Eastern District of Missouri

St. Louis, MO – The Saint Louis County Police Department and St. Charles County Sheriff’s Department will share the proceeds of a $1 million U.S. Department of Justice grant with three local social service providers to serve victims and enhance the prosecution of human trafficking crimes in the Eastern District of Missouri. These two law enforcement agencies are members of the U.S Attorney’s Office Human Trafficking Task Force in the Eastern District of Missouri.  The Task Force also includes local civilian social service partners, known as the RESTeam (Rescue Service Team).   

The Saint Louis-based International Institute, Legal Services of Eastern Missouri and the YWCA Sexual Assault Center are the three RESTeam members who joined forces with the Saint Louis County Police Department and St. Charles County Sheriff’s Department to apply for this competitive award, which was sponsored by the DOJ Office of Victims of Crime and the Bureau of Justice Assistance.  The funds will be distributed over two years. 

The 2013 grant, which is called the Enhanced Collaborative Model to Combat Human Trafficking, was established in 2010 and was awarded this year to only six applicant groups across the United States.  This year is the first time that recipients from the Eastern District of Missouri have been chosen to receive the grant.

“With these funds, we will be able to serve up to 150 victims of human trafficking, whether they are victims of sex or labor trafficking and whether they are U.S. citizens or foreign-born.  We look forward to collaborating with our law enforcement partners to more effectively serve victims of these crimes and support prosecution of the traffickers,” said Suzanne LeLaurin, Senior Vice-President for Individuals and Families,International Institute of St. Louis.

“The St. Louis County Police Department along with the St. Charles County Sheriff's Department have been battling the issues of human trafficking in the St. Louis County/ St. Charles County area for several years and have been successful in rescuing adult and child victims of trafficking,” said Sergeant Adam Kavanaugh, Deputy Commander Missouri Internet Crimes Against Children Task Force.  Kavanaugh added that these funds will be used to add local police personnel and more training for local law enforcement to better identify the indicators of human trafficking in our area.

Lieutenant Chris Mateja of the St. Charles County Sheriff's Department said, “The St. Louis County Police Department and St. Charles County Sheriff's Department will work closely with our federal partners to insure that traffickers do not find a safe haven in the Eastern District of Missouri.”  

St. Louis, MO – FRED W. ROBINSON was sentenced to 24 months in prison on multiple fraud charges involving his submission of false time sheets in the Treasurer’s Office and his diversion of federal and state education funds from the Paideia Academy Charter School. The Judge also ordered restitution of $419,333.

Robinson was the Chairman of the Board of Trustees for Paideia Academy, a Missouri charter school for kindergarten through eighth grade.  He maintained an office in the school’s administration building and was involved in the day-to-day management and administration of the school.  Paideia was tuition free and funded by federal and Missouri education funds intended for legitimate school operations.  

According to testimony presented at trial, during 2009 and 2010, Robinson diverted approximately $242,333 of Paideia Academy funds for the purchase, construction, renovation and rehabilitation of a building at 4028 West Florissant Avenue in St. Louis for the purpose of developing and operating a Little People’s Academy day care center to be operated by Robinson and an associate through Paige C. Investments, LLC, in which Robinson had an ownership and financial interest.  Robinson failed to disclose his ownership and financial interest in the proposed day care center to the Paideia Academy Board of Trustees.  Robinson’s partner in the proposed day care center was a friend and associate of Robinson who worked as a bartender at a lounge frequented by Robinson, and who had no background, experience or training in early childhood education or the operations of a day care center.

Additionally, during each year from 2006 through 2010, as an employee of the Treasurer’s Office for the City of St. Louis, Robinson submitted false weekly time sheets falsely certifying work hours and was paid approximately $35,360 each year in salary based upon those false time sheets.

Robinson, St. Louis, Missouri, was convicted in March of one count of wire fraud and seven felony counts of federal program theft after a seven-day trial before United States District Judge Audrey G. Fleissig.
Other defendants that have been charged as part of the investigation are Dannielle Benson and Frank Habeebullah, both of whom plead guilty late last year. 

This case was investigated by the Federal Bureau of Investigation and the United States Department of Education-Inspector General’s Office.  Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney’s Office.

St. Louis, MO – LARRY BRADSHAW was sentenced to 18 months in prison and ordered to pay $89,245 in restitution for his scheme to defraud a local elderly lady by obtaining a reverse mortgage on her home, then using the money for himself, including the purchase of a car and illegal drugs.

According to court documents, in July 2008, Bradshaw met a lady and expressed a need for a temporary residence.  She agreed to allow him to live with her and during that time, Bradshaw befriended her and gained her confidence.  He told her he was acting in her best interest, instead, he used his ability to access her banking accounts and funds to support his own lifestyle without her knowledge or consent.  Bradshaw set up a durable power of attorney and used it to obtain a reverse mortgage on the lady’s residence.  He represented to Frontier Mortgage that he intended to use the proceeds from the reverse mortgage for her living expenses and home rehabilitation.  Instead, he used the money for himself, including the purchase of an automobile and illegal drugs, totaling over $70,000.   Additionally, Bradshaw began receiving federal disability in 2007 and was required to fill out forms verifying his continued disability and financial status.  In December 2008, he falsified the verification form by failing to report that he received funds from the victim’s reverse mortgage.

Larry Bradshaw, St. Louis City, pled guilty in May to one felony count of wire fraud and one felony count of theft of government money. He appeared today for sentencing before United States District Judge Rodney W. Sippel.

This case was investigated by the Federal Housing Finance Agency-Office of Inspector General, U.S. Postal Inspection Service, HUD-Office of Inspector General and the Social Security Administration-Office of Inspector General.  Assistant United States Attorney Dianna Collins handled the case for the U.S. Attorney's Office.

St. Louis, MO – NANCY CICERO was sentenced to 33 months in prison on multiple fraud charges for filing false tax returns, claiming over $3 million in refunds, for four years beginning in 2005.
           
According to testimony presented at trial, tax on certain bonds must be paid as interest accrues.  Debt issuers such as banks, creditors and lenders provide a yearly form to their bond holders called a 1099-Original Issue Discount (OID).  The form shows the OID income, as well as the federal income tax that was withheld on the OID income.  To report tax liability on the interest earned, the bond holders submit the OID form to the IRS, along with income tax returns.  According to testimony presented at trial, Cicero claimed false income tax refunds by submitting income tax returns to which she attached false and fictitious 1099-OID forms for the taxable years 2005-2008.  On her 1040s for those years, Cicero claimed a refund amount based upon the false federal income tax withholdings that were reported on her false 1099-OIDs.  In total, Cicero represented that financial institutions withheld over $3 million in taxes on her 1099-OID forms, thus claiming a refund of over $3 million.

"Today's sentence demonstrates our unwavering commitment to protecting the interests of law-abiding taxpayers," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation.  "We will continue to investigate the criminals who engage in such brazen and fraudulent conduct, ensuring that the only citizens who receive tax refunds are those who are entitled to them."

Cicero, Kirkwood, MO, was convicted in May of four felony counts of filing false claims with the IRS.  She appeared today for sentencing before United States District Judge John A. Ross.

this case was investigated by Internal Revenue Service Criminal Investigation.   Assistant United States Attorneys Dianna Collins and Reginald Harris prosecuted the case for the U.S. Attorney’s Office.

St. Louis, MO –Twenty-five area people have been arrested on three indictments involving federal drug and weapons charges involving the distribution and manufacture of large amounts of methamphetamine in the Eastern District of Missouri, from October 2010 to September 2013.  Several of the individuals indicted are members of the Saddle Tramps Motorcycle Club, including Arvil B. Matthews, the President of the Club.

"This case is another example of some of the problems with House Bill No. 436.  If it were the law today, criminal defendants in this case would have the right to sue the law enforcement officers who investigated the case, and the law enforcement officers would be defendants in both civil and criminal lawsuits.  I can't believe this is what the legislature intended,"  said U.S. Attorney Richard Callahan.   

Individuals indicted:

• JORGE LOPEZ, Corinth, TX
• MELVIN J. SCHERRER, Bonne Terre, MO
• ALAN D. ADLER, Bonne Terre, MO
• BRENT T. BOUREN, St. Louis, MO
• HOWARD R. PYATT, a/k/a “Bud,” Bonne Terre, MO
• ARVIL B. MATTHEWS, Imperial, MO
• MARK E. ABNEY, Bonne Terre, MO
• AMBER D. SCISM, Farmington, MO
• TERRI L. FOX, St. Louis, MO
• GUILLERMO NAVARRO, a/k/a “Willie,” St. Louis, MO
• JERRY L. ADDISON, St. Louis, MO
• JERAMI A. WESTENBERGER, Arnold, MO
• RAY ALLEN DAVIS, JR., Union, MO
• JAMES A. MITCHELL, St. Louis area
• PATRICK A. TATE, St. Louis, MO
• JIMMIE D. JOHNSON, St. Clair, MO
• DONALD J. MAGUIRE, St. Louis, MO
• THEODORE S. HEEGE, St. Louis, MO
• NORMA J. EGAN, St. Louis, MO
• DONNA L. MOSS, St. Louis, MO
• SHEILA C. HEEGE, St. Louis, MO
• DANIELLE R. BECKER, Park Hills, MO
• HALEY L. MEIER, St. Louis, MO
• HEATHER N. MARTIN, St. Louis, MO
• AMY G. HORRELL, Bonne Terre, MO

If convicted, the drug charges carry penalty ranges of 10 years to life in prison and firearms charges carry up to 10 years 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 is a joint operation of the Federal Bureau of Investigation, the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, the Missouri State Highway Patrol, St. Charles and Jefferson County Sheriff’s Offices, the St. Louis Metropolitan Police Department and multiple local law enforcement agencies.  Assistant United States Attorney Jeannette Graviss is handling the case for the 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, MO – JOSEPH VACCA, Former Deputy Commissioner of the St. Louis Parks Division,  and THOMAS STRITZEL, Former Chief of the St. Louis Park Rangers, pled guilty to charges that they 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.  Both defendants appeared before United States District Judge Jackson in St. Louis.

According to court documents, 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 $464,722.  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.  Vacca and Stritzel 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.

These charges carry a penalty range of twenty (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.  Sentencings have been set for December 12, 2013.

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.

St. Louis, MO – FATHER WILLIAM F. VATTEROTT of St. Louis, MO, was sentenced to 37 months in prison for possession of child pornography between June 2010 and June 2011.

Father Vatterott pled guilty to one felony count of possession of child pornography. He was sentenced before Senior United States District Judge E. Richard Webber.

This case was investigated by the Missouri Internet Crimes Against Children Task Force, Regional Computer Crimes Education and Enforcement Group (RCCEEG) and by Investigator Donya Jackson for the U.S. Attorney’s Office.  Assistant United States Attorney Rob Livergood handled the case for the U.S. Attorney's Office.

St. Louis, MO – Sanborn Map Company Inc. is a photogrammetric mapping and geographic information system services company headquartered in Colorado Springs, Colorado.  Sanborn  operated a regional office in Chesterfield, Missouri, until December, 2011. 

ROBERT A. WILLIAMS was employed as a Senior Vice President and General Manager at Sanborn from 2000 until he was laid off in 2011.

In June 2007,Williams submitted a proposal to the United States Army Corps of Engineers, St. Louis Division, for an indefinite delivery/indefinite quantity contract to furnish all labor, supplies, materials, plant, equipment and personnel necessary to provide photogrammetric mapping and aerial photography for the Corps.

According to statements made in court during the plea, in September 2007, Williams participated in cost negotiations for the contract, and one of the provisions was that the Corps must pre-approve Sanborn's use of all subcontractors.  Williams agreed to that provision, and the Corps of Engineers awarded the contract to Sanborn.  Later that month, the Corps issued a "Request for Proposal" for digital orthophoto production.  Williams submitted Sanborn's cost proposal and all cost and pricing data reflected that work would be completed by Sanborn and not subcontractors.

During May 2008, Williams arranged for Spatial Data Consultants Inc., a geospatial data production company located in High Point, North Carolina, to funnel triangulation and digital orthophoto production to Eastdawn Corporation, an unapproved foreign subcontractor located in China.  Eastdawn Corporation was able to complete the orthophoto production at a rate much lower than the negotiated contract rate.

In September 2009, Williams presented to the Corps a claim for final payment on the contract, and certified that all of the contract requirements were met.  The Corps paid Sanborn for the work completed not knowing it was completed by an unapproved foreign subcontractor.

Williams, who resides in Austin, Texas, pled guilty to one misdemeanor count of theft of Government money before United States Magistrate Judge Shirley Mensah.  Sentencing has been set for November 25, 2013.

This case was investigated by the United States Army Criminal Investigation Division Procurement Fraud Division and the Defense Criminal Investigative Service.   Assistant United States Attorney Jennifer Roy is handling the case for the U.S. Attorney's Office.

St. Louis, MO – MATTHEW 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."  The advertisement indicated the charity was designed to "help wounded warriors" and "sell raffle tickets [to aid]  war veterans." Through the advertisement, Buckingham solicited individuals to help him promote his charitable events and he provided a contact number.

According to court documents, in his advertisement he 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."  He had individuals complete employment applications or other documents indicating their desire to aid and assist him in his charitable activities.  Matthews/Buckingham showed applicants a binder with various documents that purportedly indicated he was affiliated with the military and other documents that appeared to legitimize his charitable activities.  Commonly, during conversations with prospective applicants, he claimed to be employed by various agencies or Departments of the United States, including that he served in the military in Afghanistan and Iraq;  he was a Marine and had been injured during the war; he worked as a military officer and a sniper; since his return to the United States from overseas, he worked with the Department of Homeland Security and the United States Coast Guard; and, he presently worked in north St. Louis in various positions including "undercover" work infiltrating gangs and otherwise combating crime.

He told them they would earn $10 per hour, or half the amount of money they collected from ticket sales.  In January and February 2013, he recruited approximately five to ten associates to assist him in selling "raffle" tickets at various bar locations in the St. louis area. At the end of each evening, associates gave Matthews/Buckingham the proceeds from the sales which he used to pay various expenses such as gas for transportation to the various restaurants and bar locations; paraphernalia for the individuals; and "fees" or earnings that he paid the associates who assisted him.  No money remained after covering the various costs.

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. The defendant 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.  He never held a position that permitted him the authority to conduct criminal investigations or arrest individuals.  As such, his previously detailed representations that he was an agent or employee of a Department or Agency of the United States were false and the defendant knew they were false.

"For more than two hundred years, brave Americans have heeded the call to serve their country.  We honor them for their loyal and dedicated service. It disheartens me that this individual falsely represented himself as war veteran and a current member of the Coast Guard and Department of Homeland Security in order to garner support for his raffle scheme.  I applaud the efforts of the Coast Guard Investigative Service and the Department of Justice in bringing this case to fruition. I also appreciate KMOV-TV for bringing this case to our attention," said Rear Admiral Kevin Cook, Eighth Coast Guard District Commander.

Buckingham, St. Louis County, pled guilty to one felony count of impersonating a federal agent before United States District Judge Henry Autrey.  Sentencing has been set for November 25, 2013.

This charge carries a maximum penalty of three years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

This case was investigated by the Coast Guard Investigative Service and the Missouri Attorney General’s Office. Assistant United States Attorney Matthew Drake is handling the case for the U.S. Attorney’s Office.

St. Louis, MO – STANLEY "OUTLAW" CARTER of St. Louis City was sentenced to 20 years imprisonment on one felony count of brandishing a firearm in furtherance of a drug trafficking crime and a second felony count of discharging a firearm in furtherance of a drug trafficking crime.  The sentence imposed today by United States District Court Judge Henry E. Autrey must be served consecutively to the not-yet-completed sentence achieved by the St. Louis Circuit Attorney’s Office after Carter shot and wounded an individual in the spring of 2008.  

Carter pleaded guilty to two separate federal crimes in April 2013.  First, on March 26, 2008, Carter and his co-defendant Antonio “Lips” Shaw and another accomplice, Richard “Repeat” Bobbitt, entered a City of St. Louis residence with guns drawn.  The residence was occupied at the time by a 10-year old girl, a teenage boy and the children's mother.  Carter and his two accomplices stole a significant amount of marijuana that they located in the residence's lower level.

Second, on May 10, 2008, Carter utilized an AR-15 assault-style rifle to execute two individuals associated with a rival group.  The two men were inside a vehicle when Carter approached and opened fire from point-blank range.  The shooting occurred at the area commonly referred to as "the Circle" located near 1199 Riverview Boulevard within the City of St. Louis.  The first victim, Adolph Ellison, was pronounced dead at the scene.  The second victim, Donald Mack, died shortly after.  Immediately following the shooting, Carter and his two accomplices, again being Shaw and Bobbitt, fled the scene and undertook efforts to conceal evidence related to the crime. 

Carter's co-defendant, Antonio Shaw, was previously sentenced to over 31 years imprisonment on one felony count of conspiracy to possess with the intent to distribute marijuana and cocaine base (crack) and a second felony count of brandishing a firearm in furtherance of a drug trafficking crime on April 30, 2013.  Shaw was convicted by a jury after a six-day trial.

Carter’s sentencing brings to a close the federal investigation into violent criminal activity within the City of St. Louis committed by members of a group commonly referred to as the “Dip Set.”  The investigation was initiated in 2009 and conducted by the St. Louis Metropolitan Police Department, St. Louis County Police Department, United States Bureau of Alcohol, Tobacco, Firearms and Explosives and the United States Marshals Service, with the cooperation and support of the St. Louis Circuit Attorney’s Office. 

St. Louis, MO – BURTON DOUGLAS MORRISS pled guilty to 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.

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.

Sybil A. Smith, the Special Agent in Charge of IRS-Criminal Investigation, stated, "To build faith in our nation's tax system, honest taxpayers need to be reassured that everyone is paying their fair share. IRS Criminal Investigation, together with the Department of Justice, will diligently investigate and prosecute those who knowingly violate our tax system for their own enrichment."

Morriss, Creve Coeur, MO, pled guilty to one felony count of tax evasion before United States District Judge Rodney Sippel.  Sentencing has been set for November 22, 2013. 

This charge carries a maximum penalty of five years in prison and/or fines up to $100,000.  Restitution is mandatory.  In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

Morriss' plea comes shortly after a judgment of permanent injunction was ordered against him in the case of Securities and Exchange Commission v. Burton Douglas Morriss in the Eastern District of Missouri.  On August 13, 2013, United States District Judge Carol E. Jackson ordered that Morriss, among other things, is 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 at a future date. 

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 is handling the case for the U.S. Attorney’s Office. 

St. Louis, MO – BURTON DOUGLAS MORRISS pled guilty to 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.

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.

Sybil A. Smith, the Special Agent in Charge of IRS-Criminal Investigation, stated, "To build faith in our nation's tax system, honest taxpayers need to be reassured that everyone is paying their fair share. IRS Criminal Investigation, together with the Department of Justice, will diligently investigate and prosecute those who knowingly violate our tax system for their own enrichment."

Morriss, Creve Coeur, MO, pled guilty to one felony count of tax evasion before United States District Judge Rodney Sippel.  Sentencing has been set for November 22, 2013. 

This charge carries a maximum penalty of five years in prison and/or fines up to $100,000.  Restitution is mandatory.  In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

Morriss' plea comes shortly after a judgment of permanent injunction was ordered against him in the case of Securities and Exchange Commission v. Burton Douglas Morriss in the Eastern District of Missouri.  On August 13, 2013, United States District Judge Carol E. Jackson ordered that Morriss, among other things, is 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 at a future date. 

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 is handling the case for the U.S. Attorney’s Office. 

St. Louis, MO –DWAYNE DENARD JOHNSON, Wesley Chapel, Florida, pled guilty to two counts of aggravated identity theft 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 the 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 dollars in refunds, about half of which was intercepted by the IRS before coming under the control of the fraudsters.

Johnson now faces a minimum of two years imprisonment and a maximum of four years imprisonment.  Additionally, restitution is mandatory. Sentencing has been set for November 26, 2013.

His wife, Tania Henderson, of 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 the Internal Revenue Service-Criminal Investigation.  Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.

St. Louis, MO – DAVID R. WULF was convicted today after a thirteen-day trial before United States District Judge Jean C. Hamilton for his role in one of the largest frauds ever prosecuted in the Eastern District of Missouri.  Wulf was convicted on 18 counts, including bank fraud, wire fraud, wire fraud affecting a financial institution and conspiracy to commit those crimes.

Wulf was appointed in the 1980's to serve as the independent investment advisor to the preneed funeral trusts established  pursuant to Missouri statutes by National Prearranged Services, Inc. (“NPS”). As the trusts’ advisor, Wulf was responsible for protecting, investing and managing the trusts’ assets, which included more than $150 million paid by customers who were told their funds would be kept safe until the time of need. The government’s evidence at trial, however, established that Wulf continually authorized the use of trust funds to pay unrelated debts of companies affiliated with NPS, to enrich his co-defendants and ultimately to perpetuate a massive Ponzi scheme that spanned more than a dozen states and affected thousands of individual customers.

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 contracts. 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’ 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.         

Each count of bank fraud, conspiracy and wire fraud affecting a financial institution carries a maximum penalty of 30 years imprisonment. The wire fraud counts each carry a maximum penalty of 20 years. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.  Wulf’s sentencing has been set for November 7, 2013.

Wulf's co-defendants James Douglas Cassity, Brent Douglas Cassity, Howard Wittner, Randall Sutton and Sharon Nekol Province each pled guilty to charges against them earlier this year and likewise await sentencing in November.

This case was investigated by the 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.

St. Louis, MO – LISA D. PAIGE, Alexandria, Virginiawas found guilty today, following a two-day jury trial, of one felony count of Using a Counterfeit Device (Count I) and one felony count of Possession of 15 or More Counterfeit Access Devices (Count II), for her role in a credit card skimming operation in which she and two accomplices traveled from Baltimore, Maryland, to Missouri for the purpose of using counterfeit credit cards to buy cigarettes.  The trial was held at the United States Courthouse in Cape Girardeau in front of District Judge Carol E. Jackson.  The case began when a credit card number of a Michigan resident was used in Perryville, Missouri.

The sentencing date for Lisa D. Paige has not yet been determined.

his case was investigated by the Perryville, Missouri, Police Department and the United States Secret Service. Assistant United States Attorney H. Morley Swingle handled the prosecution for the Government.

St. Louis, MO –ROBERT PALMER and MARK DRIVER were the owners and operators of Princeton Partnership, LLC which operated out of an office in the Hill area of St. Louis, Missouri.  They are charged with allegedly defrauding numerous elderly Princeton customers, in an approximate amount of  $3,000,000, beginning July 2004 and continuing through February 2010.

According to the indictment, Princeton was an insurance brokerage business purportedly involved in the sale of life insurance products.  Princeton was initially located at 12231 Manchester Road, St. Louis, and then operated at 1928 Marconi Street (also known as 5149 Daggett Avenue), St. Louis. Palmer and Driver both ran the day-to-day operations of Princeton, solicited customers, marketed the company's services and had financial oversight of the company with authorization over the company's two operating bank accounts. Palmer and Driver solicited Princeton customers with the false promises that they would invest the customers' funds in suitable investments, including but not limited to real estate, stocks and life insurance annuities.  

During 2004 Palmer solicited several members of a family who had received funds upon the death of their aunt with the false representation that Princeton would place those funds in a real estate investment for the benefit of those customers.  Based upon his false representations, the family members transferred some or all of those funds to Princeton.

In 2005 Palmer solicited funds from an elderly individual and her family with the false representation that they would place those funds in a real estate investment for her benefit.  Based on those representations, the family transferred her funds to Princeton.

During 2006 through 2010 Palmer solicited investment funds from two elderly sisters with the false representations that Princeton would make suitable investments with those funds.  The sisters transferred their funds and control of their stock holdings to Princeton and, later Palmer and Driver sold and liquidated the stocks and persuaded one of the sisters to liquidate a life insurance policy as well, and transferred the funds to Princeton.

During 2007 through 2009 Driver solicited investment funds from an elderly woman who transferred her funds, as well as control of her stock holdings to Princeton. 

In 2006, an elderly woman was solicited by Driver to invest her personally-held funds in a series of life insurance annuities through Princeton.  Princeton used her funds to purchase four (4) life insurance annuities.  As a further part of the scheme, during in or about 2008 and 2009, at Driver’s direction she liquidated three (3) of her life insurance annuities and provided those funds to Princeton based upon the false representations of the funds would be placed in suitable investments for her benefit.

All of the funds transferred to Palmer, Driver and Princeton by the victims were used by Palmer and Driver for their own personal expenses and the general operating expenses of Princeton.  Palmer and Driver also engaged in Ponzi-type transactions where they used some funds provided by new customers to pay old customers who falsely believed they were receiving the returns on their purported investments.

Finally, the indictment alleges that in all cases Palmer and Driver obtained approximately $3,000,000 from Princeton customers based upon their false representations which they used for their own personal expenses and for the expenses of their company Princeton.

Palmer, Kansas City, MO, and Driver, St. Louis, MO, were each indicted by a federal grand jury on two felony counts of mail fraud and two felony counts of wire fraud. 

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.

This case was investigated by the Federal Bureau of Investigation and the Postal Inspection Service.  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.

St. Louis, MO – ELIZABETH GLOSEMEYER, St. Louis County, pled guilty to raiding the company’s escrow account to fund operations during the time she was the manager of Lenders Guarantee Title Company of St. Louis.

According to court documents, the escrow account consisted of clients’ money and was to be used only for clients’ real estate transactions.  Glosemeyer doctored financial records to cover up her raiding of the escrow account from Lenders’ underwriters.  In the summer of 2012, an audit uncovered Glosemeyer’s scheme and Lenders went out of business soon thereafter.  Due to the deficit in the escrow account Glosemeyer created, at least one transaction in excess of $200,000 had to be closed with the underwriters’ funds.  She appeared before United States District Judge Rodney W. Sippel.  Sentencing has been set for November 15, 2013.

Each count of wire fraud carries a maximum term of imprisonment of 20 years, a $250,000 fine or both.  Restitution is also mandatory.  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 and the Federal Bureau of Investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.

St. Louis, MO – RUTH JACKSON was sentenced to 34 months in prison for embezzling over $50,000 by diverting checks and funds payable to The Flood Team, LLC.  She was also ordered to pay restitution of $50,000.

The Flood Team LLC provides remediation and restoration services related to water damage. In August 2011, Ruth Jackson was hired as Director of Finance for the business.  In that capacity, Jackson had responsibility for a variety of matters relating to the books, records and finances of The Flood Team LLC.  Jackson's responsibilities included paying bills, preparing deposits and managing various bank accounts.

According to court documents, Jackson secretly kept an old corporate account open and hidden from the owner of the business.  Between November 2011 and late April 2012, Jackson embezzled over $50,000 by diverting checks and funds payable to The Flood Team LLC into the secret account, then wrote checks to herself which she cashed at various locations in the area.

Jackson, St. Louis, MO, pled guilty in January to one felony count of bank fraud. She appeared today for sentencing before United States District Judge John Ross.

            The case was investigated by the United States Postal Inspection Service and the Sunset Hills Police Department.  Assistant United States Attorney John Bodenhausen handled the case for the U.S. Attorney's Office.

Erie, PA – A former resident of Pensacola, Florida, has been sentenced in federal court to
135 months in prison and ordered to make restitution to the banks involved on his conviction of bank robbery, United States Attorney David J. Hickton announced today.

Chief United States District Judge Sean M. McLaughlin imposed the sentence on Michael
Eugene Brewster.

According to information presented to the court, between June 21, 2012 and September 10, 2012, Brewster robbed eleven banks across the nation. In the course of the bank robbery spree
Brewster used a similar method of operation and entered each bank, without being disguised, wore similar clothes, carried a dark leather notebook, presented demand notes containing similar threatening language to each of the victim tellers and left the scene driving a 2009 black SUV, which Brewster had stolen in Pensacola, Florida.

In his last bank robbery in Erie, Pennsylvania, on September 10, 2012, Brewster entered the Huntington National Bank, located at 2185 West 12th Street and presented a demand note, claiming that he had a gun and that the teller had one minute to comply. Brewster then claimed to the teller that he had cancer and did not care what happened. Brewster obtained bank proceeds and fled the area in a black SUV. Bank surveillance images and from area surveillance cameras clearly depicted Brewster and the vehicle he used.

Comparing the Erie Huntington Bank surveillance photographs with those from the ten other bank robberies that had occurred throughout the United States confirmed that each robbery had been committed by the same person. On September 12, 2012, the FBI received a tip that the bank robber depicted in the surveillance photographs was Brewster. A review of Brewster's Florida driver's license confirmed Brewster's identity as the bank robber. In addition, evidence disclosed that an arrest warrant had been issued for Brewster alleging that he had stolen a black Chevy Captiva SUV in Pensacola, Florida, on June 11, 2012. Once Brewster's identity had been established in the Erie, Pennsylvania robbery, the FBI and law enforcement partners in the jurisdictions of the other ten bank robberies confirmed his identity in those cases as well.

Brewster entered the Chase Bank at 5250 Wadsworth Boulevard in Arvada, Colorado, on
June 21, 2012, the Chase Bank at 1484 South Milton Road in Flagstaff, Arizona, on June 27, 2012; and the Ireland Bank at 486 Yellowstone Avenue in Pocatello, Idaho, on July 6, 2012, and obtained federally insured funds after presented a threatening note demanding money. In Roy, Utah, on July
6, 2012, Brewster entered the Wells Fargo Bank located at 5603 South 1900 West, and obtained money after presenting a threatening demand note claiming that he had only four months to live.
In Winston-Salem, North Carolina, on July 20, 1012, Brewster entered a Bank of America at 1209
Silas Creek Parkway and presented a threatening demand note indicating that he had nothing to lose and threatening to come back after the teller if any silent alarm was activated. Brewster obtained no money from the Wells Fargo Bank. Then, at the Regions Bank at 360 West State Road 436 in
Altamonte Springs, Florida, on July 27, 2012, the BB&T bank at 2120 Gunbarrel Road in
Chattanooga, Tennessee, on August 3, 2012; the PNC bank at 2217 West Market Street in
Bloomington, Illinois, on August 17, 2012; the Lamdmark Bank at 202 North Stadium Boulevard in
Colombia, Missouri, on August 29, 2012; and the Lindell Bank at 4521 Highway K in O'Fallon, Missouri, on August 30, 2012, Brewster obtained money after presenting threatening demand notes, including a claim that he was armed with a gun.

On September 13, 2012, a police officer with the Roland Police Department in Roland, Oklahoma, conducted a traffic stop of a black, 2009 Chevy Captiva vehicle and identified Brewster as the driver and sole occupant. A fake Utah license plate had been affixed to the vehicle. A computer check of Brewster's name revealed Brewster's outstanding arrest warrant in Pensacola, Florida, for allegedly stealing the Chevy Captiva vehicle. Brewster was then taken into custody and was found to be in possession of money from the Erie, Pennsylvania, Huntington bank robbery.
Among other items located in the Captiva vehicle was a handgun, money from the Erie, Pennsylvania Huntington Bank robbery, the clothing worn by Brewster in the bank robberies as depicted in the surveillance photographs and the leather notebook carried by Brewster into the banks he robbed. Brewster was then arrested on the Erie, Pennsylvania, arrest warrant and he was returned to the Western District of Pennsylvania to face federal prosecution.

Prior to imposing sentence, Judge McLaughlin commented on the fact that Brewster's claim of a terminal disease was untrue and stated that, "The impetus for the crimes was simply greed, not grief."

Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.

U.S. Attorney Hickton commended the Federal Bureau of Investigation in each of the jurisdictions, the Erie Bureau of Police, the Arvada Police Department, the Flagstaff Police
Department, the Pocatello Police Department, the Roy City Police Department, the Winston-Salem
Police Department, the Altamonte Springs Police Department, the Chattanooga Police Department, the Bloomington Police Department, the Columbia Police Department, the O'Fallon Police
Department and the Roland Police Department for the investigations leading to the successful prosecution of Brewster.

Erie, PA – A former resident of Pensacola, Florida, has been sentenced in federal court to
135 months in prison and ordered to make restitution to the banks involved on his conviction of bank robbery, United States Attorney David J. Hickton announced today.

Chief United States District Judge Sean M. McLaughlin imposed the sentence on Michael
Eugene Brewster.

According to information presented to the court, between June 21, 2012 and September 10, 2012, Brewster robbed eleven banks across the nation. In the course of the bank robbery spree
Brewster used a similar method of operation and entered each bank, without being disguised, wore similar clothes, carried a dark leather notebook, presented demand notes containing similar threatening language to each of the victim tellers and left the scene driving a 2009 black SUV, which Brewster had stolen in Pensacola, Florida.

In his last bank robbery in Erie, Pennsylvania, on September 10, 2012, Brewster entered the Huntington National Bank, located at 2185 West 12th Street and presented a demand note, claiming that he had a gun and that the teller had one minute to comply. Brewster then claimed to the teller that he had cancer and did not care what happened. Brewster obtained bank proceeds and fled the area in a black SUV. Bank surveillance images and from area surveillance cameras clearly depicted Brewster and the vehicle he used.

Comparing the Erie Huntington Bank surveillance photographs with those from the ten other bank robberies that had occurred throughout the United States confirmed that each robbery had been committed by the same person. On September 12, 2012, the FBI received a tip that the bank robber depicted in the surveillance photographs was Brewster. A review of Brewster's Florida driver's license confirmed Brewster's identity as the bank robber. In addition, evidence disclosed that an arrest warrant had been issued for Brewster alleging that he had stolen a black Chevy Captiva SUV in Pensacola, Florida, on June 11, 2012. Once Brewster's identity had been established in the Erie, Pennsylvania robbery, the FBI and law enforcement partners in the jurisdictions of the other ten bank robberies confirmed his identity in those cases as well.

Brewster entered the Chase Bank at 5250 Wadsworth Boulevard in Arvada, Colorado, on
June 21, 2012, the Chase Bank at 1484 South Milton Road in Flagstaff, Arizona, on June 27, 2012; and the Ireland Bank at 486 Yellowstone Avenue in Pocatello, Idaho, on July 6, 2012, and obtained federally insured funds after presented a threatening note demanding money. In Roy, Utah, on July
6, 2012, Brewster entered the Wells Fargo Bank located at 5603 South 1900 West, and obtained money after presenting a threatening demand note claiming that he had only four months to live.
In Winston-Salem, North Carolina, on July 20, 1012, Brewster entered a Bank of America at 1209
Silas Creek Parkway and presented a threatening demand note indicating that he had nothing to lose and threatening to come back after the teller if any silent alarm was activated. Brewster obtained no money from the Wells Fargo Bank. Then, at the Regions Bank at 360 West State Road 436 in
Altamonte Springs, Florida, on July 27, 2012, the BB&T bank at 2120 Gunbarrel Road in
Chattanooga, Tennessee, on August 3, 2012; the PNC bank at 2217 West Market Street in
Bloomington, Illinois, on August 17, 2012; the Lamdmark Bank at 202 North Stadium Boulevard in
Colombia, Missouri, on August 29, 2012; and the Lindell Bank at 4521 Highway K in O'Fallon, Missouri, on August 30, 2012, Brewster obtained money after presenting threatening demand notes, including a claim that he was armed with a gun.

On September 13, 2012, a police officer with the Roland Police Department in Roland, Oklahoma, conducted a traffic stop of a black, 2009 Chevy Captiva vehicle and identified Brewster as the driver and sole occupant. A fake Utah license plate had been affixed to the vehicle. A computer check of Brewster's name revealed Brewster's outstanding arrest warrant in Pensacola, Florida, for allegedly stealing the Chevy Captiva vehicle. Brewster was then taken into custody and was found to be in possession of money from the Erie, Pennsylvania, Huntington bank robbery.
Among other items located in the Captiva vehicle was a handgun, money from the Erie, Pennsylvania Huntington Bank robbery, the clothing worn by Brewster in the bank robberies as depicted in the surveillance photographs and the leather notebook carried by Brewster into the banks he robbed. Brewster was then arrested on the Erie, Pennsylvania, arrest warrant and he was returned to the Western District of Pennsylvania to face federal prosecution.

Prior to imposing sentence, Judge McLaughlin commented on the fact that Brewster's claim of a terminal disease was untrue and stated that, "The impetus for the crimes was simply greed, not grief."

Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.

U.S. Attorney Hickton commended the Federal Bureau of Investigation in each of the jurisdictions, the Erie Bureau of Police, the Arvada Police Department, the Flagstaff Police
Department, the Pocatello Police Department, the Roy City Police Department, the Winston-Salem
Police Department, the Altamonte Springs Police Department, the Chattanooga Police Department, the Bloomington Police Department, the Columbia Police Department, the O'Fallon Police
Department and the Roland Police Department for the investigations leading to the successful prosecution of Brewster.

St. Louis, MO – CANDIDA S. LEHNEN was sentenced to 15 months in federal prison for embezzling more than $90,000 from the American Bank of Missouri while working as a bank branch manager.  In addition to the prison sentence, she was ordered to pay more than $90,000 in restitution.  Following her term of imprisonment, Lehnen will be required to serve five years of supervised release.

According to court documents, between 2010 and November 2012, Lehnen stole funds by fraudulently processing checks and including false information on transaction forms to reduce the likelihood of her scheme being detected by the bank’s financial controls.  Other parts of her embezzlement scheme included using altered debit tickets to obtain funds and closing the account of a deceased account holder and withdrawing the funds.  Lehnen typically targeted accounts that she believed had a history of inactivity.

Lehnen, Middletown, MO, pled guilty in May to one felony count of embezzlement by a bank officer. She appeared today in St. Louis for sentencing before Senior United States District Judge E. Richard Webber.

            This case was investigated by the Missouri State Highway Patrol.  Assistant United States Attorney John Bodenhausen is handled the case for the U.S. Attorney’s Office.

St. Louis, MO –EHRICK PREIS admitted with his plea in court documents that on six occasions, between December 2012 and March 2013, he distributed at total of 858 units of LSD to undercover law enforcement personnel in exchange for more than $6,000 in St. Charles County. 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’s residence following the sixth drug purchase revealed two improvised explosive devices (IEDs), pipe bomb type devices/destructive devices, which he admitted creating.

Preis, St. Charles, MO, pled guilty before United States District Judge Carol E. Jackson to one felony count of distribution of a controlled substance and one felony count of possession of an unregistered destructive device.  Sentencing has been set for November 14, 2013.

The drug charge carries a maximum penalty of 20 years in prison and/or fines up to $250,000; the weapons charge carries a maximum of ten years prison and/or fines up to $10,000.  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 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 is handling the case for the U.S. Attorney's Office.

St. Louis, MO – DARRELL PECK was sentenced to ten years in prison for his  possession of child pornography in February 2010 in Franklin County.

Peck, Sullivan, MO, pled guilty February 25th to two felony counts of possession of child pornography. He appeared today for sentencing before Senior United States District Judge E. Richard Webber.

This case was investigated by the Federal Bureau of Investigation and the Franklin County Sheriff’s Office.  Assistant United States Attorney Reginald Harris handled the case for the U.S. Attorney’s Office.

St. Louis, MO – JAY DUNLAP of St. Louis County was sentenced to 60 months in prison for orchestrating two real estate fraud schemes.  After a jury trial in April, Dunlap was convicted of bank fraud and wire fraud in connection with the financing of two residential properties between 2005 and 2009.  At that time, Dunlap was the owner of A-Team Mortgage company and fraudulently used straw buyers to obtain mortgages, the proceeds of which he controlled.  In addition to his prison term, Dunlap was ordered to pay more than $350,000 in restitution to the victims of his offense.

Dunlap was convicted in April of three felony counts of wire fraud, one felony count of bank fraud and one felony count of mail fraud after a four-day trial. He appeared today for sentencing before United States District Judge E. Richard Webber. 

The case was investigated by the U.S. Postal Inspection Service and the Federal Housing Finance Agency Office of Inspector General. Assistant United States Attorneys Tom Albus and Dianna Collins handled the case for the U.S. Attorney's Office.

St. Louis, MO – TANIA HENDERSON of Wesley Chapel, Florida, was sentenced to 144 months in prison for her role in leading a stolen identity tax fraud scheme during 2012. In addition to the term of imprisonment, Henderson was ordered to repay the IRS $835,883 in restitution. She appeared in federal court in St. Louis before United States District Judge Carol E. Jackson.

According to Henderson's plea agreement and other court documents, Henderson stole the identities of more than 400 individuals, many of whom were deceased, and filed fraudulent tax returns using their names and social security account numbers.    Henderson pled guilty on April 29, 2013, to one count of theft of government funds and four counts of aggravated identity theft. 

Between August and November 2012, Henderson filed 236 fraudulent tax returns from her home in Florida.  Using a network of family and friends, she would collect refund checks or prepaid debit cards for the refund amounts and liquidate the proceeds of her scheme.  Three of this network, Betty Kirkendoll, Patrina Taylor and Jason Bibbs, have already been prosecuted and sentenced. 

"Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers.  Today's sentence should serve as a strong warning to those who are considering similar conduct," said Sybil Smith, Special Agent in Charge of IRS-Criminal Investigation.

Although Henderson filed tax returns calling for more than $1.8 million dollars, the IRS was able to intercept nearly $1,000,000 in refunds before they came into Henderson's control.

Henderson’s husband, Dwayne Denard Johnson, also of Wesley Chapel, Florida, has been indicted for theft of government funds and aggravated identity theft and awaits trial in the Eastern District of Missouri. As is always the case,  charges set forth in an indictment are merely accusations and do not constitute proof of guilt.  Mr. Johnson is presumed to be innocent unless and until proven guilty.

            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.

St. Louis, MO – Leon Jackson was sentenced to 120 months in prison involving the October 2010 armed carjacking in the City of St. Louis.

According to the facts filed with the court, on October 22, 2010, an individual was parked in front on his business in the 4100 block of Lee, in the City of St. Louis.  He was sitting in his Dodge Durango when Jackson approached, pointed a semi-automatic weapon at him, demanded the keys to the vehicle or he would be killed.  The victim and Jackson began to struggle over the firearm, and the victim eventually gave him the keys to the vehicle.  While Jackson was driving away from the scene, the victim pulled his own firearm and shot at Jackson.  During the struggle the victim sustained cuts above his eye and on the hand. A short time later Jackson was arrested in the Durango and was later identified by the victim as the individual who stole his vehicle.

LEON JACKSON, St. Louis, MO, pled guilty in April to one felony count of carjacking and one felony count of possession of a firearm in furtherance of  crime of violence. He appeared today for sentencing before United States District Judge Rodney W. Sippel.

This case was investigated by the St. Louis Metropolitan Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Assistant United States Attorney Tom Mehan handled the case for the U.S. Attorney’s Office.

St. Louis, MO – Jimi Clark, owner of a Mo' Money Tax franchise, admitted to 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.  He had been scheduled to proceed to trial this morning.

Jimi Clark admitted to overseeing 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 listed in the indictment exceeds $50,000.  The tax loss for all 288 returns on which educational credits were claimed for the office in 2009 exceeds $300,000.

JIMI CLARK, Memphis, Tennessee, pleaded guilty to conspiracy to commit tax fraud and aiding and abetting the preparation of false tax returns.   His sentencing is scheduled for November 19, 2013.  Clark appeared before U.S. District Judge Audrey Fleissig.

Co-defendants JUSTIN BUFORD, Memphis, Tennessee; LESLIE CHANEY, St. Louis; MARY TAYLOR, Memphis, Tennessee; and RAY REED, St. Louis, previously pled guilty to related charges and await sentencing.

These charges carry maximum penalties up to five year 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.  Restitution to the United States is also mandatory.

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.

St. Louis, MO – The Fire Chief for the Kinloch Fire Protection District, Darran Kelley, pled guilty to charges involving his unauthorized use of more than $140,000 of District funds from January 2007 to January 11, 2013. He also pled guilty to making a false statement relative to 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 on one or more occasions 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 on one or more occasions 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.

In June 2010, the Federal Emergency Management Agency (FEMA) awarded the District a grant of $237,500 to cover 95% of the $250,000 total cost of a fire engine, based upon an application submitted by Kelley.  The City of Kinloch also distributed $15,000 of city funds to the District to cover the District's responsibility to pay 5% of the cost of the fire engine.  Some of these funds were later used by Kelley to purchase personal items and for gambling at several casinos.  During April 2011, it was widely reported by the St. Louis area media that the District was unable to pay the insurance premium due on the newly purchased fire engine.  The premium then due was reported to be approximately $2,322.  Numerous private citizens saw the media reports and made donations to the District to pay for the insurance premium, which donations totaled well in excess of the premium then due.  Kelley paid the insurer $2,322, and the remaining donated funds were retained in the District's bank account and later used by Kelley to purchase personal items and for gambling at several area casinos.  While Kelley engaged in the unauthorized use 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 alleged 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.      

DARRAN KELLEY, Ferguson, MO, pled guilty to three felony counts of wire fraud, one felony count of federal program theft and one felony count of making false statements, before United States District Judge Catherine D. Perry.  Sentencing has been set for October 16, 2013.

Each count of wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000; federal program theft carries a maximum of 10 years prison and/or fines up to $250,000; and false statement carries a maximum of five years 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, the St. Louis County Police Department and Social Security Administration-Office of Inspector General.  Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney's Office.

St. Louis, MO - RICHARD SADDLER owned Omicron Capital LLC, a company in the business of assisting customers in refinancing commercial and real estate loans. 

According to the indictment, between January 1, 2010 and March 31, 2012, Saddler accepted roughly $250,000 from at least five customers and said that the money would be used for down payments or appraisals. Instead, Saddler actually used the money to pay the mortgage on his home, which was in danger of foreclosure, as well as airline tickets, meals and other personal expenses.

Saddler, St. Louis County, was indicted by a federal grand jury on three felony counts of wire fraud. 

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.

St. Louis, MO – DR. MEL LUCAS, PATTERSON MEDICAL CLINIC, INC. and nurse practitioner, ROBYN LEVY, were indicted on multiple health care fraud related charges for their alleged false billing for services never rendered and false statements in patients’ medical records.

According to the indictment, from June 2008 to June 2011, the Patterson Medical Clinic Inc. and osteopath Mel E. Lucas billed Medicare, Tricare and private insurers for more X-rays than were actually taken. The clinic had X-ray equipment in-house. The indictment also alleges that from 2008 to 2011, the clinic and Dr. Lucas billed for Lucas' services on 573 occasions when he was actually out of town or in Cabo San Lucas, Mexico.

The indictment states that insurers were also billed for Lucas' services on Fridays, when he did not come into the clinic. Instead the patients were seen by medical assistants, who took their vital signs and drew their blood or gave them an injection. Lucas reviewed the records when he returned and billed insurers as if he had actually examined the patients. 

Finally, the indictment alleges that Patterson, Lucas and nurse practitioner Robyn Levy also billed insurers for an FDA-approved drug when Lucas had actually bought a non-approved version in Canada for hundreds of dollars less. The patients were not told they were receiving a drug that was not FDA-approved.

Lucas, Florissant, MO; and Patterson Medical Clinic, Inc. were indicted by a federal grand jury on eight felony counts of health care fraud and seven felony counts of false statements related to health service. Levy was indicted on two felony counts of health care fraud and three felony counts of false statements related to health service.

If convicted, each count of health care fraud carries a maximum penalty of ten years in prison and/or fines up to $250,000 and each count of making false statements carries a maximum 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.

Additionally, upon a finding of guilt, the defendants will be subject to forfeiture, which will require them to forfeit to the government all money derived from their illegal activity.

This case was investigated by the Department of Health and Human Services-Office of Inspector General and the FBI.  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.

St. Louis, MO – CHRISTIAN OUNANIAN and GINA VOGEL were indicted on charges of selling merchandise stolen from Walgreens and CVS drug stores.

According to the indictment,  Ounanian owned Xtra Wholesale in St. Louis City. Between 2007 and September 2012, Ounanian and Vogel hired people to steal over the counter drugs and other items from Walgreens and CVS stores.  The shoplifters were paid for the items and Ounanian and Vogel conspired to resell the items.

Ounanian and Vogel, both of St. Louis City, were each indicted by a federal grand jury on one felony count of conspiracy to transmit stolen goods and one felony count of interstate transportation of stolen goods.  They are expected to appear in federal court later this week.

If convicted, conspiracy to transmit stolen goods carries a maximum penalty of five years in prison and/or fines up to $250,000. Interstate transportation of stolen goods carries a maximum of 10 years in prison and/or fines up to $250,000.  In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

This case was investigated by Federal Bureau of Investigation.  Assistant United States Attorney Anthony Franks 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, MO – St. Louis, MO - Carl Mathews was sentenced to 120 months in prison on charges involving the sex trafficking of two area women by force and intimidation.

According to statements made in court during his plea, between 2010 and October 2012,  Carl Mathews conspired with others to force the two women to engage in prostitution in the St. Louis metropolitan area.  The defendant arranged for one of the women to work in a local hotel.  One of the women was told that she needed to help support the household by applying for state and federally-regulated food-stamp benefits and by having sex for money.  Their food-stamp identification (EBT) cards were kept from them to deprive them of food and drink as a method of control, and they were sometimes provided the drug MDMA and clothing in preparation for the commercial sex dates.

CARL MATHEWS, Breckenridge Hills, MO, pled guilty in March to one felony count of conspiracy to commit sex trafficking by force, fraud or coercion, and appeared today for sentencing before United States District Judge Henry Autrey.

Co-defendant Carla Mathews, also of Breckenridge Hills, is facing trial on one felony count of conspiracy to commit sex trafficking by force, fraud or coercion, and two felony counts of sex trafficking by force, fraud or coercion.

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.  Assistant United States Attorney Noelle 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.  Defendant Carla Mathews is presumed to be innocent unless and until proven guilty.

Cape Girardeau, MO: JEFFREY D. SHELTON, Poplar Bluff, MO, was sentenced to 120 years imprisonment on three felony charges, including attempted production of child pornography, production of child pornography and possession of child pornography.    He appeared Monday, July 15th, before U.S. District Judge Stephen N. Limbaugh, Jr. in Cape Girardeau.

At the time of his guilty plea, Shelton admitted that on the morning of October 24, 2012, he fled his Poplar Bluff residence with a five year old child he had abducted several hours earlier and left his cellular phone in the residence.  Prior to fleeing, Shelton physically assaulted his girlfriend.  A neighbor witnessed Shelton assaulting his girlfriend on the carport and called the police.  After Shelton fled, the girlfriend turned Shelton’s cell phone over to police upon their arrival.           

The examination of Shelton’s cell phone revealed content related to the five year old female.  Shelton used the phone to produce numerous videos of the child engaged in sexually explicit conduct.  The videos were produced at Shelton’s Poplar Bluff residence on October 24, 2012, in Butler County.  The examiner also discovered additional visual depictions involving another child victim, a ten-year-old female.  Shelton attempted to produce visual depictions of the ten year old engaged in sexually explicit conduct in October 2012, while traveling from a town in Butler County to a location in Ripley County.  During the offenses, Shelton threatened both child victims with serious bodily injury.

Shelton also admitted that on October 24, 2012, he possessed a hard drive that contained more than 200 graphic image files of children engaged in sexually explicit conduct.  The laptop containing the hard drive was found in his vehicle when he was arrested by authorities in Poplar Bluff.  

Finally, in August 1990, Shelton appeared at an Army Court-Martial in Fort Hood, Texas, and was found guilty of rape of a child under sixteen years of age.

The Missouri State Highway Patrol, the Poplar Bluff Police Department, the Ripley and Butler County Sheriff’s Departments, the Dexter Police Department, the Federal Bureau of Investigation and the Butler County Prosecutor’s Office are commended for their efforts to jointly investigate this case.  Assistant United States Attorney Abbie Crites-Leoni handled the prosecution for the Government.  

St. Louis, MO - DR. WIT A. JAMRY was sentenced to one year and a day and ordered to pay restitution of $119,000 and a fine of $30,000 for billing Medicare and Medicaid for services he had not performed.  His company Dr. Wit-Internal Medicine Professional Geriatric, P.C. was ordered to pay $119,000 in restitution.

According to the facts filed with the court, between 2007 and 2011, Dr. Jamry billed for services to St. Louis patients while he was actually out of town or out of the country.  He was away on trips to Atlanta, Poland and Mexico at the time he made 276 false claims totaling $26,227.  Some of the work was performed by a nurse practitioner.  Additionally, Dr. Jamry or his company, Dr. Wit-Internal Medicine Professional Geriatric, P.C., submitted over $92,773 in claims for patient visits lasting more than an hour, when neither he nor his nurse practitioners  had spent that amount of time with the patients.

Jamry, University City, MO, pled guilty in February to one felony count of heath care fraud and appeared today for sentencing before United States District Judge E. Richard Webber.

This case was investigated by the United States Department of Health and Human Services, the Federal Bureau of Investigation and the Missouri Medicaid Fraud Control Unit.  Assistant United States Attorney Dorothy McMurtry handled the case for the U.S. Attorney’s Office.

159 Individuals Charged - 267 Firearms Seized

St. Louis, MO/EAST ST. LOUIS, IL - The results of a first of its kind partnership targeting violent crime in St. Louis, MO and East St. Louis, IL was unveiled this morning during a joint press conference held by U.S. Attorney for the Eastern District of Missouri Richard Callahan, U.S. Attorney for the Southern District of Illinois Stephen R. Wigginton, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Acting Director B. Todd Jones, City of St. Louis Mayor Francis G. Slay and St. Louis Metropolitan Police Chief D. Samuel Dotson III.

This initiative, dubbed the Violent Crime Reduction Partnership (VCRP), resulted in the indictments of 159 individuals in both Missouri and Illinois. The defendants have been charged with a variety of federal and state firearms, narcotics and robbery offenses.

Beginning in April 2013, more than 80 ATF personnel from throughout the country were working in the cities of St. Louis and East St. Louis. To combat the high rate of violent crime in these cities, the agents worked together with the U.S. Attorney’s Offices in the Eastern District of Missouri and the Southern District of Illinois, the Illinois State Police, the St. Louis Metropolitan Police Department and other federal, state and local partners. The initiative utilized multiple investigative techniques, including undercover operations, historical investigation and prosecutions of multi-convicted felons in possession of firearms.

As a result of this effort, a total of 267 firearms, more than 25 ounces of methamphetamine, more than 3 pounds of crack cocaine/cocaine, more than 7 pounds of marijuana and more than 1½ pounds of heroin were purchased or seized. On July 10, 2013, over 150 law enforcement officers searched for the remaining defendants who were not already in custody.  Those not arrested at the time of this release are now considered fugitives.

Of the 159 defendants, 99 are being prosecuted by the United States Attorney’s Office for the Eastern District of Missouri, 47 are being prosecuted by the United States Attorney’s Office for the Southern District of Illinois, 11 are being prosecuted by the St. Louis City Circuit Attorney’s Office, 1 is being prosecuted by the St. Clair County State’s Attorney’s Office and 1 is being prosecuted by the Madison County State's Attorney's Office. As a whole, the defendants have been the subjects of 1,718 felony arrests and 78% of the defendants are previously convicted felons.

"Statistically, East St. Louis, Illinois, is the most violent city in America.  The law-abiding citizens of East St. Louis, not to mention all of the law-biding citizens of all of Southern Illinois, are grateful for the very intense and dangerous work spearheaded by ATF, and done in conjunction with ATF’s federal and local law enforcement partners, in this intense surge of enforcement, to seek out, disrupt and prosecute those violent and dangerous offenders who make life intolerable for the rest of us," said Stephen R. Wigginton, the United States Attorney for the Southern District of Illinois.  "Attorney General Holder, in setting the Department of Justice’s main priorities, has said, ‘We will protect Americans from violent crime.’  The promise made in that priority has been fulfilled in these law enforcement actions taken by the brave and dedicated men and women of the ATF and their partners,” added United States Attorney Wigginton.

"Today’s work is by no means finished. ATF will continue to work with our partners to identify and target those responsible for the violence that has plagued St. Louis and East St. Louis.  As we take these individuals off the streets, we in law enforcement are sending a powerful message that the violence these individuals bring will not be tolerated,” said ATF Acting Director B. Todd Jones.

Mayor Francis Slay, City of St. Louis said, "This is one of the most significant law enforcement operations in our city in the last decade. It will result in less crime and less violence in our City.  Its impact will be felt for some time to come.  Our citizens owe a debt of gratitude to everyone involved, especially the law enforcement officers who risked their lives to get these guns off our streets and these dangerous criminals out of our neighborhoods."

"The successful results of this initiative prove that by creating partnerships within law enforcement and cracking down on violent crime, the streets of our cities are safer," said Chief Sam Dotson. "The next step is ensuring that these criminals are prosecuted and sentenced appropriately, sending a message to violent offenders that this behavior is not tolerated."

The VCRP’s core agencies are ATF, the St. Louis Metropolitan Police Department, the Illinois State Police, the Federal Bureau of Investigation (IL), the United States Attorney’s Office for the Eastern District of Missouri, the United States Attorney’s Office for the Southern District of Illinois, the St. Louis City Circuit Attorney’s Office and the St. Clair County (IL) State’s Attorney’s Office. The agencies that also participated in the VCRP are the Drug Enforcement Administration, the St. Louis County Police Department, the St Clair County (IL) Sheriff’s Department, Illinois Department of Corrections Probation and Parole and the United States Marshals Service.  This arrest operation involved law enforcement officers from all of the investigating agencies, along with numerous other law enforcement agencies.

The Eastern District of Missouri cases are being prosecuted under the supervision of Assistant U.S. Attorney Antoinette Decker, Chief of the Violent Crimes Unit.  The Southern District of Illinois cases are being prosecuted by Assistant U.S. Attorney Deirdre A. Durborow, Violent Crimes Chief; Kit R. Morrissey, Monica Stump, Ali Summers, Steven B. Clark, Daniel Kapsak and Special Assistant United States Attorneys Stephanie Richter and Neal Hong.

This is the ninth multi-month VCRP that ATF personnel have completed throughout the United States. This is the first VCRP that spanned two ATF Field Divisions and two U.S. Attorneys Offices.

These state and federal charges are allegations that a defendant has committed a crime. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.

Contact Information:

Assistant U.S. Attorney Jim Porter
U.S. Attorney’s Office
Southern District of Illinois
(618) 628-3700

Jan Diltz
Public Affairs Officer
U.S. Attorney’s Office
Eastern District of Missouri
(314) 539-7719

Sr. Special Agent Thomas J. Ahern
Public Information Officer
ATF - Chicago Field Division
(312) 846-7228

Special Agent Trista K. Frederick
Public Information Officer
ATF - Kansas City Field Division
(816) 559-0724
(916) 275-4039 (Cell)

St. Louis, MO - STEPHEN B. EVANS was sentenced to 15 months in prison and ordered to pay $154,000 restitution on mail and wire fraud charges involving his failure to pay clients and expenses, and instead keeping client settlement funds for himself.

According to court documents, between 2007 and 2012, Evans was a local attorney with a general practice, including the representation of people who were injured or had claims based on contract or negligence where he would enter into a contingent fee arrangement.  With such fee arrangements, Evans would receive a certain percentage of any successful settlement, with the rest to be paid to the client and to pay the client's expenses.  Insurance companies mailed settlement checks to Evans at his law firm's address.  The checks were typically made payable to Evans and the client.  As part of his fraud scheme, Evans often falsely represented to his clients that he was withholding a portion of the settlement funds for use in paying medical or similar expenses.  On many occasions, Evans kept and spent those funds.  Evans' scheme resulted in fraud losses in excess of $150,000.

Evans, St. Louis County, pled guilty in January to one felony count of mail fraud and one felony count of wire fraud.  He appeared today for sentencing before United States District Judge Jean C. Hamilton.

The case was investigated by the United States Postal Inspection Service with the assistance of attorney disciplinary authorities in Missouri and Illinois.  Assistant United States Attorney John Bodenhausen handled the case for the U.S. Attorney's Office.

Cape Girardeau, MO: This morning, three Sikeston, Missouri, men previously found guilty by a jury of conspiracy to possess more than 5 kilograms of cocaine with the intent to distribute, as well as multiple distribution charges, were sentenced to life imprisonment by United States District Judge John A. Ross. 

The evidence previously presented at trial showed that beginning in the Fall of 2009, Corey E. Turner, Sr., Antonio Turner and Donald R. Turner, Jr., who are all cousins, along with others, entered into an agreement to pool their money together as often as they could, to purchase large quantities of cocaine from various suppliers.  Some of the suppliers were located in Missouri, however, much of the cocaine was coming from suppliers located in Blytheville, Arkansas.  The members of the conspiracy then split that cocaine amongst themselves, cooked the powder cocaine into crack cocaine and sold it on the streets. 

COREY E. TURNER, SR., ANTONIO TURNER and DONALD R. TURNER, JR., were all sentenced to life imprisonment for the conspiracy charge and 360 months imprisonment on the individual distribution and aiding and abetting the distribution of controlled substance charges.

The fourteen co-conspirators who previously entered guilty pleas for their roles in the conspiracy, include:  Joe Lenzie Turner of Sikeston, Missouri (sentenced to 240 months); Dwayne Woods of Caruthersville, Missouri (not yet sentenced); Derrick L. Turner of Sikeston (sentenced to 192 months); Cemond Brooks of Blytheville, Arkansas (sentenced to 135 months); Mario Baker of Sikeston (sentenced to 180 months); Roderick Marks of Sikeston (sentenced to 138 months); Elgin Mills of Sikeston (sentenced to 132 months); Corey Weatherspoon of Blytheville, Arkansas (sentenced to 120 months); David Turner of Sikeston (sentenced to 120 months); Corey E. Turner, Jr., of Sikeston (sentenced to 120 months); Dawnika Hunt of Caruthersville (sentenced to 72 months); Shelby “Kay” White of Sikeston (sentenced to 60 months); Anthony Wilder of Sikeston (sentenced to 60 months); and Jerriereneika Dorsey of Sikeston (sentenced to 54 months).          

The seventeen convictions in this case are the result of a complex and long-term investigation.  This case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Sikeston Department of Public Safety, the Southeast Missouri Drug Task Force, the Missouri State Highway Patrol, the Bootheel Drug Task Force, the Second Judicial Drug Task Force of Mississippi County, Arkansas, and the Scott County Prosecuting Attorney’s Office.  Assistant United States Attorney Abbie Crites-Leoni handled the prosecution for the U.S. Attorney’s Office. 

St. Louis, MO - RICHARD J. TAYLOR of Warwickshire, England, was sentenced to 18 months of imprisonment and a fine of $800,000 for distributing adulterated prescription drugs used for cancer treatment to multiple physicians in the United States, including Town and Country, Missouri, oncologist Abid Nisar.

According to his plea agreement, during 2008-2011, Taylor distributed prescription drugs used for cancer treatment from the United Kingdom to physicians located in the United States.  One of his customers was Dr. Abid Nisar of Town and Country, MO.  To be safe and effective, some of these prescription drugs distributed by Taylor needed to be shipped and stored at constant cold temperatures, and should not have been shaken or frozen.  While distributing these prescription drugs, Taylor learned that multiple doctors in the United States had received shipments of "cold chain" cancer prescription drugs that were warm upon arrival and damaged during shipment, but still kept shipping adulterated drugs to the United States.  Taylor’s illegal drug shipments included an October 2010 shipment of the cancer drug marketed in the United States as Rituxan® that was sent to Dr. Nisar’s local medical office.    

Taylor’s plea agreement also discusses his involvement with importing a counterfeit cancer drug.  Taylor admitted that he and others imported Altuzan, an intravenous cancer treatment drug marketed in Turkey that contains the same active ingredient as the drug marketed in the United States as Avastin® into the United States.  Taylor and others believed that the drug was “a high risk play with the Turkish labeling and packaging.”  On May 10, 2011, Taylor was notified that “we had an unfortunate experience” after an oncology nurse of a U.S. doctor reported that two patients had “immediate bad reactions” during infusions of Altuzan.  One of these patients “who has been on Avastin for awhile started to shake in the middle of being transfused and had to be disconnected from treatment.”  The nurse advised that she had been administering Avastin for years and never had a patient reaction like this before.  Ultimately, the U.S. Food and Drug Administration (“FDA”) seized packages marked “altuzan” from several of Taylor’s customers in the United States and tested the substances, determining that Taylor’s customers had received counterfeit versions of Altuzan that did not contain any of the active drug ingredient bevacizumab that is found in legitimate versions of Altuzan and Avastin®.  FDA previously warned multiple doctors in the United States about the dangers of counterfeit altuzan with a public safety alert that can be found on the agency’s website, www.fda.gov.

Taylor also agreed to forfeit his interest in approximately $3.2 million dollars, some of which was seized during the investigation at a bank in the United Kingdom. 

This sentence aptly reflects the serious nature of this crime," said Special Agent in Charge Patrick J. Holland of FDA's Office of Criminal Investigations, Kansas City Field Office.  "Americans must have confidence that their health care providers are receiving and administering drugs that fully comply with U.S. laws.  The FDA will aggressively pursue all those who seek to profit from causing the importation and distribution of foreign drugs that are adulterated and misbranded."

This case was investigated by the Office of Criminal Investigation for the United States Food and Drug Administration and the Office of Inspector General for the United States Department of Health and Human Services. 

St. Louis, MO - Former Kinloch Mayor KEITH CONWAY was indicted on federal charges of falsifying employment records while completing his original sentence at a St. Louis halfway house, the Dismas House. 

According to the indictment, 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 falsely represented that he had obtained full-time employment and was permitted to leave the Dismas House premises during his purported work hours.

Conway was originally sentenced to 21 months in prison in November 2011 on charges of using Kinloch city funds to pay personal expenses, fund personal travel, 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.

Conway was indicted by a federal grand jury on four felony counts of filing  false documents.

If convicted, each count carries a maximum penalty of 5 years and/or fines up to $250,000.  In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

This case was investigated by the Federal Bureau of Investigation-Public Corruption Unit, including officers of the St. Louis County Police Department.  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.

St. Louis, MO - MATTHEW M. HANSEN pled guilty to charges of attempting to entice minor boys to engage in sexually explicit conduct for him to videotape between 2007 and 2012.

Hansen, Winfield, MO, pled guilty to eight felony counts of attempted production of child pornography before United States District Judge Jean C. Hamilton, in St. Louis.  Sentencing has been set for October 4, 2013.

Each count of attempted production of child pornography carries a penalty range of 15 to 30 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 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 is handling the case for the U.S. Attorney’s Office.

St. Louis, MO - RANDALL K. SUTTON pled guilty today before United States District Judge Jean C. Hamilton to participating in a fraudulent scheme involving the sale of prearranged funeral contracts and misappropriation of insurance premiums. Sutton faces up to 84 months in prison for his role.
 
In court, Sutton admitted that beginning in 1992 and continuing until 2008, National Prearranged Services, Inc. ("NPS") sold prearranged funeral contracts in several states, including Arizona, Florida, Illinois, Iowa, Kansas, Kentucky, Missouri, Oklahoma, Ohio and Tennessee. During that time, insurance companies affiliated with NPS, including Lincoln Memorial Life Insurance Company, issued life insurance policies related to those prearranged funeral contracts. 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.

Sutton admitted, 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. In some states, such as Illinois, insurance premiums were misappropriated before an insurance policy was issued. In other states, such as Ohio, unauthorized policy loans were taken against insurance policies owned by individual policy holders. In Missouri, NPS received withdrawals from the preneed trust of funds and assets that were required by its agreements and by the applicable state law to remain in trust.  Ultimately, 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' officers and others. 

At various times during the time period between 1981 and 2008, Sutton held the titles of Chief Financial Officer, Director and President of National Prearranged Services, Inc.; Vice President, Chief Executive Officer and Director of Lincoln Memorial Life Insurance Company; and Vice President and Director of Memorial Service Life Insurance Company. His duties for NPS included management responsibilities relating to operations and finances.

Sutton pled guilty to one count of bank fraud (count 7), one count of mail fraud (count 24), one count of money laundering (43) and one count of misappropriation of an insurance premium (count 48). Sentencing has been set for November 7, 2013.

Last week, Sutton's co-defendants James Douglas Cassity and Brent Douglas Cassity pled guilty to participating in this same scheme. Sutton's co-defendant Sharon Nekol Province pled guilty last month. Sutton's co-defendants Howard A. Wittner and David R. Wulf are scheduled to appear for trial starting on August 5, 2013. As is always the case, charges do not constitute proof of guilt and every defendant is presumed to be innocent unless and until proven guilty. 

           

Sutton's case was investigated by the 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 are handling the case for the U.S. Attorney’s Office.

St. Louis, MO - HOWARD A. WITTNER pled guilty today before United States District Judge Jean C. Hamilton to two felony counts of making false statements intended to deceive insurance regulators in connection with the acquisition and administration of the Professional Liability Insurance Company of America ("PLICA"). Wittner also pled guilty to willfully permitting a felon to engage in the business of insurance.  Wittner faces between one and five years in prison for his crimes.
 
Wittner, who served as trustee of the family trust whose holdings included National Prearranged Services, Inc. and Lincoln Memorial Life Insurance Company, admitted to making multiple false statements to the New York Department of Insurance in order to obtain approval for the trust to acquire PLICA, a New York medical malpractice insurance company. The statement submitted by Wittner and others failed to disclose several material facts, including the ultimate source of the money being used to purchase PLICA and the fact that Wittner's co-defendant James Douglas Cassity would be involved with its management and operations. Wittner admitted that he knew the statement was false and intended to deceive the New York Department of Insurance so that it would approve the trust's acquisition of PLICA. Wittner also admitted to submitting an annual statement to the New York Department of Insurance that concealed the existence of numerous agreements and transactions with affiliated persons and entities that required disclosure.

Wittner served as the trustee for the Cassity family trust since at least 1990. At various times during his trusteeship, Wittner also served as a Director of both NPS and PLICA and Chairman of the Board of Directors of Forever Enterprises, Inc., the parent company of Memorial Service Life Insurance Company and Lincoln Memorial Life Insurance Company.  

Wittner pled guilty to two counts of knowingly making a materially false statement to an insurance regulatory agency for the purpose of influencing the agency's actions (counts 45 and 46). Wittner also pled guilty to a felony count of willfully permitting James Douglas Cassity, whom he knew to have been convicted of a felony involving fraud or dishonesty, to exercise significant control over PLICA and NPS' affiliated insurance companies (count 50).

Sentencing for Wittner has been set for November 7, 2013. Also today, Wittner's co-defendant Randall Sutton, the former president of NPS, pled guilty to four counts of fraud, money laundering and misappropriation of insurance premiums. Wittner's co-defendants James Douglas Cassity, Brent Douglas Cassity and Sharon Nekol Province have each pled guilty to participating in the fraudulent scheme. Wittner's co-defendant David R. Wulf is scheduled to appear for trial starting on August 5, 2013. As is always the case, charges do not constitute proof of guilt and every defendant is presumed to be innocent unless and until proven guilty. 

           

Wittner's 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 are handling the case for the U.S. Attorney’s Office.

St. Louis, MO - RANDALL PAUL ABERNATHY, Warrenton, MO, was sentenced to 339 months in prison for his production and transportation of child pornography between September 2010 and September 2011.  Abernathy pled guilty in January. He appeared today for sentencing in St. Louis before United States District Judge Catherine D. Perry.

This case was investigated by the Federal Bureau of Investigation.  Assistant United States Attorney Erin Granger handled the case for the U.S. Attorney’s Office.

St. Louis, MO - FREDERICK CRAYTON, St. Louis City, pled guilty to federal gun and assault charges involving the April 18, 2013, assault of a federal officer.  His brother DWAYNE CRAYTON, pled guilty yesterday to charges of selling crack cocaine to an undercover officer.  Both defendants appeared before United States District Judge Audrey G. Fleissig in St. Louis.

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 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.  

Co-defendant James Edward Jones, also of St. Louis City, was indicted in April on related charges and awaits trial. 

These charges carry a penalty range of5 to 25 years in prison and/or fines up to $1,000,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.  Sentencings have been set for October 2013.

This case was investigated by the Bureau of Alcohol, Tobacco and Firearms.  Assistant United States Attorney Tom Mehan is handling the case for the U.S. Attorney’s Office.

As is always the case,  charges set forth in an indictment are merely accusations and do not constitute proof of guilt.  The remaining defendant is presumed to be innocent unless and until proven guilty.

St. Louis, MO - STEVEN HENRY KEMPER of St. Louis County, pled guilty this morning in connection with the November 16, 2001, arson of his family’s home in Florissant, Missouri.  Kemper’s 15-year old son, Zachariah Andrew Kemper, was trapped in the basement and killed during the fire.  Kemper pled guilty to one-count of aiding and abetting the use of fire to commit mail fraud.   He appeared before United States District Court Judge Audrey G. Fleissig to enter his guilty plea.

The 2001 fire was originally the subject of state charges in which only Kemper’s wife, Sandra Bryant, was charged with felony murder by arson.  During the ensuing trial, the judge declared a mistrial after ruling that certain evidence had mistakenly been shown to the jury.  The Missouri Supreme Court ultimately held that because the mistrial was declared over the defense objection, state prosecutors were barred from retrying the defendant in state court because of the United States Constitution’s “double jeopardy” provision.

The federal indictment charges both Steven Kemper and his wife Sandra Kay Bryant for their involvement in the 2001 arson.   Both defendants were charged with aiding and abetting the use of fire to commit mail fraud in count II of the indictment.  Sandra Bryant faces a separate charge in count I of the indictment.

Although no trial date has been set, charges remain pending against Sandra Bryant.  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. 

Sentencing has been set for October 3, 2013, at 10:30 a.m.  Kemper faces a mandatory minimum of 10 years up to life imprisonment for his crime.  In determining actual sentences, a judge is required to consider the United States Sentencing Guidelines, which provide recommended sentencing ranges.

This case was originally investigated by Saint Louis County Police Department.  The United States Bureau of Alcohol, Tobacco, Firearms, and Explosives took up the investigation after the Missouri Supreme Court decision barring the retrial by state prosecutors.  The St. Louis County Prosecutor’s Office also provided significant assistance.

St. Louis, MO -JAMES DOUGLAS CASSITY pled guilty today before United States District Judge Jean C. Hamilton to participating in a fraudulent scheme involving the sale of prearranged funeral contracts and misappropriation of insurance premiums. Cassity faces up to 115 months in prison for his role.
 
In court, Cassity admitted that beginning as early as 1992 and continuing until 2008, National Prearranged Services, Inc. (“NPS”) sold prearranged funeral contracts in several states, including Missouri, Illinois and Ohio. During that time, insurance companies affiliated with NPS, including Lincoln Memorial Life Insurance Company, issued life insurance policies related to those prearranged funeral contracts. 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. Cassity admitted, 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. Cassity admitted that he benefited from the misuse of customer funds.

Cassity pled guilty to two counts of wire fraud (counts 17 and 21), one count of bank fraud (count 7), one count of mail fraud (count 24), one count of money laundering (count 26) and one count of misappropriation of an insurance premium (count 48).

Cassity will be sentenced on November 7, 2013. Earlier this month, Cassity’s co-defendant Sharon Nekol Province pled guilty to six counts of mail fraud, wire fraud and misappropriation of insurance premiums arising out of the same scheme. Also today, Defendant’s co-defendant Brent Douglas Cassity pled guilty to participating in the same scheme. Cassity’s co-defendants Randall K. Sutton, Howard A. Wittner and David R. Wulf are scheduled to appear for trial starting on August 5, 2013. As is always the case, charges do not constitute proof of guilt and every defendant is presumed to be innocent unless and until proven guilty. 

Cassity’s case was investigated by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Postal Inspection Service.  Assistant United States Attorneys Steven Muchnick, Charles Birmingham and Richard Finneran are handling the case for the U.S. Attorney’s Office.

St. Louis, MO - BRENT DOUGLAS CASSITY pled guilty today before United States District Judge Jean C. Hamilton to participating in a fraudulent scheme involving the sale of prearranged funeral contracts and monetary transactions involving the proceeds of that scheme. Cassity faces up to five years in prison for his role.
 
In court Cassity admitted that beginning as early as 1992 and continuing until 2008, National Prearranged Services, Inc. ("NPS") sold prearranged funeral contracts in several states, including Tennessee 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.  Cassity admitted, 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.
           
Cassity was employed at various times by NPS and also served as a Director of Lincoln Memorial Life Insurance Company, for which NPS served as General Agent. Cassity also held numerous titles with affiliated companies, including Chief Executive Officer, Chairman, President and Director of Forever Enterprises, Inc., and President and Director of National Heritage Enterprises.

Cassity pled guilty to one count of mail fraud (count 31), one count of wire fraud (count 21) and one count of money laundering (count 38). Cassity also pled guilty to willfully permitting James Douglas Cassity, whom he knew to have been convicted of a felony involving fraud or dishonesty, to exercise significant control over NPS’ affiliated insurance companies. (Count 50)

Cassity will be sentenced on November 7, 2013, at 9 a.m. Earlier this month, Cassity’s co-defendant and fellow NPS executive Sharon Nekol Province pled guilty to six counts of mail fraud, wire fraud and misappropriation of insurance premiums arising out of the same scheme. Cassity’s co-defendants, James Douglas Cassity, Randall K. Sutton, Howard A. Wittner and David R. Wulf have entered pleas of not guilty and are scheduled to appear for trial starting on August 5, 2013.  As is always the case, charges do not constitute proof of guilt and every defendant is presumed to be innocent unless and until proven guilty. 

Cassity’s case was investigated by the 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 are handling the case for the U.S. Attorney’s Office.

St. Louis, MO - JAMALL BROWN was indicted on charges of transporting two female victims from Chicago to Missouri to Colorado and back for prostitution.

According to the affidavit filed with a criminal complaint on June 29, 2013, St. Louis Metropolitan Police Department officers responded to a report of a battered victim at St. Louis University Hospital Emergency Room.  The victim, Jane Doe, told officers that she met Brown through a girlfriend in a Chicago hotel room after the two of them traveled there from Kentucky.  In the weeks to follow, Brown was physically assaultive and he forced her and another female, Jane Doe Two, to engage in prostitution by advertising on Backpage.com online service.  After spending a few days in Chicago, the defendant transported them to St. Louis where they engaged in acts of prostitution.  After a few days he transported them to Denver, then eventually back to St. Louis. On June 28th, Doe told Brown that she wanted to stop prostituting and leave. Brown severely beat her and later dropped her off at the emergency room.

Brown, Chicago, IL, was indicted by a federal grand jury today on one felony count of interstate transportation for the purpose of prostitution. 

If convicted, the maximum penalty for this charge is 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 U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the St. Louis Metropolitan and Maplewood Police Departments.  Assistant United States Attorney Howard Marcus 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, MO - ELIZABETH GLOSEMEYER of St. Louis County, was indicted on two counts of wire fraud. 
                                               
According to the indictment, while the manager of Lenders Guarantee Title Company of St. Louis, Glosemeyer raided the company’s escrow account to fund operations.  The escrow account consisted of clients’ money and was to be used only for clients’ real estate transactions.  The indictment further alleges that Glosemeyer doctored financial records to cover up her raiding of the escrow account from Lenders’ underwriters.  In the summer of 2012, an audit uncovered Glosemeyer’s scheme and Lenders went out of business soon thereafter.  Due to the deficit in the escrow account Glosemeyer created, at least one transaction in excess of $200,000 had to be closed with the underwriters’ funds.

Each count of wire fraud carries a maximum term of imprisonment of 20 years, a $250,000 fine or both.  Restitution to financially aggrieved parties is also mandatory.  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 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.

St. Louis, MO - FRANK L. "TIGER" ZERJAV, JR., Wildwood, MO, was sentenced to 18 months in prison on charges of tax evasion for 2001 through 2004. United States District Judge Catherine D. Perry concluded two days of hearings as she imposed the sentence today in federal court in St. Louis. 

In December 2012, Zerjav plead guilty to four counts of federal income tax evasion relating to the joint income tax returns filed by him (and his wife) for the years 2001 through 2004.  The government claimed that he attempted to evade some $183,000 in taxes by running over $850,000 in income through corporate entities and then deducting personal expenses on the tax returns filed by those corporations.  In court documents submitted at the time of the guilty plea, there was a listing of expenses that were improperly taken as deductions for those years including:  payments for a condominium at the Lake of the Ozarks; a 37-foot boat; two Seadoo water craft; a home entertainment system; payments on Zerjav's student loans; payments for the BMW vehicles driven by Zerjav and his wife and thousands of dollars in fast food and other restaurant expenses.  Zerjav did not agree with the tax loss figure alleged by the Government and the two-day sentencing hearing was the result. 

In court today, Judge Perry found that the corporations created by Zerjav were "conduits" to receive his income and she also found that the corporations served no legitimate business purpose other than to avoid taxes.  She stated that Zerjav's use of the corporations made the scheme especially complex.  The judge went on to find that the extensive deductions for personal expenditures were improper as well.  She ordered Zerjav to pay restitution to the Internal Revenue Service in the amount of $181,000.

"In today's economic environment, it's more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe," said Sybil A Smith, IRS Criminal Investigation Special Agent in Charge. "Honest taxpayers deserve our vigilance in investigating and prosecuting those who evade the payment of their fair share of taxes."

According to court documents, during 2000-2007, Frank L. “Tiger” Zerjav, Jr., and his father, Frank L. Zerjav, Sr., who is a CPA, were the principals in two entities: Zerjav & Company, PC, a full service accounting firm that primarily prepared business and personal tax returns, and the Advisory Group USA, LC, which offered tax planning and asset protection strategies to clients.  Tiger Zerjav managed the activities of the accountants working at the firm and advised existing clients. Through 2003 he also prepared returns and reviewed the returns prepared by firm accountants.  Clients of the Advisory Group included many small business owners and self-employed individuals.  They were typically advised to create S-corporations into which the income from their businesses would be funneled.  Since the net income from an S-Corporation flows through to the owner for inclusion on the owner’s personal income tax return, there is an obvious incentive to maximize deductions on the S-corporation return.  Tiger Zerjav used this strategy in preparing his tax returns for the years 2001 through 2004.

In March 2010, Tiger Zerjav and Frank Zerjav Sr., and the Advisory Group entities entered into an agreement with the United States which included the following stipulations: (1) the Advisory Group would cease doing business; (2) Tiger Zerjav would not be involved in tax preparation activities for a three-year period and (3) Zerjav & Company would cease using many of the tax strategies mentioned above.

Tiger Zerjav was released on his bond and will voluntarily surrender to the prison facility when designated.

This case was investigated by Internal Revenue Service-Criminal Investigation.  Assistant United States Attorney James E. Crowe, Jr., handled the case for the U.S. Attorney’s Office.