District of Minnesota
Press releases recorded for this federal judicial district.
Nearly A Dozen Gang Members Arrested, Indicted for ConspiracyRead the Press Release
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 countTYWIN BENDER, a/k/a “Finn Winn,” 24
Charges:
• Conspiracy- Felon in Possession of Firearms, 1 countNITELEN JACKSON, a/k/a “King Nite,” 24
Charges:
• Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 countDONTEVIUS CATCHINGS, a/k/a “Lil Snake,” 22
Charges:
• Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 countCINQUE OWENS, 20
Charges:
• Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 countJABARI JOHNSON, 24
Charges:
• Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 countDARRYL PARKER, a/k/a “Thirsty,” 27
Charges:
• Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 countMARQUIS WOODS, a/k/a “Quis Moe,” 22
Charges:
• Conspiracy- Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 countMARQUES ARMSTRONG, a/k/a “Lil Kease,” 19
Charges:
• Conspiracy- Felon in Possession of Firearms, 1 countDEONTAY JONES, 22
Charges:
• Conspiracy- Felon in Possession of Firearms, 1 count
• False Statement During Purchase of a Firearm, 3 countsLAKESHA 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.
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The charges contained in the indictment are merely accusations, and the defendants is presumed innocent unless and until proven guilty.
Used Car Salesman Pleads Guilty to Tax EvasionRead the Press Release
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###
Cottage Grove Woman Indicted for Producing Pornographic Photos of A ChildRead the Press Release
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.
Pine City Couple Sentenced to A Total of 70 Months in Federal Prison for Tax FraudRead the Press Release
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###
Minneapolis Man Charged with Threatening Federal InvestigatorRead the Press 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.
Minneapolis Man Charged with Threatening Federal InvestigatorRead the Press 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
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Man Sentenced for Carrying Out Fraudulent Tax Refund Scheme While in PrisonRead the Press Release
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###
Kentucky Man Sentenced to 12.5 Years in Prison for A String of Bank Robberies in Minnesota and Two Other StatesRead the Press 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###
Pharmacist Pleads Guilty to Stealing Approximately 67,000 Doses of Prescription NarcoticsRead the Press Release
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###
Minnesota Financial Crimes Task Force Investigation Results in Charges Against 28 for Identity Theft, Check Counterfeiting, and Bank Fraud ConspiracyRead the Press Release
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.
Two Sentenced to Seven Years in Prison for Violent Crimes Committed on the Red Lake Indian ReservationRead the Press Release
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###
Two Men Indicted for Orchestrating A Bank Fraud Conspiracy in the Twin CitiesRead the Press Release
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.
Dontre Mchenry Pleads Guilty to Sex Trafficking Teenage Girls Throughout MinnesotaRead the Press Release
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###
Registered Securities Agent and Financial Advisor Pleads Guilty to Defrauding at Least 24 Victims for More Than $980,000Read the Press Release
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###
U.S. Attorney Luger Announces 2013 Law Enforcement Officer of the Year Awarded to Fbi Special Agent Ruth Hovey for Her Outstanding Investigative Work Fighting White Collar Crime in MinnesotaRead the Press Release
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.###
Defendant Pleads Guilty to Defrauding Investors for More Than $19 Million in Small Appliance Resale SchemeRead the Press Release
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###
Tax Preparer Guilty of Defrauding the Irs to Obtain Several Thousand Dollars of Tax RefundsRead the Press Release
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###
Defendant Sentenced to Nearly Six Years in Prison for Leading Multi-year Tax Fraud SchemeRead the Press Release
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###
Alison Brown Sentenced to 6 ½ Years in Federal Prison for Manslaughter at Red Lake Indian ReservationRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of ALISON ANN BROWN, 26, a member of the Red Lake Band of Chippewa Indians, to 78 months in federal prison for stabbing to death Byron Lussier, Sr., also a member of the Red Lake Band, in the early morning hours of July 4, 2013 at Lussier’s home on the Red Lake Indian Reservation. BROWN was indicted on August 5, 2013, and pleaded guilty to voluntary manslaughter on February 28, 2014. The Honorable Judge Donovan Frank handed down the sentence, which is within the recommended federal sentencing guidelines range, today in U.S. District Court in St. Paul, Minn.
“We are committed to fighting against senseless violence in Indian Country,” said U.S. Attorney Luger. “This case should serve as a reminder that violence is preventable, and treatment is available for those who suffer from addiction, and who may act maliciously when under the influence. I hope that today’s sentence brings some measure of closure to the family of the victim in this case.”
According to the defendant’s guilty plea and documents filed in court, ALISON BROWN stabbed Byron Lussier, Sr., to death in the kitchen of his own home. On the evening of July 3, 2013, Lussier was at a party, from which he returned home with two friends early in the morning on July 4, 2013. BROWN, who was inebriated at the time, entered Lussier’s home. Despite Lussier’s demand that she leave, BROWN became angry, grabbed two kitchen knives and a BBQ grill fork, and stabbed Lussier in his face and torso. He died as a result of the wounds.
This case was the result of an investigation conducted by the Federal Bureau of Investigation and the Red Lake Police Department.
This case was prosecuted by Assistant U.S. Attorneys Clifford Wardlaw and Steven Schleicher.
Defendant Information:
ALISON ANN BROWN, 26
Red Lake, MN
Convicted:
• Voluntary Manslaughter, 1 count
Sentenced:
• 78 months in prison
• 3 year term of supervised release###
Native Mob Gang Leader Sentenced to 43 Years in PrisonRead the Press Release
United States Attorney Andrew M. Luger today announced the sentence last week of WAKINYON WAKAN MCARTHUR, a/k/a “Kon,” a/k/a “Killa,” 36, the former leader of the Native Mob, to 43 years in prison. WILLIAM EARL MORRIS, 27, and ANTHONY FRANCIS CREE, 27, were also sentenced to 35 years and approximately 24 years respectively. The defendants were convicted by a jury on March 19, 2013, after a trial lasting nearly seven weeks. They were sentenced today in U.S. District Court in Minneapolis before United States District Court Judge John R. Tunheim.
As proven at trial, the Native Mob is a regional criminal organization that originated in Minneapolis in the early 1990s. Members routinely engage in drug trafficking, assault, robbery, and other violent crime, including murder. Membership is estimated at 200, with new members, including juveniles, regularly recruited from communities with large, male, Native American populations. Association with the gang is often signified by wearing red and black clothing or sporting gang-related tattoos. According to the 2011 National Gang Threat Assessment, the Native Mob is one of the largest and most violent Native American gangs in the U.S. and is most active in Minnesota and Wisconsin.
As proven at trial and according to documents filed in court, since at least the mid-1990s, MCARTHUR, MORRIS, CREE, and others have conspired to engage in criminal activity through the Native Mob, in violation of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. The primary objective of the Native Mob is to preserve, protect, promote, and enhance its power, territory, and finances, which gang members sought to accomplish by distributing illegal drugs, including crack cocaine. Native Mob members also provide financial support to other members, including those incarcerated; share with one another police reports, victim statements, and other case discovery; hinder or obstruct officials from identifying or apprehending those wanted by the law; and intimidate witnesses to Native Mob crimes. Moreover, they maintain and circulate firearms for gang use and commit acts of violence, including murder, against individuals associated with rival gangs.
In addition to MCARTHUR, MORRIS, and CREE, 25 other defendants have pleaded guilty or been convicted of conspiracy and other crimes related to their membership in the Native Mob. Those defendants were sentenced to between 2 ½ and 43 years in prison for their crimes.
This case was the result of a long-term, cross-jurisdictional investigation conducted by numerous local, state, federal, and tribal law enforcement officers. These agencies include representatives from the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the U.S. Drug Enforcement Administration; the U.S. Bureau of Indian Affairs; the FBI-funded Headwaters Safe Trails Task Force; the Paul Bunyan Drug Task Force; the Minnesota Department of Corrections; the Minnesota Bureau of Criminal Apprehension; the Carlton County Sheriff’s Office; the Mille Lacs Tribal Police Department; the Bemidji Police Department; and the Minneapolis Police Department. These investigators were assisted by those from—in alphabetical order—the Becker County Sheriff’s Office, the Beltrami County Sheriff’s Office, the Carlton County Attorney’s Office, the Cass County Attorney’s Office, the Cass County Sheriff’s Office, the Crow Wing County Sheriff’s Office, the Douglas County Sheriff’s Office of Wisconsin, the Duluth Police Department, the Fon du Lac Tribal Police Department, the Fridley Police Department, the Itasca County Sheriff’s Department, the Hennepin County Attorney’s Office, the Hennepin County Sheriff’s Office, the Hubbard County Sheriff’s Office, the Leech Lake Tribal Police Department, the LCO Reservation Police Department, the Lower Sioux Tribal Police Department, the Mahnomen County Sheriff’s Office, the Minnesota State Patrol, the Mille Lacs County Attorney’s Office, the Mille Lacs County Sheriff’s Office, the New Brighton Police Department, the North Central Drug Task Force, the Prior Lake Police Department, the Red Lake Tribal Police Department, the Redwood County Sheriff’s Office, the Richfield Police Department, the Sherburne County Sheriff’s Office, the St. Paul Police Department, the U.S. Marshals Service, the Minneapolis Violent Offender Task Force, the Washington County Sheriff’s Office, and the White Earth Tribal Police Department.
This case was prosecuted by Assistant U.S. Attorneys Andrew R. Winter and Steven L. Schleicher.
Defendant Information:
WAKINYON WAKAN MCARTHUR, 36
Cass Lake, Minn.
Convicted:
• Conspiracy to Participate in Racketeering Activity, 1 count
• Conspiracy to Use and Carry Firearms During and in Relation to a Crime of Violence, 1 count
• Conspiracy to Distribute and Possess With Intent to Distribute Controlled Substances, 1 count
• Distribution of a Controlled Substance, 1 count
• Use and Carrying of a Firearm During and in Relation to a Crime of Violence, 2 counts
Sentenced:
• 43 years in federal prison
ANTHONY FRANCIS CREE, 27
Cass Lake, Minn.
Convicted:
• Conspiracy to Participate in Racketeering Activity, 1 count
• Conspiracy to Use and Carry Firearms During and in Relation to a Crime of Violence, 1 count
• Attempted Murder in Aid of Racketeering, 1 count
• Assault with a Dangerous Weapon in Aid of Racketeering, 1 count
• Use and Carrying of a Firearm During and in Relation to a Crime of Violence, 1 count
• Conspiracy to Distribute and Possess With Intent to Distribute Controlled Substances, 1 count
Sentenced:
• 24 1/3 years in federal prison
WILLIAM EARL MORRIS, 27
Cass Lake, Minn.
Convicted:
• Attempted Murder in Aid of Racketeering, 1 count
• Assault with a Dangerous Weapon in Aid of Racketeering, 1 count
• Use and Carrying of a Firearm During and in Relation to a Crime of Violence, 1 count
• Armed Career Criminal in Possession of a Firearm, 1 count
Sentenced:
• 35 years in federal prison###
North Minneapolis Heroin Trafficking Organization Indicted for ConspiracyRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of eight members of “The Crew,” a North Minneapolis-based heroin trafficking organization, for conspiring to distribute heroin in Minneapolis. The indictment is the result of an investigation conducted by the Southwest Hennepin Drug Task Force (SWHDTF), which is comprised of federal and local law enforcement agencies, including the Drug Enforcement Administration, Hennepin County Sheriff’s Office, Minneapolis Police Department, Minnetonka Police Department, Edina Police Department, Hopkins Police Department, Eden Prairie Police Department, and the St. Louis Park Police Department. The SWHDTF has been investigating “The Crew” since May 2014, as part of an ongoing effort to reduce and eliminate the sale of heroin in Minnesota.
“Those who sell heroin are literally poisoning our children,” said U.S. Attorney Luger. “This investigation and indictment will make North Minneapolis safer for the law-abiding residents who are simply trying to live their lives. Working in collaboration with local and federal law enforcement and prosecutors, we are together making Minneapolis a safer place for our children to grow up.”
Hennepin County Sheriff Richard Stanek said: “This investigation was a collaborative effort, and partnerships such as the Southwest Hennepin Drug Task Force are critical to combatting the heroin crisis in our communities. Law enforcement is fully committed to shutting down the ‘heroin highway’ and the organizations responsible for distributing this deadly drug around the Twin Cities metro area.”
Dan Moren, Assistant Special Agent in Charge of the DEA, Minneapolis-St. Paul District Office said: “When law enforcement officials and prosecutors announced the arrests of over 100 heroin traffickers as part of Operation Exile in April, we made a collective promise to our citizens that we would continue the fight against those dealing heroin in Minnesota. Today is yet another reminder to criminal organizations that we don’t go back on our promises.”
Minneapolis Police Chief Janee Harteau said: “The Minneapolis Police Department was proud to partner with law enforcement teams throughout the metro. While the heroin epidemic is still extremely concerning to us, this type of success will let distributors and residents know that we are aggressively investigating and arresting the people who bring these drugs into our community.”
Hennepin County Attorney Mike Freeman said: “We are always pleased to work with U.S. Attorney Andy Luger and federal agents to stamp out heroin trafficking in our county. This has been a strong partnership, which is only getting stronger, as we try to eliminate this scourge that has taken too many lives in our communities.”
According to the indictment and documents filed in court, from January 2012 until September 2014, RICHARD LEE ENGLISH a/k/a “Nation,” and MILTON EUGENE INGRAM a/k/a “Meech,” led a heroin distribution network called “The Crew,” that sold heroin in North Minneapolis. ENGLISH was primarily responsible for obtaining wholesale amounts of heroin from out-of-state sources, including sources in Chicago, Ill., and INGRAM led the distribution network in Minneapolis.
According to the indictment, ENGLISH AND INGRAM traveled about two times per month to Chicago, Ill., to buy 300-400 grams of heroin per trip. They would bring the drugs back to Minneapolis, where it was sold in packets of .1 or .2 grams, at a price of approximately $40 per bag. INGRAM was responsible for dispatching drug runner members of The Crew, who together sold more than 5,000 packets of heroin per month for an approximate street value of more than $140,000. The runners included alleged conspirators JOHNNY MARTELL BROWN, LEE ANTOINE HOWELL a/k/a “Lee Ball,” SHANEQUA AMERSON, ORLANDO DONEE PRYOR, RUSSELL ANTHONY GREYER a/k/a “Rello,” DION TERRANCE FISHER, and others.
According to the indictment and documents filed in court, the runners were available 24 hours per day, seven days per week to deliver heroin to customers, who would call a dispatcher at one of three different cellular telephone numbers. Customers were typically directed to go to North Minneapolis and call back for a specific location, which was typically between 8th Street North and 27th Street North, and Oliver Avenue North and Morgan Avenue North. Once a customer would arrive at the specific location, they would place a third call to inform the dispatcher that they had arrived. The dispatcher typically indicated that a runner would arrive shortly with heroin for sale. The Crew would direct multiple customers at the same time to a single location.
This case is the result of an investigation conducted by the Southwest Hennepin Drug Task Force (SWHDTF), which is comprised of federal and local law enforcement agencies, including the Drug Enforcement Administration, Hennepin County Sheriff’s Office, Minneapolis Police Department, Minnetonka Police Department, Edina Police Department, Hopkins Police Department, Eden Prairie Police Department, and the St. Louis Park Police Department.
This case is being prosecuted by Assistant U.S. Attorney Jeffrey Paulsen.
Defendant Information:
RICHARD LEE ENGLISH a/k/a “Nation,” 37
Chicago, Ill.
Charges:
• Conspiracy to Distribute Heroin, 1 count
MILTON EUGENE INGRAM a/k/a “Meech,” 22
Minneapolis, Minn.
Charges:
• Conspiracy to Distribute Heroin, 1 count
JOHNNY MARTELL BROWN, 22
Unknown
Charges:
• Conspiracy to Distribute Heroin, 1 count
LEE ANTOINE HOWELL a/k/a “Lee Ball,” 32
Minneapolis, Minn.
Charges:
• Conspiracy to Distribute Heroin, 1 count
SHANEQUA AMERSON, 20
Minneapolis, Minn.
Charges:
• Conspiracy to Distribute Heroin, 1 count
ORLANDO DONEE PRYOR, 21
Chicago, Ill.
Charges:
• Conspiracy to Distribute Heroin, 1 count
RUSSELL ANTHONY GREYER a/k/a “Rello,” 26
Minneapolis, Minn.
Charges:
• Conspiracy to Distribute Heroin, 1 count
DION TERRANCE FISHER, 31
Chicago, Ill.
Charges:
• Conspiracy to Distribute Heroin, 1 count###
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Eleven Members of Ortega Drug Trafficking Organization Indicted for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of 11 individuals charged with conspiring to distribute methamphetamine in Minnesota. The indictment is the result of a two-year investigation, and a collaborative effort among members of the Minnesota Bureau of Criminal Apprehension (BCA), the Drug Enforcement Administration (DEA), the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Internal Revenue Service, Criminal Investigation Division (IRS-CID), the Minnesota Department of Corrections, Office of Special Investigations (DOC-OSI), and several other local law enforcement partners.
According to the indictment, from approximately January 2012 through September 2014, the defendants conspired to possess and distribute methamphetamine. DANIEL SEGURA, JR., and SAGE OLLERMAN are charged with distributing approximately 26 pounds of methamphetamine in Minnesota on one occasion. MARK THOMAS BUSKOVICK, JEREMY JOSEPH HUNT, JAMIE LEE HUNT, JASON ORTEGA, JOSHUA ORTEGA, SALVADOR ORTEGA, and DANIEL SEGURA, JR., are charged with conspiring to distribute more than 500 grams of methamphetamine in Minnesota and elsewhere. Each of the other defendants is charged with conspiring to distribute additional quantities of methamphetamine.
This case is the result of a joint investigation, which is ongoing, including law enforcement efforts from the DEA, ATF, IRS-CID, Minnesota BCA, Minnesota DOC-OSI, the South Central Drug Investigation Unit (SCDIU), the Minnesota River Valley Drug Task Force (MRVDTF), the Southeast Minnesota Narcotics and Gang Task Force (SMNGTF), and the Rochester Police Department Narcotics Unit, with additional assistance from the Steele County Attorney’s Office, the Olmsted County Attorney’s Office, the Prairie Island Police Department, the Red Wing Police Department, the Owatonna Police Department, the Olmsted County Sheriff’s Office, the Rochester Police Department Street Crimes Unit, and the Goodhue County Sheriff’s Office.
This case is being prosecuted by Assistant U.S. Attorney Allen Slaughter.
Defendant Information:
MARK THOMAS BUSKOVICK, 39
Owatonna, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 2 counts
RIGOBERTO BASURTO, 21
Fresno, Calif.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 1 count
• Possession with Intent to Distribute Methamphetamine, 1 count
JAMIE LEE HUNT, 27
Owatonna, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 2 counts
JEREMY JOSEPH HUNT, 28
Owatonna, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 3 counts
ASHLEY MARIAKAS, 26
Owatonna, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 2 counts
SAGE OLLERMAN, 24
Owatonna, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 1 count
JASON ORTEGA, 33
Owatonna, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 1 count
JOSHUA ORTEGA, 33
Owatonna, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 5 counts
SALVADOR ORTEGA, 32
Owatonna, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Possession of Methamphetamine and Cocaine, 1 count
DALTON QUIMBY, 21
Rochester, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 2 counts
DANIEL SEGURA, JR., 30
Owatonna, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine, 1 count
• Distribution of Methamphetamine, 1 count###
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Founder of Bixby Energy Systems Sentenced to 25 Years in Prison for Stealing More Than $56 Million from InvestorsRead the Press Release
Minneapolis – ROBERT ALLEN WALKER, 72, of Ramsey, Minnesota, was sentenced on September 25, 2014, to 25 years in federal prison for stealing more than $56 million from hundreds of investors. On March 5, 2014, after an 8-week trial, WALKER was found guilty of four counts of Mail Fraud, nine counts of Wire Fraud, one count of Witness Tampering and three counts of Tax Evasion.
From 2001 to 2011, WALKER was the president, chief executive officer, and chairman of the board at Bixby Energy. In that capacity, he raised more than $43 million from at least 1,800 investors by offering company securities based on false and misleading information about 1) the payment of salaries and commissions to Bixby officers and directors; 2) the operational capability of Bixby’s core product, a coal gasification machine; and 3) the prospect of conducting an initial public stock offering. WALKER also used investor money fund his and his family’s lavish lifestyles.
As part of the scheme, WALKER told investors that Bixby officers and directors would not be compensated for selling company securities but then directed payments of at least $3 million to a company officer for doing just that. From those payments, the officer then kicked back more than $600,000 to WALKER. This “commission sharing” arrangement was not only concealed from investors but from the company’s board of directors. WALKER also lied repeatedly about the capability of the company’s coal gasification machine, characterizing it as “proven” and “ready for market,” when, in fact, the technology had never worked, and the machine had substantial defects.
Moreover, throughout the company’s existence, WALKER told investors that Bixby was going to conduct an initial public offering of its stock in the near future, when, in truth, he knew it could not be done because, among other things, the company could not obtain legitimate audited financial statements, and the company’s coal gasification machine was incapable of delivering results consistent with WALKER’s outlandish promises.
As part of his sentence, WALKER was ordered to pay over $56 million in restitution.
Assistant U.S. Attorneys David J. MacLaughlin and Benjamin F. Langner prosecuted this case.
This case was the result of an investigation conducted by U.S. Postal Inspection Service, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation Division.
Defendant Information:
ROBERT ALLEN WALKER, 72
Ramsey, MN
Convicted:• Mail Fraud, 4 counts
• Wire Fraud, 9 counts
• Witness Tampering, 1 count
• Tax Evasion, 3 counts
Sentenced:
• 25 years in federal prison
• 3 years supervised release###
St. Paul Attorney Sentenced for Failure to Pay TaxesRead the Press Release
Ronald A. Cimino, Deputy Assistant Attorney General, Department of Justice, Tax Division, Andrew M. Luger, United States Attorney for the District of Minnesota, and Special Agent in Charge Kelly R. Jackson of the St. Paul Field Office Internal Revenue Service (“IRS”) Criminal Investigation, announced today that BARRY VAUGHN VOSS of St. Paul, Minnesota, was sentenced to serve three years of probation with 90 days in a halfway house, perform 300 hours of community service and ordered to pay restitution in the amount of $244,922. In May 2013, VOSS was disbarred from the practice of law by the Supreme Court of Minnesota after being a practicing attorney for more than thirty years.
VOSS pleaded guilty in May to a one-count felony Information charging him with failure to pay over income, Medicare and Social Security taxes for the fourth quarter of 2008. These taxes were withheld from the salaries of employees of his law firm, Barry V. Voss, P.A. According to the plea agreement, VOSS filed quarterly employment tax returns with the IRS from July 2007 through December 2010 which reflected taxes withheld from the salaries of the employees of his law firm, including VOSS’s own salary, but failed to timely pay over to the IRS the full amount of the taxes due and owing totaling just under $160,000. VOSS admitted that he intentionally failed to pay these taxes to the IRS.
This case is the result of a long-term investigation by the IRS Criminal Investigation Division. It is being prosecuted by Trial Attorney Lori A. Hendrickson of the Department of Justice, Tax Division, and Assistant United States Attorney Karen Schommer.
Defendant Information:
BARRY VAUGHN VOSS, 62
St. Paul, MN
Convicted:
• Failure to Account for and Pay Over Withheld Taxes, 1 count
Sentenced:
• 3 years probation
• 300 hours community service
• $244,922 restitution###
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Minnesota Business Owner Stole More Than $1 Million in Real Estate InvestmentsRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of MICHAEL JOHN MANGAN, 43, owner of multiple Minnesota-based businesses, on four counts of Wire Fraud and three counts of Mail Fraud. MANGAN is charged with stealing over $1 million of investment funds and loans which he claimed would be used to fund and grow his various real estate-oriented businesses.
According to documents filed in court, from October 2009 until at least November 2011, MANGAN was the principal officer of High Point Construction & Remodeling LLC, High Point Property Management LLC, High Point Group World Wide LLC, High Point Education LLC and Fortune Forward Education. As part of the scheme, MANGAN allegedly used these businesses to solicit thousands of dollars in investments and loans in various real estate-oriented projects.
During the indicted period, MANGAN was able to defraud his investors by lying about, among other things, the success and profitability of his businesses and providing investors with false financial statements to that effect. Other solicitation tactics that MANGAN used included the promise of company shares, employment and leadership positions on the board of directors of his companies and falsely representing that the companies’ business operations would generate returns on their investments.
According to the indictment, MANGAN used some of investors’ money to fund his own lifestyle, pay personal expenses and make Ponzi-type payments to other investors. When investors demanded repayment or threatened to report him to law enforcement, MANGAN would attempt to buy more time by making lulling payments or issuing checks he knew to be worthless.
This case is being prosecuted by Assistant U.S. Attorney Michelle E. Jones.
This case is the result of an investigation conducted by the Federal Bureau of Investigation.
Defendant Information:
MICHAEL JOHN MANGAN, 43
Charges:
• Wire Fraud, 4 counts
• Mail Fraud, 3 counts###
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
A Dozen Members of Penaloza Organization Indicted for Conspiracy to Distribute Methamphetamine, Money Laundering, and Related ChargesRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of 12 members of the Penaloza drug trafficking organization for conspiring to distribute methamphetamine and marijuana in Minnesota. The indictment is the result of a three-year investigation, which was a collaborative effort between Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), Minneapolis Police Department, and St. Paul Police Department, operating under the auspices of Organized Crime Drug Enforcement Task Force (OCDETF) designation. Agents today executed search and arrest warrants in Minnesota, California, and Illinois. Four defendants made initial appearances in US District Court in St. Paul before Magistrate Judge Jeffrey J. Keyes. Two defendants appeared in US District Court in Fresno, Calif., and one appeared in Chicago, Illinois.
“Drug traffickers will not find a safe haven in Minnesota,” said US Attorney Luger. “Criminals in Minnesota continue to be stymied by the coordinated effort of federal and local law enforcement. It is a credit to their hard work and dedication that another international drug trafficking organization is under indictment today.”
J. Michael Netherland, Special Agent in Charge of HSI St. Paul said: "As a result of this investigation, we've successfully dismantled a dangerous drug trafficking organization responsible for flooding the Twin Cities with methamphetamine. Leveraging our worldwide assets, HSI will continue to partner with other federal, state and local agencies, not only to stem the flow of illegal narcotics into the United States, but also to intercept and seize the illicit proceeds being funneled out of the United States."
Dan Moren, Assistant Special Agent in Charge of the DEA, Minneapolis-St. Paul District Office said: “Federal, state, and local law enforcement partners have dealt a swift and expansive blow to Organized Crime today. Multi-jurisdictional criminal organizations, such as the Penaloza Drug Trafficking Organization, pray that DEA, HSI, and the Minneapolis and St Paul Police Departments aren’t communicating with each other and connecting the dots…we are.”
Saint Paul Police Chief Tom Smith said: “It is thanks to partnerships like those being utilized in this operation that our communities are safer. Those we serve know that we are all stronger and safer because our law enforcement agencies are working together. It’s time that the people involved in these criminal activities get that message, too. Their crimes will not be tolerated.”
According to the indictment and documents filed in court, the Penaloza drug trafficking organization has been distributing methamphetamine, cocaine, and marijuana in Minnesota and other states since at least August 2011. EDUARDO PENALOZA-ROMERO leads the Minnesota branch of the drug trafficking organization, based out of an automotive repair business called Auto Laser in Spring Lake Park, Minnesota. Auto Laser is an alleged front- business for the Penaloza organization, and is used to store and transfer methamphetamine, and as a meeting place to collect drug money.
According to documents filed in court, ELEUTERIO IZAZAGA-PASCACIO, one of the Penaloza ringleaders, has supplied PENALOZA-ROMERO with methamphetamine, and on at least one occasion discussed in coded language the sale of two pounds of narcotics for $10,000 each. PENALOZA-ROMERO was supposed to sell the methamphetamine for $12,500 per pound and send the profit to IZAZAGA’s brother. PENALOZA-ROMERO and other members of the conspiracy repeatedly discussed trafficking of methamphetamine through the Auto Laser shop in Spring Lake Park, Minnesota. On August 5, 2014, law enforcement officers stopped a vehicle traveling to the Auto Laser shop from California. Ten pounds of methamphetamine was recovered from the vehicle.
According to the indictment, other members of the Penaloza organization participated in the conspiracy by transporting or selling methamphetamine, or laundering the proceeds of the drug trafficking organization. Between August 2011 and September 23, 2014, law enforcement seized from the Penaloza drug trafficking organization approximately $600,000 in cash, 47 pounds of methamphetamine, 10 pounds of marijuana, and a handgun. Law enforcement has conducted nine purchases of controlled substances from associates of the Penaloza organization.
This case is the result of an investigation conducted jointly by HSI, DEA, Minneapolis Police Department, and St. Paul Police Department, under the auspices of the OCDETF.
This case is being prosecuted by Assistant U.S. Attorney Allen Slaughter.
Defendant Information:
ELEUTERIO IZAZAGA-PASCACIO, 48
Fresno, Calif.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Possession with Intent to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count
• Distribution of Marijuana, 1 count
• Money Laundering, 3 counts
IMER PENALOZA-PINEDA, 36
Zihuatanejo, Mexico
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 4 counts
• Money Laundering, 2 counts
• Distribution of Marijuana, 1 count
EDUARDO PENALOZA-ROMERO, 24
Spring Lake Park, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 3 counts
• Distribution of Marijuana, 1 count
GERRARDO SANCHEZ, 28
Chicago, Ill.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Money Laundering, 2 counts
FELIX VELAZQUEZ-GARAY, 41
St. Paul, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 3 counts
ARNALDO ENRIQUE ALMENDAREZ, 40
St. Paul, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count
AUNDRAY LINDSEY, 36
St. Paul, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count
CESAR DANIEL MOLINA-CARRANZA, 31
St. Paul, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count
MAGEDALENO PEREZ-ARENAS, 36
St. Paul, Minn.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count
RAMON ESPINOSA-CARDENAS
Fresno, Calif.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count
ALFREDO BASURTO-HERRERA, 26
Fresno, Calif.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count
JESUS SOTELO-VALDOVINOS, 40
Fresno, Calif.
Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count###
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Founder of Burnsville-based Company Indicted for Multi-year Investment Fraud SchemeRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of BRYAN REICHEL, 59, founder and former principal shareholder of PureChoice, Inc. (PureChoice), on seven counts of Wire Fraud. REICHEL is charged with stealing more than $2.5 million in investment funds and loans from a variety of investors by lying about the intended use of the funds and failing to disclose the true status of the company’s products.
“Protecting the citizens of Minnesota from financial predators is one of my top priorities,” said U.S. Attorney Luger. “This office will continue working diligently to ensure that criminals who engage in investment fraud are held responsible for their actions.”
According to documents filed in court, from April 2007 until November 2009, REICHEL solicited investments and loans to PureChoice, a Burnsville-based company that sold air quality monitors. During the indicted period, REICHEL stole money from investors, primarily Victim A, by lying about the success of the company and not telling investors that PureChoice’s main product did not comply with federal regulations.
According to the indictment, in 2007, REICHEL sold Victim A $600,000 worth of PureChoice stock, falsely representing that the funds would be used for manufacturing and operational expenses. Instead, REICHEL used the funds to purchase stock in other companies and pay personal credit card debt.
According to the indictment, in May 2008 and July 2008, REICHEL asked Victim A to provide PureChoice with loans in the amount of $800,000 and $200,000, respectively, stating that the funds were needed to “bridge the gap” until the next round of funding was complete. Again, REICHEL used the majority of the funds for personal use, including the purchase of stock in other companies and paying off thousands of dollars in credit card debt.
As part of the scheme, REICHEL sent a sales and marketing update to PureChoice investors and prospective investors in which he allegedly lied about the company’s corporate agreement with 3M. In the update, REICHEL stated that PureChoice was “currently working to expand [its] existing relationship” with 3M, when, in reality, REICHEL had received notice from 3M of its intent to allow its agreements with PureChoice to expire. REICHEL also sent investors a company update that included a Government Services Administration publication that had been altered to appear as if it specifically referred to PureChoice and its products.
According to the indictment, in September 2009, REICHEL asked two victims to provide a $1.5 million loan to PureChoice to purchase manufacturing materials so the company could meet projected sales and hire additional staff. In order to secure the loan, REICHEL again misrepresented the company’s relationship with 3M and expressly stated that the funds would be used to purchase products from suppliers. Over the course of four transactions, REICHEL obtained a $1.5 million loan from Victim A, of which a significant portion was used to pay off earlier investors in PureChoice.
This case is being prosecuted by Assistant U.S. Attorneys Joseph H. Thompson and David J. MacLaughlin.
U.S. Attorney Luger thanked the United States Postal Inspection Service, Internal Revenue Service-Criminal Investigations, and Federal Bureau of Investigation for conducting the investigation.
Defendant Information:
BRYAN REICHEL
Prior Lake, MN
Charges:
• Wire Fraud, 7 countsThe charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense Contractors Settle Alleged Violation of the False Claims Act for $5.5 MillionRead the Press Release
United States Attorney Andrew M. Luger today announced a settlement agreement between the United States, Relator David McIntosh, M.K. Battery, Inc. (MK Battery), East Penn Manufacturing Co., Inc. (East Penn), NPC Robotics, Inc. (NPC), BAE Systems, Inc., and BAE Systems Tactical Vehicle Systems LP (BAE). The $5.5 million agreement resolves an alleged violation of the False Claims Act related to the sale of batteries for use in gun turrets on military vehicles.
According to documents filed in court, East Penn manufactured batteries that were sold to NPC, for use by the United States Department of Defense (DOD). DOD wanted dual-purpose batteries, with both a strong starting capacity and good deep cycling ability, to power the turrets atop Humvee vehicles. Based on representations made by Defendants, DOD believed that the East Penn batteries were deep cycle batteries, and contracted with BAE to install the batteries in the Humvees.
DOD received samples of the battery in 2005 and approved its use. However, East Penn later made changes to the design and manufacturing of the battery that negatively affected its deep cycle performance. Defendants did not inform DOD of the change.
“The Department of Defense relies on companies it deals with to be honest about the products they provide, especially when those products will be used on the battlefield,” said Assistant United States Attorney Chad A. Blumenfield. “Inaccuracies about such products cannot be tolerated.”
Despite knowledge by MK Battery, East Penn, NPC, and BAE of the diminished battery performance, BAE continued to install the batteries in Humvees supplied to DOD through 2012, and did not inform DOD about the decreased deep cycle performance of the batteries. The United States only became aware of the change to the battery’s design and performance by the filing of a qui tam complaint. The $5.5 million settlement resolves allegations contained in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act that are pending in Minnesota. As part of the resolution, the whistleblower will receive a payment of $990,000.
Assistant U.S. Attorney Chad Blumenfield handled this matter for the United States.
U.S. Attorney Luger thanked the Defense Criminal Investigative Service for investigating this case.###
Us Attorney Luger Announces Guilty Plea of Plymouth Attorney Who Stole $500,000 from InvestorsRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of TIMOTHY JON OLIVER, 60, for stealing $500,000 from ARS Tectonica, a Mexican construction company, in connection with an alleged real estate project in Libya. OLIVER entered his guilty plea today before Chief Judge Davis in U.S. District Court in Minneapolis.
“Lawyers committing fraud is simply unacceptable,” said Assistant U.S. Attorney David J. MacLaughlin. “Lawyers who commit fraud also conduct professional misconduct which reflects poorly on people who are trained to know better. Lawyers, investment advisors, and other licensed professionals are expected to live up to a higher standard.”
According the defendant’s guilty plea and documents filed in court, from May 2009 to May 2010, he controlled two companies, American Diversified Industries, LLC (ADI), which was used to receive proceeds of the scheme, and GVA International Limited, which was purported to be developing a real estate project in Bani Walid, Libya. OLIVER pressured, and ultimately convinced, ARS Tectonica to send $500,000 to ADI to secure a letter of credit from a Minnesota credit union.
According to his guilty plea, OLIVER told ARS Tectonica that the letter of credit would be presented to the Organization for Development of Administrative Centers (ODAC), an arm of the Libyan government, as a performance bond for the real estate project in Libya. He also told ARS Tectonica that, once ODAC approved the letter of credit, it would be awarded the opportunity to become the construction manager for the Bani Walid project.
According to documents filed in court, on May 21, 2009, ARS Tectonica wired $500,000 to OLIVER, which was received through ADI’s account that was maintained by the defendant. Instead of using the money to secure a letter of credit, OLIVER spent the money on unrelated debts. For almost a year thereafter, OLIVER lulled ARS Tectonica into believing that the $500,000 remained at the credit union and was being utilized by the credit union to secure the letter of credit.
This case was prosecuted by Assistant U.S. Attorney David J. MacLaughlin.
U.S. Attorney Luger thanked the Federal Bureau of Investigation for conducting the investigation.
Defendant Information:
TIMOTHY JON OLIVER
Plymouth, MN
Convicted:
• Wire Fraud, 1 countInvestment Advisor Pleads Guilty to Tax EvasionRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of JOEL WILLIAM CARLSON, 43, of Vadnais Heights, MN, to two counts of tax evasion for tax years 2010 and 2011. CARLSON, who was charged via information on August 4, 2014, pleaded guilty today before Untied States District Court Judge David S. Doty.
“The IRS enforces the nation's tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others,” said Special Agent in Charge Kelly R. Jackson of the IRS Criminal Investigation St. Paul Field Office. “The IRS Criminal Investigation Division, together with the Department of Justice, will investigate and prosecute those who violate our tax system.”
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 belonging to his father, into a Trust Financial Group (“TFG”) account, which was CARLSON’s 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 to the investment fraud victims and his father, CARLSON agreed to pay $1,239,735.35 in restitution to the IRS.
Assistant U.S. Attorney Tracy L. Perzel prosecuted the case.
U.S. Attorney Luger thanked the Internal Revenue Service-Criminal Investigations for conducting the investigation.
Defendant Information:
JOEL WILLIAM CARLSON
Vadnais Heights, MN
Charges:
• Attempt to Evade and Defeat Tax, 2 countsTwo Charged with Armed Robbery of Roseville Pawn ShopRead the Press Release
United States Attorney Andrew M. Luger today announced a complaint charging DERRICK LYNCH, 51, and MARVIN SPENCER, 51, both of St. Paul, Minnesota, with armed robbery in violation of the Hobbs Act and using, carrying and discharging a firearm during and in relation to a crime of violence. The defendants are charged with robbing Pawn America, a pawn shop in Roseville, MN, on July 21, 2014. The defendants made an initial appearance in U.S. District Court in Saint Paul on September 9, 2014. Their next court appearance is expected on September 11, 2014.
According to the criminal complaint and documents filed in court, on July 21, 2014, at approximately 5:30 p.m., LYNCH and SPENCER used a semi-automatic handgun to rob Pawn America of approximately $200,000 worth of jewelry. SPENCER fired a number of shots in the direction of several store employees, hitting one of them in the ankle. While SPENCER was shooting, LYNCH smashed a display case from which he collected the jewelry.
According to documents filed in court, LYNCH was apprehended in Woodbury, Minnesota, on August 8, 2014. SPENCER was arrested in Moline, Illinois, on August 20, 2014. Both defendants subsequently admitted to robbing Pawn America. SPENCER also admitted to discharging a firearm during the robbery.
The case is being prosecuted by Assistant U.S. Attorney Tom Hollenhorst.
U.S. Attorney Luger thanked the Roseville Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives for conducting the investigation. U.S. Attorney Luger also thanked the U.S. Marshals Service for their help in apprehending the defendants.
Defendant Information:
DERRICK LYNCH
St. Paul, MN
Charges:
• Violation of 18 U.S.C. § 1951 (Hobbs Act robbery), 1 count
• Violation of 18 U.S.C. § 924(c) (using, carrying and discharging a firearm during and in relation to a crime of violence), 1 count
MARVIN SPENCER
St. Paul, MN
Charges:
• Violation of 18 U.S.C. § 1951 (Hobbs Act robbery), 1 count
• Violation of 18 U.S.C. § 924(c) (using, carrying and discharging a firearm during and in relation to a crime of violence), 1 countFlorida Man Sentenced to 63 Months in Prison for Stealing More Than $3 Million from InvestorsRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of GARY RICHARD VIBBARD, 58, formerly of Ocala, Florida, to 63 months in federal prison for stealing more than $3,000,000 from dozens of investors and investment fund managers. Rather than paying investors based on corporate profits as promised, the defendant operated a Ponzi-like scheme, repaying earlier investors with investment funds provided by later investors. VIBBARD pleaded guilty on May 15, 2014, in U.S. District Court in St. Paul, to mail fraud.
“Mr. Vibbard tricked investors into believing they were making an informed and sound investment,” said U.S. Attorney Luger. “By lying about his past and disguising his operation as legitimate, he was able to defraud his clients of millions of dollars. Investment fraud is a priority for this Office and financial predators will be brought to justice.”
According to his guilty plea and documents filed in court, VIBBARD, the owner and manager of R. Capital Advisors (RCA), operated a Ponzi-like scheme to defraud investors and investment fund managers. VIBBARD admitted that from approximately August 20, 2008 until 2010, he marketed and sold investments by lying about RCA’s financial performance and capabilities and by omitting facts about his history as a financial manager. VIBBARD told potential investors that he was a proven and talented financial manager, when in fact he had filed for bankruptcy in 2000, owed more than $1.5 million in back taxes, and lost more than $1,000,000 in investor funds through a prior failed company.
In addition to using investor funds to repay prior investors, VIBBARD used the funds entrusted to him for personal expenses including child support, gym membership, upscale clothing, and an internet dating service. VIBBARD directed his bookkeeper to drain corporate bank accounts and hide the funds in cashier’s checks, to thereby prevent creditors and the Internal Revenue Service from seizing accounts.
As part of his plea agreement, VIBBARD agreed to pay $6.9 million in restitution, which includes restitution for losses from before the period covered by the guilty plea.
Assistant U.S. Attorney Robert M. Lewis prosecuted this case.
This case was the result of an investigation conducted by the United States Postal Inspection Service and the Federal Bureau of Investigation, with assistance from the Lake County, Florida Sheriff’s Department.
Defendant Information:
GARY RICHARD VIBBARD
Ocala, FL
Convicted:
• Mail Fraud, 1 count
Sentenced:
• 63 Months in federal prison
• 3 years supervised releaseU.S. Attorney Luger Files Civil Rights Lawsuit Alleging Religious Discrimination by the City of St. Anthony VillageRead the Press Release
United States Attorney Andrew M. Luger and Acting Assistant Attorney General Molly Moran for the Justice Department’s Civil Rights Division today announced the filing of a lawsuit against the City of St. Anthony Village for an alleged violation of the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA). Specifically, the lawsuit seeks injunctive relief requiring St. Anthony to allow the Abu Huraira Islamic Center to maintain a worship space in the basement of the St. Anthony Business Center.“Freedom of religion and the right to assemble peaceably are enshrined for all Americans in the Bill of Rights,” said U.S. Attorney Luger. “This office conducted a thorough investigation of the circumstances surrounding the City Council’s decision to deny Abu Huraira the right to worship in the St. Anthony Business Center. It is a solemn duty of all United States Attorneys to uphold the Constitution. The people of Abu Huraira have a right to assemble peaceably – they have a right to practice their religion, and it’s our job to enforce that right.”
“Religious freedom is one of our most cherished rights, and there are few aspects of that right more central than the ability of communities to establish places for collective worship,” said Molly Moran, Assistant Attorney General of the Civil Rights Division.
The complaint, filed in the U.S. District Court in Minneapolis, alleges that the St. Anthony Village City Council treated an application for a conditional use permit to assemble in the St. Anthony Business Center filed by Abu Huraira on less than equal terms as other, non-religious, conditional use permits for assembly. The denial of the necessary permit for the worship center unlawfully disfavored a religious use, because the light industrial zone where the building is located allowed “assemblies, meeting lodges and convention halls,” including a union hall with banquet facilities available to be rented by the public.
In addition to Abu Huraira treatment on less than equal terms to similarly situated secular organizations, the denial of Abu Huraira’s permit substantially burdens its members in practicing their faith. Abu Huraira members’ ability to exercise their religion is limited by their current worship site options, including, but not limited to the fact that members in the northern Twin Cities are burdened from praying together based on the length of time it takes to travel to the worship centers in south Minneapolis. Moreover, prayer space at locations in Minneapolis are too small to accommodate members, many of whom often have to pray in hallways or entryways, and hold multiple prayer sessions 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. The business center is an ideal location for Abu Huraira because it is centrally located, has a basement measuring approximately 11,600 square feet, and has ample parking. The business center is in the “light industrial” zone of St. Anthony, conditional uses for which included “assemblies, meeting lodges, and convention halls.”
In February 2012, after consulting St. Anthony Village officials, Abu Huraira applied for a conditional use permit for assembly in the light industrial zone. It was denied on June 12, 2012, by a St. Anthony Village City Council vote of 4-1, despite the professional St. Anthony City Planning Staff recommending approval, despite the St. Anthony Village City Planning Commission recommending approval, and despite members of Abu Huraira attending each meeting of the Council and Planning Commission to address any concerns held by the City.
The lawsuit filed by the U.S. Attorney’s Office in Minnesota seeks to enforce Abu Huraira’s constitutional rights under RLUIPA by requiring St. Anthony Village to grant the conditional use permit to allow Abu Huraira to assemble for the purpose of worship.
Assistant U.S. Attorneys Bahram Samie, Ana Voss, and Greg Brooker, as well as Justice Department
attorneys from the Civil Rights Division are representing 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.
Former Lonsdale Debt Collector Sentenced to 175 Months in Prison for Attempting to Steal More Than $700,000 Through Identity Theft and FraudRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of KHEMALL JOKHOO, 36, to 175 months in federal prison for attempting to steal more than $700,000 by using the identities of more than 60 victims. On November 5, 2013, a jury in United States District Court in Minneapolis convicted JOKHOO of all the charges presented to them, including Aggravated Identity Theft, Bank Fraud, Mail Fraud, Wire Fraud, and False Personation of an Officer or Employee of the United States.“Identity theft is a widespread problem,” said U.S. Attorney Luger. “Working with our partners in local and federal law enforcement, including the Minnesota Financial Crimes Task Force, we stopped this defendant from targeting additional victims. Only through continued partnership among law enforcement officials will we stem the tide of financial fraud and identity theft. There is more work to be done.”
As proven at trial and according to documents filed in court, JOKHOO, formerly registered as a debt collector, was the owner and sole employer of First Financial Services, Inc. (First Financial), a collection agency licensed in Minnesota from May 9, 2002, until November 3, 2009. As a debt collector, the defendant had access to sensitive credit information, including social security numbers, bank account information, dates of birth, addresses, and other identifying information of the victims of his scheme. JOKHOO used this information to harass and intimidate victims and to demand payment to him for purported debts. When he could not convince victims to pay him, JOKHOO impersonated victims, using their bank account and other identifying information to take over and steal directly from their accounts.
According to documents filed in court, JOKHOO, in addition to using intimidation tactics, threatened victims with physical harm if they did not pay him. With regard to one victim, a disabled veteran, the defendant threatened to “push his wheelchair over the bridge,” if he did not pay. JOKHOO also targeted elderly victims as part of his scheme. Assistant U.S. Attorney Lola Velazquez-Aguilu said: “The term ‘identity theft’ seems an inadequate description for what the defendant did to the victims in this case. He used their identifying information not only to steal their money, but also to terrorize them, taking pleasure in making other human beings feel completely powerless and without worth. This defendant’s sentence
sends an important message to debt collectors who use their positions of trust to steal.”Assistant U.S. Attorneys Velazquez-Aguilu and LeeAnn K. Bell prosecuted this case.
The Minnesota Financial Crimes Task Force, Minnesota Department of Commerce, United States Postal Inspection Service, and Lonsdale Police Department conducted the investigation.
The Minnesota Financial Crimes Task Force was established under state law, and is comprised of local, state, and federal law enforcement investigators, who work to combat the growing trend of cross-jurisdictional financial crimes.
Defendant Information:KHEMALL JOKHOO
Lonsdale, MN
Convicted:
• Bank Fraud, 11 counts
• Aggravated Identity Theft, 10 counts
• Mail Fraud, 9 counts
• Wire Fraud, 2 counts
• False Personation of an Officer or Employee of the United States, 1 count
Sentenced:
• 175 Months in federal prison
• 5 years supervised releasePrisoners in Faribault Correctional Facility Filed More Than $400,000 in Fraudulent Tax Returns from PrisonRead the Press Release
United States Attorney Luger announced an indictment unsealed on Thursday, August 14, 2014, after the arrest of two defendants charged in a conspiracy to file fraudulent tax returns while incarcerated in state prison. A federal grand jury on August 12, 2014, returned a 21-count indictment charging TONY TERRELL ROBINSON, 30, and TANKA JAMES TETZLAFF, 39, with conspiring to defraud the United States and filing and making false claims against the government.
According to the indictment, from October 2009 through approximately September 2010, ROBINSON and TETZLAFF, who were incarcerated by the state of Minnesota in the Faribault Correctional Facility, conspired to prepare and file false federal income tax returns and fraudulently claim tax refunds. As part of their scheme, the defendants recruited other state prisoners to file false tax returns using their names and social security numbers. The defendants and other co-conspirators filed the tax returns using false wage and federal income tax withholding information.
According to the charges, tax refunds were paid by check, deposited directly into bank accounts, or deposited onto debit cards. Co-conspirators who were not in prison, including CARMEN ALLEN, VANESSA WALBERG, and DEEANNA CRIST, received refund checks at addresses they controlled, which were then cashed using a Power of Attorney signed by the filing co-conspirators. Refunds also were deposited directly into bank accounts controlled by the co-conspirators. As a result of the conspiracy, over $400,000 of false claims were made to the Internal Revenue Service.
ALLEN pleaded guilty to a conspiracy charge in March 2014 and was sentenced on August 7, 2014. Both, WALBERG and CRIST pleaded guilty to a conspiracy charge in May 2014 and are awaiting sentencing.
Assistant U.S. Attorney Michael Cheever is handling the prosecution.
This case is the result of an investigation by the Internal Revenue Service-Criminal Investigation Division.
For more information about how to protect yourself from identity theft, visit http://www.stopfraud.gov/protect-identity.html.
The IRS-Criminal Investigations urges citizens to review the Taxpayer Guide to Identity Theft, which can be found at http://www.irs.gov.
Defendant Information:
TONY TERRELL ROBINSON
Bayport, MN
Charges:
• Conspiracy to Defraud the United States, 1 count
• False Claims against the United States, 10 counts
TANKA JAMES TETZLAFF
Duluth, MN
Charges:
• Conspiracy to Defraud the United States, 1 count
• False Claims against the United States, 10 countsThe charges contained in an indictment are mere allegations and defendants are presumed innocent unless and until proven guilty.
U.S. Attorney Luger Announces Charges for More Than $2 Million Stolen in Three Unrelated Coin Fraud SchemesRead the Press Release
United States Attorney Andrew M. Luger today announced the August 6, 2014 indictment of DENNIS CHARLES HELMER, a/k/a “Jeff Jones,” a/k/a, “Mr. Diamond,” a/k/a, “Dennis Dimon,” 53, for devising an elaborate coin fraud scheme and defrauding victims of over $1 million. HELMER is charged with 16 counts of Mail Fraud and three counts of Wire Fraud. In an unrelated indictment unsealed on August 12, 2014, TORY EVAN HUGHES, 44, is charged with Mail Fraud in a similar coin fraud scheme. In a third unrelated case, a felony Information was filed on July 22, 2014, in federal court charging CHRYSANTHOS NICHOLAS, 55, with one count of Mail Fraud.“Minnesota has more than its share of coin fraud,” said U.S. Attorney Luger. “In completely unrelated cases, these three defendants are charged with defrauding unsuspecting victims of more than $2 million dollars in total. Working with federal, state, and local law enforcement partners, we are investigating and prosecuting those who prey on vulnerable victims.”
According to the indictment, HELMER operated Wholesale Assets Worldwide, LLC (WAW), which engaged in appraising, buying, selling, and trading of coins and precious metals. From November 2009 to
December 2013, through WAW, HELMER contacted individuals, many of whom were elderly, and persuaded them to send him money, coins, and precious metals, based on his false promises to provide money or coins in return. Some victims also relied on HELMER to provide safe storage for their coins. As
part of the scheme, HELMER intentionally misled customers about the size and stability of his business, including providing them with copies of a false “Dun and Bradstreet Credibility Report,” and stating that WAW had 75 employees and $500 million in annual revenue.According to court documents, WAW received over $1.2 million in coins, precious metals, and cash from victims. Instead of fulfilling their orders, HELMER sold many of the coins and used customers’ money and proceeds from those sales to fulfill other orders, make payments to other customers, pay his own personal expenses, and attempt to fund start-up costs for another company, Smoke Shack, Inc.
According to the indictment, HELMER at different times used various aliases, including “Jeff Jones,” in an attempt to hide his prior criminal charges for similar conduct in both Dakota and Hennepin Counties. In November 2013, when HELMER learned that WAW was under investigation, he moved his coin fraud operation to Florida. In January 2014, HELMER formed Best Price International, LLC and continued to operate his scheme to defraud customers, this time under the aliases, “Mr. Diamond” and “Dennis Dimon.”
In an unrelated indictment unsealed on August 12, 2014, TORY EVAN HUGHES, 44, is charged with Mail Fraud in a similar coin fraud scheme. According to the indictment, HUGHES owned and operated Reputable Rare Coins, LLC (RRC), located in Roseville, Minnesota. HUGHES bought and sold gold, silver and other coins. The defendant and his sales staff made unsolicited phone calls, primarily to elderly individuals, in an attempt to sell or buy coins. Several customers sent money and coins to HUGHES and received nothing in return. HUGHES is charged with stealing more than $600,000 in cash and coins.
According to the indictment, in November 2013, HUGHES moved his coin fraud operation to Gilbert,
Arizona, where he continued to victimize elderly individuals in the same manner as he had done through RRC. Through his new business, U.S. Collectables, HUGHES stole more than $100,000 from customers intending to purchase coins.In a third unrelated case, a felony Information was filed on July 22, 2014, in federal court charging CHRYSANTHOS NICHOLAS, 55, with one count of Mail Fraud. NICHOLAS is scheduled to make his first appearance before United States District Court Chief Judge Michael J. Davis on August 20, 2014.
According to the information, NICHOLAS owned and operated two coin businesses, TWC Trading (TWC)
and North Fork Six Rare Coin Consultants (North Fork), located in New York State. Both businesses
evaluated, stored, bought, sold and traded coins and precious metals. Through TWC and North Fork,
NICHOLAS entered into contracts with clients to evaluate, store, and sell their coins; however, NICHOLAS did not pay his clients or return the coins to the clients upon their request. Through this scheme NICHOLAS stole more than $200,000 of coins and precious metals.Assistant U.S. Attorney Kimberly Svendsen is handling the case against DENNIS CHARLES HELMER.
Assistant U.S. Attorney Karen Schommer is handling the cases against TORY EVANS HUGHES, and
CHRYSANTHOS NICHOLAS.The U.S. Postal Inspection Service investigated the HELMER and HUGHES cases. The Minnesota
Department of Commerce also investigated the HELMER case. The Roseville Police Department also
worked the HUGHES investigation.
The Federal Bureau of Investigation conducted the NICHOLAS investigation.
Defendant Information:DENNIS CHARLES HELMER, D.O.B. 2/3/1961
Farmington, MN
Charges:
• Mail Fraud, 16 counts
• Wire Fraud, 3 counts
TORY EVAN HUGHES, D.O.B. 12/8/1969
Minneapolis, MN
Charges:
• Mail Fraud, 1 count
CHRYSANTHOS NICHOLAS, D.O.B. 1/22/1959
Mettituck, NY
Charges:
•Mail Fraud, 1 countThe charges contained in an indictment are mere allegations and defendants are presumed innocent unless and until proven guilty.
Last Place on Earth Owner Sentenced to 17.5 Years in Federal Prison for Conspiring to DistributeRead the Press Release
SYNTHETIC DRUGS
U.S. Attorney Andrew M. Luger today announced the sentencing of JAMES CARLSON, 57,
the former owner of Last Place on Earth (LPOE), and LAVA HAUGEN, 34, who were
convicted on October 7, 2013, after a jury trial in U.S. District Court in Minneapolis for their
roles in a conspiracy to distribute synthetic drugs. CARLSON was sentenced by United States
District Judge David Doty to 17.5 years in federal prison. HAUGEN was sentenced to 5 years in
prison.Assistant U.S. Attorney Surya Saxena said: “The Court’s sentence, and the jury verdicts in this
case, should confirm once and for all that synthetic drugs are illegal, and that they always have
been illegal under both the Food Drug and Cosmetic Act and the Controlled Substances
Analogue Enforcement Act. These drugs are just as dangerous as traditional illicit drugs like
methamphetamine, cocaine, and heroin, and their effects are often more unpredictable.”“Synthetic drugs, like those sold at Last Place on Earth, create health and safety dangers for
individuals, their families, and their communities,” said U.S. Attorney Andy Luger. “Residents,
medical personnel, and law enforcement officials in Duluth know this all too well. Moreover, these
drugs are illegal, and those who sell them should expect to be prosecuted.”Kelly R. Jackson, Internal Revenue Service Criminal Investigation Division Special Agent in Charge
of the St. Paul Field Office said: “Today’s sentencing demonstrates how federal law enforcement
will band together to help put an end to the criminal behavior of those who prey on others for
their personal financial gain. IRS Criminal investigators will continue to use their financial
expertise to identify and trace laundered funds in these types of fraud schemes.”John J. Redmond, U.S. Food and Drug Administration Office of Criminal Investigations, Special Agent
in Charge of the Chicago Field Office, which includes Minnesota, said: “The defendants in this case
demonstrated blatant disregard for the health and welfare of the general public by illegally
distributing dangerous misbranded drugs. The sentence speaks for itself and serves as a
deterrent to others who choose to put the public’s health at risk. We commend the
U.S. Attorney's Office and our law enforcement partners for their dedicated collaborative efforts in
pursuing this matter."Jack Riley, U.S. Drug Enforcement Administration Special Agent in Charge of the Chicago Field
Division, which includes Minnesota, said: “Today’s sentence should send a message to those involved
in the distribution of synthetic drugs. And I hope they hear that message loud and clear; those who
sell these dangerous drugs in our communities and hope to avoid detection by mislabeling and
misrepresenting their intended use will be investigated and prosecuted to the fullest extent of the
law. I hope today’s sentence also sends a message to the community that these types of drugs pose
a serious public health threat to the state and region,” he added.As proven at trial, CARLSON and HAUGEN conspired to obtain and sell synthetic drugs misbranded as
incense, potpourri, bath salts, exotic skin treatments, glass cleaner, watch cleaner. The items,
marketed under names like “No Name,” “Smoking Dragon,” “Role-X Watch Cleaner,” and
“Binger,” among others, were synthetic drugs as defined by federal law, and subject to regulation
pursuant to the U.S. Food and Drug Administration (FDA). The defendants intended to and did sell
these synthetic drugs for human consumption for the purpose of mimicking other illegal narcotics
and hallucinogens.As proven at trial, CARLSON and HAUGEN intentionally misled government authorities with the false
labels, which, in addition to suggesting that the products were not drugs, failed to describe
package contents accurately, failed to include health warnings regarding use, and failed to
identify the manufacturer or distributor of the items. Between March 16, 2010, and September
29, 2012, the defendants paid nearly $2 million for at least 510 packages of synthetic drugs from
suppliers in California, Arizona, Wisconsin, Florida, and Pennsylvania.From at least 2010 through 2013, CARLSON made millions of dollars by distributing synthetic drugs
through LPOE. He used LPOE employees as guinea pigs for testing untested and unregulated drugs so
that he could confirm that those drugs would “work” on his customers. Some LPOE customers became
addicted to the synthetic drugs sold by CARLSON and suffered dangerous side effects, including
tachycardia, paranoia, agitation, seizures, and black outs.As proven at trial, HAUGEN regularly ordered synthetic drugs from suppliers. She acted as a general
manager of LPOE, and was responsible for weighing and repackaging bulk quantities of synthetics.
HAUGEN also managed inventory, verified orders of drugs delivered to LPOE, and sold synthetic drugs
both by mail, and in person to LPOE customers.According to documents filed in court, Duluth-area hospital emergency rooms treated a
significant number of synthetic drug users while LPOE was in operation. By 2012, the
emergency room at St. Luke’s Hospital was receiving nearly three synthetic-drug-abuse cases each
day. Of those, approximately 10 percent exhibited serious symptoms requiring the use of physical
restraints and chemical sedatives or admission to the Intensive Care Unit or mental health ward.
Each patient willing to disclose to hospital staff where they obtained the synthetic drugs they
took, invariably reported obtaining the drugs from LPOE. After the City of Duluth successfully
enjoined LPOE from distributing synthetic drugs, St. Luke’s Hospital reported a 95 percent decline
in the number of synthetic drugs patients requiring emergency medical attention.
This case was prosecuted by Assistant U.S. Attorneys Surya Saxena and Nate Petterson.U.S. Attorney Luger thanked the Duluth Police Department, the U.S. Food and Drug Administration,
the U.S. Drug Enforcement Administration, and the Internal Revenue Service- Criminal Investigation
Division, the United States Marshals Service, the Duluth City Attorney’s Office, the St. Louis
County Attorney’s Office, and the Lake Superior Drug and Violent Crime Task Force.Defendant Information:
JAMES CARLSON, D.O.B. 4/30/1957
Superior, WI
Convicted:
• Conspiracy to Commit Offenses against the United States, 1 count
• Causing Misbranded Drugs to be Introduced into Interstate Commerce, 9 counts
• Delivery of Misbranded Drugs Received in Interstate Commerce, 6 counts
• Doing Acts Resulting in Drugs Being Misbranded While Held for Sale, 1 count
• Distribution of a Controlled Substance, 1 count
• Conspiracy to Distribute Controlled Substance Analogues, 1 count
• Distribution of Controlled Substance Analogues, 8 counts
• Monetary Transactions in Property Derived from Specified Unlawful Activity, 24 counts
Sentenced:
• 17.5 years in Federal Prison
• 3 years of supervised releaseLAVA HAUGEN, D.O.B. 7/16/1980
Superior, WI
Convicted:
• Conspiracy to Commit Offenses against the United States, 1 count
• Delivery of Misbranded Drugs Received in Interstate Commerce, 1 count
• Doing Acts Resulting in Drugs Being Misbranded While Held for Sale, 1 count
• Conspiracy to Distribute Controlled Substance Analogues, 1 count
Sentenced:
• 5 years in Federal Prison
• 3 years of supervised releaseInvestment Advisor and Attorney Sentenced to 10 Years in Prison After Pleading Guilty to Stealing More ThanRead the Press Release
$4 MILLION
United States Attorney Andrew M. Luger today announced the sentence of MARK HOLT, 45, to
ten years in federal prison for stealing more than $4 million from his investment advisory clients.
The defendant, a securities broker, investment advisor, and now disbarred attorney, operated a
fraud scheme for at least eight years, during which time he used the criminal proceeds to fund his
own lavish lifestyle. HOLT pleaded guilty on April 1, 2014, in United States District Court in St.
Paul, MN, to wire fraud.“Far too often, investment advisors are caught defrauding their clients,” said U.S. Attorney Luger.
“This defendant was an attorney during the time that he was stealing from his clients. He not only
engaged in criminal activity by stealing from his clients, he eroded public trust in our
profession. My Office will continue to prosecute aggressively those who abuse professional
positions of trust.”According to his guilty plea, HOLT owned and operated the Harbor Investment Planning Group, LLC,
later known as the Harbor Group, LLC (Harbor Group) from 2002 through January 2014. In 2005, HOLT
opened bank accounts in the name of the Harbor Group, over which he had exclusive control. Between
September 2005 and November 2013, HOLT persuaded investors to place more than $4 million into his
trust by telling them that he was investing their money in legitimate long-term investments, such
as bonds and mutual funds with JP Morgan Chase, Morgan Stanley, Berkshire Hathaway, and
others. By convincing clients to make long-term investments, HOLT expected them not to draw on
those funds for many years. Instead, HOLT diverted the funds into Harbor Group checking accounts.HOLT continued to defraud his clients using an array of schemes to make their investments seem
legitimate, including making monthly annuity or interest payments to clients; providing
fraudulent Morningstar “Portfolio Fact Sheet, Client Summary” printouts falsely reflecting that
the clients’ funds had been placed in legitimate investment products; and creating
online accounts for clients with Blueleaf, a web-based portal for viewing account information, including
account balances and performance information, and causing weekly e-mail updates to be sent to
clients via the Blueleaf system showing fraudulent account balances.According to the documents filed in court, HOLT converted the investors’ money to his own use. He
spent most of the money to fund his lavish lifestyle, including purchasing a membership at the
White Bear Yacht Club, luxury cars from Maplewood Imports and Sears Imports, and stays at the Ritz
Carlton. He also used some of the stolen funds to make Ponzi payments to the victims.This case was prosecuted by Assistant U.S. Attorney Kimberly Svendsen.
U.S. Attorney Luger thanked the Federal Bureau of Investigation for its assistance in the
investigation.Defendant Information:
MARK HOLT, D.O.B. 9/15/1969
Vadnais Heights, MNConvicted:
• Wire Fraud, 1 countSentenced:
• 10 years in Federal Prison
• 3 years supervised release
• Restitution of $2,940,982.75MUSTAFA FAMILY CRIME RING INDICTED FOR USING THOUSANDS OF STOLEN IDENTITIES TO STEAL CELLULAR TELEPHONES AND TABLET DEVICES WORTH MILLIONS OF DOLLARSMustafa Family Trafficked Stolen Mobile Devices Throughout United States and OverseasRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of 20 members of the
Mustafa Family (The Organization), a Twin Cities-based criminal organization, for trafficking
stolen and fraudulently obtained mobile telephones and tablets. The Organization, led by
JAMAL TALAL MUSTAFA, a/k/a “Jimmy,” primarily obtained devices by robbery, burglary, identity
theft, and contract-fraud schemes. JAMAL MUSTAFA¸ KANAN M T MUSTAFA, a/k/a “Kenny,” NASER MOHAMAD MUSTAFA, a/k/a “Nasty Nas,” EDWAN T MUSTAFA, a/k/a “Eddy,” NIZER M MUSTAFA, a/k/a “Shaggy,” a/k/a “Mike,” BILAL MUHAMMED MUSTAFA, a/k/a “Billy,” TALAL M MUSTAFA, a/k/a “Tommy,” MOISES NAVARRO CAZALES, AHMED RD SUNOQROT, a/k/a “Abu Shanab,” CEDRIC CHAPPELL, DEANTRE RICKEY-RENE SQUALLS, BLANYON TOE DAVIES, VICTOR TOMBEKAI DOE, YOLANDA COOMBS, CASWANA MILES, MARCUS PHILLIP COLEMAN, ROBERT RICHARD COLEMAN, DANIELLE YVONNE COLEMAN, MARQUIS TERELL MAGGIESFIELD, a/k/a “Kenny,” and TIARA LIGON, are each charged in U.S. District Court with Conspiracy to Engage in Interstate Transportation of Stolen Goods.“Identity theft rings are the modern face of organized crime,” said U.S. Attorney Luger. “Identity
thieves often use fraudulent identities to obtain goods, which they can sell for cash. These
defendants are charged with obtaining stolen cell phones through identity theft and fraud, and then
selling them for exorbitant profits. It is only through close collaboration and cooperation between
each of the law enforcement agencies involved in this case that we are able to stand here today
having taken out one of the largest criminal enterprises in the Twin Cities.”St. Paul Police Department Assistant Chief Bill Martinez said: “We want our communities to
understand that this isn’t just about someone simply swiping the phones we hold in our hands. These
are not petty crimes. Those thefts and robberies filtered into other crimes.”United States Secret Service Special Agent in Charge Louis Stephens said: “Today is a very good day
for the people of Minnesota. A significant organized crime network is no longer at work. Today’s
success is the result of the close and collaborative working relationships between local, state and
federal law enforcement agencies, and federal prosecutors. When we combine our resources, leverage
our various areas of expertise, and work as one, we make big things happen and significant crime is
stopped in its tracks.”Minnesota Bureau of Criminal Apprehension Superintendent Wade Setter said: “Today’s indictments in
this complicated case are truly the product of investigative partnerships. The Minnesota Financial
Crimes Task Force worked this case along with the U.S. Secret Service and the St. Paul Police
Department in a multi-jurisdictional approach necessary to investigate this type of crime.”University of Minnesota Assistant Vice President and Chief of Police Gregory S. Hestness said:
“Last fall a wave of robberies targeted University of Minnesota students and their cell phones in
campus area neighborhoods. Officers of the University of Minnesota Police Department worked
literally thousands of hours in robbery suppression, and we saw results. However, without
addressing the underlying criminal enterprise creating a market for these phones, we were not doing
everything possible to protect our students. UMPD was honored to contribute to this critical major
investigation. Today’s successes are remarkable, but also emblematic of the strong partnership of
Minnesota law enforcement at the local, state, and federal levels.”According to the indictment and documents filed in court, from at least 2006 through 2014, JAMAL
MUSTAFA directed the Organization to use stolen identity information to obtain cellular
telephones and other mobile devices for the purpose of trafficking them throughout the United
States and internationally. JAMAL MUSTAFA, KANAN MUSTAFA, NASER MUSTAFA, EDWAN MUSTAFA, NIZER MUSTAFA, BILAL MUSTAFA, TALAL MUSTAFA, and MOISES NAVARRO-CAZALES, owned and operated 13 mobile device stores in the Twin Cities metropolitan area. The Organization used these storefronts to buy devices that they knew had been illegally obtained, including purchasing thousands of cellular phones from runners and other persons who got the phones through robberies, burglaries, shoplifting, and fraud and identity-theft schemes.With the assistance of AHMED SUNOQROT, the Organization moved inventory and money between their
stores, which the Organization used as fronts to funnel the illicit proceeds of their criminal
activity.According to the indictment, the Organization paid runners who stole mobile devices or obtained
them fraudulently by other means. CEDRIC CHAPPELL, DEANTRE-RICKEY-RENE SQUALLS, BLANYON TOE DAVIES, VICTOR TOMBEKAI DOE, YOLANDA COOMBS, CASWANA MILES, TIARA LIGON, MARQUIS TERELL MAGGIESFIELD, MARCUS PHILLIP COLEMAN, ROBERT RICHARD COLEMAN, and DANIELLE YVONNE COLEMAN, were each paid by the Mustafas to steal or fraudulently obtain mobile devices by contract or subscription fraud. They targeted stores like Best Buy, WalMart, Verizon outlets, T- Mobile stores, and online Apple stores.As charged, various members of the Mustafa Family provided stolen or fraudulent identity
information to the runners, including names, dates of birth, social security numbers, credit card
numbers, passport information, and driver’s license numbers of victims. Some of the runners
operated solely within Minnesota, while others travelled to Arizona, Idaho, North Dakota, Iowa,
Wisconsin, Illinois, and Utah to obtain devices. The Organization arranged out-of-state travel for
the runners and paid their expenses. One runner was arrested in Utah in 2013 with more than 80
counterfeit identification documents and genuine victim-information documents. This runner used
those documents to open lines of credit at various retail outlets to make fraudulent device
purchases.The runners were instructed by the Mustafas to obtain phones by contract-fraud and
subscription-fraud schemes. In such schemes, runners used real stolen identities to obtain cell
phone contracts. At times, the runners obtained “family plans” or “business accounts.” In so doing,
runners were sold phones at deeply discounted prices by the legitimate retailers. The full retail
price of an iPhone 5s in the United States is approximately $648. Under a two-year contract, the
same phone is sold for approximately $200. Runners then opened accounts entitling them to obtain as
few as one discounted phone, and as many as 30. The runners then shipped or delivered the phones
back to the Mustafas, via one of the thirteen Twin Cities storefronts, or shipped the phones to
wholesalers in other states for sale overseas. A new iPhone 5s retails for between $1,000 and
$1,200 overseas.Other runners engaged in street-level violence or burglary to obtain phones. The Sunrise Group, a
burglary ring that traveled throughout the Upper Midwest for the purpose of breaking into WalMart
stores to steal cell phones, iPads, and other electronic devices, provided electronic devices to
the Mustafa Family on several occasions. The Mustafa Family made requests of the Sunrise Group for
large quantities of new phones, and would act as a fence for the stolen merchandise.Assistant U.S. Attorney Karen Schommer, Chief of the Major Crimes Section; Assistant U.S. Attorney
Steven Schleicher, Chief of the Special Prosecution Section; and Assistant U.S. Attorney
John Marti are handling the prosecution of this case.U.S. Attorney Luger thanked the St. Paul Police Department, United States Secret Service,
University of Minnesota Police Department, Minnesota Department of Public Safety and Bureau of
Criminal Apprehension, Minnesota Financial Crimes Task Force, United States Postal Inspection
Service, Internal Revenue Service Criminal Investigations, Homeland Security Investigations, Edina
Police Department, Minneapolis Police Department, Plymouth Police Department, Federal Bureau of
Investigation, and the United States Marshal’s Service for their assistance in the investigation.Defendant Information:
JAMAL TALAL MUSTAFA, a/k/a “Jimmy,” D.O.B. 6/17/1972
Apple Valley, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countKANAN M T MUSTAFA, a/k/a “Kenny,” D.O.B. 6/16/1977
Rosemount, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countNASER MOHAMAD MUSTAFA, a/k/a “Nasty Nas,” D.O.B. 1/6/1991
Rosemount, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countEDWAN T MUSTAFA, a/k/a “Eddy,” D.O.B. 11/14/1974
Apple Valley, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countNIZER M MUSTAFA, a/k/a “Shaggy,” a/k/a “Mike,” D.O.B. 8/27/1978
Savage, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countBILAL MUHAMMED MUSTAFA, a/k/a “Billy,” D.O.B. 6/25/1984
Minneapolis, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countTALAL M MUSTAFA, a/k/a “Tommy,” D.O.B. 4/19/1971
Burnsville, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countMOISES NAVARRO CAZALES, D.O.B. 11/15/1992
Bloomington, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countAHMED RD SUNOQROT, a/k/a “Abu Shanab,” D.O.B. 6/2/1955
St. Paul, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countCEDRIC CHAPPELL, D.O.B. 2/17/1971
Minneapolis, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countDEANTRE RICKEY-RENE SQUALLS, D.O.B. 9/6/1990
Brooklyn Center, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countBLANYON TOE DAVIES, D.O.B. 8/8/1993
UnknownCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countVICTOR TOMBEKAI DOE, D.O.B. 2/1/1991
UnknownCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countYOLANDA COOMBS, D.O.B. 2/23/1987
Oakdale, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countCASWANA MILES, D.O.B. 8/10/1988
UnknownCharges:
MARCUS PHILLIP COLEMAN, D.O.B. 11/5/1991
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 count
St. Paul, MNCharges:
ROBERT RICHARD COLEMAN, D.O.B. 5/3/1984
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 count
St. Paul, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countDANIELLE YVONNE COLEMAN, D.O.B. 12/1/1985
St. Paul, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countMARQUIS TERELL MAGGIESFIELD, a/k/a “Kenny,” D.O.B. 5/9/1986
UnknownCharges:
TIARA LIGON, D.O.B. Unknown
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 count
St. Paul, MNCharges:
• Conspiracy to Engage in Interstate Transportation of Stolen Goods, 1 countThe charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Luger: St. Paul Man Sentenced for Producing Child PornographyRead the Press Release
United States Attorney Andrew M. Luger announced the sentencing last week of DOUGLAS LUKE ROBINETTE, 27, to 360 months in federal prison. ROBINETTE was indicted on April 9, 2013, and pleaded guilty to one count of Production of Child Pornography on November 8, 2013. He was sentenced on July 28, 2014, by United States District Court Chief Judge Michael J. Davis.
“Distributing child pornography re-victimizes the children in these cases,” said Assistant U.S. Attorney Lola Velazquez-Aguilu. “The defendant in this case sexually assaulted a young boy, digitally recorded the assaults, and emailed the images, virtually guaranteeing that they will forever exist in cyberspace. We hope that this sentence sends a strong message to others who trade in images of sexual violence against children.”
According to documents filed in court, ROBINETTE was convicted on November 11, 2010, of First Degree Criminal Sexual Conduct in Kanabec County, Minnesota. He was sentenced to a 144-month state prison sentence. After ROBINETTE’S conviction in Kanabec County, the United States Attorney’s Office investigated and prosecuted the defendant for the production of child pornography.
According to his guilty plea in federal court, ROBINETTE induced a developmentally delayed boy to engage in sexually explicit conduct, which the defendant recorded on his cell phone. ROBINETTE further admitted to engaging in sexual contact with the boy on several occasions, and producing and distributing images of the sexual contact.
The 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 U.S. Attorney offices and the Justice Department’s Criminal Division, 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.”
This case was prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.
U.S. Attorney Luger thanked the Kanabec County Sheriff’s Office, the Minnesota Bureau of Criminal Apprehension, and the Minnesota Child Exploitation Task Force, which is sponsored by the Federal Bureau of Investigation.
Defendant Information:
DOUGLAS LUKE ROBINETTE, D.O.B. 5/5/1986
St. Paul, MN
Convicted:
• Production of Child Pornography, Felony
Sentenced:
• 360 Months in Custody of the Bureau of Prisons
• Supervised Release for a term of lifeInvestment Advisor Indicted for Defrauding Investors for More Than $10 MillionRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of SEAN MEADOWS, 41, for using his financial planning and asset management firm, Meadows Financial Group (MFG), to operate a Ponzi scheme and fraudulently obtain at least $10 million from at least 50 victims. The defendant is charged with Mail Fraud, Wire Fraud, and Money Laundering offenses.
“Abusing the trust of those who invest their hard-earned money is particularly cynical,” said U.S. Attorney Luger. “This defendant is charged with defrauding victims out of their retirement and other savings, and spending their money on his own lavish lifestyle. Targeting investment fraud is a priority of this U.S. Attorney’s Office, and we will continue to work closely with our partners in federal and local law enforcement to root out fraud and seek justice for victims.”
Minnesota Commerce Commissioner Mike Rothman said: “We will fight for our seniors and investors who become victimized by the tragic financial abuse by professionals; we are working hard to stop and punish those who use their professional licenses to steal from Minnesotans. Working together with U.S. Attorney Luger, we are sending a strong message that they will be brought to justice.”
As charged in the indictment, 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. For example, as charged in the indictment, on September 26, 2013, MEADOWS made a payment of more than $500,000 to one victim, purportedly paying off a successful investment with MFG. In fact, the payment was actually comprised of newly invested funds from other victims.
According to the charges, 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. Attorney Benjamin Langner.
U.S. Attorney Luger thanked Agents Jonathan Ferris and Ephraim Holmgren of the Minnesota Department of Commerce Fraud Bureau, the United States Postal Inspection Service, and the Internal Revenue Service-Criminal Investigation Division for their assistance with the investigation.
Defendant Information:
SEAN MEADOWS, D.O.B. 4/25/1973
Eden Prairie, MN
Charges:
• Mail Fraud, 3 counts
• Wire Fraud, 7 counts
• Money Laundering, 1 count
• Transaction Involving Fraud Proceeds, 1 countThe charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Sex Trafficker Sentenced to 25 Years in Federal PrisonRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of MARKEACE CANTY a/k/a “QUAKE,” 33, to 300 months in federal prison for prostituting a child throughout the Upper Midwest, including in Minnesota, Illinois, Indiana, North Dakota, and Wisconsin. CANTY was indicted on May 6, 2013, and found guilty by a federal jury on September 12, 2013, of Conspiring to Commit Sex Trafficking of a Child, and Sex Trafficking of a Child.
“This defendant sexually trafficked a young woman for his own personal enrichment,” said U.S. Attorney Luger. “Victims of sex trafficking may never fully recover from the harm done to them, and this office will continue to prosecute aggressively those who prey on children.”
Assistant U.S. Attorney Thomas Calhoun-Lopez said: “Markeace Canty reaped great financial rewards by exploiting a child. He used money gained by advertising and selling an underage girl in order to buy personal items like jewelry and a flat-screen television. In doing so, he exposed the victim to physical and psychological harm. The lengthy sentence handed down today clearly demonstrates that, whatever the financial gain, the cost of these crimes is too high.”
As proven at trial and according to documents filed in court, from at least July 2012 through in or about January 2013, CANTY trafficked at least one girl for the purpose of prostitution in at least five states. The defendant placed sexually suggestive advertisements in the “adult entertainment” section of a website called backpage.com. CANTY and the trafficking victim were observed multiple times by law enforcement officials at various hotels in locations for which he had placed ads on backpage.com, including one incident in which she agreed to perform sexual acts with an undercover police officer in exchange for $200. The victim was arrested at least once on suspicion of engaging in prostitution during this time period.
On January 14, 2013, agents from the Federal Bureau of Investigation (FBI) and Grand Forks Police Department executed a search warrant for a hotel room booked in CANTY’S name. Pursuant to federal warrants, agents seized an iPhone belonging to CANTY containing photographs used in backpage.com advertisements linked to the defendant’s cell phone number. Also contained on the iPhone were photographs of CANTY displaying large sums of cash, jewelry, and a flat-screen television.
This case was prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.
United States Attorney Andrew M. Luger thanked the Federal Bureau of Investigation, Duluth Police Department, Porter County Sheriff’s Department (IN), Grand Forks Police Department (ND), Fargo Police Department (ND), and the Grand Forks Sheriff’s Department (ND), for their assistance with the investigation.
Defendant Information:
MARKEACE CANTY a/k/a “QUAKE,” D.O.B. 8/23/1980
Duluth, MN
Convicted:
• Conspiring to Commit Sex Trafficking of a Child, 1 count
• Sex Trafficking of a Child, 1 count
Sentenced:
• 300 months in prison
• 180 month term of supervised releaseU.S. Attorney Luger Announces Guilty Plea in Violent Drug ConspiracyRead the Press Release
Andrew M. Luger, United States Attorney for the District of Minnesota, today announced the guilty plea of ANTONIO NAVARRO, a/k/a TONY SANCHEZ, 19, to Conspiracy to Distribute Methamphetamine. NAVARRO pleaded guilty before United States District Court Judge John R. Tunheim. NAVARRO was indicted on May 5, 2014, with three co-defendants: JESUS RAMIREZ, 31; JONATAN DELGADO ALVAREZ, 22; and JUAN RICARDO ELENES VILLAVAZO, a/k/a. CHAPO, 32. RAMIREZ and ALVAREZ are in custody and awaiting trial. VILLALVAZO remains unapprehended.
“This case is a powerful example of the violent tactics of drug traffickers,” said U.S. Attorney Luger. “The United States Attorney’s Office in Minnesota, along with our local and federal law enforcement partners, is committed to stopping the flow of illegal drugs into our state, and aggressively prosecuting the violent crime that so often comes with it.”
As set forth by the defendant’s guilty plea, between February 2014, and April 2014, NAVARRO distributed methamphetamine and maintained a house in St. Paul where a large amount of methamphetamine was stored.
According to the indictment, on April 14, 2014, RAMIREZ and ALVAREZ flew from Los Angeles to Minneapolis. Later than evening, the defendants are charged with kidnapping two victims at gunpoint, holding them captive, and beating and making violent threats against their lives that of their families. According to the indictment, VILLAVAZO sliced and nearly severed one of the victim’s fingers.
NAVARRO was arrested at approximately 7:30 p.m. on April 15, 2014. He is expected to be sentenced at a future date. This conviction is the result of an investigation by the Safe Streets Task Force. Safe Streets is a FBI-sponsored task force focused on combating violent street crime, as well as gang and drug- trafficking offenses. This case is being prosecuted by Assistant United States Attorney Jeffrey S. Paulsen.
United States Attorney Andrew Luger thanked the Minneapolis Police Department, and the St. Paul Police Department, for their assistance in the investigation.Mounds View Man Pleads Guilty to Heroin DistributionRead the Press Release
MINNEAPOLIS—Today in federal court, a 27-year-old Mounds View man pleaded guilty to one count of Distribution of Heroin. Andrew Terrell Davis, Jr., who was indicted on May 12, 2014, entered his guilty plea this morning in Minneapolis before United States District Court Chief Judge Michael J. Davis.
According to the plea agreement, the defendant conducted a drug transaction with an undercover police officer in south Minneapolis. The undercover officer gave the defendant $700 and received 5.19 grams of heroin in return from the defendant. On a separate occasion, the defendant conducted a similar drug transaction with the undercover officer wherein the defendant provided 48.15 grams of heroin in exchange for $5,000. On April 17, 2014, law enforcement executed a search warrant of the defendant’s residence and recovered 16 grams of heroin and 56 grams of cocaine.
For his crime, Davis faces a potential maximum penalty of 20 years in federal prison and a supervised release term of three years. Judge Davis will determine his sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Drug Enforcement Administration and the Dakota County Drug Task Force. It is being prosecuted by Assistant U.S. Attorney Richard A. Newberry.Inver Grove Heights Man Indicted for Trafficking in Counterfeit Sports JerseysRead the Press Release
MINNEAPOLIS—The United States Attorney’s Office announced today that a federal grand jury recently indicted a man on charges of conspiracy and trafficking in counterfeit goods. Brian Todd Gore, 45, of Inver Grove Heights, made his initial appearance on July 11, 2014 before U.S. Magistrate Judge Jeanne J. Graham.
The indictment alleges that from November 2009 through September 2012, Gore conspired with other individuals to traffic in goods, specifically counterfeit sports jerseys, imported from China. As part of the alleged conspiracy, Gore would order the counterfeit sports jerseys from suppliers in China, have them delivered to him in the United States, and then sell them to Co- conspirator A with the knowledge that the counterfeit jerseys would be sold to the public.
During this time, Co-conspirator A possessed hundreds of counterfeit sportswear items in his retail store in Roseville, Minnesota, some of which he had purchased from the defendant. The indictment further alleges that the defendant transported hundreds of counterfeit jerseys in his van and stored counterfeit jerseys at his residence in Inver Grove Heights, Minnesota and in a leased storage unit in Des Moines, Iowa.
In February 2010, the defendant traveled to Miami, Florida, the location of the 2010 NFL Super Bowl, to sell counterfeit NFL jerseys. During that time, the defendant allegedly possessed approximately 383 counterfeit NFL jerseys and two DHL shipping receipts showing packages sent from China to Fort Lauderdale, Florida. The defendant and Co-conspirator B also allegedly possessed approximately 70 counterfeit NFL jerseys at an apartment where they were temporarily residing in Fort Lauderdale.
United States Attorney Andrew Luger praised the work of federal agents from Homeland Security Investigations, stating “I am pleased that HSI is pursuing these counterfeit cases. We will prosecute those who traffic in counterfeit goods aggressively.”
“Trafficking in counterfeit goods is not a victimless crime,” said Special Agent in Charge J. Michael Netherland of HSI St. Paul. “Buying these items may appear at first to be a bargain, but when we take into account how the money it generates is often tied to organized crime or worse, we see that this 'victimless crime' harms us all in the long run."
If convicted, Gore faces a potential maximum penalty of 10 years in prison and a $2 million fine. All sentences are ultimately determined by a federal district court judge.
This case is being investigated by Homeland Security Investigations (“HSI”) and the Coalition to Advance the Protection of Sports Logos (“CAPS”). It is being prosecuted by Assistant United States Attorney Sarah E. Hudleston.An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
Four Men Charged in A Mortgage Fraud SchemeRead the Press Release
MINNEAPOLIS— A federal grand jury has recently returned an indictment charging four men in connection with the Split Rock Realty mortgage fraud investigation. On July 9, 2014, Thomas Edward Rosensteel III, 41, of Excelsior, Robert Scott “Rod” Aslesen, 65, of Little Canada, Justin Joseph Christenson, 34, of East Bethel, and Dale Russell Wurzinger, 57, of Burnsville, were each charged with eight counts of Wire Fraud and one count of Conspiracy to Commit Wire Fraud.
The four defendants allegedly participated in a scheme to defraud mortgage lenders in connection with the sale of excess unsold builder inventories of residential real estate. The scheme allegedly involved recruiting purchasers to buy properties at inflated prices, falsifying loan applications and other documents, fronting down payments for purchasers, and paying kickbacks to the purchasers outside of closing. The indictment alleges that the defendants concealed the fronted down payments and kickbacks from the lenders. United States Attorney Andrew Luger stated, “The allegations in this indictment illustrate a sophisticated scheme carried out by licensed professionals in the real estate industry. We have been working closely with the FBI and the Minnesota Department of Commerce Fraud Bureau to bring charges against these four individuals who used their knowledge and position to take advantage of the system.”
"The Commerce Department takes very seriously its job to stop fraud by licensed professionals, and to protect the public from these kinds of crimes,” said Commerce Commissioner Mike Rothman. “These criminal charges result from a thorough investigation done by the Commerce Fraud Bureau and FBI, in tandem with the U.S. Attorney's Office, and should send a strong message that when laws are broken, there will be tough consequences.”
Three other individuals have already pleaded guilty to criminal charges in connection with this scheme and are awaiting sentencing. They are Amri Elsafy, 42, of Brooklyn Park; Gerald Edwin Carlson, 67, of Kennedy, Minnesota; and James Bryan Crook, 58, of Brooklyn, New York.
If convicted, the defendants face a potential maximum penalty of 30 years in prison on each count. All sentences are ultimately determined by a federal district court judge.
This case is the result of an investigation by the Federal Bureau of Investigation and the Minnesota Department of Commerce Fraud Bureau. It is being prosecuted by Assistant U.S. Attorney William J. Otteson.An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
Four Individuals Indicted on Heroin Distribution ChargesRead the Press Release
MINNEAPOLIS— Recently in federal court, four defendants were charged with heroin distribution in two separate indictments. The first indictment charges Francisco James Bell, 38, of Madison, WI, with two counts of Distribution of Heroin.
Count One of the indictment alleges that on May 20, 2014, Bell distributed approximately 50 grams of heroin. Count Two alleges that on May 30, 2014, Bell distributed approximately 100 grams of heroin. According to an affidavit filed in court, surveillance officers recorded both drug transactions which took place between Bell and a cooperating individual (CI) in a McDonald’s parking lot in Duluth. Bell faces a potential maximum penalty of 40 years in prison. This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”).
The second indictment charges three Minneapolis men in a separate heroin distribution conspiracy. Darnell Travor King, 35, Latese Capree Hudson, 25, and James Purnell Thomas, 43, were charged with one count of Conspiracy to Distribute Heroin and one count of Possession with Intent to Distribute over 500 grams of Heroin. The indictment includes three forfeiture allegations related to the drug charges. Upon conviction of either of the counts, the defendants would forfeit $20,455 in U.S. currency seized during a search of the defendants’ apartment, along with a Ruger 9mm semi-automatic pistol and a Smith and Wesson .40 caliber pistol. The three defendants face a potential maximum penalty of 40 years in prison. This case is being investigated by the Drug Enforcement Administration (“DEA”) and the Hennepin County Sheriff’s Office.
“The U.S. Attorney’s Office and our law enforcement partners are committed to combating heroin trafficking in our state. We will continue working together to prosecute distributors who bring heroin into our communities,” said United States Attorney Andrew Luger.
These cases are being prosecuted by Assistant U.S. Attorney Jeffrey S. Paulsen.An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
Northfield Man Pleads Guilty to Distributing Child PornographyRead the Press Release
MINNEAPOLIS — Last week in federal court, a 42-year-old Northfield man pleaded guilty to one count of Distribution of Child Pornography. Charles Edward Bracken, who was indicted on October 8, 2013, entered his guilty plea before United States District Judge Richard H. Kyle on July 2, 2014.
In his plea agreement, Bracken admitted that on September 16, 2010, he distributed a computer image depicting two minor boys engaged in sexually explicit conduct. The defendant also admitted that he possessed on his laptop computer approximately 21,541 images and more than 574 videos of child pornography, some of which portrayed sadistic or masochistic conduct or other depictions of violence. The defendant distributed these images through an Internet file- sharing program.
For his crime, Bracken faces a possible maximum sentence of 20 years in federal prison. Judge Kyle will determine his sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Karen B. Schommer.
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 U.S. Attorney offices and the Justice Department’s Criminal Division, 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.”Man Pleads Guilty to Filing False ClaimsRead the Press Release
MINNEAPOLIS— Last week in federal court, a man pleaded guilty to submitting false tax returns to the Internal Revenue Service. On July 1, 2014, Dusten Lee Barth pleaded guilty to one count of False Claims and one count of Aggravated Identity Theft. Barth, who was indicted on March 3, 2014, entered his guilty plea before United States District Court Judge Paul A. Magnuson.
According to the plea agreement, Barth admitted to preparing and submitting approximately 10 fraudulent tax returns to the Internal Revenue Service (“IRS”), claiming over $43,000 in false tax refunds. The defendant also admitted to using the identities of several other individuals to submit a false tax return in their names.
For his crimes, Barth faces a potential maximum penalty of five years in federal prison and a fine of up to $250,000 for the False Claims count and a two year mandatory, consecutive prison sentence for the Aggravated Identity Theft count Judge Magnuson will determine his sentence at a future hearing, which is yet to be scheduled.
This case is the result of an investigation by the IRS Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney Surya Saxena.Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.
Loretto Man Pleads Guilty to Lying About Employees’ WagesRead the Press Release
MINNEAPOLIS—Today in federal court, a 52-year-old Loretto man pleaded guilty to felony false statements in connection with prevailing wage violations. Jeffrey John Plzak was charged on June 17, 2014, and entered his plea this morning in Minneapolis before United States District Court Judge Patrick J. Schiltz.
As set forth in the plea agreement, Plzak and his spouse run Honda Electric, Inc., a company based in Loretto, Minnesota. Honda Electric bids on construction projects, including highway and road projects, that are federally and state funded. Many of the projects Plzak bid on required that Honda Electric pay its electricians and other laborers the prevailing wage rate.
On numerous occasions, Plzak won bids based in part on the representation that Honda Electric employees working on the project would receive prevailing wage. Those projects required periodic submission by Honda Electric of a certified payroll report. In those reports, Plzak knew Honda Electric, at his direction, was representing to the United States Department of Transportation – Federal Highway Administration and to the Minnesota Department of Transportation that Honda Electric’s employees were being paid the required prevailing wage.
In fact, as Plzak knew, in many instances employees were being paid less than half of the prevailing wage rate. In total, Plzak admitted that over a series of projects between 2010 and 2013, Honda Electric underpaid its employees over $271,000.
For example, Plzak admitted that in a certified payroll report dated September 24, 2010, Honda Electric stated it was paying prevailing wage on a federally funded project in Ramsey County, when, in fact, he knew the employees were receiving far less than prevailing wage.
“When contractors lie about paying prevailing wage, workers, competitors, and taxpayers all lose,” said United States Attorney Andrew M. Luger. “Workers are underpaid, competitors who played by the rules are underbid, and the wrongdoer makes off with taxpayer dollars meant for honest employers. We thank the outstanding work done by the Minnesota Department of Transportation and the FBI in investigating these and other prevailing wage violations.”
As a result of his plea, Plzak faces up to five years in prison, repayment of unpaid wages, and a fine of up to $250,000 or twice the loss amount, whichever is greater. Plzak will be sentenced at a later date.
This case is the result of an investigation by the Minnesota Department of Transportation’s Labor Compliance Unit and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney David M. Genrich.