Eastern District of Missouri
Press releases recorded for this federal judicial district.
Local In-Home Healthcare Provider Indicted on Bank Fraud ChargesRead the Press Release
St. Louis, MO – TINA KUEHL was indicted on bank fraud charges involving her fraudulent statements involving payment of a bank loan.
According to the indictment, 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. Kuehl made the loan payments using checks drawn on her personal bank accounts at several banks, including a business account in the name of Baby Boomers Health, LLC, which Kuehl owned and operated. On many occasions, they did not make timely payments on the loan and in July 2013, Maries Bank foreclosed on the property.The indictment alleges that after the foreclosure in July 2013, 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 allegedly 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, the indictment states that 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. She also gave copies of the fraudulent documents, including the fraudulent checks, to her attorneys who presented the fraudulent documents to the bank.
Kuehl, of Ballwin, Missouri,, was indicted by a federal grand jury on February on one felony count of bank fraud. She is expected to appear in federal court today.If convicted, bank 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.
In November 2013, Kuehl was indicted by a federal grand jury on five counts of health care fraud and one count of making false statements to federal agents. The trial of these offenses is scheduled for May 5, 2014.
This case was investigated by Health and Human Services Office of 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.CEO of Local Visiting Nurse Care Provider Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – SUSAN WINEBARGER was indicted for allegedly embezzling approximately $600,000 from company accounts and falsifying documents to conceal the embezzlement.
According to the indictment, 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. The indictment states that between January 2008 and December 2013, Winebarger embezzled approximately $600,000 from VNA-TIP accounts. Without company authority, Winebarger issued checks to herself from both the operating account and its payroll account and deposited those checks into her personal bank accounts and 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. Finally, the indictment alleges that Winebarger failed to remit money 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, was indicted by a federal grand jury on two felony counts of wire fraud.In addition to the wire fraud charges, the indictment contains a forfeiture allegation that, if convicted, requires the forfeiture of money and property derived from the criminal activity.
If convicted, 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. Assistant United States Attorney Hal Goldsmith 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.Leader of Drug Conspiracy That Resulted in Death Sentenced to 27 Years in PrisonRead the Press Release
St. Louis, MO – ANDREUS O'BRYANT, St. Louis, Missouri, was sentenced to 330 months imprisonment for his organization and leadership in a drug conspiracy that required the murder of Jamie Benson of Houston, TX, on April 22, 2011. In August 2013, O’Bryant pleaded guilty to conspiracy to possess with the intent to distribute over 500 grams of cocaine. O’Bryant was sentenced today by United States District Court Judge Audrey G. Fleissig after a two-day sentencing hearing.
According to court documents and testimony provided during the sentencing hearing, in early April 2011, O’Bryant recruited multiple individuals, including his co-defendants Scott Compton and Lodgy Jackson, to participate in a conspiracy that included robbing and murdering victim Benson within the City of St. Louis, after luring Benson from Houston to St. Louis. Compton was recruited by O’Bryant to act as an individual interested in purchasing over 500 grams of cocaine from Benson for an inflated price. Compton played that role. In doing so, Compton, along with O’Bryant and Jackson, convinced Mr. Benson that a drug transaction was going to occur when, in reality, O’Bryant, Jackson and others intended to rob Benson of the cocaine and murder him.
Jackson was brought to St. Louis by O’Bryant for purposes of carrying out the murder in exchange for compensation from O’Bryant. In the early morning hours of April 22, 2011, O’Bryant drove himself, Benson, Jackson and another individual to a St. Louis alley. O’Bryant exited the vehicle. Jackson and Benson sat inside O’Bryant’s vehicle. Benson was the front seat passenger. Jackson sat directly behind him. To facilitate Benson’s murder, Jackson initiated a heated argument with Benson. As the argument began, Jackson sent a text to O’Bryant notifying O’Bryant that the murder was imminent. As the argument continued, Jackson mouthed the words “watch this” to another passenger inside O’Bryant’s vehicle. Jackson then fired one shot into the back of Benson’s head from a firearm Jackson possessed. That firearm was given to Jackson by O’Bryant prior to the murder. Jackson, O’Bryant and another abandoned Benson's body in the alley, where it was later discovered by the St. Louis Metropolitan Police Department. Jackson, O’Bryant and others undertook significant efforts to cover up the conspiracy and destroy evidence of the crime.
Upon learning of the indictment against him, O’Bryant fled the State of Missouri. He eluded authorities for almost a year. A joint task force of officers from St. Louis, Missouri, and Houston, Texas, with the Bureau of Alcohol, Tobacco, Firearms and Explosives and the United States Marshals Service apprehended O’Bryant in Houston, Texas, and returned him to the Eastern District of Missouri to face the indictment. O’Bryant is the third of three defendants to be sentenced in this matter. Compton pleaded guilty for his involvement and has been sentenced to 5 years imprisonment. Jackson also pleaded guilty and has been sentenced to 33 years imprisonment.
This case was investigated by the St. Louis Metropolitan Police Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the United States Marshals Service; the Franklin County Sheriff's Department; the St. Charles County Police Department and the O’Fallon Police Department.Former Bank Employee Pleads Guilty to Fraud ChargesRead the Press Release
St. Louis, MO - KYLE MILLER, St. Louis, Missouri, admitted to stealing $15,000 in cash from a U.S. Bank facility in Maplewood where he worked in 2013. Miller pleaded guilty to one count of misappropriation of funds by a bank employee. He appeared before Judge John A. Ross in federal court in St. Louis this morning.
According to the plea agreement, Miller stole the cash between April 23, 2013, and July 5, 2013. He faces up to 30 years imprisonment and a $1,000,000 fine. Restitution of the stolen funds is also mandatory. Sentencing has been set for May 8, 2014.
The case was investigated by the Maplewood Police Department. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
Local Dentist Pleads Guilty to Charges Involving Fraudulent Oxycodone PrescriptionsRead the Press Release
St. Louis, MO – DR. KURT MORGESTER pled guilty to fraudulently obtaining prescriptions for Oxycondone. According to court documents, on multiple occasions in December 2012 and January 2013, Dr. Morgester wrote and picked up prescriptions for his dental patients. The patients had no knowledge of these prescriptions.
Morgester, Fenton, MO, pled guilty to one felony count of possession of a controlled substance by subterfuge before United States District Judge Rodney W. Sippel. Sentencing has been set for May 8, 2014.
He now faces a maximum penalty of four 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 Drug Enforcement Administration. Assistant United States Attorney John T Davis is handling the case for the U.S. Attorney's Office.
Fifteen People Arrested and Charged in Drug ConspiracyRead the Press Release
St. Louis, MO – Five local men and ten out-of-state associates have been arrested on charges involving a conspiracy to distribute large amounts of cocaine and methamphetamine in the St. Louis area and New Mexico, along with money laundering of the proceeds of the illegal activity.
According to the indictment, ALPHONSO EDUARDO GONZALES of Albuquerque, New Mexico, is charged with engaging in a Continuing Criminal Enterprise between 2009 and November 2013. The indictment alleges that Gonzales committed a series of violations of federal drug statutes by transporting large quantities of cocaine, methamphetamine and marijuana from Albuquerque to other cities, including St. Louis. Fourteen associates are charged on multiple drug conspiracy and money laundering charges as part of the Gonzales criminal enterprise.
Charged locally are Floyd Huntley, Jr. of St. Ann; Jonathan Arnez Spencer of Ferguson; Orlando James Allen of St. Louis; Dallas Wayne Lane of St. Louis; and David Michael Young of St. Louis. The defendants were arrested Thursday and are expected to appear in federal court on Monday, February 10.If convicted, defendant Alphonso Gonzales is subject to a minimum mandatory term of imprisonment of 20 years for the Continuing Criminal Enterprise. Other charges carry penalties ranging from10 years to life in prison. 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 – St. Louis Division, with the cooperation of the St. Ann Police Department.
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 Woman Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO - THERESA MOORE was sentenced to 44 months in prison and ordered to pay $86,084 restitution to the victims of the crimes. Moore employed various aliases and claimed to be with law enforcement and the legal profession to induce victims to pay her money by convincing them that she could assist them with various legal matters. Moore contacted her victims by telephone and made false representations about non-existent legal matters.
According to court documents, in July 2009, Moore met an elderly widower through a telephone dating service. Soon after making the acquaintance, Moore, and her associates, using various aliases, began contacting him by telephone to inform him he was a victim of identity theft. Moore intentionally deceived him into believing that he was entitled to restitution and that he had to pay money up front in order to collect the restitution payment. At other times, Moore intentionally deceived him into believing that he would be receiving money as part of a legal settlement, but that he had to pay money up front in order to collect the settlement. In reliance on Moore's false representations, over the course of about three years the man made numerous payments to Moore totaling in excess of $61,473.
In May 2011, Moore and one of her associates contacted victim J.N. by telephone and told J.N. that there were several warrants out for the arrest of J.N.'s adult daughter, P.N., who had developmental learning disabilities. Moore stated to J.N. that Moore had paid fines on behalf of P.N. and needed to be reimbursed, when in fact, Moore was not aware of any such arrest warrants and had made no such payments. Moore enlisted an associate who posed as a police detective in order to lend credibility to her scheme. J.N. paid Moore in excess of $23,894 as a result of the fraud scheme.
Moore, St. Louis, Missouri, pled guilty last September to four felony counts of wire fraud. She appeared today for sentencing before United States District Judge John A. Ross.
This case was investigated by the United States Postal Inspection Service, the Hazelwood Police Department, the Clayton Police Department, The St. Louis County Police Department and the Missouri Attorney General’s Office. Assistant United States Attorney Reginald Harris handled the case for the U.S. Attorney’s Office.Local Woman Sentenced on Sex Trafficking ConspiracyRead the Press Release
St. Louis, MO -St. Louis, MO - CARLA MATHEWS was sentenced to 10 years in prison involving a conspiracy to commit sex trafficking of two area women by force and intimidation.
According to court documents, between 2010 and the October 2012, Carla Mathews and her co-defendant recruited and maintained women, physically assaulted them and forced them to engage in prostitution in the St. Louis metropolitan area. Mathews took the women to various hotels for commercial sex dates and kept the money generated by the victims for herself. She confiscated their food-stamp identification (EBT) cards to control them and deprive them of food and drink as a method of control. Mathews also provided the victims with the drug MDMA and clothing in preparation for the commercial sex dates she arranged for them.
Mathews, Breckenridge Hills, MO, pled guilty last October to conspiracy to commit sex trafficking by force, fraud or coercion. She appeared today for sentencing before United States District Judge Henry Autrey.
Co-defendant Carl Mathews, also of Breckenridge Hills, was sentenced to 10 years in prison in July 2013.
This case was investigated by the Federal Bureau of Investigation, the U.S. Department of Agriculture Office of Investigations and the Breckenridge Hills Police Department.
St. Charles Doctor Pleads Guilty to Medicare FraudRead the Press Release
St. Louis, MO - DR. KHALED HASSAN, St. Charles County, pled guilty to billing Medicare for "face to face" office visits performed on dates when he was actually traveling outside of the United States.
According to his plea agreement, Dr. Hassan dispensed prescription drugs to a large percentage of his patients, including the drugs Percocet®, Xanax®, Ativan®, Oxycontin® and Oxycodone®. Since some states and many health care programs limit controlled substance prescriptions to thirty-day supply amounts, his patients often had regular appointments with him roughly every thirty days to renew their prescriptions for these drugs. However, on some occasions, Dr. Hassan’s patient appointments conflicted with his travel schedule. On three occasions in March 2009, September 2009 and December 2011, Dr. Hassan traveled internationally, leaving his nurse to conduct a number of patient visits in his absence and provide his patients with assorted pre-signed prescriptions for controlled substances. During these same time frames, Dr. Hassan directed his office staff to bill Medicare for face-to-face office visits. Ultimately, the Drug Enforcement Administration received a number of complaints about Dr. Hassan’s prescribing practices, including a report from the Hazelwood Fire Department in February 2012, that a patient had overdosed and become unconscious in the parking lot of Dr. Hassan’s medical office in Florissant, Missouri. During a subsequent search of Dr. Hassan’s office, agents recovered a number of pre-signed prescriptions for several patients, as well as medical records for individual patients with unusual controlled substance prescribing patterns.
Dr. Hassan pled guilty to three felony counts of making false statements to the Medicare program before United States District Judge Catherine D. Perry. Sentencing has been set for April 23, 2014.
He now faces a maximum penalty of five years in prison and/or fines up to $250,000 per count. 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 and the Office of Inspector General for the U.S. Department of Health and Human Services.
St. Charles Pleads Guilty to Theft of Federal FundsRead the Press Release
St. Louis, MO - WILLIAM NAES, of St. Charles, pled guilty to theft of government funds for his improper receipt of $150,480 in disability benefits over eight years. Naes admitted that he earned significant income running a tax preparation business between 2005 and 2013 and omitted that work and income from documents he submitted to the Social Security Administration in connection with his disability status.
Naes faces up to 10 years imprisonment and a $250,000 fine for his crime. Restitution to the Social Security Administration is also mandatory.
Judge E. Richard Webber accepted his guilty plea this morning and has scheduled sentencing for April 24, 2014. Naes remains in custody pending sentencing.
The case was investigated by the Social Security Administration Office of Inspector General and the Treasury Department. Assistant United States Attorney Tom Albus is handling the cased for the U.S. Attorney’s Office.
Local Tax Preparer Indicted on Fraud ChargesRead the Press Release
St. Louis, MO - The owner and operator of Discount Tax Service was indicted for allegedly filing false tax returns. The indictment alleges that Christopher Mickles prepared over seven hundred and fifty federal income tax returns on behalf of his clients for tax years 2008 through 2011. Many of those returns contained falsely claimed fraudulent items and credits, such as household help income and earned income tax credits.
CHRISTOPHER MICKLES, St. Louis, MO, was charged with four felony counts of aiding and abetting in the preparation of false tax returns. He is expected to appear in federal court later today.
If convicted, each count carries a maximum penalty of three years in prison and/or fines up to $100,000. 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 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.Former Chief of St. Louis Park Rangers Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO - THOMAS STRITZEL, Former Chief of the St. Louis Park Rangers, was sentenced to 36 months in prison on charges that he and Joseph Vacca, Former Deputy Commissioner of the St. Louis Parks Division, defrauded the City of St. Louis of approximately one-half million dollars by submitting false invoices for materials and services supplied to the Parks Division. He appeared before United States District Judge Carol E. Jackson in St. Louis.
According to court documents at the time of their guilty pleas, from January 1, 2005, to December 31, 2012, Vacca and Stritzel embezzled funds of the City of St. Louis based upon the submission of sham and false invoices, which included false charges of approximately $472,722. They used the funds for their own personal use, including lease payments on personal vehicles, fuel costs, the payment of personal credit card charges and other personal living expenses unrelated to the legitimate operations of the St. Louis Parks Division.
Vacca and Stritzel set up a sham company called Dynamic Management and then funneled city funds received through the submission of false and sham invoices to Dynamic Management's bank account. They then used those fraudulently obtained funds for their own personal use, including leasing personal vehicles, payment of fuel costs and the payment of personal credit card charges.
Stritzel, St. Louis, mo, was also ordered to pay restitution of $472,722.
Joseph Vacca, St. Louis, MO, was sentenced in December to 36 months in prison, and ordered to pay restitution to the City of St. Louis in the amount of $472,722.
This case was investigated by the Federal Bureau of Investigation and the St. Louis Metropolitan Police Department. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney's Office.
Local Bookkeeper/Office Manager Sentenced on $2 Million EmbezzlementRead the Press Release
St. Louis, MO - ELIZABETH BYRNE was sentenced to 41 months in prison for embezzling more than $2 million over the course of about ten years.
According to court documents, between 1997 and February 2013, Elizabeth Earnest, a/k/a Elizabeth Byrne, a/k/a Elizabeth Johnson, worked as an office manager and assistant for various businesses owned by an individual referred to in court documents as Employer. Her duties included managing and paying the Employer's personal bills and attending to the Employer's personal schedule. Earnest admitted with her plea that from 2003 to February 2013, she abused her position of trust to embezzle funds from her Employer and to cover up her embezzlement. Earnest made blank checks signed by the Employer payable to herself instead of paying the Employer's personal expenses. After making the checks payable to herself, she deposited the checks into one of her personal bank accounts and used the funds to pay her personal bills and to send funds to family members. In order to conceal the scheme, Earnest intercepted Employer's monthly bank statements and removed and shredded the incriminating checks that she had made payable to herself. To further cover her tracks, Earnest falsified bookkeeping entries she prepared for the Employer and falsely classified the expenses.
Her scheme was uncovered in February 2013 when she was out of the office for a vacation and someone else was able to receive, open and review the true bank information.
Earnest, St. Louis, MO, pled guilty last July to one felony count of mail fraud and appeared today for sentencing before United States District Judge Jean C. Hamilton. Additionally, as part of her earlier plea, Earnest has agreed to the forfeiture to the government all money and property derived from her illegal activity.
This case was investigated by the United States Postal Inspection Service. Assistant United States Attorney John Bodenhausen handled the case for the U.S.Franklin County Man Sentenced on Drug and Money Laundering ChargesRead the Press Release
St. Louis, MO - CRAIG MOLITOR was sentenced to 84 months in prison on January 22 for distributing multi-ounce quantities of methamphetamine in the St. Louis metropolitan area.
According to statements presented to the court at the time of his plea, Craig Molitor began to obtain and distribute methamphetamine before 2010. Molitor obtained bulk quantities of actual methamphetamine, which he distributed to others. He was the main supplier for co-defendant Eric Wessler, who redistributed a large portion of the methamphetamine he received. At times, Wessler also made contact with different sources of supply for actual methamphetamine, which he met through co-defendant Kellen Lincoln. The sources for actual methamphetamine included Peter Coyle, Gerald Dement, Luz Angelica Carrillo and others. Additionally, Eric Wessler obtained ounces of actual methamphetamine from co-defendant Jason Knox.
As Craig Molitor began to distribute actual methamphetamine before 2010, he utilized various credit cards to fund his trips. The credit cards used were obtained by his grandmother. Funds from their joint accounts were used to pay the credit card balances, bills and to make periodic payments for various high-end vehicles utilized by Molitor. Molitor had his grandmother make deposits from cash derived from the distribution of actual methamphetamine, which was used to pay the various bills. The purpose was to conceal the true nature of the proceeds of actual methamphetamine distribution.
The following co-defendants have previously pled guilty to related charges:
- Eric Wessler, Lake Saint Louis, MO, scheduled for sentencing March 25, 2014
- Gerald Dement, Liberty, MO, sentenced in October to 120 months in prison
- Peter Coyle, Larexa, KS, sentenced in August to 120 months in prison
- Jason Knox, Foristell, MO, scheduled for sentencing February 6, 2014
- Kellen Lincoln, Kansas City, MO, sentenced in August to one year and one day in prison.
Luz Angelica Carrillo, is currently a fugitive and still faces trial. She is presumed innocent until and unless proven guilty.
This case was investigated by the Drug Enforcement Administration, Franklin County Narcotics Unit and IRS Criminal Investigation.
St. Louis Man Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO - ANTHONY LAMONT WINTERS, of St. Louis, was sentenced to two years imprisonment for aggravated identity theft. Winters appeared before Judge Stephen N. Limbaugh, Jr. in St. Louis. Winters admitted to stealing credit card numbers from patrons of a Maplewood restaurant at which he was employed in January 2013. Winters charged more than $12,000 to the stolen credit cards. Winters had fled to New York City by the time he was apprehended and awaits trial on other stealing and identity theft related charges in New York City; Pittsburgh, Pennsylvania; Arlington, Virginia; Chesapeake, Virginia; and Anne Arundel County, Maryland. In addition to the term of imprisonment, Winters will be ordered to repay the stolen funds.
This case was investigated by the Maplewood Police Department with the assistance of Amtrak Police Department and the United States Marshals Service. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
Local Tax Preparer Indicted on Fraud ChargesRead the Press Release
St. Louis, MO - The owner and operator of a St. Louis County tax preparation service was indicted yesterday for filing false returns and stealing the identities of taxpayers. RONALD SHONIWA, of Florissant, faces one count of theft of government funds for filing 15 tax returns, which generated more than $50,000 in improperly paid refunds, and two counts of aggravated identity theft for stealing the names and social security numbers of unsuspecting citizens and filing fraudulent returns in their names without their consent or knowledge.
If convicted, the theft of government funds count carries a maximum penalty of ten years, and/or a fine of up to $250,000. The aggravated identity theft counts are punishable by two years mandatory imprisonment and a fine of up to $250,000. The sentence for aggravated identity theft runs consecutively to any sentence imposed on the theft of government funds count. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
Additionally, restitution to the IRS for the improperly paid refunds will be sought.
United States Attorney Richard Callahan noted that "stolen identity refund fraud is a large and growing problem across the country, and the IRS and Justice Department dedicates substantial resources in fighting it, particularly at this time of year."
"Taxpayers should exercise caution when choosing a tax professional, especially since you will hand over your personal and financial identifying information," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. "They should also be aware of the many free, professional tax preparation services available to low and moderate income taxpayers and senior residents throughout St. Louis."
This case was investigated by IRS Criminal Investigation. Assistant United States Attorney Tom Albus 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 Turkish Nationals Indicted for Smuggling Counterfeit Cancer DrugRead the Press Release
St. Louis, MO - The United States Attorney’s Office for the Eastern District of Missouri announced that OZKAN SEMIZOGLU and SABAHADDIN AKMAN, both from Turkey, have been charged with obtaining unapproved, misbranded, adulterated and counterfeit cancer treatment prescription drugs from Turkey and other foreign countries and smuggling the drugs into the United States, including three shipments sent from Turkey to Chesterfield, Missouri.
According to the indictment, which was filed this morning in St. Louis, Missouri, the defendants 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. Defendants 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, the indictment states that the defendants shipped some prescription drugs requiring 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 the United States, defendants were aware that on many occasions their packages of their prescription drugs arrived in the United States at temperatures outside the constant cold temperature range discussed on the drugs’ labeling.
Semizoglu and Sabhaddin Akman, both of Instanbul, Turkey, were charged by indictment by a federal grand jury with one felony count of conspiracy to smuggle merchandise into the United States and three counts of smuggling. Both were arrested this morning in Puerto Rico.
If convicted, each count of smuggling carries a maximum penalty of twenty 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 United States Food and Drug Administration, Office of Criminal Investigations, with assistance from the United States Marshal’s Service, the Office of Inspector General for the U.S. Department of Health and Human Services, Johnson County Crime Lab of Olathe, Kansas, and the United States Attorney’s Offices for the Eastern District of Missouri and the District of Puerto Rico.
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.Knox County Man Sentenced and Ordered to Pay More Than $800,000 Restitution for Transporting Stolen Property Across State LinesRead the Press Release
Cape Girardeau, MO - The United States Attorney's Office announced today that a Knox County, Missouri, man was sentenced to federal prison for three charges involving transporting stolen goods.
CHARLES WILLIAM TAGUE of Hurdland, Missouri, was sentenced to 14 months imprisonment on one felony count of conspiracy to transport stolen property across state lines and two felony counts of interstate transportation of stolen goods. He was also ordered to pay a total of $801,928.07 restitution. Upon completion of the prison sentence, he will be placed on federal supervised release for a period of three years. Tague appeared before U.S. District Judge John A. Ross on Wednesday, January 15, 2014, in Cape Girardeau.
Previously with his plea, Tague admitted that on April 26, 2010, Roger L. Smith, the owner of Yield Plus, Inc., a plant food company in Scott City, Missouri, realized that someone had stolen over 8,000 gallons of liquid plant food from his business over the weekend. Smith contacted the Scott County Sheriff’s Department and an investigation was initiated.
Yield Plus, Inc., is a company that makes liquid plant food that is shipped in interstate commerce to many different states. The investigation revealed that the plant manager, John A. Greenlee, was filling tanker trucks owned by Tague at night and on weekends in exchange for money. Tague, who owned a trucking company, would in turn sell the stolen liquid plant food to mostly out-of-state customers. Tague collected a total of nearly $802,000 from those customers for the stolen liquid plant food and paid Greenlee roughly $14,000.
Greenlee was previously sentenced to a term of 27 months imprisonment and ordered to pay restitution in the amount of $283,672.
The Federal Bureau of Investigation and the Missouri State Highway Patrol are commended for their efforts to prosecute this case. Assistant United States Attorneys Abbie Crites-Leoni and Morley Swingle handled the prosecution for the Government.
Three Area Businessmen Indicted on Federal Fraud ChargesRead the Press Release
St. Louis, MO - Three area businessmen surrendered to authorities on two separate indictments alleging bank fraud against Excel Bank, which failed in 2012 after receiving $4,000,000 in capital from the Treasury Department through the Troubled Asset Relief Program (TARP).
According to the indictments, William Glasgow owned dozens of rental properties as part of his real estate business, Glasgow Realty, and did business with Excel Bank, the holding company of which was Investors Financial Corporation of Pettis County, Missouri. The indictment states that Glasgow had two loans on his rental properties, which he received by falsifying documentation.
In a separate unrelated indictment, James Crews and Michael Hilbert are alleged to have engaged in the real estate business, doing business through various entities including Crews Corporation, Hillcrew Properties, Merz Properties, Eagle Group and Marathon RE. They owned dozens of rental properties in the St. Louis area and are alleged to have defrauded Excel Bank by submitting numerous draw requests for hundreds of thousands of dollars in escrow funds set aside for improvements to those properties.
WILLIAM GLASGOW, Town & Country, MO, was indicted by a federal grand jury on two felony counts of bank fraud. In a separate unrelated indictment, JAMES CREWS, Wentzville, MO; and MICHAEL HILBERT, St. Charles, MO, were indicted the same day on two felony counts each of bank fraud. The indictments were returned December 11, 2013, but remained sealed until the defendants appeared in federal court for arraignment today in St. Louis.
If convicted, each count of bank 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 Office of the Special Inspector General for the Troubled Asset Relief Program and the Federal Bureau of Investigation. Assistant United States Attorney Tom Albus 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.U.S. Attorney's Office Announces Collections of $19,891,159 for U.S. Taxpayers in Fiscal Year 2013Read the Press Release
St. Louis, MO - United States Attorney Richard Callahan announced today that for the fiscal year 2013, his office collected $11,448,830 in criminal and civil actions during the year. Of this amount, $10,113,957 was collected in criminal actions and $1,334,873 was collected in civil actions
In addition to the above eleven million dollars, the Office also assisted partner law enforcement agencies in the Eastern District of Missouri in collecting an additional $8,442,329 in asset forfeiture actions in FY 2013. Forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.
Aside from these collection efforts in the Eastern District of Missouri, the office also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect additional monies, but those monies are not included in the numbers being announced.
Earlier today, Attorney General Eric Holder announced that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending September 30, 2013. The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period."The department’s enforcement actions help to not only ensure justice is served, but also deliver a valuable return to the American people," said Attorney General Holder. "It is critical that Congress provide the resources necessary to match the Department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment."
The U.S. Attorneys’ Offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Former Local Loan Officer Pleads Guilty to Federal Fraud ChargesRead the Press Release
St. Louis, MO - MICHAEL WALLIS pled guilty to federal criminal charges related to a fraud scheme involving applications for home loans.
According to the facts stated in court during the plea, since at least 2007, Michael Wallis worked in the mortgage lending industry in the St. Louis area. Initially, Wallis was employed as a loan officer, but later operated a company known as Missouri Builders and Home Remodeling (hereinafter referred to as "Missouri Builders"), which performed interior construction and remodeling work on houses. In or around 2007, Wallis began doing real estate business deals with two associates, whose initials are J.B. and J.H., who also worked in the St. Louis real estate market. Wallis, J.B. and J.H. each had experience dealing with mortgages insured by the United States Department of Housing and Urban Development, Federal Housing Administration ("FHA loans"). In addition, they had experience dealing with conventional mortgage loans from banks insured by the Federal Deposit Insurance Corporation ("FDIC") and mortgage loans held by the government sponsored entity known as the Federal National Mortgage Association ("Fannie Mae").
From as early as 2007 until as late as January 2010, in the Eastern District of Missouri, Wallis conspired with J.B. and J.H. to commit the crimes of Bank Fraud and False Statements to an Agency of the United States, in that Wallis and his co-conspirators made material false representations on HUD-1 forms, resulting in the disbursement of excess loan funds which Wallis and his co-conspirators shared among themselves. As part of the conspiracy, Wallis and his co-conspirators found and recruited individuals to apply for loans to purchase homes. Wallis and his co-conspirators supplied the funds for the down payments on the home purchases, but falsely represented to HUD and to the lending banks that the borrowers were making the down payments. Wallis and his co-conspirators created fake "gift letters," which falsely stated that the borrowers’ relatives were providing the down payment funds as gifts to the borrowers.
In addition, Wallis and his co-conspirators falsely stated on HUD-1 forms that remodeling expenses had been incurred and had to be paid from loan proceeds. Wallis and J.B. created fake and inflated invoices for expenses for remodeling work that was never done. As a result, at closing, the title company disbursed loan funds to Wallis’ company, Missouri Builders, based on the false statements on the HUD-1 forms and the false and inflated invoices. Wallis then paid kickbacks to J.B. and J.H. from the illegally obtained loan funds.
Most of the loans went into default, causing substantial losses to the United States and financial institutions. The parties agreed that, for purposes of sentencing guideline calculations, Wallis is responsible for losses in excess of $400,000 but not more than $1,000,000.
Wallis, St. Louis, MO, appeared before United States District Judge John Ross and pled guilty to one felony count of conspiracy to commit bank fraud and make false statements and one felony count of making false statements. Sentencing has been set for March 27, 2014.
Conspiracy carries a maximum of 5 years in prison and/or fines up to $250,000, or both; and making false statements carries a maximum of five years in prison and/or fines up to $250,000, or both. 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 Department of Housing and Urban Development Office of Inspector General, the Federal Housing Finance Agency Office of Inspector General and the Postal Inspection Service. Assistant United States Attorney Reginald Harris is handling the case for the U.S. Attorney's Office.
Owner of Medical Equipment Company Pleads Guilty to Bank FraudRead the Press Release
St. Louis, MO - MICHAEL EDWARD FILMORE pled guilty to a multi-million dollar bank fraud against Pulaski Bank over several years while operating a medical equipment sales firm. In his plea agreement, Filmore admitted to fabricating and altering brokerage account records which purportedly showed he had millions of dollars in securities that he agreed to pledge as collateral for his outstanding loans, including a $1,000,000 revolving line of credit. Ultimately, Filmore obtained more than six million dollars from Pulaski through the fraud scheme and currently owes Pulaski more than five million dollars. None of the security pledged by Filmore, in the form of securities accounts or purported valuable medical equipment, existed as was represented to the bank.
According to court documents, Filmore was a borrower from Pulaski Bank, and had at least fifteen outstanding loans with a total balance owed of more than six million dollars by late 2013. Most of these loans are held in the name of Filmore’s company, Healthcare Partners Group, LLC. Over the course of Filmore’s relationship with Pulaski, which spanned many years, it was Pulaski’s understanding that he was engaged in the brokerage of medical equipment. Filmore often needed to finance the acquisition of equipment, which he sold and leased to his customers.
On November 1, 2013, Pulaski personnel determined that purchase order and account information associated with a new loan was suspicious. Further investigation by the bank revealed fictitious information had been submitted to the bank. Discovering these discrepancies, Pulaski cancelled the wire transfer of funds and reported the matter to authorities. A criminal complaint was filed against Filmore in federal court on November 16, 2013.
Filmore, Chesterfield, MO, pled guilty to one felony count of bank fraud before United States District Judge Audrey G. Fleissig, who set sentencing for March 18, 2014.
This charge carries a maximum penalty of 30 years in prison and/or fines up to $1million. 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; the U.S. Postal Inspection Service and the Special Inspector General for the Troubled Asset Relief Program (TARP), in cooperation with the executive staff of Pulaski Bank, who offered essential support to the investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.I-55 Bandit Pleads Guilty to Bank Robbery ChargesRead the Press Release
St. Louis, MO - ANDREW MABERRY, O’Fallon, IL, who the FBI referred to as the I-55 Bandit, entered a guilty plea to bank robbery, including the July 2, 2013, robbery of the Commerce Bank in Jefferson County, Missouri. He entered his plea before United States District Judge Catherine D. Perry in St. Louis.
According to court documents, on July 2, 2013, Maberry robbed the Commerce Bank in Arnold, Missouri. He also admitted with his plea agreement to nine other robberies in five states: May 15, 2013, US Bank in Crystal City, Missouri; May 21, 2013, First State Community Bank in Cape Girardeau, Missouri; May 6, 2013, Scott Credit Union in Edwardsville, Illinois; June 5, 2013, Harford Bank in Bel Air, Maryland; June 9, 2013, TD Bank located in Essex, Maryland; July 19, 2013, Wells Fargo Bank in Bel Air, Maryland; July 24, 2013 Susquehanna Bank in Ocean City, Maryland; July 30, 2013 Huntington National Bank in Hurricane, West Virginia; and August 14, 2013 Bank of Jackson in Jackson, Tennessee. On September 10, 2013, a multi-state press release was issued, which included bank security camera photographs of the robber who had been dubbed the "I-55 Bandit." The FBI here and in other districts received numerous phone calls from individuals stating that they know Andrew Maberry. On the same date, FBI in St. Louis was contacted and told that the I-55 Bandit wanted to turn himself in, and on September 11, 2013, Andrew Caleb Maberry turned himself in to the FBI in St. Louis.
Bank robbery 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. A sentencing date has not been set.
This case is being investigated by the Federal Bureau of Investigation with assistance from multiple law enforcement agencies from several states. Assistant United States Attorney Tom Mehan is handling the case for the U.S. Attorney’s Office.
St. Louis Man Sentenced for Home Invasion Robbery ConspiracyRead the Press Release
St. Louis, MO -- TRAY FERGUSON of Saint Louis, Missouri, was sentenced to 18 years imprisonment on December 18 by the Honorable Catherine D. Perry. Ferguson pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine and one count of possession of a firearm in furtherance of drug trafficking in July 2013. Ferguson is the first of five defendants to be sentenced in connection with an April 2013 conspiracy in which the five men agreed to, among other things, arm themselves, make entry into a house located in south Saint Louis City, and rob between 22 and 30 kilograms of cocaine from inside the residence.
In preparation for the robbery, Ferguson armed himself with a Springfield Armory make, Model XD, .45 caliber pistol loaded with 14 rounds of ammunition; an additional .45 caliber magazine loaded with 13 rounds of ammunition; and a Glock make, Model 22, .40 caliber pistol with an extended magazine loaded with 21 rounds of ammunition. Ferguson also obtained and provided to co-defendant Ricky Turner a Colt, Model Python, .357 caliber revolver; 15 rounds of ammunition; and a loaded Hi Point, Model C9, nine millimeter caliber pistol. Co-defendant James Clark possessed a Glock make, Model 19, nine millimeter caliber pistol with an extended magazine loaded with 33 rounds of ammunition.
Sentencing for each of the remaining four co-defendants has been set as follows: Tramaine Ellis: January 2, 2014; Ahmad Britton: February 11, 2014; Rickey Turner: February 6, 2014; and James Clark: March 4, 2014.
Ferguson’s sentencing comes as a result of the proactive investigation initiated by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives and the Saint Louis Metropolitan Police Department in the Spring of 2013 to reduce violent crime within the City of Saint Louis.Owner of Invision Investments Sentenced on Wire Fraud ChargesRead the Press Release
St. Louis, MO - The United States Attorney's Office announced today that KEVIN BROWN, owner of Invision Investments, was sentenced to 36 months of imprisonment for operating a Ponzi-style investment scheme in which Brown falsely and fraudulently represented to investors that their money would be used to invest in real estate.
According to court documents, Brown represented to investors and potential investors that Invision Investments had equity in property when in truth and fact, only a portion of investor funds went into the purchase and/or rehabilitation of properties. Brown executed and provided promissory notes that falsely and fraudulently represented the rate of return investors were promised to receive. He represented that Invision Investments would acquire, rehabilitate and resell properties sufficient to produce the promised rates of return. In truth, Invision's real estate purchases and efforts to rehabilitate and resell properties were insufficient to generate the promised funds. Investors were paid returns on their investments using funds obtained from subsequent investors, in addition to returns on legitimate investments, i.e. the sale of real estate. In addition, Brown used investor's funds for business expenses, to pay interest to other investors and to pay Brown's compensation and some personal expenses.
Brown was also ordered to pay more than $1.6 million in restitution to victims of his fraud scheme.
This case was investigated by the United States Postal Inspection Service and the Federal Bureau of Investigation. Assistant United States Attorney Dianna R. Collins handled the case for the U.S. Attorney's Office.
Local Woman Indicted on Federal Bank Fraud and Identity Theft ChargesRead the Press Release
St. Louis, MO - MELANIE ANN MAHANEY was indicted on multiple fraud charges involving her alleged misuse of bank funds.
According to the indictment, between March 8, 2013, and April 19, 2013, defendant was recruited to impersonate car burglary victims in a bank fraud scheme. During the course of the scheme, defendant received stolen drivers licenses, social security cards, personal checks, credit and debit cards and other forms of identification which had been stolen by others from the vehicles. Using the stolen identification of one car burglary victim, defendant cashed checks stolen from other car burglary victims at banks located in the St. Louis Metropolitan Area and the Southern District of Illinois.
Mahaney, St. Louis, was indicted by a federal grand jury on two felony counts of bank fraud and two felony counts of aggravated identity theft.
If convicted, each count of bank fraud carries a maximum penalty of 30 years in prison and/or fines up to $1 million and each count of aggravated identity theft carries a mandatory imprisonment of 2 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 U.S. Postal Inspection Service. Assistant United States Attorney Tracy Berry handled 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 Venture Capitalist Sentenced on Tax ChargesRead the Press Release
St. Louis, MO -- BURTON DOUGLAS MORRISS was sentenced to sixty months on tax evasion charges associated with his evasion of taxes on millions of dollars of income he earned between 2006 and 2009. According to his plea agreement, the tax liability Morriss attempted to evade in 2007 was $2,888,483. The total tax due and owing by Morriss for all tax years is $5,559,386.
"Tax evasion is not a victimless crime, said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. "We all pay when others swindle the government."
According to court documents, Morriss was a venture capitalist living in St. Louis County. Morriss admitted that, through his work, he was versed in tax laws. As a venture capitalist, he would discuss tax consequences of buying and selling investments to sophisticated investors. Moreover, he had been dealing with advisers and lawyers regarding his personal taxes for many years before 2006.
For the tax year 2007, which is the tax evasion count to which he pleaded guilty, Morriss earned substantial income from his venture capital activities. In order to reduce his tax liability for that year, he claimed $18,160,613 in losses associated with a number of entities, including Morriss Holdings, MIC Aircraft, Tech Aircraft and MIC Real Estate. These entities were established as single-member limited liability companies for Morriss' mother. Additionally, Mrs. Morriss had already claimed these passive losses for her own benefit in previous years. In addition to these 2007 tax losses, Morriss admitted to evading millions more in taxes on income from his venture capital companies in subsequent tax years.
Morriss did not timely file tax returns for 2006, 2007, 2008 and 2009. On June 27,2011, Morriss filed the delinquent 2007 tax return that is the subject of the guilty plea, along with delinquent 2008 and 2009 tax returns.Morriss, Creve Coeur, MO, pled guilty in August to one felony count of tax evasion, and appeared today for sentencing before United States District Judge Rodney Sippel.
Morriss' case was prosecuted at the same time as the civil enforcement action of Securities and Exchange Commission v. Burton Douglas Morriss was pending in the Eastern District of Missouri. On August 13, 2013, United States District Judge Carol E. Jackson ordered that Morriss, among other things, be prohibited from acting as an officer or director of certain companies issuing securities. The SEC matter was filed in 2012 in the wake of the collapse of the Acartha Group, LLC and other venture capital companies run by Morriss. The SEC complaint alleged that Morriss had fraudulently transferred millions of investor dollars to himself for personal use. In addition to the director/officer bar, the SEC will ask the Court to order disgorgement of ill-gotten gains and civil penalties.
In addition to the SEC, this case was investigated by Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney's Office.
Former Vice President of Alberici Constructors and Subcontractor Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO - CLONE JEFFERSON OLIVER was sentenced to 60 months in prison for his participation in a scheme to defraud Alberici Constructors, Inc. by inflating invoices.
Oliver, Apollo Beach FL, former vice-president of construction at St. Louis-based Alberici, pled guilty to six counts of mail fraud, wire fraud and money laundering last September and appeared today for sentencing before United States District Judge Catherine D. Perry.Sybil Smith, Special Agent in Charge of IRS Criminal Investigation said, “This is yet another example of multiple agencies working together with our financial fraud investigators to dismantle a sophisticated fraud scheme.”
According to court documents, Oliver was the project manager for Alberici on a project to build a water treatment plant in Arlington County, Virginia. Work on the project began in September 2006 and the cost of the project was $238,000,000. Oliver and Kenneth Marc Simmons, a subcontractor on the project, participated in a scheme to defraud Alberici through the preparation and submission of inflated invoices and false change orders for materials provided to the project by Simmons' business, Industrial and Municipal Supply (IMS). When IMS received payment on the bad invoices, Simmons kept a share and then forwarded money in the nature of kickbacks to Oliver. Simmons made many of the payments to a corporation formed by Oliver called Advanced Construction Solutions, which had the same initials (ACS) as another supplier to the Arlington project, American Construction Services. The court document refers to Oliver's company as the "fake ACS" while the latter company is referred to as the “real ACS.” Oliver admitted that, in the scheme to overpay IMS, Alberici was overbilled in the amount of $4.8 million from 2006 through 2011.
The real ACS provided welding services to the project. At Oliver's direction the owner of the real ACS billed Alberici for piping actually supplied by IMS in a situation where the real ACS provided only welding services on that piping. IMS invoiced the real ACS for that piping through inflated invoices of approximately $2,000,000. The real ACS included those billings in the invoices it submitted to Alberici for payment.Oliver will be liable to pay Alberici the full $6.8 million in restitution. He also agreed that property and assets he acquired with the stolen money would be forfeited. This includes two houses in Florida (one in Apollo Beach and one in Zephyrhills), a diamond ring with platinum mounting, a 2010 Mercedes Benz vehicle, a 2007 Sea Ray boat, two SeaDoo Bombardier water craft and several bank accounts.
Co-defendant Kenneth Marc Simmons, La Grange GA, pled guilty in September to two felony counts of mail fraud and two felony counts of wire fraud and was sentenced yesterday to 24 months prison and ordered to pay restitution of $4.8 million.
This case was investigated by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation. Assistant United States Attorneys Anthony Franks and Richard Finneran handled the case for the U.S. Attorney’s Office.
Former St. Louis Parks Division Deputy Commissioner Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO - JOSEPH VACCA, Former Deputy Commissioner of the St. Louis Parks Division, was sentenced to 36 months in prison on charges that he and Thomas Stritzel, Former Chief of the St. Louis Park Rangers, defrauded the City of St. Louis of approximately one-half million dollars by submitting false invoices purportedly for materials and services supplied to the Parks Division. He appeared before United States District Judge Jackson in St. Louis.
According to court documents at the time of their guilty pleas, from January 1, 2005, to December 31, 2012, Vacca and Stritzel embezzled funds of the City of St. Louis based upon the submission of sham and false invoices, which included false charges of approximately $472,722. They used the funds for their own personal use, including lease payments on personal vehicles, fuel costs, the payment of personal credit card charges and other personal living expenses unrelated to the legitimate operations of the St. Louis Parks Division.
Vacca and Stritzel set up a sham company called Dynamic Management and then funneled city funds received through the submission of false and sham invoices to Dynamic Management's bank account. They then used those fraudulently obtained funds for their own personal use, including leasing personal vehicles, payment of fuel costs and the payment of personal credit card charges.
Vacca was also ordered to pay restitution to the City of St. Louis in the amount of $472,722.26
Co-defendant Thomas Stritzel is scheduled for sentencing January 27, 2014.
This case was investigated by the Federal Bureau of Investigation and the St. Louis Metropolitan Police Department. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney's Office.
Former Belgrade State Bank Branch Manager Indicted on Fraud and Embezzlement ChargesRead the Press Release
St. Louis, MO --A federal indictment was returned today naming Sheila Aubuchon as the defendant in an alleged scheme to misdirect funds held at Belgrade State Bank to her personal use. The indictment alleges that Aubuchon forged signatures, altered account numbers and evaded bank procedures in order to conceal her misappropriation of more than $120,000 in funds owned by Belgrade State Bank and its customers. The indictment also alleges that Aubuchon failed to file currency transaction reports (CTRs) relating to these transactions as required by federal law.
SHEILA AUBUCHON was indicted by a federal grand jury on three felony counts of bank fraud, three felony counts of theft or embezzlement by a bank employee and two felony counts of causing Belgrade Bank to fail to file CTRs. If convicted, each count of bank fraud and embezzlement carries a maximum penalty of 30 years in prison. Failure to file a CTR carries a maximum penalty of 10 years in prison. In determining any actual sentence imposed, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case is being investigated by the United States Secret Service and the Internal Revenue Service. Assistant United States Attorney Richard E. Finneran 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 City Man Sentenced on Charges Involving the Assault of A Federal OfficerRead the Press Release
St. Louis, MO - JAMES EDWARD JONES was sentenced to 20 years in prison. Jones pled guilty in September to federal gun and assault charges involving the April 18, 2013, assault of a federal officer and selling crack cocaine to an undercover officer. He appeared today before United States District Judge Audrey G. Fleissig.
According to court documents, on April 15, 2013, Dwayne Crayton sold crack cocaine to an undercover agent. Three days later on April 18, 2013, his brother Frederick Crayton and James Jones arranged to sell three firearms to an ATF undercover agent and two confidential informants. During a struggle involving several firearms, Frederick Crayton assaulted the undercover agent in an attempt to rob the agent of the money that was to be used to buy the three firearms.
Frederick Crayton, St. Louis City, was sentenced to 168 months in prison on gun and assault charges involving the April 18, 2013, assault of a federal officer. His brother Dwayne Crayton, also of St. Louis City, was sentenced to 32 months in prison on charges of selling crack cocaine to an undercover officer. Both were sentenced on October 23, 2013, by United States District Judge Audrey G. Fleissig.
This case was investigated by the Bureau Alcohol, Tobacco, Firearms & Explosives. Assistant United States Attorney Tom Mehan handled the case for the U.S. Attorney's Office.
Former Kinloch Mayor Sentenced for Falsifying Halfway House RecordsRead the Press Release
St. Louis, MO - Former Kinloch Mayor KEITH CONWAY was sentenced to six months in prison on federal charges of submitting false employment records while completing his original sentence at a St. Louis halfway house--the Dismas House.
Conway was originally sentenced to 21 months in federal prison in November 2011 on charges of using Kinloch city funds to pay personal expenses, fund personal travel and purchase a Florida vacation condominium timeshare; and attempting to influence Kinloch city officials to provide false information to federal law enforcement about the criminal charges pending against him.
According to court documents, on May 1, 2013, the United States Bureau of Prisons transferred Conway from its prison facility at Marion, Illinois, to the Dismas House residential reentry center in St. Louis. The Bureau of Prisons contracts with Dismas House for the housing and supervision of inmates, and retains jurisdiction and responsibility over those inmates until their ultimate release from Bureau of Prisons' custody upon completion of their sentence. As a resident of Dismas House, Conway was required to seek and obtain full-time employment and to submit paycheck stubs to verify that employment to the Dismas House Program Director. While a resident at Dismas House awaiting final release from the Bureau of Prisons, Conway obtained and submitted numerous false payroll records, falsely representing that he had obtained full-time employment. Based upon those false records, Conway had been permitted to leave the Dismas House premises every day during his falsely reported work hours.
Conway pled guilty in September to four felony counts of filing false documents. He appeared today for sentencing before United States District Judge Catherine D. Perry.
This case was investigated by the Federal Bureau of Investigation Public Corruption Unit, including Officers of the St. Louis County Police Department. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney's Office.
Poplar Bluff Man Sentenced to 30 Years for Producing Child PornographyRead the Press Release
St. Louis, MO - DAVID L. CATHEY of Poplar Bluff, Missouri, was sentenced to 30 years imprisonment on two felony charges for producing child pornography. He appeared before U.S. District Judge John A. Ross in Cape Girardeau. Upon completion of that sentence, he will be placed on supervised release for the remainder of his life.
Previously with his plea, Cathey admitted that over a period of several years he took photographic images of two minor females whom he caused to engage in sexually explicit conduct. Both children were less than twelve years old when Cathey started taking the photographs. Cathey stored some of the sexually explicit images on a compact disc. The images of the children were discovered when Cathey sold his computer and failed to remove the compact disc containing the photographs.
The Poplar Bluff Police Department, the Southeast Cyber Crimes Task Force, the Butler County Sheriff’s Department and the Federal Bureau of Investigation are commended for their efforts to jointly investigate this case. Assistant United States Attorney Abbie Crites-Leoni handled the prosecution for the Government.
Local Man Indicted on Fraud ChargesRead the Press Release
St. Louis, MO - A federal indictment was unsealed today naming RONALD L. ROBERTS as the culprit in a multi-million-dollar loan fraud scheme. The indictment alleges that Roberts solicited personal loans for a fictitious real estate transaction involving property in or around Poplar Bluff, Missouri, from which Roberts claimed he would receive between $7 million and $22 million in proceeds after the property was sold to Wal-Mart. According to the indictment, there was no such real estate transaction pending, the property in question was worth substantially less than Roberts represented and the funds provided by lenders were instead diverted to Roberts’ personal use, including gambling at the River City Casino. The indictment alleges that Roberts caused more than $2.5 million in losses as a result of the fraud.
Roberts was indicted by a federal grand jury on three felony counts of wire fraud and one felony count of mail fraud. The indictment was returned December 11th, but remained sealed until the defendant turned himself in to authorities earlier today.
If convicted, 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.
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.
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.Houston, Texas, Man Sentenced to 33 Years for April 2011 MurderRead the Press Release
St. Louis, MO - LODGY MICHAEL JACKSON of Houston, TX, was sentenced to 400 months imprisonment for the murder of Jamie Benson, of Houston, TX, on April 22, 2011. In February, Jackson pleaded guilty to three counts: conspiracy to possess with the intent to distribute over 500 grams of cocaine; conspiracy to possess a firearm in furtherance of a drug trafficking crime and discharging a firearm in furtherance of a drug trafficking crime where death resulted. Jackson was sentenced today by United States District Court Judge Audrey G. Fleissig.
According to court documents, in early April 2011, Jackson, co-defendants Scott Compton and Andreus O’Bryant, along with others, joined in a conspiracy that included robbing and murdering victim Benson within the City of St. Louis after luring Benson from Houston to St. Louis. Compton was recruited by O’Bryant to act as an individual interested in purchasing over 500 grams of cocaine from Benson for an inflated price. Compton played that role. In doing so, Compton, along with O’Bryant and Jackson, convinced Mr. Benson that a drug transaction was going to occur when, in reality, O’Bryant, Jackson and others intended to rob Benson of the cocaine and murder him.
Jackson, who was friends with Benson from living in Houston together, was brought to St. Louis, Missouri, by O’Bryant for purposes of carrying out the murder in exchange for compensation from O’Bryant. In the early morning hours of April 22, 2011, Jackson and Benson sat inside O’Bryant’s vehicle that was parked in a St. Louis alley. Benson was in the front passenger seat. Jackson sat directly behind him. To facilitate Benson’s murder, Jackson initiated a heated argument with Benson. As the argument continued, Jackson mouthed the words “watch this” to another passenger inside O’Bryant’s vehicle. Jackson then fired one shot into the back of Benson’s head from a firearm Jackson possessed. Jackson and others abandoned Benson's body in the alley, where it was later discovered by the St. Louis Metropolitan Police Department. Jackson, O’Bryant and others undertook significant efforts to cover up the conspiracy and destroy evidence of the crime, but were ultimately unsuccessful.
Jackson is the second of three defendants to be sentenced in this matter. Compton pleaded guilty for his involvement and has been sentenced to 5 years imprisonment. O’Bryant has also pleaded guilty. He awaits sentencing on February 10, 2014.
This case was investigated by the St. Louis Metropolitan Police Department; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the United States Marshals Service; the Franklin County Sheriff's Department and the St. Charles County Police Department.Fenton Area Woman Pleads Guilty to EmbezzlementRead the Press Release
St. Louis, MO – Elaine Lewis pleaded guilty to embezzling more than $300,000 from a church checking account, between 2009 and August 2013.
According to court documents, Elaine Lewis worked as a bookkeeper for the Lutheran Church of the Resurrection, located in St. Louis County, MO. Between 2009 and August 2013, Lewis used a variety of schemes to embezzle more than $300,000 from the Church’s checking 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, MO.
ELAINE LEWIS, Fenton, MO, pled guilty to one felony count of mail fraud before United States District Judge Rodney W. Sippel. Sentencing has been set for March 7, 2014.
Mail 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. Lewis will also be required to pay full restitution.
This case was investigated by the United States Postal Inspection Service and the Sunset Hills, MO, Police Department. Assistant United States Attorney John Bodenhausen is handling the case for the U.S. Attorney’s Office.
Owners of St. Charles Real Estate Company Sentenced for Tax FraudRead the Press Release
St. Louis, MO - JOHN and ANTHONY CALANDRELLA were sentenced today for their failure to file income tax returns for three years on the income from their company, Golden Delta Enterprises. John was sentenced to 18 months in prison; Anthony was sentenced to 6 months in prison.
According to court documents, John and Anthony Calandrella owned Golden Delta Enterprises, (GDE), a business that purchased, renovated and then sold or rented homes in the St. Louis metropolitan area. For the tax years 2003, 2004 and 2005, GDE generated substantial profits, part of which went directly to the defendants. Accordingly, they received substantial, personal gross income which required them to prepare and file individual federal income tax returns. However, for these three tax years, the Calandrellas’ had returns prepared for these tax years, but failed to file these returns or pay any taxes due and owing to the United States of America. Additionally, they sent letters to the Internal Revenue Service claiming to be citizens of the sovereign state of Missouri, therefore not required to sign or file federal income tax returns or pay federal income taxes. They also concealed personal income and assets in order to lower potential tax liability. Finally, the brothers used GDE funds to purchase literature from well-known promoters of tax evasion schemes and activities. For the tax years 2003-2005, John Calandrella caused a loss to the United States in the amount of $227,032; Anthony Calandrella caused a loss of $198,644. Both were ordered to pay those amounts in restitution.
"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. "Honest individuals should not have to pick up the tab for those people not filing returns."
John P. Calandrella and Anthony R. Calandrella, both of Lake St. Louis, MO, pled guilty in July to three felony counts of attempting to evade taxes. They appeared today for sentencing before United States District Judge Jean C. Hamilton.
This case was investigated by Internal Revenue Service Criminal Investigation. Assistant United States Attorney Stephen Casey handled the case for the U.S. Attorney’s Office.
Clinic Manager Pleads Guilty to Receiving Misbranded BotoxRead the Press Release
St. Louis, MO - THOMAS GREG MARTIN pled guilty to receiving misbranded Botox® from a foreign unlicensed drug wholesaler, some of which had counterfeit exterior packaging.
According to court documents, Martin operated Aestheticare LLC, a medical clinic which provided assorted cosmetic procedures to patients in St. Louis County, Missouri. In March 2010, Martin received a facsimile transmission from an unlicensed drug wholesaler that offered low prices for assorted prescription drugs, including "Botox (Turkish)" for $344.99 a vial. During this same time frame, the FDA-approved version of Botox® was sold through licensed drug wholesales at higher prices in the United States, typically $525 a vial. From March 2010 through September 2012, Martin made over thirty separate purchases of these drugs from the unlicensed drug wholesaler. Ultimately, Martin and others provided the illegal drugs to the clinic’s patients without informing them of the source of the drugs. The U.S. Food and Drug Administration has recently issued a public safety alert regarding misbranded Botox®, found on the agency’s website at: http://www.fda.gov/drugs/drugsafety/ucm349503.htm.
Martin, St. Louis, Missouri, pled guilty to one felony charge of receiving misbranded drugs before United States District Judge Rodney Sippel. Sentencing has been set for March 7, 2014.
Martin faces 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 the U.S. Food and Drug Administration, Office of Criminal Investigations.
Florida Man Sentenced in Connection with Stolen Identity Tax Fraud SchemeRead the Press Release
St. Louis, MO – DWAYNE DENARD JOHNSON, Wesley Chapel, Florida, was sentenced to 36 months in prison for his role in a stolen identity tax fraud scheme lead by his wife, Tania Henderson, from their home in suburban Tampa. Johnson is the fifth person involved in the scheme charged and convicted in the Eastern District of Missouri.
According to his August plea agreement, Johnson admitted to helping his wife and others use the identities and social security numbers of hundreds of people to file phony tax returns and collect the refunds generated by those returns. In all, the scheme has been found to have involved more than 400 stolen identities and generated more than $1.8 million in refunds, about half of which was intercepted by the IRS before coming under the control of the fraudsters.
His wife, Tania Henderson, Wesley Chapel, Florida, was sentenced in July to 144 months in prison for her role in leading a stolen identity tax fraud scheme during 2012.
This case was investigated by Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney's Office.
Final of Five Defendants Enters Guilty Plea to Home Invasion Robbery ConspiracyRead the Press Release
St. Louis, MO – JAMES CLARK, Saint Louis, Missouri, entered his guilty plea today before the Honorable Catherine D. Perry. Clark pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine and one count of possession of a firearm in furtherance of drug trafficking. Clark is the last of five defendants to plead guilty in connection with an April 2013 conspiracy in which the five men agreed to, among other things, arm themselves, make entry into a house located in south Saint Louis City and rob between 22 and 30 kilograms of cocaine from inside the residence.
In preparation for the robbery, Clark possessed a Glock make, Model 19, nine millimeter caliber pistol with an extended magazine loaded with 33 rounds of ammunition. Co-defendant Tray Ferguson armed himself with a Springfield Armory make, Model XD, .45 caliber pistol loaded with 14 rounds of ammunition; an additional .45 caliber magazine loaded with 13 rounds of ammunition; and a Glock make, Model 22, .40 caliber pistol with an extended magazine loaded with 21 rounds of ammunition. Co-defendant Ricky Turner possessed a Colt, Model Python, .357 caliber revolver; 15 rounds of ammunition; and a loaded Hi Point, Model C9, nine millimeter caliber pistol.
In addition to Clark’s guilty plea this morning, co-defendant TRAY FERGUSON, entered his guilty plea on July 31, 2013, to one count of conspiracy to possess with the intent to distribute over five kilograms of cocaine and one count of possession of firearms in furtherance of drug trafficking. Co-defendant Tramaine Ellis, pleaded guilty on October 10, 2013, to one count of conspiracy to possess firearms in furtherance of drug trafficking. Co-defendant Ricky Turner, pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine and one count of possession of a firearm in furtherance of drug trafficking on November 14, 2013. Co-defendant Ahmad Britton, entered his guilty plea on November 21, 2013, to distribution of more than 28 grams of cocaine base (crack); conspiracy to possess with the intent to distribute over five kilograms of cocaine and conspiracy to possess firearms in furtherance of drug trafficking.
Each defendant faces maximum possible penalties ranging from 20 years to life imprisonment. Sentencing for each will occur in early 2014. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges. Sentencings have been set as follows: Ferguson: December 18, 2013; Ellis: January 2, 2014; Britton: February 11, 2014; Turner: February 6, 2014; and Clark: March 4, 2014.
The guilty plea of each defendant comes as a result of the proactive investigation initiated by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives in the Spring of 2013 to reduce violent crime within the City of Saint Louis.
Local Man Sentenced for Faking Military Service and Conducting Phony Raffle to Aid VeteransRead the Press Release
St. Louis, MO – MATTHEW BUCKINGHAM was sentenced this morning to one year in prison by United States District Judge Henry Autrey.
According to court documents, Buckingham posted an advertisement on Craigslist in January 2013, indicating he was involved with a veterans’ charity identified as "Veterans Aid From All Foreign Wars." His advertisement stated that he planned to hold a raffle on July 4, 2013. Tickets would cost $5 each and he identified raffle awards of "First Prize: $3,000; Second Prize: $2,000; and Third Prize: $1,000." Through the advertisement, Buckingham solicited individuals to help him promote his charitable events, and he provided a contact number. Subsequently, a number of female individuals in the St. Louis area inquired and responded.
Buckingham arranged to meet the individuals who responded at various restaurants and bars in the St. Louis area and introduced himself as "Tyler Matthews." Buckingham claimed to be employed by various government agencies or departments of the United States, including claiming that he served as a United States marine in Afghanistan and Iraq; that he had been injured during the war; and since his return to the United States from overseas, he worked with the Department of Homeland Security and the United States Coast Guard; including working "undercover" in north St. Louis work infiltrating gangs and otherwise combating crime.Ultimately, Buckingham did not hold a raffle on July 4, 2013, and he distributed no money from the ticket sales to wounded or homeless soldiers, veterans or other military personnel. Buckingham was not, and has never been, employed by the Department of Defense or the Department of Homeland Security. Similarly, he never served in the United States military or the United States Coast Guard.
Buckingham, St. Louis County, pled guilty in August to one felony count of impersonating a federal agent. He appeared today for sentencing before United States District Judge Henry Autrey.
This case was investigated by the Coast Guard Investigative Service and the Missouri Attorney General's Office. Assistant United States Attorney Matthew Drake handled the case for the U.S. Attorney's Office.Wentzville, Missouri, Man Indicted for Multiple Armed Bank Robberies and Shooting Missouri State Highway Patrol TrooperRead the Press Release
St. Louis, MO – A joint, cooperative investigation by the Federal Bureau of Investigation and multiple local law enforcement agencies has resulted in the federal grand jury returning am indictment against WARREN J. GLADDERS, Wentzville, Missouri, for multiple armed bank robberies committed by Gladders between October 2012 and September 2013. Following Gladders’ final armed bank robbery on September 20, 2013, Gladders was pursued and captured by a Missouri State Highway Patrol trooper. During the course of the capture, Gladders fired four rounds at the trooper. One round struck the trooper in his protective ballistic vest. The trooper returned fire, disabling Gladders and effectuating his arrest.
"The FBI and our local and state law enforcement partners have a close working relationship, especially when bank robberies involve physical violence," said Dean C. Bryant, Special Agent in Charge of the FBI St. Louis Division. "As a result of the partnerships, 90% of the bank robberies last year in the entire Eastern Missouri have been solved."
If convicted, each charge of armed bank robbery 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. Gladders also faces an additional maximum possible penalty of up to 10 years in prison for his possession of an unregistered "sawed-off" shotgun on September 20, 2013, as well. 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 is being 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 by the Warren County, St. Charles County and St. Louis County Prosecuting Attorneys’ Offices.
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.
Owner of Local Tax Preparation Franchise Sentenced on Tax Conspiracy ChargesRead the Press Release
St. Louis, MO – JIMI CLARK, owner of a Mo' Money Tax franchise, was sentenced to 20 months in prison for falsely claiming educational tax credits on 47 returns. The American Opportunity Credit (AO Credit) allows certain taxpayers with educational expenses to take a refundable credit on their income taxes.
Jimi Clark supervised the preparation of tax returns at his franchise, addressed specific questions about returns as they arose, and generally supervised all preparers working in his franchise including his co-defendants, Justin Buford, Leslie Chaney, Ray Reed and Mary Taylor.
The defendants were trained on educational tax credits, including the American Opportunity Credit (AO Credit). Clark abused the AO Credit program at the Mo' Money franchise during the 2009 filing season to attract and keep clients. The office filed at least 47 returns with false and inflated AO Credit line items. On the vast majority of the line items on which AO Credits were claimed on the false returns, Clark and his preparers claimed exactly $3,765 in qualified education expenses. Out of 494 tax returns prepared for the 2009 tax year at Clark's franchise, more than half, 288 returns, claimed AO credits. On each of the 47 returns, the taxpayers did not incur the educational expenses claimed and were, therefore, not entitled to the AO credits. Defendants Chaney, Reed and Buford went so far as to false claim educational expenses on their personal 2009 returns. The tax loss to the United States on just the 47 returns exceeds $50,000. The tax loss for all 288 returns on which educational credits were claimed for the office in 2009 exceeds $300,000.
Sybil Smith, Special Agent in Charge of IRS Criminal Investigation said, "While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government, the tax-paying public and their own clients."
Jimi Clark, Memphis, Tennessee, pled guilty in July to conspiracy to commit tax fraud and aiding and abetting the preparation of false tax returns. He appeared today before U.S. District Judge Audrey Fleissig. Co-defendant Mary Taylor, Memphis, TN, was also sentenced today to 6 months prison for her part in the scheme.
Co-defendants Justin Buford, Memphis, Tennessee; Leslie Chaney, St. Louis, Missouri; Mary Taylor, Memphis, Tennessee; and Ray Reed, of St. Louis, Missouri, previously pled guilty to related charges and have been sentenced.
This case was investigated by Internal Revenue Service Criminal Investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney's Office.
Kinloch, Missouri, Fire Protection District Chief Sentenced for Federal Fraud ChargesRead the Press Release
St. Louis, MO – The Fire Chief for the Kinloch Fire Protection District, DARRAN KELLEY, was sentenced to 33 months in prison and ordered to pay $259,738 restitution. He was sentenced on charges involving his unauthorized use of more than $140,000 of District funds from January 2007 to January 11, 2013, as well as charges that he made false statements about his receipt of Social Security disability payments, which resulted in overpayments to him of approximately $120,000. Kelley has been the District Fire Chief since 2002.
According to court documents, the Kinloch Fire Protection District maintained a District banking account for the receipt and disbursement of District funds. From January 2007 through January 2013, the District received approximately $160,361 in tax revenues from St. Louis County, Missouri. The City of Kinloch also distributed city funds to the District's bank account for payroll and operations of the District. It was a part of Kelley's scheme that he made unauthorized cash withdrawals from the District's bank account for his own personal use, including for the purchase of various personal items and for gambling at several casinos in the St. Louis area, that were unrelated to the legitimate operations of the District. It was a further part of Kelley's scheme that he made unauthorized transfers of funds from the District's bank account to pay for charges on his own personal Mastercard credit card, which were unrelated to the legitimate operations of the District. Further, Kelley stole and embezzled a portion of the funds received by the District in June 2010 from the Federal Emergency Management Agency (FEMA), which awarded the District a grant to cover 95% of the $250,000 total cost of a fire engine. Additionally, Kelley stole and embezzled funds which were donated to the District by concerned citizens who made the donations to assist the District in paying for its operations.
While Kelley engaged in the theft and embezzlement of District funds, there were substantial outstanding bills from AmerenUE for electric service, American Water for water service, to AT&T for telephone and communications services, and to North Central County Fire Alarm System for dispatch services, radios and pagers. Many of these bills went unpaid as a result of his criminal conduct and some of the necessary services were reduced or cut off due to non-payment.
Beginning on August 15, 2000, Kelley began receiving monthly disability benefit payments through the Social Security Administration pursuant to his application for benefits relative to a personal medical condition. Following his initial application, and in order for the Social Security Administration to determine his continued eligibility for disability benefits, he was required to immediately report any work and income, and to periodically verify his continued disability and report any work on Continuing Disability Review Reports. Kelley failed to truthfully report his work for the Kinloch Fire Protection District, and his income from that work to the Social Security Administration. On July 26, 2011, Kelley made a false statement on his Continuing Disability Review Report by stating that he had not worked since April 1, 2006, the date of his last medical disability decision, when in fact, he had been working as the paid Chief of the Kinloch Fire Protection District during that period of time. Kelley was paid a salary of approximately $640 every two weeks until December, 2011.
Kelley, Ferguson, MO, pled guilty in July to three felony counts of wire fraud, one felony count of federal program theft and one felony count of making false statements. He appeared today for sentencing before United States District Judge Catherine D. Perry.
This case was investigated by the Federal Bureau of Investigation, the Social Security Administration Office of Inspector General and the St. Louis County Police Department. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney's Office.
St. Charles Man Sentenced on Federal Drug and Weapons ChargesRead the Press Release
St. Louis, MO – EHRICK PREIS was sentenced to 37 months in prison. On six occasions between December 2012 and March 2013 in St. Charles County, he distributed at total of 858 units of LSD to undercover law enforcement personnel in exchange for more than $6,000. During the transactions, Preis made statements indicating he knew the substance was intended for human consumption, including statements that the substance was "LSA, 2CI and LSD," a "beefed up version of LSD." A subsequent search of Preis’ residence following the sixth drug purchase revealed two improvised explosive devices (IEDs), pipe bomb type devices/destructive devices, which he admitted creating.
Ehrick Stefan Preis, St. Charles, MO, pled guilty in August to one felony count of distribution of a controlled substance and one felony count of possession of an unregistered destructive device. He appeared today for sentencing before United States District Judge Carol E. Jackson.
This case was investigated by the St. Louis County Multi-Jurisdictional Drug Task Force, the Drug Enforcement Administration and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Michael Reilly handled the case for the U.S. Attorney's Office.
Six Defendants Sentenced to Total of 36 Years in Prison in National Prearranged Services CaseRead the Press Release
St. Louis, MO – Six defendants were sentenced today before United States District Judge Jean C. Hamilton for their roles in one of the largest frauds ever prosecuted in the Eastern District of Missouri. The defendants were sentenced on more than 40 counts of fraud, money laundering and related crimes and received a total of 36 years and one month incarceration. At sentencing, Judge Hamilton recognized that these defendants, acting through National Prearranged Services, Inc. and Lincoln Memorial Life Insurance Company, had defrauded more than 97,000 customers in more than 16 states, hundreds of funeral homes, and multiple financial institutions, causing more than $450 million in losses.
Five of the defendants previously pled guilty to various counts of fraud in June and July of this year, and each of those defendants was sentenced to the terms of imprisonment consistent with their respective plea agreements. Of the defendants who pled guilty, JAMES DOUGLAS CASSITY received the longest sentence of 115 months imprisonment after admitting that he organized and led the fraudulent enterprise. The former CEO of Lincoln Memorial Life Insurance Company, RANDALL K. SUTTON received a sentence of 84 months imprisonment. BRENT DOUGLAS CASSITY, a one-time officer of NPS, received a sentence of 60 months imprisonment. HOWARD A. WITTNER, an attorney for the companies, received a sentence of 36 months imprisonment. Former NPS President SHARON NEKIL PROVINCE received a sentence of 18 months imprisonment.
One defendant, DAVID WULF, the statutorily appointed independent investment advisor entrusted to oversee the prearranged funeral trusts established in Missouri, faced trial in August and was convicted by a jury on 18 counts of bank fraud, wire fraud and wire fraud affecting a financial institution. Wulf was sentenced to 10 years in prison.
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation.
"This is the largest corporate fraud case prosecuted in the Eastern District of Missouri," said Dean C. Bryant, Special Agent in Charge of the FBI St. Louis Division. “This case affects us all because part of the life insurance premium we pay goes to cover such loss from fraud.”
These sentences mark the culmination of a multi-year investigation and prosecution that brought together three federal law enforcement agencies, numerous state regulatory agencies and the Department of Justice to unravel a complex and immense fraud that spanned more than 15 years. According to court documents and testimony presented at trial, beginning as early as 1992 and continuing until 2008, NPS sold prearranged funeral contracts in several states, including Missouri, Illinois and Ohio. During that time, insurance companies affiliated with NPS issued life insurance policies related to those prearranged funeral contacts. As part of the contracts, the total price for funeral services and merchandise for an individual was agreed upon, and that price would remain constant regardless of when the funeral services and merchandise would be needed. Customers entering into prearranged funeral contracts would usually pay a single sum of money up front to NPS either directly or through a funeral home that was also a party to the contract. NPS represented to individual customers, funeral homes and state regulators that funds paid by customers under the prearranged funeral contracts would be kept in a secure trust or insurance policy as required under state law.
Court documents disclose, however, that NPS made use of funds paid by customers in ways that were inconsistent both with its prior and continuing representations and with the applicable state laws and regulations. Instead, NPS operated as a fraudulent Ponzi-like scheme, where customer funds were neither kept safe in bank trusts or insurance policies, but instead were utilized for unauthorized purposes and the personal enrichment of NPS’s officers and others. In turn, new business became the source of funding for funerals that prior customers had previously paid for in advance. Victims of the scheme include individual customers, funeral homes and state insurance guarantee associations across the country.
This case was investigated by Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation and the Postal Inspection Service. Assistant United States Attorneys Steven Muchnick, Charles Birmingham and Richard Finneran prosecuted the case for the U.S. Attorney’s Office.
New York People Plead Guilty in Counterfeit Fraud SchemeRead the Press Release
St. Louis, MO –These five New York residents traveled from New York to St. Louis returning stolen merchandise to various retail stores using counterfeit driver’s licenses and receipts.
According to court documents, on November 29, 2012, Maryland Heights police officers conducted a traffic stop of a vehicle being driven by Ishaan Davis. A subsequent search revealed Toshiba laptop computers, a Star TSP 100 Future Print receipt printer, document making card stock, counterfeit State of Florida and New York drivers licenses in Davis' name and the names of others and assorted clothing bearing sales tags. Further investigation revealed two rooms in which Davis, Shonta V. Simpson and William Randall Estes were registered. In addition to items similar to those found in Davis’ car, in the hotel rooms, the officers found boxes of additional clothing with tags which had been mailed from Leo Lewis in New York to Davis in St. Louis, as well as receipts showing wire transfers of money from Davis to Lewis and Ingrid Millsaps.
Through his plea, Davis admitted that he utilized the equipment to produce counterfeit drivers licenses and merchant receipts so that Simpson and Estes could return stolen merchandise for cash. The total number of counterfeit drivers licenses found in the vehicle and the two hotel rooms was 13. During the scheme, they defrauded Ann Taylor and The Loft stores, as well as stores such as The Gap. Simpson had been recruited by Davis, and Leo Lewis recruited Estes to participate in the fraudulent scheme. Estes received a daily rate for his participation, and Simpson was promised a percentage of the money received when she returned the stolen items.
The merchandise that was fraudulently returned was stolen by individuals such as co-defendant Ingrid Millsaps from stores located in, and near, the Brooklyn, New York area. In general, Millsaps was able to steal merchandise valued at $5,000 within two to three days, which she then provided to Davis and others. On one occasion, in order to comply with a request for merchandise, Millsaps stole clothing and items valued at approximately $60,000 during a two to three week period. Millsaps also stole receipt tape and proprietorial store information from retailers such as Ann Taylor in order to facilitate the fraudulent scheme. Millsaps and Davis engaged in the criminal activity for approximately 11 years. Through their pleas, they agreed that a conservative estimate would place the loss for this area exceeding $400,000.
ISHAAN DAVIS, Springfield Gardens, NY; INGRID MILLSAPS, Brooklyn, NY; and LEO LEWIS, Brooklyn, NY, entered guilty pleas this week before United States District Judge Henry Autrey. Sentencings have been set for February 10, 2014.
Co-defendants, Shonta Simpson and William Estes, both of Brooklyn, NY, pled guilty to related charges and were sentenced earlier this year.
The case was investigated by the City of Maryland Heights Police Department and the United States Postal Inspection Service. Assistant United States Attorney Tracy Berry handled the case for the U.S. Attorney’s Office.
Justice Department Announces More Than $62 Million to Strengthen Re-entry; Probation and Parole ProgramsRead the Press Release
WASHINGTON – The Justice Department has awarded more than $62 million in grants to strengthen efforts to help people returning from prison rejoin their communities and become productive, law-abiding citizens. This grant announcement was made by Attorney General Eric Holder today while in St. Louis, where he visited Project EARN, a Drug Reentry Court program. Attorney General Holder delivered remarks to the program’s graduates and emphasized that successful reentry is a top priority at the Justice Department and a central part of his new “Smart on Crime” initiative.
“Over the course of my career, I’ve seen just how important – and powerful – reentry programs can be,” said Attorney General Eric Holder. “I learned how this cycle weakens communities, tears families apart and destroys individual lives. If more communities adopt reentry programs like the one I witnessed today in St. Louis, it will reduce criminal justice spending, ensure the fairest possible outcomes, and forge the stronger, safer communities that all of our citizens deserve.”
Later today, Attorney General Holder will travel to Peoria, IL, to attend a pre-court meeting with judges and pretrial service officers. He will also deliver remarks at an alternative to detention court hearing.
The Office of Justice Programs (OJP) made these 112 competitive and supplemental Second Chance Act (SCA) awards to state, tribal and local governments, and non-profit organizations to reduce recidivism, provide reentry services, conduct research and evaluate the impact of reentry programs. The SCA programs, administered through the Bureau of Justice Assistance (BJA) and the Office of Juvenile Justice and Delinquency Prevention (OJJDP), are designed to help communities develop and implement comprehensive strategies to reduce recidivism and address the challenges faced by incarcerated adults and youth when they return to their communities following release from confinement.
“Effective reentry services are critical to helping formerly incarcerated individuals remain crime-free and become productive, law-abiding citizens,” said Assistant Attorney General of the Office of Justice Programs Karol V. Mason. “The awards continue this Administration’s commitment to achieving sustainable reductions in recidivism and improving the safety of our communities.”
“We must continue to draw on the science of recidivism reduction and what works to ensure that the right people get the right integrated interventions at the right times,” said BJA Director Denise E. O’Donnell.
Of the over $62 million in funding provided, more than $57 million (91 BJA awards and 19 OJJDP awards) supports smart probation projects, treatment of returning adult and juveniles with co-occurring substance abuse and mental health disorders; adult and juvenile reentry demonstration projects; adult mentoring programs; technology career training projects for incarcerated adults and juveniles; and demonstration field experiments to test a parole reentry model. The remaining $5.4 million supports two awards for evaluation activities and training and technical assistance for Second Chance Act grantees and the reentry field in general.
OJJDP awarded more than $9.7 million in Second Chance Act Juvenile Reentry Program grant awards to reduce recidivism and assist youth in successfully returning to their communities after secure confinement. This includes $176,000 to assist four jurisdictions in planning a juvenile reentry program, and $6,573,177 for ten jurisdictions to implement evidence-based reentry programs that provide a comprehensive range of services for juveniles up to 18 years of age. This also includes $2,977,252 for five community programs to reduce long-term alcohol and other substance abuse among youth in secure confinement facilities and to increase drug treatment and mental health services for these youth.
“Too many young people caught up in the juvenile justice system fail to return to school, find a job, or live healthy, drug-free lives after being confined,” said OJJDP Administrator Robert L. Listenbee. “These grants will help them find a path out of crime and delinquency and begin to make positive contributions to their communities.”
OJP will also continue to provide reentry resources to the field through the National Reentry Resource Center (NRRC), through a cooperative agreement with the Council of State Governments (CSG) Justice Center, administered by BJA. The NRRC offers training and technical assistance for SCA grantees, provides distance learning and other reentry resources to the field, and administers the “What Works in Reentry Clearinghouse.” NRRC collaborates with other federal agencies focused on reentry activities and with the Attorney General’s Federal Interagency Reentry Council and its staff working group.
For a list of all OJP grant awards, please visit: www.ojp.gov/funding/funding.htm.
For more information on the NRRC, please visit: www.nationalreentryresourcecenter.org.
For more information on the Federal Reentry Council, please visit: csgjusticecenter.org/nrrc/projects/firc/.
The Office of Justice Programs, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking.
Lincoln County Man Sentenced on Federal Child Pornography ChargesRead the Press Release
St. Louis, MO – MATTHEW M. HANSEN was sentenced to 20 years in prison on charges of attempting to entice minor boys to engage in sexually explicit conduct for him to videotape between 2007 and 2012.
According to court documents, Hansen was an elementary teacher at the Fort Zumwalt School District, a volunteer fireman and a camp counselor for the school district’s fifth grade camps. Investigation revealed that Hansen video recorded over 75 minor boys under the age of twelve undressing to take showers at the camps.
Hansen, Winfield, Missouri, pled guilty in July to eight felony counts of attempted production of child pornography. He appeared today in St. Louis before United States District Judge Jean C. Hamilton for sentencing.
This case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and St. Charles County Cyber Crime Unit. Assistant United States Attorney Rob Livergood handled the case for the U.S. Attorney's Office.
Local Doctor Pleads Guilty to Making False Statement to AgentRead the Press Release
St. Louis, MO – DR. ERICK FALCONER pled guilty to making a false statement to federal agents regarding his purchases of misbranded Botox® from a foreign unlicensed drug wholesaler, some of which had counterfeit exterior packaging.
According to court documents, during the summer of 2009, Dr. Falconer received a facsimile transmission from an unlicensed drug wholesaler that offered low prices for assorted prescription drugs, including “Botox (Turkish)” for $354.99 a vial, listing a 1-800 telephone number and an individual’s “g-mail” address for contact purposes. The facsimile was sent to his medical practice, The Youthful Body, Inc., in Florissant, Missouri. During this same time frame, the FDA-approved version of Botox® was sold through licensed drug wholesales at higher prices in the United States, typically $525 a vial. From August 2009 through February 2013, Dr. Falconer and his corporation made over fifty separate purchases of these counterfeit drugs, which he provided to his patients without informing them of the source of the drugs. During an interview in February 2013 with special agents of the U.S. Food and Drug Administration (“FDA”), Dr. Falconer told the agents he had only made three purchases of the illegal drugs from this unlicensed foreign wholesaler. On April 26, 2013, FDA issued an alert regarding “fraudulent versions of Botox found in the United States” with counterfeit exterior cartons.
Falconer, of St. Louis, Missouri, pled guilty to one felony charge of making a false statement before United States District Judge Carol E. Jackson. Sentencing has been set for February 4, 2014.
Dr. Falconer faces 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 U.S. Food and Drug Administration, with assistance from the Office of Inspector General for the U.S. Department of Health and Human Services.