District of Minnesota

United States Attorney Andrew M. Luger today announced the guilty plea of CINDY LEE LINEBAUGH, 48, to one count of False, Fictitious and Fraudulent Claims. LINEBAUGH was indicted on September 24, 2014, and pleaded guilty on February 24, 2015, before U.S. District Judge Susan Richard Nelson in St. Paul, Minn.

According to the defendant’s guilty plea, in February 2010, LINEBAUGH began a tax fraud scheme in which she knowingly prepared and filed false tax returns on behalf of herself and others. LINEBAUGH used fraudulent W-2s which falsely claimed that the individuals were employed by and earned wages from employers such as Northwest Airlines and the City of St. Paul.

According to court documents, during calendar years 2010 and 2011, LINEBAUGH prepared and filed approximately 73 false returns for tax years 2009 and 2010 using online tax- preparation software. The refunds were loaded onto a debit card and sent by the IRS directly to the individuals. LINEBAUGH charged individuals anywhere from $100 to $300 for her tax- preparation services. The total amount of the tax loss for all returns was approximately $287,561.

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 John E. Kokkinen.


Defendant Information: CINDY LEE LINEBAUGH, 48
St. Paul, Minn.

Convicted: • False, Fictitious and Fraudulent Claims, 1 count

 

 

At least 35 Properties throughout Minnesota went into Foreclosure as a Result of Scheme

The United States Attorney’s Office for the District of Minnesota today announced the guilty plea of JUSTIN JOSEPH CHRISTENSON, 35, who admitted conspiring with THOMAS ROSENSTEEL, ROBERT SCOTT “ROD” ASLESEN, and at least four others to defraud mortgage lenders by falsifying loan applications and related documents. CHRISTENSON is the seventh co-conspirator to plead guilty to participating in the scheme. The defendant pleaded guilty today before Senior Judge David S. Doty in U.S. District Court in Minneapolis, Minn. Last week, ROSENSTEEL and ASLESEN also entered guilty pleas before Judge Doty.

“This was a classic case of criminals perpetrating sham real estate scams to steal money,” said Minnesota Department of Commerce Commissioner Mike Rothman. “Commerce investigators are working closely with our colleagues from the U.S. Attorney's Office, FBI, and the U.S. Postal Inspection Service to stop financial fraud in our state.”

According to the defendants’ guilty pleas and documents filed in court, ROSENSTEEL founded, owned, and was the President of Split Rock Realty, a Twin Cities-based real estate company. In 2006, ROSENSTEEL hired CHRISTENSON to be his Director of Developments. From the fall of 2006 through the fall of 2007, ROSENSTEEL, a licensed real estate salesperson, and CHRISTENSON participated in numerous real estate transactions on behalf of Split Rock to conceal payments from mortgage loan proceeds and divert them to buyers of real properties and other individuals through the use of fraudulent underwriting and closing documentation. Moreover, ROSENSTEEL and others fraudulently concealed that the buyers were given money for down payments and passed these funds off as the buyers’ own funds, thereby misleading mortgage loan lenders to believe that the buyers had a financial stake in the purchased residences and thus incentive to pay the loans.

“This scheme was pervasive and calculated,” said Assistant U.S. Attorney William J. Otteson. “Although the defendants used a variety of complex terms and methods to justify their conduct, what they were convicted of is quite simple: they were lying to mortgage lenders to get money.”

According to the defendants’ guilty pleas and documents filed in court, ROSENSTEEL was aware that fraudulent loan application documentation was provided to potential lenders for purposes of loan underwriting. Among other things, the documentation falsely overstated the true purchase prices to be paid for the properties, falsely overstated the incomes of buyers/borrowers, and concealed the fact that payments were going to be made from the loan proceeds to the buyer and other individuals, including the defendant. CHRISTENSON and others, working with ROSENSTEEL’s knowledge and approval, worked to improperly influence appraisers to ensure that property appraisals were sufficiently inflated to facilitate the cash-back scheme. This included manipulating MLS listings and creating comparable sales for use in appraisals that were themselves fraudulent.

According to the defendants’ guilty pleas and documents filed in court, other individuals, including ASLESEN, a licensed closing agent who owned Split Rock Title (not affiliated with Split Rock Realty), facilitated the fraudulent scheme by making concealed payments to the buyers and other third parties, including through a company ASLESEN created, Eastwind Construction Consulting, whose only real purpose was to facilitate the distribution of the fraudulent payments. ROSENSTEEL, ASLESEN, and CHRISTENSON admitted participating in at least 35 fraudulent real estate transactions as part of the scheme, resulting in nearly all of the properties going into foreclosure. The actual loss to the mortgage holders was more than $2.5 million.

The three recent guilty pleas bring to seven the number of individuals who have pleaded guilty since 2011 in connection with this scheme. The others include: DALE RUSSELL WURZINGER, a licensed real estate agent working for Split Rock Realty; AMRI ELSAFY, owner of The Mortgage Shop, a real estate loan brokerage company; JAMES BRYAN CROOK, owner of Compass Title Company; and GERALD EDWIN CARLSON, a loan officer employed by Cascade Mortgage.

This case resulted from an investigation conducted by the Minnesota Department of Commerce, Federal Bureau of Investigation, and the United States Postal Inspection Service.

This case was prosecuted by Assistant U.S. Attorneys William J. Otteson and Robert M. Lewis.


Defendant Information: JUSTIN JOSEPH CHRISTENSON, 35
Forest Lake, Minn.

Convicted: • Conspiracy to commit wire fraud, 1 count

THOMAS EDWARD ROSENSTEEL, II, 42
Excelsior, Minn.

Convicted: • Conspiracy to commit wire fraud, 1 count

DALE RUSSELL WURZINGER, 58
Burnsville, Minn.

Convicted: • Conspiracy to commit wire fraud, 1 count

ROBERT SCOTT ASLESEN, a/k/a “ROD” ASLESEN, 66
Little Canada, Minn.

Convicted: • Conspiracy to commit wire fraud, 1 count

AMRI ELSAFY, 43
Golden Valley, Minn.

Convicted: • Conspiracy to commit wire fraud, 1 count

JAMES BRYAN CROOK, 59
Staten Island, N.Y.

Convicted: • Conspiracy to commit wire fraud, 1 count

GERALD EDWIN CARLSON, 67
Kennedy, Minn.

Convicted: • Conspiracy to commit wire fraud, 1 count

 

 

United States Attorney Andrew M. Luger announced the sentencing of TIMOTHY GLEN CASKEY, 43, to 300 months in federal prison for assaulting a woman, kidnapping her, and robbing a bank in Kansas while in-transit to Mexico with the kidnapped victim. CASKEY was charged on September 21, 2011, with kidnapping and interstate domestic violence, and on October 19, 2011 with bank robbery. CASKEY pleaded guilty on February 6, 2014, to kidnapping and bank robbery. The defendant was sentenced on February 20, 2015, before Judge John R. Tunheim in U.S. District Court in Duluth, Minn.

“Timothy Caskey kidnapped the victim and took her to Mexico, where he repeatedly threatened her, and physically and sexually assaulted her,” said Assistant U.S. Attorney Michelle E. Jones. “The defendant funded his violent escapade by robbing a bank in Kansas and stealing a truck in Texas. His history of violent criminal behavior, combined with his guilty plea for these crimes, properly resulted in his 25-year prison sentence. I am grateful to the police departments in Virginia, Minnesota and New Braunfels, Texas, as well as the FBI and BCA for conducting an excellent investigation in this case.”

According to the defendant’s guilty plea and documents filed in court, on July 14, 2011, CASKEY forcibly kidnapped the victim from a street in Virginia, Minnesota, while she was walking with her 9-year-old son, and three others. CASKEY forced the victim into his car, attacked her 9-year-old son and another person, and fled with the victim. CASKEY attacked her repeatedly with the handle of a screwdriver before pulling off the highway and sexually assaulting the victim.

According to the defendant’s guilty plea and documents filed in court, on July 15, 2011, CASKEY robbed the Great Southern Bank in Ottawa, Kansas. Before entering the bank, CASKEY used shoelaces to tie up the kidnapping victim and left her in his vehicle. The defendant later stole a pickup truck from a used car dealership in New Braunfels, Texas. Thereafter, CASKEY crossed the border into Mexico, where he continued to physically and sexually assault the kidnapping victim. He threatened to kill her if she tried to escape, and also withheld food and water from the victim. CASKEY was apprehended on August 8, 2011 in Mexico.

This case resulted from an investigation conducted by the Federal Bureau of Investigation, the Minnesota Bureau of Criminal Apprehension, Virginia Police Department (Minnesota), and the New Braunfels Police Department (Texas).

This case was prosecuted by Assistant U.S. Attorneys Michelle E. Jones and Nate Petterson.


Defendant Information: TIMOTHY GLEN CASKEY, 43
Virginia, Minn.

Convicted: • Kidnapping, 1 count
• Bank Robbery, 1 count

Sentenced: • 300 months in prison
• 5 years of supervised release

 

 

United States Attorney Andrew M. Luger announced the sentencing of BUCK OTTO WHITE a/k/a “TIMOTHY JOSEPH HOFFMAN,” 50, to 300 months in federal prison for illegally possessing stolen firearms and ammunition. WHITE was charged on April 7, 2014, with two counts of possession of firearms and ammunition by a convicted felon and two counts of possession of stolen firearms and ammunition. On April 25, 2014, following a three-day trial, a federal jury found WHITE guilty on all counts. The defendant was sentenced on February 13, 2015, before Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minn.

“Buck White is a career felon,” said Assistant U.S. Attorney Bradley Endicott. “As a result of his prior convictions, Mr. White cannot legally possess firearms. He is now facing 25 years in prison for his repeated illegal activity. This conviction would not have been possible without the investigative efforts of the ATF and our local partners in the New Ulm Police Department and Nicollet County Sheriff’s Office.”

As proven at trial, WHITE illegally possessed numerous firearms at a storage unit in Courtland, Minn., which included two rifles and two shotguns, as well as 140 rounds of ammunition. All of the firearms and ammunition were stolen during the course of a residential burglary in a nearby town. WHITE also illegally had a rifle and various stolen ammunition at his home in New Ulm, Minn.

During the pendency of his court proceedings, WHITE was released to a treatment facility and ordered to wear a location monitoring bracelet. The defendant on July 22, 2013, removed the GPS monitoring bracelet, fled the facility, and remained a fugitive until the U.S. Marshals arrested him on January 15, 2014. During the arrest, WHITE attempted to flee, leading officers on a high-speed car chase in a densely populated area of Minneapolis, Minn.

This case resulted from an investigation conducted by the New Ulm Police Department, the Nicollet County Sheriff’s Office, and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives.

This case was prosecuted by Assistant U.S. Attorneys Bradley M. Endicott and John R. Marti.


Defendant Information: BUCK OTTO WHITE, a/k/a “TIMOTHY JOSEPH HOFFMAN,” 50
New Ulm, Minn.

Convicted: • Armed Career Criminal in Possession of Firearm, 1 count
• Armed Career Criminal in Possession of Ammunition, 1 count
• Possession of Stolen Firearms, 1 count
• Possession of Stolen Ammunition, 1 count

Sentenced: • 300 months in prison
• 5 years of supervised release

 

 

United States Attorney Andrew M. Luger and Assistant Attorney General for National Security John P. Carlin today announced the indictment of HAMZA NAJ AHMED, 19, for conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL). AHMED is also charged with attempting to provide material support to ISIL, and for making a false statement in a terrorism investigation.1 AHMED was previously charged by criminal complaint for lying to FBI agents. The defendant was detained on February 5, 2015, after making an initial appearance before Magistrate Judge Steven Rau in U.S. District Court in St. Paul, Minn.

“Hamza Ahmed is at least the fourth person from the Twin Cities charged as a result of an ongoing investigation into individuals who have traveled or are attempting to travel to Syria in order to join a foreign terrorist organization,” said U.S. Attorney Luger. “Since 2007, dozens of people from the Twin Cities have traveled or attempted to travel overseas in support of terror. While my office will continue to prosecute those who attempt to provide material support to ISIL or any other terrorist organization, we remain committed to working with dedicated community members to bring this cycle to an end.”

According to the indictment and documents filed in court, AHMED and three companions, M.F., H.M.M, and Z.A., travelled by bus from Minneapolis, Minn., to New York City’s John F. Kennedy International Airport (JFK). The four men were each booked on international flights scheduled to depart JFK on November 8, 2014. AHMED and M.F. were booked on the same flight from JFK to Istanbul, Turkey. M.F., H.M.M., and Z.A. were each prevented from boarding their flights. AHMED successfully boarded, but was escorted from the aircraft by U.S. Customs and Border Protection agents before it left the boarding gate.

According to the indictment and documents filed in court, AHMED was subsequently interviewed by FBI agents. He made multiple false statements during the interview, including telling agents that he was traveling alone, and that he did not know M.F. or H.M.M. When AHMED arrived back in Minnesota on November 9, 2014, FBI agents conducted a second voluntary interview, during which AHMED again lied to agents.

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

This case is being prosecuted by Assistant U.S. Attorneys Andrew Winter and John Docherty, and Attorney Andrew Sigler of the Justice Department’s National Security Division.


Defendant Information: HAMZA NAJ AHMED, 19
Minneapolis, Minn.

Charges: • Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization, 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 1 count
• Making a False Statement in a Terrorism Investigation, 1 count

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

 

 

Defendant arrested after leading Stevens County Sheriff’s Office on high-speed chase

United States Attorney Andrew M. Luger today announced the sentencing of JOSHUA M. PROUDFOOT, 36, to 202 months in federal prison for possession of methamphetamine and illegally possessing body armor. PROUDFOOT pleaded guilty on September 4, 2014, to Possession with Intent to Distribute Methamphetamine and to being a Felon in Possession of Body Armor. PROUDFOOT was sentenced on February 6, 2015, before Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn.

According to the defendant’s guilty plea and documents filed in court, on May 7, 2014, PROUDFOOT led police officers on a high-speed car chase lasting nearly two miles before the defendant lost control of his vehicle and crashed into a field. PROUDFOOT threw at least 14 bags of methamphetamine, totaling more than 20 grams, out of the driver’s side window during the chase. PROUDFOOT, who also had several yellow pills and a live round of .38-caliber ammunition, was arrested a short distance from the crash site after attempting to flee on foot.

According to the defendant’s guilty plea and documents filed in court, PROUDFOOT also possessed two backpacks containing a loaded .38-caliber revolver, additional ammunition and several empty small plastic baggies. In a car he owned, the defendant also had a Point Blank brand bulletproof vest, a loaded .40-caliber handgun, and a tin containing drug paraphernalia and several unidentified pills.

Stevens County Sheriff Jason Dingman said, “This was a significant case for Stevens County. I appreciate the partnership between the federal, state, and local agencies involved in this investigation.”

“The court imposed a just and appropriate sentence based on this defendant’s repeated violent behavior,” said Assistant U.S. Attorney Benjamin Bejar. “The case agent and investigators were instrumental in obtaining justice in this case.”

This case is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Bureau of Criminal Apprehension, Stevens County Sheriff’s Office, and the Morris Police Department.

Assistant United States Attorney Benjamin Bejar prosecuted this case.


Defendant Information: JOSHUA M. PROUDFOOT, 36
Appleton, Minn.

Convicted: • Possession With Intent to Distribute Methamphetamine, 1 count
• Felon in Possession of Body Armor, 1 count

Sentenced: • 202 months in federal prison
• 8 years supervised release

 

 

United States Attorney Andrew M. Luger today announced the sentencing of PEGGY EISCHENS, 45, to one year and one day in federal prison for failing to pay more than $200,000 in employment taxes. EISCHENS pleaded guilty on October 14, 2014, to one count of Willful Failure to Pay Over Taxes. She was sentenced on February 4, 2015, before Judge Michael J. Davis in U.S. District Court in Minneapolis, Minn.

According to the defendant’s guilty plea and documents filed in court, from 2002 through 2011, EISCHENS was a co-owner and employee of R.D. Hanson Associates, Inc. (“RDHA”), which conducted business under the names Kernel Pops of Minnesota and Kernel Concession Supply. During her employment, EISCHENS was responsible for handling payroll and accounting for RDHA, which included the preparation of employee paychecks and the preparation and filing of Form 941 quarterly tax returns with the IRS.

According to her guilty plea and documents filed in court, from 2003 through December 2011, EISCHENS willfully failed to pay over to the IRS federal income taxes and Federal Insurance Contribution Act (“FICA”) taxes, meaning Social Security and Medicare taxes, deducted and collected from the wages of RDHA employees. In total, EISCHENS failed to pay over approximately $201,285 of withheld federal income taxes, withheld FICA taxes, and the employer’s share of FICA taxes.

This case is the result of an investigation conducted by the Internal Revenue Service-Criminal Investigations.

Assistant U.S. Attorney Joseph H. Thompson prosecuted the case.


Defendant Information: PEGGY EISCHENS, 45
LeSueur, Minn.

Convicted: • Willful Failure to Pay Over Taxes, 1 count

Sentenced: • 1 year and 1 day in prison
• 3 years supervised release

 

 

United States Attorney Andrew M. Luger today announced the guilty plea of KHADRA ABDISAFAD HIRSI, 47, for stealing money in the form of child care subsidies from the U.S. Department of Health and Human Services and the State of Minnesota. The defendant pleaded guilty on February 4, 2015, before Judge Donovan W. Frank in U.S. District Court in St. Paul, Minn., to one count of Theft of Public Money.

According to her guilty plea and documents filed in court, HIRSI was the director and co-owner of Ace DayCare Center, Inc. (Ace DayCare) located in Eden Prairie, Minn. Many of the families for whom Ace DayCare provided childcare services participated in the Child Care Assistance Program, which provides low-income families with childcare assistance. HIRSI was responsible for submitting truthful and accurate billing forms for childcare services provided by Ace DayCare to families participating in the Child Care Assistance Program. Under the Child Care Assistance Program, child-daycare providers submit billing forms for reimbursement directly to the counties where qualifying families reside.

According to her guilty plea and documents filed in court, in February and March of 2013, HIRSI knowingly submitted Child Care Assistance Program billing forms that falsely inflated the number of children who received childcare services provided by Ace DayCare. As a result, HIRSI fraudulently obtained approximately $20,000 from the U.S. Department of Health and Human Services and the State of Minnesota for childcare services that were not actually provided.

"With our partners, we are aggressively targeting child care providers who try to collect payments from public programs for services they don't provide," said Minnesota Department of Human Services Inspector General Jerry Kerber, whose office oversees fraud prevention and detection efforts for state public assistance programs. "The seriousness of this crime is underscored by the fact that more than 6,100 Minnesota families are waiting to receive child care assistance."

This case is the result of an investigation conducted by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services – Office of Inspector General.

U.S. Attorney Luger thanked the Minnesota Department of Human Services for their assistance.

Assistant U.S. Attorney John E. Kokkinen is prosecuting the case.


Defendant Information: KHADRA ABDISAFAD HIRSI, 47
Eden Prairie, Minn.

Convicted: • Theft of Public Money, 1 count

 

 

United States Attorney Andrew M. Luger and Special Agent in Charge of the Internal Revenue Service – Criminal Investigation Division St. Paul Field Office Shea Jones today announced the sentence of JOEL WILLIAM CARLSON, 43, of Vadnais Heights, MN, to 42 months in prison. CARLSON pleaded guilty on September 10, 2014, to two counts of tax evasion for tax years 2010 and 2011.

According to his guilty plea and documents filed in court, CARLSON acted as an investment advisor during 2010 and 2011. He deposited client investments, as well as additional funds solicited from his father, into a Trust Financial Group (“TFG”) account, that CARLSON treated as his personal bank account. Instead of investing the funds, CARLSON spent the money on personal items and, when confronted, lied to his clients about the existence of their investments. In addition to intentionally misappropriating both client assets and his father’s assets, totaling more than $1.5 million, CARLSON failed to file personal income tax returns for tax years 2010 and 2011.

According to his guilty plea, CARLSON also failed to timely file personal income tax returns for tax years 2005 through 2007. As a result, the IRS filed a federal tax lien against CARLSON for approximately $495,000.

In addition to paying restitution of approximately $1.9 million to the investment fraud victims and his father, CARLSON will also pay approximately $1.2 million in restitution to the Internal Revenue Service.

Assistant U.S. Attorney Tracy L. Perzel prosecuted this case.

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


Defendant Information: JOEL WILLIAM CARLSON
Vadnais Heights, MN

Convicted: • Attempt to Evade and Defeat Tax, 2 counts

Sentenced: • 42 months in prison
• Ordered to pay approximately $3.1 million in restitution

 

 

Defendant Intercepted in New York City While Attempting to Fly Overseas Possibly to Join Terror Organization

United States Attorney Andrew M. Luger today announced a criminal complaint charging HAMZA AHMED, 19, with lying to agents from the Federal Bureau of Investigation (FBI). AHMED is charged with making a false statement in a terrorism investigation.1 The defendant made an initial appearance on February 5, 2015, before Magistrate Judge Steven Rau in U.S. District Court in St. Paul, Minn.

“Any person has a right to remain silent, or to consult an attorney when speaking with federal agents or prosecutors,” said U.S. Attorney Luger. “However, this Office will continue to prosecute those who lie to federal law enforcement officers and impede criminal investigations into suspected terrorist activity.”

According to the complaint and documents filed in court, AHMED and three companions, H.M.M, M.F., and Z.A., travelled by bus from Minneapolis, Minn., to New York City’s John F. Kennedy International Airport (JFK). The four men were each booked on international flights scheduled to depart JFK on November 9, 2014. AHMED and M.F. were booked on the same flight from JFK to Istanbul, Turkey. Z.A., M.F., and H.M.M. were each prevented from boarding their flights. AHMED successfully boarded, but was removed from the aircraft before it left the boarding gate.

According to the complaint and documents filed in court, AHMED was subsequently interviewed by FBI agents. He made multiple false statements during the interview, including telling agents that he was traveling alone, and that he did not know M.F. or H.M.M. When AHMED arrived back in Minnesota on November 9, 2014, FBI agents conducted a second voluntary interview, during which AHMED lied to agents.

According to the criminal complaint and documents filed in court, AHMED told FBI agents that he traveled to New York alone and intended to vacation in Madrid for four days by himself. However, the itinerary he booked would have allowed AHMED only one full day in Madrid. Moreover, AHMED did not book a hotel room in Madrid, and he did not know anyone in Madrid. AHMED again denied that he was traveling with M.F.

According to the criminal complaint and documents filed in court, AHMED told agents that he only “vaguely” knew H.A.M., an individual from Minnesota known to have traveled to Syria in 2014. However, a review of AHMED’s publicly available Twitter account shows that a lengthy series of messages between AHMED and H.A.M. took place between November 2013 and March 2014.

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

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


Defendant Information: HAMZA AHMED, 19
Minneapolis, Minn.

Charge: • False Statement in a Terrorism Investigation, 1 count

Hamza Ahmed Complaint

 

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

United States Attorney Andrew M. Luger today announced a criminal complaint charging MICHAEL RONALD GARANT, 42, for acting as a straw purchaser of three firearms for Ray Kmetz. GARANT is charged by complaint with making a false statement to acquire firearms on behalf of another person. GARANT will appear today before Magistrate Judge Steven Rau in U.S. District Court in St. Paul, Minn.

“Background checks are only as good as the accuracy of the information collected,” said U.S. Attorney Luger. “Honestly answering questions about the intended recipient of a firearm is an important component of responsible gun ownership and key to public safety, which is why it is a crime to act as a straw purchaser. This defendant is charged with committing that very crime – buying guns for another person and lying about it.”

According to the criminal complaint and documents filed in court, on August 21, 2014, Ray Kmetz was the highest bidder for three shotguns in an online auction, which were actually purchased by GARANT on August 23, 2014, at Full Metal Gun Shop in Princeton, Minn. The defendant informed the owner of the gun shop that he used the alias “Ray Kmetz” during the online auction to hide his true identity. GARANT produced a driver’s license to the store owner to verify that he was, in fact, GARANT.

According to the criminal complaint and documents filed in court, a National Instant Criminal Background Check was performed on GARANT, and was returned “clear.” One of the forms completed by GARANT as part of the background check contained the following question: Are you the actual transferee/buyer of the firearm(s) listed on this form? Warning: You are not the actual buyer if you are acquiring the firearm(s) on behalf of another person. If you are not the actual buyer, the dealer cannot transfer the firearm(s) to you.

GARANT responded “yes” to this question by checking the corresponding box. GARANT paid $659.29 in cash for the three shotguns, one of which was a Stoeger Model 2000 12-gauge shotgun bearing serial number 915191.

According to the criminal complaint and documents filed in court, on January 26, 2015, Ray Kmetz entered New Hope City Hall, in New Hope, Minn., during a meeting of the city council. He was armed with the same Stoeger Model 2000 12-gauge shotgun that GARANT had purchased. Kmetz fired one round from the shotgun in the direction of the council chambers. New Hope Police Officers responded with fire and killed Kmetz.

This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Hennepin County Sheriff’s Office.

Assistant U.S. Attorneys Nate Petterson and Benjamin Bejar are prosecuting this case.


Defendant Information: MICHAEL RONALD GARANT, 42
Golden Valley, Minn.

Charges: • Making a false statement to acquire firearms on behalf of another person, 1 count

Garant Complaint & Affidavit

 

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

United States Attorney Andrew M. Luger today announced a criminal complaint charging ROBERT JAMES SCHUELLER, 29, in a murder-for-hire plot targeting the fiancé of his former paramour. SCHUELLER is charged with the use of interstate commerce facilities in the commission of murder-for-hire, in violation of 18 U.S.C. §1958(a).1 The defendant appeared this afternoon before Magistrate Judge Tony Leung in U.S. District Court in St. Paul, Minnesota.

“This defendant is charged with orchestrating a murder-for-hire plot,” said Assistant U.S. Attorney Julie Allyn. “Fortunately for the intended victim in this case, the contract killing was never carried out. The FBI and Stearns County Sheriff’s Office pursued diligently this investigation, and we are grateful for their successful efforts to keep Minnesotans safe from violence.”

According to the complaint and documents filed in court, ROBERT SCHUELLER is the President of Nomad Pipeline Services (Nomad). Between approximately May 2013 and August 2013, SCHUELLER, who is married, was engaged in an extramarital affair with R.T., then an employee of Nomad. Approximately three months after R.T. ended the relationship with SCHUELLER, SCHUELLER learned that R.T. was in a relationship with C.A. SCHUELLER subsequently tried to reignite the relationship with R.T., but was rebuffed.

According to the complaint and documents filed in court, on February 6, 2014, SCHUELLER contacted another employee of Nomad, W.E. SCHUELLER knew W.E. had several prior felony convictions and had served time in prison. He asked if W.E. maintained contact with anyone from prison. When W.E. answered in the affirmative, SCHUELLER told W.E that he wanted to hire someone to murder C.A. On February 13, 2014, W.E. pretended to have identified a former prison associate who may be willing to murder C.A. for SCHUELLER.

According to the complaint and documents filed in court, sometime in March 2014, SCHUELLER sent a package to W.E. containing $10,000 in cash and two of his own business cards, on which he had written C.A.’s name and information about where C.A. worked. On May 2, 2014, W.E. called SCHUELLER and told him that he was unable to find someone to carry out the murder. After the phone call, SCHUELLER texted W.E., “burn those business cards.” W.E. subsequently returned the $10,000 to SCHUELLER.

This case is the result of an investigation conducted by the Federal Bureau of Investigation and the Stearns County Sheriff’s Office.

This case is being prosecuted by Assistant United States Attorneys Julie E. Allyn and Steven L. Schleicher.

Defendant Information: ROBERT JAMES SCHUELLER, 29
Farming Township, Minn.

Charge: • Use of interstate commerce facilities in the commission of murder-for-hire, 1 count

 

 

United States Attorney Andrew M. Luger today announced the guilty plea of KENNETH FRANK HARYCKI, 51, to conspiracy to defraud the United States by preparing and filing tax forms that he knew to be fraudulent. HARYCKI pleaded guilty today before U.S. District Judge Ann D. Montgomery in Minneapolis.

“As a former mayor, Mr. Harycki understands, better than most, the magnitude and impact of the fraud he helped to perpetrate,” said U.S. Attorney Luger. “By his guilty plea, Mr. Harycki has taken responsibility for his actions, but that does not excuse his criminal acts. This defendant not only violated his accounting license by covering up a tax fraud, he eroded the trust of the residents of Stillwater, who elected him to a position of high public office.”

According to his guilty plea, during the course of the conspiracy, HARYCKI owned and operated businesses that provided bookkeeping, payroll, and accounting services, including tax- related services, to clients. In 2007, the defendant began providing services to two separately charged co-conspirators. Within the first few payroll cycles for Model Health Care (Model), a company controlled by the two separately charged co-conspirators, the defendant concluded that while payroll taxes were being withheld from the wages of employees, those taxes were not being paid over to the government. The defendant learned that these co-conspirators had directed that the withheld taxes not be paid to the government and, instead, the taxes would be used for other purposes, including compensating the co-conspirators and their family members and funding other businesses operated by the co-conspirators.

According to the defendant’s guilty plea, on February 18, 2010, HARYCKI created the entity MKH Holdings, Inc., to assume control over bank accounts used to fund businesses operated by the co-conspirators. The entity was used to cause funds falsely reported on income tax returns to be paid to the co-conspirators and others. During the course of the conspiracy, HARYCKI also incorporated other businesses, obtained employer identification numbers, paid for personal expenses, filed false tax returns, and opened and used numerous bank accounts for the benefit of the separately charged co-conspirators in order to avoid payment of taxes.

The tax loss from the defendant’s relevant conduct is between $1 million and $2.5 million.

This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation, and Department of Health and Human Services Office of the Inspector General.

This case is being prosecuted by Assistant U.S. Attorney Robert Lewis.

Defendant Information: KENNETH FRANK HARYCKI, 51
Stillwater, Minn.

Convicted: • Conspiracy to Defraud the United States, 1 count

 

 

United States Attorney Andrew M. Luger today announced a complaint charging IRINA VOROTINOV, 48, with defrauding Mutual of Omaha Insurance Company for more than $2 million in life insurance proceeds by falsely claiming that her former husband died. Her son, ALKON VOROTINOV, 25, is charged with actively concealing the fraudulent scheme. IRINA was charged by criminal complaint with mail fraud, and ALKON was charged with having knowledge of the actual commission of a felony and concealing the crime. Both defendants appeared today before Magistrate Judge Hildy Bowbeer in U.S. District Court in St. Paul, Minnesota.

Assistant United States Attorney David J. MacLaughlin, who is prosecuting the case, said: “Fraud against insurance companies drives up the premiums paid by legitimate insureds. Those who cheat insurance companies should expect to be investigated, prosecuted, and held accountable for the economic harm inflicted on those who deal honestly with the insurance industry.”

According to the criminal complaint and documents filed in court, on April 22, 2010, Igor Vorotinov purchased a life insurance policy on his own life from Mutual of Omaha, and listed IRINA VOROTINOV and ALKON VOROTINOV as the beneficiaries. 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 criminal complaint and documents filed in court, IRINA VOROTINOV traveled to Moldova to identify the body. Along with Igor’s cousin and a representative from the U.S. Embassy, IRINA went to the morgue where she identified the body as Igor. At IRINA’S request, the body was cremated on October 20, 2011, in Odessa, Ukraine. IRINA returned to Minnesota on October 29, 2011, and filed a death claim with Mutual of Omaha on November 7, 2011. Mutual of Omaha paid IRINA $2,048,414.09 in the form of a check sent on March 23, 2012, by U.S. mail to IRINA’S home in Maple Grove, Minnesota.

According to the criminal complaint and documents filed in court, IRINA and ALKON VOROTINOV opened an account at a local branch of U.S. Bank and deposited the check, which they both knew to be the life insurance policy proceeds resulting from the death of Igor Vorotinov. Between March 29, 2012 and January 2015, IRINA and ALKON together transferred more than $1.5 million of the life insurance proceeds to accounts located in Switzerland and Moldova.

According to the criminal complaint and documents filed in court, on November 27, 2013, ALKON was stopped by Customs and Border Protection (CBP) in Detroit, Michigan upon returning from a trip to Moldova. A computer seized by CBP agents contained digital photographs of Igor Vorotinov taken on April 19, 2013 and on May 12, 2013, in which Igor is alive.

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, 50
Plymouth, Minn.

Charge: • Mail Fraud, 1 count

ALKON VOROTINOV, 25
Plymouth, Minn.

Charge: • Misprision of a Felony, 1 count

Vorotinov Complaint

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

 

 

James Needham possessed more than 1,300 images of child sexual abuse

United States Attorney Andrew M. Luger today announced the conviction of JAMES PATRICK NEEDHAM, 53, of Red Lake, Minn., for distributing and possessing images and videos containing child pornography. On May 7, 2013, NEEDHAM was indicted on one count of Distribution of Child Pornography and one count of Possession of Child Pornography. On January 9, 2015, following a three-day trial, a federal jury found NEEDHAM guilty on both counts.

“Protecting children from the physical and psychological trauma associated with the distribution of images and videos portraying their sexual abuse is a law enforcement priority,” said Assistant U.S. Attorney Laura M. Provinzino. “This verdict demonstrates that those who possess and distribute child pornography will be prosecuted to the fullest extent of the law. I thank the jury members for their service in this very difficult case.”

As proven at trial, NEEDHAM possessed images and videos containing visual depictions of minors engaged in sexually explicit conduct. On August 4, 2010, NEEDHAM distributed several images of similar material. According to documents filed in court, the illegal images were reported to the National Center for Missing and Exploited Children (NCMEC) through its “Cyber Tipline.” The NCMEC notified the FBI which, in turn, tracked the username and IP address associated with the illegal images to NEEDHAM’S Red Lake residence. The Red Lake Police Department discovered more than 1,300 images and 100 videos containing child pornography on a computer at NEEDHAM’S home.

U.S. District Judge John R. Tunheim will sentence NEEDHAM at a later date, yet to be scheduled.

This case is the result of an investigation by the Federal Bureau of Investigation and the Red Lake Police Department in response to “cyber tips” reported to the National Center for Missing and Exploited Children.

Assistant U.S. Attorneys Laura M. Provinzino and Katharine T. Buzicky are prosecuting this case.

This case was brought as part of Project Safe Childhood (“PSC”), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the U.S. Attorney offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children and identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab “resources.”

Defendant Information: JAMES PATRICK NEEDHAM, 53
Red Lake, Minn.

Convicted: • Distribution of Child Pornography, 1 count
• Possession of Child Pornography, 1 count

 

 

United States Attorney Andrew M. Luger said: “I look forward to participating in the White House Summit on February 18 with Twin Cities law enforcement and community leaders and stakeholders, my colleagues from the U.S. Attorney’s Offices in Boston and Los Angeles, and CVE leaders from around the world. Since I began working with the Somali Minnesotan community last spring to design a plan that will address the root causes of terrorist recruiting, I have come to learn that we share a deep commitment to see our community prosper in peace and security.”

It is expected that the Minneapolis-St. Paul delegation to the White House Summit will include approximately 15 law enforcement and Somali community leaders.

 

 

United States Attorney Andrew M. Luger today announced the guilty plea of DMITRI SOUDAKOV, 41, for the illegal purchase and transport of smokeless tobacco. The defendant pleaded guilty on January 5, 2015, before Judge David S. Doty in U.S. District Court in Minneapolis, Minn., to one count of Shipment, Transport, Receipt, Possession, Sale, Distribution and Purchase of Contraband Smokeless Tobacco.

Bureau of Alcohol, Tobacco, Firearms and Explosives-St. Paul Field Division Special Agent in Charge James C. Modzelewski stated, “The trafficking in contraband tobacco is all about the money and the substantial profits that are obtained. With our outstanding relationship with the Minnesota Department of Revenue, we are accomplishing what we are mandated to do, prosecuting these offenders and taking away their profits.”

“The transportation and sale of unstamped tobacco products is illegal and unfair to distributors and businesses who comply with the state’s tobacco laws,” said Revenue Commissioner Cynthia Bauerly. “We appreciate the collaboration with our federal partners and we take our role of enforcing these tax laws very seriously.”

According to his guilty plea and documents filed in court, on June 27, 2011, SOUDAKOV purchased at least 938 containers of contraband smokeless tobacco from a wholesaler in Chicago, Ill. The defendant purchased the smokeless tobacco free of any state taxes and intended to resell it without paying any state taxes in Illinois, Minnesota or elsewhere. SOUDAKOV knew he was not a licensed distributor, manufacturer or carrier and, therefore, was unauthorized to purchase, sell, distribute, possess or receive smokeless tobacco products.

Between April 2011 and July 2011, SOUDAKOV purchased and transported at least 4,760 containers of smokeless tobacco from Illinois to Minnesota, where he resold the products without paying any state taxes. On June 28, 2011, while transporting the containers of smokeless tobacco from the Chicago area to Minnesota, SOUDAKOV’S vehicle was stopped by law enforcement officers who discovered the containers of smokeless tobacco stashed in the rear of the vehicle.

According to his guilty plea and documents filed in court, SOUDAKOV also purchased and resold additional tobacco products without paying Minnesota state taxes. SOUDAKOV purposely evaded the payment of state taxes and is ordered to pay a total of $47,753.77 in restitution to the state of Minnesota.

This case is the result of a joint investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Minnesota Department of Revenue.

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

Defendant Information: DMITRI SOUDAKOV, 41
Eden Prairie, Minn.

Convicted: • Shipment, Transport, Receipt, Possession, Sale, Distribution and Purchase of Contraband Smokeless Tobacco, 1 count

 

 

Defendants Charged with Conspiracy to Violate the Neutrality Act and Conspiracy to Possess Firearms in Furtherance of a Crime of Violence

United States Attorney General Eric Holder, United States Attorney for the District of Minnesota Andrew M. Luger, Assistant Attorney General for National Security John P. Carlin, and Federal Bureau of Investigation Special Agent in Charge of the Minneapolis Division Richard T. Thornton today announced a criminal complaint charging CHERNO NJIE, 57, and PAPA FAAL, 46, for their role in a recent attempted coup in The Gambia. Both men are in custody and are expected to have initial appearances in court today. NJIE will appear in United States District Court in Baltimore, Maryland.  FAAL will appear in U.S. District Court in Minneapolis, Minnesota. Both defendants are charged with conspiring to violate the Neutrality Act by making an expedition against a friendly nation from the United States and conspiring to possess firearms in furtherance of a crime of violence. 1

On December 30, 2014, there was an unsuccessful attempted coup against the government of The Gambia. The Gambia is a country in West Africa bordered by Senegal and the Atlantic Ocean.

“These defendants stand accused of conspiring to carry out the violent overthrow of a foreign government, in violation of U.S. law,” said Attorney General Eric Holder. “The United States strongly condemns such conspiracies. With these serious charges, the United States is committed to holding them fully responsible for their actions.”

United States Attorney for the District of Minnesota Andrew M. Luger said: “This case would not be possible without the dedication of prosecutors around the country and FBI agents around the world, who worked non-stop to uncover evidence of the plot to overthrow the Gambian government. My office will continue to work cooperatively with our law enforcement partners here and abroad to bring these defendants to justice.”

FBI Special Agent in Charge for the Minneapolis Division Richard T. Thornton said: “This investigation reinforces the continued success of the FBI's Joint Terrorism Task Force in Minneapolis. The FBI, along with its many task force partners, remains committed to disrupting and preventing political violence no matter what form it takes.”

According to the criminal complaint and documents filed in court, in December 2014, CHERNO NJIE and PAPA FAAL separately traveled from the United States to The Gambia for the purpose of overthrowing the Gambian government. FAAL is a dual U.S./Gambian citizen and a resident of Minnesota. NJIE, a U.S. citizen of Gambian descent and a resident of Texas, is a businessman who served as financier and leader of the conspiracy. NJIE and his co-conspirators expected that NJIE would have served as the interim leader of the Gambia had the coup attempt succeeded.

According to the criminal complaint, approximately 10-12 members of the conspiracy entered The Gambia to carry out the coup attempt, with the expectation that others in the country would join and assist them. Prior to departing for The Gambia, between August and October 2014, FAAL and other co-conspirators purchased multiple firearms, including M4 semi-automatic rifles, and shipped them to The Gambia for use in the coup attempt. Members of the conspiracy also acquired night-vision goggles, body armor, ammunition, black military style uniform pants, boots, and other personal equipment.

According to the criminal complaint, on December 30, 2014, a number of the co-conspirators, including FAAL, met in the woods near the State House in Banjul, which is the home of the Gambian President, and split into two assault teams. NJIE was not present at that meeting, instead waiting in a safe place until the assault teams took control of the facility. However, when one of the assault teams approached the State House and fired a shot into the air, the team began taking heavy fire from the guard towers. Although numerous conspirators on the assault teams were killed or injured during the failed attempt to take control of the government building, FAAL was able to flee the scene and he ultimately returned to the U.S. NJIE also returned to the U.S. Both men have since been arrested.

The criminal complaint (including the affidavit) is attached as a pdf document.

This investigation is being led by the Federal Bureau of Investigation and its partners on Joint Terrorism Task Forces in multiple field offices. U.S. Attorney Luger commended the many agents, analysts, and prosecutors in multiple offices who are responsible for this ongoing investigation.

Assistant U.S. Attorney Charles Kovats of the United States Attorney’s Office for the District of Minnesota is prosecuting this case, with assistance from Richard Scott, a Deputy Chief in the Counterespionage Section of the Justice Department's National Security Division. A number of other U.S. Attorney’s Offices, including those in the District of Maryland and the Western District of Texas provided critical support during the investigation.

Defendant Information: CHERNO NJIE, 57
Austin, Tex.

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

PAPA FAAL, 46
Brooklyn Center, Minn.

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

Complaint and Affidavit

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

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

MINNEAPOLIS—Earlier today in federal court in St. Paul, a 29-year-old St. Paul felon was sentenced for possessing a .357-caliber revolver. United States District Court Judge Susan Richard Nelson sentenced Richard Alonzo Woods to 77 months in prison on one count of being a felon in possession of a firearm. Woods was indicted on May 15, 2012, and pleaded guilty on July 27, 2012.

In his plea agreement, Woods admitted that on November 16, 2011, he possessed the Smith & Wesson revolver. Because he is a felon, Woods is prohibited under federal law from possessing a firearm at any time. His prior convictions – all in Ramsey County-- include third-degree sale of controlled substances (2002 and 2003), check forgery (2003), fifth-degree possession of controlled substances (2006), and possession of a firearm by an ineligible person (2006).

This case was the result of an investigation by the St. Paul Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Surya Saxena.

 

 

United States Attorney Andrew M. Luger today announced a criminal complaint charging ABBAS ATEIA AL HUSSAINAWEE, 40, for acting as a runner for defendants separately charged with conspiring to engage in the interstate transportation of stolen goods, namely cell phones and other electronic devices. AL HUSSAINAWEE was charged on December 19, 2014, in U.S. District Court in St. Paul, Minn., with conspiracy to engage in interstate transportation of stolen goods. In a separate complaint filed today, AL HUSSAINAWEE was charged with possession with intent to distribute methamphetamine.

“This defendant is charged with being one of the many runners employed by the Mustafa Organization,” said U.S. Attorney Luger. “In August, my office charged 20 defendants with conspiracy to steal and sell mobile devices on the underground market. Our investigation continues to uncover others who fueled the theft of cell phones in Minnesota and elsewhere.”

According to the criminal complaint and documents filed in court, from at least 2006 through 2014, the separately charged Mustafa Organization and their criminal associates illegally obtained cellular telephones and other mobile devices for the purpose of trafficking them throughout the United States and internationally. The Mustafas paid runners who stole mobile devices or obtained them fraudulently by other means. AL HUSSAINAWEE is an alleged runner for the Mustafa Organization.

According to the criminal complaint and documents filed in court, AL HUSSAINAWEE regularly traveled to other states to steal phones, including to Michigan, Illinois, and Missouri. To avoid detection while burglarizing cell phone stores, AL HUSSAINAWEE broke into businesses adjacent to cell phone stores, and then gained entry to the cell phone store by breaking through the wall. He specifically targeted strip malls with vacant adjacent store space.

According to the criminal complaint and documents filed in court, on November 27, 2012, AL HUSSAINAWEE burglarized a Best Buy in Maplewood, Minn. The defendant broke into an adjacent business and broke through the wall to gain entry to the Best Buy. He stole 48 cellular phones, 20 iPads and five tablet computers. On December 12, 2014, AL HUSSAINAWEE burglarized a Verizon Store in Buffalo, Minn. He gained entry to the store by prying open the back door of a vacant business and then breaking through the sheetrock to gain access to the adjacent Verizon Store. The defendant stole $33,015 in cell phones.

According to the criminal complaint and documents filed in court, on July 14, 2014, the defendant stole 44 cell phones and iPads from a Verizon store in Waconia, Minn. The total value of the stolen merchandise was $22,279.97. On March 9, 2014, the defendant broke through the sheetrock of a Verizon store in Menomonie, Wis., and stole $32,000 worth of cell phones and iPads. AL HUSSAINAWEE was responsible for burglary or attempted burglary in at least 22 cell phone stores. The Mustafas paid AL HUSSAINAWEE in cash for the stolen merchandise.

According to a separate criminal complaint filed today, when agents executed a search warrant at AL HUSSAINAWEE’S home in Minneapolis, they discovered a backpack containing approximately 268 grams of methamphetamine.

This case is the result of an investigation conducted by the St. Paul Police Department, United States Secret Service, and Minnesota Bureau of Criminal Apprehension, under the auspices of the Minnesota Financial Crimes Task Force.

Assistant U.S. Attorneys Steven Schleicher and John Marti are prosecuting this case.

Defendant Information: ABBAS ATEIA AL HUSSAINAWEE, 40
Minneapolis, Minn.

Charges: • Conspiracy to engage in interstate transportation of stolen property, 1 count
• Possession with intent to distribute methamphetamine, 1 count

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

 

 

United States Attorney Andrew M. Luger today announced the guilty plea of ROBERTA BARNES, 57, for using her nonprofit organizations to defraud two Minnesota state agencies, stealing more than $460,000 in state and federal grant funds. The defendant pleaded guilty on December 15, 2014, before Judge John R. Tunheim in U.S. District Court in Minneapolis, Minn., to one count of Mail Fraud.

“This defendant stole from grant programs designed to help underprivileged communities in Minnesota,” said Assistant U.S. Attorney Benjamin Langner. “She used the guise of two nonprofit entities to steal money that could have been used for philanthropic purposes in order to enrich herself.”

According to her guilty plea and documents filed in court, BARNES was the president of two St. Paul-based nonprofit organizations, Agape House for Mothers (“Agape”) and Sierra Young Family Institute (“Sierra”). Through Agape and Sierra, BARNES obtained approximately $1.7 million in grant funds offered by the Minnesota Department of Health (“MDH”) and the Minnesota Housing Finance Agency (“MHFA”).

From 2002 until May 2012, BARNES applied for and received grant money from MDH and MHFA through promises that the funds would be used for philanthropic purposes such as combating teen pregnancy and providing housing assistance to needy families. Instead, BARNES intended to and did use a significant portion of the grant funds to make mortgage payments, car payments and other unauthorized payments to herself and her family.

Between 2002 and 2012, BARNES, on behalf of Agape and Sierra, obtained a series of grants from MDH for the purported purpose of operating teen pregnancy programs for minority populations in the St. Paul area. In 2008, BARNES, on behalf of Sierra, applied for and received a grant from MHFA, falsely representing that the funds would be used for finance programs designed to provide assistance to households experiencing long-term homelessness.

According to her guilty plea and documents filed in court, BARNES spent more than $460,000 of the grant funds on personal expenses for herself and her family; she attempted to conceal her fraud scheme by creating fraudulent invoices that reflected false expenses incurred by Agape and Sierra.

This case is the result of an investigation conducted by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services.

Assistant U.S. Attorneys Benjamin Langner is prosecuting the case.

Defendant Information: ROBERTA BARNES, 57
St. Paul, Minn.

Convicted: • Mail Fraud, 1 count

 

 

Health care fraud conspiracy lasted more than 10 Years

United States Attorney Andrew M. Luger today announced the indictment of THURLEE BELFREY, 48, and ROYLEE BELFREY, 48, for conspiracy to defraud the United States and healthcare fraud. For more than 15 years the BELFREYS own and operate businesses in Minnesota that provide healthcare services including nursing and home care. A significant portion of their revenue came from Medicaid. A separately charged defendant, KENNETH FRANK HARYCKI, 51, is charged by information for conspiracy to defraud the United States by preparing and filing tax forms for the BELFREYS which he knew to be fraudulent.1 THURLEE and ROYLEE BELFREY made initial appearances in United States District Court in St. Paul, Minn., on December 16, 2014.

“These defendants are charged with conspiring to obtain significant amounts of money from the United States by fraud,” said U.S. Attorney Luger. “When individuals steal from government agencies like Medicaid, they are effectively taking money from us all to line their own pockets. It is critically important that law enforcement actively investigate and prosecute healthcare fraud. I thank my partners at the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation, and Department of Health and Human Services Office of the Inspector General for the hard work they all put into this case. ”

“The Special Agents of IRS Criminal Investigation are committed to protecting the integrity of our system of taxation by investigating tax and accounting professionals who conspire with others to violate the tax laws,” said Special Agent in Charge Shea Jones of IRS Criminal Investigation St. Paul Field Office. “All tax professionals, including CPA Kenneth Harycki, have a duty to their clients to prepare accurate and complete tax returns that comply with the law.”

According to the indictment and documents filed in court, THURLEE and ROYLEE BELFREY owned, managed, and participated in the operation of multiple businesses in Minnesota, including Royal Health Care (Royal), Model Health Care (Model), and Integrated Health Care Services (Integrated). On October 5, 2001, investigators from the Medicaid Fraud Unit of the State of Minnesota executed a search warrant at Royal, and interviewed the BELFREYS. On June 10, 2003, THURLEE BELFREY pleaded guilty and was convicted of theft by false representation for more than $35,000 relating to Royal’s participation in the Medicaid program. Under Medicaid rules, a person convicted of a health care offense may be barred from participating in any capacity or profiting from healthcare services compensated by all Federal health care programs, including Medicaid. On February 20, 2004, THURLEE BELFREY was suspended for a period of 20 years from participation of the Minnesota Health Care Program, which administers Medicaid in Minnesota. On September 30, 2004, THURLEE BELFREY was excluded from participating in all Federal health care programs for at least 10 years.

According to the indictment and documents filed in court, sometime in 2002, THURLEE and ROYLEE BELFREY recruited a relative to be named as the owner of Model, in order to conceal THURLEE BELFREY’S role with the new company. From 2002 until at least March 20, 2014, the BELFREYS conspired to defraud Medicaid by causing THURLEE BELFREY to operate, manage, and profit from Model and other health care businesses, in violation of his suspension by the Minnesota Department of Human Services (DHS) and the United States Department of Health and Human Services (DHHS). Model illegally submitted thousands of fraudulent claims and received millions of dollars in fraudulent proceeds from Medicaid during the course of the conspiracy.

According to the indictment and documents filed in court, in order to conceal their fraudulent activity, the BELFREYS moved the proceeds of their fraudulent Medicaid claims between other businesses and bank accounts. During the conspiracy, the BELFREYS and the businesses they managed were associated with no less than 138 personal and business bank accounts, which they regularly opened and closed. They used funds paid from State and Federal health care programs for personal expenses, including $3,376.82 for Royal Caribbean Cruises, $7,276 for Sun Country Airlines, $991.12 at the W Hotel, $8,548.21 at the Trump International Resort in Miami, Fla., $2,360 at Louis Vuitton, $5,730.16 at the Dara Condo Hotel in Las Vegas, Nev., $6,378.78 to Alaska Air, $3,458.70 at the Lavo Las Vegas Restaurant, and $9,364.20 for Delta Airlines. The BELFREYS or a family member also made cash withdrawals of at least $48,783.50.

According to the HARYCKI information and documents filed in court, KENNETH FRANK HARYCKI was a certified public accountant. From at least 2007 until at least 2014, HARYCKI owned and operated a business that provided bookkeeping, payroll, and accounting services, including tax-related services. In 2007, HARYCKI began providing services to THURLEE AND ROYLEE BELFREY, including tax-related services. HARYCKI regularly prepared Model’s IRS quarterly Form 941, which reports an employer’s payroll and FICA tax liabilities to the IRS. HARYCKI knew that the BELFREYS were deducting and collecting payroll taxes from their employees, but not paying those funds to the government. HARYCKI made no attempt to correct the forms, and instead fabricated entries onto the forms to match other records and assist the BELFREYS to avoid detection by the government.

According to the HARYCKI information, on February 18, 2010, HARYCKI created the entity MKH Holdings, Inc., to assume control over bank accounts used to fund Model and other businesses operated by the BELFREYS. MKH Holdings was used to cause funds not accurately reported on income tax returns to be paid to the BELFREYS and others. During the course of the conspiracy, HARYCKI also incorporated other businesses, obtained employer identification numbers, paid for personal expenses, and opened and used numerous bank accounts for the benefit of the BELFREYS in order to avoid payment of taxes.

This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation, and Department of Health and Human Services Office of the Inspector General.

This case is being prosecuted by Assistant U.S. Attorney Robert Lewis.

Defendant Information: THURLEE BELFREY, 48
Saint Paul, Minn.

Charges: • Conspiracy to Defraud the United States, 1 count
• Health Care Fraud, 1 count

ROYLEE BELFREY, 48
Saint Paul, Minn.

Charges: • Conspiracy to Defraud the United States, 1 count
• Health Care Fraud, 1 count

KENNETH FRANK HARYCKI, 51
Stillwater, Minn.

Charges: • Conspiracy to Defraud the United States, 1 count

Belfrey Indictment

Harycki Information

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

 

 

St. Anthony Village Agrees in Principle to Allow Abu-Huraira Islamic Center to Worship in St. Anthony Business Center

The United States Attorney for the District of Minnesota Andrew M. Luger and Acting Assistant Attorney General for Civil Rights Vanita Gupta today announced a settlement agreement in principle between the Department of Justice and the City of St. Anthony Village, Minn., resolving allegations that the city violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA). In June 2012, the City of St. Anthony Village denied Abu-Huraira Islamic Center’s application for a conditional use permit (CUP) to use the basement of the St. Anthony Business Center for religious assembly. The agreement, which must still be approved by the Saint Anthony City Council, the Department of Justice, and a federal district court judge in Minneapolis, will resolve the lawsuit between the United States and the City of St. Anthony Village.

“Four months ago, my office filed a civil rights lawsuit to protect the religious freedoms of the congregants of the Abu-Huraira Islamic Center,” said U.S. Attorney Luger. “We made it clear then that an injustice had been done to these Somali Minnesotans. After lengthy negotiations involving attorneys from my office and the Department of Justice, St. Anthony Village, and Abu-Huraira, we have reached a resolution that respects the Constitution and provides the worship space that Abu-Huraira sought. This agreement would not have been possible without the guiding hand of Magistrate Judge Jeffrey J. Keyes, whose wisdom and hard work brought us to this resolution. Today we all join together to announce with great pride that the Abu-Huraira Islamic Center has a new home in St. Anthony Village.”

“The Department of Justice will remain vigilant to ensure that the freedom to worship is a reality for all,” said Acting Assistant Attorney General Vanita Gupta. “We are pleased that the city worked with us to ensure that the rights of this congregation and others will be protected.” On August 27, 2014, the United States filed a lawsuit to enforce Abu-Huraira Islamic Center’s constitutional rights under RLUIPA and require the City of St. Anthony Village to allow Abu- Huraira’s religious assembly. The United States’ complaint alleged that denial of the permit imposed a substantial burden on Abu-Huraira’s exercise of religious worship. Moreover, the denial unlawfully disfavored a religious use, because the light industrial district where Abu- Huraira’s building is located allowed other, non-religious assemblies.

The United States specifically alleged that the denial of the CUP substantially burdened members of Abu-Huraira in practicing their faith. Abu-Huraira members’ ability to exercise their religion was limited by their worship site options, including, but not limited to, the fact that members in the northern Twin Cities were burdened from praying together based on the length of time to travel to worship centers in south Minneapolis. Moreover, prayer spaces at locations in south Minneapolis were too small to accommodate members, many of whom often prayed in hallways or entryways, and prayer sessions were held in shifts to accommodate crowds.

After conducting a search for adequate prayer space lasting nearly three years, Abu-Huraira entered into a purchase agreement for the St. Anthony Business Center. Abu-Huraira chose the property because it is centrally located, has a basement measuring approximately 11,600 square feet and has ample parking for its congregation. The business center is in St. Anthony’s “light industrial” district, which permitted conditional uses for “assemblies, meeting lodges, and convention halls” at that time.

In February 2012, after consulting St. Anthony Village officials, Abu-Huraira applied for a CUP for assembly. The permit was denied on June 12, 2012, by a St. Anthony Village City Council vote of 4-1.

On December 11, 2014, after a settlement conference lasting nearly twelve hours before Magistrate Judge Jeffrey J. Keyes, the City has agreed, in principle, to create a Planned Use Development (PUD) at the property in question. The PUD will allow Abu-Huraira to use the St. Anthony Business Center for religious worship. The agreed upon language also stipulates that the City of St. Anthony Village will not treat Abu-Huraira or any other religious groups in a discriminatory manner by application of its zoning laws. The agreement also indicates that elected leaders, managers, and certain City employees will participate in educational training about requirements of RLUIPA. The City of St. Anthony Village will also make RLUIPA information available to the public through its website and will report periodically to the Justice Department.

Assistant United States Attorneys for the District of Minnesota, Bahram Samie, Ana Voss, and Gregory Brooker, and attorneys from the Civil Rights Division of the United States Department of Justice, represented the United States in this matter.

RLUIPA, enacted in 2000, contains multiple provisions prohibiting religious discrimination and protecting against unjustified burdens on religion exercise. Persons who believe that they been subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section of the Justice Department’s Civil Rights Division at 1-800-896- 7743. More information about RLUIPA, including a report on the first ten years of its enforcement, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.

ST ANTHONY CONSENT ORDER

 

 

United States Attorney Andrew M. Luger today announced the guilty plea of SEAN MEADOWS, 41, for using his financial planning and asset management firm, Meadows Financial Group (MFG), operated a Ponzi scheme and fraudulently obtained millions of dollars from dozens of victims. The defendant pleaded guilty on December 10, 2014, before Judge Susan Richard Nelson in U.S. District Court in St. Paul, Minn., to Mail Fraud, Wire Fraud, and Money Laundering offenses.

According to his guilty plea and documents filed in court, MEADOWS operated MFG, through which he sold insurance and investment products to clients in Minnesota, Indiana, Arizona, and elsewhere. From 2007 until April 2014, MEADOWS successfully solicited a total of at least $10 million from more than 50 clients for a purported investment managed by MFG. The defendant falsely told victims that he would use their funds to purchase bonds, real estate, or other legitimate third-party investments.

MEADOWS lured victims into removing funds from their retirement and other savings accounts by promising high rates of returns – up to 10 percent annually – when, in fact, he did not invest their funds and did not have a legitimate means by which to make interest payments. Instead, MEADOWS used funds from new investors to make interest and/or principal repayments to existing investors.

According to his guilty plea and documents filed in court, MEADOWS used the illicit proceeds of the Ponzi scheme to pay personal expenses, including: making “salary” payments to himself; making payments to his spouse; paying expenses on personal investment properties; paying personal credit card bills; purchasing a vehicle for himself; traveling to Las Vegas; gambling at various casinos and online; and spending more than $100,000 at adult entertainment establishments in Minnesota and Las Vegas.

This case is being prosecuted by Assistant U.S. Attorneys Benjamin Langner and Melinda Williams.

This case is the result of an investigation conducted by the Minnesota Department of Commerce Fraud Bureau, the United States Postal Inspection Service, and the Internal Revenue Service- Criminal Investigation Division.

Defendant Information: SEAN MEADOWS, 41
Eden Prairie, Minn.

Convicted: • Wire Fraud, 7 counts
• Mail Fraud, 3 counts
• Transaction Involving Fraud Proceeds, 1 count

 

 

United States Attorney Andrew M. Luger today announced the sentencing of MICHAEL ROBERT DRILLING, 47, to 60 months in federal prison for devising and executing a multi- million dollar investment fraud scheme. DRILLING pleaded guilty on April 17, 2014, to one count of securities fraud. He was sentenced on December 10, 2014, before Judge Ann D. Montgomery in U.S. District Court in Minneapolis.

According to the defendant’s guilty plea and documents filed in court, from May 2009 through March 2014, DRILLING, defrauded 13 investment advisory clients for more than $5.7 million. Through his company, Financial Advisory Partners LLC, DRILLING developed personal relationships with these clients and convinced them to entrust to him the management of their investment funds. In order to conceal the theft, DRILLING created phony accounts for each of his clients using a financial planning website, eMoneyAdvisor.com, that made it appear as if investment funds had been placed in real investment vehicles.

In total, DRILLING stole more than $5.7 million in investment funds from thirteen of his clients. He lied to his clients, telling them that their money was placed in a larger pool of funds that could be managed more efficiently. Instead, DRILLING used the stolen funds for his own personal and business expenses. DRILLING also lost millions of dollars at casinos.

This case resulted from an investigation conducted by the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Timothy C. Rank.

Defendant Information: MICHAEL ROBERT DRILLING, 47
Grand Marais, Minn.

Convicted: • Securities Fraud, 1 count

Sentenced: • 60 months in prison
• Restitution in the amount of $5,778,877.88

 

 

United States Attorney Andrew M. Luger today announced the sentencing of ALPHA RASHIDI MSHIHIRI, 39, to 150 months in federal prison for orchestrating a multi-million dollar mortgage fraud conspiracy. MSHIHIRI was convicted, on February 20, 2014, following a seven-day trial, of each count of the indictment against him, including Conspiracy to Commit Bank Fraud, Bank Fraud, Mail Fraud, and Wire Fraud. He was sentenced on December 8, 2014, before Senior Judge David S. Doty in U.S. District Court in Minneapolis.

As proven at trial, between 2007 and 2009, MSHIHIRI, who was once a licensed mortgage broker, and his co-conspirators defrauded a number of lenders for millions of dollars by recruiting straw buyers, falsifying loan applications and other documents, and inflating real estate purchase prices. As part of the conspiracy, straw buyers submitted fraudulent loan applications to mortgage lenders. In some instances, they used stolen identities to fill out loan applications.

In support of fraudulent loan applications, MSHIHIRI and his co-conspirators also created false documents, such as W-2s, paystubs, driver’s licenses, and bank statements, which straw buyers submitted to mortgage lenders to obtain financing. In some instances, the proceeds of the loans were used to pay existing mortgages, financially benefitting MSHIHIRI and others. The scheme also included MSHIHIRI’s involvement in kickbacks to GWP and Pristine Home Loans, companies he owned and operated. Every property purchased through the scheme went into foreclosure, resulting in nearly $2 million in losses to the victim lenders.

This case resulted from an investigation conducted by the Internal Revenue Service-Criminal Investigation, the Minnesota Financial Crimes Task Force, the United States Secret Service, and the U.S. Department of Housing and Urban Development – Office of Inspector General.

The case was prosecuted by Assistant U.S. Attorneys Lola Velazquez-Aguilu and David Genrich.

The U.S. Attorney’s Office reminds people to protect themselves from mortgage fraud. For more information, visit http://www.stopfraud.gov/protect-mortgage.html.

Defendant Information: ALPHA RASHIDI MSHIHIRI, 39
Maple Plain, Minn.

Convicted: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 3 counts
• Wire Fraud, 2 counts
• Mail Fraud, 1 count

Sentenced: • 150 months in prison
• Five years supervised release

 

 

United States Attorney Andrew M. Luger today announced the sentencing of KYLE WAYNE MARTIN, SR., 25, an enrolled member of the Red Lake Band of Chippewa Indians, to 120 months in federal prison for a violent domestic assault committed on the Red Lake Indian Reservation. MARTIN pleaded guilty on August 20, 2014, to one count of strangulation. The defendant was sentenced today before Chief Judge Michael J. Davis in U.S. District Court in Minneapolis, Minn.

According to the defendant’s guilty plea and documents filed in court, on March 24, 2014, MARTIN assaulted the victim, who was an intimate acquaintance, in the driveway of the family home in the Ponemah District within the exterior boundaries of the Red Lake Indian Reservation. MARTIN strangled the victim in a severe act of domestic violence, restraining her as she attempted to escape in her car. MARTIN also assaulted his relatives when the victim sought to escape from the house. The attack left the victim with both physical and emotional injuries.

The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.

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

This case resulted from an investigation conducted by the Red Lake Tribal Police Department and the Federal Bureau of Investigation.

The case was prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.

Defendant Information: KYLE WAYNE MARTIN, SR., 25
Ponemah, Minn.

Convicted: • Strangulation, 1 count

Sentenced: • 120 months in prison

 

 

United States Attorney Andrew M. Luger today announced the sentencing of TERRY DEAN ICEMAN, 47, to 41 months in federal prison for a violent assault committed on the Red Lake Indian Reservation. On April 3, 2014, following a three-day trial, a federal jury found ICEMAN guilty of one count of strangulation. The defendant was sentenced in U.S. District Court in Duluth, Minn., on December 2, 2014.

As proven at trial, on the morning of July 18, 2013, ICEMAN assaulted his girlfriend by hitting her repeatedly and dragging her by her hair. During the assault, ICEMAN threw the victim onto the ground and strangled her with an article of clothing that he had torn from her body. As a result of the attack, the victim suffered swelling and bruising on her face and neck as well as bruising all over her body.

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.

Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered during their lives than Caucasian women.

The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.

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

This case resulted from an investigation conducted by the Red Lake Tribal Police Department and the Federal Bureau of Investigation.

The case was prosecuted by Assistant U.S. Attorneys Manda M. Sertich and Deidre Y. Aanstad.

Defendant Information: TERRY DEAN ICEMAN, 47
Ponemah, Minn.

Convicted: • Strangulation, 1 count

Sentenced: • 41 months in prison

 

 

United States Attorney Andrew M. Luger today announced the indictment of CHARLES MICHAEL COLES, 43, and others, for conspiring to defraud an Illinois-based food packaging and processing company for more than $1.8 million. COLES was employed as a buyer/inventory coordinator for the Illinois-based company, and was responsible for maintaining the parts inventory of a food packaging plant located in Lakeville, Minn. The defendants are expected to make initial appearances on December 15, 2014, in U.S. District Court in Saint Paul, Minn.

According to the indictment and documents filed in court, from at least 2011 until November 14, 2014, COLES was responsible for ordering parts, submitting purchase orders, receiving shipments of parts, and maintaining the parts inventory at the Lakeville, Minn., plant of a food packaging and processing company. COLES devised a scheme to defraud his employer by submitting false invoices for industrial supplies and parts purportedly supplied by several fictitious industrial supply companies.

According to the indictment and documents filed in court, COLES conspired with and recruited his co-conspirators, STEVE CROOK, AARON ASH, DARREN GARDNER, JACQUELINE ROBINSON, and WILLIAM DAMPIER, to create fictitious industrial supply companies. COLES then submitted fraudulent purchase orders and invoices to his employer from each of his co-conspirators’ fictitious companies. After COLES’ employer paid the fraudulent invoices, each co-conspirator split the proceeds with COLES.

According to the indictment and documents filed in court, between April 2011 and October 2014, CROOK owned a fictitious company called Karlvelous Supply. The only address for Karlvelous Supply was a rented mailbox inside a UPS Store in White Bear Lake, Minn. COLES and CROOK caused approximately $582,224 to be paid to Karlvelous Supply on the basis of false and fraudulent invoices submitted by COLES, and COLES and CROOK split the proceeds of these fraudulent payments.

According to the indictment and documents filed in court, between October 2011 and October 2014, ASH owned a fictitious company called Rubber-Steel Products, LLC. The only address for Rubber-Steel Products, LLC, was a rented mailbox inside a UPS Store in Brooklyn Center, Minn. COLES and ASH caused approximately $512,218 to be paid to Rubber-Steel Products on the basis of false and fraudulent invoices submitted by COLES, and COLES and ASH split the proceeds of these fraudulent payments.

According to the indictment and documents filed in court, between January 2012 and October 2014, GARDNER owned a fictitious company called DG Automation Controls, LLC. The only address for DG Automation Controls, LLC, was a rented mailbox inside a UPS Store in Eden Prairie, Minn. COLES and GARDNER caused approximately $409,191 to be paid to DG Automation Controls on the basis of false and fraudulent invoices submitted by COLES, and COLES and GARDNER split the proceeds of these fraudulent payments.

According to the indictment and documents filed in court, between January 2013 and November 2014, ROBINSON owned a fictitious company called Tessman Industrial Supply, LLC. The only address for Tessman Industrial Supply, LLC, was a rented mailbox inside a UPS Store in Saint Paul, Minn. COLES and ROBINSON caused approximately $253,881 to be paid to Tessman Industrial Supply on the basis of false and fraudulent invoices submitted by COLES, and COLES and ROBINSON split the proceeds of these fraudulent payments.

According to the indictment and documents filed in court, between June 2014 and November 2014, DAMPIER owned a fictitious company called A-Z Industrial Supply Co., LLC. The only address for A-Z Industrial Supply Co., LLC., was DAMPIER’S home address in Phoenix, Ariz. COLES and DAMPIER caused approximately $47,666 to be paid to A-Z Industrial Supply Co., on the basis of false and fraudulent invoices submitted by COLES, and COLES and DAMPIER split the proceeds of these fraudulent payments.

This case is the result of an investigation conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, the Internal Revenue Service – Criminal Investigations, and the Lakeville Police Department.

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

Defendant Information: CHARLES MICHAEL COLES, 43
Otsego, Minn.

Charges: • Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 5 counts

STEVE KARLVELOUS CROOK, 43
Maplewood, Minn.

Charges: • Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 count

AARON ARTHUR ASH, 42
Minneapolis, Minn.

Charges: • Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 count

DARREN LAMONT GARDNER, 42
Unknown

Charges: • Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 count

JACQUELINE ROBINSON, 46
Saint Paul, Minn.

Charges: • Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 count

WILLIAM CURTIS DAMPIER, 32
Phoenix, Ariz.

Charges: • Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 count

 

 

United States Attorney Andrew M. Luger today announced a complaint charging YUSRA ISMAIL, 20, with stealing and misusing a passport. According to the complaint and documents filed in court, on August 18, 2014, ISMAIL visited a friend and asked to see her passport. Before leaving her home on that day, ISMAIL surreptitiously took the passport and subsequently left her friend’s home.

According to the complaint and documents filed in court, three days later, ISMAIL asked a different friend to drive her to Minneapolis/Saint Paul airport, from which she departed on a flight bound for Amsterdam, the Netherlands. She later traveled from Amsterdam to Oslo, Norway.

According to the complaint and documents filed in court, ISMAIL contacted members of her family on August 24, 2014, and told one or more of them that she was in “Sham,” which is a term commonly used to describe the area within Syria and Iraq where the Islamic State of Iraq and Syria (ISIS) is attempting to establish a caliphate.

There is no record that ISMAIL, who is not a United States citizen, has lawfully returned to the United States.

This case is the result of an investigation conducted by the Joint Terrorism Task Force, under the supervision of the Federal Bureau of Investigation.

Defendant Information: YUSRA ISMAIL, 20
Saint Paul, Minn.

Charges: • Misuse of Passport, 1 count

Yusra Ismail Criminal Complaint

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

 

 

United States Attorney Andrew M. Luger today announced the conviction of BARTOLOMEA JOSEPH MONTANARI, 57, formerly of Bayport, Minn., for tax evasion and fraud. On May 21, 2014, MONTANARI was indicted on one count of Evasion of Payment of Taxes, one count of Mail Fraud, and one count of Wire Fraud. On November 25, 2014, following a 6-day trial, a federal jury found MONTANARI guilty on all counts.

The evidence presented at trial proved that from 2009 until January 2012, MONTANARI willfully evaded the payment of employment and excise taxes owed by him and the three businesses he controlled: St. Croix Development, Emlyn Coal Processing, and Montie’s Resources. One of the ways MONTANARI avoided paying taxes and TFRPs was by transferring over $1.1 million into a bank account in the name of Bella Luca Properties LLC (“Bella Luca”), a shell company with no legitimate business purpose but used by MONTANARI to pay personal expenses. MONTANARI evaded payment of more than $700,000 in taxes and TFRPs to the federal government.

In December 2009, when the IRS attempted to collect taxes and TFRPs, MONTANARI filed a fraudulent financial statement making numerous misrepresentations to the IRS to avoid paying the taxes he owed. For example, he failed to disclose multiple personal vehicles that he owned and he denied the existence of the Bella Luca bank account, which he was using to receive monthly compensation of $50,000 from two of his companies. MONTANARI also lied about living in Bayport, Minn., when, in truth, he had already moved into a $1.4 million house he was purchasing in Knoxville, Tennessee.

In addition, as part of a fraud scheme, MONTANARI lied about the sale price of a Caterpillar dozer that he needed to purchase for one of his companies. Montanari submitted a doctored invoice to the dozer financing company, which issued a check for the dozer for $100,000 more than the true purchase price. MONTANARI kept the extra $100,000 and used it as a down payment for the house in Tennessee.

U.S. District Judge Ann D. Montgomery will sentence MONTANARI following the completion of a presentence investigation. A date for sentencing has not been set.

This case is the result of an investigation by the Internal Revenue Service-Criminal Investigation Division, the U.S. Postal Inspection Service, and the Minnesota Financial Crimes Task Force.

Assistant U.S. Attorneys William Otteson and Melinda Williams are prosecuting this case.

Defendant Information: BARTOLOMEA JOSEPH MONTANARI, 57
Knoxville, Tenn.

Convicted: • Evasion of Payment of Taxes, 1 count
• Mail Fraud, 1 count
• Wire Fraud, 1 count

 

 

United States Attorney for the District of Minnesota Andrew M. Luger today announced a criminal complaint charging ABDI NUR, 20, and ABDULLAHI YUSUF, 18, with conspiracy to provide material support to a designated foreign terrorist organization, namely, the Islamic State of Iraq and the Levant (ISIL). NUR is additionally charged with providing material support to a foreign terrorist organization. YUSUF is expected to make an initial appearance at 2:00 p.m. today before Magistrate Judge Janie S. Mayeron in United States District Court in Minneapolis, Minn.

“As charged, these two young men conspired to join ISIL and travel from Minnesota to the Middle East to engage in a campaign of terror in support of a violent ideology,” said U.S. Attorney Luger. “Since al-Shabaab began recruiting young adults from the Twin Cities in 2007, our region has lost dozens of disaffected young people to terrorist organizations that would sooner see Somali Minnesotans die on foreign battlefields than prosper in peace and security in the United States. The law-abiding members of Minnesota’s Somali community are great partners in our fight against terror, and I am proud to work closely with community and religious leaders to lift up those Somali youth who remain vulnerable to terrorist recruiters. Unfortunately, Yusuf and Nur were not the first – and may not be the last – to conspire in support of ISIS. As we work with our many partners to improve the lives of Somali Minnesotans, we will continue to investigate and prosecute aggressively criminals who provide support for terror.”

“More than 16,000 recruits from over 90 countries traveled to Syria to become foreign terrorist fighters with alarming consequences,” said John Carlin, Assistant Attorney General for National Security. “This is a global crisis and we will continue our efforts to prevent Americans from joining the fight and to hold accountable those who provide material support to foreign terrorist organizations. With these two defendants, we have now charged more than 15 individuals with offenses related to the foreign fighter threat in Syria.”

FBI Special Agent in Charge for the Minneapolis Division Richard T. Thornton said, “The FBI remains committed to both its community partners and to its law enforcement mandate concerning the detection and disruption of terrorist activity. This Complaint epitomizes the FBI's commitment to upholding the laws of the United States as they apply to those who would support terrorism.”

ABDULLAHI YUSUF

According to the criminal complaint and documents filed in court, on April 28, 2014, YUSUF applied for an expedited passport at the Minneapolis Passport Office. He told the passport specialist that he intended to travel to Turkey, but when asked, YUSUF could not specify his travel itinerary, travel companions, hotel location, or the name or address of a friend in Turkey who he claimed to have met recently via Facebook. The passport specialist also asked YUSUF about the cost of his trip, which YUSUF reported as, “about $1,500,” however, YUSUF had no known source of income. YUSUF obtained his passport on May 5, 2014, and used it to open a checking account on the same day.

According to the criminal complaint and documents filed in court, on May 23, 2014, YUSUF deposited $1,500 in cash into his Wells Fargo checking account in four separate ATM deposits spread throughout the day. On May 24, 2014, YUSUF used a debit card associated with the same account to purchase a $1,417.05 airline ticket from Minneapolis/Saint Paul to Istanbul, Turkey. The ticket was for a flight scheduled to depart Minneapolis/Saint Paul on May 28, 2014. His parents did not know that YUSUF had obtained a passport and planned to travel to Turkey, nor did they know that he had acquired $1,500 and purchased an airline ticket.

YUSUF is associated with H.M., a former Minnesota resident now believed to be fighting in Syria, and who traveled from Minnesota to Turkey on March 9, 2014. The same debit card was used to purchase H.M.’s airline ticket as was used to purchase an airline ticket for a third man from Minnesota who later traveled to Syria to fight with ISIL. YUSUF exchanged several telephone calls and text messages with H.M. in the days before YUSUF attempted to depart for Turkey.

On the morning of May 28, 2014, YUSUF’S father drove him to school. Approximately one hour after arriving at school, YUSUF walked to a mosque near his school. YUSUF left the mosque and was driven to a light rail station from which YUSUF departed for the airport. At the airport, YUSUF was advised by agents from the Federal Bureau of Investigation (FBI) that he would not be permitted to travel to Turkey as he had planned.

ABDI NUR

According to the criminal complaint and documents filed in court, ABDI NUR departed from the Minneapolis/Saint Paul airport for Istanbul, Turkey on May 29, 2014. Prior to his departure, on 2 3 April 24, 2014, NUR obtained an expedited U.S. Passport. On May 24, 2014, NUR made an ATM deposit of $1,540 in cash to his checking account. On May 27, 2014, NUR purchased an airline ticket for $1,619.30, using a debit card associated with the same checking account. Like YUSUF, NUR was unemployed when he purchased his airline ticket. NUR successfully boarded a flight for Turkey on May 29, 2014. He was scheduled to return to the United States on June 16, 2014, but did not.

According to the criminal complaint and documents filed in court, NUR had become “much more religious,” in the two months preceding his departure, including talking about how his family needed to pray more and wear more traditional clothing. NUR began to talk about jihad during this time period.

According to the criminal complaint and documents filed in court, NUR has communicated via Facebook with an individual in the United States after his departure for Turkey. During those communications, NUR stated that he has gone “to the brothers,” and that we “will see each other in the afterlife inshallah,” and “im not coming back” (sic). NUR has also communicated with a separately charged defendant, Mohamed Abdullahi Hassan, a/k/a “Miski.”

According to the criminal complaint and documents filed in court, after asking NUR if he knew “Duale” (a U.S. citizen known to have traveled to Syria), MISKI advised NUR “…Being connected in Jihad make you stronger and you can all help each other by fulfilling the duties that Allah swt (sic) put over you…Like us in Somalia the brothers from mpls are well connected so try to do the same….It is something we have learned after 6 years in Jihad.”

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

Defendant Information: ABDI NUR, 20
Minneapolis, Minn.

Charges: • Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Providing Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count

ABDULLAHI YUSUF, 18
Inver Grove Heights, Minn.

Charges: • Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count

Yusuf and Nur Complaint

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

 

 

United States Attorney Andrew M. Luger, the Hennepin County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives today announced the arrest and federal indictment of 11 individuals charged with organizing and maintaining two street gangs operating throughout Hennepin County.[1] The defendants are comprised of alleged leaders, prominent members, and close associates of the “1-9” and “Stick Up Boys” gangs; both of which worked together to illegally obtain and jointly possess firearms. The federal indictment charges the defendants with conspiracy, felon in possession of a firearm, and making a false statement during the purchase of a firearm.

“The indictment of these alleged gang members is a step forward in the fight against violent crime in Minneapolis,” said U.S. Attorney Luger. “As charged, these defendants engaged in armed robbery and drug dealing to fund the illegal purchases of firearms they used to conduct gang warfare. Minnesotans deserve to live in a community free of gangs and gang warfare. We will continue to charge armed criminal organizations in pursuit of this goal. Thanks to the hard work of our state and federal law enforcement partners, these violent defendants are now off the streets.”

“The dismantling of this criminal enterprise, which we believe to be responsible for numerous acts of violence, is a huge win for law enforcement and the residents of Hennepin County. This successful multi-agency operation should send a clear message to others that future violent crimes will be met with similar enforcement and prosecution efforts,” said Hennepin County Sheriff Rich Stanek.

“As a result of this joint local and federal investigation, a violent group has been removed from the streets of the Twin Cities,” said ATF-St. Paul Field Division Special Agent in Charge Jim Modzelewski, “ATF is committed to combating firearms violence and will continue to utilize all available resources to increase the safety in our communities.”

According to the indictment and documents filed in court, the 1-9 is led by VELTREZ BLACK, a/k/a “Chief,” and the Stick up Boys are led by TYWIN BENDER, a/k/a “Finn Winn,” NITELEN JACKSON, a/k/a “King Nite,” and DONTEVIUS CATCHINGS, a/k/a “Lil Snake.” The defendants coordinated their illegal activities in order to obtain firearms by theft, trading drugs for guns, and by using straw purchasers without felony histories to buy guns for those members of the gang with felony records.

During the period of the indictment, members of the 1-9 and Stick Up Boys were in a gang war with two other rival gangs. The gang war resulted in the shooting deaths and wounding of numerous gang members on both sides of the conflict. At least fifteen alleged gang members have been killed or wounded by gunfire during the gang conflict.

According to the indictment, due to the conflict, members of 1-9 and Stick Up Boys conspired with straw purchasers to illegally acquire and jointly possess firearms. The straw purchasers, identified in the indictment as DEONTAY JONES of Brooklyn Center, and LAKESHA COLEMAN of Minneapolis, purchased at least 10 guns in their own names and provided at least some of those firearms to members of the 1-9 and Stick Up Boys. JONES filed false police reports explaining that these guns were stolen from his home, when in fact, at least two of the guns were provided to 1-9 gang members.

According to the indictment, MARQUES ARMSTONG participated in the conspiracy by making his North Minneapolis residence available as a meeting place for members of the two gangs, and as a place for them to store their guns.

The indictment is the result of an intense investigation conducted by the Hennepin County Violent Offender Task Force (VOTF), the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Minneapolis Police Department. The investigation began as part of an ongoing effort to reduce gang activity connected with numerous incidents of violent crime in Hennepin County. VOTF investigators on this case include personnel from the Hennepin County Sheriff’s Office, Brooklyn Park Police Department, Brooklyn Center Police Department, Golden Valley Police Department, and Richfield Police Department.

This case is being prosecuted by Assistant U.S. Attorney Jeffrey Paulsen.

Defendant Information:

VELTREZ BLACK, a/k/a “Chief,” 25

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 count

TYWIN BENDER, a/k/a “Finn Winn,” 24

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count

NITELEN JACKSON, a/k/a “King Nite,” 24

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 count

DONTEVIUS CATCHINGS, a/k/a “Lil Snake,” 22

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 count

CINQUE OWENS, 20

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 count

JABARI JOHNSON, 24

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 count

DARRYL PARKER, a/k/a “Thirsty,” 27

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 count

MARQUIS WOODS, a/k/a “Quis Moe,” 22

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 count

MARQUES ARMSTRONG, a/k/a “Lil Kease,” 19

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count

DEONTAY JONES, 22

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count
• False Statement During Purchase of a Firearm, 3 counts

LAKESHA COLEMAN, 26

Charges: • Conspiracy- Felon in Possession of Firearms, 1 count
• False Statement During Purchase of a Firearm, 3 counts

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

###

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

 

 

United States Attorney Andrew M. Luger today announced the guilty plea of JAMES FRANCIS VOLIN, 64, of Inver Grove Heights, for hiding income from used car sales from the Internal Revenue Service. VOLIN pleaded guilty to an Information filed on November 18, 2014, charging him with Income Tax Evasion. He pleaded guilty before Chief Judge Michael J. Davis in U.S. District Court in Minneapolis. VOLIN will be sentenced at a future date.

According to his guilty plea and documents filed in court, in 2008 VOLIN agreed to pay nearly $100,000 in outstanding taxes to the IRS. VOLIN still owed the taxes in 2012 and 2013 when he was operating an unlicensed and illegal used car dealership which generated substantial income in cash. Instead of paying the back taxes as agreed, VOLIN hid the income. VOLIN admitted that he did not report the cash income or file tax returns and that he put money into cashier’s checks and used bank accounts opened under another’s name and social security number to avoid detection.

VOLIN was originally indicted earlier this year for structuring bank deposits. “Structuring” is a way of depositing money into bank accounts in amounts less than those required by law to be reported by the financial institution to the Financial Crimes Enforcement Network (FinCEN). According to that indictment, between April 2012 and April 2013, VOLIN made structured deposits totaling more than $200,000, in amounts insufficient to trigger mandatory reporting to the government.

This case is the result of an investigation by the Internal Revenue Service – Criminal Investigations and the Minnesota State Patrol Vehicle Crimes Unit.

The case is being prosecuted by Assistant United States Attorney Robert Lewis.

Defendant Information: JAMES FRANCIS VOLIN, 64
Inver Grove Heights, MN

Convicted: • Income Tax Evasion, 1 count

###

 

 

United States Attorney Andrew M. Luger today announced a federal indictment charging ROXANNE MERRELL, 35, of Cottage Grove, Minn., with producing pornographic images of a child. MERRELL is charged with two counts of Production of Child Pornography. The defendant appeared in United States District Court in Minneapolis, Minn., earlier today.

According to the indictment and documents filed in court, MERRELL was offered $100,000 to take photos depicting a minor “below the waist” and nude, which she took while the child was sleeping. The photographs were discovered in North Dakota on the computer of a known sex- offender. MERRELL’S hands appeared in at least one such photograph, and she was identified as the producer and sender of the images.

“HSI is committed to aggressively pursuing those individuals suspected of trading in child pornography,” said HSI St. Paul Special Agent in Charge J. Michael Netherland. "It is our job to do everything that we can to protect the most vulnerable members of our society.”

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 United States Attorneys’ Offices and the Department of Justice Criminal Division’s Child Exploitation and Obscenity Section (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 http://www.projectsafechildhood.gov

This case is the result of an investigation conducted by Homeland Security Investigations (HSI) and the Cottage Grove Police Department.

Assistant U.S. Attorney Katharine T. Buzicky is prosecuting the case.

Defendant Information: ROXANNE MERRELL, 35
Cottage Grove, Minn.

Charges: • Production of Child Pornography, 2 counts

###

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

 

 

United States Attorney Andrew M. Luger today announced the sentencing of MARK ALLEN GARCIA, 60, and PATRICIA ANN MCQUARRY, 56, for conspiracy to defraud the United States by filing false individual income tax returns. On May 20, 2014, following a one-week trial, a federal jury found the two defendants guilty of all charges. United States District Court Judge Patrick J. Schiltz sentenced GARCIA to 30 months in prison and MCQUARRY to 40 months in prison. Both defendants were also ordered to pay $226,000 in restitution.

As proven at trial, beginning in 2007, GARCIA and MCQUARRY engaged in a scheme to obstruct foreclosure proceedings on their house, avoid responsibility for repaying loans, and steal money from the United States Treasury by filing false individual income tax returns. In 2007, GARCIA and MCQUARRY were several months behind on their mortgage payments and attempted to obstruct foreclosure proceedings by sending a host of frivolous documents to their bank. The documents included fake tax forms and a “Bonded Promissory Note” for $10,000,000, along with instructions that the financial institution should use the document to pay off their $266,000 mortgage and keep the remaining funds.

For tax years 2007 and 2008, both defendants filed self-prepared tax returns falsely claiming to have received hundreds of thousands of dollars in 1099-OID income and that the entire amount had been withheld and paid over to the IRS on their behalf. Although the defendants filled out their tax returns in a way that made them appear legitimate, GARCIA and MCQUARRY knew that their claims for large refunds were frivolous and were based on the fraudulent 1099-OID tax defier scheme.

Both defendants created fake 1099s showing false interest income and withholding from various financial institutions, going so far as to include the banks’ tax identification numbers on the forged documents. In total, the defendants sought more than $500,000 in false refunds. GARCIA and MCQUARRY attempted to hide the proceeds of their fraud scheme by purchasing real estate near Pine City, Minn., and then transferring the property to a private Trust called “POKE-A- BOTTOM.” The defendants also used the stolen money to purchase gold coins and a motorhome.

This case resulted from an investigation conducted by the Internal Revenue Service-Criminal Investigations. It was prosecuted by Assistant U.S. Attorneys Kimberly A. Svendsen and Timothy C. Rank.

Defendant Information: MARK ALLEN GARCIA, 60
Pine City, Minn.

Convicted: • Conspiracy to Defraud the United States, 1 count
• False Claims Against the United States, 2 counts

Sentenced: • 30 months in prison
• 3 year term of supervised release

PATRICIA ANN MCQUARRY, 56
Pine City, Minn.

Convicted: • Conspiracy to Defraud the United States, 1 count
• False Claims Against the United States, 2 counts

Sentenced: • 40 months in prison
• 3 year term of supervised release

###

 

 

United States Attorney Andrew M. Luger and Federal Bureau of Investigation Special Agent in Charge for the Minneapolis Division Richard T. Thornton today announced charges filed against MOHAMED ALI OMAR, 21, for knowingly and intentionally threatening a Special Agent of the Federal Bureau of Investigation (FBI) during a routine interview. The defendant made an initial appearance this afternoon before Magistrate Judge Steven E. Rau in United States District Court in St. Paul, Minn. His next court appearance is expected on Friday, November 14, 2014 in United States District Court in St. Paul, Minn.

“The safety and security of FBI employees is of paramount concern to the organization,” said FBI Special Agent in Charge Thornton. “The FBI will aggressively address all actual or implied threats to its employees.”

“Those who threaten violence against federal agents are committing a crime,” said U.S. Attorney Luger. “Any person has the right not to talk to law enforcement officers. But it is a crime to threaten violence against a federal law enforcement agent. This Office will do everything in our power to ensure the continued safety of federal agents.”

According to the complaint and documents filed in court, on November 6, 2014, two FBI Agents and a language interpreter went to OMAR’S house in South Minneapolis to interview a member of his family about the possible commission of an unrelated crime. When the agents and interpreter arrived outside of the house, OMAR opened the door and directed obscene language toward the FBI agents, threatened to “put down” the interpreter, and told the agents that “he had a permit to carry, and that if they came back, he would get them.” OMAR also told that agents that they “knew his history.” Taken in combination with the defendant’s history, the FBI agents understood him to mean that he would shoot at them if they returned to his house.

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

Defendant Information: MOHAMED ALI OMAR, 21
Minneapolis, Minn.

Charges: • Knowingly and intentionally threatening a federal officer, 1 count

###

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

 

 

United States Attorney Andrew M. Luger and Federal Bureau of Investigation Special Agent-in- Charge for the Minneapolis Division Richard T. Thornton today announced charges filed against MOHAMED ALI OMAR, 21, for knowingly and intentionally threatening a Special Agent of the Federal Bureau of Investigation (FBI) during a routine interview. The defendant made an initial appearance this afternoon before Magistrate Judge Steven E. Rau in United States District Court in St. Paul, Minn. His next court appearance is expected on Friday, November 14, 2014 in United States District Court in St. Paul, Minn.

“The safety and security of FBI employees is of paramount concern to the organization,” said FBI Special Agent-in-Charge Thornton. “The FBI will aggressively address all actual or implied threats to its employees.”

“Those who threaten violence against federal agents are committing a crime,” said U.S. Attorney Luger. “Any person has the right not to talk to law enforcement officers. But it is a crime to threaten violence against a federal law enforcement agent. This Office will do everything in our power to ensure the continued safety of federal agents.”

According to the complaint and documents filed in court, on November 6, 2014, two FBI Agents and a language interpreter went to OMAR’S house in South Minneapolis to interview a member of his family about the possible commission of an unrelated crime. When the agents and interpreter arrived outside of the house, OMAR opened the door and directed obscene language toward the FBI agents, threatened to “put down” the interpreter, and told the agents that “he had a permit to carry, and that if they came back, he would get them.” OMAR also told that agents that they “knew his history.” Taken in combination with the defendant’s history, the FBI agents understood him to mean that he would shoot at them if they returned to his house.

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

Defendant Information:

MOHAMED ALI OMAR, 21
Minneapolis, Minn.

Charges:

• Knowingly and intentionally threatening a federal officer, 1 count

###

 

 

United States Attorney Andrew M. Luger today announced the sentencing of GARY LEE SPEAR, 36, to 58 months in federal prison for filing fraudulent tax returns. SPEAR, who was indicted on January 7, 2014 along with co-defendants MONEER JUNE KHAZRAEINAZMPOUR and KELLY MATTESON, pleaded guilty on April 11, 2014 to one count of Conspiracy to Defraud the United States. KHAZRAEINAZMPOUR pleaded guilty on March 11, 2014 to one count of Conspiracy to Defraud the United States and one count of Distribution of Methamphetamine. She was sentenced on June 9, 2014 to 60 months in federal prison. MATTESON, who pleaded guilty on May 1, 2014 to one count of Conspiracy to Defraud the United States, was sentenced on October 17, 2014 to 18 months in federal prison.

According to documents filed in court, from January 2009 through September 2011, SPEAR conspired with KHAZRAEINAZMPOUR and MATTESON, and other unnamed individuals, to file fraudulent tax returns in order to obtain large tax refunds. The purpose of the conspiracy was to steal money from the IRS by filing tax returns that reported inflated income, false withholdings, and other false items.

According to his guilty plea, SPEAR admitted that his role in the conspiracy involved obtaining personal identifying information, including birth dates and social security numbers, of prison inmates and then providing the information to his co-defendants. SPEAR carried out his role in the scheme while incarcerated in state prison for other crimes. SPEAR and his co-defendants submitted more than 130 fraudulent claims seeking refunds totaling more than $500,000.

This case resulted from an investigation conducted by the Internal Revenue Service-Criminal Investigations and the Minnesota Bureau of Criminal Apprehension. It was prosecuted by Assistant U.S. Attorney William J. Otteson.

Defendant Information: GARY LEE SPEAR, 36
Sherburne County Jail

Convicted: • Conspiracy to Defraud the United States, 1 count

Sentenced: • 58 months in prison
• 3 year term of supervised release

###

 

 

United States Attorney Andrew M. Luger today announced the sentencing of GEORGE RICHARD GAUNT, 26, to 150 months in federal prison for robbing banks in three states, including Virginia, Iowa, and Minnesota. GAUNT was charged with one count of Bank Robbery in the District of Minnesota, one count of Bank Robbery in the Northern District of Iowa, and two counts of Bank Robbery in the Western District of Virginia. GAUNT pleaded guilty to all charges on April 7, 2014, in United States District Court in St. Paul, Minn. He was sentenced on November 5, 2014.

“This case is the result of successful efforts by multiple law enforcement agencies and federal prosecutors across three districts,” said Assistant U.S. Attorney Katharine Buzicky. “Working together, law enforcement officers apprehended a defendant who committed violent crimes across the country.”

According to the indictment and documents filed in court, in the fall of 2013, GAUNT disappeared from a halfway house in Kentucky and went on a bank robbery spree in Virginia, Iowa, and Minnesota. During each of the four bank robberies, GAUNT intimidated bank employees using a black BB gun that was designed to look exactly like a handgun. The defendant also passed to tellers violent and threatening notes. GAUNT handed a bank teller in Center Point, Iowa, a note that read, “I have a gun Give me $ No dye, trackers, or alarms I’ll kill everyone!”

According to documents filed in court, on October 15, 2013, GAUNT robbed a bank in Eagle Lake, Minnesota, using a BB gun and passing a threatening note that read, “I have a gun, this is no joke, I will kill you! Act normal, no alarms, trackers, or dye packs. PS this aint my first bank. So don’t make me kill again.” Later that day, law enforcement agents apprehended GAUNT with a BB gun and a bag with approximately $7,472 in cash that he had taken from the bank in Eagle Lake, Minnesota.

This case is the result of an investigation by the Federal Bureau of Investigation, the Augusta County Sheriff’s Office and the Henry County Sheriff’s Office in Virginia, the Linn County Sheriff’s Office in Iowa, the Minnesota State Patrol, the Eagle Lake Police Department, the Blue Earth County Sheriff’s Office and the Waseca County Sheriff’s Office in Minnesota.

This case was prosecuted by Assistant U.S. Attorney Katharine T. Buzicky.

Defendant Information: GEORGE RICHARD GAUNT, 26
Louisville, KY

Convicted: • Bank Robbery, 4 counts

Sentenced: • 150 months in prison

###

 

 

United States Attorney Andrew M. Luger today announced the guilty plea of ANISSA JEANNE SHORES, 37, to one count of Obtaining a Controlled Substance by Fraud. SHORES was charged by criminal information on October 16, 2014, for Obtaining a Controlled Substance by Fraud. She pleaded guilty on October 28, 2014, before United States District Court Judge David S. Doty.

“Pharmacist Anissa Jeanne Shores abused her position as a trusted member of the medical community by diverting significant quantities of opioid based prescription drugs,” said Dan Moren, Assistant Special Agent in Charge of the Drug Enforcement Administration. “In order to combat the threat of opioid prescription drug addiction, which has been linked to heroin abuse, it is vital that the medical industry and the state licensing boards continue to work diligently with DEA and its federal, state, and local law enforcement partners in deterring, detecting, and investigating those individuals and groups responsible for diverting prescription drugs for non- medical purposes.”

“Prescription drug abuse is both a law enforcement and public health challenge,” said U.S. Attorney Luger. “Pharmaceutical drugs taken without a prescription or a doctor’s supervision can be just as dangerous as using illegal drugs like heroin. I am grateful to the DEA and our law enforcement partners for the ongoing and successful efforts to curb prescription drug abuse in Minnesota. Working together, we are reducing illegal access to these highly addictive and potentially deadly drugs.”

According to the charges and documents filed in court, SHORES was employed at a pharmacy in Burnsville, Minn., as a full-time pharmacist responsible for maintaining inventory records of controlled substances. The inventory procedures included accounting for the pharmacy’s receipt of controlled substances in written logbooks and/or computer logs. The purpose of the inventories is to track all controlled substances to ensure that they are lawfully dispensed by prescription and not illegally diverted.

Beginning no later than 2011, SHORES began stealing Hydrocodone, Oxycodone, Carisoprodol, and Diazepam, all controlled substances, as well as Tramadol, a non-controlled substance, from the pharmacy for her own personal use. According to her guilty plea and documents filed in court, SHORES stole approximately 67,000 dosages of controlled and non-controlled substances from the pharmacy.

According to her guilty plea, SHORES falsified the pharmacy’s written and computer logs, making it appear that the pharmacy received smaller quantities of the drugs than had actually been received. SHORES then stole the quantity of controlled substances that had been omitted from the logbooks for her own use and benefit.

This investigation was conducted by the DEA, Minneapolis/St. Paul District Office, Tactical Diversion Squad (TDS). The TDS is comprised of investigators from the DEA, FBI, FDA, Hennepin County Sheriff’s Office, Washington County Sheriff’s Office, Ramsey County Sheriff’s Office, Minneapolis Police Department, and the Plymouth Police Department.

This case is being prosecuted by Assistant United States Attorney David M. Genrich.

Defendant Information: ANISSA JEANNE SHORES, 37
Burnsville, Minn.

Convicted: • Obtaining a Controlled Substance by Fraud, 1 count

###

 

 

United States Attorney Andrew M. Luger today announced the indictment of 25 members of a bank fraud conspiracy in which conspirators stole or attempted to steal more than $2 million by manufacturing counterfeit checks and cashing them, along with other fraudulent checks, at dozens of banks and check cashing facilities.1 Three additional defendants have been charged by information for related crimes. Federal, state, and local law enforcement officers today, under the auspices of the Minnesota Financial Crimes Task Force (MNFCTF), executed arrest warrants in Minnesota, Oregon, and North Dakota. Defendants are making initial appearances today in U.S. District Court in St. Paul before Magistrate Judge Jeffrey J. Keyes.

“The indictment of the Sienemah Gaye Organization effectively shuts down a pervasive identity theft and bank fraud conspiracy in the Twin Cities,” said U.S. Attorney Luger. “This case is representative of a recurring trend – the migration of traditional street criminals to white collar fraud. Law enforcement officials and prosecutors, working in close collaboration through the Minnesota Financial Crimes Task Force, were able to put together the pieces of hundreds of attempted instances of alleged fraud to build today’s conspiracy indictment. I am grateful to my partners in law enforcement for their superb investigative work continuing to stay ahead of those who seek to commit fraud.”

Bureau of Criminal Apprehension Assistant Superintendent Drew Evans, said: “These criminals targeted Minnesotans, local businesses and financial institutions. The Minnesota Financial Crimes Task Force together with its local and federal partners worked across jurisdictions to bring the conspiracy to light, identify the players and bring them to justice. When criminals aren't bound to one jurisdiction, this kind of criminal justice partnership puts us in the best position to stop them.”

Special Agent in Charge of the United States Secret Service in Minneapolis Louis Stephens, said: “Today's law enforcement operation involved over 75 federal, state and local law enforcement officers and is the culmination of thousands of investigative man hours involving the efforts of 12 different law enforcement agencies working collaboratively with private industry and federal prosecutors under the auspices of the Minnesota Financial Crimes Task Force. Today, thanks to talented investigators, analysts and prosecutors, a significant identity theft ring adept at victimizing Minnesota businesses and citizens is no longer in business.”

Acting Special Agent in Charge of the Internal Revenue Service – Criminal Investigation, Karl Stiften, said: "The individuals indicted today thought they could use trickery and deception for financial gain. What they didn't count on was the financial expertise of IRS Criminal Investigation special agents. IRS Criminal Investigation is proud to be a part of the powerful law enforcement team that stopped this alleged criminal activity."

According to the indictment and documents filed in court, from at least November 14, 2007, until September 11, 2013, the conspiracy, using fraudulently obtained and otherwise compromised account information, manufactured counterfeit checks with blank check stock and check-printing software, which they distributed to other members of a bank fraud conspiracy to cash at dozens of different banks and other financial institutions. The check manufacturers, including SIENEMAH TERRANCE GAYE, FINOH SAHR FILLIE, and KARZIL RENALDO CANNEDY, worked with “recruiters,” who were responsible for distributing the fraudulent checks they obtained from GAYE and FILLIE. The recruiters directed “check runners” to cash fraudulent checks at banks or check cashing establishments. In some instances, the check runners opened bank accounts in their own names in which they would deposit fraudulent checks and later withdraw for cash. Other members of the conspiracy, including GAYE, FILLIE, JEFFREY GBOR, JR., JAMES CAPEHART, III, ANTHONY KUGMEH, and BAI KIAWOIN, used stolen personally identifiable information and fraudulent checks to open new bank accounts. After opening these new accounts, the conspirators were issued blank personal checks that they used to engage in fraudulent transactions. Each member of the conspiracy took a portion of the proceeds of the fraud.

According to the indictment and documents filed in court, three primary counterfeit check manufacturers, twelve recruiters, and seven runners are charged at this time. GAYE, FILLIE, and CANNEDY used various means of obtaining account information to make counterfeit checks, including getting access to sensitive account information through two bank insiders. FELISHA HASSIM was a branch manager at a TCF Bank branch and ANNESA HASSIM was a teller at a Central Bank branch. Both FELISHA and ANNESA HASSIM facilitated the conspiracy by using their access to legitimate account information to provide the manufacturers with account numbers and balance information. A third facilitator, TIMOTHY TILLMAN, who worked as a door-to-door meat salesman, provided to the conspiracy copies of the legitimate checks he received from customers as payment, which were then used to manufacture fraudulent checks.

According to documents filed in court, in December 2012, a recruiter named JEFFREY GBOR, JR., approached FELISHA HASSIM and asked her to provide him with bank account and checking information, to which she had access through her position with the bank. HASSIM provided copies of cashed or deposited checks to GBOR on multiple occasions, and she facilitated fraudulent transactions by assisting check runners with the deposit of counterfeit checks and the immediate withdrawal of cash based on the deposit of those counterfeit checks. GBOR also communicated with HASSIM via text message to determine if specific accounts had sufficient funds for the conspiracy to engage in fraudulent transactions.

According to the indictment and documents filed in court, the defendants also obtained account numbers and bank routing information through research on the social media website Instagram. Members of the conspiracy accessed compromised account information posted by unrelated persons using the #myfirstpaycheck hashtag, among others. The conspiracy also obtained account information of legitimate business and personal accounts by stealing checks.

The Minnesota Financial Crimes Task Force (MNFCTF) protects and serves the public by investigating financial crimes related to identity theft, with a special emphasis on organized criminal enterprises. The MNFCTF is comprised of multi-jurisdictional law enforcement agencies working together to provide investigative expertise and resources. The MNFCTF includes representatives from the Minnesota Bureau of Criminal Apprehension, United States Secret Service, Edina Police Department, Internal Revenue Service - Criminal Investigations, Immigration and Customs Enforcement – Homeland Security Investigations, Ramsey County Sheriff’s Office, United States Postal Inspection Service, and the United States Attorney’s Office for the District of Minnesota.

This case is the result of an investigation conducted jointly under the auspices of the MNFCTF by the Minnesota Bureau of Criminal Apprehension, United States Secret Service, Edina Police Department, Internal Revenue Service - Criminal Investigations, United States Postal Inspection Service, Ramsey County Sherriff’s Office, St. Paul Police Department, Immigration and Customs Enforcement – Homeland Security Investigations, United States Marshal Service, Plymouth Police Department, and United States Diplomatic Security Service.

U.S. Attorney Luger thanked TCF Bank and Central Bank for their assistance in the investigation.

This case is being prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.

Defendant Information: SIENEMAH TERRANCE GAYE, 30
Anoka, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 20 counts
• Aggravated Identity Theft, 2 counts

FINOH SAHR FILLIE, 28
Brooklyn Park, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 5 counts
• Aggravated Identity Theft, 1 count

KARZIL RENALDO CANNEDY, 23
Sherburne County Jail

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 5 counts

JAMES LUELLYING CAPEHART, III, 31
Brooklyn Center, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 2 counts
• Aggravated Identity Theft, 1 count

JEFFREY DULWONH GBOR, 26
Minnesota Correctional Facility – St. Cloud

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 11 counts
• Aggravated Identity Theft, 1 count

LARRY WLEAH BORTEH, 29
Brooklyn Park, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

ANTHONY TARPEH KUGMEH, 32
Coon Rapids, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 3 counts
• Aggravated Identity Theft, 1 count

SAMUEL GAYAH KARMO, 33
Brooklyn Park, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

SAMBA ERIC KONDEH KAMARA, 25
St. Paul, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 2 counts

FULTON KPENEON BADIO, 27
Fargo, N.D.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 3 counts

KHAN Z GBOR, 23
Columbia Heights, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

———————————————

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 2 counts

PRINCE KORBOI SUMOSO, 29
Fargo, N.D.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 3 counts

BAI ALBERT KIAWOIN, 23
Brooklyn Park, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 2 counts
• Aggravated Identity Theft, 1 count

VICTOR JERRY MASSALY, 30
St. Paul, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 3 counts

FELISHA HASSIM, 20
Blaine, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 4 counts

ANNESA HASSIM, 23
Blaine, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 2 counts

TIMOTHY JASON TILLMAN, 30
Gervais, Ore.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

MALCOLM LOUIS CORNELL, 24
Minneapolis, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

KLEME DOGBO SAMOLU, 24
Waterloo, Iowa

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

AYESHA VERNEDER MCKINNEY, 26
Atlanta, Ga.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

JOHNSON SAYONKON, 31
Richfield, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

MAURICE LERON GRIFFIN, 25
Minneapolis, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

KAELA MONAE LEWIS, 22
St. Paul, Minn.

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

OWEN MENSOHN GBORPLAY, 25
Minnesota Correctional Facility – St. Cloud

Charges: • Conspiracy to Commit Bank Fraud, 1 count
• Bank Fraud, 1 count

###

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 the unrelated sentencings of FERNANDO LUIS MAY-GIL-GARCIA, 29, and AVERY WADE SCHOENBORN, 25, each to 84 months in federal prison for unrelated violent offenses committed on the Red Lake Indian Reservation. Both defendants are enrolled members of the Red Lake Band of Chippewa Indians. They were sentenced yesterday in U.S. District Court in Duluth before Senior Judge Richard H. Kyle.

According to MAY-GIL-GARCIA’S guilty plea and documents filed in court, MAY-GIL- GARCIA repeatedly struck a female victim multiple times with his fists. During the assault, the victim was holding a baby in her arms and she was unable to fend off the blows. The baby was also struck during the assault. MAY-GIL-GARCIA also bit the victim in the face and on the back. As a result of the assault, the victim suffered multiple broken bones in her face.

As proven at trial in the SCHOENBORN case, SCHOENBORN sexually assaulted an intoxicated victim. While the victim was unconscious in a friend’s home, SCHOENBORN entered the house and proceeded to sexually assault the victim. The victim was later taken to a hospital where she regained consciousness and was treated and released. The trial lasted two days in U.S. District Court in Duluth. The jury deliberated for less than two hours before returning a guilty verdict.

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

Both cases were prosecuted by Assistant U.S. Attorney Clifford Wardlaw.

Defendant Information: FERNANDO LUIS MAY-GIL-GARCIA, 29
Red Lake, Minn.

Convicted: • Assault Resulting in Serious Bodily Injury, 1 count

Sentenced: • 84 months in prison

AVERY WADE SCHOENBORN, 25
Red Lake, Minn.

Convicted: • Sexual Abuse, 1 count

Sentenced: • 84 months in prison

###

 

 

United States Attorney Andrew M. Luger today announced a federal indictment charging two individuals with orchestrating a $1 million bank fraud conspiracy in the Minneapolis/St. Paul metro area. VINH XUAN NGO, a/k/a “Houng Van Tran,” 36, and NORINH INTHONEPRADITH, a/k/a “Chau Ngo,” 38, are charged with Aggravated Identity Theft, and Conspiracy to Commit Bank Fraud and Access Device Fraud, in a 15-count indictment.

According to the indictment, from approximately December 2012 through February 2014, NGO and INTHONEPRADITH conspired to defraud several individuals and financial institutions throughout the Twin Cities. The defendants created false identification documents from stolen information and assumed the victims’ identities to gain control over bank and credit card accounts. In addition, NGO and INTHONEPRADITH opened new bank accounts, conducted transactions, and obtained cash and merchandise through fraud.

According to the indictment, from approximately January 2013 through June 2013, NGO and INTHONEPRADITH used counterfeit permanent resident cards and driver’s licenses to open bank accounts and post office boxes, and to complete applications to reroute the delivery of victims’ mail, including mail related to bank and credit card accounts. Using victims’ names, identification and bank account information, NGO and INTHONEPRADITH made more than $46,000 in fraudulent deposits, withdrawals, and transfers at various financial institutions. The defendants also used counterfeit checks and credit cards to purchase approximately $20,000 worth of merchandise and gift cards at multiple retailers.

This case is the result of an investigation conducted by Homeland Security Investigations and the United States Postal Inspection Service.

Assistant U.S. Attorney John E. Kokkinen is prosecuting the case.

Defendant Information: VINH XUAN NGO, 36
Brooklyn Park, Minn.

Charges: • Conspiracy, 1 count
• Bank Fraud, 6 counts
• Access Device Fraud, 2 counts
• Aggravated Identity Theft, 2 counts

NORINH INTHONEPRADITH, 38
Brooklyn Center, Minn.

Charges: • Conspiracy, 1 count
• Bank Fraud, 5 counts
• Access Device Fraud, 2 counts
• Aggravated Identity Theft, 2 counts

###

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 the guilty plea of DONTRE D’SEAN MCHENRY, a/k/a “Dontre Sean McHenry,” a/k/a “Avon,” a/k/a “Rico,” 25, for recruiting and sex trafficking teenage girls throughout Minnesota. MCHENRY pleaded guilty today to sex trafficking of a minor before Judge David S. Doty in United States District Court in Minneapolis. The defendant is expected to be sentenced at a future court appearance.

Minneapolis Police Chief Janee Harteau said: “Dontre McHenry has been transforming vulnerable girls into products for sale for years. This vile and horrific behavior will not be tolerated and we are determined to track down these people and bring them to justice. The Minneapolis Police Department, along with our law enforcement partners, is committed to protecting our youth. Our thanks go out to the police departments from the cities of Roseville, St. Paul, and Rochester, along with the Homeland Security Investigators who worked so closely with us on this case, along with U.S. Attorney Andrew Luger, for his tenacity in charging cases like this.”

Special Agent in Charge of HSI St. Paul J. Michael Netherland said: "Sex traffickers are constantly on the hunt for vulnerable children they can exploit for their financial gain, which is a heartless crime. It is imperative for law enforcement to protect those who cannot protect themselves. HSI will continue to work in tandem with our law enforcement partners to identify, investigate, and assist in the prosecution of individuals who have exploited children."

Assistant U.S. Attorney Laura Provinzino, who is in charge of human trafficking prosecutions, said: “Sex trafficking of girls is a very real problem in Minnesota. We will continue to be aggressive in the prosecution of these cases to protect our young people from the manipulation and violence that causes them to be sold for sex. Today, Dontre McHenry is being held accountable for his role in recruiting and trafficking the most vulnerable girls in our state – runaways, recent immigrants, and girls in foster care. Protecting our children from violent and manipulative predators like this defendant is a central mission for the U.S. Attorney’s Office and for our law enforcement partners.”

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, which was sent out to prospective “johns.” 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 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 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. MCHENRY also had photos on his cellphone of two victims in their underwear, as well as numerous text message conversations from customers arranging to meet with victims to purchase sex.

This case is 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 are prosecuting the case.

Defendant Information: DONTRE D’SEAN MCHENRY, a/k/a “Dontre Sean McHenry,” a/k/a “Avon,” a/k/a “Rico,” 25
St. Paul, Minn.

Convicted: • Sex Trafficking of a Minor, 1 count

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United States Attorney Andrew M. Luger today announced the guilty plea of SUSAN ELIZABETH WALKER, 50, for abusing her position of trust as a registered securities agent and financial advisor to steal nearly $1 million from at least 24 victims. WALKER, who was charged by information on September 22, 2014, pleaded guilty today before Chief Judge Michael Davis in United States District Court in Minneapolis.

“The theft of investment funds by trusted financial advisors erodes the public’s confidence in the market,” said U.S. Attorney Luger. “Prosecutors in my Office, in collaboration with our state and federal law enforcement partners, will continue to investigate and prosecute aggressively those who abuse their positions of trust to steal from clients, and as in this case, endanger their retirement security.”

According to the defendant’s guilty plea and documents filed in court, from October 2008 until March 2013, WALKER provided financial planning services to several clients through her affiliation with Ameriprise Financial Inc. She was a securities agent registered with the Minnesota Department of Commerce, and a financial advisor registered with the Financial Industry Regulatory Authority (FINRA). WALKER stole from her clients by misusing her access to several victim retirement accounts and causing checks to be drawn from victim accounts and deposited into accounts that she controlled.

According to documents filed in court and statements made on the record in court, WALKER also opened investment brokerage accounts in her own name, and in the names of several victim- clients without their knowledge or authorization, which she used to conceal money stolen from other clients. She caused money to be withdrawn from retirement accounts belonging to clients and deposited in those brokerage accounts, which she took for her own personal use. For example, on September 18, 2009, WALKER caused a check for $75,000 to be issued from a victim account and deposited into an account controlled by WALKER. The defendant used funds stolen as part of the fraud scheme to pay for, among other things, private school tuition and for her own expensive vacation travel.

According to her guilty plea, in addition to stealing from her clients, WALKER also failed to report any of the funds obtained through fraud on her tax returns. The total tax loss on her unreported income is approximately $325,000.

This case is the result of an investigation conducted by the Internal Revenue Service-Criminal Investigations, Federal Bureau of Investigation, and the Minnesota Department of Commerce.

Assistant U.S. Attorney Timothy Rank prosecuted the case.

Defendant Information: SUSAN ELIZABETH WALKER, 50
Plymouth, Minn.

Convicted: • Mail Fraud, 1 count
• Tax Evasion, 1 count

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United States Attorney Andrew M. Luger today announced that Special Agent Ruth Hovey of the Federal Bureau of Investigation (FBI) is the recipient of the 2013 Law Enforcement Officer of the Year Award for her outstanding law enforcement work in the State of Minnesota. Special Agent Hovey has been an outstanding partner to the U.S. Attorney’s Office’s pursuit of justice in fraud cases for more than a decade, and her exemplary work during 2013 was consistent with her many previous accomplishments.

“The U.S. Attorney’s Office depends on excellent work by our law enforcement partners to pursue successful prosecutions,” said U.S. Attorney Luger. “It takes a particular diligence to make white collar cases like those investigated by Special Agent Hovey. On behalf of the Department of Justice and the Assistant U.S. Attorneys in my Office, as well as all of the victims for whom she has sought justice throughout her career, I am honored to present Ruth Hovey with the 2013 Law Enforcement Officer of the Year Award.”

Assistant U.S. Attorney Kimberly Svendsen said: “Special Agent Ruth Hovey is being honored today for her body of work investigating financial crimes. In the past several years she has brought her extensive skills to many significant investigations involving investment advisor fraud, working to protect the people of this country from those who would prey on them and steal their hard-earned savings. Special Agent Hovey is also a tremendous teammate and mentor to white collar prosecutors and agents alike. I have been privileged for the past several years to work with Ruth and to call her my friend, and I am pleased that she is being recognized for her hard work.”

Special Agent Hovey works primarily on white collar investigations focusing on investment fraud. She has led or played a central role in several large investigations that resulted in successful federal prosecutions. In 2013, Special Agent Hovey made invaluable contributions to multiple prosecutions, including acting as a leader on a team that investigated a number of hedge funds that placed money with Tom Petters and Petters Company, Inc., including the trial and conviction of Jim Fry, an investment manager of one of those hedge funds, in one of the most complex white collar cases in the history of the U.S. Attorney’s Office for the District of Minnesota. The defendants in these hedge fund cases lied to investors and used their money to invest in the Petters Ponzi scheme, playing an essential role in one of the largest fraud schemes in history, which resulted in catastrophic losses to the victims. The successful prosecution of this complex case required extraordinary cooperation and teamwork between the U.S. Attorney’s Office and law enforcement agents from three different agencies. With respect to the investigation, Special Agent Hovey was particularly adept at finding the needles in this massive haystack of documents and other evidence. All told, this evidence amounted to millions of pages of documents. Special Agent Hovey and the other agents interviewed hundreds of potential witnesses, resulting in nearly 12,000 pages of written memoranda of interviews.

Special Agent Hovey was also instrumental in the recent investment fraud case against Mark Holt, a securities broker, investment advisor, and now disbarred attorney, who operated a multi- million dollar fraud scheme for at least eight years. Throughout the investigation, Special Agent Hovey did an outstanding job communicating with the victims to ensure that their voices were heard by the probation officer and the sentencing court. As a result of her work, the Court received many powerful letters detailing the impact of Holt’s crimes on the victims and their families. Holt was sentenced to serve 10 years in federal prison, and ordered to pay more than $2.9 million in restitution to the victims of his scheme.

The U.S. Attorney’s Office Law Enforcement Award is presented annually to a local, state, or federal law enforcement agent, officer, or investigative team that has performed outstanding work on a significant federal case or on a series of cases. In addition, the recipient of the award must exemplify the cooperative spirit Minnesotans have come to expect from local, state, and federal law enforcement.

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United States Attorney Andrew M. Luger today announced the guilty plea of TYRONE HERMAN, 55, of St. Anthony, Minn., for defrauding investors for more than $19 million. HERMAN, who was charged by information on September 9, 2014, pleaded guilty today before Untied States District Judge Joan N. Ericksen.

“Investment fraud takes all forms – even sophisticated investors can be victims,” said U.S. Attorney Luger. “Working closely with our colleagues from the Minnesota Department of Commerce and the Federal Bureau of Investigation, today we are protecting more people than ever before, by removing from the market place those who are stealing clients’ money by investment fraud.”

Minnesota Department of Commerce Commissioner Mike Rothman said: “We will continue to fight investment fraud and criminal Ponzi schemes. After a concerned citizen gave a tip to our securities investigators, our agents from the Commerce Fraud Bureau and the FBI collaborated to investigate and stop Mr. Herman from committing any more criminal financial abuse.”

Special Agent in Charge of the Federal Bureau of Investigation Minneapolis Division Richard Thornton said: “The FBI remains steadfast in its commitment to prevent financial fraud. This guilty plea serves as a reminder to those who commit financial fraud that no safe harbor exists.”

According to his guilty plea and documents filed in court, HERMAN, from 1998 through December 2013, operated Executive Marketing Group (EMG) and Ty Herman & Associates, which he claimed had business relationships with manufacturers and wholesalers from whom he could purchase small appliances and other inventory at below-retail market rates. HERMAN told the victims that he could re-sell the inventory in which they invested for a profit of 35 percent, and that victims would receive their money back, with a 30 percent rate of return, within 90 days of the sale of inventory.

According to his guilty plea and documents filed in court, HERMAN created false invoices to demonstrate to victims that had sold the inventory. When they demanded return of their investments, HERMAN provided fake bank statements showing that, while he had the money in his bank account, the Internal Revenue Service had frozen the account so that he could not access the victims’ money. HERMAN repaid some investors with Ponzi-type payments, not from the sale of inventory.

According to HERMAN’S guilty plea and documents filed in court, he stole more than $19 million from at least 25 separate victims.

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

Assistant U.S. Attorney Karen Schommer prosecuted the case.

Defendant Information: TYRONE R. HERMAN, 55
St. Anthony, Minn.

Convicted: • Wire Fraud, 1 count

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United States Attorney Andrew M. Luger today announced the guilty plea of TYMONIA SHAFAY WILLIAMS, 33, to one count of filing False, Fictitious and Fraudulent Claims. WILLIAMS was indicted on August 11, 2014 for filing False, Fictitious and Fraudulent Claims against the government, and pleaded guilty on October 6, 2014 before United States District Court Judge Richard H. Kyle.

According to the defendant’s guilty plea and documents filed in court, in February 2010, WILLIAMS devised a scheme in which she prepared and electronically filed false tax returns on behalf of her friends, family and acquaintances. As part of the scheme, WILLIAMS collected personal information from the individuals for whom she was preparing tax returns, including addresses, social security numbers and Form W-2 or 1099s.

Additionally, for each false return, WILLIAMS completed a Schedule C claiming that the individuals earned self-employment income from various jobs such as “hairdresser,” “dancer,” or “entertainer.” By including false amounts of self-employment income on the tax returns, WILLIAMS was able to apply certain credits to fraudulently generate large tax refunds. The total amount of the tax loss for all returns is at least $100,000.

“Investigating refund fraud is a top priority for IRS Criminal Investigation,” said IRS Criminal Investigation Acting Special Agent in Charge Karl Stiften. “Filing false tax returns is a serious crime that hurts innocent taxpayers. Law enforcement and the United States Attorney’s Office are serious about investigating these crimes and holding accountable those who defraud the government and taxpayers.”

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

Assistant United States Attorney John E. Kokkinen prosecuted the case.

Defendant Information: TYMONIA SHAFAY WILLIAMS, 33
West St. Paul, Minn.

Charges: • False, Fictitious and Fraudulent Claims, 1 count

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United States Attorney Andrew M. Luger today announced the sentencing of YOSSIMAR ALARCON-PATINO, 25, to 70 months in prison for directing a conspiracy to obtain tax refunds by filing false income tax returns. He was also ordered to pay more than $1.7 million in restitution to the Internal Revenue Service. ALARCON-PATINO pleaded guilty on August 23, 2013, to Conspiracy to Defraud the United States and Money Laundering Conspiracy. Three other defendants pleaded guilty to conspiracy to defraud the United States or related charges as a result of this investigation. MARIA TERESITA ALVAREZ-MATEOS pleaded guilty on September 25, 2013, to one count of Conspiracy to Defraud the United States; SETH MOGOLLON-FLORES pleaded guilty on December 5, 2013, to one count of Conspiracy to Defraud the United States; and YULIANA ALVAREZ-MATEOS pleaded guilty on January 2, 2014, to one count of Making a Materially False Statement to Federal Agents.

According to his guilty plea and documents filed in court, since at least 2010, ALARCON- PATINO engaged in a tax fraud scheme through which he obtained tax refunds by filing false income tax returns that reported false income and claimed fictitious dependents. The majority of the false returns filed by ALARCON-PATINO were for undocumented workers or fictitious individuals. The Internal Revenue Service (IRS) requires people without Social Security numbers to obtain an Individual Taxpayer Identification Number (ITIN) in order to file tax returns and W-2 forms. ALARCON-PATINO obtained fake identification documents that he used to obtain false ITINs. MOGOLLON-FLORES also provided legitimate W-2 wage information to ALARCON-PATINO, which ALARCON-PATINO would augment and file with the tax returns. ALARCON-PATINO paid MOGOLLON-FLORES $100 for each W-2 he provided.

According to his guilty plea and documents filed in court, ALARCON-PATINO also falsely reported dependents in order to claim child tax credits and thereby generate a higher refund payment. He had the refund checks mailed to his residence in Minneapolis, and the residences of other defendants in Minnesota, who cashed the checks for him in exchange for a percentage of each check cashed.

This case is the result of an investigation by the Internal Revenue Service-Criminal Investigation Division, Federal Bureau of Investigation, U.S. Postal Inspection Service, and U.S. Department of the Treasury – Office of the Inspector General.

Assistant U.S. Attorney William Otteson prosecuted this case.

Defendant Information: YOSSIMAR ALARCON-PATINO, 25
Minneapolis, Minn.

Convicted: • Conspiracy to Defraud the United States, 1 count
• Money Laundering Conspiracy, 1 count

Sentenced: • 70 months in prison
• Restitution ordered in the amount of $1.7 million

MARIA TERESITA ALVAREZ-MATEOS, 41
Bloomington, Minn.

Convicted: • Conspiracy to Defraud the United States, 1 count

Sentenced: • 24 months in prison

SETH MOGOLLON-FLORES, 29
Willmar, Minn.

Convicted: • Conspiracy to Defraud the United States, 1 count

Sentenced: • 18 months in prison

YULIANA ALVAREZ-MATEOS, 30
Minneapolis, Minn.

Convicted: • Making a Materially False Statement to Federal Agents, 1 count

Sentenced: • 2 years probation

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