serious attack on an important right guaranteed by law,” said Principal Deputy Assistant Attorney General Gupta.  “The Justice Department will continue to vigorously prosecute those who seek to interfere with access to reproductive health care.”

“Our Constitution allows for a healthy debate on important issues of public concern,” said U.S. Attorney Luger.  “Threatening the lives of health care workers is not a legitimate means of voicing dissent.  Today’s guilty plea serves as an important reminder that our disagreements cannot devolve into violent threats.”

Harris faces a maximum penalty of one year in prison for each of the two counts.          

This case is being investigated by the FBI, and is being prosecuted by Trial Attorney Risa Berkower of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Manda M. Sertich of the District of Minnesota.  

WASHINGTON – Principal Deputy Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division and U.S. Attorney Andrew M. Luger of the District of Minnesota announced today that Michael John Harris, 33, pleaded guilty to making telephonic threats to two clinics that provide reproductive health services in Minneapolis. 

In connection with his plea, Harris admitted that on May 12, 2014, he made telephonic threats to two different health clinics in Minneapolis that provide reproductive health services.  In his call to the first clinic, Harris threatened to kill the person on the other end of the call using his bare hands, and then cut the person’s head off with a band saw.  In his call to the second clinic, Harris said he would kill the person on the other end of the call and everyone else who worked there, and that he was going to travel to the clinic and shoot everyone present.  Harris admitted that he made these threats to intimidate people from obtaining or providing reproductive health services. 

“Harris’s violent threats against clinics that provide reproductive health services constitute a serious attack on an important right guaranteed by law,” said Principal Deputy Assistant Attorney General Gupta.  “The Justice Department will continue to vigorously prosecute those who seek to interfere with access to reproductive health care.”

“Our Constitution allows for a healthy debate on important issues of public concern,” said U.S. Attorney Luger.  “Threatening the lives of health care workers is not a legitimate means of voicing dissent.  Today’s guilty plea serves as an important reminder that our disagreements cannot devolve into violent threats.”

Harris faces a maximum penalty of one year in prison for each of the two counts.          

This case is being investigated by the FBI, and is being prosecuted by Trial Attorney Risa Berkower of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Manda M. Sertich of the District of Minnesota. 

 

# # #

United States Attorney Andrew M. Luger today announced the guilty plea of LEVI DAVID LINDEMANN, 40, for stealing from investment advisory clients. LINDEMANN was indicted on December 22, 2015, for one count of mail fraud and one count of money laundering. He pleaded guilty today to the entire indictment against him before U.S. District Judge Donovan W. Frank in U.S. District Court in Saint Paul, Minn. A sentencing date has not yet been determined.

According to the defendant’s guilty plea, between 2009 and 2014, LINDEMANN owned and operated Gershwin Financial, Inc., an investment management company that did business under the name, Alternative Wealth Solutions (AWS). Through AWS, LINDEMANN provided financial planning and asset management services, and sold insurance annuities and investment products to clients in Minnesota and Wisconsin.

According to the defendant’s guilty plea, LINDEMANN used AWS to solicit investor funds from approximately 50 investor clients. LINDEMANN encouraged his clients to surrender to him their retirement accounts so that he could invest funds on their behalf. LINDEMANN induced clients to entrust him with their money by falsely representing that he would use the invested funds to buy secured notes or other legitimate investment vehicles. Instead of investing their money into legitimate investment vehicles, LINDEMANN used the invested funds to pay personal expenses, convert the investments to cash for his own use, purchase an Infiniti QX56 sport utility vehicle and to make Ponzi-type payments of promised returns to other investors.

According to his guilty plea, LINDEMANN took steps to conceal his fraudulent activity and lull investor-clients by creating counterfeit secured notes and providing them to investor-clients as proof of their investment.

This case is the result of an investigation conducted by the Minnesota Department of Commerce Fraud Bureau, Criminal Investigation Division of the IRS and the Federal Bureau of Investigation.

This case is being prosecuted by Assistant United States Attorney Joseph H. Thompson.

 

Defendant Information:

LEVI DAVID LINDEMANN, 40

Stillwater, Minn.

Convicted:

• Mail fraud, 1 count

• Money laundering, 1 count

 

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United States Attorney Andrew M. Luger today announced the guilty pleas of the remaining two defendants from an August 2015 indictment charging seven members of the 10z and 20z street gangs with crimes related to a multi-year gang war with their rivals, which included a shooting attack in August 2014 outside of the Hennepin County Medical Center in which the hospital was peppered with gunfire. The defendants include both leaders and other members of the 10z and 20z. Four defendants pleaded guilty to conspiracy to possess firearms in the furtherance of a drug trafficking conspiracy, including the guilty pleas today of DANIEL ALFRED ADAMS, a/k/a “Funk,” and PERCY MINIFER LACEY, JR., a/k/a “P3.” Two defendants earlier this month pleaded guilty to illegally possessing ammunition and one pleaded guilty to distribution of cocaine base. Each defendant pleaded guilty before U.S. District Judge Patrick Schiltz in U.S. District Court in Minneapolis, Minn.

“Seven gang members are now behind bars,” said U.S. Attorney Luger. “Today’s guilty pleas are an important step forward for public safety, but our work is not done. Already this year, there have been dozens of shots-fired incidents across Minneapolis. Working together with all our law enforcement partners, including the ATF and Minneapolis Police Department, we are committed to ending the gun violence that disrupts the peacefulness of neighborhoods across Minneapolis.”

According to the defendants’ guilty pleas and documents filed in court, between at least January 2013 and August 2015, the 10z and the 20z gangs operated in South Minneapolis, primarily between Franklin Avenue, and Lake Street, and I-35W and Minnehaha Avenue. Their primary purpose was to make money for the gang members through the sale of illegal drugs, including crack cocaine, heroin, and marijuana. As part of their drug trafficking operation, members of the gangs routinely engaged in gun violence with rival gangs. The purpose of this violence was to protect drug dealing territory controlled by the 10z and 20z, to protect individual drug distributors from rival gang violence, to attack and seize drug dealing territory controlled by rival gangs, and to attack and rob drug distributors associated with rival gangs.

According to the defendants’ guilty pleas and documents filed in court, the 10z and 20z were involved in a gang war with their primary rival gangs, the Bloods and the Bogus Boys. The gang war was very violent and resulted in shootings of gang members on both sides, some of which caused the death of gang members. Virtually all of these shootings were the product of disputes over territory, robberies of rival drug dealers, or retaliatory violence.

This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Minneapolis Police Department.

This case was prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.

 

Defendant Information:

DANIEL ALFRED ADAMS, a/k/a “Funk,” 29

Minneapolis, Minn.

Convicted:

Conspiracy to possess firearms in furtherance of a drug trafficking crime, 1 count

 

CLARENCE JAMES DICKENS, JR., a/k/a “Claro,” a/k/a, “Sneaky,” 24

Roseville, Minn.

Convicted:

Conspiracy to possess firearms in furtherance of a drug trafficking crime, 1 count

 

ANTHONY PIERRE DOSS, a/k/a “Two Tone,” a/k/a “Tony,” 25

Brooklyn Park, Minn.

Convicted:

Conspiracy to possess firearms in furtherance of a drug trafficking crime, 1 count

 

PERCY MINIFER LACEY, JR., a/k/a “P3,” 22

Richfield, Minn.

Convicted:

Conspiracy to possess firearms in furtherance of a drug trafficking crime, 1 count

 

THOMAS DUPREE BENNETT, a/k/a “Deandre Clay,” a/k/a “Trigga,” 28

Minneapolis, Minn.

Convicted:

Felon in possession of ammunition, 1 count

 

ANDREW INDELICATO PETERSON, a/k/a “Boo Boo,” 25

St. Louis Park, Minn.

Convicted:

Felon in possession of ammunition, 1 count

 

PAUL ANTONIO EARLY, a/k/a “Stamps,” a/k/a, “Man Man,” 23

Minneapolis, Minn.

Convicted:

Distribution of cocaine base, 1 count

 

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United States Attorney’s Office, District of Minnesota: (612) 664-5600

United States Attorney Andrew M. Luger today announced that ALEXANDER EDWARD HEYING, 33, who was sentenced last month to serve 140 months in prison after being convicted in after trial November 2014 of conspiracy to distribute several tons of marijuana and conspiracy to commit money laundering, was ordered on February 23, 2016, to forfeit his Ukiah, Calif., farm on which he grew marijuana, a residence in Minnetonka, Minn., a truck and two guns. Also convicted in this conspiracy were PETER GREGORY HEYING, 29, and ACACIA LAUREN RUIZ, 35. PETER HEYING and RUIZ pleaded guilty in October 2014 to the charges against them and were sentenced on January 22, 2016.

As proven at trial and according to the defendants’ guilty pleas, between at least 2003 and October 2012, the HEYING brothers and RUIZ conspired to distribute marijuana in Minnesota. During the course of the conspiracy, the co-conspirators were responsible for trafficking several tons of marijuana into Minnesota, primarily from large-scale grow farms in California.

As a result of the conspiracy and money laundering convictions, the United States moved to forfeit property because the property facilitated the conspiracy, including the grow farm from which marijuana was harvested and sold.

These cases resulted from an investigation conducted by the Drug Enforcement Administration, Criminal Investigation Division of the IRS, Hennepin County Sheriff’s Office, West Metro Drug Task Force, Southwest Hennepin Drug Task Force, West Hennepin Public Safety, Wisconsin Department of Justice, Division of Criminal Investigation, Medina Police Department and the Orono Police Department.

This case was prosecuted by Assistant U.S. Attorneys LeeAnn Bell, Surya Saxena and Craig Baune.

 

Defendant Information:

ALEXANDER EDWARD HEYING, 33
Minnetonka, Minn.

Convicted:

• Conspiracy to distribute marijuana, 1 count
• Conspiracy to commit money laundering, 1 count

Sentenced:

• 140 months in prison

PETER GREGORY HEYING, 29
Minnetonka, Minn.

Convicted:

• Conspiracy to distribute marijuana, 1 count
• Conspiracy to commit money laundering, 1 count

Sentenced:

• Three years in prison

ACACIA LAUREN RUIZ, 35
Ukiah, Calif.

Convicted:

• Conspiracy to distribute marijuana, 1 count
• Conspiracy to commit money laundering, 1 count

Sentenced:

• Time served

United States Attorney Andrew M. Luger today announced a federal indictment charging EITAN BENJAMIN FELDMAN, 28, for illegally dealing in firearms without a license and lying on at least nine firearms transaction records (Form 4473).[1] The defendant is expected to appear later today before Magistrate Judge Mayeron in United States District Court in Minneapolis, Minn.

“There is far too much gun violence in the Twin Cities,” said U.S. Attorney Luger. “Violent crimes involving guns are often committed by people who cannot legally obtain a firearm, but they find a way. According to today’s indictment, Eitan Feldman was one of those ways. This defendant engaged in the business of dealing guns without a license. He didn’t conduct background checks on the people to whom he sold the guns, and at least three of the guns were connected to Twin Cities crime scenes. Thanks to the dedicated special agents of the ATF, Feldman today is in custody and there is one less backdoor through which potential criminals can get a gun.”

“Today’s arrest should send a message to unlicensed firearm dealers who put the public at risk each time they sell a firearm to a potential criminal,” said ATF St. Paul Field Division Special Agent in Charge James Modzelewski. “They are recklessly circumventing the criminal background check system and it is a crime.”

According to the indictment and documents filed in court, between January 2014 and January 2016, FELDMAN engaged in a regular pattern and practice of unlawfully dealing in firearms without a license by repeatedly purchasing firearms and offering them for resale within days of getting them. FELDMAN routinely purchased firearms offered by out-of-state Federal Firearms Licensees (FFLs) through websites such as gunbroker.com, an online firearms auction site. FELDMAN arranged to have the firearms transferred to L.E. Gun Sales, a FFL in Minnesota, where he received and took possession of the guns after completing and signing the appropriate documentation and submitting to a National Instant Criminal Background System (NICS) check.

According to the indictment and documents filed in court, during the same time period, FELDMAN regularly listed and offered the same firearms for sale – often at a higher price than what he paid – on armslist.com, a website that allows individuals to list firearms for sale. Of the 41 guns FELDMAN purchased and re-sold during this time, the average time he actually possessed a gun before offering it for resale was only nine days.

According to the indictment and documents filed in court, FELDMAN would sometimes include on his for-sale listings on armslist.com a false story indicating that he had actually owned a particular firearm for much longer than he had or concoct a reason why he was then selling the gun. For example, on one listing for a 20-guage pump-action shotgun that FELDMAN had possessed for only two days before listing on armslist.com, FELDMAN wrote that he, “is a gun collector, has had the shotgun for two years, never shot it.” On another listing for a .38 caliber handgun that he had possessed for only seven days before listing for resale, FELDMAN wrote, “bought a couple of years ago but only taken to the range a few times.” In yet another listing for a semiautomatic 9mm carbine rifle that he had possessed for only six days, FELDMAN claimed that the rifle had been “sitting in [his] closet for a few months” and that he had not fired it for about four months.

According to the indictment and documents filed in court, in July 2015, an ATF Special Agent told FELDMAN that some of the firearms he had received at L.E. Gun Sales, and subsequently sold, had been linked to crime scenes within days of FELDMAN taking possession of and selling the guns.

According to the indictment and documents filed in court, on April 26, 2015, the Minneapolis Police Department (MPD) recovered a loaded Ruger .380 pistol when responding to a gun-pointing assault. The weapon was submitted for National Integrated Ballistics Information Network (NIBIN) analysis, which showed that the weapon had also been used on March 19, 2015, in a shots-fired incident from which MPD recovered two spent shell casings. FELDMAN had purchased this same weapon on March 12, 2015, only seven days before the shots-fired incident and 45 days before it was recovered from the gun-pointing crime scene.

According to the indictment and documents filed in court, on May 28, 2015, MPD responded to a narcotics call, during which they recovered a Bersa Thunder .380. This same gun had been purchased by FELDMAN 18 days earlier on May 10, 2015.

According to the indictment and documents filed in court, on August 25, 2015, Bloomington Police (BPD) identified and stopped several vehicles involved in the transport of at least 50 pounds of marijuana from California to Minnesota. In one of the vehicles, BPD officers recovered a backpack containing two loaded handguns, one of which was a Taurus .38-caliber revolver. One of the suspects admitted that both guns belonged to him and that he had bought the Taurus revolver from a private seller in Minneapolis. That same gun was purchased only three months earlier by FELDMAN on May 10, 2015.

According to the indictment and documents filed in court, on July 17, 2015, ATF Special Agents executed a search warrant at FELDMAN’s home in Saint Paul, Minn., and seized five shotguns. FELDMAN had completed the transfer of each shotgun at L.E. Gun Sales and had listed and offered each shotgun for resale on armslist.com between two and 25 days of receiving them at L.E. Gun Sales. ATF Special Agents also recovered three firearm bills of sale, showing that FELDMAN had sold four firearms to three different individuals. FELDMAN had received the four firearms at L.E. Gun Sales between three and 24 days before reselling them.

According to the indictment and documents filed in court, during at least nine transactions at L.E. Gun Sales in which FELDMAN received the four firearms seized during the search and 23 other firearms that he offered for resale, he falsely represented his residential address on the Form 4473.

According to the indictment and documents filed in court, on October 2, 2015, ATF Special Agents served FELDMAN with a written Warning Notice of Unlicensed Firearms Dealing in Violation of Federal Law, warning him that his continuous and repetitive firearm-related activity appears to make him an unlicensed “dealer in firearms” and that he should stop immediately or risk criminal prosecution. Despite the warning, FELDMAN continued his unlawful dealing in firearms on at least eight more occasions.

According to the indictment and documents filed in court, on December 3, 2015, ATF Special Agents made an undercover purchase of a .38-caliber revolver from FELDMAN, a gun that he had received 10 days prior. The undercover officer paid FELDMAN $260 cash in the parking lot of a local shopping mall. FELDMAN never sought to verify the identity of the purchaser, nor did he make any effort to determine if the buyer was prohibited by law from purchasing a firearm. FELDMAN conducted no background check.

According to the indictment and documents filed in court, on January 21, 2016, ATF Special Agents made an undercover purchase of a Hi-Point 9mm semiautomatic carbine rifle from FELDMAN, a gun that he had received seven days prior. The undercover officer paid FELDMAN $250 cash in the parking lot of a local shopping mall. FELDMAN never sought to verify the identity of the purchaser, nor did he make any effort to determine if the buyer was prohibited by law from purchasing a firearm. Again, FELDMAN conducted no background check.

This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Minneapolis Police Department, Saint Paul Police Department and Bloomington Police Department.

Assistant U.S. Attorney Benjamin Bejar is prosecuting the case.

 

Defendant Information:                                                                                                                     

EITAN BENJAMIN FELDMAN, 29

Saint Paul, Minn.

Charges:

• Willfully engaging in the business of dealing in firearms without a license, 1 count

• Making a false statement during a firearm purchase, 9 counts

 

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[1] The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

At Least Three Guns Sold by Feldman Were Recovered From or Connected to Twin Cities Crime Scenes

U.S. Attorney Andrew M. Luger for the District of Minnesota today announced a federal indictment charging Eitan Benjamin Feldman, 28, of Saint Paul, Minnesota, for illegally dealing in firearms without a license and lying on at least nine firearms transaction records.  The defendant is expected to appear later today before Magistrate Judge Mayeron in U.S. District Court in Minneapolis, Minnesota.

“There is far too much gun violence in the Twin Cities,” said U.S. Attorney Luger.  “Violent crimes involving guns are often committed by people who cannot legally obtain a firearm, but they find a way.  According to today’s indictment, Feldman was one of those ways.  This defendant engaged in the business of dealing guns without a license.  He didn’t conduct background checks on the people to whom he sold the guns and at least three of the guns were connected to Twin Cities crime scenes.  Thanks to the dedicated special agents of the ATF, Feldman today is in custody and there is one less backdoor through which potential criminals can get a gun.”

“Today’s arrest should send a message to unlicensed firearm dealers who put the public at risk each time they sell a firearm to a potential criminal,” said Special Agent in Charge James Modzelewski of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) St. Paul Field Division.  “They are recklessly circumventing the criminal background check system and it is a crime.”

According to the indictment and documents filed in court, between January 2014 and January 2016, Feldman engaged in a regular pattern and practice of unlawfully dealing in firearms without a license by repeatedly purchasing firearms and offering them for resale within days of getting them.  Feldman routinely purchased firearms offered by out-of-state Federal Firearms Licensees (FFLs) through websites such as gunbroker.com, an online firearms auction site.  Feldman arranged to have the firearms transferred to L.E. Gun Sales, a FFL in Minnesota, where he received and took possession of the guns after completing and signing the appropriate documentation and submitting to a National Instant Criminal Background System (NICS) check.

According to the indictment and documents filed in court, during the same time period, Feldman regularly listed and offered the same firearms for sale – often at a higher price than what he paid – on armslist.com, a website that allows individuals to list firearms for sale.  Of the 41 guns Feldman purchased and re-sold during this time, the average time he actually possessed a gun before offering it for resale was only nine days.

According to the indictment and documents filed in court, Feldman would sometimes include on his for-sale listings on armslist.com a false story indicating that he had actually owned a particular firearm for much longer than he had or concoct a reason why he was then selling the gun.  For example, on one listing for a 20-guage pump-action shotgun that Feldman had possessed for only two days before listing on armslist.com, Feldman wrote that he, “is a gun collector, has had the shotgun for two years, never shot it.”  On another listing for a .38 caliber handgun that he had possessed for only seven days before listing for resale, Feldman wrote, “bought a couple of years ago but only taken to the range a few times.”  In yet another listing for a semiautomatic 9mm carbine rifle that he had possessed for only six days, Feldman claimed that the rifle had been “sitting in [his] closet for a few months” and that he had not fired it for about four months.

According to the indictment and documents filed in court, in July 2015, an ATF Special Agent told Feldman that some of the firearms he had received at L.E. Gun Sales and subsequently sold, had been linked to crime scenes within days of Feldman taking possession of and selling the guns.

According to the indictment and documents filed in court, on April 26, 2015, the Minneapolis Police Department (MPD) recovered a loaded Ruger .380 pistol when responding to a gun-pointing assault.  The weapon was submitted for National Integrated Ballistics Information Network (NIBIN) analysis, which showed that the weapon had also been used on March 19, 2015, in a shots-fired incident from which MPD recovered two spent shell casings.  Feldman had purchased this same weapon on March 12, 2015, only seven days before the shots-fired incident and 45 days before it was recovered from the gun-pointing crime scene.

According to the indictment and documents filed in court, on May 28, 2015, MPD responded to a narcotics call, during which they recovered a Bersa Thunder .380.  This same gun had been purchased by Feldman 18 days earlier on May 10, 2015.

According to the indictment and documents filed in court, on Aug. 25, 2015, Bloomington Police (BPD) identified and stopped several vehicles involved in the transport of at least 50 pounds of marijuana from California to Minnesota.  In one of the vehicles, BPD officers recovered a backpack containing two loaded handguns, one of which was a Taurus .38-caliber revolver.  One of the suspects admitted that both guns belonged to him and that he had bought the Taurus revolver from a private seller in Minneapolis.  That same gun was purchased only three months earlier by Feldman on May 10, 2015.

According to the indictment and documents filed in court, on July 17, 2015, ATF Special Agents executed a search warrant at Feldman’s home in Saint Paul and seized five shotguns.  Feldman had completed the transfer of each shotgun at L.E. Gun Sales and had listed and offered each shotgun for resale on armslist.com between two and 25 days of receiving them at L.E. Gun Sales.  ATF Special Agents also recovered three firearm bills of sale, showing that Feldman had sold four firearms to three different individuals.  Feldman had received the four firearms at L.E. Gun Sales between three and 24 days before reselling them.

According to the indictment and documents filed in court, during at least nine transactions at L.E. Gun Sales in which Feldman received the four firearms seized during the search and 23 other firearms that he offered for resale, he falsely represented his residential address on the Form 4473.

According to the indictment and documents filed in court, on Oct. 2, 2015, ATF Special Agents served Feldman with a written Warning Notice of Unlicensed Firearms Dealing in Violation of Federal Law, warning him that his continuous and repetitive firearm-related activity appears to make him an unlicensed “dealer in firearms” and that he should stop immediately or risk criminal prosecution.  Despite the warning, Feldman continued his unlawful dealing in firearms on at least eight more occasions.

According to the indictment and documents filed in court, on Dec. 3, 2015, ATF Special Agents made an undercover purchase of a .38-caliber revolver from Feldman, a gun that he had received 10 days prior.  The undercover officer paid Feldman $260 in the parking lot of a local shopping mall.  Feldman never sought to verify the identity of the purchaser, nor did he make any effort to determine if the buyer was prohibited by law from purchasing a firearm.  Feldman conducted no background check.

According to the indictment and documents filed in court, on Jan. 21, 2016, ATF Special Agents made an undercover purchase of a Hi-Point 9mm semiautomatic carbine rifle from Feldman, a gun that he had received seven days prior.  The undercover officer paid Feldman $250 in the parking lot of a local shopping mall.  Feldman never sought to verify the identity of the purchaser, nor did he make any effort to determine if the buyer was prohibited by law from purchasing a firearm.  Again, Feldman conducted no background check.

This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Minneapolis Police Department, Saint Paul Police Department and Bloomington Police Department.

Assistant U.S. Attorney Benjamin Bejar for the District of Minnesota is prosecuting the case.

Five Co-Defendants Expected to Go to Trial in May 2016

Abdirizak Mohamed Warsame, 20, of Egan, Minnesota, pleaded guilty today to an information charging him with conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.  The defendant pleaded guilty before Senior U.S. District Judge Michael J. Davis of the District of Minnesota.

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Andrew M. Luger of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division made the announcement.

“With his guilty plea, Abdirizak Mohamed Warsame has admitted to conspiring to provide material support to ISIL,” said Assistant Attorney General Carlin.  “Warsame was part of a group of individuals who sought to travel to Syria to fight with the designated foreign terrorist organization.  The National Security Division’s highest priority is counterterrorism, and we will continue to work to stem the flow of foreign fighters abroad and hold accountable those who conspire to provide material support to terrorists.”

“ISIL recruiting in Minnesota is an ongoing problem,” said U.S. Attorney Luger.  “Federal law enforcement and our local partners remain dedicated to ending terror recruitment in our state.  One of the important factors we believe will help stop the recruiting pipeline is for those who have been charged to take responsibility for their crimes.  I am encouraged that today Mr. Warsame is doing just that.  He has now taken the first step to help himself begin the process of rehabilitation and help our entire community begin to heal.”

“Preventing terrorism in the United States or against U.S. interests remain the FBI’s top priority,” said Special Agent in Charge Thornton.  “This includes identifying individuals who aspire to travel overseas to fight on behalf of foreign terrorist organizations such as ISIL.  Every person we stop from joining ISIL is one less person ISIL has to conduct acts of terror and the atrocities they are known for.  This Joint Terrorism Task Force investigation which culminated in today’s guilty plea was the result of collaboration with our state, local, and federal partners.”

According to the defendant’s guilty plea, throughout early 2014, Warsame participated in several meetings with a group of individuals who wished to travel to Syria to join ISIL.  Warsame and his co-conspirators discussed means of funding travel to Syria and potential routes from Minnesota to Syria that would best elude law enforcement.  In April 2014, Warsame applied for an expedited passport with the intent of using the passport to travel overseas to join ISIL and in that same month, provided approximately $200 to co-conspirator Adnan Farah for fees associated with Farah’s expedited passport application.  Warsame knew Farah planned to use the passport to travel to Syria to join ISIL.

According to the defendant’s guilty plea, during a May 2014 meeting between Warsame and his co-conspirators, Warsame accepted the position of “emir,” or leader, of the group.  Guled Ali Omar had previously been “emir,” but was at that time planning to depart for Syria to join ISIL.

According to the plea, in June 2014, Warsame obtained a phone number for H.K., who at the time was an ISIL fighter, and Warsame passed the contact information along to Y.J., who was then attempting to travel from Turkey to Syria to join ISIL.

In April 2015, according to his guilty plea, Warsame participated in a series of meetings with co-conspirators Omar, Abdirahman Daud, Mohamed Farah and Adnan Farah.  At one of the meetings, Warsame repeatedly encouraged Omar to travel to Syria to join ISIL.

This case is the result of an investigation conducted by members of the FBI-led Joint Terrorism Task Force (JTTF).  The case is being prosecuted by Assistant U.S. Attorneys Andrew R. Winter and John Docherty of the District of Minnesota with assistance provided by the National Security Division’s Counterterrorism Section. 

A Forrest Lake, Minnesota, man was sentenced today for failing to disclose, during his immigration to the United States, multiple crimes committed in Bosnia and Herzegovina before and during the Bosnian Conflict in the 1990s, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Andrew M. Luger of the District of Minnesota.

Zdenko Jakiša, 47, stipulated to an order of judicial removal from the United States, in which he agreed that he is not lawfully admissible in the United States and on Feb. 16, 2016, will self-surrender to U.S. Immigration and Customs Enforcement (ICE) for removal.  Jakiša was sentenced to time served by U.S. District Judge Susan Richard Nelson of the District of Minnesota.

According to the plea agreement, Jakiša is a Bosnian citizen and between July 1990 and October 1997, he was convicted of various crimes and charged with others in Bosnia, including a conviction for shooting and killing his neighbor through her bedroom window in September 1993.  While some of these charges remained pending in Bosnia, Jakiša fled to the United States where, he now admits, he lied about his criminal history on his legal permanent resident applications and was granted lawful permanent resident status in the United States. 

The ICE Homeland Security Investigations St. Paul, Minnesota, Office investigated the case with support from the FBI’s Minneapolis Field Office.  ICE’s Human Rights Violators and War Crimes Center provided the lead in this investigation.  The Criminal Division’s Office of International Affairs and their counterparts at the Prosecutor’s Office of Bosnia and Herzegovina provided valuable assistance.

Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Nathan P. Petterson of the District of Minnesota prosecuted the case.

United States Attorney Andrew M. Luger today announced the conviction of MARVIN SPENCER, 53, for the armed robbery of Pawn America in Roseville, Minn., on July 21, 2014. On April 8, 2015, SPENCER was charged in a superseding indictment with one count of Interference with Commerce by Robbery; one count of Conspiracy to Interfere with Commerce by Robbery; one count of Using, Carrying and Discharging a Firearm During and in Relation to a Crime of Violence; and one count of Being a Felon in Possession of Ammunition. On February 3, 2016, following a three-day trial, a federal jury found SPENCER guilty on all counts.

As proven at trial, on July 21, 2014, at approximately 5:30 p.m., SPENCER, and co-defendant DERRICK LYNCH, entered the Roseville, Minn. Pawn America. SPENCER, who was armed with a semi-automatic handgun, shot a store employee in the leg and then fired at least one more round in the direction of several store employees. While SPENCER was shooting, LYNCH used a heavy tool to smash a display case and then removed approximately $58,350 worth of jewelry from the case. Before leaving the pawn shop, SPENCER helped LYNCH place the stolen jewelry into a duffle bag.

As proven at trial, SPENCER and LYNCH fled the scene in a vehicle with one other individual who later admitted involvement in receiving some of the stolen jewelry. LYNCH was apprehended in Woodbury, Minn., on August 8, 2014. SPENCER was arrested in Moline, Ill., on August 26, 2014. SPENCER, a career criminal with a violent history, admitted to discharging a firearm during the robbery, but claimed that the first shot was accidental. LYNCH, who was indicted on October 7, 2014, pleaded guilty on December 17, 2014, to the armed robbery and to aiding and abetting SPENCER in using and, carrying and discharging the firearm. Sentencing hearings will be set at a later date.

The case is being prosecuted by Assistant U.S. Attorneys Thomas Hollenhorst and Benjamin Bejar.

This case is the result of an investigation conducted by the Roseville Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Moline Police Department.

 

Defendant Information:

MARVIN SPENCER, 53

St. Paul, MN

Convicted:

• Interference with Commerce by Robbery, 1 count
• Conspiracy to Interfere with Commerce by Robbery, 1 count
• Using, Carrying and Discharging a Firearm During and in Relation to a Crime of Violence, 1 count
• Felon in Possession of Ammunition, Armed Career Criminal, 1 count

 

 

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United States Attorney’s Office, District of Minnesota: (612) 664-5600

WASHINGTON – A federal grand jury sitting in Minneapolis returned an indictment on Feb. 1, which was unsealed today, charging a chiropractor with one count of tax evasion and one count of passing a fictitious obligation, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Andrew Luger of the District of Minnesota announced today.

According to the allegations in the indictment, Donald Gibson failed to file federal income tax returns with the Internal Revenue Service (IRS) for the years 2004 through 2010 to report his income from his work as a chiropractor.  In May 2012, the IRS informed Gibson that he owed approximately $330,000 in federal income taxes for those years.  Gibson allegedly evaded paying his federal income taxes for 2004 through 2010 by, among other things, cashing his business checks at a check-cashing facility, purchasing money orders and directing his income onto stored-value debit cards.  Gibson is further alleged to have used Sovereign Christian Mission, a nonprofit corporation he registered with the Oregon Secretary of State, to hide his income and pay his personal expenses. The indictment also charges Gibson with submitting a fake bond that he claimed to be valued at $300 million to the Department of the Treasury to pay off his tax liabilities.

If convicted, Gibson faces a statutory maximum sentence of five years in prison for the tax evasion charge and a statutory maximum sentence of 25 years in prison for the passing a fictitious obligation charge. 

An indictment is not a finding of guilt.  The individual charged in the indictment is presumed innocent until proven guilty beyond a reasonable doubt.     

Acting Assistant Attorney General Ciraolo and U.S. Attorney Luger thanked special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorney Ryan R. Raybould of the Tax Division and Assistant U.S. Attorney Joseph Thompson of the District of Minnesota, who are prosecuting the case.

 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website

 

# # #

 

United States Attorney Andrew M. Luger today announced the sentence of JEFFREY SCOTT EVANS, 51, to 96 months in federal prison for with traveling from Tennessee to Bloomington, Minnesota, for the purpose of engaging in illicit sexual conduct with a 13-year-old female. EVANS pleaded guilty on August 11, 2015, and was sentenced on January 22, 2016, before Judge Susan R. Nelson in U.S. District Court in St. Paul, Minn.

“The sexual exploitation of children by predators has reached epidemic proportions nationally and internationally,” said acting Special Agent in Charge William Lowder of HSI St. Paul. “Targeting these predators through the tireless efforts by our HSI special agents has been a high priority for more than a decade. These cases demonstrate how every parent must remain vigilant to Internet predators who may pose in various disguises to meet and ultimately sexually exploit children.”

According to the defendant’s guilty plea and documents filed in court, on June 12, 2015, EVANS used the screen name “taboolooking” on a social media site called “chathour.com,” to initiate a conversation with another user who EVANS believed to be a 13-year-old female. This user was actually an undercover federal agent. EVANS quickly turned the conversation sexual in nature, and discussed traveling from Tennessee to Minnesota to meet and have sex with the child.

According to the defendant’s guilty plea and documents filed in court, between June 12, 2015, and June 22, 2015, EVANS sent dozens of email messages and text messages describing the sexual acts he wanted to engage in with the girl. He also sent sexually explicit photos of himself. In one message, EVANS discussed bringing a digital camera so he could take pictures and video of himself having sex with the 13-year-old female.

According to the defendant’s guilty plea and documents filed in court, on June 22, 2015, EVANS was arrested shortly after he arrived at the Bloomington hotel at which he had planned to engage in illicit sexual relations with the 13-year-old female. Inside EVANS’ hotel room law enforcement found sex toys and lingerie on the bed, as well as a camera and illegal drugs. Inside EVANS’ vehicle, law enforcement found a loaded .38 caliber pistol.

This case was the result of an investigation conducted by Homeland Security Investigations with the assistance of the Bloomington Police Department.

This case was prosecuted by Assistant U.S. Attorney Kevin S. Ueland.

 

Defendant Information:

JEFFREY SCOTT EVANS, 51

Blaine, Tenn.

Convicted:

• Traveling with the intent to engage in illicit sexual conduct, 1 count

Sentenced:

• 96 months in prison
• 15 years supervised release

 

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United States Attorney’s Office, District of Minnesota: (612) 664-5600

United States Attorney Andrew M. Luger today announced the sentence of DONTRE D’SEAN MCHENRY, a/k/a “Dontre Sean McHenry,” a/k/a “Avon,” a/k/a “Rico,” 26, to 293 months in prison for recruiting and sex trafficking teenage girls throughout Minnesota. MCHENRY pleaded guilty on October 17, 2014, and was sentenced today before Judge David S. Doty in United States District Court in Minneapolis.

“Human traffickers don’t care whom they victimize, as long as they can profit from it,” said acting Special Agent in Charge William Lowder, of HSI St. Paul. “HSI is dedicated to working with its law enforcement partners in all jurisdictions to identify, pursue, arrest and prosecute the predators involved in human trafficking.”

Assistant U.S. Attorney Laura Provinzino, who is in charge of human trafficking prosecutions, said: “Today, Dontre McHenry was held accountable for recruiting and trafficking the most vulnerable girls in our state—runaways, recent immigrants, and girls in foster care. As our recent anti-trafficking efforts show, protecting our children from violent and manipulative predators is a central mission for the U.S. Attorney’s Office and our law enforcement partners. We will continue to be aggressive in the prosecution of these cases to protect our children from manipulation and violence at the hands of these predators that causes them to be sold for sex.”

According to the defendant’s guilty plea and documents filed in court, from at least January 2013 until March 2014, MCHENRY recruited at least three girls under the age of 18 and prostituted them for his own financial benefit. MCHENRY advertised girls on backpage.com and in chatrooms, and made a sexually-explicit video of a 15-year-old victim. MCHENRY directed the victims about how to talk to men on chat lines, what rates to charge for various sex acts, and how to set up “dates.” The victims were instructed to, and did, give all of the money they were paid for commercial sex acts to the defendant.

According to documents filed in court, on March 13, 2014, Minneapolis police executed a search warrant at a motel room in Roseville, Minnesota, which was previously occupied by MCHENRY and one of the victims. During the search, investigators discovered, among other evidence, handwritten notes and a book entitled “Pimpology: The 48 Laws of the Game.” The handwritten notes included references to trafficking and prostitution, as well as questions that referred to recruiting and coercing minors. Numerous text message conversations from customers arranging to meet with victims to purchase sex were found on the cellphones used by the defendant and the victims.

This case was the result of an investigation conducted by Homeland Security Investigations, the Minneapolis Police Department, the St. Paul Police Department, the Rochester Police Department, and the Roseville Police Department.

Assistant U.S. Attorneys Laura M. Provinzino and Melinda A. Williams prosecuted the case.

National Slavery and Human Trafficking Prevention Month

January is National Slavery and Human Trafficking Prevention Month, and the U.S. Attorney’s Office is proud to combine its efforts with federal, tribal, state, and local law enforcement partners to combat trafficking.

As part of that anti-trafficking effort, United States Attorney Andrew M. Luger today announced the guilty plea of PHILLIP DWAYNE LLOYD, a/k/a Marcus Strong, a/k/a Philip Dwayne Loyd, a/k/a Dwayne Smith, a/k/a Alfred Woods, a/k/a “PC,” 44, for recruiting and sex trafficking a 17-year-old girl in January 2015 and for directing and producing a video of the minor engaged in sexually-explicit conduct. LLOYD, who was indicted on May 4, 2015, pleaded guilty yesterday to sex trafficking of a minor and production of child pornography before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis.

Co-defendant RAQUEL MONE BELCHER, 29, also pleaded guilty yesterday to one count of conspiracy to commit sex trafficking of minors. Both defendants are expected to be sentenced on May 16, 2016 before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis.

This case is the result of an investigation conducted by the Anoka County Sheriff's Office, Homeland Security Investigations and the Minneapolis Police Department.

United States Attorney Andrew M. Luger today also announced the guilty plea of MYKEL LAMAR HARRIS, 25, for recruiting and sex trafficking a 17-year-old girl in late 2013. HARRIS, who was indicted on October 5, 2015, pleaded guilty yesterday to sex trafficking of a minor before Judge Donovan W. Frank in U.S. District Court in St. Paul.

This case is the result of an investigation conducted by Homeland Security Investigations and the St. Paul Police Department.

Assistant U.S. Attorney Laura M. Provinzino is prosecuting the cases.

 

Defendant Information:

DONTRE D’SEAN MCHENRY, a/k/a “Dontre Sean McHenry,” a/k/a “Avon,” a/k/a “Rico,” 26

St. Paul, Minn.

Convicted:

• Sex Trafficking of a Minor, 1 count

Sentenced:

• 293 months in prison

• Lifetime supervised release

PHILLIP DWAYNE LLOYD, a/k/a Marcus Strong, a/k/a Philip Dwayne Loyd, a/k/a Dwayne Smith, a/k/a Alfred Woods, a/k/a “PC,” 44

Minneapolis, Minn.

Convicted:

• Sex Trafficking of a Minor, 1 count

• Production of Child Pornography, 1 count

RAQUEL MONE BELCHER, 29

Minneapolis, Minn.

Convicted:

• Conspiracy to Commit Sex Trafficking of a Minor, 1 count

MYKEL LAMAR HARRIS, 25

St. Paul, Minn.

Convicted:

• Sex Trafficking of a Minor, 1 count

 

 

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United States Attorney’s Office, District of Minnesota: (612) 664-5600

United States Attorney Andrew M. Luger today announced that the federal government and a housing discrimination victim have entered into an agreement with a Brooklyn Park landlord and a property management company to settle allegations that they violated the federal Fair Housing Act (“FHA”) by refusing to allow the victim to keep her support animal at Huntington Place Apartments because the support animal was a pit bull. The alleged violations included: requiring the victim to purchase liability insurance for her support animal; requiring the victim to make her support animal wear a vest identifying it as a support animal; demanding excessive medical information; and refusing to renew the victim’s lease based on the breed of her support animal.

Under the terms of the agreement, filed in the form of a consent decree on Friday, January 22, 2016, the defendants, Brooklyn Park 73rd Leased Housing Associates, LLC; Dominium Management Services, LLC; Susan Meyer; and Gina Estrem will pay $35,000 to the housing discrimination victim. The defendants, who are the landlord, management firm, and two employees, were sued by the U.S. Attorney’s Office on May 18, 2015.

Pursuant to the consent decree, the defendants will be enjoined from: refusing to rent or discriminating in the terms, conditions and privileges of a dwelling of because of a person’s disability; refusing to make reasonable accommodations that may be necessary to afford a person with a disability an equal opportunity to use and enjoy a dwelling; and coercing, intimidating or interfering with a person’s use and enjoyment of a dwelling on account of having exercised a right granted by the FHA. In addition, they will adopt a reasonable accommodation policy for Huntington Place Apartments, which specifies that assistance animals are not considered “pets” under Huntington Place Apartment’s policies, and will display fair housing materials and include the words “Equal Housing Opportunity Provider” in advertising materials. Defendants and certain employees and agents will also attend an educational training program regarding the FHA and its disability discrimination provisions.

In its complaint, the federal government alleged that the defendants learned in February 2013 that a tenant had a pit bull in her apartment at Huntington Place Apartments, which included pit bulls in a prohibited breed policy. The victim requested the reasonable accommodation of being allowed to keep her dog, named “King,” as a “support animal” pursuant to the FHA. The defendants required additional medical information and maintained that the victim should get rid of King and replace him with a dog of a different breed. After receiving two letters from a psychologist and one from a social worker that verified the victim’s need to retain King, the defendants threatened eviction. The defendants’ attorney ultimately interviewed the victim’s psychologist in a phone call in which the psychologist reiterated the importance of King and the victim’s relationship with that specific dog to her well-being and recovery.

The defendants subsequently allowed the victim to keep King, but required her to purchase insurance for King, make him wear a vest identifying him as an emotional support animal, keep King leashed at all times and execute an indemnity agreement. The victim complied with the defendants’ requirements, but the defendants still demanded that she leave at the end of her initial lease term only because of the breed of her support animal.

The victim filed a discrimination complaint with the U.S. Department of Housing and Urban Development (“HUD”), alleging housing discrimination based on disability. HUD investigated the complaint and, on April 14, 2015, issued a charge of discrimination against the defendants, alleging they had engaged in discriminatory housing practices based on disability in violation of the FHA. This case arose from that charge.

“The Fair Housing Act requires landlords to make reasonable accommodations for people with disabilities, including allowing support animals that would be prohibited if they were simply pets. When tenants exercise the right to keep support animals, the FHA prohibits landlords from retaliating or discriminating against them,” said Assistant U.S. Attorney Craig Baune, who represented the United States in the matter.

The FHA prohibits discrimination in housing of the basis of race, color, religion, sex, familial status, national origin and disability. Civil Rights enforcement is a priority of the U.S. Department of Justice (“DOJ”), and individuals who believe they have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743), email DOJ at [email protected], or contact HUD at 1-800-669-9777.

The underlying case is United States of America, et al v. Brooklyn Park 73rd Leased Housing Associates, LLC, et al, Civil No. 15-2489 (PJS/SER). Assistant U.S. Attorney Craig Baune represented the United States in this court action. The victim intervened and was represented by Mawerdi Hamid and Lael Robertson of Mid-Minnesota Legal Aid. The claims settled by this agreement are allegations only; there has been no determination of liability.

 

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United States Attorney Andrew M. Luger and the Minnesota Department of Revenue-Criminal Investigation Division today announced the sentencing of RASHID FEHMI IBRAHIM, 40, for conspiracy, mail fraud and the illegal purchase and transport of tobacco products. The defendant pleaded guilty on June 8, 2015, before Judge Susan R. Nelson in U.S. District Court in St. Paul, Minn., to one count of Conspiracy to Commit Mail Fraud and Wire Fraud, five counts of Mail Fraud, one count of Conspiracy to Ship, Transport, Receive, Possess, Sell, Distribute and Purchase Contraband Smokeless Tobacco, and six counts of Shipment, Transport, Receipt, Possession, Sale, Distribution and Purchase of Contraband Smokeless Tobacco.

According to his guilty plea and documents filed in court, between 2007 and 2011, IBRAHIM purchased approximately $4,300,000 of untaxed Other Tobacco Products (“OTP”) from out-of-state tobacco wholesalers such as ISA Chicago Wholesale, Inc. (“ISA”) and shipped them to Minnesota. The defendant purchased the OTP free of any state taxes and intended to resell it without paying any state taxes in Illinois, Minnesota or elsewhere. IBRAHIM knew he was not a licensed distributor, manufacturer or carrier and, therefore, was unauthorized to purchase, sell, distribute, possess or receive smokeless tobacco products.

According to his guilty plea and documents filed in court, IBRAHIM used various aliases and addresses to conceal his OTP purchases and used private interstate contract carriers to ship the products from the wholesaler to Minnesota where IBRAHIM stored them in rented storage units. After receiving the shipment of OTP, IBRAHIM would illegally resell the products to retail establishments and other OTP traffickers in Minnesota. IBRAHIM purposely evaded the payment of state taxes and is ordered to pay a total of $3,048,109.39 in restitution to the state of Minnesota.

This case is the result of a joint investigation conducted by the Minnesota Department of Revenue-Criminal Investigation Division and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives.

This case was prosecuted by Assistant U.S. Attorney Benjamin Langner.

 

Defendant Information:

RASHID FEHMI IBRAHIM, 40

San Juan, Puerto Rico.

Convicted:

• Conspiracy to Commit Mail Fraud and Wire Fraud, 1 count
• Mail Fraud, 5 counts
• Conspiracy to Ship, Transport, Receive, Possess, Sell, Distribute and Purchase Contraband Smokeless Tobacco, 1 count
• Shipment, Transport, Receipt, Possession, Sale, Distribution and Purchase of Contraband Smokeless Tobacco, 6 counts

Sentenced:

• 57 months in prison
• 3 years supervised release
• $3,048,109.39 in Restitution

 

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United States Attorney Andrew M. Luger today announced the sentencing of CARNEL LAVEL HARRISON, a/k/a “Boo Man,” 27, with conspiring to distribute crack cocaine in the Twin Cities and Greater Minnesota. HARRISON pleaded guilty on April 30, 2015. He was sentenced on January 21, 2016 before U.S. District Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minn.

Assistant U.S. Attorney David Steinkamp said: “The defendant and other members of his violent street gang sold significant quantities of crack cocaine to the citizens of St. Cloud and Minneapolis. A sentence of 10 years provides deterrence to others who may try to profit from the misery that drug addiction brings, and will also protect the public from an individual with a history of violent crime.”

According to his guilty plea and documents filed in court, between January and December 2014, HARRISON was closely associated with the Minneapolis-based Taliban/Young N Thuggin (YNT) street gangs. Taliban/YNT gang members use hand gestures, social media, and specific language to communicate amongst each other and to convey membership. They claim an area of north Minneapolis as their territory, and other north Minneapolis gangs, including the 19-Dipset and Stick Up Boys, as enemies.

According to his guilty plea and documents filed in court, HARRISON and his co-conspirators made money by trafficking in illegal drugs, among other criminal activity. Members of the Taliban/YNT frequently traveled to St. Cloud and Duluth, Minnesota, and to Fargo, North Dakota, to sell crack. Crack that the Taliban/YNT could sell in Minneapolis for $20 could be sold for $50 in Greater Minnesota and in North Dakota. Similarly, an amount of crack cocaine sold for $150 in the Metro area would sell for between $220 and $250 in Greater Minnesota.

According to his guilty plea and documents filed in court, HARRISON and his co-conspirators would carry guns to protect themselves and their money while trafficking crack cocaine. They also use guns to both protect against attacks by rival gangs and to retaliate violently to threats or assaults by their rivals. Their use of weapons is intended to gain street supremacy and further the gang’s ability to sell illegal drugs.

This case was the result of an investigation conducted by the Safe Streets Task Force, which is comprised of federal and local law enforcement agencies, including, but not limited to, the FBI, Minneapolis Police Department, Minnesota Bureau of Criminal Apprehension and St. Paul Police Department. The St. Cloud Violent Crimes Task Force and the St. Cloud Police Department were a critical part of this investigation.

This case was prosecuted by Assistant U.S. Attorney David Steinkamp.

 

Defendant Information:

CARNEL LAVEL HARRISON, a/k/a “Boo Man,” 27

Unknown

Convicted:

• Conspiracy to Distribute Crack Cocaine, 1 count

Sentenced:

• 10 years in prison

• Five years supervised release

 

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United States Attorney Andrew M. Luger today announced the sentencing of DARRELL ALAN LUSSIER, 36, to 360 months in federal prison for kidnapping and violently assaulting three victims on the Red Lake Indian Reservation. On September 3, 2015, following a four-day trial, a federal jury found LUSSIER guilty of all counts. The defendant was sentenced on January 20, 2016 before Judge Richard H. Kyle in U.S. District Court in Duluth, Minn.                 

As proven at trial, on February 9, 2015, LUSSIER used his fists and feet to assault victim G.L.M. after the two individuals got into a verbal argument with each other at G.L.M.’s home. The defendant continued to brutally beat the victim before wrapping a shoelace around the victim’s neck in an attempt to strangle him. LUSSIER then threw the victim into a crawlspace beneath the home. After assaulting G.L.M., LUSSIER brutally assaulted two other victims, D.M.R., who is legally blind, and D.M.R.’s sister, N.L.R., and then threw them into the crawlspace before leaving the house. The three victims were found the next day and taken to the Red Lake Hospital and subsequently transferred to Sanford Hospital in Fargo, all suffering from traumatic brain injuries and various broken bones and other injuries.

Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.

To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.

These cases resulted from an investigation conducted by the Federal Bureau of Investigation and the Red Lake Police Department.

This case was prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.

 

Defendant Information:

DARRELL ALAN LUSSIER, 36

Red Lake, Minn.

Convicted:

• Kidnapping, 3 counts

• Assault Resulting in Serious Bodily Injury, 3 counts

Sentenced:

• 360 months in prison

• Five years supervised release

   

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Andrew M. Luger, United States Attorney for the District of Minnesota and Ed Grace, Deputy Assistant Director for the U.S. Fish and Wildlife Service, announced that today in federal court a St. Cloud State University Professor pleaded guilty to smuggling elephant ivory and to illegally exporting rhinoceros horns from the United States in violation of the Lacey Act. Under the Lacey Act, it is unlawful to import, export, transport, sell or purchase wildlife, fish or plants that were taken, possessed, transported or sold in violation of a state, federal or foreign law. When it was passed in 1900, the Lacey Act became the first federal law protecting wildlife.

YIWEI ZHENG, A/K/A STEVE ZHENG, 43, of St. Cloud, Minnesota, pleaded guilty today in U.S. District Court in Minneapolis to knowingly and fraudulently smuggling elephant ivory out of the United States on April 30, 2011, to a recipient in Shanghai, China, contrary to U.S. smuggling statutes. ZHENG also pleaded guilty to violating the Lacey Act by knowingly exporting two rhinoceros horns from the U.S. between July 25, 2010 and July 27, 2010, with knowledge that the two rhinoceros horns were transported and sold in violation of the laws and regulations of the United States, including the Endangered Species Act.

In addition to his employment as a Professor of Philosophy at St. Cloud State University, ZHENG operated an online business known as Crouching Dragon Antiques. As part of this business, ZHENG offered for sale and sold a variety of items, including items made of elephant ivory and rhinoceros horn.

As alleged in court filings and admitted to during the plea hearing today, on May 5, 2011, U.S. Customs and Border Protection officers at the International Mail Facility in Chicago, Illinois identified a parcel being exported from the United States and destined for an individual in Shanghai, China. The shipper was identified as YIWEI ZHENG, a Professor at St. Cloud State University in St. Cloud, Minnesota. A U.S. Fish and Wildlife Service wildlife inspector determined the package contained a number of elephant ivory carvings. The accompanying Customs Declaration and Dispatch Note completed by the shipper described the contents as “Chinese artifact: Desk Decorative item” with a declared value of $35.00. Additionally, the ivory contained within the shipment had not been declared to the U.S. Fish and Wildlife Service upon export nor had ZHENG obtained any Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) permits for the ivory being exported as required.

U.S. Fish and Wildlife Service agents determined through investigation that ZHENG purchased the elephant ivory items found in the intercepted shipment through the online auction site eBay and that the value of those items was actually $6,961.41 rather than the $35.00 ZHENG declared on the exported shipment. During the course of the investigation, agents also documented that ZHENG purchased two rhinoceros horns from an individual in Florida for more than $20,000 and subsequently smuggled the two rhinoceros horns out of the United States to China where they were ultimately sold at auction for approximately $68,000. At the time, ZHENG knew that all rhinoceros species were protected under CITES and were listed as endangered or threatened species under the Endangered Species Act (ESA). ZHENG further knew that the ESA made it unlawful to import or export any endangered wildlife species.  

In total, agents documented that ZHENG smuggled into and out of the United States and sold in China and elsewhere, elephant ivory, rhinoceros horn and products with a fair market value in excess of $1,000,000. Pursuant to the plea agreement presented in U.S. District Court earlier today, ZHENG agreed that the fair market value of the illegal wildlife documented in his case was between $550,000 and $1,500,000.

Assistant U.S. Attorney Laura Provinzino stated “the U.S. Attorney’s Office is committed to protecting the environment and natural resources by prosecuting those individuals who violate our federal laws. Cases like this are important to curb the market for rhinoceros horn and elephant ivory to help ensure the survival of those species across the globe.”

“This is another significant case which documents the extent of global wildlife trafficking and the pressure it places on the world’s most rare and endangered animals,” said U.S. Fish and Wildlife Service Deputy Assistant Director for Law Enforcement Ed Grace. “These types of investigations remain the top priority for us as we carry out the President’s National Strategy for Combating Wildlife Trafficking,” continued Grace.

ZHENG faces a maximum sentence of up to 10 years imprisonment and a criminal fine of up to $500,000. The defendant will be sentenced on May 9, 2016 in Minneapolis before Chief Judge John R. Tunheim of the U.S. District Court for the District of Minnesota.

This case is the result of an investigation by the U.S. Fish and Wildlife Service and is being prosecuted by Assistant U.S. Attorney Laura M. Provinzino.

The mission of the U.S. Fish and Wildlife Service is working with others to conserve, protect and enhance fish, wildlife, plants and their habitats for the continuing benefit of the American people.

 

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WASHINGTON – The Department of Justice has granted a request by the Mille Lacs Band of Ojibwe for the United States to assume concurrent criminal jurisdiction on the tribe’s reservation in central Minnesota, Deputy Attorney General Sally Quillian Yates announced today. 

The decision was the second assumption of jurisdiction granted by the Department of Justice under the landmark Tribal Law and Order Act of 2010 (TLOA), which gave the department discretion to accept concurrent federal jurisdiction to prosecute violations of the General Crimes Act and the Major Crimes Act within areas of Indian country that are also subject to state criminal jurisdiction under Public Law 280.  Public Law 280 is the 1953 law that mandated the transfer of federal law enforcement jurisdiction for certain tribes to six states, including Minnesota.  The first assumption of federal jurisdiction took place on Minnesota’s White Earth Reservation in March 2013. 

The decision will take effect on Jan. 1, 2017.  Tribal, state and county prosecutors and law enforcement agencies will also continue to have criminal jurisdiction on the reservation.   

“We believe this decision – made after a careful review of the tribe’s application and the facts on the ground – will strengthen public safety and the criminal justice system serving the Mille Lacs Band of Ojibwe,” said Deputy Attorney General Yates.  “This is another step forward in the Justice Department’s commitment to serve and protect American Indian and Alaska Native communities, to deal with them on a government-to-government basis and to fulfill the historic promise of the Tribal Law and Order Act.  Strong law enforcement partnerships with the Tribe, as well as state and local counterparts, will be essential to the success of this effort.”

“We want to make certain that the outcome of this decision will benefit the residents of the Mille Lacs Band and improve the safety of the community,” said U.S. Attorney Andrew M. Luger of the District of Minnesota.  “As we work towards full implementation, we will work to strengthen the bonds between our tribal and local partners in pursuit of our common goal of providing a safe environment where this community can thrive.”

The Department of Justice already has jurisdiction to prosecute certain crimes, such as drug trafficking, wherever they occur in the United States – including on the Mille Lacs Reservation.  The change announced today will expand this existing jurisdiction to allow federal prosecution of major crimes such as murder, rape, felony assault and felony child abuse.

The decision followed careful consideration of the request and information provided by the Mille Lacs Band Tribal government, as well as by the Justice Department’s Office of Tribal Justice, the Executive Office for U.S. Attorneys, the U.S. Attorney's Office for the District of Minnesota, the Federal Bureau of Investigation, the U.S. District Court, state and local law enforcement partners and other sources.

 

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United States Attorney Andrew M. Luger today announced the guilty pleas of FRANCIS SELLNER, 66, and EUGENE SELLNER, 63, for income tax evasion. EUGENE SELLNER was charged on December 9, 2015, and FRANCIS SELLNER was charged on December 10, 2015, by felony information, each with one count of tax evasion. Both defendants pleaded guilty yesterday before U.S. District Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn. A sentencing date has not yet been determined.

According to the defendants’ guilty pleas and documents filed in court, FRANCIS and EUGENE SELLNER are brothers and co-owners of a farm in Sleepy Eye, Minnesota. From approximately 2011 through 2013, the Sellner Farm regularly sold corn and soybeans to a feed and grain company located in Morgan, Minnesota. During this time, the feed and grain company paid for the goods with checks written out to both defendants. Rather than depositing the checks, the defendants cashed the majority of the checks to avoid paying taxes on the income.

According to the defendants’ guilty pleas and documents filed in court, FRANCIS and EUGENE SELLNER filed false income tax returns for the tax years 2011, 2012 and 2013, failing to report income received from the feed and grain company. In total, the defendants failed to report more than $500,000 in income.

FRANCIS SELLNER and EUGENE SELLNER each face up to five years in prison.

This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division.

This case is being prosecuted by Assistant U.S. Attorney Joseph H. Thompson.

 

Defendant Information:

FRANCIS SELLNER, 66

Sleepy Eye, Minn.

Convicted:

• Tax Evasion, 1 count

 

EUGENE SELLNER, 63

Sleepy Eye, Minn.

Convicted:

• Tax Evasion, 1 count

   

   

   

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United States Attorney Andrew M. Luger today announced the indictment of LEVI DAVID LINDEMANN, 39, for stealing more than $2.5 million from investment advisory clients. LINDEMANN is charged with mail fraud and money laundering. He is expected to make an initial appearance before Magistrate Judge Hildy Bowbeer in U.S. District Court in St. Paul, Minn.   

“People entrusted their savings to Mr. Lindemann based on his promise to invest their money and help them save for retirement,” said Assistant United States Attorney Joseph H. Thompson. “But, as charged, Mr. Lindemann abused that trust in order to steal his clients’ money and enrich himself at their expense. After receiving a tip from one of Mr. Lindemann’s victims, agents from the IRS, FBI, and Minnesota Department of Commerce worked together to ensure that he will be held to account for his actions.”

“As the charges allege, Levi Lindemann abused his position of trust as a financial adviser to steal from his clients, including elderly individuals,” said Minnesota Commerce Commissioner Mike Rothman. “Lindemann promised clients he would put their money in legitimate and safe investments. Instead, he used the funds to pay for personal expenses while also making Ponzi-type payments to other clients to cover up and continue his fraud.”

“IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney's Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud their clients,” stated IRS CI Special Agent in Charge Shea Jones. “Today's indictment of Levi Lindemann should serve as a strong warning to those who are considering similar fraudulent conduct.”

According to the indictment and documents filed in court, between 2009 and 2014, LINDEMANN owned and operated Gershwin Financial, Inc., an investment management company that did business under the name, Alternative Wealth Solutions (AWS). Through AWS, LINDEMANN provided financial planning and asset management services, and sold insurance annuities and investment products to clients in Minnesota and Wisconsin.

According to the indictment and documents filed in court, LINDEMANN used AWS to solicit approximately $4.3 million in investor funds from approximately 50 investor clients. LINDEMANN encouraged his clients to surrender to him their retirement accounts so that he could invest funds on their behalf. LINDEMANN induced clients to entrust him with their money by falsely representing that he would use the invested funds to buy secured notes or other legitimate investment vehicles. Instead of investing their money into legitimate investment vehicles, LINDEMANN used the invested funds to pay personal expenses, convert the investments to cash for his own use, purchasing at least one vehicle and to make Ponzi-type payments of promised returns to other investors.

According to the indictment and documents filed in court, LINDEMANN took steps to conceal his fraudulent activity and lull investor-clients by creating counterfeit secured notes and providing them to investor-clients as proof of their investment. LINDEMANN also used some of the investment funds that he stole to make monthly payments to investor-clients, which were intended to appear to be monthly interest payments accruing from legitimate investments.

This case is the result of an investigation conducted by the Minnesota Department of Commerce Fraud Bureau, Criminal Investigation Division of the IRS and Federal Bureau of Investigation.

This case is being prosecuted by Assistant United States Attorney Joseph H. Thompson.

 

Defendant Information:

LEVI DAVID LINDEMANN, 39

Stillwater, Minn.

Charges:

• Mail fraud, 1 count

• Money laundering, 1 count

   

   

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The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

United States Attorney Andrew M. Luger today announced the sentencing of ZACHARY LEE MORGENSTERN, 19, to 41 months in prison, followed by 3 years supervised release, for calling in multiple false bomb threats, making harassing text messages, and making “swatting” phone calls, in which he falsely reported hostage situations. MORGENSTERN was arrested in Texas on May 14, 2015, and was transported to Minnesota. MORGENTERN pleaded guilty on August 7, 2015. He was sentenced today before U.S. District Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minn. 

“The defendant engaged in a pattern of harassing activity against several victims using the cloak of anonymity afforded by the Internet,” said Assistant United States Attorney Timothy C. Rank.  “He wrought emotional havoc and caused the needless expenditure of public funds to respond to his destructive emails, tweets, and phone calls. Mr. Morgenstern committed his crimes in part because he thought he would not get caught. Because of the excellent investigative work of the FBI, he was wrong, and the sentence today sends a strong message that there are serious consequences for this type of behavior.”

“This sentencing reinforces the FBI's willingness and ability to bring to justice those who would make bomb threats against our schools and misuse law enforcement resources,” said Special Agent in Charge of the FBI Minneapolis Division Richard T. Thornton. “There is no tolerance for such crimes.”

“It's good to have closure in this matter so we can move on from the disruption in our city and school district caused by Mr. Morgenstern's actions,” said Marshall Police Chief Rob Yant.

According to the defendant’s guilty plea and documents filed in court, between October 2014 and May 2015, MORGENSTERN, made a series of threatening communications against a number of different victims in the Marshall, Minnesota area. MORGENSTERN, concealing his identity using anonymized email addresses, Twitter handles, and Internet-based phone accounts, made threats to kill a police officer and her family; threats to use explosives to blow up a school; and threats to use guns to shoot up a school. MORGENSTERN also engaged in a series of “swatting” attacks, in which he made hoax phone calls to law enforcement making it appear that there was a violent crime in progress at a residence, when in fact no such crime was taking place. The defendant engaged in these “swatting” calls with the intent that they would result in an emergency police response to the residence, ideally involving a Special Weapons and Tactics (SWAT) team.

According to the defendant’s guilty plea and documents filed in court, one such attack came on October 7, 2014, when MORGENSTERN called the Marshall Police dispatch center and claimed to have taken two people hostage at a residence of H.M., a minor, in Marshall. MORGENSTERN further claimed that he had shot one of the hostages in the knee cap and that he was going to kill both hostages unless he received a duffel bag containing a half a million dollars. The Marshall Police Department determined that call was a hoax.

According to the defendant’s guilty plea and documents filed in court, on January 6, 2015, MORGENSTERN called in a bomb threat into the Marshall, Minnesota Police Department dispatch center. In the call, MORGENSTERN claimed to be D.R., a 17-year-old male from Marshall, Minnesota, and he stated that he had placed bombs around Marshall High School that were set to detonate in approximately one hour. School officials evacuated the school and responding officers searched the school and determined the threat was a hoax. Two days later, on January 8, 2015, MORGENSTERN, concealing his identity, placed a call to Marshall Police dispatch claimed he had taken a father and son hostage at gunpoint at their residence in Marshall.  MORGENSTERN claimed he had already shot the father in the leg and would soon shoot both hostages in the head. The address provided by the caller for the hostage situation was the residence of a D.R. Police responded to the call and learned that it had been a hoax. Shortly after the call to Marshall Police, MORGENSTERN tweeted that he was in the process of “swatting” D.R.

According to the defendant’s guilty plea and documents filed in court, on January 9, 2015, MORGENSTERN called the Marshall Police dispatch and, claiming to be D.R., threatened to “shoot up” Marshall High School in 30 minutes and kill everybody. MORGENSTERN then tweeted from the account, @RIURichHomie that D.R. was going to shoot up a school in 10 minutes. On January 11, 2015, MORGENSTERN sent an email message to the Superintendent of Marshall, Minnesota Public Schools which had purportedly been sent by D.R. In the message, MORGENSTERN claimed he was D.R. and that he had planted a bomb at a Marshall school that would detonate at 10:00 am the following day. MORGENSTERN also claimed he would arrive at a different Marshall school at the same time and shoot students and faculty members.

According to the defendant’s guilty plea and documents filed in court, on January 29, 2015, an email message was received by a Marshall Public Schools employee that purportedly had been sent by D.R., but in fact sent by MORGENSTERN. The sender claimed he had placed a bomb in the building and all survivors would be killed by a team who would be coming to the school. 

According to the defendant’s guilty plea and documents filed in court, on February 16, 2015, the Marshall Police dispatch received a phone call from a person identifying himself as a 13-year-old boy named I.W., who claimed that two black men had just broken into his apartment and shot his mother in the leg.  The call came from MORGENSTERN. He told the dispatcher that he was frightened and hiding in a bedroom closet, that the men were in the living room with his mother and 3-year-old sister, and that he could hear the men yelling at his mother.  Police responded to the call and determined it was a hoax. 

Finally, according to the defendant’s guilty plea and documents filed in court, on April 20, 2015, MORGENSTERN, concealing his identity, left a voicemail message for a Marshall Police Officer who worked as a school resource officer at Marshall High School in which MORGENSTERN threatened to kill the officer’s family. 

This case is the result of an investigation conducted by the Federal Bureau of Investigation and the Marshall Police Department.

This case was prosecuted by the United States Attorney’s Office for the District of Minnesota.

 

Defendant Information:

ZACHARY LEE MORGENSTERN, 19

Cypress, Tex.

Convicted:

• Threats to kill, 1 count

Sentenced:

• 41 months in prison

• 3 years of supervised release

 

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United States Attorney Andrew M. Luger today announced the indictment of COLIN ALEXANDER CHISHOLM, 64, for stealing more than $2 million from investors by lying to them about an investment in a purported television network startup. CHISHOLM was indicted on seven counts of wire fraud and six counts of mail fraud.  The defendant is expected to make an initial appearance today before Magistrate Judge Becky Thorson in U.S. District Court in St. Paul, Minn.  

“According to the indictment, Mr. Chisholm claimed to have devised a creative and exciting investment opportunity,” said Assistant U.S. Attorney Lola Velazquez-Aguilu. “However, it was built on a series of lies. Instead of providing a real possibility for a return on their investment, this defendant is charged with victimizing those who entrusted their money to him. Thanks to the hard work of investigators from the Minnesota Department of Commerce and United States Postal Inspection Service, this defendant will now have to answer for his alleged crimes.”

“As the indictment alleges, Colin Chisholm told one lie after another to steal from investors who thought they were financing a promising new business enterprise,” said Minnesota Commerce Commissioner Mike Rothman. “In reality, Chisholm was using their money for his own personal enrichment and luxurious lifestyle. This case shows the Commerce Fraud Bureau’s continuing partnership with federal authorities to bring white-collar criminals to justice.”

Craig I. Goldberg, Postal Inspector in Charge of the Denver Division, which also covers the Twin Cities, said, “When the U.S. mail is alleged to have been used for the purposes of committing fraud, it’s the job of the Postal Inspection Service to aggressively investigate and ensure America’s continued confidence in the integrity of its postal system.”

“This case is yet another example of successful cooperation between federal and local law enforcement and prosecutors,” said U.S. Attorney Luger. “I am especially grateful to my colleagues and friends in the Hennepin County Attorney’s Office who referred this case for federal prosecution.”

According to the indictment and documents filed in court, 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. As part of the solicitation, CHISHOLM told potential investors that TCN would serve as a network for a group of cable television channels, thereby allowing advertisers to obtain advertising time on multiple channels via a single network advertising buy. 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 indictment and documents filed in court, 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. CHISHOLM lied to some investors by telling them that they were buying shares of TCN stock owned by CHISHOLM’S alleged family trust – the Comar Trust and told some investors that their investments were guaranteed by the Comar Trust. In fact, the Comar Trust did not have funds to guarantee the investments.

According to the indictment and 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 Clam Chisholm and claimed to have close personal ties to members of the Bush family, specifically to Prescott S. Bush, Hr., 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 the indictment and documents filed in court, 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 the indictment and documents filed in court, CHISHOLM also failed to disclose his own misuse of investor funds, including funds he used to satisfy a $255,500.50 settlement with Verizon and for personal expenses, such as the purchase of a yacht, personal fitness and wellness expenses, and rent for his home on Lake Minnetonka.

CHISOLM is charged with causing the loss of more than $2 million to individual 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, 64
Minneapolis, Minn.

Charges:

• Wire fraud, 7 counts
• Mail fraud, 6 counts

United States Attorney Andrew M. Luger announced the sentencing of STEVEN RICHARD SMASAL, 48, to 51 months in prison for traveling abroad to engage in illicit sexual conduct. SMASAL pleaded on guilty on July 24, 2015, before U.S. District Judge John R. Tunheim. He was sentenced today in U.S. District Court in Minneapolis, Minn., before now Senior U.S. District Judge Tunheim.

“This sentence serves as a warning to all those who would consider traveling  overseas to sexually exploit children, ” said acting Special Agent in Charge William Lowder of HSI St. Paul. “Sex tourism is a crime in the United States. HSI and our law enforcement partners here and around the world will aggressively pursue those who attempt to harm children, no matter where that may be.” 

According to the defendant’s guilty plea, on February 24, 2015, SMASAL, who had spent significant time teaching in the Philippines, was scheduled to travel from the Twin Cities to Beijing via Toronto. The purpose of his trip was to teach English in Beijing and to engage in illicit sexual conduct with minor girls in the Phillippines.

According to the defendant’s guilty plea, SMASAL communicated with at least two females, one of whom was the mother of a 14-year-old girl. SMASAL indicated to the woman that he would like to meet her and her 14-year-old daughter in the Phillippines, at one point stating, “…understand that I will want you and ur daughter.” SMASAL later stated, “Is it ok that I have sex with ur daughter?” Finally, he asked, “Can I just have ur daughter then?”

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.

Assistant U.S. Attorney Laura M. Provinzino prosecuted the case.

Defendant Information:

STEVEN RICHARD SMASAL, 48
Eau Claire, Wisc.

Convicted:

• Travel with intent to engage in illicit sexual conduct, 1 count

Sentenced:

• 51 months in prison
• 15 years of supervised release

United States Attorney Andrew M. Luger today announced an indictment charging DANNY JAMES HEINRICH, 52, with 25 counts of felony child pornography offenses, including 17 counts of possession and eight counts of receipt of child pornography.  HEINRICH was originally charged by criminal complaint on October 29, 2015.

According to the indictment, a search warrant was executed on July 28, 2015, at the Annandale, Minn., home of the defendant. During the execution of the search warrant, officers recovered numerous images of suspected child pornography from the residence. Those images were organized into separate collections of child pornography within multiple three-ring binders located throughout the residence.

According to the indictment, additional images of child pornography were recovered from the hard-drive of a desktop computer located in the basement of the defendant’s residence.

If you have information about this case, please contact the Stearns County Sheriff’s Office at 1-320-656-6625 or the National Center for Missing and Exploited Children at 1-800-THE-LOST.

This case is the result of an investigation conducted by the FBI, Minnesota Bureau of Criminal Apprehension and the Stearns County Sheriff’s Office.

This case is being prosecuted by Assistant United States Attorneys Julie E. Allyn and Steven L. Schleicher of the U.S. Attorney’s Office’s Special Prosecutions Unit.

Defendant Information:

DANNY JAMES HEINRICH, 52
Annandale, Minn.

Charges:

• Possession of child pornography – printed material, 10 counts
• Possession of child pornography – victim under 12 – printed material, 5 counts
• Possession of child pornography – morphed image – printed material, 1 count
• Possession of child pornography – digital image, 1 count
• Receipt of child pornography – digital material, 7 counts
• Receipt of child pornography – printed material, 1 count

United States Attorney Andrew M. Luger today announced the sentencing of COREY VICTOR BEVINS, 39, to 25 years in prison for making pornographic images and videos of a nine-year-old child. BEVINS was originally charged by indictment on April 22, 2014, and pleaded guilty on June 30, 2015, to production, receipt and possession of child pornography. He was sentenced this morning in U.S. District Court in Duluth, Minn., before U.S. District Judge Richard H. Kyle.

“Bevins downloaded child pornography to help him groom a nine-year-old victim so that he could exploit that child,” said Assistant U.S. Attorney Deidre Aanstad. “He then produced child pornography of that same victim who he repeatedly sexually abused. The sentence imposed by the court is both fair and just.”

According to the defendant’s guilty plea, on July 17, 2012, BEVINS persuaded a nine-year-old child to engage in sexually explicit conduct so that he could make visual depictions, including videos, of such conduct. The videos show the defendant removing the child’s clothes and sexually assaulting the child. BEVINS also attempted to make child pornography involving the same child victim at least two other times during the summer of 2012.

According to the defendant’s guilty plea, on November 22, 2012, BEVINS used his computer to receive child pornography via a peer-to-peer file sharing program. The pornography depicted a pre-pubescent child engaged in sexually explicit conduct.

According to the defendant’s guilty plea, on January 7, 2014, within the confines of the White Earth Indian Reservation, BEVINS possessed at least five videos of child pornography depicting children engaged in various acts of sexually explicit conduct.

In total, BEVINS downloaded and possessed at least 60 digital media images and 269 videos of the sexual exploitation of children, including images and videos of prepubescent minors under the age of 12.

This was the result of an investigation conducted by the Federal Bureau of Investigation and the Minnesota Bureau of Criminal Apprehension.

Assistant U.S. Attorney Deidre Y. Aanstad prosecuted this case.

Defendant Information:

COREY VICTOR BEVINS, 39
White Earth, Minn.

Convicted:

• Production of child pornography, 1 count
• Receipt of child pornography, 1 count
• Possession of child pornography, 1 count

Sentenced:

• 25 years in prison
• 15 years supervised release

United States Attorney for the District of Minnesota Andrew M. Luger today announced the trial conviction of LEE ANDREW PAUL, a/k/a “Black,” 35, who was originally indicted on February 17, 2015, in the District of Minnesota, for sex trafficking two minor girls. A superseding indictment subsequently charged PAUL with three counts of sex trafficking. The jury returned a guilty verdict in less than two hours after a five-day trial before U.S. District Judge Ann D. Montgomery. A sentencing date has not yet been set.

“Lee Paul is a predator,” said Assistant United States Attorney Melinda A. Williams. “He hunted down vulnerable girls, including a sixth grader, to traffic for commercial sex. He controlled these women and girls through physical, sexual, and psychological abuse. The stories of these girls are difficult to hear and were even more difficult for these victims to recount. We thank the victims who courageously testified at trial and the jury who rendered this just verdict.”

“While no jail sentence is long enough to erase the damage he has done to his victims, today’s verdict will ensure Lee Paul will have years to reflect on the pain and suffering he has caused,” said William Lowder, acting special agent in charge of HSI St. Paul. “Our communities are safer today, as a result of the excellent cooperative efforts in this case of the Anoka County Sheriff’s Office, the Rochester Police Department, the U.S. Marshals Service and Homeland Security Investigations.”

As proven at trial, LEE PAUL is a self-proclaimed “pimp.” During Memorial Day weekend of 2013, PAUL sought out a 12-year-old sixth grader to join his sex trafficking “family.” He lured a 12-year-old and 16-year-old girl to a party at a motel in Rochester, Minn., where he gave them marijuana and alcohol. After the victims became inebriated, PAUL told them he was a pimp and that they would be working for him. PAUL then took the girls to the Twin Cities where they know no one. PAUL sexually assaulted the 16-year-old victim and brutally raped the 12-year-old.

As proven at trial, while at a motel in Maple Grove, Minn., that same weekend, the 16-year-old victim escaped PAUL and found a police officer and reported what had happened to her. However, PAUL had been tipped off that the 16-year-old victim was trying to find the police and PAUL fled the scene. He then directed another victim, this one 19-years-old, to take the 12-year-old victim to Alexandria, Minn., to “show her the ropes.” The 12-year-old was sold two times that that night for sex with men. Law enforcement arrested PAUL on the morning of May 27, 2013, and was in jail pending state charges in Olmsted and Anoka Counties until he made bail on August 26, 2013. PAUL fled in July 2014 on the eve of his Olmsted County trial.

As proven at trial, while on the run, PAUL got rid of his cell phone and shut down his Facebook page to avoid being tracked by law enforcement. He fled first to Chicago, Ill., and then Atlanta, Ga., where he lived under two different assumed identities and used “burner” phones to avoid being tracked by law enforcement. He was arrested on January 14, 2015 by the U.S. Marshals Service and brought back to Minnesota to face federal charges.

This case is the result of an investigation conducted by Homeland Security Investigations, the United States Marshal Service, Rochester Police Department, Alexandria Police Department, Douglas County Sheriff’s Office, Anoka County Sheriff’s Office, Pope County Sheriff’s Office and the Maple Grove Police Department.

This case is being prosecuted by Assistant U.S. Attorney Melinda A. Williams, Special Assistant U.S. Attorney Erin Gustafson and U.S. Attorney Andrew M. Luger. The United States Attorney’s Office thanks the Olmsted County Attorney’s Office for its substantial assistance in the prosecution of this case.

Defendant Information:

LEE ANDREW PAUL, a/k/a “Black,” 35
Bloomington, Minn.

Convicted:

• Sex trafficking of a minor, two counts
• Sex trafficking by use of force, fraud and coercion, one count

United States Attorney for the District of Minnesota Andrew M. Luger, Special Agent in Charge for the Minneapolis Division of the FBI Richard T. Thornton and Assistant Attorney General for the National Security Division John P. Carlin today announced a criminal complaint charging ABDIRIZAK MOHAMED WARSAME, 20, with conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL) and providing material support to ISIL. The defendant made an initial appearance today before Senior District Judge Michael J. Davis in U.S. District Court in Minneapolis, Minn.

“This defendant is the tenth Twin Cities’ man charged as part of a broad conspiracy to provide material support to ISIL,” said US Attorney Luger. “The FBI and prosecutors in my office continue to work without pause to keep Minnesotans safe and bring these defendants to justice.”

“This arrest demonstrates the commitment to U.S. national security by the members of the FBI's Joint Terrorism Task Force,” said Special Agent in Charge Thornton.  “The members of this task force work in concert to ensure the protection of the United States and its citizens every day.  These efforts will continue as long as threats persist.”

“Abdirizak Warsame conspired with others to travel to Syria to fight with ISIL,” said Assistant Attorney General Carlin. “Counterterrorism is the National Security Division’s highest priority, and we will continue to work to stem the flow of foreign fighters abroad and to bring to justice those who seek to provide material support to designated foreign terrorist organizations.”

According to the complaint and documents filed in court, in the spring of 2014, WARSAME and his co-conspirators began meeting to watch propaganda videos that glorified religious violence and discussing their aspirations to travel to Syria to join and fight with ISIL. Members of the group, including WARSAME, discussed ways to leave the United States and travel to Syria despite the fact that law enforcement scrutiny of them was intense. At one such meeting, GULED OMAR was elected “emir,” or leader, of the group. Later in 2014 when OMAR was planning to depart for Syria, OMAR appointed WARSAME to replace him as “emir” for the remaining co-conspirators.

According to the complaint and documents filed in court, in the spring of 2014, WARSAME provided $200 to a co-conspirator, ADNAN FARAH, so that A. FARAH could obtain an expedited U.S. Passport so that A. FARAH could travel overseas to join ISIL. WARSAME also applied for an expedited passport in the spring of 2014, but his application was initially denied.

According to the complaint and documents filed in court, WARSAME repeatedly attempted to obtain a telephone number or other contact information of ISIL members, including ISIL member H.K. In June 2014, WARSAME attempted to obtain this contact information so that he could pass the contact information along to Y.J., who was then attempting to travel from Turkey to Syria to join ISIL.

According to the complaint and documents filed in court, in April 2015 WARSAME had actively encouraged OMAR and other co-conspirators to travel to Syria through Mexico, but did not plan to join the Mexico group because he was planning to travel with his family to East Africa. From East Africa, WARSAME planned to either break free from his family and travel to Syria, or wait in Somalia for a time when, he believed, al-Shabaab would pledge allegiance to ISIL, thus expanding ISIL to Somalia.

According to the criminal complaint and documents filed in court, on April 2, 2015, WARSAME recounted a conversation he had with ABDI NUR, before NUR left the United States for Syria. In that exchange, WARSAME told OMAR that he proposed to NUR that they rob people in order to finance their travel to Syria. WARSAME further explained that NUR rejected this idea, and suggested they rob the government instead.

This case is the result of an investigation conducted by members of the FBI-led Joint Terrorism Task Force (JTTF). The JTTF includes members from the following departments:  the United States Marshals Service, Bloomington Police Department, Ramsey County Sheriff’s Office, Hennepin County Sheriff’s Office, Federal Air Marshals Service, Customs and Border Patrol, Department of Homeland Security, Minneapolis Police Department, the Airport Police, and the FBI.

This case is being prosecuted by Assistant U.S. Attorneys Andrew R. Winter and John F. Docherty.

 

Defendant Information:                                                                                                                     

ABDIRIZAK MOHAMED WARSAME, 20

Eagan, Minn.

Charges:

• Conspiracy to provide material support to a designated foreign terrorist organization, 1 count

• Providing material support to a designated foreign terrorist organization, 1 count

   

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The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Three Co-Conspirators Have Already Pleaded Guilty; Five Expected to Go to Trial in May 2016

Abdirizak Mohamed Warsame, 20, of Eagan, Minnesota, was charged by criminal complaint with conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Andrew M. Luger of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division.

“Abdirizak Warsame conspired with others to travel to Syria to fight with ISIL,” said Assistant Attorney General Carlin.  “Counterterrorism is the National Security Division’s highest priority, and we will continue to work to stem the flow of foreign fighters abroad and to bring to justice those who seek to provide material support to designated foreign terrorist organizations.”

“This defendant is the 10th Twin Cities’ man charged as part of a broad conspiracy to provide material support to ISIL,” said U.S. Attorney Luger. “The FBI and prosecutors in my office continue to work without pause to keep Minnesotans safe and bring these defendants to justice.”

“This arrest demonstrates the commitment to U.S. national security by the members of the FBI's Joint Terrorism Task Force,” said Special Agent in Charge Thornton.  “The members of this task force work in concert to ensure the protection of the United States and its citizens every day.  These efforts will continue as long as threats persist.”

According to the complaint and documents filed in court, in spring 2014, Warsame and his co-conspirators began meeting to watch propaganda videos that glorified religious violence and to discuss their aspirations to travel to Syria to join ISIL.  Members of the group, including Warsame, discussed ways to leave the United States and travel to Syria, despite the fact that law enforcement was intensely scrutinizing the group.  At one such meeting, Guled Omar was elected “emir,” or leader, of the group.  Later in 2014, when Omar was planning to depart for Syria, Omar appointed Warsame to replace him as emir for the remaining co-conspirators.

According to the complaint and documents filed in court, during the same period, Warsame provided $200 to a co-conspirator, Adnan Farah, so that Farah could obtain an expedited U.S. passport to travel overseas to join ISIL.  Warsame also applied for an expedited passport during this time, but his application was initially denied.

According to the complaint and documents filed in court, Warsame repeatedly attempted to obtain a telephone number or other contact information of ISIL members, including ISIL member H.K.  In June 2014, Warsame specifically attempted to obtain this contact information so that he could pass it along to Y.J., who was attempting to travel from Turkey to Syria to join ISIL.

According to the complaint and documents filed in court, in April 2015, Warsame actively encouraged Omar and other co-conspirators to travel to Syria through Mexico, but did not plan to join their group because he was planning to travel with his family to East Africa.  From East Africa, Warsame planned to either break free from his family and travel to Syria, or wait in Somalia for a time when, he believed, al-Shabaab would pledge allegiance to ISIL, thus expanding ISIL to Somalia.

According to the criminal complaint and documents filed in court, on April 2, 2015, Warsame recounted a conversation he had with Abdi Nur, before Nur left the United States for Syria.  In that exchange, Warsame told Omar that he proposed to Nur that they rob people in order to finance their travel to Syria, which Nur rejected and suggested instead that they rob the government.

The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.           

This case is the result of an investigation conducted by members of the FBI-led Joint Terrorism Task Force in Minneapolis.

This case is being prosecuted by Assistant U.S. Attorneys Andrew R. Winter and John F. Docherty of the District of Minnesota and the National Security Division’s Counterterrorism Section.

Warsame Complaint

United States Attorney Andrew M. Luger today announced the sentencing of LYLE HOFFMAN a/k/a “Ty,” 45, to 57 months in prison. HOFFMAN pleaded guilty on July 8, 2015, to armed bank robbery at a Blaine TCF Bank branch. The defendant was sentenced today by United States District Court Judge Richard H. Kyle in U.S. District Court in St. Paul, Minn.

According to the defendant’s guilty plea and documents filed in court, on August 11, 2014 HOFFMAN, murdered his former partner, Kelly Phillips, at a gas station in Arden Hills, Minn. While on the run from authorities, on August 31, 2014, HOFFMAN, shielded by a blue baseball cap and sunglasses, robbed a TCF Bank branch located on County Road 10 in Blaine, Minn. The defendant ordered a bank teller to give him money, before removing a handgun from his backpack and pointing it at the teller while he repeated his demand. The teller gave HOFFMAN approximately $12,020 during the robbery, included a packet of money containing a dye pack.

According to the defendant’s guilty plea and documents filed in court, reports were made to law enforcement that HOFFMAN was in Prior Lake, Minn., and had been spotted at various casinos. Following up on those tips, law enforcement collected dye-stained money from casinos in Prior Lake and from a transit machine at the Mall of America. The defendant was arrested on September 11, 2014, after walking through the drive-thru lawn of an Arby’s restaurant in Shakopee, Minn. HOFFMAN had more than $3,000 in dye-stained money on him when he was arrested.

The case was the result of an investigation conducted by the Federal Bureau of Investigation and the Blaine Police Department.

This case was prosecuted by Assistant U.S. Attorney Kevin Ueland.

 

Defendant Information:

LYLE “TY” HOFFMAN, 45

St. Cloud, Minn.

Convicted:

• Armed bank robbery, one count

Sentenced:

• 57 months in prison

 

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United States Attorney’s Office, District of Minnesota: (612) 664-5600