District of Minnesota
Press releases recorded for this federal judicial district.
Lakeville Man Pleads Guilty to Conspiring to Commit Fraud in Connection with Burnsville Condo DevelopmentRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 47-year-old Lakeville man pleaded guilty for his role in a scheme to defraud mortgage lenders in connection with the sale of condominiums at the Chateau Ridge development in Burnsville. John Michael Stevens, the developer of the Chateau Ridge project, pleaded guilty to one count of conspiracy to commit wire fraud. Stevens, who was indicted on November 20, 2012, entered his plea before United States District Judge Susan Richard Nelson.
In his plea agreement and in Court today, Stevens admitted that in 2007, he conspired with others to defraud lenders who were financing his sale of certain units at Chateau Ridge.
In one of the sales, Stevens admitted to misrepresenting the true purpose of a payment that was to be made from mortgage loans proceeds. In that sale, he directed the loan closer to state in closing documents that a payment from loan proceeds was to satisfy a pre-existing mortgage on the property, even though he knew that was not the case. The loan was ultimately approved. The lender in that sale lost an estimated $227,712 when the unit went to foreclosure.Stevens also admitted that he arranged for the buyers of four other units to be repaid their earnest money down-payments and closing costs. In effect, the buyers purchased the units for an actual price lower than what was disclosed to the lenders. The total amount refunded to the buyers of these four units was approximately $240,500.
For his crime, Stevens faces a potential maximum penalty of five years in federal prison. Judge Nelson 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 and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorneys Robert M. Lewis and Karen B. Schommer.
The U.S. Attorney’s Office wants to remind people to protect themselves from mortgage fraud. For more information, visit http://www.stopfraud.gov/protect-mortgage.html.Western Minnesota Man Pleads Guilty to Possessing Child PornographyRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 62-year-old man from the western Minnesota community of Graceville pleaded guilty to possessing more than 600 images of child pornography. John Rolland Parent pleaded guilty to one count of possession of child pornography. Parent, who was indicted on May 7, 2013, entered his plea before United States District Judge John R. Tunheim.
In his plea agreement, Parent admitted that on June 12, 2013, he possessed images that contained visual depictions of minors engaged in sexually explicit conduct. Parent admitted the images had been obtained via a computer. Authorities found the items on computers, hard drives, and other digital media that they seized during the execution of a state search warrant at Parent’s residence. Numerous images portrayed sadistic or masochistic conduct or other depictions of violence.
For his crime, Parent faces a potential maximum penalty of 20 years in prison, with a mandatory minimum penalty of ten years. Judge Tunheim will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minnesota Internet Crimes Against Children Task Force, the Big Stone County Sheriff’s Office, the Federal Bureau of Investigation, and the Minnesota Bureau of Criminal Apprehension. It is being prosecuted by Assistant U.S. Attorney Andrew Dunne.
Possession of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.
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.”Mexican National Indicted for Illegal Re-entry After DeportationRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 26-year-old Mexican national was indicted for entering the United States illegally after previously being deported as an aggravated felon. Joel Aguayo-Gomez was specifically charged with one count of illegal re-entry after deportation.
The indictment alleges that on November 5, 2011, Aguayo-Gomez was found in the U.S. after being deported to Mexico in 2011, following a 2008 Ramsey County conviction for aggravated robbery. On November 5, 2011, Aguayo-Gomez was taken into state custody on charges of terroristic threats and strangulation. In August 2013, Aguayo-Gomez was acquitted of all charges, and was placed into the custody of U.S. Immigration and Customs Enforcement (“ICE”).
If convicted of the federal charges now levied against him, Aguayo-Gomez will face a potential maximum penalty of 20 years in federal prison, followed by deportation. Any sentence would be determined by a federal district judge.
This case is the result of an investigation by ICE’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney David P. Steinkamp.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.
Federal Jury Convicts Duluth Man for the Sex Trafficking of A ChildRead the Press Release
MINNEAPOLIS—Late yesterday in federal court, a jury found a 33-year-old Duluth man guilty of the sex trafficking a child for approximately seven months last year. Following a four-day trial, the jury convicted Markeace Arque Canty on one count of conspiracy to commit sex trafficking of a child and one count of sex trafficking of a child. The jury acquitted Canty of one count of receipt of child pornography. Canty, also known as Quake, was indicted on May 7, 2013.
According to the indictment and the evidence presented at trial, from at least July 2012 through January 2013, Canty recruited and transported the female victim, who was under the age of 18 at the time, to engage in commercial sex acts, from which Canty benefitted financially. Canty purchased “escort” advertisements on the website known as backpage.com and transported the female victim to locations in Duluth, Minneapolis, Chicago, and elsewhere to meet advertisement responders at motels, where the victim engaged in sexual acts in exchange for money.
The jury heard evdience that on September 12, 2012, law enforcement in Indiana responded to an advertisement listing a phone number registered to Canty, and arrested the female victim after she agreed to perform sex acts in exchange for money. The advertisement in that instance included a phone number registered to Canty.
Evidence was also presented about results of a search of Canty’s iphone, which included texts that the prosecution argued coordinated times and amounts with respondents to the advertisements, as well as texts that the prosecution argued were between Canty and the victim in which she updated him on her illicit activities.
For his crimes, Canty faces a potential maximum penalty of life in prison on each of the sex trafficking counts, with a mandatory minimum penalty of ten years on the sex trafficking of a child count. United States District Judge Joan N. Ericksen 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 and the Duluth Police Department, with cooperation from the St. Louis County Attorney’s Office, the Fargo and Grand Forks, North Dakota, police departments, the Grand Forks County Sheriff’s Office in North Dakota, the Eau Claire, Wisconsin, police department, and the Porter County Sheriff’s Office in Indiana. It is being prosecuted by Assistant U.S. Attorneys Thomas Calhoun-Lopez and LeeAnn K. Bell.
Anyone who may have information about any human trafficking matter is encouraged to report that information to the FBI at 763-569-8000. For information about human trafficking, the National Human Trafficking Resource Center’s toll-free hotline (1-888-373-7888) is available to answer calls from anywhere in the country. The U.S. Department of Justice reports that an estimated 14,500 to 17,500 people are trafficked within the U.S. alone each year.
For more information, visit http://www.fbi.gov/about-us/investigate/civilrights/human_trafficking.White Bear Lake Felon Pleads Guilty to Possessing A Nine-millimeter PistolRead the Press Release
MINNEAPOLIS—Yesterday in federal court in St. Paul, a 25-year-old White Bear Lake felon pleaded guilty to possessing a nine-millimeter, semi-automatic pistol. On September 11, 2013, Marquis Leval Cotton pleaded guilty to one count of being a felon in possession of a firearm. Cotton, who was indicted on December 3, 2013, entered his plea before United States District Judge Donovan W. Frank.
In his plea agreement, Cotton admitted that on April 30, 2012, he possessed the pistol, which was recovered by the Minneapolis Police Department.
Because he is a felon, Cotton is prohibited under federal law from possessing a firearm or ammunition at any time. His prior Chisago County convictions include fourth-degree assault (twice in 2010) and criminal damage to property (2010). In 2005, Cotton was convicted in Anoka County for aggravated robbery. Because those convictions constituted crimes of violence, Cotton will now be subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in federal prison for anyone with such a record who is subsequently convicted in federal court for being a felon in possession of a firearm or ammunition.Judge Frank will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minneapolis Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Richard Newberry.
The case was charged federally through Project Exile Minneapolis. That law enforcement initiative was launched on July 22, 2010, as part of a city-wide effort to reduce gun violence. Through Project Exile, the Minneapolis Police Department and the ATF work together to apprehend serial criminals for violations of gun laws. Then, the Hennepin County Attorney’s Office teams up with the U.S. Attorney’s Office to determine where those offenders will most effectively be prosecuted – state or federal court. Those determinations are based on the offenders’ criminal histories and current charges, among other factors. To date, the U.S. Attorney’s Office has brought charges against more than two dozen serious habitual criminals through Project Exile Minneapolis.St. Paul Felon Sentenced for Possessing A .22-caliber RevolverRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 26-year-old St. Paul felon was sentenced for possessing a .22-caliber revolver. United States District Judge Patrick J. Schiltz sentenced Christopher Lee Rousseau to 180 months in prison on one count of being an armed career criminal in possession of a firearm. Rousseau was indicted on January 15, 2013, and pleaded guilty on May 16, 2013.
In his plea agreement, Rousseau admitted that on December 3, 2012, he possessed the revolver. It was hidden in the center console of the GMC Jimmy he was driving at the time he was stopped by authorities. A law enforcement affidavit filed in the current case states that at approximately 12:30 a.m. on December 3, 2012, officers stopped Rousseau for a traffic violation near the intersection of U.S. Highway 61 and Warner Road. He was subsequently arrested for driving after cancellation of his license. During a search of Rousseau’s person, police found two rounds of ammunition and $385. A search of the vehicle led to the recovery of the gun.
Because he is a felon, Rousseau is prohibited under federal law from possessing a firearm or ammunition at any time. His prior convictions in Ramsey County include aiding and abetting second-degree burglary (2010) and fleeing police in a motor vehicle (2011). In addition, Rousseau was convicted in Pine County for fleeing police in a motor vehicle (2007) and, in Dakota County, for third-degree burglary (2010).
Since those felony convictions were for violent crimes, Rousseau was subject to the federal armed career criminal statute in the current federal case. That statute mandates a minimum sentence of 15 years in federal prison upon conviction. Given that the federal criminal justice system does not have parole, offenders serve virtually their entire sentence behind bars.
This case was the result of an investigation by the St. Paul Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.Shakopee Man Sentenced for Using Other People’s Food StampsRead the Press Release
MINNEAPOLIS—Yesterday in federal court in St. Paul, a 47-year-old Shakopee man was sentenced for using other people’s food stamps. On September 5, 2013, United States District Judge Paul A. Magnuson sentenced Chin Son Kim to three years of probation on one count of food stamp fraud. Kim was charged on April 18, 2013, and pleaded guilty on June 12, 2013. Kim was ordered to pay restitution of $29,816.
In his plea agreement, Kim admitted that between November 2010 and July 2012, he obtained Supplemental Nutrition and Assistance Program (“SNAP”) cards, commonly known as food stamps, from the true recipients of those benefits. To acquire the cards, he waited near a charity facility in St. Paul, as well as at other locations, and then approached people he thought might be in possession of them.
After obtaining a card, Kim would go to cooperating local markets, where he would use the card in an unauthorized manner. Typically, he would present the card to the grocer, who would swipe it through a food-stamp scanner, routinely noting a transaction of approximately $200. Kim would then receive cash, groceries, or store credit in that amount. Afterwards, he would return the card to its rightful owner, providing that person with cash in the amount of approximately half of the transaction total. The loss to the SNAP program because of Kim’s action was approximately $29,816.
Following the sentencing, Assistant Special Agent-in-Charge Robert Wagner of the U.S. Department of Agriculture’s Office of Inspector General, said, “SNAP is the largest program in the domestic hunger safety net, and those who prey on the poor by illegally purchasing SNAP benefits erode the public trust in the program.”
Wagner expressed appreciation to the Ramsey County Sheriff’s Office, the St. Paul Police Department, and U.S. Attorney’s Office for effectively working together to prosecute those whose criminal conduct diverts vital federal nutrition assistance away from needy individuals and families.
Each individual who receives SNAP benefits is issued an electronic benefit transfer (“EBT”) card, which contains a monthly allocated benefit amount that can be used at authorized retailers. The U.S. Department of Agriculture (“USDA”) reimburses those retailers for the benefit amounts redeemed. Only eligible food items may be acquired with food stamps, and some items, such as alcoholic beverages, tobacco products, and cell phone minutes are not eligible. Moreover, food stamps may not be redeemed for cash.
This case was the result of an investigation by the USDA-Office of Inspector General, the Ramsey County Sheriff’s Office, and the St. Paul Police Department. It was prosecuted by Assistant U.S. Attorney David P. Steinkamp.Red Lake Man Sentenced for Endangering Baby’s HealthRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 33-year-old Red Lake man was sentenced for endangering the health of a baby. United States District Judge Donovan W. Frank sentenced Chad Joseph Sumner to 40 months in prison on one count of child endangerment. Sumner was indicted on January 8, 2013, and pleaded guilty on April 12, 2013.
In his plea agreement, Sumner admitted that on August 17, 2011, while acting as the caretaker for the baby when the mother was temporarily away, the child was injured. As a result of Sumner’s failure to properly care for the child, the infant suffered substantial physical harm, including head trauma and skull fractures.
This case was the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney's Office.Prosecutions Continue in Illegal Entry Cases Involving Those with Prior Criminal RecordsRead the Press Release
MINNEAPOLIS -- In the District of Minnesota, court action continued this week in three separate cases that involve foreign nationals who entered the United States illegally after being deported subsequent to criminal convictions. In each case, the individual was charged with one count of illegal re-entry after removal.
In the first case, Hector Rios-Guzman, age 27, pleaded guilty yesterday in federal court. He was indicted on July 16, 2013, and entered his plea before U.S. District Judge John R. Tunheim. In his plea agreement, Rios-Guzman, also known as Hector Rios, admitted that on May 15, 2013, authorities found him in the U.S. illegally after he had been previously deported to Mexico. His deportation followed a 2004 Hennepin County conviction for terroristic threats. On May 15, 2013, Rios-Guzman was arrested following a traffic stop in Bloomington. According to a law enforcement affidavit filed in the case, Rios-Guzman fled the scene on foot before he was arrested. Rios-Guzman also has a previous federal court conviction in the District of Minnesota for illegal re-entry.For his crime, Rios-Guzman faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Judge Tunheim will determine his sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations (“ICE ERO”). It is being prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.
In the second case, Alfredo Rios-Guzman, age 35, also pleaded guilty yesterday in federal court. He was indicted on June 18, 2013, and entered his plea before U.S. District Judge Donovan W. Frank in St. Paul. In his plea agreement, Rios-Guzman admitted that on May 7, 2013, authorities found him in the U.S. illegally after he had been previously deported to Mexico. His deportation followed a 2007 Hennepin County conviction for assault in the second degree involving a dangerous weapon. Rios-Guzman was identified as an alien with a criminal record and was arrested on May 17, 2013, after a traffic stop near his Bloomington residence.
For his crime, Rios-Guzman faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Judge Frank will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by ICE ERO. It is being prosecuted by Assistant U.S. Attorney Sarah E. Hudleston.
In the third case, U.S. District Court Chief Judge Michael J. Davis, on September 3, 2013, sentenced Noe Castro-Coj, age 41, to 30 months in federal prison, followed by deportation. Castro-Coj was indicted on March 11, 2013, and pleaded guilty on May 7, 2013. In his plea agreement, Castro-Coj admitted that on February 5, 2013, he was found in the U.S. after having been deported to Guatemala in 2003, after a 2000 Kansas conviction for kidnapping. On February 5, 2013, Castro-Coj was arrested in Steele County for violating an order for protection. On February 7, 2013, ICE was notified that he was in jail.
This case was the result of an investigation by the Steele County Sheriff’s Office and ICE ERO. It was prosecuted by Assistant U.S. Attorney Andrew Dunne.St. Cloud Man Pleads Guilty to Robbing TCF BankRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 36-year-old St. Cloud man pleaded guilty to robbing the TCF Bank located at 1001 Fourth Street in St. Cloud. Fehd El Mehdi Kourima specifically pleaded guilty to one count of bank robbery. Kourima, who was indicted on June 10, 2013, entered his plea before United States District Judge Paul A. Magnuson.
In his plea agreement, Kourima admitted that on May 5, 2013, he stole approximately $1,000. At approximately 12:30 p.m. that day, he entered the bank, which is located inside a grocery store, approached a teller, and presented a note that read, “Put as many $100 bills as you can into this envelope in fifteen seconds and no one gets hurt.” After receiving the money, Kourima left the premises and ran to a vehicle parked outside. Kourima was arrested later that day.
For his crime, Kourima faces a potential maximum penalty of 20 years in federal prison. Judge Magnuson will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the St. Cloud Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys Katharine T. Buzicky and Nathan P. Petterson.Four Individuals Sentenced for Their Roles in Large, Multi-state Identity Theft RingRead the Press Release
MINNEAPOLIS—Yesterday in federal court in St. Paul, four individuals were sentenced for their roles in a large, multi-state, identity theft ring. United States District Judge Paul A. Magnuson sentenced Jerome Davis, Jr., Jemall Ronta Williams, Tierra Samantha Catrina House, and Shanell Collette Brewer each on one count of conspiracy to commit bank fraud and one count of aggravated identity theft.
Davis, age 44, no known address, was sentenced to 50 months of imprisonment, Williams, age 38, no known address, was sentenced to 36 months of imprisonment, House, age 23, of St. Paul, was sentenced to 32 months of imprisonment, and Brewer, age 34, of Minneapolis, was sentenced to 27 months of imprisonment.
These individuals, along with more than 100 others, were involved in a conspiracy, from 2006 through December of 2011, to defraud banks, bank customers, and businesses. The co-conspirators used victim information to create counterfeit checks and false identification documents to conduct fraudulent transactions at retail establishments, where expensive merchandise was purchased and returned for cash. At banks, the conspirators posed as customers and withdrew money from victims’ bank accounts. The members of the conspiracy conducted these fraudulent transactions in Minnesota and at least 13 other states. Victim information was obtained by members of the conspiracy through multiple sources, including from individuals who stole information from their places of employment, from people employed at area banks, from those who stole information from mail, during vehicle break-ins, and through business burglaries, among other sources.
In his plea agreement, Davis admitted that from 2010 through 2011, he, too, was part of the conspiracy. For his part, Davis recruited individuals to conduct fraudulent transactions at financial institutions and retail establishments. He provided those individuals with false identification documents and counterfeit checks that he had received from other members of the conspiracy. Davis also drove individuals to retail stores, where the co-conspirators conducted fraudulent transactions in excess of $140,000.
In his plea agreement, Williams admitted that he joined the conspiracy in 2009, and from that time forward, he obtained victim information from a co-conspirator who worked at Wells Fargo. Williams also admitted providing that information to others, who then used it to create false and fictitious identification documents and counterfeit checks. In addition, Williams admitted recruiting individuals to pass those counterfeit checks at banks and retail establishments. Williams was responsible for approximately $40,000 in fraudulent transactions.
In her plea agreement, House admitted that between July and November 2008, while employed as a bank teller at the St. Paul Postal Employees Credit Union (“PCU”), she provided co-conspirators with customer information, including names, dates of birth, Social Security numbers, account numbers, and account information. The co-conspirators used that information to create false identification documents, which were then used by other co-conspirators to conduct fraudulent transactions using counterfeit checks. House admitted responsibility for approximately $22,000 in fraudulent transactions involving money stolen from the accounts of others.
In her plea agreement, Brewer admitted that in 2009, while employed at Sonus, a Plymouth-based business, she provided co-conspirators with customer information, including names, addresses, and bank account numbers. The co-conspirators used that information to create counterfeit checks and false identification documents, which were then used by other co-conspirators to conduct fraudulent transactions at various businesses. Brewer admitted responsibility for at least $18,000 in attempted fraudulent transactions and purchases through the use of counterfeit checks.
To date, 28 other members of the conspiracy have been sentenced. The remaining co-conspirator, Gordon Lamarr Moore, awaits sentencing, which has not yet been scheduled. Moore was convicted in April 2013, following a jury trial. During the trial, Moore fled from the jurisdiction. On July 8, 2013, he was arrested in at a hotel in Milwaukee, Wisconsin. Moore then attempted to flee again but was apprehended without incident.
These prosecutions resulted from an investigation conducted by the Minnesota Financial Crimes Task Force, the U.S. Postal Inspection Service, and the IRS-Criminal Investigations. The defendants were prosecuted by Assistant U.S. Attorney Karen B. Schommer and Assistant U.S. Attorney Michelle E. Jones.
The Financial Crimes Task Force was established pursuant to state law and is comprised of local, state, and federal law enforcement investigators dedicated to combating the growing problem of cross-jurisdictional financial crimes. The task force, overseen by an advisory board also created under state law, serves the entire District of Minnesota, presenting its cases to county or federal prosecutors, as appropriate.
The task force and the Minnesota U.S. Attorney’s Office want to remind people to protect themselves from identity theft. For more information, visit http://www.stopfraud.gov/protect-identity.html.
For more information on how to avoid becoming a victim of identity theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/IdentityTheft.aspx . The IRS-Criminal Investigations also urges citizens to review the Taxpayer Guide to Identity Theft, which can be found at http://www.irs.gov.
For tips on how to prevent mail theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/MailTheft.aspx.Michigan Man Pleads Guilty to Armed Robbery of Stillwater BankRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 66-year-old man from Cheboygan, Michigan, pleaded guilty to robbing the U.S. Bank in Stillwater. David Michael Tyler specifically pleaded guilty to one count of armed bank robbery. Tyler, who was indicted on July 8, 2013, entered his plea before United States District Chief Judge Michael J. Davis.
In his plea agreement, Tyler admitted that on June 8, 2013, at approximately 9:30 a.m., he entered the US Bank in Stillwater, wearing a fake beard and glasses and carrying a briefcase and backpack. Tyler placed the briefcase on a banker’s desk and showed him what appeared to be a homemade bomb inside. He then gave the banker a note, which demanded $200,000. It also threatened that if the demands were not met, Tyler would detonate the bomb.
While the banker placed the money into Tyler’s backpack, Tyler admittedly pushed a button on his cell phone, warning the banker that he had ten minutes before the bomb went off. Tyler then grabbed the bag and fled the premises, leaving the briefcase and purported bomb on the banker’s desk. Tyler was apprehended a short distance from the bank, after officers witnessed him throwing the backpack into a pickup truck. All of the money was recovered.For his crime, Tyler faces a potential maximum penalty of 25 years in prison. Judge Davis will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Stillwater Police Department, the St. Paul Police Department, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Kevin S. Ueland.
Felon Sentenced for Possessing A Nine-millimeter PistolRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a felon was sentenced for possessing a nine-millimeter, semi-automatic pistol. United States District Chief Judge Michael J. Davis sentenced Demetrius Demarco Spencer, age unknown, to 80 months in prison. He was indicted on November 14, 2012, and was convicted on January 16, 2013.
According to the indictment and the evidence presented at trial, Spencer possessed the gun on August 23, 2012. On that day, officers on routine patrol outside a Minneapolis nightclub saw Spencer standing in the parking lot. He reached into his pants and removed an “L-shaped” item covered with a white sock. He carried the item to a nearby car and placed it under the front seat. Officers later recovered the item—the nine-millimeter, semi-automatic pistol—from in the sock.
Because he is a felon, Spencer is prohibited under federal law from possessing a firearm at any time. His prior Hennepin County convictions include possession of a pistol by a prohibited person (2003), assault in the third degree (2007), and aggravated robbery (2007). Spencer was also convicted in Ramsey County for possession of a pistol by a prohibited person (2000).This case was the result of an investigation by the Minneapolis Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). It was prosecuted by Assistant U.S. Attorney Richard Newberry.
The case was charged federally through Project Exile Minneapolis. That law enforcement initiative was launched on July 22, 2010, as part of a city-wide effort to reduce gun violence. Through Project Exile, the Minneapolis Police Department and the ATF work together to apprehend serial criminals for violations of gun laws. Then, the Hennepin County Attorney’s Office teams up with the U.S. Attorney’s Office to determine where those offenders will most effectively be prosecuted – state or federal court. Those determinations are based on the offenders’ criminal histories and current charges, among other factors. To date, the U.S. Attorney’s Office has brought charges against more than two dozen serious habitual criminals through Project Exile Minneapolis.Man Sentenced in False Tax Refund SchemeRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a Minnesota man was sentenced for being part of a conspiracy to file false tax returns to generate inflated refunds. United States District Judge Joan N. Ericksen sentenced Solomon Frank-Sawari to 27 months in federal prison on one count of conspiracy to defraud the United States. Frank-Sawari was indicted on January 15, 2013, and pleaded guilty on March 26, 2013.
In his plea agreement, Frank-Sawari admitted to obstructing the Internal Revenue Service (“IRS”) and the State of Minnesota in their lawful collection of income taxes by falsifying hundreds of tax returns. The tax loss due to the conspiracy was estimated at between $80,000 and $200,000.
From 2007 through 2009, Frank-Sawari conspired with his two co-conspirators and others to prepare fraudulent tax returns for customers of his tax preparation services, Merit Tax Service of Robbinsdale and Capitol Income Tax of Minneapolis. Frank-Sawari admitted that the returns included false income and fraudulent dependent information, among other things. The returns generated inflated refunds for his customers and fraudulent fees and other payments for himself and others. He also admitted instructing customers to sign false income declarations and other paperwork to substantiate the false tax refund claims.
According to the IRS, approximately 60 percent of taxpayers use tax professionals to prepare and file their tax returns, with these paid preparers now collectively responsible for more than 80 million individual tax returns annually. “Tax return preparer fraud” is one of the IRS’s “Dirty Dozen Tax Scams.” For more information about the fight against tax fraud or how to choose a reliable tax return preparer, visit http://www.irs.gov/uac/Tips-for-Choosing-a-Tax-Return-Preparer.
This case was investigated by the IRS-Criminal Investigations with assistance from the Minnesota Department of Revenue. It was prosecuted by Assistant U.S. Attorney William J. Otteson.
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.Federal Inmate Pleads Guilty to EscapingRead the Press Release
MINNEAPOLIS—Earlier today in federal court, an inmate who escaped from the Federal Prison Camp in Duluth in March 2013 pleaded guilty to that crime. Gerald James Greenfield, age 67, of Bloomington, specifically pleaded guilty to one count of escape from custody. Greenfield, who was charged on April 29, 2013, entered his plea before United States District Judge Patrick J. Schiltz.
In his plea agreement, Greenfield admitted that on March 30, 2013, he left the custody of the federal prison camp without authorization. According to a law enforcement affidavit filed in the case, Greenfield was present for a prisoner count at 4:00 p.m. on March 30. However, he was not present for the prisoner count at 10:00 p.m. He was arrested six days later, on April 5, 2013, at a Burnsville motel. At the time of his escape, he was serving a 50-month sentence following a 2012 conviction in the District of Minnesota for conspiracy to commit money laundering.
For his crime, Greenfield faces a potential maximum penalty of five years in prison, which could be added to his current sentence. Judge Schiltz will determine his sentence at a future hearing, yet to be scheduled.This case is the result of an investigation by the U.S. Marshals Service. It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.
Red Lake Man Sentenced for Assaulting A WomanRead the Press Release
MINNEAPOLIS—Yesterday in federal court in Duluth, a 44-year-old Red Lake man was sentenced for causing serious bodily injury to a woman after assaulting her while on the Red Lake Indian Reservation. On August 28, 2013, United States District Judge Richard H. Kyle sentenced Roderick Arlyn Sayers to 43 months in prison on one count of assault resulting in serious bodily injury. Sayers was indicted on November 5, 2012, and convicted on April 16, 2013.
The evidence presented at trial proved that on November 25, 2011, Sayers assaulted the woman, which resulted in serious bodily injury.
This case was the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorneys Deidre Y. Aanstad and Thomas Calhoun-Lopez.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.
The U.S. Justice Department is taking steps to increase engagement, coordination and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.
Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered in during their lives than Caucasian women.Le Center Man Sentenced for Receiving Child PornographyRead the Press Release
MINNEAPOLIS—Late yesterday in federal court, a 47-year-old Le Center man was sentenced for receiving several videos containing child pornography. On August 28, 2013, United States District Judge David S. Doty sentenced Harold Duane Davenport to 60 months in prison on one count of receipt of child pornography. Davenport was indicted on November 5, 2012, and pleaded guilty on March 20, 2013.
In his plea agreement, Davenport admitted that from September 16, 2009, through February 6, 2010, he knowingly received visual depictions via the Internet that involved minors engaged in sexually explicit conduct. In addition, Davenport admitted that he possessed more than 600 images of child pornography, including images and videos portraying sadistic or masochistic conduct or other depictions of violence.
This case was the result of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the LeSueur County Sheriff’s Office, and the Minneapolis Police Department. It was prosecuted by Assistant U.S. Attorney Nathan P. Petterson.Receipt of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is presently funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children and identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/ For more information about internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab “resources.”Former Armored Truck Driver Pleads Guilty to Stealing from ATMsRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a former armored truck driver pleaded guilty to stealing money from automated teller machines (“ATM”) in numerous locations in Minnesota and North Dakota. Christopher James Diestler, age 31, of Fergus Falls, pleaded guilty to one count of bank larceny. Diestler, who was indicted on July 16, 2013, entered his plea before United States District Chief Judge Michael J. Davis.
In his plea agreement, Diestler admitted that from March 2005 through March 15, 2012, while working as an armored truck driver for a company out of Sauk Rapids, Minnesota, he stole approximately $182,350 from Bremer Bank ATMs in Alexandria, Breckenridge, Detroit Lakes, Fergus Falls, and Morris, Minnesota, and Wahpeton, North Dakota, as well as a Wells Fargo ATM in Alexandria and a U.S. Bank ATM in Fergus Falls.
ATM currency is dispersed from cassettes that are installed into ATM machines. Diestler admittedly took cash from a number of those cassettes. Then, upon returning to an ATM to retrieve a cassette from which he had stolen money, he replaced the missing funds with currency taken from another ATM. By doing this, any audit performed on the cassettes would fail to reveal the prior thefts.For his crime, Diestler faces a potential maximum penalty of ten years in prison. Judge Davis will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minnesota Bureau of Criminal Apprehension, the Otter Tail County Sheriff’s Office, the Fergus Falls Police Department, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.
Excelsior Coin Dealer Sentenced for Defrauding Customers and Investors Out of over $3.3 MillionRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 53-year-old Excelsior coin dealer was sentenced for devising and executing a scheme to defraud customers and investors out of more than $3.3 million. United States District Judge Patrick J. Schiltz sentenced David Laurence Marion to 60 months in prison on one count of conspiracy to commit mail and wire fraud and one count of money laundering. Marion was indicted on November 14, 2012, and pleaded guilty on February 21, 2013.
Marion owned International Rarities Corporation (“IRC”), a business that bought, sold, and traded gold coins and precious metals, among other things. Marion directed his sales staff to “cold call” people from “lead” sheets in an attempt to get them to buy, sell, or trade coins and precious metals.
In his plea agreement, Marion admitted that between December 2010 and August 2011, IRC received over $2 million in coins, precious metals, and money from customers who intended to make purchases or trades. In August 2011, IRC purportedly had over $2 million in unfulfilled customer orders. When customers inquired about the status of their orders, they were ignored by Marion and the IRC sales staff, or they were falsely advised that their orders were being processed or their money, coins, and precious metals could not be returned at that time. In the meantime, Marion used the customers’ money, coins, and precious metals to support his gambling and lavish lifestyle as well as to pay commissions and salaries, fulfill other customer orders, and support his family. Customers lost approximately $1.7 million in money, coins, and precious metals as a result of this scheme.
As president of International Rarities Holdings (“IRH”), Marion also directed his sales staff to sell securities in the form of ownership shares in the company. However, Marion was not registered with the Securities and Exchange Commission (“SEC”) as a broker or dealer at that time, nor was he associated with a registered SEC broker or dealer. In fact, in April 2009, the SEC rejected Marion’s attempt to register the IRH offering as a security, yet, from at least November 2008 through July 2009, Marion and his sales staff raised approximately $1 million from at least 26 investors who believed they were purchasing ownership shares in the company. Marion used approximately $200,000 of those investor funds for his own personal use.
This case was the result of an investigation by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, and the Internal Revenue Service-Criminal Investigations. It was prosecuted by Assistant U.S. Attorney Karen B. Schommer.
The U.S. Attorney’s Office wants to remind people to protect themselves from securities fraud. For more information, visit http://www.stopfraud.gov/protect-securities.html.Eveleth Woman Indicted for Obtaining $27,851 Social Security Benefits FraudulentlyRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 33-year-old Eveleth woman made her initial appearance after being indicted for stealing more than $27,000 in Social Security benefits. On August 13, 2013, Kimberly Joann Wauzynski was charged with one count of theft of public money and one count of supplemental security income (“SSI”) benefits fraud.
The indictment alleges that from September 2008 through May 2012, Wauzynski, also known as Kimberly Joann Denne, stole approximately $27,851.08 from the Social Security Administration (“SSA”). According to the indictment, Wauzynski concealed from the SSA the true nature of her living arrangements in order to continue receiving SSI benefits on behalf of her child. Specifically, the indictment alleges that Wauzynski concealed the fact that the father of her child was living with her and her child and supporting the household. Per law, beneficiaries of SSI payments must report any change in living arrangements or sources of income.
If convicted, Wauzynski faces a potential maximum penalty of ten years in prison on each charge. Any sentence would be determined by a federal district judge. This case is the result of an investigation by the SSA-Office of Inspector General. It is being prosecuted by Assistant United States Attorney John E. Kokkinen.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.
Delano Man Pleads Guilty to Robbing Buffalo McDonald’sRead the Press Release
MINNEAPOLIS—Yesterday in federal court, a 34-year-old Delano man pleaded guilty to committing the April 24, 2013, robbery of a McDonald’s in Buffalo. On August 27, 2013, Matthew Dillon Sisneros pleaded guilty to one count of interference with commerce by robbery, pursuant to the Hobbs Act, and one count of possession of a firearm in furtherance of a crime of violence. Sisneros, who was indicted on June 3, 2013, entered his plea before United States District Judge Ann D. Montgomery.
In his plea agreement, Sisneros admitted that on April 24, 2013, he took $3,266 from the restaurant and, with a firearm, threatened violence against the employees. Upon entering the restaurant, Sisneros admittedly pointed a sawed-off 12-gauge shotgun at employees and demanded money. After receiving the money, he ran to a waiting vehicle and left the area.
The Hobbs Act, passed by Congress in 1946, allows federal prosecutors to prosecute individuals who commit armed robberies of businesses engaged in interstate commerce.
For his crimes, Sisneros faces a potential maximum penalty of 20 years in prison for robbery and a mandatory minimum penalty of ten years for possession of a firearm in furtherance of a crime of violence. Judge Montgomery will determine his sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Buffalo Police Department, the Wright County Sheriff’s Office, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, with cooperation from the Minnesota Bureau of Criminal Apprehension. It is being prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Laura M. Provinzino.Two Harbors Man Indicted for Producing Child PornographyRead the Press Release
MINNEAPOLIS—A federal indictment unsealed late yesterday charges a 37-year-old Two Harbors man with producing images of child pornography. The indictment, which was filed on August 13, 2013, charges Joel Ray Allard with one count of production of child pornography. The indictment was unsealed following Allard’s initial appearance in federal court.
The indictment alleges that in August and September 2011, Allard enticed a minor to engage in sexually explicit conduct for the purpose of producing visual depictions of that conduct.
If convicted, Allard faces a potential maximum penalty of life in prison, with a mandatory minimum penalty of 15 years. Any sentence would be determined by a federal district judge.
This case is the result of the Cook County Sheriff’s Office and the Minnesota Child Exploitation Task Force, sponsored by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David P. Steinkamp.
Production of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.
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.”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.
Three Indicted for Conspiring to Facilitate the Interstate Travel of A Minor for ProstitutionRead the Press Release
MINNEAPOLIS—Earlier today in federal court, three individuals were indicted for arranging interstate transportation for the purpose of prostitution. Brandon Lynn Gilmore, age 23, and Angelica Marie Carter, age 20, both of Milwaukee, Wisconsin, and Dominique Alexandra McKee, age 19, no known address, were specifically charged with one count of conspiracy to facilitate travel in interstate commerce to engage in prostitution.
The indictment alleges that on July 12, 2013, the defendants entered into the conspiracy. A law enforcement affidavit filed in the case indicates that on July 20, 2013, Bloomington police were called to a local hotel to address a problem involving a 14-year-old girl. Upon their arrival, the police learned from the girl that she allegedly had been working as a prostitute out of the hotel for the past week. She reportedly said that Gilmore and McKee had brought her to the hotel from Milwaukee, where she wished to return. Officers located Gilmore and McKee in a hotel room. Carter was also found at the hotel. All three were immediately arrested.
According to police records, the minor female said she met McKee on a social website and chatted with him about escorting and making money. Then, on July 11, 2013, she allegedly met Gilmore and McKee at a Milwaukee hotel, where she was invited to travel with them to Minnesota to work as a prostitute. Allegedly, Gilmore took photographs of McKee and the young girl for the purpose of website-based advertising. For his part, Carter drove them all to Minnesota.
If convicted, the defendants face a potential maximum penalty of 30 years in prison. Any sentence would be determined by a federal district judge. This case is the result of an investigation by the Bloomington Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David P. Steinkamp.
Anyone who may have information about any human trafficking matter is encouraged to report that information to the FBI at 763-569-8000. For information about human trafficking, the National Human Trafficking Resource Center’s toll-free hotline (1-888-373-7888) is available to answer calls from anywhere in the country. The U.S. Department of Justice reports that an estimated 14,500 to 17,500 people are trafficked within the U.S. alone each year.
For more information, visit http://www.fbi.gov/about-us/investigate/civilrights/human_trafficking.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.
Red Lake Man Indicted for Sexual AbuseRead the Press Release
MINNEAPOLIS—A federal indictment unsealed earlier today charges a 43-year-old Red Lake man with sexually abusing a woman on the Red Lake Indian Reservation. The indictment, which was filed on July 23, 2013, charges Alan James Lussier with one count of sexual abuse. The indictment was unsealed following Lussier’s initial appearance in federal court.
The indictment alleges that on March 13, 2011, Lussier caused the victim to engage in a sexual act by placing her in fear.
If convicted, Lussier faces a potential maximum penalty of life in prison. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Deidre Y. Aanstad.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force explores current issues raised by professionals in the field and recommends “best practices” in prosecution strategies involving domestic violence, sexual assault, and stalking.
Violence against American Indian women occurs at epidemic rates. In 2005, Congress reported that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered during their lives as Caucasian women.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.
Minneapolis Felon Pleads Guilty to Possessing Four FirearmsRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 47-year-old Minneapolis felon pleaded guilty to one count of being a felon in possession of a firearm for possessing a .357-caliber revolver, a rifle and two shotguns. Carl Craig Larson, who was indicted on June 18, 2013, entered his plea before United States District Judge Susan Richard Nelson.
In his plea agreement, Larson admitted that on April 21, 2013, law enforcement officers responded to a burglary call at a home in Waseca County, where they found Larson inside the residence. Police went on to discover several pieces of jewelry in Larson’s pockets. They also found a loaded .357 revolver in the house, which Larson had admittedly possessed and had used to shoot at doors in attempting to enter the house.
During the execution of a search warrant on the car Larson drove to the burglary, officers uncovered three other guns. The guns matched the description of firearms that had been reported stolen during a burglary in LeSueur County on April 20, 2013. The guns included a seven-millimeter caliber rifle and two 12-gauge shotguns.
Because he is a felon, Larson is prohibited under federal law from possessing a firearm at any time. Larson was previously convicted in Hennepin County for second-degree murder (1986), financial transaction card fraud (1997), and burglary (1999 and 2010). Because at least three of those convictions constituted crimes of violence, Larson will now be subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in federal prison for anyone with such a record who is subsequently convicted in federal court for being a felon in possession of a firearm or ammunition. Judge Nelson will determine Larson’s sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the LeSueur and Waseca county sheriff’s offices, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Sarah E. Hudleston.Hastings Man Sentenced to 30 Years in Prison for Producing Child PornographyRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 25-year-old Hastings man was sentenced for producing child pornography. United States District Judge Ann D. Montgomery sentenced Mark Matthew Cortes to 360 months in prison, along with a lifetime of supervised release, on one count of production of child pornography. Cortes was indicted on December 3, 2012, and pleaded guilty on April 9, 2013.
In his plea agreement, Cortes admitted that in November 2011, he knowingly persuaded a minor under the age of 12 to engage in sexually explicit conduct for the purpose of producing images of such conduct on his cellular telephone. Cortes also admitted that he transferred the images from his phone to his computer and then distributed them to another person. In addition, Cortes admitted that he committed a sexual act with the victim during production.
This case was the result of an investigation by the Minnesota Child Exploitation Task Force, which is sponsored by the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney David P. Steinkamp.
Production of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.
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.”Anoka Felon Indicted for Possessing A Nine-millimeter PistolRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 25-year-old Anoka man was indicted for possessing a nine-millimeter, semi-automatic pistol. Arlan Kaleb Schultz was charged with one count of being a felon in possession of a firearm.
The indictment alleges that on January 19, 2013, Schultz possessed the pistol. According to a law enforcement affidavit filed in the case, at approximately 9:00 p.m. on January 19, Coon Rapids police attempted to stop a vehicle for a traffic violation. The driver refused to yield and, instead, speeded away, ultimately colliding with another vehicle at the intersection of Seventh Avenue and Main Street in Anoka. The driver, later identified as Schultz, immediately exited the vehicle and fled on foot. Police shortly apprehended him. And during the subsequent execution of a search warrant on the vehicle, the officers found the loaded pistol under the front passenger seat. Schultz’s DNA was found on the grip of the pistol. Ammunition was located elsewhere in the vehicle.
Because he is a felon, Schultz is prohibited under federal law from possessing firearms at any time. His previous Anoka County convictions include simple robbery (2008), third-degree burglary (2009), fleeing a peace officer in a motor vehicle (2010), and fifth-degree controlled substance crime (2012). In addition, Schultz was also convicted in Sherburne County for prohibited possession of a stun gun (2011).
Since at least three of Schultz’s prior convictions constitute crimes of violence or major drug crimes, he is subject to the federal Armed Career Criminal Act if convicted in the current federal case. That act mandates a minimum of 15 years in federal prison. The potential maximum penalty is life in prison. Any sentence would be determined by a federal district judge.
This case is the result of an investigation by the Coon Rapids Police Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorneys Benjamin Bejar and Andrew R. Winter.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.
St. Paul Felon Pleads Guilty to Possessing A .22-caliber HandgunRead the Press Release
MINNEAPOLIS—Yesterday in federal court, a 23-year-old St. Paul felon pleaded guilty to possessing a .22-caliber handgun. On August 20, 2013, Phuvanath Ronald Mounthachack pleaded guilty to one count of being a felon in possession of a firearm. Mounthachack, who was indicted on June 3, 2013, entered his plea before United States District Judge Patrick J. Schiltz.
In his plea agreement, Mounthachack admitted that on January 15, 2013, he made arrangements to sell a firearm to two individuals, one of whom was an undercover police officer. Mounthachack admitted instructing the individuals to meet him near the intersection of Interstate 94 and Lexington Avenue in St. Paul. At approximately 8:10 p.m., Mounthachack arrived at that location, carrying a .22-caliber, semi-automatic handgun along with some ammunition. In return for $500 in cash, he handed over the gun and ammunition to the two individuals.
Because he is a felon, Mounthachack is prohibited under federal law from possessing a firearm or ammunition at any time. His prior Wright County convictions include aggravated robbery (2007) and fifth-degree sale of a controlled substance while employing a dangerous weapon (2009).For his crime, Mounthachack faces a potential maximum penalty of ten years in prison. Judge Schiltz will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minneapolis Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.
The case was charged federally through Project Exile Minneapolis. That law enforcement initiative was launched on July 22, 2010, as part of a city-wide effort to reduce gun violence. Through Project Exile, the Minneapolis Police Department and the ATF work together to apprehend serial criminals for violations of gun laws. Then, the Hennepin County Attorney’s Office teams up with the U.S. Attorney’s Office to determine where those offenders will most effectively be prosecuted – state or federal court. Those determinations are based on the offenders’ criminal histories and current charges, among other factors. To date, the U.S. Attorney’s Office has brought charges against approximately two dozen serious habitual criminals through Project Exile Minneapolis.Former Postmaster Pleads Guilty to Stealing Postal FundsRead the Press Release
MINNEAPOLIS—Yesterday in federal court, the former postmaster of the Marble Post Office in Itasca County pleaded guilty to stealing funds from the office. On August 20, 2013, Jill Marie Rousse, age 39, of Calumet, pleaded guilty to one count of misappropriation of postal funds. Rousse, who was indicted on June 10, 2013, entered her plea before United States District Judge Ann D. Montgomery.
In her plea agreement, Rousse admitted that between August 2011 and October 2012, she stole money from the post office by either taking cash from the cash drawer or issuing money orders in her own name. Rousse also admittedly falsified reports regarding the sale of money orders and postage in order to conceal her theft. An audit of the post office identified shortages totaling $9,031.43 in cash and stamps.
For her crime, Rousse faces a potential maximum penalty of ten years in prison. Judge Montgomery will determine her sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the U.S. Postal Service-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.Four Individuals Sentenced for Their Roles in Large, Multi-state Identity Theft RingRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, two individuals were sentenced for their roles in a large, multi-state, identity theft ring. United States District Judge Paul A. Magnuson sentenced Russell Raymond Royals, age 61, of Cottage Grove, to 120 months in prison; and Desmon Desmond Burks, age 38, of St. Paul, to 252 months in prison. Royals previously pled guilty to one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Burks was convicted on September 6, 2012, following a jury trial, of one count of conspiracy to commit bank fraud, two counts of aiding and abetting bank fraud, and two counts of aggravated identity theft.
Two related defendants were sentenced last month for their roles in this conspiracy. On July 23, 2013, Norman Scott Allen, age 44, of Minneapolis, was sentenced to 80 months in prison on one count of conspiracy to commit bank fraud and one count of bank fraud. On July 22, 2013, Frederick Adrianne Hamilton, age 57, also of Minneapolis, was sentenced to 57 months in prison on one count of conspiracy to commit bank fraud and two counts of bank fraud. Both men were convicted on September 6, 2012 following a jury trial. Twenty-three other defendants have been sentenced in this case thus far, while five more await sentencing.These individuals, along with over 100 others, were involved in a conspiracy from 2006 through December of 2011 to defraud banks, bank customers, and businesses. The co-conspirators used victim information to create counterfeit checks and false identification documents to conduct fraudulent transactions at retail establishments where expensive merchandise was purchased and returned for cash. At banks, the conspirators posed as customers and withdrew money from victims’ bank accounts. The members of the conspiracy conducted these fraudulent transactions throughout Minnesota and in at least 13 other states. Victim information was obtained by members of the conspiracy through multiple sources, including from individuals who stole victim information from their places of employment, from individuals employed at area banks, from those who stole the information from the mail, during vehicle break-ins, and business burglaries, among other sources.
Following sentencing, Patrick Henry, the head of the Minnesota Financial Crimes Task Force, said, “The Minnesota Financial Crimes Task Force led this investigation, but the effort was a success because of the extraordinary collaboration by all of the agencies involved.”
Kelly R. Jackson, Special Agent in Charge of Internal Revenue Service-Criminal Investigations, St. Paul Field Office, which also participated in the investigation, said, “Investigating identity theft is a priority for IRS-Criminal Investigations. Today’s sentencings of Desmon Burks and Russell Royals should serve as a strong deterrent to those who are considering similar conduct. Law enforcement and the U.S. Attorney’s Office are serious about investigating identity theft crimes and holding those accountable who commit these types of crimes.”
In a related case, five individuals were charged with conspiracy to commit bank fraud, bank fraud and aggravated identity theft. Jemall Ronta Williams, Jerome Davis, Jr., Tierra Samantha Catrina House, and Shanell Collette Brewer each pleaded guilty to one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Gordon Lamarr Moore was convicted in April 2013 following a jury trial. During the trial, Moore fled and became a fugitive. On July 8, 2013, he was arrested in at a hotel in Milwaukee, Wisconsin. Moore attempted to again flee, but was ultimately apprehended without incident.
These cases resulted from an investigation conducted by the Minnesota Financial Crimes Task Force, the U.S. Postal Inspection Service, and the IRS-Criminal Investigations. They were prosecuted by Assistant U.S. Attorney Karen B. Schommer and Assistant U.S. Attorney Michelle E. Jones.
The Financial Crimes Task Force was established pursuant to state law and is comprised of local, state, and federal law enforcement investigators dedicated to combating the growing problem of cross-jurisdictional financial crimes. The task force, overseen by an advisory board also created under state law, serves the entire District of Minnesota, presenting its cases to county or federal prosecutors, as appropriate.
The task force and the Minnesota U.S. Attorney’s Office want to remind people to protect themselves from identity theft. For more information, visit http://www.stopfraud.gov/protect-identity.html.
For more information on how to avoid becoming a victim of identity theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/IdentityTheft.aspx . The IRS-Criminal Investigations also urges citizens to review the Taxpayer Guide to Identity Theft, which can be found at http://www.irs.gov.
For tips on how to prevent mail theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/MailTheft.aspx.Second Man Pleads Guilty to Preparing False Tax ReturnsRead the Press Release
FOR IMMEDIATE RELEASE
August 13, 2o13
MINNEAPOLIS—Earlier today in federal court in St. Paul, a man pleaded guilty to conspiring to file false tax returns after admitting he had used the identity information of several children to generate false dependents. Rotimi Williams specifically pleaded guilty to one count of conspiracy to obstruct the lawful functioning of the Internal Revenue Service (“IRS”) and four counts of identity theft. Williams, who was indicted along with Ayo Aseph on April 15, 2013, entered his plea before United States District Judge Paul A. Magnuson.
In his plea agreement, Williams admitted that from about April 15, 2008, through about April 15, 2011, he conspired with others to obstruct the IRS in its legal obligation to collect income taxes. During that time, Williams was in the business of preparing and filing federal and state income tax returns for clients, his main office located in Brooklyn, New York. Williams had several clients in Minnesota, including Aseph.
Williams, who had clients in Minnesota and New York, admitted to generating false tax returns for certain New York clients by adding the names, social security numbers, and birthdates of children who were not their dependents. Williams did this in order to lower the amount of federal taxes owed, and, thereby, qualify for refunds, by claiming additional dependents on their tax returns. The dependent information involved minors from Minnesota, and were added to certain New York clients’ tax returns.
On June 12, 2013, Williams’ co-defendant, Ayo Aseph, pleaded guilty to one count of conspiracy. In his plea agreement, Aseph admitted that Williams prepared his tax returns starting in 2007, and that Williams was his employer until 2011. In 2008, Aseph, at Williams’ direction, obtained the identities of children not his own to claim on his income tax return for that year. Aseph admittedly gave his brother money in exchange for the identification information of two children that his brother knew. The identification information of a third child was also provided by one of Aseph’s co-workers. Those three children were claimed as dependents on Aseph’s 2009 tax return as well. And, for his 2010 tax return, one of the children as well as two other children were claimed as dependents.
For their crimes, both defendants face a potential maximum penalty of five years in prison for conspiracy. In addition, Williams faces a potential maximum penalty of 15 years on each count of identity theft. Judge Magnuson will determine their sentences at a future hearing, yet to be scheduled.
This case is the result of an investigation by the IRS-Criminal Investigations. It is being prosecuted by Assistant U.S. Attorney John Docherty.
According to the IRS, approximately 60 percent of taxpayers use tax professionals to prepare and file their tax returns, with these paid preparers now collectively responsible for more than 80 million individual tax returns annually. “Tax return preparer fraud” is one of the IRS’s “Dirty Dozen Tax Scams.” For more information about the fight against tax fraud or how to choose a reliable tax return preparer, visit http://www.irs.gov/uac/Tips-for-Choosing-a-Tax-Return-Preparer.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.
Red Lake Man Sentenced for Assaulting A Man with an Axe HandleRead the Press Release
MINNEAPOLIS—Yesterday in federal court in Fergus Falls, a 48-year-old Red Lake man was sentenced for assaulting a man with an axe handle. On August 12, 2013, United States District Judge John R. Tunheim sentenced Joseph William Howard, Jr., to 105 months on one count of assault resulting in serious bodily injury. Howard was indicted on February 22, 2012, and pleaded guilty on May 29, 2012.
In his plea agreement, Howard admitted that on January 13, 2012, he assaulted the victim at a Redby residence. According to a law enforcement affidavit filed in the case, authorities were called to the residence, located on the Red Lake Indian Reservation, on that day. There, they found the victim, whose face had been severely beaten and lacerated. Officers also discovered blood splattered on the bed and walls in the room where the victim was staying. A bloody axe handle was ultimately uncovered behind the dryer in that home’s utility room. As a result of the assault, the victim suffered multiple fractures, and his left eye was so badly damaged that it had to be surgically removed.This case was the result of an investigation conducted by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.Minneapolis Man Sentenced to 30 Years in Prison for Committing Sexual Abuse Against A ChildRead the Press Release
MINNEAPOLIS—Yesterday in federal court in Fergus Falls, a 32-year-old Minneapolis man was sentenced for committing aggravated sexual abuse against a child. On August 12, 2013, United States District Judge John R. Tunheim sentenced Joseph Valerian Parshall to 360 months in prison on two counts of aggravated sexual abuse against a child under the age of 12. Parshall was indicted on September 21, 2011, and was convicted on February 7, 2012.
According to the indictment and evidence presented at trial, Parshall committed two sexual acts against the child between February 1 and July 27, 2011. A law enforcement affidavit filed in the case states that on July 27, 2011, the Red Lake Tribal Police Department was informed of the abuse. The Federal Bureau of Investigation’s Fugitive Task Force arrested Parshall on August 31, 2011, in Minneapolis.
This case was the result of an investigation by the Red Lake Tribal Police Department and the FBI. It was prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw. Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.St. Paul Man Pleads Guilty to Possessing .357 Revolver and MarijuanaRead the Press Release
MINNEAPOLIS— Earlier today in federal court, a 27-year-old St. Paul man pleaded guilty to carrying a .357-caliber revolver during and in relation to a drug-trafficking crime. Leroy Uriah Spivey, who was indicted on April 15, 2013, entered his plea before Chief United States District Judge Michael J. Davis.
In his plea agreement, Spivey admitted that on December 8, 2012, he got out of a taxi near an ongoing police investigation at a residence on George Street West in St. Paul, Minnesota. Spivey tried to walk away from investigating police officers while he admittedly tried to pull the .357 revolver from his waistband. Spivey then slid the firearm beneath a nearby car when finally complied with the officers’ command to stop and get down on the ground. Police recovered the weapon and found a large bag containing approximately 40 grams of marijuana on Spivey’s person. Spivey admittedly intended to distribute the bag of marijuana, which included 27 smaller bags of distribution amounts of marijuana. In his plea agreement, Spivey admitted that he possessed the firearm for security and protection during his drug distribution efforts.For his crime, Spivey faces a potential maximum penalty of life in prison, with a mandatory minimum penalty of five 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 St. Paul Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Allen A. Slaughter.Man Pleads Guilty to Tax EvasionRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a man pleaded guilty to evading taxes for tax years 2006-2009. Roger Martin Pedley pleaded guilty to four counts of tax evasion. Pedley, who was indicted on April 9, 2013, entered his plea before Chief United States District Judge Michael J. Davis.
In his plea agreement, Pedley admitted owning and operating the Pine Ridge Golf Course in Motley as well as engaging in other business ventures. These ventures generated considerable cash income for Pedley. Pedley also admitted engaging in transactions with this cash at various banks in ways that avoided triggering the banks’ federal currency reporting requirements. In addition, Pedley admitted that he failed to declare the cash as income on his personal income tax returns, filed jointly with his wife for tax years 2006, 2007, 2008, and 2009.
For his crimes, Pedley faces a potential maximum penalty of five years in prison on each count. Judge Davis will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Internal Revenue Service-Criminal Investigations. It is being prosecuted by Assistant U.S. Attorney John Docherty.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.
St. Paul Man Sentenced for Bank FraudRead the Press Release
MINNEAPOLIS—Yesterday in federal court, a 37-year-old St. Paul man was sentenced for fraudulently obtaining funds from several financial institutions. On August 8, 2013, United States District Judge David S. Doty sentenced Christopher Terrelle Harness to 81 months in prison on one count of bank fraud and one count of aggravated identity theft. Harness was indicted on November 20, 2012, and pleaded guilty on March 11, 2013.
In his plea agreement, Harness admitted that from October 2007 through July 2012, he fraudulently obtained money from banks. Specifically, he and others, at his direction, opened accounts into which they deposited checks they knew were stolen or not backed by sufficient funds. Then, they made ATM withdrawals from the falsely inflated balances. In total, the victimized financial institutions sustained losses of between $30,000 and $400,000 because of this crime.
This case was the result of an investigation by the U.S. Postal Inspection Service and the Minnesota Financial Crimes Task Force. It was prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and Manda M. Sertich.The Financial Crimes Task Force was established pursuant to state law and is comprised of local, state, and federal law enforcement investigators dedicated to combating the growing problem of cross-jurisdictional financial crimes. The task force, overseen by an advisory board also created under state law, serves the entire District of Minnesota, presenting its cases to county or federal prosecutors, as appropriate.
The task force and the Minnesota U.S. Attorney’s Office want to remind people to protect themselves from identity theft. For more information, visit http://www.stopfraud.gov/protect-identity.html
For more information on how to avoid becoming a victim of identity theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/IdentityTheft.aspxSouth Dakota Man Sentenced for Robbing Arden Hills and Bloomington BanksRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 45-year-old South Dakota man was sentenced for robbing two Twin Cities’ banks during the first week of 2012 and one North Dakota bank in December 2011. United States District Judge David S. Doty sentenced William Roy St. John, of Sisseton, South Dakota, to 188 months in prison on three counts of bank robbery. On April 3, 2012, St. John was indicted in connection with the Minnesota robberies, and on May 2, 2012, he was indicted for the North Dakota robbery. On December 5, 2012, St. John pleaded guilty to all three robberies.
In his plea agreement, St. John admitted that on January 2, 2012, he stole approximately $3,810 from the US Bank on Lyndale Avenue South in Bloomington; on January 4, 2012, he stole approximately $5,520 from the Wells Fargo Bank on County Road E in Arden Hills; and on December 31, 2011, he stole approximately $2,107 from the Bank of the West in Fargo, North Dakota.
Surveillance images from the two Minnesota banks indicated that the suspect was the same man. As part of a law enforcement investigation into those crimes, authorities executed a state search warrant at a Minneapolis apartment on January 5, 2012. Among other things, they recovered clothing similar to that worn by the robber.
On January 7, 2012, authorities arrested St. John in Bloomington. In addition to being charged federally with bank robbery, St. John was charged in Hennepin County District Court with attempted home invasion as well as attempted carjacking, kidnapping, and auto theft, all of which were unrelated to the bank robberies. St. John has since been convicted of those state charges, and he remains in state custody.
This federal bank robbery case was the result of an investigation by the Federal Bureau of Investigation, the U.S. Marshals Service, the Bloomington Police Department, and the Ramsey County Sheriff’s Office. It was prosecuted by Assistant U.S. Attorney Andrew Dunne.Maple Plain Man Indicted for Defrauding Mortgage Loan LendersRead the Press Release
MINNEAPOLIS—A federal indictment unsealed late yesterday charges a 38-year-old Maple Plain man with conspiring to defraud mortgage loan lenders. The indictment, which was filed on July 16, 2013, specifically charges Alpha Rashidi Mshihiri with one count of conspiracy to commit bank fraud, three counts of bank fraud, two counts of wire fraud, one count of mail fraud, and one count of money laundering conspiracy. The indictment was unsealed following the Mshihiri’s initial appearance in federal court.
The indictment alleges that from June 2006 through January 2009, Mshihiri conspired with others to defraud and obtain money from mortgage lenders by means of false and fraudulent representations. Mshihiri operated Pristine Home Loans and allegedly recruited straw buyers to purchase residential real estate properties. The straw buyers submitted fraudulent loan applications to the mortgage lenders and, in some instances, used the stolen identity others in their applications.
In support of the false loan applications, Mshihiri purportedly created false documents, such as false W-2s and fraudulent paystubs and driver’s licenses, which the straw buyers then submitted to the mortgage lenders. In some instances, the proceeds of the loans were allegedly used to pay existing mortgages, financially benefiting Mshihiri and his un-named co-conspirators. In other situations, proceeds were purportedly paid as kickbacks to the straw buyers. Every property purchased through the scheme has gone into foreclosure, resulting in substantial losses to the victim lenders.
If convicted, Mshihiri faces a potential maximum penalty of 30 years on each count. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the Minnesota Financial Crimes Task Force, the Internal Revenue Service-Criminal Investigations, the United States Secret Service and the U.S. Department of Housing and Urban Development-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.
The Financial Crimes Task Force was established pursuant to state law and is comprised of local, state, and federal law enforcement investigators dedicated to combating the growing problem of cross-jurisdictional financial crimes. The task force, overseen by an advisory board also created under state law, serves the entire District of Minnesota, presenting its cases to county or federal prosecutors, as appropriate.
The U.S. Attorney’s Office wants to remind people to protect themselves from mortgage fraud. For more information, visit http://www.stopfraud.gov/protect-mortgage.html.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.
Eden Prairie Man Indicted for Embezzling Millions of Dollars from His Long-time EmployerRead the Press Release
MINNEAPOLIS—A federal indictment unsealed earlier today charges a 56-year-old Eden Prairie man with embezzling millions of dollars from his long-time employer. The indictment, which was filed on August 5, 2013, charges John Joseph Waters, Jr., with four counts of mail fraud, 16 counts of wire fraud, three counts of income tax evasion, and three counts of filing a false income tax return. The indictment was unsealed today, following Waters’ initial appearance in federal court. The indictment alleges that from at least 1999 through at least March 2012, Waters embezzled the funds to support his personal lifestyle.
The victim of the embezzlement is a former senior executive and shareholder at West Publishing, for whom Waters worked from approximately 1994 to1996. After retiring in 1996, the victim hired Waters to manage his numerous personal, business, and philanthropic pursuits. According to the indictment, Waters served in that capacity from 1996 to March 2009, during which time he was responsible for the oversight and management of the victim’s considerable assets, including numerous bank, trust, and investment accounts. To that end, Waters reportedly obtained signing authority on a number of the accounts.The indictment alleges that Waters used that signing authority to transfer millions of dollars from his employer’s accounts to accounts controlled by Waters, all without his employer’s knowledge or permission. To conceal the scheme, Waters reportedly used a bank account he controlled in the name of a deceased foreign exchange student, made false entries in his employer’s books and records, and directed others to refrain from reviewing certain bank statements.
After Waters left his position and the alleged embezzlement was uncovered, he purportedly discouraged his former employer from reporting it to authorities. He allegedly went so far as to threaten his former employer, warning him that harmful information about him would be revealed if he turned Waters in. The indictment asserts that, as part of the scheme, in March of 2012, Waters commenced a civil lawsuit against his victim, falsely alleging that the funds he took while an employee constituted payment of “deferred compensation” owed him pursuant to an oral modification of his employment agreement.
The indictment also states that Waters failed to report as income on his 2007, 2008, and 2009 federal tax returns the millions of dollars he embezzled. Accordingly, he allegedly filed false tax returns for those three years in addition to committing tax evasion.
If convicted, Waters faces a potential maximum penalty of 20 years in prison on each count of mail and wire fraud, five years on each count of income tax evasion, and three years on each count of filing a false tax return. Any sentence would be determined by a federal district judge.
This case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations. It is being prosecuted by Assistant United States 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.
Second Bloomington Resident Sentenced to Federal Prison for Mortgage Fraud ScamRead the Press Release
MINNEAPOLIS—Yesterday in federal court, a 40-year-old Bloomington man was sentenced for his role in defrauding financial institutions and homeowners under the guise of a program to rescue homes from foreclosure. On July 31, 2013, United States District Court Judge John R. Tunheim sentenced Richard Scott Spady to 24 months in federal prison and two years of supervised release on one count of conspiracy to commit wire and mail fraud and one count of filing a false income tax return. On April 4, 2012, Spady was charged in a superseding indictment, and he pleaded guilty on September 5, 2012.
On April 22, 2013, Spady’s co-defendant, Michele Denise Sengstock, age 50, also of Bloomington, was sentenced to 14 months in federal prison on one count of wire fraud. Spady and Sengstock were ordered to pay $1,127,129.31 in restitution.
In his plea agreement, Spady admitted operating his scheme between 2005 and 2007. According to the charges in the case, Spady operated a company called Unified Home Solutions, or UHS, which identified homeowners who were facing mortgage foreclosure or already in foreclosure proceedings. UHS then found third party investors to purchase the homes, planning to sell them back to the original homeowners within one to two years. In the meantime, according to the Indictment in the case, the distressed homeowners could live in their homes.
Though in foreclosure, because they could not make mortgage payments, the homeowners still had some equity in their homes. When the properties were sold, checks were issued to the original homeowners for their equity. The homeowners then signed over the equity checks and the proceeds were used to pay expenses and divided among the investors, UHS, and others. In some cases, equity from one sale was used to purchase other distressed properties.
In his guilty plea, Spady admitted that false and mortgage loan applications and loan closing documents were prepared and that lenders were not told about the distribution of equity from the sales, including rolling one homeowner’s equity into the purchase of a subsequent home for an investor. According to the charges in the case, fewer than 10 percent of the homeowners who used UHS were able to retain their homes, and all the homeowners lost their equity in the process.
Spady also admitted that for the tax years 2006 and 2007, he filed federal income tax returns that failed to report over $100,000 in income, resulting in an underpayment of taxes of more than $30,000.
In her plea agreement, Sengstock admitted assisting in the fraudulent operations of UHS by preparing false mortgage loan applications and closing documents.
This case was the result of an investigation by the U.S. Postal Inspection Service and the Internal Revenue Service-Criminal Investigations. It was prosecuted by Assistant U.S. Attorney Robert M. Lewis.
The U.S. Attorney’s Office wants to remind people to protect themselves from mortgage fraud. For more information, visit http://www.stopfraud.gov/protect-mortgage.html.
This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.Former Chisholm Resident Pleads Guilty to Defrauding Customers at Classic Car Restoration CompanyRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 26-year-old Michigan man, formerly of Chisholm, pleaded guilty to defrauding customers of Memory Lane Classics, a company that restored and rebuilt classic cars, out of more than $1 million. Edwin Scott Verdung pleaded guilty to one count of wire fraud and one count of transaction money laundering. Verdung, who was charged on May 14, 2013, entered his plea before United States District Judge Patrick J. Schiltz.
In his plea agreement, Verdung admitted that from April 2007 through May 2010, he took money from individuals who were in the market for classic automobiles or who brought their own vehicles into the shop to be restored or rebuilt. Despite accepting funds, Verdung failed to provide the vehicles or the restoration services promised. In some instances, he represented falsely that he had made progress in rebuilding or restoring a customer’s vehicle, when, in fact, he had done nothing along those lines. Verdung also admitted requiring some customers to make “progress” payments, providing those customers with fraudulent photographs as evidence of the progress made in restoring the vehicle.For his crimes, Verdung faces a potential maximum penalty of 20 years in federal prison for wire fraud count and 10 years in federal prison for money laundering. Judge Schiltz will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Internal Revenue Service-Criminal Investigations, Minnesota Bureau of Criminal Apprehension, and the Chisholm Police Department. It is being prosecuted by Assistant U.S. Attorney Nicole A. Engisch.
Coon Rapids Man Sentenced for Stealing Prosthetics from Fairview Medical Center and Selling Them OnlineRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 52-year-old Coon Rapids man was sentenced for stealing prosthetics and related supplies from the Fairview Medical Center and selling them online. United States District Court Judge Ann D. Montgomery sentenced Peter Stasica to two years of probation, to pay more than $88,000 in restitution, and to perform 100 hours of community service on one count of wire fraud. Stasica was charged on March 8, 2013, and pleaded guilty on April 11, 2013.
In his plea agreement, Stasica admitted that from February to August 2011, while he was the prosthetics manager for Fairview’s Orthotics and Prosthetics Department, he began removing prosthetics and prosthetic-related supplies without authorization to sell on eBay. In his capacity as prosthetics manager, Stasica’s duties included purchasing supplies and equipment, working with vendors, and advising patients about whether a new prosthetic limb was necessary.
In addition, Stasica admitted he solicited from several patients, under false pretenses, prosthetics they were not using. Stasica did not disclose to those patients that he intended to sell them. During the course of the scheme, approximately 40 buyers purchased more than 60 prosthetics and related supplies from Stasica via eBay.
This case was the result of an investigation by the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney David M. Genrich.Redby Man Indicted for Assaulting Others with A Tire IronRead the Press Release
MINNEAPOLIS—A federal indictment unsealed yesterday charges a 20-year-old Redby man with assaulting two other people while on the Red Lake Indian Reservation. The indictment, which was filed on July 23, 2013, charges Ryan Devin Ravensborg with two counts of assault with a dangerous weapon and two counts of assault resulting in serious bodily injury. The indictment was unsealed following Ravensborg’s initial appearance in federal court.
The indictment alleges that on May 26, 2013, Ravensborg assaulted the two victims with a metal object. One of the victims had a depressed skull fracture and intracranial bleeding, while the second victim suffered a laceration on his scalp that required staples and a linear skull fracture.
If convicted, Ravensborg faces a potential maximum penalty of ten years in prison on each count. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney John E. Kokkinen.Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.
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.
Nurse Pleads Guilty to Fraudulently Acquiring A Controlled SubstanceRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 38-year-old Madelia nurse pleaded guilty to fraudulently acquiring a controlled substance, namely oxycodone, while employed at an inpatient health care facility. Tess Marie Johnson pleaded guilty to one count of obtaining a controlled substance by fraud. Johnson, who was indicted on May 21, 2013, entered her plea before United States District Court Judge Patrick J. Schiltz.
In her plea agreement, Johnson admitted that in October 2012, she obtained for her own use Percocet tablets that had been intended for patients. Specifically, she removed the Percocet, which is oxycodone, that was intended for patients and replaced it with Tylenol tablets.
For her crime, Johnson faces a potential maximum penalty of four years in prison. Judge Schiltz will determine her sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the U.S. Drug Enforcement Administration and the Mankato Police Department. It is being prosecuted by Assistant U.S. Attorney Nicole A. Engisch.Minneapolis Man Sentenced to More Than 18 Years for Armed Robbery of St. Paul PharmacyRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 31-year-old Minneapolis man was sentenced for the April 3, 2012, armed robbery of the West 7th Pharmacy in St. Paul. United States District Judge Susan Richard Nelson ordered Michael Brooks Bynum to serve 220 months in federal prison on one count of interference with commerce by robbery pursuant to the Hobbs Act and one count of possession of a firearm in furtherance of a crime of violence. Bynum was indicted along with two co-defendants on July 10, 2012, and pleaded guilty on March 11, 2013.
Following today’s sentencing, Scott D. Sweetow, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), St. Paul Field Division, said, “Armed commercial robberies represent a serious and real threat to the public, one that ATF is fully committed to investigate with our partners, using tools, such as the Hobbs Act, to bring violent offenders to the bar of justice. The public should not have to worry that when they are getting a prescription filled or stopping at the store for a gallon of milk, that they may encounter violent, armed predators looking to steal prescription drugs at gunpoint.”In his plea agreement, Bynum admitted that on April 3, 2012, he drove Ray James Brown, age 25, and Rayshawn Earl James Brown, age 21, both of Minneapolis, to the West 7th Pharmacy in St. Paul. The men entered the establishment wearing masks. They pointed a .40-caliber, semi-automatic pistol at store employees and demanded they get down on the floor. They ordered the pharmacist to dump drugs, such as Percocet, Vicodin, and Oxycontin, into a plastic bag. Grabbing the filled bag, they then ran from the premises to their get-away car. Bynum drove the car, which was stopped by police a short time later. Both of the Browns attempted to run from police, but they were quickly apprehended. The gun brandished during the robbery was recovered nearby.
Bynum and Ray Brown also committed the armed robberies of Lloyds Pharmacy in St. Paul on February 18, 2012; the Best Aid Pharmacy in St. Louis Park on March 15, 2012; and the Pro Pharmacy in St. Paul on March 27, 2012. Rayshawn Brown took part in the Pro Pharmacy robbery. In addition, Bynum has been previously convicted on other robbery and firearms charges and was on supervised release at the time he committed the recent four robberies.
On May 20, 2013, Rayshawn Brown was sentenced to 120 months on one count of interference with commerce by robbery pursuant to the Hobbs Act and one count of possession of a firearm in furtherance of a crime of violence. He pleaded guilty on September 21, 2012. On May 15, 2013, Ray Brown was sentenced to 168 months on two counts of possession of a firearm during and in relation to a crime of violence. He pleaded guilty on September 19, 2012.
The Hobbs Act, passed by Congress in 1946, provides federal jurisdiction for cases involving violent, habitual criminals who commit armed robbery in businesses involved in interstate commerce.
This case was the result of an investigation by the St. Paul Police Department, the St. Louis Park Police Department, the Hennepin County Violent Offender Task Force, and the ATF. It was prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Surya Saxena.Minneapolis Man Sentenced for Bank RobberyRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 51-year-old Minneapolis man was sentenced for robbing the TCF Bank on West Lake Street in Minneapolis. United States District Court Judge Patrick J. Schiltz sentenced Phillip Leo Nietz to 151 months on one count of bank robbery, as well as three other bank robberies Nietz admitted in his plea agreement to also having committed. Nietz was indicted on October 10, 2012, and pleaded guilty on January 11, 2013. Nietz was ordered to pay restitution to the bank he had robbed.
In his plea agreement, Nietz admitted that on August 22, 2012, he walked into the West Lake Street branch of TCF Bank and gave a teller a note demanding money. He took approximately $3,794, placed it in a black bag, and left the premises on foot.
Nietz also admitted to robbing the three other banks in the same manner: a U.S. Bank in Roseville on August 14, 2012, where he stole $1,047; a Wells Fargo in St. Paul on August 28, 2012, where he stole $7,389; and a U.S. Bank in St. Paul on September 13, 2012, where he stole $1,045.This case was the result of an investigation by the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.
Man Pleads Guilty to Conspiring to Distribute Methamphetamine and Possessing A FirearmRead the Press Release
MINNEAPOLIS—Yesterday in federal court in St. Paul, a 25-year-old man pleaded guilty to conspiring to distribute methamphetamine. Jose Alfredo Varela-Meraz, no known address, pleaded guilty to one count of conspiracy to distribute 500 or more grams of methamphetamine and one count of using, carrying, and possessing a firearm during and in relation to a drug-trafficking crime. Varela-Meraz, who was indicted on March 19, 2013, entered his plea before United States District Judge Susan Richard Nelson.
In his plea agreement, Varela-Meraz admitted that from the fall of 2009 through April 20, 2011, he conspired with others to distribute methamphetamine. He also admitted that during the period of the conspiracy, he obtained quantities of methamphetamine from various sources in Minnesota, Arizona, and elsewhere. He then distributed it to mid-level dealers. On March 25, 2010, police arrested Varela-Meraz in Minneapolis. At that time, they also seized 1,131.3 grams of methamphetamine and a loaded nine-millimeter handgun.
For his crimes, Varela-Meraz faces a potential maximum penalty of life in federal prison for each offense. Judge Nelson will determine his sentence at a future hearing, yet to be scheduled.This case is the result of an investigation by the U.S. Drug Enforcement Administration, the Ramsey County Sheriff’s Office, the Hennepin County Sheriff’s Office, the Minnesota State Patrol, and the police departments of Maplewood, Minneapolis, and Roseville. It is being prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.
To learn more about the harmful effects of methamphetamine, visit http://www.justice.gov/dea/pr/multimedia-library/publications/drug_of_abuse.pdf#page=48.Two Red Lake Women Indicted for KidnappingRead the Press Release
MINNEAPOLIS—A federal indictment unsealed recently charges two Red Lake women in connection to kidnapping. The indictment, which was filed on July 23, 2013, specifically charges Melanie Rose Benais, age 27, and Ronalda Myra Smith, age 33, with one count of kidnapping. On July 24, 2013, the indictment was unsealed following the defendants’ initial appearance in federal court.
The indictment alleges that on June 13, 2013, the defendants kidnapped another person while on the Red Lake Indian Reservation and held that person against their will.
If convicted, the defendants face a potential maximum penalty of life in prison. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Deidre Y. Aanstad.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.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.
Red Lake Man Pleads Guilty to Running Another Vehicle Off the RoadRead the Press Release
MINNEAPOLIS—Earlier today in federal court in Duluth, a 30-year-old Red Lake man pleaded guilty to running a vehicle off the road on the Red Lake Indian Reservation. Tony Lee Lussier specifically pleaded guilty to one count of assault with a dangerous weapon. Lussier, who was charged May 21, 2013, in a superseding indictment, entered his plea before United States District Court Judge Richard H. Kyle.
In his plea agreement, Lussier admitted that on May 12, 2013, while he was driving a motor vehicle, he chased another vehicle. That vehicle contained four people. Lussier admittedly crashed into the other vehicle, causing it to roll into the ditch. Then, Lussier attempted to assault the other vehicle’s occupants before returning to his vehicle and driving away.
For his crime, Lussier faces a potential maximum penalty of ten years in 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 Red Lake Tribal Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys Laura M. Provinzino and Manda M. Sertich.Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.
Former Postal Employee Pleads Guilty to Stealing from Post OfficeRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a former employee of the United States Post Office pleaded guilty to issuing money orders to himself, among other offenses. Wayne E. O’Connell, age 52, of the northwestern Minnesota community of Shelly, specifically pleaded guilty to one count of misappropriation of postal funds. O’Connell, who was charged on July 5, 2013, entered his plea before U.S. District Court Judge Donovan W. Frank.
In his plea agreement, O’Connell admitted stealing cash from the money drawer at the Shelby post office and using funds received from the sale of post office box rentals for his own use. In addition, O’Connell admitted issuing postal money orders to himself without paying for them.
Authorities began investigating O’Connell after learning that money orders issued from the Shelby post office were being cashed prior to the dates they were reportedly issued. In December 2012, an audit of the post office identified shortages of $2,729.85 in cash and stamps.For his crime, O’Connell faces a potential maximum penalty of ten years in federal prison. Judge Frank will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the U.S. Postal Service-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Kevin S. Ueland.