Eastern District of Missouri
Press releases recorded for this federal judicial district.
Local Attorney Who Fled the United States Sentenced on Multiple Federal Fraud ChargesRead the Press Release
St. Louis, MO – St. Charles County attorney JEFFREY WITT was sentenced to forty-four (44) month’s imprisonment and five (5) years supervised release following his term of imprisonment, and ordered to pay restitution in the amount of $234,472.33 on charges of falsifying documents to obtain a bank loan secured by a St. Louis County home, which did not actually belong to him, using an associate to impersonate the true home owner at the bank loan closing and cashing legal client settlement checks without their knowledge.
According to court documents and statements made in court, during September 2013, Witt submitted a loan application in the name of his mother in order to obtain a $100,000 line of credit secured by his mother’s St. Louis-area residence. His mother was unaware of Witt’s loan application. Witt provided a female associate with his mother’s driver’s license, which he had stolen from his mother, along with other false documentation so the associate could impersonate his mother during the loan closing at the bank. Together they were able to obtain the $100,000 bank loan credit line. Witt immediately drew out $60,000 from the credit line, which he deposited into his law firm bank account and then withdrew for personal purposes. Subsequent to the loan closing, Witt’s mother learned of Witt’s action and confronted him. In order to conceal the scheme, Witt falsely represented to his mother that he had cancelled the loan. To convince his mother, Witt created a false letter on fake bank letterhead, forged the signature of a bank officer and created a false "Deed of Release," all of which purportedly released the Deed of Trust on his mother’s home securing the fraudulent t loan.
Additionally, as part of his law practice, Witt would enter into settlement discussions on behalf of one and more of his legal clients. Several times, without the knowledge of many of his clients, Witt settled their legal cases, accepted settlement checks on their behalf and forged their signatures on their settlement checks. Witt deposited the clients’ checks into his law firm bank account and spent those funds on his own personal expenses and business expenses unrelated to those clients without their knowledge. Further, and in order to conceal his scheme, Witt falsely represented to his clients that he had neither settled their cases nor received settlement checks.
Witt also looted a client’s family trust of more than $100,000 over which he had been made Trustee.
During October, 2013, aware of the ongoing federal criminal investigation, Witt fled the United States, traveling to the Philippines, Australia, Jordan, England and Turkey. Due to the efforts of federal and international law enforcement in tracking Witt, on March 7, 2014, Witt was arrested as he arrived at John F. Kennedy International Airport in New York City on an inbound flight from Istanbul, Turkey. Witt planned to spend the weekend in New York City and then return to Istanbul on the return airplane ticket recovered from Witt by federal agents upon Witt’s arrest.
Witt, St. Charles, MO, pled guilty in July to one felony count of bank fraud, one felony count of aggravated identity theft and one felony count of mail fraud. He appeared today for sentencing before United States District Judge E. Richard Webber.
This case was investigated by the Federal Bureau of Investigation. Assistant United States
Attorney Hal Goldsmith handled the case for the U.S. Attorney’s Office.Local Tax Preparer Pleads Guilty to Fraud ChargesRead the Press Release
St. Louis, MO – JENNIFER WALTER pled guilty to multiple charges of making false, fictitious and fraudulent claims to the U.S. Department of the Treasury in connection with the filing of false tax returns and the creating of false W-2 forms.
Walter was employed as a tax return preparer for Liberty for All Tax Service in St. Louis, Missouri. For tax years 2010 through 2012, Walter assisted clients with filing fraudulent tax returns with the Internal Revenue Service. Walter also made false claims for refunds on her taxes for the tax years 2008 through 2010. Walter created false W-2 forms in which she claimed false wages and withholdings for herself and others. The false information reported to the IRS allowed Walter to claim various tax credits for her clients, including child tax credits and the earned income credit, to which her clients otherwise would not have been entitled. Walter’s fraudulent conduct resulted in the payment of approximately $114,457 in refunds by the IRS.
"Refunds are issued to taxpayers who are entitled to them," said Sybil Smith, Special Agent in Charge of IRS-Criminal Investigation. "We will aggressively pursue those who prepare false claims for refunds for the purpose of enriching themselves and stealing from the U.S. Treasury."
Jennifer Walter, St. Louis, MO, pled guilty to five felony counts of making false claims upon a department of the United States, before United States District Judge Henry Autrey. Sentencing has been set for January 12, 2015.Each count of making false claims carries a maximum penalty of five years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by IRS-Criminal Investigation, the Missouri Department of Revenue, Criminal Tax Investigation Bureau and University City Police Department. Assistant United States Attorney Dianna Collins is handling the case for the U.S. Attorney's Office.
Two Local Businessmen Sentenced on Multiple Federal Fraud Charges Involving Elderly Victims in St. LouisRead the Press Release
St. Louis, MO - ROBERT PALMER and MARK DRIVER were sentenced to 70 months and 30 months in prison, respectively, for defrauding numerous elderly victims of approximately $3,000,000, beginning in 2004 and continuing through 2010.
According to court documents, Princeton Partnership, LLC, was an insurance brokerage business involved in the sale of life insurance products. Princeton operated out of offices in the Hill area of St. Louis at 1928 Marconi Street (also known as 5149 Daggett Avenue). Palmer and Driver both ran the day-to-day operations of Princeton, solicited customers, marketed the company's services and had financial oversight of the company with authorization over the company's two operating bank accounts. Palmer and Driver solicited Princeton customers with the false promises that they would invest the customers' funds in suitable investments, including but not limited to, real estate, stocks and life insurance annuities. Examples of those victims include:
During 2004 Palmer solicited several members of a family who had received funds upon the death of their elderly aunt with the false representation that Princeton would place those funds in a real estate investment for the benefit of those customers. Based upon his false representations, the family members transferred some or all of those funds to Princeton.In 2005 Palmer solicited funds from an elderly individual and her family with the false representation that they would place those funds in a real estate investment for her benefit. Based on those representations the family transferred her funds to Princeton.
During 2006 through 2010 Palmer solicited investment funds from two elderly sisters with the false representations that Princeton would make suitable investments with those funds. They transferred their funds and control of their stock holdings to Princeton and, later Palmer and Driver sold and liquidated the stocks. They also persuaded one of the sisters to liquidate a life insurance policy as well and transfer the funds to Princeton.
During 2007 through 2009 Driver solicited investment funds from an elderly woman who transferred her funds, as well as control of her stock holdings, to Princeton.
In 2006, an elderly woman was solicited by Driver to invest her personally held funds in a series of life insurance annuities through Princeton. Princeton used her funds to purchase four (4) life insurance annuities. As a further part of the scheme, during in or about 2008 and 2009, at Driver's direction she liquidated three (3) of her life insurance annuities and provided those funds to Princeton based upon the false representations that the funds would be placed in suitable investments for her benefit.
Most or all of the funds transferred to Palmer, Driver and Princeton by the numerous victims were used by Palmer and Driver for their own personal uses and the general operating expenses of Princeton. Palmer and Driver also engaged in Ponzi-type transactions where they used some funds provided by new customers to pay old customers who falsely believed they were receiving the returns on their purported investments.
In all cases Palmer and Driver obtained approximately $3,000,000 from Princeton customers based upon their false representations, which they used for their own personal use and for the expenses of their company, Princeton.
Palmer, Kansas City, MO; and Driver, St. Louis, MO, pled guilty in June to two felony counts of mail fraud and two felony counts of wire fraud. They appeared today for sentencing before United States District Judge Rodney Sippel.
This case was investigated by the Federal Bureau of Investigation and the Postal Inspection Service, with assistance of the Missouri Secretary of State’s Office. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney's Office.
St. Louis County Man Pleads Guilty to Tax ChargesRead the Press Release
St. Louis, MO – RAJU MUKHI pled guilty to failing to file a report to the IRS on his foreign financial accounts and for filing false tax returns.
United States citizens are required to report income from foreign countries, such as bank accounts, securities and any other financial accounts on their tax returns. If the value is more than $10,000, they are required to file a Report of Foreign Bank and Financial Accounts, Form TD F90-22.1 (FBAR).
According to court documents, Mukhi failed to disclose the existence of Clariden Bank and Goldman, Sachs & Company Bank-Singapore accounts and the income earned in these accounts, to his tax preparers for the years 2006 and 2008. Additionally, Mukhi, failed to file an FBAR disclosing that he had financial accounts in Singapore and Switzerland for years 2007-2010."Every honest American who pays his or her taxes should be offended that a select few use anonymous offshore accounts to avoid paying their fair share," said Sybil A. Smith, Special Agent in Charge, IRS Criminal Investigation. "It is our duty to the American taxpayer to use all lawful means to identify and prosecute those who use offshore accounts to evade their taxes."
Mukhi, St. Louis, MO, pled to one felony count of filing false tax returns and one felony count of failure to file reports of foreign bank and financial accounts. He appeared before United States District Judge Audrey G. Fleissig. Sentencing has been set for January 15, 2015.
Each count of filing false tax returns carries a maximum penalty of three years in prison and/or fines up to $100,000; each of the other counts carry a maximum penalty of five years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Dianna Collins is handling the case for the U.S. Attorney's Office.
Farmington, Missouri Pharmacist Indicted on Federal Fraud ChargesRead the Press Release
St. Louis, MO – PATRICIA HOEHN allegedly wrote prescriptions for hydrocodone for three different people representing that they were prescribed by a licensed medical doctor. She is also charged with attempting to destroy her cellular telephone so that investigators could not find information about her diversion of these controlled substances.
Hoehn, Farmington, MO, was indicted by a federal grand jury on three felony counts of obtaining a controlled substance by forgery, three felony counts of making false statements relating to a health care matter, one felony count of fraud with identification documents and one felony count of attempting to destroy a cellular telephone to impair official proceeding. She is expected to appear in federal court today.
If convicted, these charges carry penalties ranging from 4 to 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Missouri State Highway Patrol, the Drug Enforcement Administration and Health & Human Services Office of Inspector General.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Lincoln County Man Convicted of Tax ChargesRead the Press Release
St. Louis, MO – PETER GIAMBALVO was convicted of obstructing the internal revenue laws and filing false tax returns for the years 2003-2010. The three-day trial was held before United States District Judge Rodney W. Sippel.
According to testimony presented at trial, Giambalvo was an employee of The Boeing Company and had not filed income tax returns for the years 2000-2009. After being contacted by an IRS Revenue Officer in late 2010, Giambalvo agreed to file income tax returns for those years. However, in January 2011, Giambalvo mailed tax returns to the Revenue Officer for years 2000-2010. Each of these returns stated that the amount of wages and other items of income which he received during those years was zero. However, for the years 2003-2010, there was evidence that Giambalvo received wages from The Boeing Company in amounts substantially in excess of the zero amounts reported on the returns. Giambalvo also included a letter to the Revenue Officer which claimed that he was a "nontaxpayer," and was not required to pay taxes because he worked in the private sector and not for the government.
"The law is clear on the issue of taxable income and who is required to file and pay taxes: There is no gray area on the subject," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. "Today’s conviction shows that those who willfully defy the tax laws, regardless of their motivations or convictions, will be held accountable.".
Giambalvo, Hawk Point, MO, was convicted of one felony count of interfering with the administration of the Internal Revenue laws, and eight felony counts of filing false tax returns. Sentencing has been set for January 2, 2015. After the jury verdict, Judge Sippel ordered that Giambalvo be held in custody until sentencing.
Each count carries a maximum penalty of three years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by IRS Criminal Investigation. Assistant United States Attorney Steven Muchnick is handling the case for the U.S. Attorney's Office.
Pine Lawn Mayor Arrested on Charges of ExtortionRead the Press Release
St. Louis, MO – The mayor of Pine Lawn, Missouri, SYLVESTER CALDWELL, has been arrested as a result of an indictment charging him with extortion of cash payments from the owner of a local towing company.
Caldwell, Pine Lawn, was indicted by a federal grand jury on one felony count of interference with commerce by extortion. He was arrested by FBI agents Thursday. He appeared in court late yesterday afternoon and was released on bond. Caldwell is scheduled for arraignment Monday, September 29, at 9:30 a.m.
According to the indictment, Mayor Caldwell exercised authority over which towing companies provided the towing services for the City of Pine Lawn. The indictment alleges that between December 2013 and April 2014, Caldwell extorted cash payments from the owner of one local towing company, referred to in the indictment as "John Doe," in exchange for directing the Pine Lawn Police Department to use Doe’s towing company.
If convicted, this charge carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentence, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Reginald Harris is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Jefferson County Man Indicted on Federal Bank Robbery ChargesRead the Press Release
St. Louis, MO – CHRISTOPHER DAVID HENDRICKS, JR. was indicted for his alleged August 29 robbery of the First State Community Bank in DeSoto, Missouri.
Hendricks, Hillsboro, MO, was indicted by a federal grand jury on one felony count of robbery of a federally-insured institution. He appeared for arraignment in federal court this morning.
If convicted, this charge carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Tom Mehan is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Local Paralegal Sentenced for Federal Fraud and False Statement ChargesRead the Press Release
St. Louis, MO – JILLIAN NICHOLS, a local paralegal, was sentenced to 15 months in prison on charges involving her attempt to defraud a law firm client by falsely representing that the prosecutor on the client’s criminal case had solicited a bribe. Nichols also lied to the FBI during their investigation of her illegal conduct.
According to court documents and statements made in court at the time of her guilty plea hearing, Nichols worked for a local law firm, assisting one of the firm’s attorneys on his legal cases. She had no formal legal training and was paid hourly. While she was working at the firm, she worked on the defense of a state felony criminal case pending in St. Louis County Circuit Court against a firm client. As part of her duties, she worked closely with the client in investigating and helping prepare his defense, often meeting with him, as well as speaking with him on the telephone and texting, outside the presence of the defense attorney. Nichols left the defense attorney’s firm in September 2013. After Nichols left the law firm she continued to meet with the client and discuss his criminal case with him. Between June and December 2013, Nichols engaged in a scheme to defraud the client by falsely telling him that the St. Louis County assistant prosecutor assigned to his case had solicited a bribe of $10,000 in order to give favorable consideration in his pending criminal case. Further, she falsely represented that she had favorable evidence “planted” on the client’s cell phone in order to support his defense. She also falsely represented that she had paid the forensic expert hired by the defense attorney to analyze his cell phone so that the expert would validate and verify the “planted” evidence. On November 15, 2013, in response to Nichols’ false statements about the $10,000, the client agreed to give her an initial $5,000 in cash for her to pay the bribe to the prosecutor, and then an additional $5,000 after the prosecutor gave him favorable consideration in his pending criminal case. In order to conceal the scheme, she told the client not to tell his defense attorney of their discussions about bribing the prosecutor or planting evidence on his cellular phone.During the FBI’s investigation of her fraud scheme, Nichols lied repeatedly to Special Agents about her involvement in the scheme when they interviewed her during December 2013.
Nichols, St. Louis, pled guilty July 1st to one count of wire fraud and one count of making false statements. She appeared today for sentencing before United States District Judge Rodney W. Sippel.
This case was investigated by the Federal Bureau of Investigation-Public Corruption Task Force, including officers of the St. Louis Metropolitan Police Department. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney's Office.
Cape Girardeau Neurosurgeon, Owner of Medical Device Supplier and Their Two Companies Indicted on Federal Anti-Kickback ChargesRead the Press Release
Cape Girardeau, MO –MIDWEST NEUROSURGEONS LLC and its owner, DR. SONJAY FONN, and DS MEDICAL LLC and its owner, DEBORAH SEEGER, were indicted for allegedly violating the Medicare Anti-Kickback Statute by conspiring to solicit and receive commissions from medical device manufacturers related to the purchase of spinal implants and supplies used during spinal fusion surgeries performed by Dr. Fonn.
According to the indictment, Dr. Fonn and his fiancée, Ms. Seeger, both of Cape Girardeau, jointly operated DS Medical LLC to serve as the distributor of medical devices and supplies to Dr. Fonn and his neurosurgery practice, Midwest Neurosurgeons LLC. Through DS Medical, Ms. Seeger and DS Medical demanded and were paid exorbitant commissions by medical device manufacturers for medical devices and supplies purchased by the hospital where Dr. Fonn performed spinal fusion surgeries. The hospital’s purchases were based on Dr. Fonn’s decision to use those devices and supplies during operations he performed. According to the indictment, once DS Medical started operating, Dr. Fonn altered the way he practiced medicine, generally using more spinal implants in each of his surgeries while performing more surgeries than he typically performed before or after DS Medical was operating. In December 2008, the first full month of operation for DS Medical, Dr. Fonn ordered approximately $1,330,090 worth of spinal implants for his surgeries, more than twice as much as his nearest medical peer in the local health care market. The commissions paid to DS Medical and Ms. Seeger by the manufacturers were allegedly used to purchase a house where Dr. Fonn and Seeger resided, a boat, an airplane and various home improvements, which they shared.
Dr. Sonjay J. Fonn, Deborah Seeger, DS Medical, LLC and Midwest Neurosurgeons, LLC were indicted by a federal grand jury today in Cape Girardeau on one felony count of conspiracy to solicit and receive illegal kickbacks and three felony counts of anti-kickback violations.
If convicted, each of the charges against Dr. Fonn and Deborah Seeger carry a maximum penalty of five years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation and the United States Department of Health and Human Services-Office of the Inspector General. Assistant United States Attorney Dorothy McMurtry is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Five People Indicted on Charges Involving Large Drug ConspiracyRead the Press Release
St. Louis, MO – These five men were indicted for their alleged conspiracy and distribution of large quantities of cocaine and methamphetamine in Audrain County. Travis and Cody McDonald are also charged with growing over 100 marijuana plants between September 2007 and the present time and laundering the proceeds of the illegal activity.
The defendants were arrested by agents Monday.
Individuals indicted:
- TRAVIS EUGENE McDONALD, Montgomery City, Missouri,
- CODY WAYNE McDONALD, Vandalia, Missouri,
- WILLIAM RAY LAIRD, Vandalia, Missouri,
- RUSSELL DALE GAY, Columbia, Missouri, and
- JOHN WESLEY HARRISON, Annada, Missouri
If convicted, each count of conspiracy to distribute in excess of 500 grams of cocaine and conspiracy to manufacture in excess of 100 marijuana plants carries a penalty range of 5 to 40 years in prison and or fines up to $5 million. Conspiracy to distribute in excess of 500 grams of methamphetamine carries a penalty range of ten years to life in prison. Money laundering carries a maximum penalty of 20 years in prison and/or fines up to $500,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Drug Enforcement Administration, Internal Revenue Service, the East Central Missouri Drug Task Force, the North Eastern Missouri Drug Task Force, Missouri Highway Patrol, Audrain County, Lincoln County and Warren County Sheriff’s Departments and St. Louis, Troy and Jefferson City, Missouri Police Departments. Assistant United States Attorney John T Davis is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Operator of Local Frison Flea Market Convicted of Federal Fraud ChargesRead the Press Release
St. Louis, MO - JACK FRISON, SR. was convicted of multiple charges relating to his involvement in the sale of counterfeit goods and DVD?s.
According to testimony presented at trial, for more than two decades, Frison owned and operated the Frison Flea Market, in Pagedale, Missouri. Vendors paid Frison a rental fee to rent and operate sales booths at his Flea Market. For more than ten years, many of Frison’s vendors openly sold counterfeit goods from their booths at the Market. The counterfeit goods included clothing, footwear, purses, accessories, movie DVDs and music CDs. Some of the vendors sold counterfeit purses and similar luxury items bearing marks owned by Coach, Louis Vuitton, Dolce & Gabbana and others. Frison knew that the goods were counterfeit and allowed vendors to continue selling such goods. Rather than removing vendors selling illegal goods, Frison fined them instead, adding to his income.
Frison, Frontenac, Missouri, was convicted of one felony count of conspiracy to traffic in counterfeit goods, one felony count of aiding and abetting copyright infringement and one felony count of aiding and abetting trafficking counterfeit goods. The two-day trial was held in June before United States District Judge Rodney Sippel. He returned his ruling today and set sentencing for January 2015.
The conspiracy and copyright infringement charges each carry a maximum penalty of five years in prison and/or fines up to $250,000 and trafficking in counterfeit goods carries a maximum of 10 years in prison and/or fines up to $2,000,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Federal Bureau of Investigation, the St. Louis Metropolitan Police Department and the St. Louis County Police Department. Assistant United States Attorneys John Bodenausen and Jennifer Roy are handling the case for the U.S. Attorney's Office.
Pennsylvania Woman Pleads Guilty to Conspiring to Make False Statements and Defraud the GovernmentRead the Press Release
St. Louis, MO – REGINA DANKO, of Ivyland, Pennsylvania, pleaded guilty to participating in a conspiracy to defraud the United States in federal court this morning. Danko, the principal shareholder of Tri-Ark Industries, Inc., a government contracting firm located in the Philadelphia area, admitted to conspiring to make false statements and defraud the government in connection with a five-year contract to provide janitorial services at the Robert A. Young, Jr. federal building in downtown St. Louis.
According to the plea agreement, Danko conspired with others to provide a false joint venture agreement and other false representations to government contracting officials that the firm bidding on the company was owned in the majority and controlled by a service disabled veteran to comply with rules for government contracts set aside for firms owned by such veterans. Danko admitted that the veteran with whom she partnered was merely a straw person and, contrary to her representations to the government, had no duties with the contract and accepted only small annual payment so that his name and status could be used. Danko also admitted the project manager at the Robert A. Young, Jr. building and another employee of Tri-Ark participated in the scheme. From 2007 to 2012, Tri-Ark collected more than $8.7 million dollars under this contract and almost all of the profits earned on the contract were retained by Tri-Ark to the benefit of Danko.
Danko pleaded guilty to one count of conspiracy to commit an offense against the United States in violation of Title 18, United States Code, Section 371. At sentencing, which was set for December 11, 2014, she faces up to five years imprisonment, a fine of up to $250,000 or both. In addition to these penalties, Danko agreed to the criminal forfeiture of more than $2.4 million dollars, which was seized by investigators. Danko has also acquiesced to the non-renewal of a successor contract she held at the Robert A. Young, Jr. building with an unrelated service-disabled veteran.
The case was investigated by the General Services Administration-Office of the Inspector General, the U.S. Department of Veterans Affairs-Office of the Inspector General and the St. Louis Division of the FBI. Assistant U.S. Attorney Tom Albus is handling the case for the U.S. Attorney’s Office for the Eastern District of Missouri.
Office Manager of Moberly, Missouri Funeral Home Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – BEVERLY SUSAN RENE SMITH was sentenced to six months of home confinement and five years of probation on charges involving her theft of approximately $176,000 from Million-Taylor Funeral Home. These funds were intended to cover customer’s funeral expenses. She was also ordered to pay restitution of $175,705.
According to court documents, Smith was hired by the original owner of the Million-Taylor Funeral Home (MTFH) in Moberly. James Taylor, Sr. hired Smith in 2001 as the office manager, a job she held from 2001 to June 2012. Her position included payroll expenses and expenses to vendors for the costs of funerals. She also received payment for funerals, which she recorded in a financial ledger. Additionally, she was required to report all of MTHF’s financial transactions to their accounting firm, Federated Funeral Directors of America (Federated). Smith also had access to MTHF’s banking, general fund and escrow accounts.
To pay for funeral expenses of a client, MTHF first used money from its general operating fund to cover these expenses. Then Smith was supposed to recoup payment for the funeral expenses from the representatives or family members of the deceased, from the life insurance of the deceased and/or from pre-needs insurance accounts of the deceased. When the payments were received, Smith was to deposit them back into the general fund. If she was not able to recoup full payment for funeral expenses of a client, she reported this information to Federated and informed them that the account was a bad account and that they should write it off as no further effort would be made to recoup payment for these expenses. This way she was able to conceal that she had stolen some client payments made for funeral expenses, which she deposited into the escrow account.
While James Taylor, Sr. operated MTHF, he allowed customers to pay money for their expected funeral expenses before they died. MTHF deposited this money into MTHF’s escrow account. He and Smith were the only employees who had access to the escrow account. After James Taylor, Sr. died in 2006, Smith concealed the existence of the escrow account from other MTHF employees. On several occasions Smith took the payments that were sent to MTHF for funerals, and instead of depositing them into the general fund, she deposited the funds into the escrow account. Smith was able to withdraw funds from the escrow account undetected to use for her personal use, including the purchase of clothing and jewelry. She hid the withdrawals by manipulating the financial records of MTHF.
Smith, Higbee, MO, pled guilty in May to one felony count of wire fraud, and appeared in St. Louis today for sentencing before United States District Judge Rodney Sippel.
The case was investigated by the Federal Bureau of Investigation and the Missouri State Highway Patrol. Assistant United States Attorney Anthony Franks handled the case for the U.S. Attorney’s Office.Manager of Local Housing Complex & Two Associates Plead Guilty to Identity Theft ChargesRead the Press Release
St. Louis, MO – MARSHA HARRINGTON,CALVIN SHAW and LARRY CORNER, all of the St. Louis area, have entered guilty pleas to one felony count of conspiracy to commit identity theft and one felony count of identity theft. Corner appeared in court Tuesday afternoon, Harrington and Shaw entered their pleas in July. All defendants appeared before United States District Judge Catherine D. Perry. Sentencing for Corner has been set for November 12, 2014. Harrington and Shaw will be sentenced in October.
According to court documents, Marsha Harrington used her employment as manager of the Clinton-Peabody Housing Complex to acquire social security numbers and other personal information from tenants, and used this information to file false tax returns. Co-defendants Calvin Shaw and Larry Corner also provided identity information to Harrington. After Harrington filed the false tax returns, she kept the tax refund. If the tax return used a stolen name and social security number provided by Shaw and/or Corner, she shared those funds with them respectively.
"Misusing her position of trust as Manager of the Clinton-Peabody Housing Complex, Ms. Harrington stole the identities of people and filed false tax returns in their names," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. "Let me be clear that we will continue to pursue the criminals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes."
Conspiracy to commit identity theft carries a maximum penalty of five years in prison and/or fines up to $250,000 and identity theft carries a maximum of 15 years in prison and or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by IRS Criminal Investigation. Assistant United States Attorney Stephen Casey is handling the case for the U.S. Attorney's Office.
CEO of Local Nurse Care Provider Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – SUSAN WINEBARGER was sentenced to thirty-eight (38) months imprisonment for embezzling more than $600,000 from company accounts and falsifying documents to conceal the embezzlement. Winebarger was also ordered to pay restitution of $699,897 to the company.
According to court documents, Winebarger was Chief Financial Officer, then Chief Executive Officer of VNA-TIP of Bridgeton, Missouri. VNA-TIP provides visiting nurse care, hospice care and related patient care service in Missouri and Illinois. In this capacity, she ran the day-to-day business and financial operations of VNA-TIP, including reconciling bank statements and having full access to bank checks for the company’s operating and payroll accounts. Winebarger also directly coordinated payments to the outside Administrator for VNA-TIP’s employee 401(k) plan. Between January 2008 and December 2013, Winebarger embezzled approximately $600,000 from VNA-TIP accounts. Without company authority, Winebarger issued more than two hundred (200) checks to herself from both the operating account and its payroll account and deposited those checks into her personal bank accounts. She also used the company debit card to purchase personal items. In order to conceal her scheme, she made sure she received all the bank account statements, which she altered for submission to VNA-TIP auditors. She also falsified internal financial reports, including monthly profit and loss statements submitted to the shareholders and board members. Winebarger failed to remit moneys withheld from VNA-TIP employees’ paychecks for their individual 401 (k) retirement accounts to the plan administrator so that the cash reserves would be falsely inflated in order that VNA-TIP shareholders, board members and auditors would not be aware of the true financial status of the company and potentially discover her theft and embezzlement. She also failed to remit state and federal withholding taxes, social security and Medicare funds.
Winebarger, Highland, IL, pled guilty to two felony counts of wire fraud in May. She appeared today for sentencing before United States District Judge John A. Ross.This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney's Office.
St. Charles Woman Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – DANIELA SPIRIDON was sentenced to 78 months in prison involving a real estate scheme related to the purchase or sale of properties. In addition to the prison sentence, she was also ordered to pay $2,499,988 restitution and a fine of $5,000.
According to court documents, Spiridon was affiliated with several businesses from an office in Chesterfield, Missouri, which included A & AD Investments, LLC; CDRS ESC Investments; Sentrix Loan Production Office and others. As part of the scheme, Spiridon fraudulently offered to assist buyers in the purchases of properties that were acquired by lenders through foreclosure and held in inventory, known as Real Estate Owned (REO) properties. She offered to broker purchases or arrange for financing related to the purchase or sale of the REO properties. She had potential buyers place deposits on the properties, which she was to put into an escrow account, but she actually put the monies in a non-escrow account in one of her own companies. She often used buyers’ funds for personal expenses and to reimburse other buyers who demanded their funds be returned rather than to secure real property or financing.Spiridon, St. Charles, MO, pled guilty last September to six felony counts of wire fraud. She appeared today for sentencing before United States District Judge John A. Ross.
This case was investigated by the Federal Bureau of Investigation, Postal Inspection Service and Federal Housing Finance Agency-Office of Inspector General. Assistant United States Attorney Rob Livergood is handling the case for the U.S. Attorney's Office.Area Investment Advisor Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – BRYAN BINKHOLDER was indicted on multiple fraud charges involving his financial planning and investment strategy businesses.
According to the indictment, Binkholder labeled himself "The Financial Coach" and provided investment and financial planning advice to the general public through his affiliated websites, YouTube channel, published books and articles and an investment related talk-radio show that aired on local radio stations. In 2008, he developed a real estate investment he termed "hard money lending." Using his platform as an investment advisor and financial talk show host, Binkholder solicited his clients and others to invest in the hard money lending program. As part of his sales pitch he represented that he had relationships with developers in the real estate community who wanted to purchase, renovate and sell residential real estate in the St. Louis area, but were not able to secure financing from traditional banks. As part of the hard money lending program, Binkholder told investors that they would invest money with him, and he would act as a bank and provide short-term loans to these developers at a high rate of interest, which would be shared with the investor. Instead of exclusively making hard money loans as promised, he commingled the vast majority of investor money across a number of different accounts. Binkholder then allegedly used the commingled funds to pay interest to subsequent investors and pay personal expenses. The indictment states that Binkholder took in millions of dollars of investor money, made only a small number of hard money loans and caused investors to lose more than $3,000,000.
Binkholder, Wentzville, MO, was indicted by a federal grand jury on four felony counts of wire fraud and one felony count of bank fraud. He is expected to appear in federal court today.
Additionally, upon a finding of guilt, the defendant will be subject to a forfeiture allegation, which will require the forfeiture to the government all monies and property derived from the illegal activity.
If convicted, each of these charges carries a maximum penalty of 30 years in prison and/or fines up to $1 million. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation and the Postal Inspection Service. Assistant United States Attorney Stephen Casey is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Joint Statement of United States Attorney Richard G. Callahan, Acting Assistant Attorney General for the Civil Rights Division Molly J. Moran and FBI SAC William P. WoodsRead the Press Release
At the request of local authorities and at the direction of Attorney General Eric H. Holder, Jr., our respective offices have opened a civil rights investigation into the shooting death of Michael Brown that occurred in Ferguson, Missouri, this past Saturday. In conducting the independent federal investigation into whether there were federal civil rights violations, we will be working as much as possible with the local authorities who are determining whether there were any state law violations. While the investigation will be handled as expeditiously as possible, our pledge to the community is that it will be a thorough and complete investigation, following the facts wherever they may take us.
We urge witnesses or individuals with any information related to the incident who have not yet come forward to contact the local FBI office. The FBI office in St. Louis can be reached at (314) 589-2500.
Turkish Man Pleads Guilty to Smuggling Adulterated Cancer DrugsRead the Press Release
St. Louis, MO – SABAHADDIN AKMAN, the owner and manager of a Turkish drug wholesaler, pled guilty today to smuggling misbranded and adulterated cancer treatment drugs into the United States, including multiple shipments of Altuzan® (the Turkish version of Avastin®) sent from Turkey to Chesterfield, Missouri.
Akman entered his plea before United States District Judge Audrey G. Fleissig in St. Louis, MO. He now faces a penalty range of up to twenty years in prison. In his plea agreement, Akman agreed to pay a fine of $150,000 if imposed by the Court, plus a $150,000 forfeiture payment to the United States. Sentencing has been set for November 18, 2014.
According to Akman’s plea agreement, Akman, through his company and employees, used shipping labels that concealed the illegal nature of the prescription drug shipments, including customs declarations falsely describing the contents as "gifts" with no or low declared monetary values. Some cancer chemotherapy prescription drugs sent by defendant to the United States from Turkey had different lot numbers on the exterior packaging of the drugs than the lot numbers found on the actual vials of the drug inside the packages. Additionally, Akman shipped some prescription drugs that needed constant cold temperatures to maintain their stability and effectiveness in shipping boxes without insulation or any temperature protection whatsoever.
Further, Akman admitted in his plea agreement that his company and employees sold Altuzan® to Richard Taylor, a United Kingdom drug wholesaler. The U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigations (FDA-OCI) previously seized Altuzan® from various physician/customers of Taylor in 2012, and ultimately determined that this Altuzan® from Taylor and Semizoglu actually contained mold and water, with no active drug ingredient in the drug vials. FDA issued several public safety alerts about these events. FDA-OCI’s ongoing investigation has led to a number of related prosecutions in this District, including Dr. Abid Nisar, Sandra Behe, James Newcomb, Richard Taylor, Dr. Erick Falconer, Greg Martin, Kamaldeep Sandhu and Navdeep Sandhu.
"Of all U.S. consumers, those with cancer are among the most vulnerable and most in need of proven effective treatments. To prey on that vulnerability is to exploit the health of those individuals and of the public at large," said Philip J. Walsky, acting director, FDA Office of Criminal Investigations. "OCI commends its colleagues - international, national, state and local - for their collaborate efforts in bringing this criminal to justice."This case was investigated by FDA’s Office of Criminal Investigations, with assistance from the United States Marshal’s Service, Rosa Emilia Rodríguez-Vélez , the United States Attorney for the District of Puerto Rico, the Office of Inspector General for the U.S. Department of Health and Human Services, the Johnson County, Kansas Sheriff’s Office Criminalistics Laboratory, Europol, the Bonn prosecutor in Germany (Staatsanwaltschaft); the Federal Criminal Police of Germany (Bundeskriminalamt, BKA); the Dusseldorf Police, the German State Criminal Police (Landeskriminalamt, LKA), the U.S. Department of State’s Diplomatic Security Service, the U.S. Consulate General’s Overseas Criminal Investigations Branch in Istanbul, Turkey and the Drug Enforcement Administration, Istanbul Resident Office.
Owner of Local Payroll Services Company Pleads Guilty to Fraud and Money Laundering ChargesRead the Press Release
St. Louis, MO – BRADLEY FERGUSON, owner of Fenton-based Paymaster Business Solutions, Inc., pled guilty to mail fraud and money laundering charges involving his failure to remit federal, state and local taxes to the proper taxing authorities that had been deducted from victim client bank accounts. Ferguson also failed to remit FICA withholding to the IRS on behalf of his business clients. Ferguson’s clients included churches, youth organizations, child daycare facilities, law firms and other businesses throughout the St. Louis area.
According to court documents, from January 2005 through January 2014, Ferguson drafted funds directly from Paymaster business clients’ bank accounts in order to pay their federal, state and local tax liabilities. However, Paymaster, at Ferguson’s direction, failed to forward the Paymaster business clients’ funds to the taxing authorities in order to pay their tax liabilities then due and owing. Paymaster drafted in excess of $2,700,000 from Paymaster business clients’ bank accounts to pay client’s federal, state and local tax liabilities, as well as FICA liabilities, for the period July 2013 through December 2013, but were not forwarded to the proper taxing authorities. Additionally, Ferguson,as Power of Attorney for Paymaster business clients, was contacted directly by the IRS and questioned as to the failure of the payments of client federal tax liabilities. Fergusondid not tell his clients about the IRS inquiries. When clients occasionally learned that Paymaster had not forwarded their funds to the taxing authorities, Ferguson lied to them and told them Paymaster had made the payments. In December 2013, Ferguson retained the services of a commercial shredding company and directed that the Paymaster business client records be shredded and removed from the Paymaster offices.
Ferguson, Washington, MO, pled guilty to one felony count of mail fraud and one felony count of money laundering before United States District Judge E. Richard Webber. Sentencing has been set for November 6, 2014.
Additionally, Ferguson is subject to a forfeiture allegation, which will require the forfeiture to the government of all money derived from the illegal activity.
Mail fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000; money laundering carries a maximum of 5 years. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation, Postal Inspection Service and Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney's Office.
Chicago Area Man Sentenced for Sex Trafficking of MinorsRead the Press Release
St. Louis, MO – REGINALD WILLIAMS was sentenced to 240 months on multiple charges involving the interstate transportation of two minors with the intent to engage in prostitution.
According to testimony presented at trial, on September 12, 2012, Collinsville, Illinois police received a report regarding a missing 16-year-old girl who was being forced to work as a prostitute by one or several adult males. The person reporting the information was familiar with online postings on the website, www.backpage.com, in which photographs of the girl were used to offer her services for commercial sex. The telephone number associated with the advertisement was recognized to be used by "Reggie," who was later identified as defendant Reginald Williams. Detectives reviewed the on-line advertisement, which contained sexually suggestive language and listed the poster’s age to be 20 years old. However, Illinois police were able to confirm that the girl was born in 1996.
Investigators also learned that a second minor female was believed to be in the 16-year-old’s company at a hotel in St. Louis County. Detectives from Illinois then contacted the St. Louis FBI and the St. Louis County Police Department.
On September 13, 2012, an undercover detective called the phone number listed in the online advertisement to set up a paid sex "date" with the two girls. When officers arrived at the hotel, they observed a person later identified as defendant Reginald Williams exit the same hotel room where the two minor females were eventually found. Williams was arrested on the parking lot. When officers went to the room they found both girls, ages 16 and 17. Thereafter, officers determined that Williams transported the 16-year-old girl to the St. Louis area and Chicago with the intent she engage in prostitution. Officers also determined that Williams had attempted to recruit the 17-year-old girl and posted her on www.backpage.com, in which photographs of the girl were used to offer her services for commercial sex as well.
Williams, from the Chicago, Illinois area, was convicted in March of one felony count each of interstate transportation of a minor with the intent to engage in prostitution, sex trafficking a minor, attempted sex trafficking of a minor, possession of a firearm in furtherance of a crime of violence, and use of interstate facilities to promote prostitution. He appeared today for sentencing before United States District Judge Jean C. Hamilton.
In addition to the Collinsville, Illinois and St. Louis County police departments, this case was also investigated by the Federal Bureau of Investigation.
Jefferson County Man Sentenced to Lengthy Prison Term on Multiple Child Pornography ChargesRead the Press Release
St. Louis, MO – JODY EUGENE SMITH, Pevely, Missouri, was sentenced to 720 months in prison on multiple child pornography charges, including production, attempted production, receipt and transportation. Smith pled guilty to the charges in April and appeared today for sentencing before United States District Judge Henry Autrey.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Florida Department of Law Enforcement and the St. Louis County Police Department. Assistant United States Attorney Rob Livergood handled the case for the U.S. Attorney's Office.
Hillsdale Police Lieutenant and Officer Plead Guilty to Federal Drug ChargesRead the Press Release
St. Louis, MO – LIEUTENANT PARRISH SWANSON and OFFICER RAYMOND STEPHENS pled guilty to charges of conspiracy to distribute and attempted distribution of heroin.
According to court documents, during March 2014, Swanson and Stephens agreed to assist an associate, a suspected drug dealer, rob or what is more commonly referred to as "rip off," a drug courier of an amount of heroin within the City of Hillsdale. The associate agreed to pay Swanson and Stephens cash for their assistance in this "rip off." On March 20, 2014, Stephens, while on duty as a Hillsdale police officer, approached the drug courier and robbed him of approximately four ounces of suspected heroin. He later met with the associate and gave him the heroin in exchange for $900 cash. Stephens then gave Swanson $200 of the $900 per their previous agreement.
Swanson, St. Louis, Missouri; and Stevens, St. Charles, Missouri, pled guilty to one felony count each of conspiracy to distribute heroin and attempt to distribute heroin before United States District Judge Rodney W. Sippel. Sentencing for both defendants has been set for October 2014.
Each count carries a maximum penalty of 20 years in prison and/or fines up to $1 million. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation and the St. Louis County Police Department. Assistant United States Attorneys Hal Goldsmith and John Bodenhausen are handling the case for the U.S. Attorney's Office.
Wentzville Woman Pleads Guilty to Theft of Government FundsRead the Press Release
St. Louis, MO – VICTORIA JEAN BRILEY, of Wentzville, admitted to collecting $138,000 in veteran’s benefits in the name of her deceased mother.
According to the plea agreement, after her mother’s death in 2006, Briley maintained control over a bank account in her mother’s name which received the monthly payments from the U.S. Department of Veterans Affairs. When confronted by investigators, Briley admitted she had been concealing her mother’s death from the government and improperly receiving the benefits for years.
Briley pled guilty to one count of theft of government funds before United States District Judge Audrey G. Fleissig. Sentencing has been set for November 4, 2014.
The maximum term of imprisonment for theft of government funds is 10 years and/or a fine of $250,000. Restitution to the government is also mandatory. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case was investigated by the U.S. Department of Veterans Affairs-Office of Inspector General. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
Local In-Home Healthcare Provider Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – TINA KUEHL was sentenced to 51 months in prison on multiple healthcare fraud charges and separate unrelated bank fraud charges and ordered to pay $200,000 restitution. Her company, Better Way Home Care, was sentenced to three years of probation and also ordered to pay $200,000 restitution. Kuehl and Better Way represented on billing work sheets and claim forms that patients had received therapy services when they knew that the patients had not received the therapy. Kuehl and Better Way caused the submission of hundreds of reimbursement claims to Medicare for services which they knew had not been provided.
According to court documents regarding the bank fraud charges, in December 2010, Kuehl’s mother obtained a $305,000 property loan from the Community Bank of Owensville, MO, a branch of the Maries County Bank. Both Kuehl and her mother are listed on the deed of trust for the property. On many occasions, they did not make timely payments on the loan, and in July 2013, Maries Bank foreclosed on the property. After the foreclosure, Kuehl devised a scheme to defraud Maries Bank by submitting fraudulent checks as proof that she had made loan payments to the bank. On six occasions, she changed the payee on copies of unrelated cancelled checks so that it would appear that she had made loan payments to Community Bank of Owensville. She continued the fraud by claiming to have made cash payments to a bank employee on two occasions. The bank employee was on sick leave on the day Kuehl claimed she made the first $4,000 cash payment to the employee at the bank. Kuehl claimed that she made a second cash payment of $6,900 to a bank employee at a truck stop. Finally, Kuehl retained attorneys to represent her after the foreclosure, and falsely told them she had made payments by checks and cash, which the bank had not credited to her loan account.According to court documents regarding the healthcare fraud charges, Better Way was a home health care agency located in Ellisville, Missouri. Tina Kuehl was the owner, president, and administrator of Better Way and was responsible for the day-to-day operations. Medicare pays home health agencies for 60-day episodes of care. Medicare makes two payments to the home health care agencies, the first before the service is provided based on the patient’s anticipated need for services and a second payment at the end of the 60-day episode of care based on the actual number of services provided.
Kuehl has no medical or health care education, training or experience, which would qualify her to assess or evaluate patients or determine their care needs. Prior to opening Better Way, she worked in the cosmetology field. Better Way hired nurses and contracted with therapists to assess and evaluate patients and to determine the patients’ needs for therapy services. Better Way staff recorded this information on the Outcome and Assessment Information Set form (OASIS).To increase the reimbursement that Better Way would receive, Kuehl directed Better Way nurses and other employees to make false statements on the OASIS forms and the reimbursement claim forms. At Kuehl’s direction, the staff increased the number of therapy visits, although Kuehl knew the patients did not need and had not received the therapy; falsified the diagnosis codes; and exaggerated the patients’ conditions and the reasons the patients were receiving home health care services from Better Way. When some employees refused to increase the number of therapy visits, Kuehl personally increased the number of visits. In some instances the patient had received no therapy at all.
Kuehl, Ballwin, MO, pled guilty May 1st to one felony count of bank fraud, one felony count of healthcare fraud, two counts of making false statements relating to healthcare and one count of making false statements to federal agents. She appeared today for sentencing before United States District Judge Henry Autrey.This case was investigated by the Office of the Inspector General of the U.S. Department of Health and Human Services and the FBI. Assistant United States Attorney Dorothy McMurtry handled the case for the U.S. Attorney's Office.
Boeing Subcontractor Pleads Guilty to Federal Fraud ChargesRead the Press Release
St. Louis, MO – JEFFREY LAVELLE, owner and operator of J. L. Manufacturing pled guilty to multiple counts of mail and wire fraud in connection with a bribery/kickback scheme involving Boeing military aircraft parts.
Boeing Company Defense Space and Security Division is a defense contractor providing military-style aircraft to the United States Department of Defense and the United States armed services with offices and procurement operations located in St. Louis. Deon Anderson was a Procurement Officer for Boeing, residing in the St. Louis area.
J. L. Manufacturing of Everett, Washington, is an aerospace job machine shop specializing in hard metals, with the capability of producing small to medium-sized complex parts of ferrous and non-ferrous materials, and was a sub-contractor to Boeing on numerous United States government contracts. Jeffrey Lavelle, owner and operator of J. L. Manufacturing, directed the day-to-day operations of the company, and oversaw all financial aspects of the company.Inland Empire and Associates, Inc., Las Vegas, Nevada, is engaged in consulting to defense aircraft manufacturers and parts suppliers, including consulting for J. L. Manufacturing. Robert Diaz, Jr. was the owner and operator of Inland Empire, and personally consulted to J. L. Manufacturing and Jeffrey Lavelle relative to numerous Boeing sub-contracts.
Globe Dynamics International, Inc., Santa Ana, California is a leader in producing small to large, close tolerance precision machined parts and the assembly of complex components. Globe Dynamics was a sub-contractor to Boeing on numerous United States government contracts. William Boozer, owner and operator of Globe Dynamics, directed the day-to-day operations of the company, including the submission of contract bids.
Beginning in May 2011 and continuing through April 2013, Deon Anderson provided J.L. Manufacturing, through Lavelle and Diaz, non-public competitor bid information and historical price information in connection with one and more Boeing military aircraft part purchase order requests for quotes. Lavelle used that information in preparing and submitting bids on behalf of J.L. Manufacturing to Boeing for approximately nine different Boeing requests for quotes relative to those various purchase orders. Of those nine, J.L. Manufacturing was awarded seven purchase orders to supply United States military aircraft parts to Boeing totaling in excess of approximately $2,052,746. In exchange for that information, they made cash payments to Anderson in St. Louis and in California.
Jeffrey Lavelle, Mukilteo, WA, pled guilty to one count of mail fraud and two counts of wire fraud before United States District Judge Henry Autrey, in St. Louis. Sentencing has been set for October 27, 2014.
Co-defendants Deon Anderson, St. Louis; William P. Boozer, Hacienda Heights, CA; and Robert Diaz, Jr., Alta Loma, CA, previously pled guilty to related charges and are scheduled for sentencing October 15, 2014, August 15, 2014, and September 2, 2014, respectively.
Each count of mail and wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by Defense Criminal Investigative Service, Federal Bureau of Investigation, NASA-Office of Inspector General, Air Force Office of Special Investigations, Navy Criminal Investigative Service, and Internal Revenue Service-Criminal Investigations. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.
Local Attorney Pleads Guilty to Multiple Federal Fraud ChargesRead the Press Release
St. Louis, MO – St. Charles County attorney JEFFREY WITT pled guilty to three (3) federal felony charges: falsifying documents to obtain a bank loan secured by a St. Louis County home, which did not actually belong to him; using an associate to impersonate the true home owner at the bank loan closing; and cashing legal client settlement checks without their knowledge.
According to court documents and statements made in court, during September 2013, Witt submitted a loan application in the name of an individual identified in documents as PW, in order to obtain a $100,000 line of credit secured by the PW’s St. Louis area residence. PW, the individual home owner was unaware of Witt’s loan application. Witt provided a female associate with false documentation and identification in PW’s name so the associate could impersonate PW during the loan closing at the bank. Together they were able to obtain the $100,000 bank loan credit line. Witt immediately drew out $60,000 from the credit line, which he deposited into his law firm bank account and then withdrew for personal purposes. Subsequent to the loan closing, PW learned of Witt’s action and confronted him. In order to conceal the scheme, Witt falsely represented to PW that he had cancelled the loan. To convince PW, Witt created a false letter on fake bank letterhead, forged the signature of a bank officer and created a false “Deed of Release,” all of which purportedly released the Deed of Trust on PW’s home securing the fraudulent t loan.
Additionally, as part of his law practice, Witt would enter into settlement discussions on behalf of one and more of his legal clients. Several times, without the knowledge of his clients, Witt settled their legal cases, accepted settlement checks on their behalf and forged their signatures on their settlement checks. He admitted with his plea that he deposited the checks into his law firm bank account and spent those funds on his own personal expenses and business expenses unrelated to those clients without their knowledge. Further, and in order to conceal his scheme, Witt falsely represented to his clients that he had not settled their cases or received settlement checks.
Witt was arrested on the charges by FBI Special Agents on March 7, 2014, as he arrived in New York City from Turkey.
Witt, St. Charles, MO, pled guilty to one felony count of bank fraud, one felony count of aggravated identity theft and one felony count of mail fraud before United States District Judge E. Richard Webber. Sentencing has been set for October 16, 2014.
Bank fraud carries a maximum penalty of 30 years in prison and/or fines up to $1 million, mail fraud carries a maximum of 20 years in prison and/or fines up to $250,000 and aggravated identity theft carries a mandatory 2-year term of imprisonment consecutive to any term of imprisonment on the fraud charges and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.
St. Louis Area Man Pleads Guilty to Fraud ChargesRead the Press Release
St. Louis, MO – RONALD L. ROBERTS pled guilty today to charges of mail and wire fraud in connection with his obtaining more than a million dollars from lenders in what he now admits was a loan fraud scheme.
According to court documents, Roberts solicited personal loans for a fictitious real estate transaction involving property in or around Poplar Bluff, Missouri, which Roberts claimed he owned and planned to sell to Wal-Mart. In some instances, Roberts claimed that the funds were needed to buy out the interests of family members, including his half-brother, who had purportedly asserted claims against the property; in others, he claimed that it was necessary to extinguish liens or perform environmental remediation; in yet others, he claimed that one or more parties associated with the transaction were demanding additional sums to close the transaction.
Roberts usually promised lenders either that their money would be returned in a matter of days or weeks at most, usually with considerable interest, or that they would receive a portion of the profits that Roberts expected to generate from the fictitious transaction. The rate of return promised by Roberts varied from 0% to at least as much as 180%, with terms varying between a couple of weeks and a few hours.
In truth, Roberts owned a piece of property, constituting less than ten (10) acres in size, in Neelyville, Missouri, more than ten (10) miles outside of Poplar Bluff, Missouri. At the time of Roberts’s representations, the property had a market value of less than $30,000 and was encumbered by a judgment against Roberts in excess of $13 million, making the property worthless to Roberts. During the scheme, Wal-Mart had not made any offer to purchase that property, nor did it have any present plans to develop additional land in or near Poplar Bluff, where there is already an existing Wal-Mart store. Instead, Roberts employed funds given to him by lenders for his own personal use.
Roberts, of Town and Country, MO, pled guilty to three felony counts of wire fraud and one felony count of mail fraud. He appeared before United States District Judge E. Richard Webber, in St. Louis. Sentencing has been set for October 16, 2014.
Each count of mail and wire fraud carries a maximum penalty of 20 years in prison and/or fines of up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case is being investigated by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. Assistant United States Attorney Richard E. Finneran is handling the case for the U.S. Attorney’s Office.
Turkish Man Pleads Guilty to Smuggling Counterfeit Cancer DrugsRead the Press Release
St. Louis, MO – OZKAN SEMIZOGLU, the “Foreign Trade Director” of a Turkish drug wholesaler, pled guilty today to smuggling counterfeit, misbranded and adulterated cancer treatment drugs into the United States, including multiple shipments of Altuzan® (the Turkish version of Avastin®) sent from Turkey to Chesterfield, Missouri. Sentencing is set for October 28, 2014.
According to Semizoglu’s plea agreement, Semizoglu used shipping labels that concealed the illegal nature of the prescription drug shipments, including customs declarations falsely describing the contents as "gifts" or "documents" or “product sample” with no or low declared monetary values. Semizoglu also ensured that large drug shipments were broken into several smaller packages to reduce the likelihood of seizures by U.S. Customs authorities and the corresponding loss of expensive drug shipments. Additionally, Semizoglu shipped some prescription drugs that needed constant cold temperatures to maintain their stability and effectiveness in shipping boxes without insulation or any temperature protection whatsoever. Given the length of time required to ship products from Turkey to Missouri, Semizoglu was aware that on many occasions the packages arrived in the United States at temperatures outside the constant cold temperature range discussed on the drugs’ labeling.
Further, Semizoglu admitted in his plea agreement to selling Altuzan® to Richard Taylor, a United Kingdom drug wholesaler. The U.S. Food and Drug Administration’s (“FDA”) Office of Criminal Investigations (“FDA-OCI”) previously seized Altuzan® from various physician/customers of Taylor in 2012, and ultimately determined that this Altuzan® from Taylor and Semizoglu was counterfeit, with no active drug ingredient in the drug vials. FDA issued several public safety alerts about these events. FDA-OCI’s ongoing investigation has led to a number of related prosecutions in this District, including Dr. Abid Nisar, Sandra Behe, James Newcomb, Richard Taylor, Dr. Erick Falconer, Greg Martin, Kamaldeep Sandhu and Navdeep Sandhu.
“Today’s guilty plea marks a significant step in national and international cooperation,” said Philip J. Walsky, acting director, FDA Office of Criminal Investigations. “Federal, state and local officials in the U.S. and Germany and at Europol worked together in partnership to help protect the public’s health and remove a potentially unsafe medication from the U.S. marketplace.”
This case was investigated by FDA’s Office of Criminal Investigations, with assistance from the United States Marshal’s Service; Rosa Emilia Rodríguez-Vélez , the United States Attorney for the District of Puerto Rico; the Office of Inspector General for the U.S. Department of Health and Human Services; the Johnson County, Kansas Sheriff’s Office Criminalistics Laboratory; Europol, the Bonn prosecutor in Germany (Staatsanwaltschaft); the Federal Criminal Police of Germany (Bundeskriminalamt, BKA); the Dusseldorf Police; the German State Criminal Police (Landeskriminalamt, LKA); the U.S. Department of State’s Diplomatic Security Service; the U.S. Consulate General’s Overseas Criminal Investigations Branch in Istanbul, Turkey and the Drug Enforcement Administration.
Statement from U.S. Attorney Callahan Regarding the Filing of A Motion to Intervene on Behalf of the FBI in the ACLU LawsuitRead the Press Release
St. Louis, MO – United States Attorney Richard G. Callahan today announced that the U.S. Attorney’s Office has filed a Motion to Intervene on behalf of the FBI in the ACLU lawsuit seeking the release of FBI reports in possession of St. Louis County under the Missouri Sunshine law. Callahan explained that the objective of the Motion is not necessarily to prevent the disclosure of any specific reports, but rather to preserve the principle that any public release of FBI reports must be pursuant to and governed by federal law, not state law.
Brookfield Man Sentenced on Federal Child Pornography ChargesRead the Press Release
St. Louis, MO – MARK JACKSON, Brookfield, MO, was sentenced to 63 months in prison for his possession of child pornography between January 2008 and November 2011.
He pled guilty in March to one felony count of possession of child pornography. He appeared today for sentencing before United States District Judge Henry E. Autrey.
This case was investigated by the Kirksville Office of the Federal Bureau of Investigation, the Kirksville Police Department, Brookfield Police Department, Kirksville Regional Computer Crimes Unit and the Linn County Prosecuting Attorney’s Office. Assistant United States Attorney Erin Granger handled the case for the U.S. Attorney’s Office.
Wentzville Man Pleads Guilty to Multiple Armed Bank Robberies and Shooting of Missouri State TrooperRead the Press Release
St. Louis, MO – WARREN J. GLADDERS, Wentzville, MO, pled guilty to three armed bank robberies committed in July, August and September 2013. On July 7, 2013, Gladders took approximately $7,000 from the Reliance Bank located in Creve Coeur, Missouri. On August 2, 2013, Gladders took approximately $5,000 from First National Bank located in Weldon Springs, Missouri. On September 20, 2013, Gladders took approximately $43,000 from the First Bank located in Marthasville, Missouri. In each instance, Gladders entered the banking institution and threatened the bank teller(s) while displaying a firearm.
On September 20, 2013, Gladders fled the scene of his final bank robbery in his personal vehicle. Gladders was traveling at a high rate of speed. A witness outside of First Bank observed the robbery in progress. The witness was able to obtain a partial license plate number and description of Gladders’ vehicle. That information was provided to law enforcement officials. A Missouri State Highway Patrol trooper observed a vehicle matching the description and license plate number and followed it. The trooper pursued and caught up to Gladders and his vehicle. The trooper activated his vehicle’s emergency lights and sirens. Gladders eventually pulled his vehicle over. The trooper exited his vehicle and demanded that Gladders get out of his vehicle. As the trooper was exiting his vehicle, Gladders exited his.
As Gladders exited his vehicle, he raised the Smith and Wesson revolver possessed by him and shot at the trooper approximately four times. One of those shots struck the trooper in the center of the trooper’s chest. The trooper was protected by his protective vest. The bullet from Gladders’ firearm penetrated the vest but not the trooper’s body. The trooper was able to return fire. The trooper struck Gladders at least once in the leg. Gladders fell to the ground and the firearm fell out of Gladders’ hand. Gladders attempted to regain control of his firearm. The trooper fired additional warning shots at Gladders -- not striking him. Gladders stopped moving at that point. The trooper was able to remove Gladders’ firearm from his proximity and place Gladders under arrest. Multiple law enforcement officials from various agencies responded to the scene. Gladders was taken into custody and transported for medical attention.
Following Gladders’ arrest, search warrants were obtained for his vehicle, residence and business. Among other things, most of the items worn or used by Gladders during the armed bank robberies were located and seized by law enforcement. Furthermore, an officer recovered and seized what is commonly referred to as a “sawed-off shotgun” from inside Gladders’ vehicle.
Gladders entered his plea before United States District Judge Carol E. Jackson, who has set sentencing for October 16, 2014.
Each armed bank robbery charge carries a maximum penalty of 20 years in prison and/or fines up to $250,000. For his use and discharge of the firearm, Gladders is facing a maximum possible penalty of life in prison. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
In addition to the Federal Bureau of Investigation, this case was investigated by the Missouri State Highway Patrol, the Warren County Sheriff’s Department, the St. Charles County Sheriff’s Department, the Creve Coeur Police Department, the Montgomery County Sheriff’s Department, the Jonesburg Police Department and the Wright City Police Department, along with coordination amongst the Warren County, St. Charles County and St. Louis County Prosecuting Attorneys’ Offices.
Local Paralegal Pleads Guilty to Federal Fraud and False Statement ChargesRead the Press Release
St. Louis, MO – JILLIAN NICHOLS, a local paralegal, pled guilty to charges involving her attempt to defraud a law firm client by falsely representing that the prosecutor on the client’s criminal case had solicited a bribe. Nichols also pled guilty to charges that she lied to the FBI during their investigation of her illegal conduct.
According to court documents and statements made in court at the time of her guilty plea hearing, Nichols worked for a local law firm, assisting one of the firm’s attorneys on his legal cases. She had no formal legal training and was paid hourly. While she was working at the firm, she worked on the defense of a state felony criminal case pending in St. Louis County Circuit Court against a firm client. As part of her duties, she worked closely with the client in investigating and helping prepare his defense, often meeting with him, as well as speaking with him on the telephone and texting, outside the presence of the defense attorney.Nichols left the defense attorney’s firm in September 2013. After Nichols left the law firm she continued to meet with the client and discuss his criminal case with him. Between June and December 2013, Nichols engaged in a scheme to defraud the client by falsely telling him that the St. Louis County assistant prosecutor assigned to his case had solicited a bribe of $10,000 in order to give favorable consideration in his pending criminal case. Further, she falsely represented that she had favorable evidence "planted" on the client’s cell phone in order to support his defense. She also falsely represented that she had paid the forensic expert hired by the defense attorney to analyze his cell phone so that the expert would validate and verify the "planted" evidence. On November 15, 2013, in response to Nichols’ false statements about the $10,000, the client agreed to give her an initial $5,000 in cash for her to pay the bribe to the prosecutor, and then an additional $5,000 after the prosecutor gave him favorable consideration in his pending criminal case. In order to conceal the scheme, she told the client not to tell his defense attorney of their discussions about bribing the prosecutor or planting evidence on his cellular phone.
During the FBI’s investigation of her fraud scheme, Nichols lied repeatedly to Special Agents about her involvement in the scheme when they interviewed her during December 2013.
Nichols, St. Louis, Missouri, pled guilty to one count of wire fraud and one count of making false statements before United States District Court Judge Rodney W. Sippel. Sentencing has been set for September 19, 2014.
Wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000. Making false statements carries a maximum penalty of 5 years and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation-Public Corruption Task Force, including officers of the St. Louis Metropolitan Police Department. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney's Office.
Local Business Owner Sentenced on Federal Fraud Charges for Second TimeRead the Press Release
St. Louis, MO – RICHARD SADDLER owned Omicron Capital LLC, a local St. Louis company purportedly in the business of assisting customers in refinancing commercial and real estate loans.
According to court documents and statements made in court, between January 1, 2010, and March 31, 2012, Saddler accepted roughly $350,000 from at least nine customers, falsely representing that the money would be used for down payments or appraisals relative to commercial and real estate refinancing deals. Instead, Saddler actually used the money to pay the mortgage on his own home, which was in danger of foreclosure, as well as airline tickets, meals and other personal expenses. Saddler’s victims were located throughout the United States. During 2006, Saddler was convicted and sentenced to 14 months in federal prison relative to a similar fraud scheme also involving his company, Omicron Capital LLC. On this new conviction, he was sentenced today to 33 months in prison and ordered to pay restitution of $335,650.
Saddler, St. Louis County, pled guilty to three felony counts of wire fraud in March and appeared today for sentencing before United States District Judge Catherine D. Perry.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney’s Office.
Wentzville Man Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – JAMES STALEY was indicted for his alleged scheme to defraud investors by making false promises of high rates of return and minimal risk. The indictment states that Staley defrauded eleven investors/lenders by causing them to invest over $3.4 million, giving him commissions totaling over $570,000.
According to the indictment, in 2007, James Staley operated Wealth Financial International. That same year, he became a sales agent for a Premium Financing Company located in California known as B & B Equity. As a sales agent Staley found individuals to provide loans for life insurance policies. In many instances, several of these investor/lender’s funds were bundled together to provide financing to purchase one life insurance policy. Staley received a commission for each investor/lender that he found to contribute financing for the purchasing of the life insurance policies. B & B required the lender/investor to invest in the insurance policy for a fixed period of time varying from 18 months to two years. During this period of time Staley represented to clients of Wealth Financial that B & B Premium Financing Company would sell the bundled insurance policies on the open market with guaranteed returns. However, Staley was well aware that if B & B was unable to secure a buyer for the bundled insurance policies, his clients would lose all their monies invested in the Premium Financing product sold by B & B. The indictment states that Staley defrauded eleven investors/lenders by causing them to invest over $3.4 million with B & B, giving him commissions totaling over $570,000.
Staley, Wentzville, MO, was indicted by a federal grand jury on three felony counts of wire fraud on June 18, 2014. He appeared in federal court earlier this week.
If convicted, wire fraud carries a maximum penalty of 30 years in prison and/or fines up to $ 1 million. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Dianna Collins is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.St. Louis County Man Indicted on Tax ChargesRead the Press Release
St. Louis, MO – RAJU MUKHI was indicted for his alleged failure to file a report to the IRS on his foreign financial accounts and for filing false tax returns.
United States citizens are required to report income from foreign countries, such as bank account, securities and any other financial accounts on their tax returns. If the value is more than $10,000, they are required to file a Report of Foreign Bank and Financial Accounts, Form TD F90-22.1 (FBAR).
According to the indictment, Mukhi failed to disclose the existence of Clariden Bank and Goldman, Sachs & Company Bank-Singapore accounts and the income earned in these accounts to his tax preparers for the years 2006 and 2008. The indictment also states that Mukhi failed to file an FBAR disclosing that he had financial accounts in Singapore and Switzerland for years 2007-2010.Mukhi, St. Louis, MO, was indicted by a federal grand jury on two felony counts of filing false tax returns and four felony counts of failure to file reports of foreign bank and financial accounts. The indictment was returned June 5th, but remained sealed until the arrest of the defendant. He is expected to appear in federal court for arraignment this morning.
If convicted, each count of filing false tax returns carries a maximum penalty of three years in prison and/or fines up to $100,000. Each of the other counts carry a maximum penalty of five years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Dianna Collins is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
St. Louis Man Sentenced on Federal Drug ChargeRead the Press Release
St. Louis, MO – ELIJAH BOYKINS of St. Louis, Missouri, was sentenced to 33 months imprisonment for possession with the intent to distribute heroin. Boykins appeared before Judge Henry E. Autrey in U.S. District Court in St. Louis.
According to his March plea agreement, St. Louis police found approximately one ounce of heroin divided into more than 100 doses at Boykins’ home in St. Louis while executing a search warrant on February 10, 2014. Additionally, more than $3,000 in cash was found and was forfeited as part of the plea agreement. Boykins, who was on federal supervised release for a 2007 weapons offense, also had his supervision revoked in that case as a result of the new case.
The case was investigated by the St. Louis Metropolitan Police Department. Tom Albus handled the case for the U.S. Attorney’s Office.
28 Indicted on Synthetic Drug Trafficking ChargesRead the Press Release
St. Louis, MO – Within the last thirty hours, twenty-eight people have either been arrested or have surrendered on multiple charges contained in four separate indictments alleging offenses involving the manufacturing and sale of synthetic drugs. Specifically charged in each indictment are: a) conspiracy to distribute and possess with the intent to distribute Schedule I controlled substances and Schedule I controlled substance analogues; b) conspiracy to introduce and receive misbranded drugs in interstate commerce; c) conspiracy to import controlled substances and controlled substance analogues; d) conspiracy to receive, sell and facilitate the transportation of smuggled goods with forfeiture allegations; and e) money laundering counts.
The manufacture of synthetic drugs is a recent development designed to circumvent traditional drug laws by creating new chemical compounds that mimic the effects of drugs like marijuana and cocaine, but purport to avoid the classification of a controlled substance because of a chemical alteration. The synthetic drugs are most frequently marketed as legitimate products and sold in typical commercial outlets such as convenience stores and gas stations. The drugs masquerade as incense, potpourri, glass cleaner, bath salts, and plant food, just to name a few; their cost however is much higher than the normal commercial product they mimic.
One group of synthetic drugs is made up of cathinones, and is a “speed” type drug commonly marketed as bath salts. The synthetic cathinones are typically snorted and are packaged in containers with names such as Full Throttle, Fresh, Limited, Starry Nights, Twisted, Pump It and Blitz. Reported effects have included hypertension, paranoia, anxiety and even psychosis.
Another group of synthetic drugs is made from synthetic cannabinoids which are a far more powerful and unpredictable form of marijuana. The cannabinoids are typically smoked and are packaged in multi-gram packets with names such as Mega Kush, Mad Hatter, Bayou Blaster, Avalon, Pirates Booty, Lights Out, Golden Leaf, DEEW, Cloud 9, Primo, Optima and Crazy Eyes. Although commonly referred to as synthetic marijuana, the effects are far more powerful and dangerous than so-called natural marijuana, with reported additional effects, including excessive heart rate, vomiting and seizures.
United States Attorney Richard Callahan warned, "Parents should not be lulled into a false sense of confidence that these substances must be okay just because they were purchased down at the corner gas station or convenience store. The bottom line is that these drugs are extremely dangerous, and the ingestion of these substances has led to serious medical consequences requiring hospitalization and even death and suicide."
"These drugs can cause serious health problems or even kill those who ingest them," said James Gibbons, Deputy Special Agent in Charge for HSI Chicago, which oversees St. Louis. "Homeland Security Investigations will continue to work with our federal, state and local law enforcement partners to identify these criminal schemes, seize their unregulated contraband and bring purveyors of synthetic drugs to justice."
IRS Criminal Investigation Special Agent in Charge James C. Lee stated, "IRS-Criminal Investigation is united with the rest of the law enforcement community in our resolve to financially disrupt criminal organizations that commit crimes against our society. IRS-CI will continue to investigate and protect the American people."
Charged in the first indictment (4:14CR00150 JAR) are:
- Anwer Rao, O’Fallon, IL
- Michael Lentsch, O’Fallon, IL
- Matthew Fiedler, Belleville, IL
- Larry Farmer, Jr., Keyesport, IL
- Charles Kinney, O’Fallon, IL
- Brandien Robinson, O’Fallon, IL
- Mansi Patel, Phoenix, AZ
Charged in the second indictment (4:14CR00152 FWS) are:
- Greg Sloan, St. Charles, MO
- Doug Sloan, Indianapolis, IN
- Igor Holdaiy, St. Louis, MO
- Elizabeth Pogue, Bridgeton, MO
- Charles Wolfe, St. Peters, MO
- Brett Beeman, O’Fallon, MO
- Sherri Beeman, O’Fallon, MO
- Roger Galvin, Charlack, MO
- John Galvin, St. Louis, MO
- Robert Jaynes, Jr., Indianapolis, IN
- Kirk Parsons, Indianapolis, IN
- David Neal, Carmel, IN
- Marcia Gronek, St. Peters, MO
Charged in the third indictment (4:14CR00175 AGF) are:
- Mark Palmer, Granite City, IL
- Anthony Palmer, Mt. Vernon, IL
- Samuel Leinicke, Arnold, MO
- Charles Wolfe, St. Peters, MO
- Robert Wolfe, Hazelwood, MO
- Joseph Gabrick, O’Fallon, MO
Charged in the fourth indictment (4:14CR000187 JAR) are:
- Pamela Tabatt, St. Peters, MO
- Richard Gross, Winfield, MO
- Paul Berra, Jr., Warrenton, MO
If convicted, the drug conspiracy charges and money laundering conspiracy charges carry a penalty of up to 20 years in prison for each count and/or fines ranging from $500,000 to $1,000,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges. Additionally the indictments seek forfeiture of assets and property totaling more than $12 million.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation, Drug Enforcement Administration, the Postal Inspection Service and the Federal Bureau of Investigation. Additional assistance was received from the St. Louis County Police Department, St. Charles County Sheriff’s Department, MO Lake Area Narcotics Enforcement Group, Metropolitan Enforcement Group for Southern IL, Southern Illinois Drug Task Force, the Illinois Attorney General’s Office, as well as the prosecuting attorneys offices in St. Louis County, MO, St. Charles County, MO, Madison County, IL and St. Clair County, MO. Assistant United States Attorneys James Delworth, Erin Granger, Jennifer Winfield and John Mantovani are handling the cases for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Local Man Pleads Guilty to Identity Theft ChargesRead the Press Release
St. Louis, MO – DEANDREA ROBINSON, St. Peters, MO, pled guilty to one count of aggravated identity theft for an equity stripping real estate fraud scheme that victimized a homeowner in north St. Louis County.
According to the plea agreement, Robinson stole the identity of an individual homeowner to take control of the business entity that owned her home. Then, Robinson borrowed against the homeowner’s equity in the home. When Robinson failed to repay the loan, the lender initiated foreclosure on the homeowner, who was not even aware of the loan. After the criminal investigation of the matter began, the lender agreed to halt the foreclosure and the homeowner remains in her home.
Robinson, who has previously been prosecuted in the Eastern District of Missouri for real estate fraud, went into custody after U.S. District Judge John Ross accepted his plea. Robinson will serve 2 years in prison for aggravated identity theft and will be ordered to pay restitution to the lender he defrauded. Sentencing has been set for September 11, 2014.
The U.S. Postal Inspection Service investigated the case. Tom Albus is handling the case for the U.S. Attorney’s Office.
Seven People from Knox and Adair Counties Indicted on Federal Methamphetamine ChargesRead the Press Release
St. Louis, MO –These seven people have been arrested on an indictment for their alleged participation in a methamphetamine conspiracy beginning as early as 2009 and continuing until 2013, in Knox and Adair Counties. They are expected to appear in federal court this week.
JONATHAN R. PREBE; JESSICA A. RUDD; and JERRY E. DAVIS, all of Edina, MO, were indicted on one felony count each of conspiracy to possess pseudoephedrine for the manufacture of methamphetamine and possession of pseudoephedrine for the manufacture of methamphetamine.
BILLY J. REARDON, Quincy, IL, SARAH S. BAKER, Brashear, MO, ASHLEY N. REARDON, Quincy, IL, and ANGEL RYAN, Woodstock, IL, were each indicted on one felony count of possession of pseudoephedrine for the manufacture of methamphetamine.
If convicted, each count of the indictment carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Missouri State Highway Patrol’s Division of Drug & Crime Control - Narcotics/Vice Unit and the Knox and Adair County Sheriff’s Offices. Assistant United States Attorney John Mantovani is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Two Local Businessmen Plead Guilty to Multiple Federal Fraud Charges Involving Elderly Victims in St. LouisRead the Press Release
St. Louis, MO – ROBERT PALMER and MARK DRIVER plead guilty late Thursday to defrauding numerous elderly victims of approximately $3,000,000, beginning in 2004 and continuing through 2010.
According to the indictment, Princeton Partnership, LLC, was an insurance brokerage business involved in the sale of life insurance products. Princeton operated out of offices in the Hill area of St. Louis, at 1928 Marconi Street (also known as 5149 Daggett Avenue). Palmer and Driver both ran the day-to-day operations of Princeton, solicited customers, marketed the company's services and had financial oversight of the company with authorization over the company's two operating bank accounts. Palmer and Driver solicited Princeton customers with the false promises that they would invest the customers' funds in suitable investments, including but not limited to real estate, stocks and life insurance annuities. Examples of those victims include:
During 2004 Palmer solicited several members of a family who had received funds upon the death of their elderly aunt with the false representation that Princeton would place those funds in a real estate investment for the benefit of those customers. Based upon his false representations, the family members transferred some or all of those funds to Princeton.In 2005 Palmer solicited funds from an elderly individual and her family with the false representation that they would place those funds in a real estate investment for her benefit. Based on those representations the family transferred her funds to Princeton.
During 2006 through 2010 Palmer solicited investment funds from two elderly sisters with the false representations that Princeton would make suitable investments with those funds. They transferred their funds and control of their stock holdings to Princeton and, later Palmer and Driver sold and liquidated the stocks and persuaded one of the sisters to liquidate a life insurance policy as well and transfer the funds to Princeton.
During 2007 through 2009 Driver solicited investment funds from an elderly woman who transferred her funds, as well as control of her stock holdings to Princeton.
In 2006, an elderly woman was solicited by Driver to invest her personally held funds in a series of life insurance annuities through Princeton. Princeton used her funds to purchase four (4) life insurance annuities. As a further part of the scheme, during in or about 2008 and 2009, at Driver’s direction, she liquidated three (3) of her life insurance annuities and provided those funds to Princeton based upon the false representations that the funds would be placed in suitable investments for her benefit.
Most or all of the funds transferred to Palmer, Driver and Princeton by the numerous victims were used by Palmer and Driver for their own personal uses and the general operating expenses of Princeton. Palmer and Driver also engaged in Ponzi-type transactions where they used some funds provided by new customers to pay old customers who falsely believed they were receiving the returns on their purported investments.
In all cases Palmer and Driver obtained approximately $3,000,000 from Princeton customers based upon their false representations, which they used for their own personal use and for the expenses of their company Princeton.
Palmer, Kansas City, Missouri; and Driver, St. Louis, Missouri, pled guilty to all charges contained in the indictment, including two felony counts of mail fraud and two felony counts of wire fraud, before United States District Judge Rodney Sippel. Sentencings have been set for September 12, 2014.
Each count of mail and wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation and the Postal Inspection Service, with assistance of the Missouri Secretary of State’s Office. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney's Office.
St. Louis County Man Indicted on Tax and Weapons ChargesRead the Press Release
St. Louis, MO – JOEY D. WOOD was indicted for allegedly filing six false tax returns for himself and three others claiming refunds totaling over $27,000 for tax years 2011 and 2012.
According to the indictment, Wood filed false tax returns for himself claiming refunds for 2011 and 2012, and filed false returns claiming refunds for three other people for the same years. The indictment also alleges that on May 17, 2013, Wood was in possession of one or more firearms. Due to a previous felony conviction, he is prohibited from owning or possessing firearms.
Wood, St. Louis County, MO, was indicted by a federal grand jury on six felony counts of filing false tax returns and one felony count of being a previously convicted felon in possession of a firearm. The indictment was returned May 28th, but remained sealed until the arrest of the defendant earlier today.If convicted, each of the tax counts of the indictment carries a maximum penalty of five years in prison and/or fines up to $250,000, the firearms charges carries a maximum of 10 years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by IRS Criminal Investigation, the St. Louis County Police Department and the Missouri Department of Revenue. Assistant United States Attorney Steven Muchnick is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
California Sub-Contractor Consultant Pleads Guilty to Fraud Involving Boeing ContractsRead the Press Release
St. Louis, MO – ROBERT DIAZ JR., a consultant to a Boeing sub-contractor, pled guilty to fraud charges in connection with a bribery/kickback scheme involving Boeing military aircraft parts during May 2011 through April 2013.
Boeing Company Defense Space and Security Division is a defense contractor providing military-style aircraft to the United States Department of Defense and the United States armed services with offices and procurement operations located in St. Louis. Deon Anderson was a Procurement Officer for Boeing, residing in the St. Louis area.
J. L. Manufacturing, of Everett, Washington, is an aerospace job machine shop specializing in hard metals, with the capability of producing small to medium-sized complex parts of ferrous and non-ferrous materials, and was a sub-contractor to Boeing on numerous United States government contracts. Jeffrey Lavelle, owner and operator of J. L. Manufacturing, directed the day-to-day operations of the company and oversaw all financial aspects of the company.Inland Empire and Associates, Inc., Las Vegas, Nevada, is engaged in consulting to defense aircraft manufacturers and parts suppliers, including consulting for J. L. Manufacturing. Robert Diaz, Jr. was the owner and operator of Inland Empire, and personally consulted to J. L. Manufacturing and Jeffrey Lavelle relative to numerous Boeing sub-contracts.
According to the court documents, beginning in May 2011 and continuing through April 2013, Deon Anderson provided J.L. Manufacturing, through Lavelle and Diaz, non-public competitor bid information and historical price information in connection with one and more Boeing military aircraft part purchase order requests for quotes. Lavelle used that information in preparing and submitting bids on behalf of J.L. Manufacturing to Boeing for approximately nine different Boeing requests for quotes relative to those various purchase orders. Of the those nine, J.L. Manufacturing was awarded seven purchase orders to supply United States military aircraft parts to Boeing totaling in excess of orders totaled approximately $2,052,746. Diaz’s scheme went from May 2011 through April 2013. In exchange for that information they made cash payments to Anderson in St. Louis and in California.
Robert Diaz, Jr., Alta Loma, CA, pled guilty to two felony counts of mail fraud and one felony count of wire fraud before United States District Judge Henry Autrey, in St. Louis. Sentencing has been are set for September 2, 2014.
Co-defendant William P. Boozer, Hacienda Heights, California, pled guilty to related charges in May and is scheduled for sentencing August 15, 2014.
Co-defendants Deon Anderson, St. Louis; and Jeffrey Lavelle, Mukilteo, WA; are facing related charges and are presumed innocent until and unless proven guilty.
Each count of mail and wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by Defense Criminal Investigative Service, Federal Bureau of Investigation, NASA-Office of Inspector General, Air Force Office of Special Investigations, Navy Criminal Investigative Service and Internal Revenue Service-Criminal Investigations. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.
St. Louis County Man Pleads Guilty to Trafficking Counterfeit GoodsRead the Press Release
St. Louis, MO – RASHAD SHABAZZ, of St. Louis, pleaded guilty to trafficking in counterfeit goods this morning. He appeared before U.S. District Judge Carole E. Jackson, who accepted his plea and set sentencing for August 29, 2014. At sentencing, Shabazz faces up to 10 years imprisonment, a fine of up to $2,000,000 or both.
According to the plea agreement, on November 5, 2013, Shabazz was found to be running an open-air store offering counterfeit apparel from purveyors such as Polo Ralph Lauren, Nike, Timberland and True Religion, as well as counterfeit electronic media. Shabazz admitted that he knew the merchandise he was selling was counterfeit and also admitted he had received the goods from interstate and foreign shipments.
The case was investigated by the St. Louis Metropolitan Police Department and the United States Department of Homeland Security.
O'Fallon Man Sentenced to Prison on Fraud ConspiracyRead the Press Release
St. Louis, MO – JASON RAUSCHELBACH was sentenced to 24 months in federal prison after pleading guilty to conspiring to defraud the United States and several banks through his business, The Mortgage Store, Inc., in 2008. United States District Judge Henry E. Autrey imposed the sentence today and also ordered Rauschelbach to pay restitution.
According to court documents, Rauschelbach was the CEO of The Mortgage Store, Inc. (TMS) and the president of Title America. By 2008, TMS was a major mortgage brokering business with officers in four states and hundreds of employees. The main offices were in Westport Plaza and Wentzville. The businesses were operating at a financial deficit in 2008. TMS incurred over $600,000 in federal employment (including withholding) tax liabilities in the first three quarters of 2008 that were not paid over to the United States. There were not sufficient funds available to fund the disbursements from TMS and, in addition, to meet all of the expenses incurred by TMS, including the delinquent employment tax liabilities. In order to meet certain expenses and, at the same time, conceal the absence of adequate funds, Rauschelbach and others at TMS caused insufficient funds checks drawn on the checking accounts of both TMS and Title America to be deposited between those accounts in such a way that the “float” concealed the true balances of each account. The accounts were at Enterprise Bank in Clayton and at the First Bank of the Lake in Osage Beach, Missouri. The TMS account had a negative balance of approximately $850,000 in June, 2008, when the banks stopped accepting the floated checks.Rauschelbach’ s guilty plea also involved submitting a false net worth statement to HUD and failing to pay over about $31,000 in employees’ withholdings for a 401K plan and health insurance. Restitution payments will be first directed to reimburse those employees.
Court documents showed that Rauschelbach received substantial distributions from TMS and Title America in 2008 despite the federal employment tax delinquencies and other unpaid liabilities, as well as the artificial balances being maintained in the TMS and Title America checking accounts. In addition, he and others at TMS directed that TMS funds be paid on loans on properties at Tan Tar A Resorts in the Lake of the Ozarks, and for a ranch property in Breckenridge, Colorado. He was a partial owner of those properties
Rauschelbach, of O’Fallon, Missouri, will voluntarily surrender to a prison facility when it is designated.This case was investigated by the FBI, IRS Criminal Investigation and the Inspector General Offices of HUD and the Department of Labor. Assistant United States Attorney James E. Crowe, Jr., is handling the case for the U.S. Attorney's Office.
Illinois Man Sentenced for Assaulting Federal AgentsRead the Press Release
St. Louis, MO – EXCEDRIN COLLINS was sentenced to 84 months in prison for forcibly assaulting agents of the Bureau of Alcohol, Tobacco, Firearms & Explosives with an automobile.
According to court documents, on May 20, 2013, in the City of St. Louis, Collins forcibly assaulted agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), while the agents were engaged in the performance of their official duties, and in the commission of the assault, Collins used a deadly or dangerous weapon, that is, an automobile.
In the days leading up to May 20, 2013, an ATF undercover agent arranged to meet with Collins’ co-defendants Lonnell Wilson and Retonio Dickerson to purchase a firearm for $500.On May 20, 2013, Collins drove Wilson and Dickerson to meet the undercover agent in a white Ford Expedition, a full-sized sport utility vehicle. Collins, Wilson and Dickerson met the undercover agent at Sherman Park, in North St. Louis City.
With Collins and Dickerson present, Wilson showed a Browning 9mm semi-automatic pistol to the undercover agent. The undercover agent, Wilson and Dickerson discussed the purchase of the Browning 9mm pistol. The undercover agent handed Wilson $500 in recorded ATF buy money. Wilson handed the money to Dickerson, who counted the money and returned it to Wilson. Dickerson then grabbed the Browning 9mm pistol away from the undercover agent. Collins, Wilson and Dickerson fled to the Ford Expedition. The entire transaction was audio and video recorded.Wilson pointed and discharged the Browning 9mm pistol at the undercover agent, who was engaged in the performance of his official duties. Collins, Wilson and Dickerson then fled in the Ford Expedition, with Collins driving.
While exiting Sherman Park, Collins knowingly and intentionally rammed the Ford Expedition into an ATF vehicle, in which three ATF agents were responding to the scene of the assault. The ATF agents were engaged in the performance of their official duties. The ATF vehicle sustained significant damage.
Collins fled from pursuing ATF agents at speeds exceeding 100 miles per hour on busy residential streets, which recklessly created a substantial risk of death or serious bodily injury to other persons.
Collins, Madison, IL, pleaded guilty on January 9, 2014, to one felony count of forcibly assaulting an agent with a deadly or dangerous weapon. He appeared today for sentencing before United States District Judge Catherine D. Perry.
This case was investigated by ATF. Assistant United States Attorney Cristian M. Stevens is handling the case for the U.S. Attorney’s Office.
Owner of Local Advertising Company Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – CARY JORDAN was sentenced to 18 months on fraud charges involving his diversion of over $500,000 of client funds for his personal use. Additionally, he was ordered to pay restitution of $519,975.
According to court documents, Cary Jordan owned and operated the Jordan Group, which was in the business of assisting companies in placing advertisements with various print, radio, television and outdoor media companies throughout the United States and Canada. Jordan Group clients contracted them to act on their behalf in finding media outlets for their advertising campaigns. Once the Jordan Group located media outlets in the appropriate geographical location for the advertising campaigns, they negotiated with the media outlets on behalf of its clients and invoiced a pre-bill to the client based on the price and estimated number of advertising spots negotiated with the media outlets. In turn, clients paid the Jordan Group based on the pre-bill. After the ads ran, the media outlets invoiced the Jordan Group based on the price and actual number of advertising spots that ran. The Jordan Group then made payment to the media outlet from the funds it received from its client due to the pre-bill.
Between January and October 2008, the Jordan Group ceased paying the media outlets for their advertising spots. Instead, Cary Jordan diverted funds for his personal use and invested in other non-related investment opportunities.
Jordan, formerly of Webster Groves, MO, currently residing in Florida, pled guilty in February to two felony counts of mail fraud. He appeared today for sentencing before United States District Judge John A. Ross.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Dianna Collins handled the case for the U.S. Attorney’s Office.
Fenton Man Sentenced to 72 Months for Unlawful Possession of A FirearmRead the Press Release
St. Louis, MO –The United States Attorney's Office announced today that DERIC S. SILMAN of Fenton, Missouri, was sentenced today to 72 months for one felony count of Being a Previously Convicted Felon in Possession of a Firearm. He appeared before United States District Judge Stephen N. Limbaugh, Jr.
On March 9, 2013, a dispatcher for the Ellsinore Police Department received a telephone call from an individual stating Silman was at his residence and that Silman had pulled a pistol on him. Officers responded to the residence and found Silman inside and placed him under arrest. Officers searched the car that Silman had driven to the residence and located a loaded 9mm pistol under the driver’s seat.
Silman had previously been convicted of the felonies of stealing, knowingly burning, tampering in the first degree, resisting arrest, assault and possession of a controlled substance. As a convicted felon, Silman was prohibited from possessing firearms.The case was investigated by the Ellsinore Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives. Assistant United States Attorney Larry H. Ferrell handled the prosecution for the Government.
Fenton Area Woman Sentenced for EmbezzlementRead the Press Release
St. Louis, MO – ELAINE LEWIS was sentenced to 27 months in prison for embezzling more than $300,000 from a church checking account, between 2009 and August 2013. In addition to the prison sentence, she was also ordered to pay restitution of more than $303,000.
According to court documents, Elaine Lewis worked as a bookkeeper for the Lutheran Church of the Resurrection, located in St. Louis County, Missouri. Between 2009 and August 2013, Lewis used a variety of schemes to embezzle more than $300,000 from the Church’s bank account at Bank of America. Most of the funds were transferred and deposited into a Commerce Bank account associated with her family’s business -- Advanced Lock & Key, Inc. -- which was operated out her residence in Fenton, Missouri.
Lewis, Fenton, Missouri, pled guilty in December to one felony count of mail fraud. He appeared today for sentencing before United States District Judge Rodney W. Sippel.
This case was investigated by the United States Postal Inspection Service and the Sunset Hills, Missouri, Police Department. Assistant United States Attorney John Bodenhausen handled the case for the U.S. Attorney’s Office.